Professional Documents
Culture Documents
Shannon Macey
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Industrial Engineering
at
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List of Abbreviations . . . . . - . m . . . . . m ~ . . . . m ~ m ~ * - ~ ~ ~ m - . ~ m m ~ ~ ~ m ~ ~ ~ ~ ~ xi
~ ~ ~ m ~ ~ o o o o
..............................
Introduction .................................................................................................54
Development of the OPIM ......................... ..... .............w........9.9........ ..........................54
3.2.1 Framework Development ...................................................................................................... 54
3.2.2 Criteria Development ............................................................................................................ 57
3.2.3 Development of the Assessment Questions .......................................................................... 66
3.2.4 Establishment of the Scoring Scheme ................................................................................... 66
3.2.5 Scoring Scheme Cornparison ................................................................................................ 73
4.1 Introduction..................................................................................................................................
77
APPENDIX E - Approach. Deployment and Results Adapted from the EQA ...................................175
List of Tables
1would like to thank m y supervisor, Dr. St&v Karapevovic, for invithg me to take part
in this research project and for all the guidance and support that he provideci throughout the
process. His knowledge of and experience in rhis field proved Livduable and was a great
source of inspiration.
1wish to give thanks to the case study oqpkation for pamcipating in this project and for a i l
the CO-opemion1received whik performing my research there. Without its fwcial
support, this project would not have been possible. I would specifidy like to thank b o t -
Mark DeKoning and Max Jaffer for their involvement and advice. Their support was of
great benefit to the successful completion of this project.
1would Idce to thank Dr. John Blake for his valuable feedbadc and tirne spent reviewing rhis
work and Dr. Eldon Gunn for his encouragement and support. Thanlu to both for serving
as memben of m y guiding comminee. Thank ou to Dr. Walter Wdbom for his Ume spent
reviewuig some of the w o i in the thesis and for travelling to Halifax for my defence.
Thanks also to Dr. Car1Sandblom for seming as a member of my guidance cornmittee.
1would like to express my sincerest gratitude to Greg Delbndge for his inexhawible
encouragement, patience and support throughout my d e s .
In today's global economy, o&tions mua ourperform &eir cornpetitors in order to
survive. They must set goals and objectives chat will move them into leadership positions in
their indusrries. To ensure that these goals are being me5 cornplnies are developing
performance management systems to help them measure and improve the efficiency and
effectiveness of t h e u activities. S e v d modek have been developed to assist organisations
in these efforts. Some of these models, such as ISO 9001, provide the minimum
requirements for a quality management system, while orhen, like the National Quality
Awards, provide a broader set of criteria that extend the prinaples of management to
al1 organisational activities. Companies natudy question which model is best suited for
their performance management needs. It has been suggested that the model should be
selected based on the quélity maturity level of the organisation. The ISO 9001 standard for
quality management provides a necessaxy foundation for the journey towards business
excellence- The Business Excellence Models can then be used to build onto this
foundation.
In this paper, a model that integrates ISO 9001, the Malcolm Bddnge National Quai;ty
Award, the European QuaLty Award, and the Deming Pxize is developed The
Organisational Performance Improvernent Modei (OPM) is considered to be a combination
of quality assurance standards that provide the minimum recpirernents for sU1i;ty
improvement, and business excellence models that illustrate the opportunities for
improvement.
The OPIM was developed specifically for the case study organisation (CSO) but can be
easdy adapted to be used by other organisations. A comparry c m employ this model to
evaluate its current quality management system against the minimum requirernents in the
model and rhen apply the opportunities for improvement as a guide for continuous
improvement. Self-assessrnent against this model wili be beneficial in enhancing the
organisation's quality auditing program as well as its redt-based perfoxmance measurement
system.
1.0 Introduction
1
............................ Audit .....................
Self-Assessrnent
Yes
Once goals and objectives are determineci, performance measurement is used to nadr the
progress towards these goals. Performance measurement is the quantification of the
effiuency and effectiveness of an action (Neeiy et ai, 1995).
To narrow the gap becween the m e n t lwel of perfomunce and rhe levels required to meet
its objectives, an organisation must improve. Performance impmvement is the systematic
process of idennfying and implementing changes to oqpisauonal processes in order to
more efficiendy and effectively achieve set organisational objectives. Performance
improvement can be achieved in two ways. The fvst is to elimioate problems or
deficiencies. The second û to initiate actions that Mn aaualky result in improved
characterïstics.
There are rwo ways in which companies can elimliate problems. These are corrective and
preventative actions. Corrective actions are those which are taken to eliminate the cause of
an existing non-conformity[the non-fuifilment of a requirement (ISO 9000: 20W)J or other
undesirable situation (ISO 9000: 2000). Preventive actions are those taken to elMinate the
cause of a potential nonconformiry or other potentially undesirable situation (ISO9000:
2000).
Improved characteristics can be achieved through Kaizen or Quantum Leaps. Kaizen means
s m d incremental irnprovernents towards the achievement of objectives. Quantum Leaps or
breakthroughs are larger irnprovements. Both of these reduce the average nurnber of
defects or reduce variation.
ELIMINATE
PROBLEMS GET BETTER
F e ,once a goal or objective is reaiised, new goals should be set to continue the cycle.
Both performance measurement and improvernent are essenria if an organisation wishes to
sirndtaneous~achieve its objectives and maintain its cornpetitive edge.
MANAGEMENT
PLAN + ACT
+
IMPROVEMENT
v b
l
DO MEASUREMENT
L
Q d y awards are models for business excellence. These models consist of viteria to which
organisations can compare their activities and results. They have been developed based on
s Total QwLty Management FQM).TQM is a quality-oried approach
the p ~ a p l e of
chat consisu of applymg quality management techniques t h r e o u t the organisation. The
e v h t i o n criteria provide puideluies to organisations to measure their progress in these
efforts.
1.1.1.3 Integration of ISO 9001 and the Business Exceknce Models
Bo& the ISO 9000 series and the quality mat& have been adopted by orgaaisations to
measure and improve perfomiuice. Many oqpisations wonder whether one mode1 is
better than another, and whether the choice of model should depend on the type of
organisation. Many authors have mggesteci that both mo& are important to an
organisation (van der W d e et ai, 2000; Dale, 1999; Karapetrovic and Wdborn, 2ûûlB). The
ISO 9001 standard is seen as providing the minimum reS;rements for a &ty management
syaem or the basics to stan the joumey towards orgauisationalexceilence. The quality
awardr, provide guidance for the n a sep on this joumq..
Combining these modeis would provide an integrared set of criteria that codd help an
organisation transition smooddy from its quaity management system t o w d the use of the
business exceilence modek for improvernent. There are however, many differences between
these models and as a resuh, they cannot simpiy be cur and pasteci together (Dale, 1999).
Quaity au& are used to measure the effectïveness of an organisation's quahqr system
against the selected ISO 9000 model. Audits do not however, meanire the efiaency of the
system and therefore miss one essentd aspect of perfomance.
The audits used with ISO 9000 series registration look for noncornpliance and assess
whether the quJiry mern and its undeliying procedures are king followed. In other words,
+ty audits ask 'if the organisation meeu the deria", wheeas self-assessrnena ask 'how,
and how well, does the organisation meet the criteria".
Research and development (R&D) is an area in which there is much variability and
uncenainty. The ability to innitute systematic decision-making continuous improvement,
experimentation with new ideas, and tearnwork are cntical elements of the TQM philosophy
that have been found to be important for a successful RBrD work environment (Gamin,
1993, Kiella and Golhar, 1997). This area of research however has been found to be weak
as, for the most part, the lirerature deals with the manufamiring and service sectors.
Due to the l w tangibildy and repetiuon found in R m &pmnents, manufamiring-based
quality practices when applied to R&D my prove dislsrrorrr (Kumar and Boyle, 2001).
There are several issues, specific to an R&D organisation, t&atshoulcf be considered.
The company used as a case study (case mi+ organisation) for the research in this thesis is
very mu& f a e d on its research and development efforts to maintain its competirive
position in the marketplace. Many of the issues lined above apply to the R&D departments
in this organisation. The n a section provides an overview of the case study organisation.
1.3 Case Study Organisation (CSO)
The companyused for this work, which we wiU caiI the case study organisation (CSO)is a
Cinadian hrgh technology company which desigm, manufactures and markets eleamnic
components, p@ &con integrated circuits (ICs) and thick-filmhybrid circuits, for
specialised applications.
The organisation has rwo faciliaes with total plant space of 70,000square feet, encompassing
all aspects of integrated circuit development, muiufacnviag and marketing. Revenue
exceeds f 107 million per year. The CS0 employs ahost 500 people.
The company bas recendy reorganised into rhree divisions. The divisions are based on
produa families and each indu&s marketin&sales, R&D, and manufacturing functions.
The CSO recognises that in today's fast-changing economy; initiative and ingenuity are
essenùal elements of success. In 2000, it renewed its focus on RSrD, ramping up spending
to approximately 17 percent of d e s .
The organisation is dedicated to quality. To ennue hi& quality produas and services, the
organisation's Quality Program is registered to ISO-9001-94 and is constantiy evaluated
through interna and extemal audits. The quai~tysystem is currendy being updated to meet
the ISO 900 1: 2000 standard for quality management.
W e the quality synem is being rnaùitained in accordance with the ISO 9001-94 standard,
the CS0 is aware that these efforts are no longer adequate to maintain their cornpetitive
advantage. The company needs to continue its quality journey and expand its continuous
improvement efforts. Several National Quality A . suggest cnteria that should move the
C S 0 into this nez phase of excellence.
1.4 Organisation of the Thesis
Chapter Two is a nwqr of existing iitennire to develop a background for the problems
addressed in this thesis. These top& indude:
Performance Management
Chapter Five compares diree me&& of perfomance measurement used by the CSO.
These include the self-assessment, the p h t y audithg prognm, and the result-based
performance measurement system.
Chapter Six describes the modification of the OPIM to be more appropriate for use in an
R&D environment.
Chapter Seven condudes the thesis with a nimmary of r e d a and convibutions of the work.
The scope for htrther research is also discussed.
2.0 Literature Review
2.1 Introduction
A nwqr of existing literature has been conducted to review the foliowing aspects of
performance management:
the main elemenu of performance management iaduding mewrement and
improvemenr;
existing frarneworks and modeis for organisationai performance management;
the integdon of the minimum requirements for a quality management synem with die
cntexia frorn the more holinic national @ty awards;
three organisational performance measurement methob: self-assessment, audiring, and
redt-based performance measurement;
performance management in a research and devdopment environment;
Performance Management
Success of an organisation's business depends on its ability to set svafegy and objectives and
then plan for the resources and activities necessary to achieve them To ensure that these
pluuied activities acnially occur and lead to the fulfhent of the set objectives, the
organisation needs to msnage and improve its performance. Perfomiance management is
"the process by which the Company manages its performance in line wirh irs corponte and
functional strategies and objectivesn (Bititci et al., 1997). Performance management is
essentiai to the successful operation of the enterprise. It has become a key business process.
The performance management process is a dosed loop deployment and feedback ryaem
that sans with the company's vision, broken down into business objectives and strategic
goals. Action plans are created based on the achievement of these goals and objectives. To
monitor the progress towuds the accompiishment of these goals and objectives,
performance measurement is used to collect information, indicating where the nirrent
performance gaps exist. This information is then fed into the performance improvement
process, which narrows the perfomunce gaps and then feeds information back into the
process. In SV, the main elements of performance management are:
There are numerous rnodels for performance management. The next section reviews several
of these.
This section outlines the frameworks and models used by organisations today to design,
implement, maintain, and improve their performance management systems. These range
from models of the basic requirements for a quaRy management system such as the ISO
9000 standard for q d t y management to more holistic models for business excellence. The
latter includes the Malcolm Baldnge National Q d t y Awad, the European Q d r y Award,
and the Deming Prize.
Customen in today's marketplace require assurance of the quaiity of the products or services
that they are buying. To provide this assurance, organisations look to the ISO 9000 series of
standards for q d c y management to provide guiciance in the planning, implementation and
maintenance of an appropriate quality system.
A @ty system is a set of interdependent processes tbat h & o n hamoniody, using
various resources, to achieve the objectives relateci to quality (Karapeuovic and Wiibom,
1998A). The quai~tyqmem is a sub-system of the business system of an organisation.
The ISO 9000 senes of standards was developed in 1987 as a set of models that stipdated
the requirements upon which an e x t e d pany could assess an organisation's quality system.
The senes consisted of guidance nandvds and conformance standards. The guidance
standards ISO 8402, ISO 9000, and ISO 9004, provideci interpretations for using the
conforniance standards. The conformance standards ISO 9001, ISO 9002, and ISO 9003
represented three distinct f o m of funaional capability suitable for extemai qyality
assurance purposes. Companies applied the applicable standard to their organisation to
assure their customers of the @ty of their products and senices and to make their quality
efforts more uaasparent.
The original ISO 9000 senes was revised in 1994. The ISO 9001 standard in this version of
the model consisted of 20 elements that addressed all aspects of a q d t y srjem. This
sysem induded the organisation, allocation of responsibilities, procedures, processes, and
resources that joindy led to the provision of goods and seMces in accordance with the firrn's
quality policy and objectives (PG,1995).
The standards emphasised the asniance of quaiity of products and services through:
clarification of management poiicies and cornmiunent
identifilcation of roles, responsibility and authority (Elmuti, 1996)
establishment of clear instructions to ali personnel affecting qualiry
development of precise procedures and instructions in al1 areas of operationai activity to
e n w e consistenq and uniformity (kadi et ai., 1996)
This model has been used extensively by organisations 1over the world since its incepuon.
Today,over 400,000 companies world-wide are registered. There have been however,
severai criticisms made of the model:
tao much emphvis is piaced on documentation, creating bureauctacy in convol
rnechanisms and bodenecks when documents need to be c h g e d or updated
(Karapeuovk, 1999; Dale, 1999)
la& of emphasis on impmvement (Chin et al., 1995; Pun, 1998; Najmi and Kehoe, 2000)
la& of a suong focus on nistomer satisfaction @odinson, 1991)
frequendy mistaken as a guarantee for produa quahty (Bum, 1990)
In December 20d0, the ISO 9000 senes was updated for the second time. The 1994
version, which emphasised +ty assurance, has now been replaced by ISO 9001:2000 that
was developed to assis organisations implement and operate effective quality management
systems. The sUa;ty asnuance standard provided confidence that the requirements for
quaiity will be met (Karapetrovic and Wilibom, 1998A) through quality planning and
conuol. The new series adds the process of qwLty impmvement into a broader model
emphasising quality management. Q d t y management is the combination of quality
planning, q d t y conuol, and quaiity impmvement. This new emphasis on improvement
renilted in a section of the ISO 9001 standard devoted to measurement, an+ and
improvemenr processes.
The ISO 9000 senes now consists of a pair of quality management system standards: ISO
9001 and ISO 9004.
ISOSM)I
ISO 9001 s p d e s requiremerits for a qu?lity managrment system that c m be used for infernal application by
oqpnktions, or for c d c a t i o n , or for contracnui purposes. It focuses on the effectiveness of the qu;Jity
management system in meeting customer qukments. (ISO9004:2000)
ISO 9004 gives guidance on a wider range of objectives of a qu;ility management system than does ISO 9001,
particulariy for the continuai impmvement of an organisation's o v d performance and efficiency,as wd as its
effectiveness. ISO 9004 is recommended as a guide for o ~ a t i o n whose
s top management wishes to move
beyond the requirements of ISO 9001 in punuit of continual impmvement of performance. However, it is not
intendecl for certification or for c o n d purposes. (ISO 9004:2000)
These IWO standards can be used alone or a complementaxy models for an organisation's
quality management system ISO 9001 sets the essenrial requirernents and ISO 9004 shows
the way for future developments. To maintain registration status, an organisation m u s
perform intemal and extemal audits against the ISO 9001 model to show that it has met
these requirements. It can however, enhance the audit process by performing self-
assessments againn the ISO 9004 model. This process can help identify strengths and areas
for irnprovement in the quaiity management system in texms of its efficiency as well as its
effectiveness. If the issues identified in the self-assessrnent are addresseci, the results of the
next quality audit should show irnprovement.
While the ISO 9004 standard is a model for improving the efficiency and effectiveness of the
quality management system, other models have been k e l o p e d that address an even broader
set of organisationai activities. These are the National QuaLty Awarb or Business
Excellence Models (BEM) as they are often referred to.
2.2.1.2 National Quality Awardc
Three of the most pop& q d t y awards are the Malcolm Baldnge National Qua;ty Award,
the European Qua;ty Award and the Deming Prize. Each of these a w d has its own
focus, famework, mteria and scoring method
This award is named for Malcolm Baldrige, who served as Secretary of Commerce from
198 1 und 1987. His managerial excellence conuibuted to long-term irnprovement in
efficiency and effectiveness of goverment (NIST, 2001)
Organisations that aim at k i n g world-class focus on insrilling core values such as good
leadership, amorner focus, respect for employees, and continuous improvement
(Pannirselvam and Ferguson, 2001). These form the basis of the MBNQAaiteria. The
model embodies these essential values in a framework of seven main categones.
