Quality Management - Lecture

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QUALITY MANAGEMENT Autumn 2005 Lectures ppt-1 31.10.-1.11.2005 PRINT ALSO THE EFQM MATERIAL, pp. 3- 15, for Tue 1.11, see the link in the course site Professor Taina Savolainen

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Quality Management - Lecture

Transcript of Quality Management - Lecture

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QUALITY MANAGEMENT

Autumn 2005Lectures ppt-1

31.10.-1.11.2005

PRINT ALSO THE EFQM MATERIAL, pp. 3-15,for Tue 1.11, see the link in the course site

ProfessorTaina Savolainen

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DEVELOPMENTS, DIRECTIONS AND PARADIGMS

IN QUALITY THINKING

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HISTORY OF QUALITY THINKING

to discover evolution,paradigms, and directions

• Quality- antique concept?• Periods and paradigms of quality

– Craftmanship – nest of ideal quality concept– Industrialization – ’rise’ of quality (measurement) – Competition and globalization – quality boom ?!– Self-evident part of business– frustration and

ignorance?! survival-game, change & must of improvement

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PARADIGMS OF QUALITY Classical theories

’HARD’ SIDE OF QUALITY1. QUALITY CONTROL (1920-40-l.) INSPECTION (Taylorism) Mechanistic view of a human being; belief in rationalism and economic motives; task

and functions dispersed, measurement SPC (1930’s -) Shewhart, and Deming later on

Prosess control, eliminating variation, sampling methods

2. QUALITY ASSURANCE (1950’s - )Quality is not free! quality costsManagement responsibility; how much does it cost!

how much to invest? TQC: Total Quality Control (Feigenbaum , 1950’s) Reliability engineering); aircraft industry

ZERO DEFECTS: towards the soft side of quality: Management, HR involvement, training, motivation (Y-theory)

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PARADIGMS - Classical theories CONCLUSIONS

Quality Management is: – ’Defensive’ , reactive, negative attitude towards quality! – Afterwards control –picking up default products– Repairing deafults, separate departments of quality control – Not a ’business’ of managers or supervisors; – it is a duty of engineers

Are we not seeing this still these days? control, guest for measuring and deep-rooted belief in

rationalizm cf. quality systems, ISO9000, approaches to the assessment of

quality and it’s role in organizations!

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PARADIGMS OF QUALITY Management theories

’Soft’-side of quality; human issues, management role

• Traces back to ’Social Man’ School of thought in management and early 1960’s - Zero defect thinking; ’right the first time’

(P. Crosby)• 1970-80’s: Total QM strategic issue – competitive advantage,

a system for managing the organization TQM invaded in Finland in mid- 1980’s• 1990’s: TQM, learning, org. culture, teams,assessment• 2000’s: ’assessment movement’, competitive ability, change, Third sector: social communities (member oganizations), social

enterprises and organizations involved.

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EIGHT DECADES OF QUALITY THINKING

Main approaches in summary:

• 1920-50: Quality Control, Assurance• 1960-:Human approach emerges; quality circels

• 1970-80; TQM, strategic quality, competitive advantage,customer

• 1990-: teams, learning, public sector involved quality awards; rise of quality assessment

• 2000-: organizational challenges of new millenium: change, leadership, (assessment and improvement)

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The human issues

The technical issues

It’s the SOFT stuff that’s hard

The HARD stuffis easier

’SOFT and HARD’ Sides of Quality ManagementIn harmony?

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SIX CORNERSTONES OF QUALITY MANAGEMENT

Employee Involvement

Continuous Improvement

Customer & PartnershipOrientation

Concept of TQM

Concept of QualityStrategic

Competitive Advantage

Leadership & Mgmt Role

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CORNERSTONES OF QUALITY MANAGEMENT

1-3; STARTING POINTS OF QUALITY THINKING 1. BROAD QUALITY CONCEPT, - OUTPUT, PRODUCT - ACTIVITY/PROCESS - ORG.’S ACTIVITY/PROCESSES;TOTAL QUALITY

2. QUALITY - STRATEGIC COMPETITIVE ADVANTAGE - WHY QUALITY: TWO PATHS OF QUALITY IMRPOVEMENT- DEVELOPMENT MODEL FOR THE ENTIRE ORGANIZATION FOR

ENHANCING COMPETITIVENESS?

