Quality Management Principles Become CEO Management Practices

Marsha Ludwig-Becker September 2002

2001 by Becker Technology, Inc

A Quality System versus a Management System

The management system of a company should be determined strategically and must meet the companys business objectives. The ISO standards and guides can be used to accomplish strategic business objectives, to create a quality management system that fits the business, integrates company-wide operations, and makes profit. The benefits of such as system are beginning to be documented as improved worker productivity, increased process efficiency, reduced errors, time saved, access to real time information, data for making decisions, positive customer surveys and empowered workers. *
This briefing is about Quality Management Principles that ISO 9000-1994 was designed around, but since it was not in operational terms in was not interpreted in this manner. The Quality Management Principles have been defined and made part of the ISO 9000-2000
* Murphy,John M., Let the System Drive Your ISO 9000 Effort, Quality Digest, December 1996, p.37

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A Quality System is a Management System

FIG1.3B.ppt

Adapted from: Ludwig-Becker, M., Electronics Quality Management Handbook, McGraw-Hill, 1997, p.18
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ISO 9000-2000 Invokes Quality Management Principles(QMP)

ISO 9004-2000 paragraph 4.3, Use of Quality Management Principles: To lead and operate an organization successfully, it is necessary to manage it in a systematic and visible manner. These principles have been developed for use by top management in order to lead the organization toward improved performance. These quality management principles are integrated in the contents of this International Standard* They certainly have been incorporated Highlights of the new ISO 9000-2000 are: Customer focus, leadership, involvement of people, process approach, systematic approach to management, continual improvement, factual approach to decision making, and mutually beneficially supplier relations Evidence of where these requirements are in ISO 9001:2000 can be found in the module defining exact changes
*ISO 9000-2000, p. 4

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Quality Management Principles: Definition

The definition of Quality Management Principles is: A comprehensive and fundamental set of rules or beliefs for leading and operating an organization aimed at continually improving performance over the long term by focusing on customers while addressing the needs of all stakeholders.*1

*1 From the Quality Management Principles Internet site: htty:www.wineasy.se/qmp/about.html

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What are the Eight (8) Quality Management Principles?

1. A Customer Focused Organization 2. Leadership 3. Involvement of People 4. Process Approach 5. Systematic Approach to Management 6. Continual Improvement 7. Factual Approach to Decision-Making 8. Mutually Beneficial Supplier Relationships *1

*1 ISO 9004-2000, p.4-5

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Principle 1: Customer Focused Organizations

Organizations depend on customers and must understand, strive to meet and exceed customer expectations. *1

Two facets: Customer focused organizations, which should result in customer satisfaction is a number one objective World Class Companies (Motorola/Hewlitt Packard (HP)/Texas Instruments (TI) anticipate customer requirements/needs Baldrige category : Customer Focus and Satisfaction is one whole area Long term customers a plus for business Profits come from upgrades, services, new products that people believe in; Customer Satisfaction is only the first step in building long term loyal customers; the need is to focus on retention and loyalty Use Quality Function Deployment (QFD) Can be used for almost anything, see Lou Cohens book, How to Make QFD Work for You, (Addison-Wesley, 1995) as well as the QFD internet page:http.www//akao.larc.nasa.gov/dfc/qfd.html
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*1 ISO 9004-2000, p.4

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Principle 1: Customer Focus/Satisfaction

Quality is perceived according to Kano Think about what delights you as a customer !

From: Ludwig-Becker, M., Electronics Quality Management Handbook, McGraw-Hill, 1997, p. 67 from Juran and Gyrna, 8 Quality Planning and Analysis, 3rd Ed. McGraw-Hill, 1993,p. 247, used with permission
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Baldrige Award Criteria Framework

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Principle 2: Leadership
Leaders establish unity and purpose for the internal environment of the organization.*1

Leaders must be people that Have the ability to think in time spans of years instead of months Visualize life in 5 years--what do you want it to be Stresses corporate big picture Leaders Develop a participative climate Partnerships Make others responsible Employee participation Walk what you talk Say what you mean, mean what you say

*1 ISO 9004-2000, p.5

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Vision Led Value Driven Leadership

