QUALITY MANAGEMENT

- INTRODUCTION -
Businesses of all types are using quality management to
improve every aspect of their operations and ultimately
!ecoming more competitive and pro"ta!le#
INTRODUCTION
WHAT IS QUALITY MANAGEMENT
THE CONCEPTS
CASE STUDY
$ MORTGAGE EXPRESS
CASE STUDY
$ APPORT LIMITED
IMPLEMENTING QUALITY MANAGEMENT
IN YOUR BUSINESS
Introduction
%o& &ell is your !usiness performing'
%aving !een developed in manufacturing quality management has
gro&n into a &ay of helping any !usiness improve#
It aims to ma(es sure that at every level of an organi)ation* things are
done right "rst time#
+uality is for, -ny !usiness interested in reforming the &ay it &or(s to
improve pro"ta!ility#
.hat quality management are /the !asic concepts and methods0 and
guidance on ho& to approach !usiness1process1quality improvement
pro2ects'
.hat is quality management'
Originally developed as a &ay of improving manufacturing processes
quality management is no& a complete !usiness philosophy# By
emphasi)ing quality at all stages of your !usiness it can help improve
relia!ility delivery price performance and ultimately pro"ta!ility#
There is also a considera!le !ody of evidence that suggests that
quality $ a!ove relia!ility price and delivery $ is the most important
competitive &eapon that !usinesses have#
It can !e used to &in and retain customers recruit the !est people
gain resources and ena!le organi)ations to compete more e3ectively#
This document loo(s at some of the (ey concepts and methods in
quality management and e4amines ho& !usinesses of all si)es are
using them#
WHY SHOULD YOU CARE ABOUT IT?
+uality management has an image pro!lem# The phrase tends to
con2ure up visions of management gurus comple4 academic theories
and huge automated production lines#
In fact quality management involves formali)ing the things that most
!usinesses do already# There are many di3erent quality management
methodologies !ut all are !ased on t&o fundamental assumptions,
$ .hatever the !usiness process quality can !e assessed and
managed* and
$ The failure to address quality costs a !usiness "nancially and
reduces its competitiveness#
Increasingly !usinesses in all industries are responding to this message
$ often at the request of large supply chain partners &ho encourage
suppliers to adopt quality management# The result can !e,
$ a clearer !usiness focus*
$ improved e5ciency*
$ increased customer satisfaction*
$ improved communications* and
$ increased cash-6o& and the potential for pro"t#
Ta(en together these can also deliver an improved reputation $
something that can !e an incredi!ly po&erful !usiness asset#
Read on to "nd out more a!out ho& quality management &or(s and
ho& to apply it to your !usiness#
The concepts
+uality management goes far &ider than 2ust assuring product or
service quality $ it is a &ay of managing people and !usiness
processes to ensure complete customer satisfaction at every stage
internally and e4ternally#
Com!ined &ith e3ective leadership it aims to get an organi)ation
doing the right things right "rst time#
This section e4plains more a!out &hat quality management involves
!y loo(ing at some of the concepts that underpin it# 7ore detailed
documents e4ploring the issues !elo& are also availa!le from the DTI#
$ +uality
$ +uality management systems
$ 8rocess understanding
$ 8rocess improvement
$ 7easurement
$ 8eople
QUALITY
The most important concept is quality itself# .hat does it mean' -
frequently used de"nition is 9delighting the customer !y fully meeting
their needs and e4pectations:#
In other &ords &hat ;quality< is &ill !e di3erent for each !usiness# =irst
the organi)ation needs to (no& &hat these needs and e4pectations are
and !e a!le to measure its a!ility to meet them# This may include
performance appearance availa!ility delivery relia!ility