1. Leadership
2. Strategic P l k g
3. Customer and Market Focus
4. Information and Anaiysis
5. Human Resource Focus
6. Process Management
7. Business Results
There are two key assumptions thax devinthe modeL The fim is that the leadership
provided by top management is the primvy driver of the business. Top management m e s
organisational values and goals and direcrs orp.aiutional improvement. The second is that
the basic goal of the slUi;ty process is the delivery of mer-impruvingq d t y and d u e to
customers (Malcolm Baldnge National Quatty Awad, 2000). Figure 2-1 provides the
framework comecting and integrating the categories.
4
Information and Adysis
Organisations are evduated against a given set of criteria and a maximum total of 1000
points are allocated among seven award criteria Each critenon curies a different number of
points in accordance with its relative value within the a w d
The European Quality Award (EQM)was introduced in 1991 by the European Foundation
for Quality Management (EFQM).
The EFQM Excellence moQl is based on a set of fundamental concepts that formulare the
definition of excellence (European Quality Award, 1999). These are:
results orientation
amorner focus
leadership and consistency of purpose
management by processes and facrs
people dwelopment & involvement
continuous leaming innovation & improvement
partnership development
public responsibility
The mode1 incorporates these Fundamend Concepts in a set of nine criteria; five of which
are 'enablers', four of which are 'redts'. The 'enablers' criteria address what an organisation
does while the 'renilrs' cover what an organiution achieves. Figure 2-2 ilhwates the model
with the 'enablers' and 'results'.
1 Enablers Results
People
Key
Leadership Processes Performance
Redts
The Deming Prize was established, in honour of Dr.W. Edwards Deming, by the Board of
Directon of the Japanese Union of Saentists and Engineers W E ) in 1951. Dr. Deming,
one of the fathen of quaiity, is best known for his work in Japan, d e r e from 1950 onwad,
he taught top management and engineen' methob for the management of qualiry. The
impact of Dr.Deming's teachings on American manufacturing and semice organisations has
been profound
The orignal objective of this prize was to assess a company's use and application of
statisticd method (Dale and Bunney, 1999).
The prize consins of a cheddisr with ten major categories. These are:
1. Policies
2. The organisation and its operation
3. Assembhg and disserninating information
4. Standardisation
5. Human resources
6. Quaiiry asnirance
7. Mallitenance
8. Improvement
9. Effects
10. Future plans
Each pricnary category has six sub-categories (except for q d t y assurance, which has
twelve). The cheddist expiiady identifies the factors and procedures that constitute the
Company-Wide Q d t y Convol and Totai QwLty Control (CWQCrTQC) process.
Because it names specific techniques and appm&es, the ch& Y inherendy presuiptive.
There are no pre-designateci points allocarad to the individd sukategories.
The Dmimg PNc ir not b d on an udaiying fmmework linking concepts, aaiwies, processes and
resuits together. Furthemiore!,it does not assume an undcrtying causality. It si.& ~rovidesa lisr of
desirable or good gu;ility-orieûtedmanagement pncticcs. Its focus is on poliaes and plans;
implement;iOon of p h ; information collection, a d + ;mdcontrol; resulrs flowing frorn the
implemenmtion of poliaes and thtir effects; and fuwc improverncnt p h .
(Ghobadian and Woo, 1994)
Each of these rnodels har its own focus, scope, approach to evaluarion, and improvement
strateW. Table 2-1 illusvates these major differences.
F
Responsibilityfor Qu&y assurance
spnwlists and top
management
Idmufication of
ExeCUfive ExCCutive Executive
Identification of the
conformance and non- nruigths and svcngths uid existence of -ch
conformances, resulting oppominiria for oppomuiitics for dement through an
in a pasdfd verdia improvemcnt, and improvanent, and auditing process
scom i n d i h g the scores indiaring the
m;inuity of the cnanuity of the
managunmt v a n managemcnt syscem
Design and production nie entire The entire Process orientcd
processes, and dimdy- management synem, managanent system, nrong emphasis on
associateci support includlig ludcrstiip, induding leadership, proces
activities pluuung and the use people, policy and management
of infornucion and nntegv, puuiuships,
meuurunuits, the mourccs, proceses, Giteria confmed to
dorelopmenr and and the management the application of
management of of key business p r o ~ &,
e~
people, the mcrhods processes statisticd methoch
used for and q d t y c i d a
understanding
clrstomcr and market
rtquirrmenrs,and the
management of kcy
inuiness proceSKs.
1 ISO 9000 MBNQA EQA DrmingPrizt
Fnmcwodc I Basecion the vroccss B a 4 on an Based on an Does not u n i m e
undcrjuig fnmework mdatying anun-
linlunp conceps, fnmervorklinlung udty,umpIy
mkkks, processes concepts, &es, provides a list of
and rrnihs togerher proceses and re& &sirable or good
togtthff quality-oricnted
management
pncrices
( G h o b a b and
Woo, 1996)
CoaunlKnlS Quality
nonconformanccsand ilxpvmmfuung lmpmvemcnt
to pxwent m>ccurrrnce PIAN-DO- thrwghdd
of pmblans CHECK-ACI' cyde. conml
Appendix D provides a detailed cornpuison of the elemems covered by the ISO 9001
standard,the MBNQA, the EQA and the Deming Prize, in each of their cntena Table 2-2
presents an overview of the svengths and weaknesses of each model.
--
MBNQA 1 Deming R u e
I (%)
Ladership
Strategic
Planning
Customer and
1
12.5
8.5
1
Leadership
8
'1
Orpiution and iu
Market Focus
Information and
7
Standardisation 10
Business Results society Resuits
People resuits
Resulu
Custorner
Key Perfomiance
Results
Irnprovement
Future Plans
Ir is evident that each of the awards places emphasis on different areas of their criteria. Both
the EQA and the MBNQA however, assign the most points to the Results sections of their
model. The Deming Prize does not single this category out as being the most important in
rems of its scoring xheme (each is valwd at 10%). The MBNQA assigns 12.5% of its
points to Leadership and distributes the ren of its points among Strategic Planning,
Cusromer and Market Focus, Infornuon and Analysis, and Human Resource Focus
assigning 8.5% for each. The EQA however, w i p o d y 10% to Leadership d e givhg
Processes 14%. The People category is worth 9%, o d y slghrh/ higher thao in the MBNQA.
This cornparison process has rwealed that each of the performance management madels
have muiy nrengths. Each one could compensate for aaother's weaknesses. The next
section examines, in further detail, the research that has been done conceming their
The ISO 9001 standard for quality management is seen by many as a requed foundation for
a company's @ry and performance improvement efforts (van der Weile et al., 1997, Dde,
1999, Karapmvic and Willborn, 20O1B, Russell, 2000, Meegan and Taylor, 1997). For
exampie, van der Weile et al (1997) make the following comment:
Once the requirements for rhis standard have been met however, companies need to b d d
on these foundations to extend the principles learned to ail organisational activities and not
just to the activities relating to the quaiity management *en This means irnproving a
quality synern beyond the level of simply meeting spec&cations to creation of the proper
conditions for business excellence.
The transition from quaiity management to business excellence need not involve leaving ISO
9000 behind to move on to somRhing supenor (Meegan, 1997). To facilitate the movement
from ISO 9001 quaiity management to the o v e d business excelience embodied in the
quality awards, researdien niggest that these models be integrated (Mann and Voss, 2000,
Tonk, 2000, Dale, 1999, van der Wkle et al., 2000, Pun et al., 1999).
Pun et al. (1999), describe a self-assessed qual~tymanagement sysrem using the framework of
the Baldnge M d forthe integrarion of ISO 9000: 1994, ISO 14000, and the Baldrige
criteria. In a case stuciy, the assessrnent against rhis f r a m e d d l consisted of the regukr
auditkg and performance assessments performed by the organisation.
When there is a co11ection of afksystems or stan- fiam different ueu, efficiency is difficult
and misconcepuoas and coafurion often occur. It is &us ben to elimbae possible confusion and
sub-optimisation from the outset by establishing and maintaininga t o d systems approach.
(Puri et 4 1999)
Finai conclusions from Sun (2000), suggea that TQM and ISO 9000 srandards musr be
completely and systematicallyimplemented and i n t e g r a d Researchers must detemine a
method of c o m b i i g ISO 9000 and TQM, and bridging the gap bnween the two.
Mann and Voss (2000) present an innovative approach used by one company IO integrare its
ISO 9000-certified management system with the Baldrige model. The company concemed
developed its ISO 9000 qmem to address all elements of the Baldnge criteria. Of parti&
note is its process improvement approach that prioritises improvemenr projects based on
their expected impact on the company's Baldnge score.
Companies, who are ar present working for an "integrated quality management sysremw
where ISO is a major contributor, go beyond the requirements of the standard ro M e r
irnprove the performance of the organisation in various dimensions. The ISO standard is
thus the comerstone of TQM and, as such, presents both oppotrunities and challenges.
The challenges involved in integrating ISO 9000 and TQM are well reviewed in the
literantre. We have seen that ISO 9000 has been advocated as the fxst step towards total
quality management. The ISO 9000 series and the excellence models clearly have different
goals and perspectives and define total quai~tymanagement at different levels of maturity
(van der Wiele er ai., 2000). It is obvious then that the uiteria from the ISO 9000 series
cannot simply be incorporateci into a model for business excelience. The criteria represented
in the reference models are different, ISO 9000 representing the minimum requirements and
the quaiity award models k i n g more holisric paie, 1999). If rhis were to o c w , it would
lose much of its potency in the building of the foundatîon of an organisation's TQM
activities (Dale, 1999).
The quaiity a d models and the ISO 9001 standard use self-wessment and quality
auditing respectively for evaluation of rhe otganisauon against them. To integrate the
models would require the integration of these measurement methods. Karapetrovic and
Wiübom (2001B)explore the integration of quality audits and seif-assessment processes.
Another difficulty in integrating the ISO 9000and the @ty award modeis is the different
'scoring" schernes used by eadi. For example, when Tonk (îûûû) describes the integration
of the MBNQA and the ISO 9000 system, he suggesu:
The Bddrige scoring system uses percenrages, w h m s the ISO 9000 systern uses, in effect, a pus/fd
(conform;ince/nonconformuice)system Decisions need to be made as to whether to retain the
MBNQA percenage scoring sysrem and if so what scoring levels will be reqwred in each of the
uiterion in the new model.
Performance rneaswement is the process of coileccing data pertaining to al1 aspects of the
company's activiues. This data can then be used to help control and correct waning
performance areas and to set new targets for improved performance.
Each of the National QluLty Awub provides guidelines for perfonning organisational self-
assessments agalin the given set of criteria for business excellence. MBNQA provides a
Guide to Self-assessrnent and Action. The EQA provides detailed guidance to organisations
and suggests a self-assessrnent approach depending on the quaiity rnaturity of the
organisation.
These organisations usually perform self-assessrnent in one of rhree ways (van der Weile et
a., 1999):
taking the a d guideha and foiiowing these for intemal use in the sarne way as
prescribed in the respective guidance booklets for those organisations who are putting
forward a formal application for the chosen award
adjusting the cnteria and/or the scoring to fit the specifîc situation and goals of the
organisation
speQfying the parh and seps to be t&n h m the present situation ro the end goal.
Conti (1993) suggescs that organisations should use already existing data in the assessment
process and as additional information for the goal setting process. Some examples of this
data are:
cunomer survgs, amorner cornplaint statistics, marketing strategies
employee wqs, work safety statistics, illaess rates, absenteeism and fluctuation,
human resources development plans
processes e.g. processing Ume or process liability, ~rojectsand gained improvements
producr e.g. e m r rate. life duration and failure rates
fmancial e.g. trends conceming profits, sales volume, renim on investment (ROI),qwlity
coas &ink and Schmidt, 1998)
2.2.2.1.1 Self-AssessrnentProcess
The assessment method suggested in the ISO 9004 standard involves the evaluation of the
mamrity of the @ty management synem for each major dause in ISO 9004 on a scale
ranghg from 1 (no formal system) to 5 (best-inclas performance). The standard provides
exvoples of t y p i d questions that cm be asked duriag the self-assessment. It is suggested
that self-assessment can be used in a flexible way according to the needs of the organisation.
Two recommended m d o d s are to:
perfoxm the self-assessrnent on an individual basis for all or part of the quality
management system and then to pursue improvement.
have a cross-function group of people perfonn self-assessment on ail or part of the
quality management system, followed by group review and an*, then consensus
building,to detemilie improvement prioriries and action plans.
MBNQA
The Baldrige National Qwltty Progra.provides a Gui& to Self-Assesunent and Action.
This document ourlines ten seps ro conducting a self-assessment.
1. Idenufy the boundaries of the organisation to be assessed.
-7
2. Decide on a format for the assessment and action plan.
I
3. Write the business/organisaüon oveMew
4. Select seven champions and teams, one for each criteria categoty
l
-
5. Practice self-assessrnent techniques with the seven category
6. Càtegory teams prepare a response for their assigned teams
7. Share responses among te- and fiiulise the fmdings J
8. Assess the organisation's strengths and o p p o d t i e s for improvement
-1
I - 4 - e
u
9. Develop and implement an action plan for improvement 1
10. Evaluate and improve the self-assessrnent and action process JLl .~m
EQA
According to the EFQM,selectïon among assesmient methods should be dependent on the
quality ma- of the organisation. Table 2-4 presenu self-wessment approaches
correspondmg to the maturity of the oqpnkation and the desired effort level.
Award simulation
Pilot a w d simulation
Facihateci workshop
Pro-formaand wofkshop
Verv detaïleci questionnaire
This approach involves the creation of a questionnaire used to gather infomtion about the
perceptions of people within the organisation. Some questionnaires can consisr of simple
y e h o questions. Othen provide a set of possible a m e r s nich as A-Fullyachiwed, B-
Considerable progress, C-Some progress, or D-Not started. These questionnaires are
dinnbuted and used alone, or as nippon for more elaborate self-assessment approaches.
In this approach, an achievement ma& is developed For each category of the award,
statements perraliing to possible achievernents by the organisation are set on a scaie from 1
(minimum achievement) to 10 (greatest achievement). This is used as a basis for
management discussion and sening objectives for improvement.
Pro-forma
Here pro-formas are created for each sub-category. The description of the critexia in the
sub-category is printed at the top of the page with areas to address beneath it. The
assessrnent entails f&g in suengths, areas for improvement, and evidence collected on the
pro-forma itself.
Woikshor>
The management team is responsible for gathering dam from their unit and presenting the
results to their p e r s in a workshop environment.
Thic appmach is effectivelya simulation of entering for the award. The unit undenaking the
self-assessrnentwntes a full submission document. A team of trained assessors then
evduates this report.
The EFQM dso indudes in the EQA document, a figure that i i l m t e d the relationship
between the rigour of the different approaches and the quaiity of data captured. (See Figure
Qrnhuti
Process
<workrhop>
c3
Pro-f o n
Rigour 4
Low
Based on Opinion
Table 2-5 presents the evduation and scoring methods used by ach modeL
r
Mode1 Evaluation and Scoring Details
ISO 9004 Evalu?tes the m;uunty of the qu;rlity managtznenr 1 No systematic approach
system for cach major ciause in ISO 9009 on a s d e cvident, no results, poor
rianging from 1 (no formai system) to 5 (best-inîlus d t s or unpredimbIe
performuice). d t s
2
Problem or systemaric
appfo;idr; minimum data
on improvement resuits
~ a&le
S y s t d c pmess-bued
appmpC4 Fufy =%e of
system~tlcrmprovement ,
&ta avaiiable on
c o n f o m c e to
objectives and existence
of improvement vends
hpmvement process in
use; good resuits and
susuineci improvement
I I trends
5 Strongiy integrated
impmvement process;
best-in&s results
dernonstrateci
Evaiuates each element in the a d criteria bved on
the appmach, the deplayment of appmch, and resuits See Table 2-6for details
re?lised These are evaiuated on a d e from 0% to
100%.
Evaluates each elexnent in the award criteria based on
the approach, the depIoyment of approach, the resuits
r e d i d , and the assessrnent and review (RADAR) of See Table 2-7 for details.
these elemenu. These are evaiuated on a s d e fkm
OYo to 100%. I
r--
Results OutcomesinachieVing
the purposes of the
.
CuITentperformance
Performance relative to appropriate
r
item compvisons or bencbmarh
1 breacith, and importance of ~ o u r
performance impmvements
Assessrnent & Review The scope of evidence Remilu me;uurement of the effectiveness of
of measurernent, t h b r o a c h and deplayment is carrieci out
leaming and Levniag acùvities are used to idenufy and
Unprovernent activities share best practice and improvement
opportuniues
/
1
Gtpn from measurement and leamhg is
an w and useci KIidentify, prioritise, plan
and impIernent improvementr
Table 2-7illusuates the wduation dimensions used by theMBNQA
I m a c h and Dcployment
no systematic approach aident; a n d o t a l
Rcds
no resuits or poor results in areas reponed
l
eariy stages of a transition from re?cting to performance levels in a few areas
problems to generai improvernent results not r e p o d for mvry to most areas
orientation of importance to the cornpuiy's key
major gaps exist in deplayment dut wouid business requirrments
inhibit progress in ?chi+ the prinury
I(
a faa-based improvement process in place moa ueu of importince to the company's
in key areas; more emphasis is piaced on kqr business fequirements
improvement than on reaction no p a m of adverse trends d m poor
no major gaps in deployment, though performance lweis in areas of importance
someunrmayixineariyrvges to the appliant's key business requinmenu
some trends and/or current perfommce
lwels-evaiuated against relevant
cornparisons d m bencbmuks-show
areas of svengrh and/or good to very good
relative performance levels
I
p m & s is a key managem&t tool; nrong sustained excelent performance in most
refinement and integrauon - backed by ares
excellent axmlysis mong evidence of industry and benchmvk
approach is f d y deployed without any leadership dernonsvated in many areas
sipificuit weaknesses or gaps in any ueas
In self-assessment, once the evduation of each element is complete, the cmmhtive scores
are used to calculate a fnalscore. In both the EQA and the MBNQk this is a score out of
lûûû. These IWO points have k e n distributed among the caregories of the award by the
developers of these modeis based on the perceived imponanœ of each.