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Principle 2: Leadership
Leadership skills must be cultivated Encourage innovation and change No fear of failure, sponsor change 3M has scientists spend 15% of time on new ideas Provides corporate funding Create a secure environment Compromise between Japanese concept of lifetime employment and the American tendency to fire at will Creates greater work efficiency

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Principle 3: People Involvement

People at all levels are the essence of the organization and their full involvement enables their abilities to be used for the organizations benefits. *1 Worker empower comes from the ability of employees to make a difference in the process they management Workers need tools to analyze, organize, understand and use large amounts of date to make important decisions that impact the bottom line

*1 ISO 9004-2000, p.5

2001 by Becker Technology, Inc

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Principle 3: People Involvement

The Way of the Beaver People* Work best when they control their own jobs Must have clear understanding of companys overall purpose as well as their place in it (clear goals, values) People must know that their thoughts, feelings, needs and dreams are respected listened to and act on. They are in the information loop Then people take control of their work Must set realistic goals for employes Individuals take pride in in holding themselves accountable for productivity, innovations, cost control, customer service and other business needs Need boundaries--helps encourage self control and accountability Empowment cultures become team cultures Then must be taught to work in teams

*Blanchard, Ken, One Minute Manager: Quality Digest, Nov. 1997, p. 19

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Principle 3: People Involvement

Empowerment** Responsibility is delegated, not authority Three facets to empowment (each depends on the other two)
Wisdom to know what to do and when to do it The will to do what needs to be done and The wherewithal to do it: Figure 3.1a: The empowment cube

**Guest Editorial, by John Troyer, Quality Digest, Oct. 1996, p. 64

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Principle 4: Process Approach

A desired result is achieved more efficiently when related resources and activities are managed as a process. *1 Everything done is involved in a process
Meets needs and requirements of internal and external customers Must have clear responsibility for each process Measure process, measure inputs, and outputs

*1 ISO 9004-2000, p.5 Note: Figure 3.3 from ISO 9000-1: 1994, p. 4
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Principle 4: Process Approach

Baldrige Approach, Category 6, Process Management ISO 9001-1994 generally manufacturing oriented As begins more use in other industries, the new 2000 standards are changing Total quality management (TQM) is cornerstone of process

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Principle 4: Process Approach

Processes should satisfy customers needs If they dont; they are NOT good processes Process improvement focuses on implementing the best methods for translating valid operational requirements into finished products and services Processes are defined by flow charts Identify key processes and related goals Define key cross functional business processes Form teams and develop charters Develop measurements Manage the Process Discuss process maintenance, improvement, team improvement

*How to Manage Key Business Processes, by Rico Yingling, Quality Progress, April 1997, p. 107-110. Used at Border Chem. in Kent, WA.
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Principle 5: Systematic Approach to Management

Identifying, understanding, and managing a system of interrelated processes for a given objective contributes to the effectiveness and efficiency of the organization.*1

Management: A series of interrelated processes A system is defined by identifying all interrelated processes and their interdependences A system is managed as system of interrelated processes Integrated Master Plan (IMP); Integrated Master Schedule (IMS) New requirements of DOD in US A system is improved by continuous measuring and evaluating An effective system provides confidence in organizations capability to meet customer requirements

*1 ISO 9004-2000, p.5

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Principle 5: Systematic Approach to Management The Business Process

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Principle 6: Continual/Continuous Improvement

Continuous/continual improvement is the permanent object of an organization that wishes to stay in business. *1
Performance improvement: 3 flavors Strategic planning--customer needs Operational planning--translates strategy into operational and financial requirements Process improvement focuses on best methods for operational requirements into finished product/services Demings:Plan/Do/Act/Study(check) P- Plan activities D- Implement the Plan C- Study (Check) the result A- Improve the process

*1 ISO 9004-2000,p.5
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Principle 6: Continual/Continuous Improvement

Phases of continuous process improvement (see next chart)

Awareness, Resistance, Expansion, Integration and finally regeneration, or continuous improvement

Strategies for Implementation

1. Commitment 2. Training 3. Targeting and Deployment 4. Resources 5. Measurements 6. Management Structure 7. Systems Alignment 8. Communication and Information**

** Doherty, Steve D., A Blueprint for Excellence, Quality Progress, April 1991, p. 84-85
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Principle 6: Continual/Continuous Improvement Blueprint for Excellence at the Air Force Logistics Command (AFLC)

