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Chapter 1: Overview of Managing Quality and Champions of Quality By the end of this unit, you should be able to: • Develop a personal definition of quality. • Understand the two categories of customers in an organization. • Discuss the three criteria for “doing things right” • Describe the process and advantages of benchmarking. • Define a learning organization. • Understand five positive results from the process of managing for quality. • Understand Deming’s 14 Obligations of Top Management. • Explain the Malcolm Baldrige National Quality Award. • Describe “Six Sigma” applications to the hospitality industry. • Describe common themes among quality gurus. Introduction to Quality Management The concept of management quality is an outgrowth of the Total Quality Management (TQM) philosophy of management. This philosophy states that bottom line performance will take care of itself in an organization that is committed to, and practices, quality effort. While some believe that TQM is out of fashion and others think it is a failure, the truth is that organizations that practice identifying customer requirements and minimize or eliminates deficiencies perceived by customers survive in the short run and thrive in the long run. When this fundamental quality concept becomes part of the organization’s very fabric and way of doing business, the customer and organizations both win. The Systems for Managing and Improving Quality According to the TQM theory, to begin managing and improving quality, one must first know their customers and understand how the requirements of the customers drive the efforts of the organizations. All of the critical processes established and monitored in an organization and all of the changes made to improve quality are done to serve the customers better. The process of managing and improving quality takes place within 3 broad sets of expectations in any organizations: internal
customers’ expectations, external customers’ expectations, and financial expectations. Continuous quality improvement is the key to managing and improving quality for both internal and external customers. The CQI journey never ends; the objective is to deliver results that are better today compared to those of yesterday. Some of the resources used to achieve quality management: • Tools of the trade: These help measure and monitor quality improvements. • Strategic quality planning: This begins with a personal vision, which transform into a shared vision within the organization. Mission and core values are then developed. • Assessing quality: This is essential from both internal and external customers. Helps determines the requirements of the customers as well as how the organization is doing in the delivery of requirements at the levels that meet or exceeds customers’ expectations. • Implementing quality: The 6 steps of implementing quality include educating, assessing, addressing the burning issues, determining critical processes and how to measure progress, redesigning the process, and continuing improvement. • Leading quality: This is the responsibility of everyone in the organization since leadership is intimately related to managing and improving quality. Knowing these qualities can help identify strengths and weaknesses in the individual and organization. • Quality life: This results from the effective application of principles to one’s personal life. Doing the Right Things While some believe that quality is defined as “the best, the finest, the greatest, the most expensive or most superior”, others define quality as “doing the right things”. In a service organization, doing the right thing is simply balancing the 3 sets of expectations: 1. Internal customers: Associates who are selected, oriented and trained to create and deliver the products and services of the organization. 2. External customers: people that purchase an organization’s products and services. 3. Financial: Vary between organizations. Business expect to make profit for stakeholders while non-profit organizations frequently expect to generate a surplus which is used to build the organization by investing for future needs and in future growth.
Managing for quality means meeting the customer’s expectations in the product or service being purchased. It also means reducing hassles, defects, deficiencies, barriers, obstacles, or problems perceived by the customer in the product or service. When customer’s requirements are met and deficiencies are reduced, quite simply, quality has been managed Quality-driven organizations are customer-driven organizations. Successful organizations listen to their customers, both internal and external and involve their suppliers in some of the key decision-making processes in the organization. Benchmarking or learning from other organizations to raise the quality level of own products and services helps an organization to study a process at another organization and adapt, modify, and apply the process at their own organization. This learning opportunity demands time and commitment from key internal customers within the learning organization and the organization’s culture and core values must include thinking outside the box. All organizations and their associates must accept the fact that change is necessary and is part of progress in today’s world. Starting the Process of Managing and Improving Quality When starting the process of managing and improving quality, remember that there is no right or wrong way to achieve quality. However, in all cases, three common threads can be identified in organizations that excel in managing and improving quality: 1) leadership by top management, 2) a view that quality is a long-term process, and 3) a passion for gathering and acting on feedback from customers. An organization’s top management sets the direction and pace. The process for managing and improving quality is more likely to succeed if there is a strong message that there is a commitment to make quality the core of the organization’s culture. Once’ an assessment of the organization’s current level of quality takes place; the level of quality it hopes to achieve can be articulated and shared with those who can help make it happen. The organization’s mission, vision statement, and core values should be reviewed during this assessment since these provide the context for evaluating current levels of quality. It is important that those in the organization understand where it is they want to go and how they are going to get there. Many have suggested that an organization’s values are the foundation for any progress since values describe how people in the organization intend to behave and act. The mission of the organization should present the following information in written form: who is in the organization, what the organization does, and who the customers (both internal and external) are. Once the mission is developed, a vision statement can be written to describe the organization’s aspirations for the future. Everyone in the organization should have the opportunity to provide input on the development of the values, mission, and vision. Some organizations successfully combine their vision and mission into one statement. Once these are developed, the organization can start to assess the level of quality at present.
