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Chapter 11
Building and Sustaining
Total Quality Organizations
Slide 11.1
Why Adopt TQ Philosophy?
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Slide 11.2
Reaction to competitive threat to
profitable survival
An opportunity to improve
Successful TQ Organizations
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Successful total quality organizations
require:
– Adoption of sound practices
– Effective organization
– Readiness for change
Slide 11.3
Corporate Culture and Change
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Slide 11.4
Corporate culture is a company’s
value system and its collection of
guiding principles
Cultural values often seen in mission
and vision statements
Culture reflected by management
policies and actions
Organizational Infrastructure
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Organizational Infrastructure:
– organization’s management systems
and practices
– Vital to successful TQ implementation
Slide 11.5
Best Practices: Infrastructure
Design (1 of 3)
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Low performers
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Slide 11.6
process management fundamentals
customer response
training and teamwork
benchmarking competitors
cost reduction
rewards for teamwork and quality
Increasing levels of teamwork and participation tends to
benefit low performers the most
Best Practices: Infrastructure
Design (2 of 3)
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Slide 11.7
Medium performers
– use customer input and market research
– select suppliers by quality
– flexibility and cycle time reduction
– compensation tied to quality and teamwork
Best Practices: Infrastructure
Design (3 of 3)
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High performers
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Slide 11.8
self-managed and cross-functional teams
strategic partnerships
benchmarking world-class companies
senior management compensation tied to quality
rapid response
Seeking strategic partnerships and developing
new products based on customer input benefit
high performers
Areas of Critical Self-Assessment
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Self-Assessment – reviewing company’s current
quality practices and procedures
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Self-Assessment should involve:
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Slide 11.9
Management involvement and leadership
Product and process design
Product control
Customer and supplier communications
Quality improvement
Employee participation
Education and training
Quality information
ISO 9000 Standards
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Slide 11.10
Adopted by International Organization
for Standardization in 1987
Quality system standards that guide a
company’s performance of specified
requirements
Covers design/development, production,
installation, and service
Objectives of Standards (1 of 2)
The standards have five objectives:
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Slide 11.11
Achieve, maintain, and continuously
improve product quality
Improve quality of operations to continually
meet customers’ and stakeholders’ needs
Provide confidence to internal management
and other employees that quality
requirements are being fulfilled
Objectives of Standards (2 of 2)
4.
5.
Slide 11.12
Provide confidence to customers and
other stakeholders that quality
requirements are being achieved
Provide confidence that quality system
requirements are fulfilled
Structure of ISO 9000
Standards
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The standards define three levels of
quality assurance:
– Level 1 (ISO 9001) - product design,
development, production, installation, and
service
– Level 2 (ISO 9002) - production and
installation
– Level 3 (ISO 9003) - final inspection and
test
Slide 11.13
ISO 9001 Requirements
Say what you do; Do what you Say!!
Management responsibility
Quality system
Contract review
Design control
Document & data control
Control of inspection, measuring, & test
equipment
Inspection & test status
Control of nonconforming product
Corrective & preventive action
Purchasing
Handling, storage, packaging,
preserving, & delivering
Control of customersupplied products
Control of quality records
Product identification and
traceability
Process control
Inspection and testing
Slide 11.14
Internal quality audits
Training
Servicing
Statistical techniques
ISO 9000 in the U.S.
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Slide 11.15
By 1993, only 550 U.S. company sites were
certified as compared with 20,000
companies in United Kingdom
By 1997, over 12,000 U.S. company sites
were certified as compared with over
200,000 throughout Europe
Avg. cost for ISO 9000 registration is
$20,000 and costs companies $100,000
(must be recertified every 3 years)
QS 9000 Standards
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Slide 11.16
Created in 1994 by automobile industry
Interpretation and extension of
ISO 9000
Applies to all internal and external
suppliers of production and service parts
and materials
ISO 14000 Standards
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Slide 11.17
Established in 1996 to provide
industries with structure for
environmental management system
Unlike ISO 9000, does not require
third-party registration
U.S. Environmental Protection Agency
(EPA) not yet formally endorsed
standards
Implementing Total Quality
Strategy: Key Players
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Slide 11.18
Senior management
Middle management
Workforce
Common Mistakes in TQ
Implementation (1 of 3)
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Slide 11.19
TQ regarded as a “program”
Short-term results are not obtained
Process not driven by focus on customer,
connection to strategic business issues, and
support from senior management
Structural elements block change
Goals set too low
“Command and control” organizational culture
Common Mistakes in TQ
Implementation (2 of 3)
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Slide 11.20
Training not properly addressed
Focus on products, not processes
Little real empowerment is given
Organization too successful and complacent
Organization fails to address fundamental
questions
Senior management not personally and
visibly committed
Common Mistakes in TQ
Implementation (3 of 3)
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Slide 11.21
Overemphasis on teams for cross-functional
problems
Employees operate under belief that more
data are always desirable
Management fails to recognize that quality
improvement is personal responsibility
Organization does not see itself as collection
of interrelated processes