maintaina!ility cost e3ectiveness and price#
QUALITY MANAGEMENT SYSTEMS
- quality management system is a set of coordinated activities to help
an organi)ation achieve quality improvements and then !uild on them#
It does this !y ensuring that t&o important sets of requirements are
met,
$ customer reu!reme"ts # !y !uilding con"dence in the a!ility
of the organi)ation to deliver consistently products or service
that meet customers< needs and e4pectations#
$ or$%"!&%t!o"%' reu!reme"ts # !y ensuring that that the
availa!le resources $ materials human technology and
information $ are used as e5ciently and cost-e3ectively as
possi!le#
PROCESS UNDERSTANDING
In the simplest terms a process is any activity that adds value in an
organi)ation# >verything &e do is a process and ultimately forms part
of the net&or( of processes that ma(es up the &hole organi)ation#
In every organi)ation there are some very large processes &hich are
/can !e !ro(en do&n into groups of smaller processes called (ey or
core !usiness processes# These must !e carried out &ell if an
organi)ation is to achieve its mission and o!2ectives#
8rocess understanding is a (ey part of overall process improvement
/see !elo&0# It involves e4amining and mapping the processes in a
!usiness to understand ho& &ell it is performing# 8rocesses are
commonly documented under the follo&ing headings, title purpose
scope inputs outputs controls and resources#
PROCESS IMPRO(EMENT
The central aim of a ne&ly introduced quality management system is
to identify underperforming processes and improve them#
This can !e costly time consuming and disruptive so it<s vital that it is
properly planned and then e3ort targeted &here it &ill produce the
greatest !ene"ts#
- simple si4-step methodology for process improvement includes,
$ Process se'ect!o" # &here an achieva!le num!er of (ey
processes are selected for investigation#
$ Process u")erst%")!"$ # see a!ove#
$ Process *er+orm%"ce # involves recording a processes
historical performance and de"ning ho& progress should !e
measured /see !elo&0#
$ Process re,!e- # &here performance data is analy)ed and
recommendations made for improvement process $ including
timings resources and reporting mechanisms#
$ Process c.%"$e # translates the recommendations into a
detailed pro2ect plan &ith milestones o!2ectives performance
measures and targets#
$ C%*tur!"$ t.e c.%"$e # &here the process improvements are
integrated into the !usiness management system ensuring the
change is revie&ed managed and !uilt upon#
MEASUREMENT
8erformance measurement translates the aims of quality management
program into a set of targets that can !e used to monitor and control
the pro2ect# To !e truly e3ective these need to !e esta!lished at all
levels in the organi)ation#
Traditionally organi)ations have measured performance in "nancial
terms#
%o&ever quality management requires a more sophisticated approach
that uses not only cost accounting information !ut also measures the
improvements seen !y the customer and the results delivered to other
sta(eholders#
PEOPLE
The comple4ity of most processes in an organi)ation places them
!eyond the control of any one individual# This means that the only
e5cient &ay to tac(le process improvement is through team&or(#
?enior managers need to nurture a culture of quality $ !uilding trust
improving communication and encouraging contri!utions from
everyone#
________________________________________________________________________
CASE/STUDY
MORTGAGE EXPRESS
7ortgage >4press is the specialist lending arm of the Bradford @
Bingley Building ?ociety# It is !ased in Ne& Barnet north Aondon and
employs BCD sta3# It sells mortgages to customers via mortgage
advisors &ho recommend its products to customers through
partnerships &ith ma2or mortgage providers and direct to consumers#
OBE>CTIF>?