Table 2.8 uses the MBNQA categones to illusvate how a final score is calculated. First, each
category is evaluated out of 100% according to the process described previously. Nem, each
score is calculated based on the total poim value of the categoty and the evaluation v h .
For the Leadership category, the evaluation wu 60%, the total point value for the category is
125 so the score for Leadership is 75 (125 x 60%).
Point Vaiues
C;rtegory Evduation Aau;il Score M h u m Score
Leadership 60% 75 125
Srrategic Phnning 45% 38.25 85
Custorner and Market Focus 55% 46.75 85
Information and A d y m 60% 51 85
L
Human Resource Focus 52% 43.35 85
Process Management 40% 34 85
Business Resulfs 35% 157.5 450
Totai 370.85 IO00
In an initial assessment such as this, mon organisations do not score more than 250 out of
1000 points. World class perfoxmance would achieve a score of around 700 points, while a
score of 500 is exception@ good (Public Service Office, 2001)
A systematic, independent, and documenteci proces for ob- audit M d m c e , and waluati~it objecüvely
to determine the extent to which agreed aiteria ue fulfilled
(ISO 9000: 2000)
Severai elernents are essential to the performa~lceof an effective audit Fint, there is the
audit standard. Standards provide guidance on the prinaples of auditing, the management
of audit programs, the conduct of a& as weil as the competence of auditors (ISQ 19011:
2002). ISO 10011 is the m standard for @ty
t management system audi*. A new
auditkg standard however, ISO 19011, is being drafted to integrate quality and
environmental management system au&.
Before performing the audit, its scope m m be defmed. This should be based on the
objectives o r information desired byrhe client and should be communicated to the auditee
pnor to the audit (ISO 14010,1995). It is prudent ro do so to ensure that the auditee is
prepared wirh necessary documents or objective evidence to demonstrate cornpliance to the
cnteria being auditeci.
Audit criteria are the set of policies, procedures or requirements used as a reference (ISO
19011,2002). Audit evidence are the records, statements of fact or other information, which
evaluation of the coiiected a d t evidence a g d the audit &ria.
Audits should not be stand-done processes, but part of an overali auditing system (Goetsch
and Davis, 1998; Karapetrovic and Wdbom, 2ûûlA). Wdibom and Cheng (1994) suggew
thar a badine audit (a more cornprehensive and inteasive audit) establishes the starting
effectiveness of the sysrem and t h du+ the eariy p e n d of implementation, regulu audits
should be scheduled at reg& intervals to mainuia the inaeases in effectiveness of the
system. As the system matures and the effectiveness stabilises, audits should be scheduied
less frequendy.
The execution of any audit indudes sweral steps. ISO 19011 prodes a dugram to illustrate
the activities involved in the auditing process (See Figure 2-5)
T
I n i t i b g the audit
Appointhg the audit team leader
Defining objectives, scope and criteria
Determinhg the feasibility of the audit
Estabidmg the audit team
Establishing i n i d contan with the auditee
The objectives of a quality audit, as outlined by the ISO IO0 11standard, are to:
determine the conformity or nonconformity of the quality system elernents with
specified requirements
determine the effeaiveness of the implemented quality v e m in meeting specified
quality objectives
provide the auditee with an opportunityto improve the @ty systern
meet regulatory requirements and
permit the listing of the audited organisation's quality system in a regiaer
Organisations, and researchers in the performance management field, have developed many
performance mevurement models. These models range from a balanced set of indicators
that periodicdy show an organisation how it is performing in various areas of the business,
to integrated models that provide real t h e information with respect ro how thqr are
performing cmently and forecasts how thq. mry do in the future. As competitiveness
increases, organisations require measurement synems that provide not onty up to date
performance idonnation but also examine how these meanires interrelate so they can make
more informed decisions. Performance measurement systems should be aligned with
organisationai goals and objectives. This helps to ensure that the organisation is measuring
the efficiency and the effectiveness of the activities that have the greaten effect on the
achievement of these goals.
Selecting a set of measures that will fulfil these requirements can be a daunting task. One
method that researchers have used is to i d e n e uiticai performance areas and
corresponding meanires to coiiea the important data This data is then used to control and
improve performance in these key areas.
If an organisation dwelops performance mevurrs for each process, this may result in a very
large lia of measures. The question is, how does one select a few kqr measures that wili
ensure manageable data collection but yet provide a good indication of the naus of the
organisation's health.
M q authon have trieci to develop guidelines or approaches that will help in this selection
process (Keegan et al., 1989, Fitzgerald et ai., 1991, Kaplan and Norton, 1996, Dixon et al.,
1990, Neeiy et al., 1995, Globenon, 1985). To d s e the contributions of these
authors, performance measures should:
be linked to strategy
stimulate action
support long-terni improvement
emphasise whar is important to the organisation currently
cover ali the appropriate elements of perfonnance, not jus the finanaal ones
not be in conflict with each other
enable cornparison with other organisations in the same business
simple and easy to use
be mainly ratio-based Uistead of an absolute nwnber
be under convol of the evaluated organisational unir
be desiped based on discussions with the people involved (cunomers, employees,
managers)
be m a d y objective
Vary berween locations - one meanire is not suitable for all departmenu or sites
change as circumaances do
provide fan feedback
stimulate continuous improvement rather than simply monitor
Nurnerous performance measurernent frameworks have been developed since the late 1980s.
These framewoh provide information about the types of measures an organisation c m use
to track perfoxmance in a "baiancedmway. This ensures the Company is not just lwking at
its financiai situation as an indicator of its perfomunce but that all elements of performance
are being m e d and m o n i t o d Two of such h e w o & are the Balanced Scorecvd
developed by Kaplan and Norton (1996) and the model from Neeiy et al. (1995), which
consists of four elemenrs of perfoimance.
This nructure is baseci on the premise t h to achieve finuiciai success, the dt;matr? purpose of a q
organisation must be to satisfy customers. So orginisltons mut optimise their intemai vaiue-creating
processes. To do so,they mua l m and th& employees must grow in their individual capabilities.
(APQÇ 2 w
Three methods of performance meanirement have been presented in this lirerature review.
This section wdl review the work done to compare these methods in terms of their
applicability and usefulness to organisations.
Both audits and self-assessmentsshouid be dosed loop processes that foiiow Deming's
PLAN-DO-CHECK-ACTloop. Thk mearis planning for the audit or assessment,
perfomiing the a d t or assessment, reviewing rhe auditing or assessment process for
adequacy and effeheness, and making impmvements to the process as identifed in the
review.
Each of these processes is used as an evaluation method to detemine the aatus of the
current syscem A series of audits can be used to meawe the achiwed improvement of an
organisation's quaIity system but do little to indicate how fast it is going in a chosen direction
of improvement (effuency) (Karapetrovic and Wdbom, 2001B). Self-assessmentsare able
to measure this efficiency through the as- of current approaches to and deployment of
these approaches satisfying a given set of BEM cnteria. The uialysis should indicate
whether the current approaches are sound and integrated and whether there is systematic
and implemented deployment of these approaches. The remit is the ability to predict
whether these are sufficient to lead to improvement of the system. Thus, the objective of an
audit is to venfy compliance with a set of cnteria and self-assessment is used to examine the
driven for improvement (Karapetrovic, and Wdborn, 2001A).
The r e d t of a quality audit is either compliance or non-cornpliance with the criteria. Either
the organisation meets the criteria or it does not In a self-assessrnent process, the objective
is not to cornply with the cntena but to use it as a frarnework for idendjing svengths and
oppominities for improvement in each area of the BEM cxkeria.
When it cornes to perfonning the audit or assessment, the procedure is sirnilar. Both
processes are designeci around DemLig's Plan-Do-Che&-Actd e .
I1 T1 ~dentifyo ~ o x d s u u c n i r and
e mq&d
cornpetence for audit program management
Define audit..pr-
-.. objectives, wope, mler
Select approach and scope
and respoasibdiaes
DO Identifywdit teams Establish d-assessrnent teams
I 1 0 Ennve cornpetence and suitab* of auditors
I 1 Cummuniute audit pian
I 1 Manage the planning and suitability of auâitors Execute w e s sment
I 1 Gxnmuniute audit pian
I I Manage the piamhg and arecution of
Identify r e q d actions
I 1 P e r f m foÏlow-uPactions and/or audits 0 Incorponte actions into p h
Implement pians
perfofxxLlnce
A m Review and irnprove audit prognm h u g h
feedback and recommendations from the
dent. a& and auditor
Karapevovic and Wdbm (2001A)compare the principles and practices of qualicy audits
and self-assessments for the purpose of examinlig th& compatibihty and providing the
basis for integration.
The authors suggest severai suategies for increasing the capability and potential aiigriment of
audits and self-assessrnenu. These include:
Integration of reference models. This smtegy may involve a g r a d d conversion from
the basic requirements of ISO 9000 to the all-encompassing criteria of excelience
models, suggesred in literafufe. In that sense, self-assessments incorporate quality audits.
Integration of evduation merhodologies. Qwlity audits w o d be used for assessing
'hard controls", while self-usessments would be used for 'softer" issues and idenufying
improvemenu. In pnctice, this strategy is already applied.
Goss-use. Quaiity audits can be applied to enhance self-assessments, and vice-versa.
2.3 Perfo~nafliceManagement in RkD
A large portion of the quîliry problems rhat vise on the manufactuxing floor could have
been avoided completely with proper attention to the design process. Quaiity cannot be
tested into a manufactureci p d u a , but musc be designecl imo the produa. Most of the
focus of quality management research however, &als Mththe manufacniring and s e ~ c e
secton and lacksRSrD focus. The quality management pracrices that are successfd in
rnanufacniring environments are wd known and widely publishd The application of these
manufacnuing-based d t y pnctices in an R8rD environment is not as successful due to
the lads of replication and high level of variability in RBd) projeas (Kumar and Boyle,
2001). There are also high levels of uncextainry in terms of the impact of the produa on the
market and the revenue it wiU generare over the followhg years. It is more difficult to apply
@ty practices in such an environment however, the undedying concepts of quality
management are essenria to decreasing this variab'ilityin the R&D processes. Research is
needed to examine an R&D operation and idennfy pertinent quality management aspects
that are applicable in nich an environment. To adequately address this problem, there needs
to be an understanding of issues that are specific to an R&D organisation.
EspecialIy in North Amencan industry, the manner in which researchers and scientists in
R&D roles have been recognised and awarded has fostered a very individualistic work ethic.
Researchers often prosper by phcipating in a system that rewards individual achievement
and discourages alliance building and CO-operation(McLaughlui, 1995). This individual
recognition crûares an amiosphere plagued with individds working toward goals that will
move hem ahead without due consideration for the overall goals of the RgrD funaion itself.
This is counterpfoductive to the achievement of these goais. Individual performance and
mards need to be replaced with systems that reward team accomplishments.
As individuah are rewarded for their personal contributions to R&D activities, the
environment becomes one that encourages the achievemat of persona1 goals
The (R&D) environment is academic and contributions to and support of o%;iniszuonai goals and
objectives are minimai. In fact, mon researchen are unrwve of w h t the o ~ u o goah d and
objectives are.
(Swyt, 1999)
It is exuemely important that r e s e d organisations ensure they are focused on projects that
address the saaregic needs of the organisation and that rhese needs are being met effuendy.
Many of the factors that influence NPD cyde Ume are outside the R&D department's
control, making the process that much more difficult. C o p r a t e decision making, customer
needs, and orpan;Sational goals are all factors that impact the t h e to market of many new
products (McLaughLR 1995).
Fewer resources
Poor or uncertain economic conditions cui cause havoc with R&û funcihg and personnel. These
uncertain conditions have a dmmxic and powerful psychologid effect on projects, innovation, and
creativity.
@kLaughttr,1995)
Executives expect that the R&D function will perform successfullywith reduced resources
and unrealisric objectives (Kumar and Bayle72001). This reduction in resources affects the
spirit of the R8rD teams d o meanwhile must nniggle to keep improving cyde times to
keep up with the market.
W& moa research organisations there is a constant pressure to produce more results with
less budget in less rime. It is imperative therefore t h research organisations ensure their
cnticd resources, the research naff, are focused on proieas that address the strategic needs
of the organisation and that these needs are being met efficiendy (Endres, 1992).
Increased competition
The unergence of new technology gready impacts the RBrD environment. RSrD mua view
tedinology and scient& advames as tools to assis the o~anisationin meeting Company
goais (McLa.gbi.i, 1995). Inevitabiy, tedinology must be manageci within the R%D
organisation to benefit all employees/shuaiolders. The ability to manage effectively can
best be achieved through the implemenmion of quîlay management priuciples
(McLaughlin, 1995).
As a r e d t of these factors, the need for teamwork, efficient and effecrive management
sysrems, and appropriate management of technologies has become critical (McLaughLn,
1995).
One of the main benefits of irnplementing quality management in an R&D environment that
authors have reponed is the darification of the defdtion of 'quality in RBrD' (Pa&o, 1997,
Kumar and Boyle, 2001, Pearson, et ai., 1998). Several &finitions have been suggesteù. A
review of litaamre by K w and Boyle (2001) provides the following components of
'quaiity in R&D':
an understanding of who the R8rD client is and his or her values and expectations
what the key technologies are and how they can be used to meet R&D clients'
expectations and the needs of the entire organisation
who the R&D cornpetitors are and how t h q will respond to emerging R&D clients
needs
Qing diuigs nght once you know you are working on the nght things?c o n c e n t h g on
continually improving the system.
enabling people by removing barrien, and encoUrap;ig people to make their maximum
connibution
Many authors have written about the need to have systemauc processes for managing quality
to gain and remain in a cornpetitive position (Cooper et d,1990, Colurao, 1998, Auer et al.,
1996). The result of irnplementing such a q d t y approach is a hm that continuody
serves the needs of its customers (both internai and extemai) in an efficient and effective
manner (McLaughhn, 1995).
Several reasons have been provided in the literature for the limited use of quality
management practices in R8rD. These are:
concem that on of a qrulity myiagement prognm in RBrD nu& d e creative
woik and be counterpductive (Brown, et d., 1994)
the dificulty of meamring performance in R%D (Montma, 1992)
Lck of vainiog and acceptame by RBrD personnel of the "sofiwside of @ty, such as
teamwork and participation management (Montana,1992)
expectations (i.e. ahuays dohg it nght the frrn
the feu that it will raise u~vea~onable
thne) (PaGo, 1997)
concem thar it will d e proper recognition of individual accomplishment (Parino, 1997)
ciifferences in inrerpretation as to what 4 t y realiy is and how it is to be pmued
(Francis, 1992)
PaGo, (1997) suggesfs that some of these barriers can be overcome if there is sufficent
dialogue and darity as to whar ' M t y in RBrD' means.
Several authon have discussed the implications of implementing ISO 9000 in RgrD
environmenu (Cooper et ai, 1990, Davidson and Pniden, 1996, DeWeed-Nederbf et al.,
1995, McLaughlin, 1995).
Process driven quality synem mch as ISO 9001 are potenwüy of great vdue to control
the quality of the R&D process (Auer et al., 1996).
ISO 9001: 2000 provides an "ideal" oppominity for R%D managers to achieve the
benefits of total quality management and thus improvement in various kqr performance
dunensions (Jayawamaand Peuson, 2001).
W1thin the RBrD context, ISO 9001 is becomuig more popular as a way of making
people think and plan ahead and as providing a disciplineci way of capniring the R8rD
r e d t s (Cooperet ai., 1990).
The revised version of ISO 9001 look into the dyaamic chamter of organisations m
which issues such as leadership, people involvement, v e r n approach to management,
continuous ;.iprovernent and a fact -basai approach to decision-makingfor ewnple,
receive speciai attention. The need for more dynaxmc approach ro RBrD management
has been emphasised for yeus (De Weed-Nederfiof et al., 1995).
ISO 9001 addresses both the issues of better convol and continuousty raising the R&D
standards (Iayawama and Pearson,îûûl).
ISO 9001 is a good means of providmg a framework for developing a quality syscern in
R&D. It outlines the organisational nnicnup, management responsibilities, procedures
and processes r e q d to set the base for a "hoiistic @ty management system"
(Davidson and Pruden, 1996).
The Companycan adapt (select) from the specifications in the new standard,enabhg
them to ensure a good fit of the standard to their R&D activities.