Importance of Organising Cross-functional teams are the best resources for determining the present level of quality. These teams are developed from people in various functional departments (i.e., production, human resources, service, and technology). A good place to start the process of defining the current level of quality is to define a procedure for creating and submitting ideas to improve customer service and control costs and enhance profitability. In many cases cross-functional teams concentrate on finding an easy fix to get rapid, positive results. These positive results propel and encourage both individuals and teams to further explore ways to enhance customer service. This second step is repeated until overall improvement is achieved through the continuous identification of and elimination of root causes of service problems. This procedure is often called the Deming Circle, named after Dr. Deming, who first advocated its use. Once teams are formed, they continue to need direction from leaders or from the team members themselves. (Self-directed teams are exclusively directed by team members; they do not rely on the organization’s leaders for direction.) Team members must constantly remind themselves and others that all activities should be customer-driven and they help link the management of quality to the organization’s strategy mission, values, and vision. Unless the process of managing for quality is linked to strategic goals, quality efforts will not be realized. Clear goals also help make the team’s start-up phase relatively brief so that results can be seen quickly. These early results help propel teams onward to tackle and overcome more difficult customer service challenges. The process of managing for quality exists and flourishes within what has been characterized as a “learning organization.” Peter M. Senge describes the concept of organizational learning as the way an organization recreates itself. People in learning organizations have shared knowledge, insights, and goals. Individual learning is important, but the sum of organizational learning is greater than its individual components. These organizations also have an organizational memory for keeping these shared insights, knowledge, and goals. Associates in a learning organization commit to living the organizational culture. Organizational learning takes place at the individual, team, and organization levels. Learning organizations learn that if things go wrong, a hard look at the system is required; it is not a matter of who is responsible. Learning organizations look at the critical processes within the system to determine why the error occurred and implement ways to fix the process. For managing and improving quality to be successful, it must be tailored to the unique needs, wants, and expectations of the service organization and the customers it serves. A commitment to managing and improving quality unique to the organization’s culture and tied to the organization’s history and vision for the future will add value to customer service. The uniqueness of the organization, its customers, and its associates, combined with a customized process for managing and improving quality, will encourage the creation and delivery of customer service that will help sustain a competitive advantage.
As Exhibit 1.6 shows, managing and improving quality results in a reduction in costs. This savings occurs because there are fewer mistakes, less rework, fewer delays, and a more efficient use of resources. Consequently, productivity improves because resources are used more efficiently and the organization’s customer base increases because it is offered better quality at a lower price. The organization is able to stay competitive by concentrating on customers and their requirements rather than the bottom line. It builds its business through providing empowerment and satisfaction to internal customers. This boosts the retention of associates and improves products and services for external customers. The most important and perhaps only, rule in service organizations is to take care of customer needs and expectations. Doing so results in delighted customers. Not doing so results in failure—for the organization and its internal customers. The process of managing for quality never ends. The process is not a destination but a journey of evolutionary improvement in a high performance service organization. History of Managing Quality The management for qualityhas its origins in the pioneer work of several quality leaders, namely W. Edwards Deming, Joseph M. Juran, Armand Feigenbaum, Philip Crosby, Karou Ishikawa, and Genichi Taguchi. During the early decades of the twentieth century, the United States was completely transformed by the Industrial Revolution. The automobile companies, Ford Motor in particular, enjoyed tremendous success in developing the mass production process, a process based strictly on the interchangeability of labour and parts. Once there was duplication and strong marketing, however, the competitive advantage the United States had
