Total Quality Management : Frameworks for Organizational Quality

Performance Excellence

The Criteria for Performance Excellence - designed to encourage companies to enhance their competitiveness through an aligned approach to organizational performance management that results in:

1. Delivery of ever- improving value to customers, contributing to market- place success.

2. Improvement of overall company performance and capabilities.

3. Organizational and personal learning.

The criteria consist of a hierarchical set of categories, items, and areas to address. The seven categories are

1.Leadership2.Strategic planning3.Customer and Market focus4.Measurement, analysis, and

knowledge management5.Human resource focus6.Process management7.Business results

1.1 Senior Leadership a. Vision and Values b. Communication and Organizational Performance

1.2 Governance and Social Responsibility

a. Organizational Governance b. Legal and Ethical Behavior c. Support Key Communities

Baldrige Award Evaluation Process The factors used to evaluate approaches include:

appropriateness of the methods to the requirements

effectiveness of methods, namely, the degree to which the approach is systematic, integrated, and consistently applied; the degree to which the approach embodies effective evaluation/improvement cycles; and the degree to which the approach is based upon reliable information and data.

Alignment with organizational needs.

Evidence of innovation.

Deployment- refers to the extent to which the approaches are applied to all requirements of the item. The factors used to evaluate deployment include:

1. Use of the approach in addressing item requirements relevant to the organization.

2. Use of the approach by all appropriate work units.

Results- refers to the outcomes and effects in achieving the purposes given

in the item. The factors used to evaluate results include:

3. Current performance levels.4. Performance relative to appropriate comparisons or

benchmarks.5. Rate, breadth, and importance of performance improvements.6. Linkage of result measures to important customer, market,

process, and action plan performance requirements identified in the approach.

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The Baldrige Criteria And the deming Philosophy

1. Statement of purpose2. Learn the new philosophy3. Understand inspection4. End price tag decision5. Improve constantly6. Institute training7. Teach and institute leadership8. Drive out fear and innovate 9. Optimize the efforts of teams and staff10.Eliminate exhortations11.Eliminate quotas and MBO; institute improvement;and understand

processes 12.Remove barriers 13.Encourage education14.Take action

International Quality Award And Programs-numerous countries and regions of the world have

established awards and award criteria. Many other award program are similar in nature to the Baldrige Criteria.

The Deming Prize-the Deming application prize was instituted in 1951 by the

union of Japanese Scientists and engineers (JUSE) in recognition and appreciation of W. Edwards Deming’s achievements in statisticl qulity control and his friendship with the Japanese people.

The Judging Criteria consist of a checklist of 10 major categories:

1. Policies2. Organization and its operation3. Education and dissemination 4. Information gathering5. Communication and its utilization6. Analysis7. Standardization8. Control/management9. Quality assurance10. Effects and uture plans

-in october 1991, the European foundation for quality management (EFQM) in partnership with the European commission and the European Organization for quality announced the creation of European Quality Award.

European Quality Award

-Canada’s National Quality Institute recognizes Canada’s foremost achievers of excellence through the prestigious Canada awards for excellence.

Canadian Awards for Business Excellence

1. Leadership2. Customer focus3. Planning for improvement4. People focus5. Process of optimization6. Supplier focus

The Major Categories and items within each category are:

-Australian Business Excellence Awards were developed independently from the Baldrige Award from 1993.

4 levels of awards1. The Business Improvement Level 2. Award Level3. Award Gold Level4. The Australian Business Excellence Prize

Australian Business Excellence Awards

-to facilitates the emerging economy of China, the Chinese government has issued new quality standard that became effective on Jan.1, 2005, which are designed to encourage China’s thriving business sector to strive for better quality.

Quality Awards in China

Baldrige and National culture

ISO 9000ISO 9000 defines quality system standards, based on the premise that certain generic characteristics of management practices can be standardized, and that a well-designed, well-implemented, and carefully managed quality systems provides confidence that the outputs will meet customer expectations and requirements. The standards were created to meet five objectives:

1. Achieve, maintain, and seek to continuously improve product quality (including services) in relationship to requirements.

2. Improve the quality of operations to continually meet customers and stakeholders stated and implied needs.

3. Provide confidence to internal management and other employees that quality requirements are being fulfilled and that improvement is taking place.

4. Provide confidence to customers and other stakeholders that quality requirements are being achieved in the delivered product.

5. Provide confidence that quality system requirements are fulfilled.

Structure of the ISO 9000 Standards focus on developing, documenting and implementing procedures. The standards consist three documents:

1.ISO 9000 - Fundamentals and Vocabulary

2.ISO 9001 - Requirements

3.ISO 9004 – Guidance for performance improvement

Implementation and Registration

Evolution of Six Sigma

The core philosophy of Six Sigma is based on some key concepts:

1. Think in terms of key business processes and customer requirements with a clear focus in overall strategic objectives.

2. Focus on corporate sponsors responsible for championing projects, support team activity, help to overcome resistance to change and obtain resources.

3. Emphasize such quantifiable measures as defects per million opportunities that can be applied to all parts of an organization: manufacturing, engineering, administrative, software and so on.

4. Ensure that appropriate metrics are identified early in the process and that they focus on business results, thereby providing incentives and accountability.

5. Provide extensive training followed by project team deployment to improve profitability, reduce non-value added actiivities, and achieve cycle time reduction.

6. Create high qualified classes improvement experts who can apply improvement tools and lead teams.

7. Sets stretch objectives for improvement.

One of the key learnings GE discovered was that Six Sigma is not only for engineers. Welch observed the following:

1. Plant managers can use Six Sigma to reduce waste, etc.2. Human resource managers need it to reduce cycle time for hiring

employees.3. Regional sales managers use it to improve forecast reliability and

pricing strategies or variations.4. Plumbers, car mechanics and gardeners use it to understand their

customer’s needs and wants.

Six Sigma as a Quality Framework

Some of the contrasting features include:

1. TQ is based largely on worker empowerment and teams; Six sigma is owned by business leader champions.

2. TQ activities generally occur within a function, process, or individual workplace; Six Sigma projects are truly cross functional.

3. TQ training is generally limited to simple improvement tools and concepts; Six Sigma focuses on a more rigorous an advance set of statistical methods and a structured problem solving methodology.

4. TQ is focus on improvement with little financial accountability; Six Sigma requires a verifiable return on investment and focus on the bottomline.

Six Sigma in Service Oraganization

Three Key Characteristics of All Six Sigma Projects:

1. A problem to be solved.

2. A process in which the problem exist.

3. One or more measures that quantify the gap to be close and can be use to monitor progress.

4 key Measures of the Performance in Applying Six Sigma

1. Accuracy

2. Cycle time

3. Cost

4. Customer Satisfaction

Examples of Financial Application of Six Sigma

1. Reduce the average and variation of days outstanding of accounts receivable.

2. Close the books faster.

3. Improve the accuracy and speed of the audit process.

4. Reduce variation in cash flow.

5. Improve the accuracy of journal entries.

6. Improve accuracy and cycle time of standard financial report.