business excellence tqm x14

8/11/2019 Business Excellence TQM X14

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TQM and Six Sigma Assignment

Comparison of Business Excellence Models

(Japanese, American and European)

Submitted By:

Group X14

U113045 Shatajupa Mishra

U113080 Chinmay Mohapatra

U113118 Taru Vaid

Xavier Institute of Management, Bhubaneswar


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Contents

Introduction to Business excellence Models ........................................................................................... 3

Baldrige Criteria for Performance Excellence ........................................................................................ 3

The Malcolm Baldrige National Quality Award framework .................................................................. 4

Malkolm Baldrige (MB) or American Model for Business Excellence.................................................. 4

Japanese Model of Business Excellence ................................................................................................. 7

European Model for Business Excellence .............................................................................................. 9

Comparison of the business excellence models .................................................................................... 11

Award Descriptions for the various business excellence models: ........................................................ 12

Common Award Criteria for the various business excellence models: ................................................ 13

Scoring Pattern and guidelines .............................................................................................................. 14

References ............................................................................................................................................. 15


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Introduction to Business excellence Models

Key practices in business excellence applied in an enterprise include continuous andbreakthrough improvement, preventative management and management by facts. Examplesof some of the tools used are thebalanced scorecard,Lean,Six Sigma statistical tools, processmanagement, the Baldrige Criteria for Performance Excellence andproject management.

A large number of these (Malcolm Baldrige National Quality Award,EFQM ExcellenceModel ,Common Assessment Framework )concepts have been widely adopted within the

public sector as these organisations strive to provide "value for money".

For example the users of theEFQM Excellence Model andMalcolm Baldrige NationalQuality Award Criteria, do so for the purposes of self-assessment, strategy formulation,visioning, project management, supplier management, & mergers.

When used as a basis for an organization's improvement culture, the business excellencecriteria within the models broadly channel and encourage the use ofbest practices into areaswhere their effect will be most beneficial to performance.

When used simply for self-assessment, the criteria can clearly identify strong and weak areasof management practice so that tools such asbenchmarking can be used to identify best-

practice to enable the gaps to be closed.

These critical links between business excellence models, best practice, and benchmarking arefundamental to the success of the models as tools of continuous improvement.

Baldrige Criteria for Performance Excellence

History: In the early and mid-1980s, many U.S. industry and government leaders saw that arenewed emphasis on quality was necessary for doing business in an ever-expanding andmore competitive world market. But many U.S. businesses either did not believe qualitymattered for them or did not know where to begin.The Malcolm Baldrige National QualityImprovement Act of 1987, signed into law on August 20, 1987, was developed through theactions of the National Productivity Advisory Committee, chaired byJack Grayson.Thenonprofit research organizationAPQC,founded by Grayson, organized the first White HouseConference on Productivity, spearheading the creation of the Malcolm Baldrige NationalQuality Award in 1987. The Baldrige Award was envisioned as a standard of excellence thatwould help U.S. organizations achieve world-class quality. In the late summer and fall of1987, Dr. Curt Reimann, the first director of the Malcolm Baldrige National Quality

Its the systematic use of quality management tools & principles in business management. Ithas the goal of improving performance based on the principles like customer focus,stakeholder value, & process management.

Use of Business Excellence models

Self-assessment

Areas ofstrength

Strategy forfuture

Identify improvementopportunities

Organizationaldevelopment
http://en.wikipedia.org/wiki/Balanced_scorecardhttp://en.wikipedia.org/wiki/Six_Sigmahttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Malcolm_Baldrige_National_Quality_Awardhttp://en.wikipedia.org/wiki/EFQM_Excellence_Modelhttp://en.wikipedia.org/wiki/EFQM_Excellence_Modelhttp://en.wikipedia.org/wiki/Common_Assessment_Frameworkhttp://en.wikipedia.org/wiki/EFQM_Excellence_Modelhttp://en.wikipedia.org/wiki/Malcolm_Baldrige_National_Quality_Awardhttp://en.wikipedia.org/wiki/Malcolm_Baldrige_National_Quality_Awardhttp://en.wikipedia.org/wiki/Best_practiceshttp://en.wikipedia.org/wiki/Benchmarkinghttp://en.wikipedia.org/wiki/C._Jackson_Graysonhttp://www.apqc.org/http://www.apqc.org/http://en.wikipedia.org/wiki/C._Jackson_Graysonhttp://en.wikipedia.org/wiki/Benchmarkinghttp://en.wikipedia.org/wiki/Best_practiceshttp://en.wikipedia.org/wiki/Malcolm_Baldrige_National_Quality_Awardhttp://en.wikipedia.org/wiki/Malcolm_Baldrige_National_Quality_Awardhttp://en.wikipedia.org/wiki/EFQM_Excellence_Modelhttp://en.wikipedia.org/wiki/Common_Assessment_Frameworkhttp://en.wikipedia.org/wiki/EFQM_Excellence_Modelhttp://en.wikipedia.org/wiki/EFQM_Excellence_Modelhttp://en.wikipedia.org/wiki/Malcolm_Baldrige_National_Quality_Awardhttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Six_Sigmahttp://en.wikipedia.org/wiki/Balanced_scorecard