The main advaatage of ISO 9000 in RBrD is that it provides a structure and consistency to
an otherwise chaotic process.
In light of the topics reviewed in this litenture search, the following points outline the
motivation for the proposed research.
7he ISO 9001 standard for q d t y management systerns is a stepping aone on the path
to business excellence. Extending these minimum requirements for a quality
management system to encompass ail organisational processes can be a daunting task
Methodologies for evduation of a d vernis desirable systern statu have been
developed for quality management systerns (quality auditing) and for overd business
performance (self-assessment). Both of these mdodologies have been proven to be
essentiai to an organisation's compet;tiveness. There is a need to analyse the
commonalties and differences between these method01ogies in order to provide a
theoretical baclspufld for th& b e n t and possible integtation (Karapetrovic and
~ b o m2001A).
,
Result-based performance masurement k a method01ogy for measuring an
organisation's performance. Organrwtions are Ehallenged ro select a rneaningful set of
performance measures thar wili provide a broad view of organisational performance.
Whde the abject of q d t y management in a manufacturing environment has been wd
addresseci, the application of these methodologies and theu implications to an RBrD
environment hu not. Further research is needed to explore the applicability of quhty
management frameworks in rhis type of environment.
This section describes the objectives of the proposed research. These are to:
develop an integrated model for performance management based on the ISO 9001
standard for @ty management and three national @ty awards to provide a reference
model for organisations wishing to move from the minimum requirements for their
quaiity management system to overall business excellence
condua a self-assessment against diis new reference model in a case study organisation
compare the self-assessrnent renilrs to the outcornes of a quality audit to furcher
investigate the opportuniries for integration of these masurement methods
review the redt-based performance measurernent system within the case mdy
organisation and compare rhe outputs to the self-assessrnent and the quality audit
moddy the reference model for more appropriate evaluation in an R&D environment
3.0 An Integrated Mode1 For Performance Management
3.1 Introduction
This diapter addresses the development of an integrated model for performance
management combining the concepts and criteria from the ISO 9000: 2000 standards and
three nationai quality a d . The chapter describes the development of the framework for
the rnodel and correspondhg criteria, and the establishment of a scoring scheme.
This section describes the development of the new mode1 for qualiry management named
the Organisational Performance Irnprovement Mode1 (OPIM). The Grrr part illustrates its
framework or underlymg suucture. The next sub-section discusses the application of crireria
from the other models to this framework Fin*, the development of an appropriate
scoring scherne is described.
The OPIM is a model that describes the C S 0 7 s quality system. Ir focuses on the continuous
meanwmenq monitoring and control of the sysrem's performance and its impmvement
(Kanpetrovic and Macey, 2001). Figure 3-1 represenrs the systems concept for applicability
to the OHM. This concept is based on previous research by Kvapetrovic and Wdborn
(1998A). The dotted lines nirrounàing the objectives and resources are meant to emphasise
rhe active role of the processes in the system and to indicate that these elemenrs are used as
inputs to the F e m not to de-emphasise their importance.
PROCESSES RESOURCES
OBJEC77vES PROCESSES
i MANAGEMENT MANAGEMENT
V I
......................... II
RESULTS
1:
..........................................
I
PERFORMANCE MEASUREMENT, MONITORING, CONTROL & IMPROVEMENT
Each element of the synem portrayeci in Figure 3-1 is a main category of the OPIM
framework These are:
1. Objectives
2. Resources
3. Processes
4. Results
5. Performance
The fm s e p in the integrauon of other models to fonn the OPIM was to use these
categones and to devise sevenl sub-categones that were thought to encompass the purpose
of each main category. The subsategories were created from a review of the content and
purpose of each of the a w d models un& evduation and the ISO 9001:2000 nuidud
Table 3-1 shows the i n i d set of caregoris and ~~b-categories
of the OPIM.
Once the categories of the OPIM were created, each awad model was reviewed to provide
an i n i d fit of rheir categories and sub-categoriesinto the OPIM framework Table 3-2
shows these matches.
conml
5.1.1 S ~ c m p a f o ~ c e 4.1
5.1.2 G ~ ~ a msatisfaction
n 82.4
5.1.3 h a m i audi 1 82 8.2.13 6.6
5.1.4 Proces~s 822 6.5. 6.4
5.1.5 l'mduci urd/or savicc 82.3 6.7
5.1.6 GmmI of noaconfonnity 83 83 1
5.2 AiillyPs of d m 8.4 8.4 4.2 3.3.8.3
5.3 Cormxivc action 8.52 6.1.6263 Sb,% 6.5.62
5.4 Prcvmuvc action 8.53 6.1.6.2, 6 3 Sb, Se IO
After ensuring that moa of the categories from the models were mapped to the OPIM, the
contents of the awards and ISO 9001 were reviewed to ensure that the categorymatches
were appropriate. This process resulted in the rearrangement and renarning of some of the
caregones in the OPIM to provide a more streamllied set of cnteria.
Table 3-3 illustrates the process as describeci above. The first parc of the table shows the
initial sub-categones in category 5.0 and correspondmg criteria The second pan shows the
modXed mb-categoies and their comespondlig criteria.
MBNQA EQA
5.0 hprovemcnt
5.1 Mcinirrmair, monitoring and convoi
5.1.1 S y n a n pafomunce
5.12 Luorner satisfaction
5.1.3 I n t e r d audit
5.1.4Pmrs~s
5.1.5Product and/or semice
5.1.6Conml of nonconformiry
5.1 An3ysir of duî
5.3 Conmive: action
5.4 Prcvmtive action
5.0 Perfonnancc
5.1 Management
5.1.1 S p e m
5.1.2 Key Pcrformuicc Outcomcs
5.1.3 K y Perfonnancc Indiuton
5.2 Monitoring and Controlluig
5.2.1 Audits 8.2.1.3
5.2.2 Self-Assasrnaits 82.1.5
5.2.3 Puformancc M a s u m e n t 8.1,8.2.1. 8.4
5.3 Improvanent 8.5.1
5.3.1 C o k v e and Prnteative Actions 8.52,8.5.3
5.3.2 Kaizcn d Quuinun L a p s 8.5.4, Anna
illustrates the caregones and comsponding de~cn~tiom
for categoxy 5.0 Performance.
5.0 Performance
5.1 Mui;igcxnent
5.11 Systan
O
- F i OPIM
-
Rczpciramnr
Desaibe the +cm appiieci to nmmre the ky paforrmnce outcornes idurtified in section
4.6.3 of OPM
Describe how the meuwpient spem for key performance indiators is contllidy
impmved
5.2 Monitoring and Conmlling
5.2.1 Audits
Repmaens (ISO 1,8.2.2)
-
Dexnbe the syscun applied t o perfonn internai and extemai audits against the rquircmcnts of
the ~lectedmanagement nandards, induding ISO 9001: 2Cûû and/or I S O 14001:1996.
Qpmozm ( I D , 8.2.1.3)
Describe h m the effectiventss, effiaency and consistency d the audit sysrun are continuaüy
;mpmvcd.
5.2.2 Self-Assessments (IS04,8.2.1.5)
Describe the system applied to perform rcguiar self-assessrnenuagainst the The CS0
Performance improvcment M d
0 qyJmmm3
Describe h m the effmiveness, efficiuicy and consisturcy of the self-wcssmcnt synern are
concinuaiiy improveci
3-4- I
5.2.3 Performylce~wumncnt~SOI,8.1,821,8.4)
(MBNQA, 4.1al and 42)
Describe the performance mevurrmait systan d to collea, moaitor, adysc, synthcsise and
1 act upon puvpioüs (cnan;J)and performanceindiators (iuitamal) &ring to:
- C U S t O ~
- shareholdus
- people
- suppkandputnas
- -ccy
(MBNQA, 4.1d)
Descrik h m the effecUvcness, efficimcy aud connsVncy of the performuice masurement
systcm arc contindy impmved
-
Describe the v a n applied to m o ~ o ridenufy,
, +, and rcmzve the cxisting ;and potenriai auses
l of nonconformiriesin in- pmccws, outprru, objectives, rcsources and d u .
(IS04,8.5.2 and 8-53)
Desaibc how the conrctive and prevcntive actions ur used in the business piau and how theu
effcctivaress is continuîlty improvcd.
5.3.2 Kaizen and Quannun b p s (IS04,8.5.4 and Anncx B)
To better integrate the requirements of the ISO 9001 standard and the non-prexiipnve
criteria in the qualiry a w d , each category of the OPIM was split into rwo aspects, the
'MinimumRequirements' and 'Opportunities for Improvement'.
The OPIM should be considered as a combination of quaiity assurance srandards that provide the
minimum requinmenu for quality improvement and business excellence modek, iliustnting the
oppomuiities for improvernent.
(Karapetrovic and Macey, 2001)
Table 3-5 outlines the fuial OPIM and the comesponding cnteria of the MBNQA,EQA,
Deming Pnze, and ISO 9001, ISO 9004.
Please note that there is no entry in element 5.2.2 from the MBNQA or EQA. The reason
for this is that these a w d do not specifically address self-assessrnentin their uiteria but
provide further guidance in sepante documents on this process. Please refer to the
Approach to Evduation t h supplement the EQA and Guidelines for self-assessment
that accompanies the MBNQA for comsponding elemems.
Once the framework and ait& for the OPIM were cornplme, a document cded 'OPIM
Fundamentas" was created to describe the undertying frarnewods of the OPIM, its content,
terminoiogy and application (Karapev~Mcand Macey, 2001).
This document is meant to accompany the OHM Criteria and contains general information
about the OPIM induding its relationship with the CSO's performance management system,
the framework of the OPIM,the content of its criteria, a description of terminology used,
and notes pertaining to its application.
Once the model w u complete, it was ready to be wd as a reference for conducting self-
assessments. To couen appropriate information for a self-assessment, the criteria were
translated into a set of questions to be used in assessment interviews. The questions were
based on the cnteria of the OPIM and were specific enougb to capture suffiuent
information with which to evaluate each element in the OPIM.
The questions were designeci to be open ended to obtain as much information as possible.
Appendk A contains the set of questions for the assessment. Please note that category four
is the r e d t s section that is used to evaiuate the results obtained in all other sections of the
model. For this reason, there are no questions for this category in the questionnaire but
evidence of the results in each pertinent category are collecteci from interviewees when
questions pertaining to these categories are asked. These questions ask the inte~eweeto
provide perception measures or performance indicaton that indicate performance relative to
the respective category critena.
To create a scoring scheme for the OPIM, it was fim necessvy to assign point values to
each of the categories of the OPIM. The OPIM was developed to help an organisation
improve its business performance. It wu therefore important to incorporate the perceiveci
contribution of each categoq to the organisation's perfomiuice into the final disuibution of
points. A multi-criteria decision making methodology, was used to determine this
distribution of point values. This approach enables each organisation uàng the OPIM to
incorporate the impacts of each category to their specifc business.
Mdti-cnteria decision making involves the selection of one alternative from a given set of
altemarives based on a set of criteria. Preference Function Modelling is a decision
analysis method010gy for mulUsriteria decision makiog. It is used to create a mathematicai
mode1 of the decision-maker's preferences for alternatives based on a set of critenk more
detaii see Banilai (1998, 1997).
R e f e h g again to the car example, once the altemacives are listed in the software, the
decision-maker is then asked to describe the set of criteria that wili form the basis for the
decision. Next each of the altemative are compared on one criterion. For instance, if we
have a blue Ford, a red Chiysler, and a green Toyota, the decision-makeris asked for his or
her preference for a blue car when compared to the altematives for green and r d This is
done for each criterion. Once this is done, the decision-maka provides mde-offs between
the criteria. For example, how many units of price would one trade for how many units of
fuel economy?
This methodology is used to select one out of a set of alternatives. However, in this
application, the software was used for a slighdy different purpose. The hope was to develop
a function of values to be applied to the OPIM categories. The software was used to rank
the caregones of the mode1 based on their relative contributions to business performance.
These ranks would then be trandated into a set of vaiues for each of the categories. Thur
instead of selecting one car, we are creating a set of weights that would dow us to evaluate
any given car on a single, uni-dimensional scde that weights the car's characteristics
The foilowing describes the development of this function of values for the OPIM.
TOdetennine the dimibution of scores among the categones of the OPIM,the Trillium
software was iwd In this o v e d function, the htghest ranked element f~anslatesinto the
category that is worch the mon points.
The relative contribution of each category to business performance w u captured using the
opinions of top management and those who had experience with BEM and self-assessrnent
process. A review of literature rwealed several instances where authors that have vied to
determine the relationship betweai quality management practices and business performance.
In 1999, Teniovski md Samson used several performance ourcomes as representations of
business perfomiance. These agreed with the connnicrs used by other researchers. The
performance outcomes were produaivity, competitive advantage, emplayee monle, coa of
quaiity, customer relationships, and product &ty. These outcomes were adopted to help
defme business perfomance in the decision modelling process.
To dwelop the peference function for OPIM,the foUowiq process was followed. The
alternatives are the categones in the OPIM and the criteria are the six components of
business identifid Sweral people, independent of one another, ranked the set
of alternatives in sets of five on each decision cnteria Figure 3-2 shows the scale used in the
Trillium software with severai elements from the OPIM positioned on it. After these
rankings were complete it was necessary to determine the uade-offs between the cntena to
indicare to the software which cnteria was the moa important to the organisation at the
present Ume. The Chief Executive Officer, Chief Operathg Officer, Vice President of
Finance, and the Vice President and General Manager of Division A were asked to indicate
the importance of each of these to the CSO in the Trillium software.
Appendix C contains the raw data taken from the Trilliurn software.
The end renilr of this anal* was a rmkiqof all the OPIM categories on an intemai scale
from 50 to 150.
It was decided that 1000 points would also be the t o d point value to facilitate cornparison
with the other award assessments.
The following process was used to change the ranks of the alternatives on the preference
function into scores out of 1000 for the OPIM.
1. The preferences on the scale were summed.
2. The sum was divided by 1000 to give a f-~rctor.
3. Each individual preference value was divided by this factor to uuisform them into
scores. The sum of al1 the resulting values wu 1000.Table 3-6 shows the results of this
process.
4. The resulting scores were rouded to give the result in Table 3-7.
I Pmfamcw 1 Scotc out of 1000 1
People 1% 48.49
* m t 148.77 48.09
customcr Rdalionships 144.44 46.69
1 4.6 Svstem I 1
cz I
i O OPIM
1 HMBNQA
1 O EQA
! OPIM Categories 41
1
There are siight differences between the models in ternis of the preference given to each
category. The EQA and the MBNQA are both very focuzed on the results categones. A
large percentage of the total points have been assigneà to this category in these cwo models.
The s c o ~ scheme
g developed for the OPIM has points that are more evenly disvibuted
among the categories. n i e point value of the resources categoiy in the OPIM is aiso ver-
different from those of the other models.
The distribution of these points in the OPIM is based on the opinions of people in the CSO.
This distribution of points my have a great effect on the final score in a seif-assessment.
Chapter 4 describes the performance of a self-assessrnent against the OPIM. A sensitiviry
analysis is done to answer this question.
3.3 Chapter S u m n w y
4.1 Introduction
The CSO's quality system has been registered to the ISO 9001 standard since 1995. Since
thar tirne, quality audits have been conducted to ensure the continwus cornpliance of this
system. The organisation had not however, conducted a self-assessment against a mode1 for
quality management or business excellence. Sweral seps were involved in conductiag the
fwst self-assessment a g h the OPIM (See Figure 4- 1). This induded planning, garhering
idonnation, evduating the r e d s and the assessment process, and incorporating the r d t s
into the business planning process. This secrion describes the seps involved in the pilot
assessment of one of the (30's business divisions.
4.2.1 Planning
The planning phase of the self-assessrnent induded definmg the scope, self-messment
method, resources, and tim$ines. The scope refen to the areas within the organisation rhat
wili be assessed This can ange from one depanment to the whole organisation. The self-
assessrnent method concerns how the infonnation will be gathered to complete the
assessment. (Chapten 2 and 3 ourline several nich methods). It is important to defme the
resources required to conduct a self-assessrnent before it begtas. These consist of
personhoun for coUecring and analysmgthe assessment info~nation.The tirneline for the
assessrnent must also be detennined in advance. This incldes times for information
coileaion, a d y s ~ and
~ , presentation of the resuits to senior management.
4.2.1.1 Scope
It was necessary to select a self-assessrnent method that would be appropriate for the
organisation as wd as meet the requirements and expectations of the CSO.
There are sevenl choices for appropriate self-assessment method, as seen in Chapter Two.
The seleaion of a self-assessrnent mode1 involves wsessing the maturity level of the
Company.
The CS0 had progressed well in the implementation ofits quaiity system. This suggests that
it has srarted its joumey towaràs excellence, and w u 'on its wy". As a r e d t , a more
rigorous assessment approach was deerned to be appmpxiate. The main objective of this
assessment exerQse was to collect information from the organisation to identify the
suengrhs and areas for improvement in each area. The initiators of this process were also
interesteci in gaining as much information as possible from the assessment. Because of the
amount of infoxmation required and the quality manuin/ level of the organisation, a variation
on the pro-forma approach (see section 2-22) was selected.