.hen 7ortgage >4press "rst em!raced total quality and the Business
>4cellence 7odelG in CHHI the company &as no longer ta(ing on ne&
!usiness and &as &inding do&n for closure# The company performed
its "rst self-assessment in CHHI returned to pro"t in CHHB &as short-
listed for the CHHJ UK Business >4cellence -&ards and eventually &on
an a&ard in CHHL#
In CHHI !ad de!ts and the decline in the UK housing mar(et caused
the company record losses of more than MNDm# -t that time no ne&
!usiness &as !eing ta(en on and the company had &ithdra&n from
the mar(et# ?ta3 &ere !eing redeployed into the gro&ing
;7anagement of -rrears< area to !ring the arrears pro!lem under
control#
?OAUTION
- culture of continuous improvement &as introduced through a num!er
of initiatives,
O ;%assle !oards< &here sta3 could &rite do&n pro!lems and potential
solutions
O ;+uality time< $ each employee &as allocated t&o hours per month
&here s1he could underta(e improvement activities
O Re-!randing of the company<s mission and value statements to focus
on ma4imi)ing the long term value for the company<s shareholders*
providing customers &ith a "rst class service* and ena!ling all
employees to achieve their !est#
R>?UAT?
-s part of the Aloyds T?B Proup 7ortgage >4press &as put on the
mar(et to "nd a suita!le !uyer and in 7ay CHHN came under the ne&
o&nership of Bradford @ Bingley Proup# >ven during this time of
change and revie&s sales still surpassed e4pectation and the !usiness
&as 6ooded &ith mortgage applications#
7ortgage >4press reali)ed the need for departmental reorgani)ation to
improve e5ciency and speed of service and formed multi-s(illed
teams to deal &ith and o&n applications from receipt to completion# It
continues to revie& its processes procedures and policies through its
;Aistening to
Customers< program &hich gathers feed!ac( from complaint analysis
satisfaction surveys and call recordings#
C%-AA>NP>?
The !usiness has undergone a restructuring during &hich the
management team targeted speci"c areas for improvement# In
addition 7ortgage >4press undertoo( its "rst self-assessment since
&inning the CHHL UK Business >4cellence -&ard &hich highlighted (ey
areas for improvement that have since !een incorporated into the
operational plan#
T%> A-?T .ORD
7anaging Director Keith Preenough recogni)es the need to stay
a!reast of change, ;The mar(et place is changing rapidly and &e need
to continue to motivate our team of people to (eep up &ith this
change#<
________________________________________________________________________
7ethods
-pproaches to quality management are continually evolving and
developing# This section introduces three of the most commonly used
approaches and e4plains their di3erences#
=or a more detailed appraisal of these standards please visit
&&&#dti#gov#u(1!estpractice
ISO 0111
8erhaps the !est-(no&n quality management system I?O HDDD is a
family of quality standards created and maintained !y the International
Organi)ation for ?tandardi)ation#
The most recent set of standards are,
$ I?O HDDD,IDDD $ +7?s $ =undamentals and voca!ulary# This is an
introduction to the I?O HDDD family#
$ I?O HDDC,IDDD $ +uality 7anagement ?ystems $ Requirements#
This is the core mem!er of the I?O HDDD family as it speci"es
the (ey requirements of an e5cient e3ective and adapta!le
+7?#
$ I?O HDDQ,IDDD $ Puidelines for performance improvement# This
focuses on the processes that quality management systems
should em!race#
These standards originated from a regular si4-year revie& and are
intended to !e generic and adapta!le to all (inds of organi)ations#
They are !uilt around !usiness processes &ith a strong emphasis on
improvement and a focus on meeting the needs of customers# I?O
HDDC recogni)es that customers play a signi"cant role in de"ning
requirements as inputs and it stresses that monitoring customer
satisfaction is central to determining &hether customer requirements
have !een met#
THE E2QM EXCELLENCE MODEL
The >4cellence 7odel &as developed !y the >uropean =oundation for
+uality 7anagement and is promoted in the UK as Business >4cellence
!y the British +uality =oundation /B+=0#