3. CUSTOMER ORIENTATION- NEEDS AND EXPECTATIONS AS A STARTING POINT &ULTIMATE GOAL- SATISFACTION AS DECISIVE CRITERIA- EXTERNAL/INTERNAL CUSTOMERS

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FIRST CORNERSTONE OF QM

CONCEPT OF QUALITY

• Fitness for use (J.M. Juran)

• Organization’s ability to meet and/or exceed

customer and partnership expectations &needs

(The Nordic Service School)

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VIEWS OF QUALITY

QUALITY

PROCESSPRODUCTION/

DELIVERY

(APPLIED FROM P. Lillrank)

.

PRODUCT/SERVICECHARACTERISTICS

VALUEPRICE VS. QUALITY

COMPETITIONSTRATEGIC

CUSTOMERSATISFACTION

ENVIRONMENTSTAKEHOLDERS

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BROAD CONCEPT OF QUALITY

SYSTEMSORG.

STRUCTURE MGMT&

LEADERSHIPHUMAN

RESOURSESFACILITIESEQUIPMENT

QUALITY OF THE ORG’S ACTIVITY PROCESSES

CUSTOMERSUPPLIER

TOTAL QUALITY,

DEFINITION OF TQM :”An organizationwide commitment to infusing quality into every activity through continuous improvement” (Daft, 2006)

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SECOND CORNERSTONE OF QM

2. QUALITY - STRATEGIC COMPETITIVE MEANS &ADVANTAGE

-WHY QUALITY: TWO PATHS OF QUALITY IMRPOVEMENT

- QUALITY FOCUSED MANAGEMENT MODEL FOR THE ENTIRE ORGANIZATION FOR ENHANCING COMPETITIVENESS?

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TQM AND COMPETITIVENESS(Powell, 1995)

•Intangible resources matter more: open organizational culture, management commitment, employee involvement• No formal adoption of TQM is necessarily needed (quality programs) to be successful•Tools and techniques are easier to imitate; intangible resources are imperfectly imitable•Focus on developing tacit, behavioral, imperfectly imitable resources: creating a culture within which quality improvement can thrive/develop

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3RD CORNERSTONE: CUSTOMER FOCUS (ORIENTATION)

CUSTOMER PRODUCT

Philosophical

VALUE PRODUCTION

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CUSTOMER IN TQM

CUSTOMER-DRIVEN

CUSTOMER FEEDBACK & INVOLVEMENT

CUSTOMER SATISFACTION CUSTOMER FOCUSCOMPETITIVE-

NESS

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CUSTOMER AS RESOURCE

CONQUERINGTHE HEART

Emotions

SHARING INFORMATION,ADVISING

CUSTOMER COMMITMENT/INPUT/

”MONEY”

(APPLIED FROM STORBACKA & LEHTINEN, 1997)

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Discussion questions:

1) Poor quality - how can you see that? Take examples of products, services, etc.

2) What is the implication?

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Theoretical and other Notions on The Quality Movement:

Past, Present and Future

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TQM - A MANAGEMENT IDEOLOGY (PHILOSOPHY)(Savolainen 1997):

•The various arts of managing organizations (‘isms’)) provide frameworks, concepts, models and methods to understand, change and develope managerial and organizational practices;• The ultimate goal is a better business performance and enhancing of competitiveness

MANAGEMENT IDEOLOGIES ARE REAL FORCES AND MODELS FOR MANAGEMENT

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HOW TO LOOK THE QUALITY MOVEMENT

DYNAMICS OF THE MOVEMENT HOW THE MOVEMENT HAS SPREAD?• Early adopters , role models• Public sector developments• Patterns of deploying QM programs in leading comp.• (see the lecture ppt later on)

THEORETICAL LINKS & PERSPECTIVES• Organizational change & continuous improvement • Organizational culture, learning, HRM, etc. perspectives• Financial performance & TQM • (more in workshop presentations)

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TYPICAL FOR THE QUALITY MOVEMENT(TQM)

•Most widely applied and spread management model or philosophy in USA in the last two decades

•Integrates and legitimates many management models/philosophies applied and practiced in the 1980’s and legitimates them, for example, (MBO, QWL, participative management)

•Holistic (total quality) model; integration of technical, cultural, organizational and behavior aspects.