The pro-forma approach involves the creation of a set of pages where each page
corresponds to one sub-critenon. The description of the sub-critaion is printed at the top
of the page with areas ro address beneath it. The information requested on the page
indudes suengths, areas for improvement and evidence. I n t e ~ e w are
s conducceci to collect
evidence for rhis process. Once these are finisbed, the assesson then complete the pro-
formas.
Ln this self-assessment, a set of questions relating to the sub-criterion was asked of the
inte~eweesro uy to capture its essence. The assessor then identifieci the strengths and
areas for improvement based on the responses of the interviewees. Thus, the pro-forma
was completed by the assessor through the collection of information and evidence from the
interviewee.
The following organisational charcs indicate which representatives fiom eadi are? were
intervieweci.
A mauix contaïning the question set and the names of the inten?ewees w u created. This
was used to ensure that dl questions in the set were asked at least three times to three
different individuals. Questions were distributeci to employees through a nntified randorn
assignment (Mendenhall and Sinach, 1993). The employees were srratifid into
management and non-muugement to ennve that the questions would be asked to the
appropriate parties, appropriate for their function. Table 4-3 is a piece of rhis mauix.
Interviewees are listed at the top and the questions run down the length of the ma&.
'Yes" in a cell indicates that a question wrr asked of a corresponding inte~ewee.The 1st
row in the marriv monitors the number of questions asked each interviewee in total to
ennue an equal distribution The second last colwnn indicates the number of times a
particular question had been asked of an inrehewee to ensure at least rhree. The lasr
column indicates if ail the intewiewees asked the question were able to provide a usable
answer to the question. If this number wu not at leas three, the question was posed to
more inteMewees to get the three answers required.
p* manix
the &miew 1M 1 ldy 1 1 6.00
M d up session with (QA manager and 4 8.00
000) ldy 2d;iys
5 25
Conducc and analyse interviews 2-3W& 75.00
Wrrkr
1 Compare interviews and d u 1 1 Week 1 I weekl
1 Idenyfy OFh and r a s(3 OFI'r and 3 +'s
Der careeonr)
week wIFk
-
3
2
1
80.W
After the ~luiningwas complete, the next phase of the assessment involveci conducring
interviews, reviewing and e v a l b g responses, reviewing resuits, and crearion of the final
report.
InteMews were scheduled through intemal e - m S Each interviewe was sent a List of
questions to feview before his or her scheduled interview M i e . The interviews were
conducteci by the aurhor and were recorded dire+ ont0 a laprop computer. Aher each
meeting, the notes taken were rwiewed and if any dacificarion was necessary, a phone c d or
e-mail was made to the interviewee.
Objective evidence wu also coiiected from the interviewees. This evidence included the
following:
customer satisfaction nwqr re&
employee satisfaction nwqr results
monthly performance data from the result-based performance memement system
This evidence was used to evaluate the Redts section of the OPM The data was reviewed
ro see if trends from the pas few yean have shown continuous impmvement.
At the end of the interview process, the ansvers from each interview were reviewed. It was
here that the i n i d analysis of the responses took place. The three answers to each question
were midied to determine if thqr described the same approach. If al1 three answers were
sirnilar, this would indicate that there was good deployment of the approach across and
down through the division. If an inte~ieweein a management position described a strong
approach but other respondents did not concur, diis indicated that the deployment of the
approach was weak. If, after getting these dvee answers, they wue ail different, the question
was posed to yet another h t e ~ e w e e .If al1 four of these responses were different, this
niggested that there was no consistent approach to the element in question throughout the
division.
After ensuring that each question had been arked a SuffiCient number of thes, the author
and a member of the quaity assurance team ma to discuss and evaluate the amvers. The
three or four responses to each question were Nmmanred before the evduation Each
s u m m a h d question was evaluated first accordllig to the approach describeci. Appendix E,
adapted from the EQA, darifies the scores given for approach, deployment and results.
Each evaluator scored each question independen* as per these definitions If the scores feu
within 20% of each other then the average score was taken for that question. This range was
felt to be acceptabie to the assessrnent team since, as we can see in Appendix E, the range
foreach score level is 20%. If however there w u a gap greater than 20%, then discussion
ensued This was a vduable part of the evaluarion process. A large gap occurred onlytwice.
The discussion that followed led to a re-scoring and a s d e r gap.
These questions were asked in order to mess this aspect of the organisation's business.
What are the systems used to mevure organisationai performance?
H o w are these synems interrelated?
How are these relationships manageci and improved?
The responses to these questions provided enough information to evaluate the approach and
deployment cf the methods to satisfy the given element.
Approach:
There wu some evidence of a sound approach to internai auditing and remit-based
performance meanirement.
There was no self-assessrnent process in place at that t h e .
There w u some evidence the performance rneasurememt systern suppoxted policy
and strategy and that the interna1 auditing process w u well defined
Each department tracked its own perfonavrce measures but had its own merhod of
daetmiaing which performance areas needed monitoring and how this information w u
colected.
Ther- was no evidence that the relationship berween the intemal auditing systern and the
performance measurement system is managed or improved at d
The average score given was 20%. Refeming to Appeadk E, we can see that the CSO had
oniy some evidence of systemauc approaches to satisijmg the criteria in the given category.
Deplqment:
The audit resulu were used u a performance measure in the q d t y u s u r u i c e
department.
There was some evidence that the approach to internai auditing and remit-based
performance measurement was implemaued and deployed in a systematic way.
There was no evidence that any type of self-assessment process was implementedor
deplayed
There was no evidence of a weil-deployed and implemented method of remit-based
performance meanirement.
The average score given was 13% Again, the assessrnent reveaied that the CS0 had little to
no evidence of systematic deployment of approaches satisfyuig the criteria in the given
category.
4.2.2.4 Results
M e r the xoring w u complete for each sub-category, a lia of svengths and areas for
hprovement w u compiied. These were based on a bendimuking ana+ to derennine the
ben p&ces within arez Some of &e m g t h s and areas for improvemenr were
evident from the cornparison of the organisation's a p p r d e s to each part of the critek If
there were apparent gaps in approaches or the deployilent of these approaches through the
division, these were mentioned as part of this list as w d
A final presentation of the results of the assessrnent was made to the managers and directors
of the division The results were also communicated in a Gnal reporr that w u left wirh the
CSO. Each page of the body of the report conrained the sub-category title, the fmal score
for that section, the criteria in that category, the list of strengths and areas for irnprovement,
and some examples of what excellent companies do. Figure 4-5 is an excerpt from this
repon.
5.1 PRfo1111;~1ce
Management
5-13 Key Performanceindiaton
1 1 I
1 1
Pcrfonnîna Monitoringand Gnuolling 12 27% 43
Perforxuncc knprovanmt 12 28% 43
Ova;ill OPIM S c a c 281 1 28% IO00
A score of 284 on the first assessrnent indicates that the CSO and the division that
undenvent the d-assessmuir have embarked on the joumey towarb excellence. This
score is not to be taken as an absolute accurate 'proportionw of business excellence (Le. the
Company being about 28% excdlenr), but as an indicator of which areas within the
organisation are further dong than others (Le. some categories received a score of 50h
whereas others scored 30%, meaning the fint category is not as developed as the second
one). It is not the absolute score in each category that is the most important eitha but the
translation of scores into priorities for impmvement that is the most value a d d d
4.2.4 Outcornes
Once the fmai scores of these categones were caldateci, it was important to prioritise the
results. This would assist the in the process of selecting the area on which to focus
improvement efforts.
This prioritisation was based on the score achiwed in a speciiic catego'y and the value of the
category. Table 4-4 illustrates the prioritisation process. The categones are ordered by score
achieved resulting in a score index. The categones are then ordered by total point value
giving a value index. These index values are then multiplied resulting in the total index.
for
Perfomiuice Management 11 12 44 18 2 16
Supplier and P m e r Rcsults 2 25 33 8 200
Resoufce Management 14 7 47 23 161
Perfommce Monitoring and Conuolimg 12 10 43 16 160
RÊ;ilis?tion Prucesses 10 14 37 10 140
Desien Processes 13 8 43 17 136
- 0 ~ Score Scorekidcx Vaiue of ' Value Index Totai Index
Achieved Gccgory
Performance Impmvement 12 9 43 15 135
Infr;isuucnueResources 8 19 30 7 133
Work Environment 14 6 45 21 126
NaturalResources 4 24 29 5 120
Shareholder Renilrs 9 16 30 6 96
System R e d t s 4 22 28 4 88
Strategy Development & Deployment 17 4 42 14 56
Support Processes 8 18 24 3 54
People fiesources 25 2 53 26 52
&orner Results 16 5 35 9 45
Pudashg Processes 7 20 23 2 40
Financiai Resources 18 3 40 12 36
SocietyResults 1 26 10 1 1 26
Management 27 1 51 25 1 25
The self-assessrnentprocess providecl the CSO with severai important outcornes. Firn, the
self-assessrnentprocess itself was i m p o m t . The pilot assessrnent will provide valuable
information to the organisation regardmg how best to conduct their self-assessrnent process
in the future. A h , a review of the strengths and areas for improvement found in the
assessrnent will be beneficial as an input to the m u a i business planning process. The final
score on the assessrnent wili be a usefd benchmarkuip tool as weli as a good quantitative
indicator of the statu of the quaiity management system and its level of business excellence.
The observations and recommendations resulting from this wessment were the following
Objectives
Suppliers and partners are not involved in the strategic planning pmcess.
There is no syscematic process to follow-up on action items to determine if they have
been completed and to evaluate the gaps.
Processes
Lack of syste~llitticincorporation of leamhg and customer feedback into design
processes.
No systernatic process for incorporation of current and projected infernal Nsromer
requirements and priorities into the design of support processes.
No review of customer related processes to ensure they are dmeeting custorner's
requkemenu.
Collecf and use data from day to day contact with customers to enhance customer
satisfaction levels.
Resources
Provide managers with a report of only those budget items that thqr have control over.
0 Develop meanires for detennining the effectiwness of employee development and
training.
Develop a formal process for providing timely feedback to suppliers and parmers on
their performance.
Develop a synem for waiuariag the uade-off berween maintaining 'old" techdogy
and investing in new technology.
Results
Review the reporting of perfomance measures ro ensure that vends for the pan three
years are evident and that rargets are explicitly xared.
Performance
Irnplement a review of performance measures used to track rhe performance in each
deparunent to enwe thqr are reflecting the key drives of your business.
Focus on closing the loop. Irnplement processes to e n m that outputs from co~~ective
and preventive actions become inputs to design and process control activities.
4.2.5 Evaluation of Assessrnent Rocess
As this self-assessrnent was the k t for the CSO, the organisation and assessors reviewed
the process to evaiuate its effectiveness and to suggest impmvements. This should become
a reg& pan of the assessment proceu. Severai questions should be asked within this
process.
Was the tirneframe appropriate for pmper feedback into the business planning
process and 0 t h processes that would require input fiom this process?
This self-assessrnent did not oc= at the proper t h e for the results to be fed into the business
p l h g process. These self-assessments should be perfomied doser to the beginning of the
new planning q d e for the year.
This self-assessmentprocess involved many people wirhli the CSO. The tirne involved was
lengthy. As this was the first assessment of ths kind performed within this organisation,it is
useful to evduate its value to the Company. One wayto do rhis is to compare the process
and r e d t s to those of a q d t y audit performed in the same rime LamP. This anparison
indudes:
the resources required to perforrn the self-assessrnent and the quality audir
the processes themselves
the type of r e d s obtained from each process
the value of idonnation obrained from each to the o v e d performance of the business
The ne= chapter deais Mth such a comprison proces. It also lodrs at remit-based
perfommnce measufement in &on to self-assessrnent and quality a u d i ~ g .
5.0 Performance Measurement
5.1 Introduction
The CSO uses several methods for measuring organisational perfonnance. The self-
assessrnent desuibed in the previous chapter is now compareci to wo other types of
perfonnance measurement used by the organisation: a quality audit conducted in the same
time frame, and the red-based performance mevureman used to continuously monitor
the processes 4 t h the organisation.
Both the audit and self-assessrnent resulted in a set of recornmendauons for improvement.
The audit's recommendations resulted from the non-confonnities and opportunities for
improvement identified by the lead auditor. The recommendations from the self-assessrnent
arose from the areas for improvement found throughout the process. Table 5-1 shows the
main areas requiring attention that were identified in each of these processes as a remit of
the prioririsation process oudines in Chapter Four.
The Process Management category h m the OPIM however was found to be the weakest
element. This corresponds well to the audit findings since Process Management
incorporates elements 4.4,4.6,4.9,and 4.1 1 of the ISO 9ûû1 standard.
The category identifid in the self-assessment that does not seem to have been identifieci in
the quality audit is Customer Reiationships. Elemmts 4.14 and 4.17 were identiûed in the
audit but no related elements stood out in the self-assessment. Customer Relationshps in
the OPIM indudes element 4.3 of the ISO 9001 standard and a srnail part of element 4.4
deaiing with identification of cusromer requirements. Element 4.3 was not identifieci as
requiring major attention but f d e r an+ indiates an agreement h e e n the weaknesses
within Customer Relationships and those found within element 4.4 Design Conml.
Table 5-2 shows the main recormnendations, and non-cornplance issues and ares for
improvement idendied in the self-assessrnent and audit respecciveiy. The table lins the
main caregories in the OPIM with corresponding recommendations. T h e non-compliuice
issues and opportunities for improvement redting from the audit have been listed
accorciingly. The issues underlined within the table have been identified as si& issues
arising from the audit and self-assessment. As was illustrated in Table 5-1, many of the
recommendations from the self-assessrnent do not correspond to any in the audit as the
audit covers onty those items in the ISO 9001: 1994 standard. Those that were identified as
major issues in the audit may not have been major issues in the self-assessment. This is
because other issues arising in the self-assessrnent were ranked at a higher impomnce level.
M Qurlity Audit (Oct 27 NOV2,2000)-
Objectives
Qriltrysysta
Focus G devcloping a process ro follow-up on Use ISO 90012m direction for dcploying stratcgic
action items to dccumine if thcy hne been ptnn;np prinC;Plcs t o &me bmuiinkage berweai
completcd m d to ev;ihiue the gaps svPegic objectives & the systcm dtslgned to achieve
Review the timing of rhe digment m e y to ensure tbmi
t h R is opirml to pmvide input into the ;inrnul
-
items that they hne control over
-
N o compiiancc issuCs
Devclop mevurs for detuminùig the effecllveness
of employee devtlopmc~itand uaining No compiiancc issucs
Wew ROI pioccss to msurc consistent use ;uross
the division N o compluace issues
Cdlm and mriew dadinfomrztion coaccrning the
effiuency and effmiveness of informuion systems No c o m p ~ c isnics
e
and availabilityof data
Deveiop a synem for e v a i w the uaâc-off N o compLUnce issues
betwecn mîintaining 'oldw technology and investing
in new technology
Design Control
Consider using quahy funaion depiuyment to
Processes idaiufy the uue c u n o m a speufications & not what
tbey think thy wuit
Consider ;idopUng suicca DFMEA & PFMEA
Develop a process to incorporace cumnt and during the e V t y p k s
projected i n t e d cusromer requkmcnts id Use t- feasibiity Jgn-off a p p n d i
priorities into the design of nippon proces~s
Implement a rcview of amorner rctted processes to
ensure thy ue aiil mceting customa's rcquircments
Coüm and use data from day to day contact with
custorners to enhance customer satisfaction levek
for
.. .
Move t d tnic supplier qu;ilif~cationin pkcc of
to s- on k product quaMcations
IKtfofminrC Consider a formal sys~cmfor achicving the above
Intenul Audits
Prioritise audit ;ictivillcs b w d on due-added and
effective w of reu,urces
Numaous comcWe isnies ourstuiding. Consider
an &on Clause
No objective evidence that mut?gcmuit personnel
rwiewcd audit fndings
Indepuidence of auditors not evident in di cases
Statistid Techniques
Several issues can be ewacred from this comparison. A mjor problem identifid in the
q d t y audit (element 4.17) was that there was no objective evidence that management
personnel reviewed the audit fmdings. This was also emphasised by the fact that there were
numerous corrective issues found to be outstanding. This is one of the main differences
berween the self-assessrnent and auditing processes. It is evident that the outcornes or
recommendatïons from the quality audits are not reviewed and acted upon to an acceptable
level. The results are not fed back into the business planning process. The self-assessrnent
fmdings on the other hand were presented to senior management and were considered
usefil to the planning process.
The OPIM has attempted to incorporate the basic reqykments for the organisation's q d r y
system. If there were any non-conformances arising from the audit, it should follow that the
corresponding element in the OPIM would be judged as inadequate. If the minimum
reguirements have been met, the score for the eiemem in the self-assessment should be
hrgher. It does not indicate however, that ail the critexia in the corresponding element of the
seIf-assessrnent have been met. Figure 5-1 iliumtes this concept. The ana of the triangle
represents the relative percentage of elemenu with:
no non-conformanceswith a low score on the assessment
no nontonfonnances with a high score on the assessment
non-conformances with a low score on the assessment
nonsonformances with a hi& score on the assessment
Self-Assessrnent 4
Low W b
I
Wouid h?\e non-
conformanceswhilc
0bt;ilring a hi& score
on the self-asxssment.