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Program, and his staff at the National Institute of Standards and Technology (NIST)developed an award implementation framework, including an evaluation scheme, andadvanced proposals for what is now the Baldrige Award. In its first three years, the BaldrigeAward was jointly administered by APQC and theAmerican Society for Quality,whichcontinues to assist in administering the award program under contract to NIST.

TheMalcolm Baldrige National Quality Award framework

(also known as the Baldrige framework, the Baldrige Criteria, or the Criteria for PerformanceExcellence), is an integrated management framework that considers an organization's entiresystem, including its

Performance Excellence is the trademarked term used in the Baldrige Criteria as an integratedapproach to organizational performance management.

Malkolm Baldrige (MB) or American Model for Business ExcellenceThe application of this model, in a short time helped the American economy to oppose theJapanese competition, to significantly reach the level of competitiveness in the world marketand to establish as the world's leading industrial power. In 1987, the model initiated by U.S.was used as the basis for winning the national Malkolm Baldrige (MB) Quality Award. The

prize is traditionally awarded each year by the President of the USA at a special ceremony inWashington. The award is being given as an annual tribute to the American companies forexcellence performance of their products / services. The award may be granted tomanufacturing companies; service companies & enterprises which deal with small

businesses.

leadership

strategic planning

customer focus

measurement, analysis, andknowledge management

workforce focus

operations focus

results
http://www.asq.org/http://en.wikipedia.org/wiki/Malcolm_Baldrige_National_Quality_Awardhttp://en.wikipedia.org/wiki/Malcolm_Baldrige_National_Quality_Awardhttp://www.asq.org/


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Core Values of the concept of MB model

Basic elements of the model that is based on MB:

Carry and deliver strategic and operational plans, design and implementation of aninformation gathering system and analysis of results. Strategic and operational plans

represent a set of requirements at the level of the company within the short-term and long-term plan, which must be achieved for the company's strategy to succeed. The strategic andoperational plans are guide-lines for all resources and measures for all business units in orderto ensure satisfaction of the buyer / user, as well as to achieve business success.

The system consists of six categories thatdefine the organization, itsoperationalization and results.

All shares in the company lead to business

results from customer satisfaction tofinancial and nonfinancial

performance, human resource developmentand social responsibility.

Information and analysis of the system arecritical values in creating effectivemanagement companies and business systems.

Criteria for performance excellence conveyed through this model are:

1. Leadership: What does the establishment of the system of leadership denote, (values,expectations and the company's social responsibility).

Quality is being defined by customers / users;

Strong leadership;

Continuous improvement and learning;

Employee participation and development;

Quick response to the needs;

Creating quality and prevention;

Longterm orientation towards the future;

Management based on facts;

Development partnerships;

Social responsibility of companies;

Focusing on results.


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2. Strategic Planning: Effectiveness of strategic and business planning, development orperformance plans by focusing on customers and operational performancerequirements.

3. Focus on customers and market: The way in which companies determine the

requirements and expectations of customers and market, but also the way in which

they established the relationships and assess their satisfaction.4. Information and analysis: Effectiveness of the information and analysis in the

direction of achieving excellence and market success.5. Human resources development and management: Performance in an effort to

create a full human potential that will enable the creation of high-performanceorganization.

6. Management processes: Effectiveness of the system and processes for ensuring thequality of products / services.

7. Business results: Trend results and performance comparison with competitors in keybusiness areas (customer satisfaction, finance and market products and services,human resources, suppliers, partners, and operations).

8.

Grading system - there are two types of evaluation with three dimensions ofgrading, as

follows:

Access - classification that applies to the first six criteria;

Access - results which apply to the seventh criterion and determines outputs inachieving the objectives set out in the criterion, and determining what results shouldindicate the level of performance and their trends.

Advantages of this model:

1.

customers are continuously being delivered an enhanced value to the product / serviceas a result of the success of the market

2.

improving all the performance and capabilities of companies.

3.

helps in improving the performance of companies;

4.

has a major role in achieving the competitiveness of the American companies in themarket .

5. enables communications and dissemination of information about best among all typesof organizations in the united states;

6. is used as a method for understanding and managing the planning, training and assessment

companies.