?ince its introduction in CHHI the 7odel has !ecome the most popular
improvement frame&or( in >urope used !y more than IDDDD
organi)ations# Regardless of sector si)e structure or maturity
organi)ations need to esta!lish an appropriate management system if
they are to !e successful and the >4cellence 7odel is a practical tool
to help them do this !y measuring &here they are on the path to
e4cellence helping them understand the gaps and then stimulating
solutions#
The >4cellence 7odel uses a mi4ture of qualitative and quantitative
measures underpinned !y eight ;fundamental concepts<# These
concepts are,
$ Resu'ts or!e"t%t!o" # e4cellence is dependent upon !alancing
and satisfying the needs of all relevant sta(eholders
$ Customer +ocus # the customer is the "nal ar!iter of product
and service quality#
$ Le%)ers.!* %") co"st%"c3 o+ *ur*ose # the !ehavior of an
organi)ation<s leaders must create unity of purpose#
$ M%"%$eme"t 43 *rocesses %") +%cts # decisions must !e
!ased on relia!le information#
$ Peo*'e )e,e'o*me"t %") !",o',eme"t # shared values and a
culture of trust and empo&erment is needed#
$ Co"t!"uous 'e%r"!"$5 !""o,%t!o" %") !m*ro,eme"t # a
culture of continuous learning innovation and improvement is
needed#
$ P%rt"ers.!* )e,e'o*me"t # mutually !ene"cial relationships
!uilt on trust sharing of (no&ledge and integration should !e
!uilt &ith partners#
$ Cor*or%te soc!%' res*o"s!4!'!t3 # the long-term interest of the
organi)ation are served !y adopting an ethical approach#
________________________________________________________________________
CASE/STUDY
APPORT LIMITED
-pport Aimited moulds and assem!les soap dispensers# It is !ased in
Der!y and employs around QD people# During the past CJ years the
company has gradually e4panded and no& produces a &ide range of
products colors and printed logos# -s a result lead times are no&
measured in days not &ee(s and though sales are gro&ing so too are
la!or and material costs#
OBE>CTIF>?
8eter -rnott Peneral 7anager of -ppor since Decem!er CHHH noted
the deterioration of relationships !et&een management and sta3 in
the last fe& years and reali)ed the need for change# In the past
employees had !een actively encouraged to identify ideas for
improvement !ut all too often these ideas did not get implemented
usually !ecause of lac( of direction and guidance from management#
This resulted in gro&ing frustration amongst employees#
?OAUTION
To&ards the end of CHHH -ppor made a conscious decision to fortify
internal relationships and improve customer service# Though the
!usiness &as already meeting HRS of deadlines it &as under pressure
to reduce lead times further reduce costs and improve employee
morale#
-s a result four continuous improvement /CI0 teams &ere formed#
>ach team is made up of "ve or si4 employees and a representative
from management and can run a ma4imum of four pro2ects at a time#
Once a pro2ect is completed it is revie&ed to esta!lish &hether initial
o!2ectives have !een met and &hether any further &or( is necessary#
R>?UAT?
Bene"ts include,
$ The design and manufacture of an assem!ly 2ig &hich cost MHJD
!ut saves la!or costs of MIDDD per year# No& operators can
assem!le more products each day reducing overtime and &aste
and creating !etter products#
$ - change in layout of a conveyor system ena!ling operators to
&or( more comforta!ly and e3ectively at minimal cost to the
!usiness#
$ ?ourcing alternative ra& materials there!y getting more
competitive prices and creating more !ene"cial relationships
&ith suppliers# Cost savings arising from this can either !e
reinvested in the !usiness or passed on to customers#
Current pro2ects include further streamlining of assem!ly operation
automation of certain moulding tools and evaluation of services to
ensure !est value for money# It is thought that all of these initiatives
&ill !ene"t employees and customers ali(e#
Information a!out these improvements and current "nancial
performance are communicated to employees every three months in
face-to-face sessions# ?ta3 is also informed a!out future developments