Audit
The r e s h of the pilot self-assessrnent and the @ty audit with respect to the concept in
Figure 5-1 are illustrateci in Table 5-3. A l m score on the seif-assessrnent is a score in the
bottom @e of the xores on the self-assessment. A hi& score is one in the top quanile
of the scores.
This corresponds well with the hypothesis presented in Figure 5-1. The highest percentage
of elemenrs is in the quarter for low scores and non-conformances. The lowest percentage
of elements is in the quarter for high scores and non-conforniances. The other rwo quarters
are almost equal.
Figure 5-2 compares the scores on the OPIM to the elemenu of the quality audit that weie
found to have non-conformities. On average, the self-assessrnent xores were lower when
corresponding ISO 9001 elements were found to have non-conforniinces. The results do
Vary. Keep in rnind that the elements of the OPIM in moa cases cover more than
corresponding elements of ISO 9001. It is possible to have a low score on the OPIM men
if there were no non-conformances found in the audit. There should not be however, mun,
elements in the OPIM that achieve a high score if rhere are non-conforniances found in the
corresponding element from the ISO 9001 standard
5.2.1 Implications for SirnultaneousAuditing and Assessrnent
The self-assessmentperfoxmed againa the OPIM provided much information regarding the
effectiveness and the efficiency of al of the organisation's processes. In particular, suengths
and areas for improvement were identifieci in processes related to quality management. A
comparison of the resuits of the self-assessrnent and the quality audit rwealed that similar
issues were idenufied in each process. The implications of this are far reaching.
It is evident from this exercise that performing self-assessrnent on the elements related
to q d t y management c m provide valuable information regardhg rhe effciency of
these processes. This c m cl+ the quality audit, which aims to judge the effectiveness
of such processes.
The men& and weaknesses identified in the self-assessrnent process are incorporated
into the business pknning pmcess. This ensures that the areas for improvement, related
to the quality management system, are iopns h o rhis planning process as w d . This
compensates for the fact that the results of quality audits are not incaporated into the
business planning process.
Self-assessrnent of the processes relating to +ty management, especdy if perforrned
a opposing times of the year from the interna1 quality audits, would lead to further
improvements to the efficiency and effectiveness of these processes.
Self-assessmenr against the MBNQA and the EQA involves the evduation of organkationd
results. These reniks are assessed based on the history and trends of m m e s that have
tracked perfomiance in each of several areas. Each a w d suggests areas of performance
that should be monitored by an organisation. These are found in the Results caregory of the
EQA and the Business R e d t s categoxy of the MBNQA (See Table 5-4).
Gregory 5.2.3 of the OPIM, Performance Meanirement, uks the organisation to describe
its perfomiance measurement V e m (see Figure 5-3). It is at this point that the
organisation's resuit-based perfomiuice measurement system is wessed It is also here that
the organisation has the opportunity to i d e n e any gaps in ternis of areas it needs to be
meamring.
- people
- supplias and partnen
- Society
qptm- WNQA4, . 1 4
Describe how the effectiveness. emciency and consistency o f the performance
measurement system are continually improved.
OPIM
The CSO has IWO main divisions. Each of these has its R&D, marketing, and manufacninng
components but are assisted by the same support departments. These are cornputer
services, quality conuol, quality asniance, hurnan resources, and finance. Division A
focuses mady on new produa development. This means the design of new integrated
circuits @Cs) to meet the needs of its customen. Most of the new products developed are
manufactureci out of house. Division B has both new product development and on-site
manufacturing. The divisions are quite different h m one another but both must conuibute
to the ovedl adiwement of profitable gr&
Most departments have dwdoped their perfoxmance measures from the objectives of the
depanment, which in tum are developed h m the CSO's overall objectives. To improve
the C D ' s performance measurement system, it is important to identify gaps where aspects
of performance are not being measured.
Explmation
The pcrcmtage incmasc in d e s over the pmiious ycu (5 veu compound)
(Prr-tuincomc-invesmicntinromc-tucs)/~oril~-cuh+ ST-
Ilbiliries)
(Incomc/ average equity)
(incorne beforc tax + d a r i a and bcnefits)/(numba of crnployces)
Percaitigc inarve in shvt pice over the pmrious y a r (5 y a r compound)
Qualicy This is the numba of defects o k c d on di batches submitted to QA for
Assurance (to QA) in pans & - d o n (AIQ -pli%
@pm))
Producr Group 1
P d u s t Group 2
Prodm Group 3
This is the nurnber of defms observai in thc acceptable batcùa a the QA
(AOQ ( P P ~ ) )
CAOQ (cuxoma average This is che number of defective renirns observd in the total quuitiry s d c i
outgoing quaiity)
Qwlny Assurance Inspection This is rime from buch urivai ro arrivai u stores
cvdc umc
Clrnomcn d g produas want to knaw the 'rooc cause" of fdurc
- ..
A d r m e d life testing QuîLfying
Coafirmcd dcfecûve from cunoma by QA
-
NP1 New This is the p e r c a i w of corponte revenue genented from p d u c t s
Roduct
Introductions
revenue invcuaiin'~~~
Pmrntage
. .
effort for top ten This is the pcruntagr of anplqrcc t h e spenr on the cumnt top tai priority
Sales
V
-&on Producrion rate vs. MPS (%) 1 Amui pfodunion vasrrr the w produccion schcdulc
Wdcr Fab. yield (%) 1 The d e r yield before elcarialunLig (physicd ody)
BasiiiccyderLN 1 T i from the stzrr of firn operrtioa in production to end prochicr into
1 invmrory (m produns)
Product mU vs. MPS 1 The actuai mix of produas compvcd to the sch& mix of produas in
1 nwerproducrionschcdulc -
Asscmbly Opcrations/Test/Extemal
Asscmbly Master Production Schedulc Accuai prafuaion vernir the miner produaion schcdule
(MPS) Rue (%)
Yicld (%) Number of finished pro du^ v a w numba of produns stvtcd
' Cyde (w*) T i from the ninof firn operaion in production to end prodricr into
uiventory
The amai mù ofproduns çompued to the d d c d mix of pro& in 1
Testing
(Extemal
and Intemal)
The actual mix of produar testcd cornpucd to the scheduicd mir of turing in
~produaionschcdulc
. AIQ (ppm)
Prototype cyde timc in-
howc/offshorc (w-bys)
Several interviews were conmicted to gain information about the current measures being
used. These measures were reviewed with the manager of QA, the VP of Research and
Developmen~the VP of Manufaauring, and the VP of Finance. Each one was asked a
number of questions pe~ainingto these measures.
Quesuons VP Finance
Which
performance meaSures are measures are although these
indicarors are most imponant with the manufacnuing need to be
important to you in possible exception COR explained
determinhg the of the Quai~ty on-rime thoroughiy to the
performance of Assurance delivery attendees at the
your department? Inspection Cyde montMy
Time, which is qdty(%
defects) performance
done for customer meetings so that di
satisfaction production of
appropriate measures used are
reasons. These undersrd
meilSufes are a volumes
good indication of Other
the performance of healthand
the QA safety
deriment.
measures thu you
feel are not quite as
useful as they
could be?
Quesuons
Do you fed thît
yourperformuice
indiuton are in Yes Yes Yes
Yes
line with the
go;ils/objectives of
~
this 50%
improvement. to determine
tuners. ~
Based on this set of interviews, the foflowinglin of strengrhs and areas for improvement
was created.
Strengths
The measures used in the Quaiity Assurance, R8rD and Manufactwing are felt to be
adequate to capture perfoxmance in each depanment.
The meanires are felt to be in-line with the organisation's strategy.
The CS0uses its performance measurement infommion in monddy meetings.
A r e a s for impravemcnt
Most measures are monitored monrhly. Some may need to be mcked more o h .
There is no systematic review of these measures to ennue that they are d l meeting the
needs of the organisation.
Littie bendimuking is done to set competitive targets for improvement.
Targets are set according to historiai performance in R&D.
Table 5-10 places the CSO's perfoxmance measures wirhin the four penpecrives of the
Balanced Scorecard (BSC).
Fimacial Perspective I n d Business Perspective
Sales growth Design cycle time
RRurn on Average Net Assets (ROANA) De* 4 w
Rcturn on Equity (ROE) Devclopmait effort
Vaiue addecl per pcnon per year Milestones on time
EPS growth Manufaawingcyde Urnes
Design-ins
Yield
Supplier on-time delivery
Qu?lity of supplier products
Billingacmmq
Ir is evident that the C D ' s measures fit well inro the BSC fîamework The weakest category
seems to be Innovation and Learning. The CSO should find several more measures
penaining to its performance in this area Sorne suggestions follow in the next section.
I I l Investment in NPI
NP1 investment as % of forcas menue
This set is comprehensive. The con category however, is quice weak. This uea should be
reviewed to ensure that the organisation uuly understands its costs. O n e important aspect is
the identification of the c o s of quaiity. This is not addressed at all by the CSO's
performance measurement system. This indudes looking at preventative, appraisal and
fadure costs to show management the costs of poor quaiïty, to idenufy opporninities for
improvement, and to idenafy hiden costs.
A third set of measurement categories is found in the Resuhs sections of the OPIM. The
OPIM incorpontes the meanires suggested by the MBNQA and the EQA. Table 5-9
compares these measures to those that are mcked bythe CSO.
1
i OPlM Case Study Orguiisation
Reput;ition -orner Satisfaction Survey
Nature
Work EnWonment
EPS
Net Profit
On-tirne shipments
Schedule Accuracy
FA Success Rate
Mes
Design-ins
Accordhg to the utegories of perfonnuice in the OPM, the CS0 is missing perfomiance
measures that reflect the effiaent and effective use of the organisation's r e m c e s . Table 5-
10 provides suggesred meanires that shodd be incorporateci into the CSO's m t set of
masures to monitor the use of resomes. The suggested meanires have been taken from
several sources induding the E Q A
Royalties EQA
Information Resources Accessibility EQA
kitegrity EQA
Relwance EQA
Timeliness EQA
Sharine and u s ï m knolk'ledee
Y
In addition to the resource indicators, the CSO does not have indicators that show what the
organisation is adUeving in relation to s o c i q . Some of the measures that are s-ested in
literanue are k e d in Table 5-1 1. The CSO should inco'pome seved of these mevures
into its m e n t set of performance measures.
The CSO d s o does not report on services for employees. Table 5-12 indudes a lia of
suggested performance measurrs covering rhis perfomiance area.
In general these tables address the three areas where the CSO's perfomiance meanirement
system is weak Thus, performance measures should be designed or adopted to reflect
performance in the following areas:
innovation and learning
use oI resources
interaction with society
evaluation of empluyee services
The 0should a h rmiew the suengdis and areas for improvement related to its remit-
based performance measurement system identifid in this chapter.
It is evident that self-assessment, audiring and result-based performance meanirement are ali
benefiaal to an organisation's performance improvemem efforts. Each one requires a
different cype of input and each r e d t s in outpins that become inputs into the performance
management system of the organisation. Table 5-13 recaps the characteristics of these
performance mesurement methods.
Result-baseci pe dormance
Self-assessrnent Audrnng measunment
Opinions Objective evi&nce Numeric &ta
Inputs Obiective evi&nce
' Effort Possible hi& effon lwei Medium effon ievel
1
Dependent on system
Quîlttative Qualitative Quantitative
Outcornes
Subjeaive (Based on Objective Ma+ Objective
opinion) Pfocess-based Specific
Holistic
Measure Effiaency anci Effecûveness Effectiveness Efficiency and Effectiveness
These methods each have its specific role to play but are obviousiy quite interdependent.
This next section describes the relationship arnong these meanirement methods and how
they can be used together to improve organisational perfoxmance.
The OPIM, like the EQA and the MBNQA, contains cntena that address the Enablers and
Results of the performance management system. In self-assessment, the efficiency of the
Enablers is judged. Their effectiveness is mevurd by the Redts. Figure 5-4 illusmates this
relationship.
. SELF-ASSESSMENT
Efficiency of Effectiveness of
O n e wodd ask then, why wouid an organisation need self-assessment. The anmer lies in
the limited abiiity of these meanires to evaiuate the approaches and deployment of
approaches used to perform organisational activities. It is hem that self-assessment becomes
important. This process imrolves a more in-depth a d p of~why the activity is at the
current performance lweL Self-wessment, for instance, can provide information about
how the QA department performs its inspection processes thus shedding light on why it's
effiaency is where it is.
This chapter has illustrated the importance of each type of performance measurement to an
organisation. Figure 5-5 illusvates how these fit into an organisation perfonnance
measurement system. The result-based perfonnance measurement system consins of
perforrmnce meanues. The OPIM exisrs as a reference mode1 for self-assessrnent and
encompasses the elemenu that are audited against ISO 9001. The results of self-assessments
against OPIM will provide an indication of the CSO's overall performance, and therefore
will be added to the set of existing performance m e m e s .
PERFORMANCE
MEASUREMENT w
Assessrnent Audit
i
Li this chaprer, the processes of self-wessment and @ty audit* were cornpared. niis
reveded the several implications for the simuitaneous use of audits and self-assessments
within an organisation. The chapter dso described the review of the CSO's perfonnance
meanvernent system and rhen compared the use of redt-based perfonnance meanirement
to the use of audiring and self-assessment.
6.0 Pdormance Management In RdrD
6.1 Introduction
This diaprer outlines the modification of the proposed model, the OPIM, for use in an
R&D environment. These modifications were based on issues raised in the literature review
and practical experience gained t h u g h the self-assessrnent conducteci at the CSO.
The CSO, as an organisation, is very much focwd on its R&D efforts to compete in the
fast paced marketplace. There are several R&D reams woiking in each of irs three business
areas. After interviewhg several of the managers in each of these areas, it was dixoverd
that mon of the issues mentioned impact the efficiency and effectiveness of the R&D
function.
The R&D management is very much focused on reducing q d e Urnes and ensuring that
products reach the marketplace as dose to fun as possible. It is currently woriung on
increasing the awareness of the vaiue of time amongst R&D ream members. Through
several benchmarkhg mdies reporteci on in the CSO's strategic pianning meeting, it was
discovered that Ume delays con much more in the long r e m than does exceeding the project
budget to get the work done on cime.
One author found, mggesteci that in a market with 20% annual growth and 12O/0 pnce drop
per year chat a delay of six months while on budget wdl earn 33% less profit over life but
introducing the same produa on rime with a 50% budget overrun cuts profits by only 4%.
(From the 0 ' s strategic planning meeting)
The CSO is very aware of the need to malitain its RgrD efforts. About 20% of net revenue
is invested back into R&D. The CS0 is constantly exploring other markets and expanding
its opporruniaes.
Division A is involved in the design of integrated Circuits for th& application to a particular
segment of indu-. Most of these products, once designed, are manufacnued off-site.
7'he mlin activities of the division are therefore R&D relatecl.
The OMM is based on standards and models that have not s p e a f i d y been taiiored for use
in an R&D environment. To be effective as a mode1 for R%D, several modifications needed
to be made.
R&D goals and objectives shodd be defined in a waythat shows de+ how each
researcher's activities contribute to the company's goals. These should be aligned from the
a m with the goals of the organisation. If organisational objectives are undear, then the
nom is generally for individwls to outperfom othen through a system that r e w d vaiues
diat are not conduave to organisational goals (McLaughLn, 1995).
l R&D Goals
l
Organisationai goals should be translated into goais for the R&D effort and subsequently
individual goals for each researcher.
The literature review outlined a number of issues that F&D groups are facing in today's
marketplace. It is essential to consider each of these when designing a qwLty management
system for the R&D environment. Table 6-1 iflusvateshow the characteristics of a wd-
designeci quality management system could vldress each of the issues.
I
I
I d e rimes I
Fewcr rcsourccs A system that leaàs to improvernent in the
effectiveness and efficiency of the R&D proceses
which enables improved performance with fewer
1 resources '
Inaeased cornpetition A syaan that piaces the o r p k i o n in a position
to unckmnd ascorner's current and future needs
GQfLving the customa's changing nccds to continuously iinprove its ab*
neeâs and remin competiùve
to fuifil these
I
Emcrgence of ncw technology A sysrem that enables the effective management of
technology
6.3.1 Framework
The R&D hinction can be viewed as a mbsystem of the organisational management sysrem.
In this way, R&D should develop its own quaiity management system chat is aiigned and
easdy integrated with the o v e d organisational management system. This will ensure that
the R&D mbsystem is operating to achieve goals that are w d aligneci with the organisation's
overall goais. The system is comected to the overall system thmugh balances and checks to
ensure continuous alignrnent of goals and objectives. Figure 6-2 illustrates the framework
for the modified OPIM to which an RBrD subsystem has been ad& The mows in the
figure depict the interrelationships between this subsystem and the o v e d OPIM to ensure
continuhg aignment. For example, compare Figures 3-1 and 6-2. ï h e OPIM can be
applied to the qmem as a whole but the items can atm be tailoreci to be used for the R&D
system.
PROCESSES RESOURCES
PROCESSES
i MANAGEMENT i MANAGEMENT
R&D
PROCESSES
The research and development funaion can be viewed as a system of processes whose most
important resources are technology, people and understanding of the customers'
requirements and expectations.