enjoyed for years changed. At that time, the mid-twentieth century, General Motors was able to continue to dominate the industrial world, however, by becoming product based, flexible, and geared for growth. After World War II, two other changes occurred in the industrial sector: customers were suddenly looking for product differentiation and there was a drastic shortening of the product lifecycle. Most U.S. companies did not recognize this customer-based shift in expectations, but the Japanese were able to take advantage of this through incremental improvements. The Quality Gurus Deming As American leadership turned deaf ears to customer’s expectations’ W. Edwards Deming went to Japan to help improve the quality of Japanese manufacturing, specifically automobiles. He helped post World War II Japan rebuild its economy by introducing a philosophy and a statistical methodology to improve quality. This philosophy was based on continuous improvement; the methodology entered on statistics and probability, later known as statistical quality control and was developed by Walter Shewhart and his associates at Bell Labs in the 1930s. Unlike the Japanese, it took the American businesses to recognize the Deming process for quality improvement. At the heart of Deming’s philosophy was the creation of a culture of quality within a company. The foundations of Deming’s challenge to improve quality was later used to develop other quality movements. Deming defined 14 obligations of top management which form the core of his quality system and define ways for an organization to transform itself into an organization focused on quality: 1. Create constancy of purpose for improvement of products and services. 2. Adopt the new philosophy. 3. Cease independence on inspection to achieve quality. 4. End the practice of awarding business on the basis of price alone. Instead minimize total cost by working with a single supplier. 5. Improve, constantly and forever, every process for planning, production and service. 6. Institute training on the job. 7. Adopt and institute leadership. 8. Drive out fear. 9. Break down the barriers between staff areas. 10. Eliminate slogans, exhortations and targets for the work force. 11. Eliminate numerical quotas for the work force and numerical goals for management. 12. Remove barriers that rob people of pride and workmanship. Eliminate the annual rating or merit system. 13. Institute a vigorous program of education and self-improvement for everyone. 14. Put everybody in the company to work to accomplish the transformation.
Juran Dr Joseph M. Juran’s contribution to the field of quality centers on his philosophy that quality requires commitment and action from top management, training in the management of quality and quality improvements at a revolutionary rate. He suggested a way to organize an interconnected quality network to maximize an organization’s delivery of quality products and services. 10 steps to Quality Improvement: 1. Create an awareness of and commitment to improve. 2. Establish goals for improvement, utilizing input from cross-functional sources. 3. Rally people in the organization around the common goal of improving quality. 4. Train associates by creating a learning organization focused on quality. 5. Continuously learn and improve as problems are solved an projects are completed. 6. Regularly communicate progress toward quality improvement goals. 7. Recognize those who contribute to improving quality. 8. Communicate results as the process of managing quality discovers information. 9. Measure progress toward the goals of improving quality. 10. Integrate improvement into the systems of the organizations. Another of Juran’s unmatched contributions in the field of quality was his contribution to designing the Malcolm Baldrige National Quality Award. This award, established by the U.S. Congress in 1987, was named after a former U.S. Secretary of Commerce and recognizes U.S. companies who have achieved excellence through implementation by quality improvement programs. The Baldrige Quality Award emphasizes the following core values and concepts: • Visionary Leadership • Customer-driven excellence • Organizational and personal learning • Valuing internal customers and partners • Agility • Focus on the future • Managing for innovation • Management by fact • Social responsibility • Focus on results and creating value • Systems perspective
According to the Baldrige Criteria • Leadership occurs when the senior executives help others understand customer requirements for quality products and services • Performance Excellence Process (PEP) engages organization and requires total commitment from all The Ritz-Carlton Manager Beliefs Produce a work environment that: • Helps people live better • Treats people with dignity • Involves people in the planning of work that affects them to maximize the pride and joy they derive from their work • Management concentration on internal customers enables associates to take care of external customers • Internal customers trained, given all necessary information about service/product, provided with necessary tools/resources • Internal customers involved in planning process, share management’s vision, trust management, and are recognized for their efforts Armand V. Feigenbaum Armand V. Feigenbaum introduced his cost of non-conformance philosophy and rationale regarding why an organization should commit to quality. Feigenbaum also refined the concept of work process flow and showed how improvement in one component of a process helps improve other areas of the organization. Feigenbaum’s approach to quality is driven by those who purchase products and services. His philosophy of managing and improving quality, in the form of six key points, is mentioned below. Feigenbaum's Six Key Points 1. Total quality control (TQC) is a system for integrating quality development, maintenance, and improvement into the groups of an organization. This integration enables marketing, engineering, production, and service to operate at the most economical levels to provide customer satisfaction. 2. Quality control (QC) represents a management tool that sets qualitystandards, evaluates performance against the established standards, acts when standards are not met and makes plans to improve the standards. 3. Product quality is affected by both technological and human factors. The human factors are more important. 4. QC impacts all aspects of production from defining customers’ needs to following up to ensure satisfaction.
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