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Principle 7: Factual Approach to Decision-Making

Effective decisions and actions are based on the logical and intuitive analysis of data and information.*1

Cant manage what you cant measure In God we trust, all others bring data Programs that produce employee involvement Statistical Process Control (SPC)--more than for manufacturing Now used in all soft processes Software, in Europe, only think of SPC Motorolas Six Sigma program is a SPC program, that produces a goal for all the employees to aim at and rally around Must measure all processes, especially business processes This is where the money can be saved and customer satisfaction heightened

Measurement must be automatic: built into the process

*1 ISO 9004-2000, p.5
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Principle 7: Factual Approach to Decision-Making

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From: As Easy as Two Plus Two, News for a Change, Association for Quality and Participation, Cincinnati, OH., Nov. 1997, p. 4

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Principle 7: Factual Approach to Decision-Making Measuring Business Processes

26 From: Kordupleski, R., Rust, R, and Zahorik, A, Why Improving Quality Doesnt Improve Quality, California Management Review, vol.38, no. 3, Spring 1993, p. 91

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Principle 8: Mutually Beneficial Supplier Relationships

Mutually beneficial relationships between the organization and its suppliers enhance the ability of the organization to create value. *1

A Win Win Philosophy!!!! Supplier Partnership is the new buzzword Part of a new way of doing business TQM is making the difference Fewer suppliers/longer term suppliers, specialization, cost Cross functional teams including suppliers Best Value = Customer satisfaction Involved in Service sector as well

Involve suppliers in product development

On Site, strategic planning, input on product plans

Electronic purchase orders and automated systems

*1 ISO 9004-2000, p.5

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Principle 8: Mutually Beneficial Supplier Relationships

Supplier Chain Management Measures cycle time Cuts transportation costs 5-12% Inventory costs 10-40% Schedule changes 15-65% Cuts out stovepipes; allows more benchmarking**

** From The Hearth of the Matter, by Roberto Michel, Manufacturing Systems (A Cahners publication} April 1997 or 28 see http:www.manufacturingsystems.com. Figure 1.7 from Ludwig-Becker, M., Electronics Quality Management Handbook, McGraw-Hill, 1997, p. 388
2001 by Becker Technology, Inc

Summary

Implementing the Eight Principles is not easy Takes a good leader Takes vision/perseverance An infrastructure must be established Communication needs to be done Much planning should start immediately Goes along well with ISO 9000 implementation See attached Self Assessment for QMP Implementation

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Self Assessment for Quality Management Principles (QMP), page 1

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Self Assessment for Quality Management Principles (QMP), page 2

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Sources

California Management Review, S549 Haas School of Business #1900, Berkeley, CA 94720, cmr@haas.berkeley.edu ANSI/ISO/ASQ Q9004-2000, Quality Management Systems--Guidelines for performance improvements, American Society for Quality (ASQ), P.O. Box 3005 Milwaukee, WI 53201, 2000; http://standardsgroup.asq.org The Informed Outlook, International Forum for Management Systems, Inc., 15913 Edgewood Dr.Montclair, Virginia 22026, www.informintl.com ANSI/ASQC Q9001- 1994, Quality Management and Quality Assurance Standards--Guidelines for Selection and Use, ASQ, Milwaukee, WI, 1994 Ludwig-Becker, M., Electronics Quality Management Handbook, McGrawHill, 1998, becker2@worldnet.att.net

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Sources
Manufacturing Systems (A Cahners publication) April 1997 or see http.www.manufacturingsystems.com Quality Digest, 1350 Vista Way., P.O. Box 882,Red Bluff, CA 96080, qualitydig@qof.com Quality Management Principles Internet site: http:www.wineasy.se/qmp/about.html and ISO 9004: July 1998, p.415-416 & ISO/CDI ISO 9000-1998, p. 2 Quality Progress, American Society of Quality, 611 E. Wisconsin Ave., P.O. Box 3005, Milwaukee, WI 53201 For Quality Function Deployment (QFD)Lou Cohens book, How to Make QFD Work for You, (Addison-Wesley, 1995) as well as the QFD internet page:http.www//akao.larc.nasa.gov/dfc/qfd.html
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2001 by Becker Technology, Inc