•Concepts are still used that were created and developed in 1980 - 1990

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DYNAMICS OF THE MOVEMENTThe Japanese and US Quality Movements

SIMILARITIES among the two movements- Ideologically both relied on the same philosophy- Began with inspection- Moved to SPC and quality assurance- Applied Quality Circles- Focused strongly on education and training- Stimulated & supported by a small number of experts-Were organized through a national non profit promotional organizations (ASQ and JUSE)

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The Japanese and US Quality Movements

DIFFERENCES among the two movements:

- In Japan quality ideology spread faster- The success was notable, if not miraculous- The US movement progressed slowly - Did not achieve any breakthroughs (despite some well-known, prominent role models)

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THEORETICAL LINKS:QM IS LINKED WITH ORGANIZATION & MGMENT THEORIES

MANAGEMENT THEORY

Leadership

ORGANIZATION THEORYStructure

Org. Change

QUALITYMANAGEMENT

Customer focus, CI, Teamwork

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QUALITY IMPROVEMENT - AN ORGANIZATIONAL CHANGE PROCESS

LEADERSHIPPEOPLE

MANAGEMENT

SOFT‘be through’ (live) change

processes as human beings emotions, experiences,will

HARDManagement of projects and processes;quality tools and

technics

VISION, MISSIONPURPOSE

GOALS RESULTS,PERFORMANCE

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HOW DOES THE QUALITY MOVEMENT INCREASE UNDERSTANDING OF ORGANIZATIONAL CHANGE

•the fundamental question: how and why do organizations change?

•Nature of change process; linear, straight-forward process or complex, non-linear process?•Change forces; external or internal?•Change mechanisms: adaptation or selection?•Change processes and mgmt strategies in org.

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HOW DOES THE QUALITY MOVEMENT INCREASE UNDERSTANDING OF ORGANIZATIONAL CHANGE?

Change is shown by:

•Changing concept of quality - major change during the decades; dynamic and ever changing concept•Changing customer thinking; Customer-orientation• Processes of continuous imrovement (CI)• Process management and process developments• Leadership strategies (participation)• HRM strategies and processes in TQM practices

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SIMILARITIES/LINKS AND DIFFERENCES:1. AREAS ESSENTIALLY IDENTICAL• Top management leadership• HRM – employee involvement, teams, career mgmt2. AREAS WHICH WOULD BENEFIT FROM MGMT THEORY• Implementation issues - organiz. specific (TQM universal)3. RESEARCH AREAS: MGMT PRACTICES WOULD BENEFIT FROM TQM• information processing• strategy implementation• process improvement• customer focus and satisfaction

QUALITY MOVEMENT & MANAGEMENT THEORY

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Conclusions:

Several links but different concepts and terminology

•Quality movement is practitioner-based: Japanese engineers•Movement spread to USA driven by practitioners•As a consequence: challenges related to concepts; e.g. Continuous improvement – ad hoc technique•Concepts are linked with many organization theory approaches - such as operations research, systems theory,motivation, org. culture, org. learning

QUALITY MOVEMENT & MANAGEMENT THEORY

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SOME PROSPECTS FOR FUTURE

Sustaining of the movement -Success of TQM implementation

• Rhetoric over substance• Original TQM approach vs. new approaches in the name of TQM• Research on mechanisms/practices to reveal the real effects of the philosophy

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SOME PROSPECTS FOR FUTURE

IMPACT OF ORGANIZATIONAL CHANGES?

•Organizing of work (teams;employee level)•Work motivation; apportioning of rewards in organizations•Learning orientation•Top-down implementation approach vs. real employee empowerment

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ATTENTION!SEE A FEW COMPLEMENTARY

SLIDES OF THE EFQM MODEL IN THE FOLLOWING.

WE’LL USE MAINLY PRINTED MATERIAL FROM WEB-SITE

”INTRODUCTION TO EXCELLENCE”

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The EFQM Model is key in four ways:1. as a framework which organisations can use to help them develop their Vision and goals for the future in a tangible, measurable way 2. as a framework which organisations can use to help them identify and understand the systemic nature of their business, the key linkages and cause and effect relationships.3. as the basis for the European Quality Award, a process which allows Europe to recognise its most successful organisations and promote them as role models of Excellence for others to learn from.4. as a diagnostic tool for assessing the current health of the organisation. Through this process an organisation is better able to balance its priorities, allocate resources and generate realistic business plans.

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The fourth, diagnostic use, is known asSELF-ASSESSMENT

the process of Self-Assessment is a catalyst for driving business improvement

The EFQM definition of Self-Assessment is as follows:

Self-Assessment is a comprehensive, systematic and regular review of an organisation's activities and results referenced against the EFQM Excellence Model . The Self-Assessment process allows the organisation to discern its strengths and areas for improvements and culminates in planned improvement actions which are taken and monitored for progress.

