Chapter 2 - Strategic Quality Management and Ope Rationalizing Quality

Chapter 2

Strategic Quality Management and

Operationalizing Quality

Objectives

Define strategic quality managementDiscuss the strategic management

processOperationalize the dimensions of

quality Discuss ways to develop quality

measures and metricsDiscuss ways in which customer input

may be obtained

Strategic Quality Management (SQM)

The term and concept is credited to Garvin (1988).

Juran (1988) defined SQM as a “systematic approach for setting and meeting quality goals throughout the company …with upper management participation in managing for quality to an unprecedented degree.”


Madu and Kuei (1993) define the term as an extension of TQM.

SQM involves the incorporation of quality and continuous improvement as a strategic objective


SQM is fully integrated into the three phases of the strategic management process: strategic planning strategic deployment evaluation and control

The Strategic Planning Process

Begins with the organization’s mission and vision statement.

SWOT Analysis Internal assessment (strengths and

weaknesses) External assessment (opportunities and

threats)

The Strategic Planning Process (Figure 2.2)

External factors compared to internal factors to determine strategic goals

Strategies developedDeliberate strategies formed to

realize planned intentionsEmergent strategies emerge from

unplanned events

Strategic Deployment

All members of organization are involved

The strategic plan is shared with all members of the organization

Projects and actions identify for implementation

Strategic Deployment (Figure 2.3)

Bronson Methodist Hospital 2005 Malcolm Baldrige National Quality

Award Plan for Excellence Plan deployed beginning with the

Bronson Leadership System

Evaluation and Control

Feedback SystemSystematic assessment system

Measures Metrics

What is important to the firm? How does the firm create value?

Provide effective feedbackFocus attention on gaps between current

level of performance and desired level

Approaches to Monitoring Progress toward Strategic Goals

Cost of Quality Measure of all costs Decline in costs indicates overall improvement in quality

Balanced Scorecard A management control system Focused on mission, strategy, and goals Assesses progress (4 perspectives)

Financial CustomerOrganizational learning and growthInternal business

Dimensions, Measures, and Metrics

Garvin’s Eight Dimensions are often used as a framework Metric has to be developed to operationalize the

dimensions. Customer input

Service quality Multidimensional Dimensions must be developed for each service

industry Usually more qualitative than quantitative

Dimensions, Measures, and Metrics

Importance of each dimension must be considered

Weight given to the dimension should reflect how vital it is to the product or service

Customer input should be used to determine how vital the dimension is

Example: Operationalizing the Dimensions of Quality

Consider the case of a laser printer for use with a personalcomputer. Garvin’s eight dimensions of product qualitymight be operationalized as follows.


Performance:Pages per minutePrint density

Features:Multiple paper traysColor capability

Reliability:Mean time between failures (MTBF)


Conformance:UL ratedCrispness of print relative to competitors

Durability:Estimated time to obsolescenceExpected life of major components

Serviceability:Availability of authorized repair centersNumber of copies per print cartridge


Aesthetics:Control button layoutCase style

Perceived Quality:Brand name recognitionRating in Consumer ReportsRating in Byte magazine


The relative importance of each dimension could beestablished by assigning each dimension a weightbetween 0 and 1 with the total weights = 1.

Dimension WeightPerformance 0.30Features 0.05Reliability 0.15Conformance 0.10Durability 0.15Serviceability 0.10Aesthetics 0.05Perceived Quality 0.10

TOTAL 1.00


Each printer to be evaluated would be tested usingthe measures or metrics established for eachdimension. Based on the test results a dimensionscore between 0 and 10 could be assignedwhere 10 indicates perfection and 0 indicatestotal absence of that dimension.


Dimension Weight Brand X Brand Y Score Score

Performance 0.30 8 7Features 0.05 6 2Reliability 0.15 5 6Conformance 0.10 8 7Durability 0.15 9 8Serviceability 0.10 6 9Aesthetics 0.05 7 9Perceived Quality 0.10 9 6

TOTAL 1.00


Multiplying the dimension score by the dimension weight yields a weighted dimensionscore. Summing these weighted scores overthe eight dimensions yields an overall relativequality rating for each copier.

NOTE: This process can be easily done usinga spreadsheet such as Excel.


Dimension Weight Brand X Brand Y Score Wtd. Score Wtd.

Performance 0.30 8 2.40 7 2.10Features 0.05 6 0.30 2 0.10Reliability 0.15 5 0.75 6 0.90Conformance 0.10 8 0.80 7 0.70Durability 0.15 9 1.35 8 1.20 Serviceability 0.10 6 0.60 9 0.90Aesthetics 0.05 7 0.35 9 0.45Perceived Quality 0.10 9 0.90 6 0.60

TOTAL 1.00 7.45 6.95

In this case, Brand X is determined to be superioroverall to Brand Y.

Methods of Obtaining Input from Customers

Customers provide source of the dimensions used

Validity and reliability Validity-what was intended to measured is

being measured Reliability-how consistent is the method

Focus Groups Surveys Combination (Focus Groups & Surveys)

Focus Group

Unstructured interview Trained moderator Homogenous respondents

Provides more information than survey

Analysis is more difficulty because much of the data is qualitative

Surveys

Questionnaires are given to a sample population

Usually in a prearranged order with predetermined set of responses

Concerns when using survey Question design, presentation order,

response scale, non-response bias, and data analysis

Focus Groups & Surveys in Combination

Focus groups can help determine key quality characteristics

Information from focus group used to design survey that will yield desired information

Summary

Quality should be in strategic plan if it is used as a source of competitive advantage

Strategic plans must be deployed and managed

Input from many sources is vital

Summary

Input can be obtained from customer surveys and/or focus groups

Validity and reliability should always be considered in data collection

Cost of Quality and The Balanced Scorecard can be used to determine the effectiveness of strategic quality plan deployment

Chapter 2 - Strategic Quality Management and Ope Rationalizing Quality

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