Program Impacts

The ratio of Baldrige Program benefits for the U.S. economy to program costs has beenestimated at 820 to 1 (Economic Evaluation of the Baldrige Performance ExcellenceProgram, December 2011)

95Baldrige Award recipients (including 6 two-time winners) serve as national rolemodels.

Median growth in revenue for two-time Baldrige Award winners is 92.5%.
http://www.nist.gov/baldrige/publications/economic_evaluation_2011.cfmhttp://www.nist.gov/baldrige/publications/economic_evaluation_2011.cfmhttp://patapsco.nist.gov/Award_Recipients/index.cfmhttp://patapsco.nist.gov/Award_Recipients/index.cfmhttp://www.nist.gov/baldrige/publications/economic_evaluation_2011.cfmhttp://www.nist.gov/baldrige/publications/economic_evaluation_2011.cfm


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Median job growth for two-time Baldrige Award winners is 65.5% (compared with 2.5%for a matched set of industries and time periods).

20102013 Baldrige Award applicants represent 470,403 jobs, over $77 billion inrevenue/budgets, and about 434 million customers served.

The value of services donated by 482 nationalBaldrige examiners in 2013 is $7.3million.

The value of services donated bystate Baldrige-based examiners in 2013 is $30 million.

Astudy by Truven Health Analytics links hospitals that adopt and use the Baldrige Criteria tosuccessful operations, management practices, and overall performance.

65% of hospitals are likely to use the Baldrige Criteria for Performance Excellence as a

systematic framework for performance improvement or as an internal assessment toolby 2018, according to survey results reported inFuturescan 2013.

According to the same survey, 41% of hospitals are likely to submit an application for the

Baldrige Award or a state-level Baldrige-based award by 2018.

Japanese Model of Business Excellence

In the middle of the last century, Japan promoted its first Quality Award, as a Japanese modelof perfection. By the application of this model a high growth of the Japanese industry and itsoverall economy is being reached. Such results in the last centurys seventies of therepresented a threat to both the American industry and economy.

Japanese Society of Engineers and scientists (JUSE) today is being managed by the grantingof this award. In the early fifties, (1951) Demings Quality Award is being established in

Japan by applying the concept of total quality control (Total Quality Control).

Unlike MB (American) and EFQM (European) model of excellence, the Japanese model isnot sufficiently transparent by itself. The effects of the Japanese Prize present identificationof a company that is a model for the application of TQC (Total Quality Control) as well as aninspiration for others to follow it.

The checklist for assessment while applying the Japanese model for Demingsaward, shouldfollow the criteria listed below:

determining of corporate policy;

assessment of the work organization and administration; practicing of education and dissemination of knowledge.

In addition, the following items are being assessed:

Management of the profits; Cost management; Management providers; Management of production processes; Management of primary and current assets; Management of measuring equipment; Human Resource Management;

Definition of labour relations; Educational programs;
http://www.nist.gov/baldrige/examiners/index.cfmhttp://www.nist.gov/baldrige/community/state_local.cfmhttp://www.nist.gov/baldrige/baldrige-120412.cfmhttp://www.nist.gov/baldrige/upload/Futurescan-2013-p44-2.pdfhttp://www.nist.gov/baldrige/upload/Futurescan-2013-p44-2.pdfhttp://www.nist.gov/baldrige/upload/Futurescan-2013-p44-2.pdfhttp://www.nist.gov/baldrige/upload/Futurescan-2013-p44-2.pdfhttp://www.nist.gov/baldrige/baldrige-120412.cfmhttp://www.nist.gov/baldrige/community/state_local.cfmhttp://www.nist.gov/baldrige/examiners/index.cfm


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The development of new products; Management research; Relationship with the vendors; Procedures for resolving complaints, grievances; Use information from customers;

Quality Assurance; Service for customers / users; Relationship with the customer.

The following diagram shows the criteria for Deming Framework application with theassociated framework

Application of the Demings circle includes special assessments that should show how the

system relates to:

the collection and use of information for quality; making analysis;


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the introduction of the standardization; management processes; quality assurance; how the system applies in practice; the effects of the impact of TQC (Total Quality Control) upon the quality, service,

delivery,costs, profits;

the future - if there is a plan for achieving TQC program.

European Model for Business Excellence

Introduced in early 1992, as the framework for assessing applications for The EuropeanQuality Award, it is the most widely-used organizational effectiveness framework in Europeand has become the basis for most national and regional Quality Awards.

European model of excellence has become an example and a benchmark based on the latercreated national models of excellence in many European countries according to their needsand the real level of the national economy in terms of the general European market.