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EFQM: ”RADAR”/”TUTKA” logic

RESULTS/GOALS,

APPROACHES

DEPLOYMENT

ASSESS AND REVIEW

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Success level - EFQM

• Company visit >500p.• Finalist ~550p.• Prize winner ~620p.• Award winner Best Prize winner

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2001 Category for Large Businesses and Business Units No Award Winner DHL Portugal Westel Mobile Telecommunications Co. Ltd. 2001 Category for Operational Units No Award Winner No Prize Winners 2001 Category for Public Sector St. Mary's College Northern Ireland (Award Winner) No Prize Winners 2001 Category for Subsidiary SMEs Siemans Tele Industry SA Greece (Prize Winner) 2001 Category for Independents SMEs Zahnarztpraxis Switzerland (Award Winner) Maxi Coco-Mat SA Greece (Prize Winner) QMS AG Quality Management Services AG Germany (Prize

Winner)

The European Quality Award Winners

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2002 Cathegory for Large Business Units No Award Winner Dexia Sofaxis2002 Category for Operational Units No Award Winner Bosch Sanayi ve Ticaret AS2002 Category for Public Sector No Award Winner Customs and Tax Region Aarhus2002 Category for Independent SME Springfarm Architectural Mouldings Ltd ASLE, Workers Incorporated Companies Association Maxi Coco-Mat SA2002 Category for Subsidiary SME No Award Winner Banc International d’Andorra – Banca Mora

The European Quality Award Winners

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2003 Cathegory for Large Business Units No Award Winner Siemens Nederland NV2003 Category for Operational Units Bosch Sanayi ve Ticaret AS Grundfos A/S Solvay Martorell Site TNT Post Group Information Systems2003 Category for Public Sector Runshaw College Kocaeli Chamber of Industry2003 Category for Independent SME Maxi Coco-Mat SA Hunziker and Co Microdeco Robur S.p.A. Schindlerhof Klaus Kobjoll GmbH2003 Category for Subsidiary SME Edinburgh International Conference Centre

The European Quality Award Winners

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The European Quality Award Winners2004 Category: Large Organisations and Business Units Yell, United Kingdom - Award Winner and Prize Winner in Leadership and Constancy

of Purpose and in People Development and Involvement Siemens AG Power Transmission and Distribution, Germany - Prize Winner in Results

Orientation Knorr-Bremse Systems for Commercial Vehicle, Germany - Finalist Solvay Pharma, Spain - Finalist TNT Express – Finalist2004 Category: Operational Units TNT Post Group Information Systems, United Kingdom - Prize Winner in People

Development and Involvement T-Systems Development Centre South West GmbH, Germany - Prize Winner in

Customer Focus and in People Development and Involvement T-Systems Multimedia Solutions GmbH, Germany - Finalist2004 Category: Public Sector Kocaeli Chamber of Industry, Turkey - Award Winner and Prize Winner in People

Development and Involvement Colegio Ursulinas - Vitoria, Spain - Prize Winner in Leadership and Constancy of

Purpose Lauaxeta Ikastola Sociedad Cooperativa, Spain - Finalist

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The European Quality Award Winners

2004 Category: Small &Medium-sized Organisations- Subsidiary SMEs

EMAR Satis Sonrasi Musteri Hismetleri AS, Turkey - Prize Winner in Results Orientation

SKF Türk Sanayi ve Ticaret Ltd.STI, Turkey - Prize Winner in Corporate Social Responsibility and in People Development and Involvement

2004 Category: Small &Medium-sized Organisations-Independent SMEs

Fonderie del Montello SpA, Italy - Prize Winner in Leadership and Constancy of Purpose

Hunziker and Co, Switzerland - Prize Winner in People Development and Involvement

Schindlerhof Klaus Kobjoll GmbH, Germany - Prize Winner in People Development and Involvement

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Finnish Quality Award Winners (EFQM) 2001-20042004 Anttila Oy, department store 10 Recognitions for Excellence2003 Large organizations, units category: Stora Enso Ingerois Oy (subsidiary of SE Oyj), Inkeroisten kartonkitehdas, folding boxboard manufacturing2003 Public sector and other non-profit org. category: Elektroniikkalaitos (Unit of Military Finland)

2002 No winners 2001 Stora Enso Oyj, The Oulu Mill (printing paper and boards manufacturing)