and plans and are given the opportunity to as( questions#
T%> A-?T .ORD
The ne4t phase of the improvement plan involves the introduction of
structured training for sta3# - more 6e4i!le ful"lled and highly s(illed
&or(force &ill ena!le -ppor to continue to gro& increase its product
range and techniques and provide a higher standard of customer
service#
________________________________________________________________________
Implementing quality management in your !usiness
.hatever your si)e and type of !usiness and &hatever the !usiness
process $ delivery design manufacturing or customer service $
reducing error !y improving the &ay things are done can have
dramatic !ene"ts#
- central assumption of quality management &hich is supported !y a
num!er of studies is that &hen &ell e4ecuted it pays for itself# This is
!ecause quality management is a practical and focused &ay of
promoting !est practice that concentrates its e3orts &here the
greatest !ene"ts &ill occur#
.hen as(ed if a !usiness can a3ord to implement quality
management practitioners often respond ;can you a3ord not to'<
One study claimed that many organi)ations have quality related costs
of !et&een IDS and QDS of their sales revenue# -n e3ective quality
improvement program that reduces this su!stantially can therefore
ma(e a direct and signi"cant contri!ution to pro"ts#
NEXT STEPS
If &hat you<ve read in this !rochure interests you you have three
immediate options,
$ Read more $ visit &&&#dti#gov#u(1!estpractice to read our &hole
range of quality management pu!lications all of &hich are
availa!le free of charge online or in print#
$ Tal( to your colleagues $ ta(e soundings to "nd out &ho<s
interested and informed a!out quality management and discuss
your ideas#
$ Consult $ tal( to Business Ain( to get some help# Call DRQJ LDD H
DDL to "nd your nearest adviser#
Before committing time and money to a quality program you need to
clarify your motives and the level of commitment in your organi)ation
particularly at the senior management level#
There are t&o !asic approaches to quality management
implementation,
$ T.e 64'!t&7 %**ro%c. # &here the &hole organi)ation is e4posed
very rapidly to the concepts# This shoc( tactic can !e
e4traordinarily e3ective is done &ell# %o&ever if implemented
!adly it can cause confusion among sta3 and even damage
quality levels#
$ T.e s'o-5 *'%""e) %**ro%c. # &hich &or(s through gradual
change so that 9!usiness as usual: !ecomes 9the
implementation of quality and
$ e4cellence:# This relies on managers !eing role models and
e3ectively
$ promoting quality and e4cellence#
.hichever option !usinesses settle on many "rst run pilot scheme
using a small team to e4plore the issues and dip a toe in the &ater#
=urther help and advice
Br!t!s. Qu%'!t3 2ou")%t!o" 8BQ29 # is >urope<s largest not-for-pro"t
corporate mem!ership organi)ation promoting performance improvement
and e4cellence through a range of services for its mem!ers#
&&&#qualityfoundation# co#u(
Br!t!s. St%")%r)s I"st!tut!o" 8BSI9 # responsi!le for preparing British
?tandards that are used in all industries# &&&#!si-glo!al#com
I"st!tute o+ Qu%'!t3 Assur%"ce 8IQA9
8rovides training seminars and other services for mem!ers industry and
commerce# &&&#iqa#org
Qu%'!t3 Met.o)s Assoc!%t!o" 8QMA9
8romotes the sharing of (no&ledge and !est practice through seminars
and &or(shops# &&&#qma#co#u(
U"!te) :!"$)om Accre)!t%t!o" Ser,!ce 8U:AS9
The UK !ody responsi!le for assessing and accrediting the competence of
organi)ations in the "elds of cali!ration measurement testing inspection
and the certi"cation of systems personnel and products# &&&#u(as#com
QUALITY MANAGEMENT; INTRODUCTORT PUID>
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O Fisit our &e!site at ---<)t!<$o,<u=>4est*r%ct!ce
O Call us on 1?@1 AB1 CB11 to order from our range of free
!est practice pu!lications or visit ---<)t!<$o,<u=>*u4'!c%t!o"s
O Contact your local Business Ain( advisor !y visiting the &e!site at
---<4us!"ess'!"=<$o,<u= or calling 1?DB E11 0 11E
8u!lished !y the Department of Trade and Industry# &&&#dti#gov#u(
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