Once the f~ameworkfor the modified OPIM was created, the next s e p was to modify the
cnteria to reflect the specific requirement of a quaiity management system in R&D.
The categones of the OPIM should address the follo*
Obieaives
The Objectives section of the modifieci OPIM should focus on management, R&D nategy
fomulation and alignment with organisational suategy, and the main nakeholders of the
R&D function. These stakeholders include interna and external astomers, senior
management, people, suppiiers and Pamiers, and society.
Resources
This section should cover all resources indudeci in the origiuai OPIM but should focus on
how the RSrD function plans for, acquires, deplay$ and controls these resources Li order to
develop produas and new technology effiaendy and effectively.
Processes
The Processes section should aàdress process management and the planning and conuol of
customer related processes, design and development processes, purchashg processes, and
support processes. Realisation processes originally addressed in the OPIM are not required
in this version.
This section should determine how customer requirements are completely defmed. These
requirements 'drive" the design convoi process so customers are aswed that the
organisation will design the appropriate processes to ensure cornpliance. The R8rD
professes should be planned and designed frorn the customer's point of view. This indudes
everyrhuig normally associateci with design, development, test, prototyping, and
evaluation/assessment.
The R&D organisation cian re~uestrhu supplien demonstrate evidence that pudaseci
product will m a all quality reS;rements. This permits the R&D organisation to ensure
that purchased items and seMces meet the needs of the depanment.
The key support pnxesses r e q d for effective and efficient R&D should be planned and
conuolled.
Results
In the R8rD environment, the rime lag becween action and outcome is prolonged This
makes difficult the development of a comprehdve set of masures that accurateiy reflect
the outcornes of the R&D activities.
Sevenl authon have addrrssed this problem and have corne up with suggestions for
meanires that can be used in R&D organisations.
The funaion of the R&D organisation is not only to develop but &O to transfer technology to o p t i o n s
and the marketplace, to enable the compuiy to meet its business goais and therefore maximise stieholder
value. R&D's conuibution, therefore, is n a to be m d simpiy by i n t d success mevurements but
by its performance against interoll ;and e x t d customer satisfaction short and long-term pals. (Patiiio,
1995)
In general though, these meanires should reflect the achievement of set objectives relating to
customers, people, suppliers and pannes, society, and the synem itself. The meanires
-
should be reported in terms of the a d level of performance, targeted levels of
performance, trends over the past three to five years, uid performance relative to
cornpetiton.
This section should address the systems for perfomiance management, performance
monitoring and conmlling,and performance improvernent related spediuUy to the R&D
depumients. It wu not necessvy to modify this section h m the O& OPIM since the
departmental performance management, monitork and controulng and improvement
should be si& to that of the CSO.
The following is provideci as an sumpte of the modification made to the criteria of the
OPIM.
Section 1.2 of the onguial OPIM perrains to the establishment of quaLty policies and
objectives and the o v e d suategic ph.ningprocess of the organisation. Table 6-2 illusuates
the critexia from this category of the OPIM.
1.2 Strategy
1.2.1 Development
i?q&mm&(ISOI,5.3 and 5.4.1)
Describe the sysiem for establishing quaùty poliaes and objectives.
(IS04,5.3;MBNQA,2.1; EQA, EQA, la and 2c; DP,1:l-1:3)
Describe rhe strategic planning process appLed to improve organisational performuice
and set appropriate strategies and pliaes.
1.2.2 Deployment
h p m m n k (iS01,5.4.2,5.5 and 5.6)
Describe the processes of management planning and review, as weii as the wociated
respoasibilities and authorities.
qnpimomies @Sa, 5.4-5.6; MBNQA, 1. Ib and 2.2;EQA, 2d and t e ; CP,1:4 and 15)
Descnbe h m suacgic pians are deployed, reviewed and improved upon.
The developrnent and deployment of strategy in R&D ne& to be linked to the overail
business planning process. This requires uuisktion of the organisatiod goals and svategic
objectives into R8rD department goals and objectives. This transformation enables the
R%D funaion to better understand the corporate stratefies and to ensure the aignment of
its suategic goals and purpose.
Table 6 3 illusvates the modifications that have been made to this categoiy of the OPM.
OPM
1.2.2 Deplayment
ibptmm @Sol,5.4.2,5.5 and 5.6)
Describe the processes of R&D management pluining and review, as wd as the associated
responsibilities and authorities.
(IS04,5.4-5.6;MBNQA, l.lb and 2.2; EQA, Zd and 2e; DP,1:4 and 1:s)
Describe how strategic plans are deplayed to the R&D function. Describe how the
strategic plans, translated to the R&D function, are reviewed and irnproved upon to
ennire continuing alignment wirh organisationai p h
The scoring scheme for the OPIM wu developed from the opinions of people w i t h the
organisation. These people undemuid the importance of each part of the criteria to the
performance of the business. This sarne process could be foilowed to modify the scoring
scheme for R&D application. Expen opinion from those within the R8rD depments
could be c a p d using the PFM software and a new distribution of points could be done.
This wu not possible in this case because of tirne collsvaints, so a change in the disuibution
of points was made to address the issues identifieci in the litennue nwqr.
Table 6-4 shows the categoxies of the modified OPIM that mon &cdy effect these issues.
These categories should be vaiued the highea within the modified OPM model. Table 6-5
presents the s c o ~ scheme
g for the modified OPIM.The items in boldface rype are those
caregories that have become the moa important in the rarised s c o ~ scheme.
g
OPIM Modif~cdOPIM
Criteria Cîtcgoy Item Points m~g0ry Item Points
Po* Points
1.0 Objectives 129 129.00 146 146.00
1.1 Management 48.00 50.00
1.2 Stntcgy 43.00 48.00
13 Stakeholdm 38.00 48-00
The moci&ed mode1 for perfomiance management addresses many of the issues we have
seen that RgrD funcrions face today. Table 6-6 outhes how the modifications respond ro
these problems.
Mocüfied Elcmcnts Addfcssing R&D h b l e m s
Design of work and job functions Improvement of this design udi support co-
~ opecation, collaboration and innovation
The system used to reward and recognise R&D
- Irnprovement of this system to encourage - team-
pem&el b d r e w d and recignition
The development and deploymor of RdrD Improvement to ensure the alignxnent of R&D
stmegic objectives objectives with organisational goals
The use of technology- to achieve R&D Improvement to ensure efficient and effective
objectives &of technology in R&D projms to meet
organisationai goais
The identification of nistomer reqllemenfs and Impmvement to the pnxesses of idendj&g
the Licorporuion of these recpkments into the customer qukements to ensure thar changing
& s i p process customer needs are being met
n i e management and improvement of design Impmvement to increase the efficiency and
and development processes effectiveness of RBrD processes
A -
to shortai cycle
I tïmes and maintain comOefiuVeness
The rneasuremenr of results reiated to people, Improvernent of the mednument to
customers and the system as a whole ensure the effectiveness of the R&D
I 1 performance management system
6.4 Chapts Summary
This chapter illusuateci the modification of the OPM for use in an R8rD environment. The
modifications were made to address the issues outlined in the literature review. The next
section closes this thesis with a summiuy of the conclusions arising from the studyas well as
some oppomuiities for future research.
7.0 Conclusions
This chapter discusses the main conuibutions of the worir presentd in the thesis, followed
by recommendations for future research.
In Chapter Three, a proposed m d for performance management that inteptes the new
ISO 900 1standard for +ty management wirh three modek for business excelience w u
developed. The resulting model is based on a sysrems view of organisational performance.
It incorporates the requirements for a quality manageaient systern from ISO 9001 with the
identifid strengths of each model for business excellence. The redting set of aiteria
represents a path towvds business exceiience. The organisation can evduate its c u r w t
&y management system against the minimum requirements in the model and then use
the opportunities for improvement as a guide for conMuws improvement.
A scoring scheme was developed for the model using a decision an+ model that captured
the opinions of senior management regarding the relative importance of each element in the
model for business performance. The resource element was considered to be the mon
important, representing the transition from the process-based ISO 9000 to a more system-
based business excellence.
Chapter Four describes how the proposed model was used to perform a seif-assessrnent of
one division in the case study organisation. A set of questions was developed to obtain
information through interviews with a cross-section of employees from the CSO. The self-
assessrnent was successful in obtaining mudi idonnation penainiag to the organisation's
acrivities. It provided the CS0 with a comprehensive lia of areas in which to focus
improvement efforts.
Chapter Five compared the three perfomunce measurement rnethods used by the case study
organisation. This induded a cornphon of the seif-assessrnent outcornes with the results
of a quality audit perfonned at the urne rime as a m- of investigating the compatib* of
the IWO measurement methods. The chapter ais0 compareci the use of result-based
performance measurement to the ourcomes of the self-assessment and audit. This process
reinforcd the importance and interdependence of each method in an organisation's
performance measurement efforts: result-bd performance measurement is used to capture
the CUrrent performance levels withli the organisation; @y g used to detemiine
a u d i ~ is
if an organisation is meeting the requkements for its managenent system. Self-
assessrnent is used to enhance both of these measurement processes, as it requires that a
Company evduate the effiaency of its activities. This reveals why a process is perfonniflg at
its current lwel and suggests why a qualRy au& has found non-cornpliance.
Chapter Six ouùined how modifications were made to the OPIM to create a more
appropriate model for use in an R%D environment. The modiGed model addresses many of
the issues facing the CSO's R&D departments in today's marketpIace. This is a renilr of the
new focus on the most important aspects of the OPIM to W. These areas are:
Suategy dwelopment
Stakeholders' objectives
Human resounces
Techn01ogy resources
Oisromer related processes
Design and development processes
People renilu
Syaemresults
The scoling scheme was +Lo changed ro reflect the new focus of the OPM for R8rD. The
vaiue of the above listeci catepies wu increased Using rhis proposed model, the
organisation can assess its R8LD activities in more detaiL
In summaxy, the main contributions of the wotk in this thesis are the:
development of an imegrated mode1to move beyond the minimum requirernents of ISO
9001 to create the proper conditions for business excellence
funher investigation into the compatibiityof self-assessment and audithg for future
alignment or integration of these performance measunment methods
examination of the roles of self-assessment, audiMg, and redt-based performance
measurement in the o v e d performance mevurement system
a modifieci version of the OPIM which provides a good framework for future
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9.0 Appendices
1.2.2 Leadership
4. H m do leaders cornmunicate the importance of meeting customer as
wd as regdatov and legd r e q k e n t s ? (IS04,S.l)
5. How do leaders ensure the availability of resources to meet these
requirements?(IS04,S. 1)
6. What is the management review process and at what frequency is it
conducted? (IS04,5.1)
7. How are leaders involved with customen, parmers and representatives of
society?
8. How are these processes continually improved?
1.2 Suategy
1.2.1 Development
9. What is The organisation's suategic planning process?
10. How are strategic plans reviewed and impmved upon to ensure
alignrnenr with the nuTent and funire business environment?
How is the oqgmktion's m t e g y t r m s w into actionable items and
meaninble goals?
H m are!these communicated and deployed to each management level to
assure individual contribution to achievement?
How are responsibilties for these items eaablished and communicated
to the people in the organisation?
H m is progress a g a k t these plans rneasured?
How are the p r o c e s for deplayment of strategy conUnwiiy impmved?
1.2 Stakeholders
1.2.1 Customers
16. H m do you determine and review your customers' key requirements?
17. How is rhis process continually improved to keep up with current and
future business needs?
18. How are these needs and expeaations deployed and communicated to
people throughout the organisation?
19. Please provide any perception measures andior performance indicaton
that indicate performance relative to the needs and expectations of
customen. State their current levels and trends. List the targeted levels of
these performance indicators.
1.2.2 Shareholders
How does the organisation idenufy and review shareholders' needs and
expeaations?
How is this identification process continualiyimproved?
How are these needs and expectations deployed and communicated
throughout the organisation?
Please provide any perception measures a d o r performance indicaton
that indicate perfomiuice relative to the needs and expeaations of
shareholders. Include both financial and non-financial iadicators. State
th& current levek and uenb.List the targeted levels of these
performance indicators.
1.2.3 People
How does the organisation identify and review people's needs for
recognition and w o k satisfaction? (ISO), 5.2)
How does the organisation idenrify and review people's needs for
cornpetence and knowledge developmem? (IS04,5.2)
How are these processes continuaUy improvdi
How are these neeck and expeaations deplayed and communicated
h u g h o u t the organisation?
Please provide any perception measures &or performance indicaton
that indicate perfonnatlce relative to the needs and expectations of
people in the organisation. State their current levels and d.
Lin the
q e t e d levels of these performance indicators.
How does the organisation dwelop partnerships that iink to its arategic
objectives? (CABE 6.1)
How does the organisation idenufy the needs of these pamerships?
How are these pannerships reviewed to ensure rhey are still meeting
objectives of the relauonships?
How are these processes continually improved?
How are these nec& and expectations deployed and communicated
throughout the organisation?
Please provide any perception measures and/or perfomunce indicaton
that indicate performance relative to the neeb and expectations of
piumerships. State their current lwek and trends. List the tvgered levels
of these performance indicators.
1.2.5 Society
How do you i d e n e and manage the impacts of your products, seMces
and operations on society?
How do you identify other needs and expectations of society in the
process of sening your objectives?
How are these needs and expectations deployed and communicated
throughout the organisation?
How are these needs and expectations waluateci?
How are these processes continuallyimproved.?
Please provide any perception masures d o r performance indicaton
that indicate performance dative to the needs and expectations of
society. State their current levels and trends. List the targeted levels of
these performance indicators.
2. Resources
2.1 Finances
4 1. How does your department manage its budget?
42. How do you monitor your accual spending relative to your budget?
43. How do you continually irnprove this process?
44. Please provide any performance indicaton relating to fmanùal resources.
Stare their current levels and trends. List the t q e t e d lwels of these
indicators. (OHM 4.6.2)
2.3 Infrastructure
5 1. H m does your deparunent manage infasmicntre resources?
52. How do you monitor the use of infrastructure resources?
53. How do you continualiy impmve these processes?
54. Please provide any performance indicaton relating to infrasrncture
resources. State rheir curent lwels and trends. List the targeted levels of
these performance indicators. (OHM 4.6.2)
2.4 People
2.4.1 Human Resource System
How do you idenufy characteristics and skills needed by potential
employees that match the organisation's values and needs?
How are work and job funcrions designed to support CO-operation,
collaboration, individuai initiative and innovation?
What is the process for hiring and reuuiting new employees?
How is this process continually irnproved to meet future business needs?
How do you link reuwd and recognition of individuai's performance to
your suategic direction? (CABE 4.1)
How do you link reward and recognition of team performance to yuur
strategic direction? (CABE4.1)
Please provide uiy performance indicators relating to the human
resource system. State their w e n t lwels and trends. Lin the targeted
lwels of these performance indicaton. (OPIM 4.6.2)
ûinomer relationships
90. How do you design processes that affect the organisation's rekrionships
with customers?
9 1. Hm are these processes implemented and maintaineci?
92. How do you continuaily improve these processes?
93. Please provide any performance indicators relating t o cunomer
relationships. State their cunent levels and uends. List the targeted levels
of these performance indicators. (OPIM 4.1.4)
3.2.1 Knowledge
94. What is the process for idenufying and targeting customers, customer
groups and market segments?
95. How do you consider customers of cornpetitors in this process?
96. How do you continuaDy hprove the process of idennfying customen?
3.2.2 Satisfaction
97. What processes are used for determinhg Nnomer satisfaction?
98. How do you follow up with customen on produas to receive prompt
and actionable feedback?
99. How do you obtain customer satisfaction information relative to
cornpetitors a d o r benchmarks?
3-3 Design and/or development
3.31 Planning
101. How do you plan design and development processes to ensure that they
respond to the neeb and expectations of the organisation's cusromers
and other interested parties? (IS04,7.3.1)
102. How do you implanent and maintain these processes?
103. How do you contindy improve these processes?
3.3.2 Inputs
104. H m do you ensure that inputs to design and development are accurate
and complete? (IS04,7.3.2)
105. How is rhis process continua& impmvd
3.3.3 Activities
106. How do you irnplement and maintain design and development
processes?
107. How are these processes conrinuah/ improved?
3.3.4 Outputs
108. How do you validate output againn input requirements and acceptance
criteria to achieve interested p a q satisfaction? (iS04,7.3.2)
109. HOWis this process continually improved?
1IO. How is âesign &ew incoqmrated into the design and development
processes?
î i 1. How is the design review process continualh/ improvdi
3.3.6 Vedication
112. H m is design verification incorponteci into the desigri and development
processes?
113. H m is the design veficatîon process contin.aUy impfoved?
3.3.7 Validation
114. H m is design validation incorporateci into the design and development
processes?
11S. H m is the design validation process conUnually impmved?
3.3.8 Changes
116. H m do you incorporate changing customer/market requirements into
your designs and development processes?
117. How is the process of making design changes continualiy improved)
3.4 Purchasing
3.4.1 Planning
118. How do you i&nufy the resources needed, which cannot be obtained
interna& in order to defme a purchasing strategy? (IS04,7.4.1)
1 19. How do you idenufy and select capable suppliers so as to ensure
consistent quaiity and dependable nipply? (IS04,7.4.1)
120. How are these processes continualiy hproved?
121. How do you define processes to ensure that ~~ecification~
for purchased
product meet the requirements of the orpi&on and interested parties?