The European model shows that the fulfillment of the customer satisfaction, employeesatisfaction, as well as the impact on society are being achieved through leadership thatmanages the company's policy and strategy, management of staff, resources and processes.

This, again, leads to excellence in achieving business results.Each of the nine elements of a criterion can be used to evaluate the progress of the companiesin achieving the path to perfection. The results show what the organization has achieved,while opportunities show how these results are achieved.

It helps the organization to understand whether it is on the path of excellence, dulyidentifying gaps and then stimulating solutions. The fundamental concepts are:

Result Orientation

Customer Focus

Leadership and Constancy of Purpose

Management by Processes and Facts


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People Development and Involvement

Continuous Learning, Innovation and Improvement

Partnership Development

Corporate Social Responsibility

The model is based on nine criteria. Five of these are enablers and four are results. Theenabler criteria cover what an organization does. The results criteria cover what an

organization achieves. Results are caused by enablers and feedback from results help to

improve the enablers

Criteria for achieving business excellence:

Leadership: How behavior and measures taken by the top management and other managersinspire, support and promote the TQM culture.

Policy and Strategy: The manner, in which the organization formulates, develops andreassesses its policy and strategy as well as how it turns into plans and actions.

Management of staff: The manner in which the organization provides employment

potential.

Resources: The manner in which the organization manages the resources effectively andefficiently.

Processes: The manner, in which the organization identifies, manages and improves theprocesses.

Satisfaction of customers / users: What the organization conducts in order to meet the customers satisfaction.

EmployeeSatisfaction: What is the organization doing in terms of employee satisfaction? Impact on society: What is the organization doing to meet the needs and expectations of thelocal, national and international community (voluntary steps and steps beyond the legalobligations)? This applies primarily for the organization's view towards protection of theenvironment and saving resources, the view of the company upon the quality of life and itsrelation to power and institutions that govern its operation.

Business results: What is the organization conducting in terms of scheduling in order toachieve the satisfaction of all those who have a financial interest in the organization.


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Comparison of the business excellence models

Subsystem Japanese American European

Management leadership/operational

performance/continuous program elements/wall-to-walldeployment

3 4 4

Market research/ planning design procedures/ product-service development

1 4 4

Purchasing- procurement proiciency/ contractingmethods/supplier performance

1 2 3

Handling/labeling/storage/ safety 1 1 2

Documentation/records/ control procedures/ policies/traceability

3 1 2

Human resources management/training/development/education

2 4 4

Transformation and added value (production/serviceprocess activities)

3 4 4

Process quality control/ standards/qualityresults/benchmarking/auditing

3 4 4

Inspection/testing/test equipment/tagging/ correctiveaction/ control of non-conforming output

4 3 4

Packaging/handling/inventory procedures 1 1 2

Marketing/distribution/delivery/ installation/operation 1 2 3

Customer service/customer satisfaction/ guarantees-warranties

1 3 4

Codes: 0 No attention, 1 Slight attention, 2 Moderate attention, 3 Heavy attention, 4 Great

attention

Source: Technics Technology Education Management Journal


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Award Descriptions for the various business excellence models:


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Common Award Criteria for the various business excellence models:


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Scoring Pattern and guidelines:

The seven categories of the business excellence framework have been allocated a total of1,000 points. The overall weightage of points allocated for the driver and systems categoriesis 55% and the results category is 45%


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References1. http://www.juse.or.jp/e/

2. http://www.sixsigmatqmi.com/pdf/Deming%20Prize.pdf

3. http://www.spring.gov.sg/QualityStandards/be/Documents/BE_Framework.pdf4.

http://www.texas-quality.org/SiteImages/125/Reference%20Library/Comparing%20Quality%20Awards.pdf
http://www.juse.or.jp/e/http://www.juse.or.jp/e/http://www.sixsigmatqmi.com/pdf/Deming%20Prize.pdfhttp://www.sixsigmatqmi.com/pdf/Deming%20Prize.pdfhttp://www.spring.gov.sg/QualityStandards/be/Documents/BE_Framework.pdfhttp://www.spring.gov.sg/QualityStandards/be/Documents/BE_Framework.pdfhttp://www.texas-quality.org/SiteImages/125/Reference%20Library/Comparing%20Quality%20Awards.pdfhttp://www.texas-quality.org/SiteImages/125/Reference%20Library/Comparing%20Quality%20Awards.pdfhttp://www.texas-quality.org/SiteImages/125/Reference%20Library/Comparing%20Quality%20Awards.pdfhttp://www.spring.gov.sg/QualityStandards/be/Documents/BE_Framework.pdfhttp://www.sixsigmatqmi.com/pdf/Deming%20Prize.pdfhttp://www.juse.or.jp/e/