Professional Documents
Culture Documents
Strategy
Content for
Leadership
Quality
Quality
and Ethics
Quality as Strategic
Deploying Quality (Hoshin
Kanri)
Does
Quality Lead to Better
Business Result?
1-2
Strategy Content
Quality is not just a control
system;
system quality is a management
function.
function -- David Garvin
Quality is strategic. Strategic
planning has two important
dimensions content and
process.
process Strategy process
consists of the steps used to
develop the strategy Foster, T.
S.
1-3
1-4
to be achieved
Policies to guide or limit
action
Action sequences, or
programs, that accomplish
the goals
1-8
Strategic planning
1.
2.
3.
4.
5.
6.
7.
8.
9.
Focus on customers
Leaders determine critical success factors
Goals and objectives are process and results oriented
Goals and objectives are based on data and are driven
by trend or pattern analysis
Focus in on processes
Alignment exists between CSF, mission, vision, goals,
objectives, and day-to-day activities.
Everyone knows how his or her day-to-day activities
align with CSF, mission, vision, goals, objectives.
Improvement activities are focused on activities CSF
Improvement activities are both within and across
functional areas.
Summers,
1-9
2009
Foster, 2010
1 - 10
Summers, 2009.
1 - 11
Vision
Environmental assessment
Strategies
Strategic Objectives
Action Plans
Attitudes and
policies
Guiding Principles
Things to change or
improve
Implementation
Mission
Definition of products and services,
markets, customer needs, and
distinctive competencies
Solectron: to provide worldwide
responsiveness to our customers by
offering the highest quality, lowest
total cost, customized, integrated,
design, supply chain, and
manufacturing solutions through
long-term partnerships based on
integrity and ethical business
practices.
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Vision
Where the organization is headed and
what it intends to be
Brief and memorable - grab attention
Inspiring and challenging - creates
excitement
Descriptive of an ideal state - provides
guidance
Appealing to all stakeholders - employees
Solectron:
Be the best and
can identify with
continuously improve
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Foster, 2010
content refers to the
variables, definitions,
components, and concepts
that are included in the
strategy
1 - 15
Foster, 2010
What are the content variables that should
be included in strategic planning? Among the
variables are :
Time
Leadership
Quality Costs
Generic strategies (cost,
differentiation, and focus)
Order winners
Quality as a core competency.
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1 - 18
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Productivity
Improves
Capture the Market
Stay in Business
Provide Jobs and
More Jobs
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1. Customer Focus
Internal / external
customer
5. Unity of Purpose
7. Teamwork
Education VS Training
1 - 33
1 - 34
Cost
Differentiation
Focus
1 - 35
1. Cost of Quality
PAF Paradigm
Accounting for Quality-Related
Costs
Lundvall-Juran Quality Cost
Model
1 - 38
PAF Paradigm
1 - 39
Prevention Cost
(PC)
Prevention Costs
1. The cost of setting, planning, and maintaining a
documented QMS.
2. Quality planning: establishing production process
conformance to design specification procedures, and
designing of test procedures and test equipment.
3. Quality and process engineering (including preventive
maintenance)
4. Calibration of quality-related production equipment.
5. Supplier QA
6. All training
7. Robust design
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8. Defect data analysis for corrective action purposes
Appraisal Costs
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Appraisal Costs
1. Laboratory acceptance testing
2. Inspection and tests by inspector
3. Inspection and tests by noninspectors
4. Setup for inspection and test
5. Inspection and test materials
6. Product quality audits
7. Review of test andc inspection data
8. On-site performance tests
9. Internal test and release
10.Evaluation of materials and spares
11.Supplier monitoring
12.ISO 9000:2008
13.Quality award assessments
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Failure Costs
Failure Costs
IFC/EFC
1. Costs of troubleshooting
2. Reinspection of stock after defect detection
3. Disruption of production schedules
4. Complaint handling and replacements plus
extra time with customers
5. Warranty
6. Cost of holding higher levels of stock as a
buffer against quality failure
7. Cost of corrective maintenance to plant
8. Cost of corrective action to product (design,
repair)
9. Lost production because of labor availability
problems
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Failure Costs
IFC/EFC
1 - 47
Example Annual
Quality Costs
RM
5276
17265
125274
623980
1430678
Not evaluated
Not evaluated
2202473
Appraisal costs
Receiving inspection
Line 1 inspectionm
Line 2 inspection
Spot checking
TOTAL
Prevention costs
Quality training
Process Engineering
Corporate
Plant
Product redesign
TOTAL
Grand TOTAL
35765
42234
53567
63766
195332
14500
125678
39124
16422
195724
2593529
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Solution
Ratio of appraisal to failure costs:
195332 / 2202473 = .0887
Ratio of prevention to failure costs
195724 / 2202473 = .0889
Ratio of prevention and appraisal to failure
costs
(195332 + 195724) / 202473 = .1776
Proportion of total quality costs
Prevention : 195724 / 2593529 = .0755
Appraisal : 195332 / 2593529 = .0755
Failure
: 2202473 / 2593529 = .8492
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1 - 50
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2. Differentiation trough
Quality
Differentiation is achieved by a
competitor if the consumer
perceives the product or service
to be unique in an important
way.
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Example - motorcycle
1 - 54
3. Focus trough
Quality
Examples
1 - 56
KAIZEN ????
POKA-YOKE???
HOSHIN ????
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(Foster, 2010)
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Simple Strategic
Model
Foster, 2010
1 - 59
FC Simple Strategic
Model
Organizations Position
Environmental
Assessment
1. Statement of
6. Broad economic
mission.
assumption.
2. Interrelated set of
7. Key government
financial &
and regulatory
nonfinancial
issues
objectives.
8. Major
3. Statement of
technological forces.
strengths and
9. Significant market
weakness.
opportunities and
4. Forecast of
treats
operation needs.11. Strategic options;
Explicit strategic of
5. Major future
requirements for
competitors.
programs
implementing options;
contingency plans.
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Foster, 2010
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Bedi, 2006
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Development of 3 5
year Hoshin Goals
Senior Management
Devbelops 1 Year Hoshin
Goals
Product Management
Develops 1 Year Hoshin
Goals
Senior
Management
Action Plans
Product
Management
Action Plans
Revfiew By CEO
Review By Senior
Management
Yes
Problem
s
Yes
No
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Foster, 2010
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