(IS04,7.4.1)
122. How do you implement and maintain these processes?
123. How do you continually improve these processes?
3.5 Realisation
3.5.1 Pianshg
124. How do you plan and design realisation processes to ensure that they
respond to the neeb and expeaations of the organisation's customers
and other interened parties? (IS04,7.3.1)
125. How do you contiauaUy improve the design of these processes?
3.5.2 Convol
126. How do you implement and maintain realisation processes?
127. How do you improve the effciency and effectiveness of these realisation
processes?
3.6 Support
3.6.1 Planning
128. How do you determine key support process requirements?
129. How do you plan and design suppon pnxesses to meet ail key
requirements?
130. H o w do you conth& improve the design of rhese support processes?
3.6.2 Conuol
131. How do you impiement and maintain key support processes ensure
meeting key perfomiance mquirements?
132. How do you improve the effiuency and effectiveness of these processes?
4.1 Customer
4.1.1 Reputation (OPM 32.2)
4.1.2 L~~&~(OPhil3.2.2)
4.1.3 Outputs(OPIM1.3.1)(OPhil3.2.2)
4.1.4 Interfaces (OPIM 3.2)
4.2 Shareholders
4.2.1 Financial(OPM1.3.2)
4.2.2 Non-Finanaal (OPIM 1.32)
4.2.3 Interfaces (OPIM1.3.2)
4.3 People
4.3.1 Motivation (OPIM 2.4.3)
4.3.2 Satisfaction (OPIM 1.3.3)
4.3.3 Achievemenu (OPIM 2.4.2)
4.3.4 SeMces (OPIM 2.4.3)
4.5 Society
4.5.1 Citizenship(OPIM1.3.5)
4.5.2 Gmmunity(0PIM 1.3.5)
4.5.3 EnWonment (OPIM 2.7) (OPIM 1.3.5)
4.5.4 Heaith and Safety (OPIM 2.6)
4.5.5 Interfaces (OPIM 1.3.5)
4.6 System
4.6.1 Processes (OPIM 3.1)
4.6.2 Remurces (OPIM2)
4.6.3 Objectives (OPIM1.1.1)
5. Performance
5.1 Management
5.1.1 System
133. What are the systems used to measure organisauond perfoxmance?
134. How are these gcitems interrelafed?
135. How are tbese relationships manageci and improved?
5-2-2 Self-Assessments
146. What is the process for perfomiing regular self-assessments against the
organisation Perfomunce impmvement Model?
147. How do you c o n t i n d y b p o v e the effecriveness, efiiency and
consistency of rhis process?
5.3 Improvement
5.3.1 Coftective and Prwentive Actions
154. How do you monitor, iden*, &, and remove the exisUng causes of
nonconformities in inputs,processes, outputs, objectives, resources uid
results?
155. How do you indude plans for and renilu of corrective and preventative
action in the business plan?
156. How do you evaiuate the effectiveness of these actions for rheir
continuw improvement?
Describe haw the R&D funaion establishes, "plements, and maintains its quality
procedures and plans to meet the qwiity policies and objectives set by the
organisation.
qDportrmrtJs (IS04,5.4-5.6; MBNQA, 1.1b and 2.2; EQA,2d and 2e; DP, 1:4 and 15)
Describe how m e g k p h uc deplaycd to the R&D function. Describe how the
nntegic pians, m d a e d to the R&D function, ue revicwed and improved upon to
ensure continuing ;ilignment wi3i organisational pians.
Describe how st;ikeholders are iden~ed,and how th& needs and requiremeau
[iudiUiinp legal, regultory, MWP-tal, producr and protes standuds, as well as
openriod) are identiûed, deployeâ, communicated and evaiuated.
@xmmtm ( i S 0 4 , 5 2 ; MBNQ& 1 2 uid 3.1; EQA,21 and 2b; DP, 2:6 and 4:l- 4:s)
Descrik h o w the process of identification, deplayment, communication and
evaiuation of stakeholders and th& a& and requirements is continualiy irnproved
1.2.1 Customers
1.2.2 People
1.2.3 O r p w a t i o d Leaders
1.2.4 Suppbers and Puniers
2.1 Management
h p t w m (IS01,6.1)
~ ~
D e s d e how the resources listed below in d o n s 2.2 to 2.8 and 3.4 of OPIM are
managd Describe the intdtionships among these resources and how they are
used to support processes listed in section 3 of OPIM.
(IS04,6.1)
Describe how the acquisition and deployment of resources is optimiseci to ensure
effectiveness, efficienv and consistency of system operation and achievement of set
objectives. JJiustrate how the use of the resources is continuously improved Describe
how the commitment of long-tenn resources to R&D effom is ensureci. ('da &
G o h , 1997)
Desuibe how finulciai resources are planned, acquired, deployed and convolled to
achieve R&D objecrives.
QF==
Describe how the efficiency and effectiveness of the use of fmancial resources is
impmved.
2.3 Information
Describe how idonnation resources are pianneci, acquired, deployd and conmiled
to adiiwe RStD objectives.
2.4 Infrvvucturc
OS01,6.3)
Dexribe h m resources are pianned, acq;ed, deployed and contrdled
to d e v e R&D objectives.
(IS04,6.3; EQA, 4 4
Describe how the efficiency and effecciveness of the use of ' ' buuctureresources is
2.5 People
2.5.1
Describe how characteristics and skiils needed by potend employees are identifieci
to ensure h t the current and future ne& of the R&D function will be met.
Describe h m work and job functions designcd to suppon CO-opedon,
collabontion, i.adividu?lhithive and innovation.
Describe how technology is used to achieve R&D objectives. Describe how business
and technology strategies are integrated, communiated, and understood by aU
depuunents (Kumar and Bayle, 2001)
9eipomotaier
Describe how the efficiency and effectivcnss of the use of technology is improved
Describe how av;Utbilityof nîtunl resourœs in cnnved in order to prevent adverse
t negatbe effecu on the R&D perfonnuice.
impacts on the a w i m n f n ~and
q.pBd?5
Describe h m the use of n a 4 resources is optùaised to prevent negative
environmentai impacts and improve organisationaiperformance.
3. Processes
Rqamm# @SOL,7; EQA, Sa and 5d)
Describe how R8rD pmcesses listeci Mow confom to the criteri? stated in ISO
9001: 2000 standard,section 7.
Activities (MBNQA,6.11)
Describe how design and development processes are implemented, m;iintained and
impmved
Describe how processes ro ensure that specifications for purchad producc meet the
requirements of the organisation and infefened pmies are defined, implemented,
maintaineci and improved
3.5 Support
Describe how requirements for key support processes are determined. Desuibe how
these support processes are pknned, &signe4 and hproved
3.5.2 Conml @Sol, 7.5.3-7.6; IS04,7.5.2-7.6; MBNQA,6.214-5)
Describe how key support processes are implemented, maintained and impfoved to
ensure meeting kqr performance reguirrments.
4. Results
List the perception measUres and performance indica~orsrelating to the following
four componcnts of customer r d t s . S m c thci,current levels and uends.
QP--
List the targetcd leveis of perception mevurcs and performance indicators.
4.1.1 Reputaion (EQA, 611 and 6b1; MBNQA,7.Id)
4.1.2 Luydty (EQA, 6a4 and 6b4; MBNQA,7.1a2)
4.1.3 Outpufs (ISO 1, 8.2.4 and 8.3; IS04,8.2.3 and 8.3; EQA, 612 and 6b2; MBNQA,7.1a3)
4.1.4 Interfaces (EQA, 613 and 6b3; MBNQA,7.lal)
4.2 People (MBNQA, 7.3;IS04, 8.2.41)
List the perception mevures and performance indiators &ring to the following
four componenu of people results. State their current levels and m d s .
List the perception measures and performance indicaton reiating to the foiiowing
cwo components of suppliers and panners relationships. State their current levels and
trends.
9.lpnaprras
Lin the targeted leveis of perception mesures and p e r f o m c e indiators.
4.3.1 Inputs(IS01,8.2.4;IS04,8.2.3)
4.3.2 Interfaces (MNBQA, 7.4)
-
4.4 Society ( I D , 8.2.4d)
-
4.4.4 M t h and S a f q (EQA, 81))
4.4.5 htcrfaces(EQ&8b)
4.5 System
4.5.1 Processes (EQA, 9bl; MENQA, 7.511, IS04, 8.2.2)
Qv-leJ
List the tvgeted lweis of key process perfommnce indicators.
--
State their current levels and trends.
9biantrorias
List the targeted lm& of key resource performance indiutors.
4.5.3 Obj&es(EQA, 91)
List the key performance indiutors reiating to R&D effectiveness. State their current
lwels and trends.
5. Performance
5.4 Management
Describe the system applied to mcasure the key performance outcornes identifieci in
section 4.6.3 of OPM.
Describe how the measmmmt synmi for key performance outcornes is conUnually
impmved.
Describe the system applied to masure the key perfonnuice outcornes identifid in
sections 4.6.1 and 4.62 of OPIU
Describe the V e m applied to perforrn internai and extemai auclits against the
requirements of the selected management stui-, including ISO 9001: 2000
and/or ISO 14001:1996.
Qpzwntm (IS04,8.2.1.3)
Describe how the effectiveness, effiaency and consistency of the audit system are
c o n t i n d y improved.
-
(iS04,8.52 and 8.5.3)
Desuibe how the c o d e and preventive actions are used in the business pian and how
th& effectiveness is continuaiiy imprwed.
5.6.2 Kaizen and Quantum Ir?ps (IS04,8.5.4 and Annex B)
Describe the systern applied to continuousiy improve the features in inputs, processes,
outputs, objectives, resources and resuits.
REFERENCE ClUTERK
DP Demùig Application Prize (1996), Dsnirg F%E G d Orsnoiv C k p z i s , Japanese
Union of Saentists and Engineers
EQA European Qu;ility A d (1999), EFQM ExadlmP M d , European Foundation for
Quatty Myiagement
ISO1 1!50 FDIS 9001 (2ûûû), Q&y h h p a m S y a m - Rqbmmzs, Intemational
Organkation for Standudiz;ition, Geneva
1s04 rso mrs 9004 (20001, -
G-~W ,-
International O ~ u o forn Standardization, Genwa
MBNQA Maicolm Baidrige Natiod Quaiity Award (2W0), Crieiiafi A+nmx? E x d h ~ M
, n,
Gaithersburg
Kieiia, M. L,G o k , D. Y., (1997), 'Td Quaiity Management in an R8cD Environment", inrenraakll
J d o f O p e r m i c m & R d d m Mmqpmt, Vol 17, No. 2, pp. 184-198.
Kumar, V., Boyle, T., (2001), 'A quality management implementation framework for manufactuing-based
R&D envkonrnents", I M JuanafofQuhy & R$raEilrtyMhqpmt, Vol. 18, No. 3,2001, pp. 336-
359.
-
APPENDIX C Trillium Resuits
Trilliwn Resdts
Scoring for OPIM
RÊsources
lûû People 97.7 85.75 91.46 89.93 71.42 77.21
85.19 Technology 87.43 81.41 74.14 91.7 55.63 72.19
39.38 Nature 31-01 59.37 19.13 66.39 48.32 49.43
84.38 WorkEnWonment 89.75 53.86 94.47 80.06 60.13 79.06
84.83 Management of 83.8 87.37 77.82 92.97 48.72 79.56
94.44
Processes
customeir - 79.33 99.5
-
48.67
-
----
78.02
-100
-63.42
Relationships
78.73 Design Processes 89.2 89.84 52.52 100 37.9 95-36
32.8 Purchashg Processes 88.49 61.66 O 80.56 O 59.66
68.98 &uon Processes 87.1 51.83 46.26 89.39 51.85 75.78
36.8 Suppon Processes 72.36 30.76 48.21 12.47 50.51 55.09
60.3 Customer R e d u 37.98 68.29 51.11 70.03 62.94 62.8
49.48 'Sheholder R e s u l c 30.47 58.45 54.63 74.99 49.16 28.53
79.62 People Results 100 69.6 1 61.79 93.49 48.41 72.49
53.77 Supplier and Panner 50.06 71.4 28.82 69.65 51.41 72.98
Renilts
O SociqResults O O 37.65 O 37.17 47.53
44.95 System Results 67.21 42.06 63.03 35.34 43.72 46.5 1
82.05 Performance 72.86 88.67 68.46 88.91 53.31 92.56
Management
81.12 Perforrmnce 59.52 69.44 89.37 91.1 54.56 89.05
Monitoring and
Conuoltng
APPENDLX D - Cornparison of Perfknance Muiagemmt Model G i t m a
Examines how
effectively the
Company manages
its miued
Not specifically resources and
Not included Not induded
induded supplies so that
material
inventories are
m e is mkiimised
Examines how the
Not specificaiiy Eompany evduates
included and exploits Not induded
techno1og)r
Examines how the
Na specificaiiy Not included ~ompany 's
included manages its
Il~lilllcialrrSOurceS
Catcgory 1 ISO9601:ZOOO 1 MBNQA 1 EQA ] Dcming f i e
uaLlreSOurtem;inîge ent
Examines how the Examines how the
compaq-es, Company appiies
develops and Qu;ilityconcepts
reieves the full into its human
potend of its resource docation
paformuice people and management
Examines how the Examines how the
Company secks company promotes
input h m the involvement
ernployecs and and empowerment Not induded
their supervisors of its people
on.educaüon
. and
trvnrngnceds
Looking for Examines h m the Exvnincs how Examines h m the
evidence that the Company support people's companyf
company ensures business objectives kncswiedge and eduatiod
the necessary cornpetencies are poliaes and plans
cornpetence for idenaed, consider QC
personnel deveioped and management and
Eduution and performing woiir susuineci how it reviews the
Training ;iffectingproduct effectiveness of the
qu;iliv educationai
Prognms, and
whu eciucatiod
compuiies
Examines how the Examines how
organisation people are
maintains a work m;uded,
Employee well- enWoument that recognised and
being and Not induded contributes to cared for and how
employee wd- the company Not induded
satisfaction
king and promotes the
satisfaction dialogue between
i d and the
wo~le
Cjtegory 1 ISO900t:2OOO 1 MBNQA 1 EQA 1 DcmingPrizc
Processclualiw
-l
Examines how the Examines how the Great emphasis on
evidence that the ComPvIy m=%= company designs, the quaiity
company pians and its key product and -a, =d assurance of
develops the service design, improves its products and
processes a& delivery, and processes to services
for p d u c t suPpo* support its policy
and strategy
Resuits
Examines the Examines what the Prim+
compq's company is concerned with
performance and achieving in quality assurance
Unprovernent in &on to: activities and
the folluwing key Exterd WtyfeSults
ue?s customers
Not inciuded Gmomers People
Finuiduid Society
market
Key
Humui Performance
resoufces R4ts
organisational
effecriveness
r management and s;i
Examines how the
compvry
cwomer determines
homer requirements are requiremenw
deterrnined and expectation, and Not included Not inciuded
management
fulfied with the preferences of
aim of enhancing cunomers and
customer markets
b satisfaction
evidencë h t the
Examines the
compuiy's
Examines what the
zomp;uiy is
company monitors perfonnuice and ichieving in
Customer inforniluon improvement in relation to its
satisfaction customcr exterd customers Not inducfed
sarisfaction
l perception of
fuifiient of
Cpcgory 1 ISO9001:2OOO 1 MBNQA 1 EQA 1 DcmingPrizc
SuppIiers/pumtn mamgamc a d performvlce
Lcdnng for Ervnincr how the Examines how the Focused on
&ce rhîr the corn- manages corn- p h and excension of
company cv;ilu?us its supplia and manages its qu?lity
and selecu me ring extad management CO
Genenl
nippliers based on processes pvtnerships to suppliers of the
th& ab&y to support.itspolicy fum
W P P&P~ in and stnregy and
accorcfance with the effective
the company's operation of its
requiremcnfs proccsses
APPENDIX E - Apprt ich, Deploymi it and Results Ada~tedlrom the EQA
Attributes
Score 0%
1 75%
Sound:
Approach h u a clear rationaie No evidence or Some evidence Gnnprehcnsive
There are wcii àefined and àeveloped anecdotal cvidencc
processes
Approach focuses on nakeholder needs
Intcgnttd:
Approach suppons policy and nrategy No eviâence or Some evidencc dcar evidence
Approach is linked IO othcr approaches as anecdotai
appmpriate
T d
Trends:
T m & are positive and/or there is No redts or Positive trenb Positive trends Strongly positive Strongiy positive
sunained g d p c r f o m c e mecdow] and/or satisfactory and/or sustaincâ trends md/or vmds and/or
information pcrfomiiuicc on food pcrformzncc sustaincd excellent sustaincd excellent
somc muhs onmanyds pcrfomunce on performance in aü
over at leas ihrcc mon rcsutts over at vcls over at leas
Y=' lm 3 y m 5 Y-
Tugcts:
Targcts arc achievcd No r e d s or Favourable and FavowbIe and Favounble and Excellent and
a Targets ue appropriate anecdotai appropriate in some appropriate in appropriate in mon appmpriate in
information areas mvry- arcas mon