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  1. 1. Chapter Two Champions of Quality
  2. 2. “ An organization’s senior leaders should set directions and create customer focus, clear and visible values, and high expectations. The directions, values, and expectations should balance the needs of all your stakeholders. Leaders should ensure the creation of strategies, systems, and methods for achieving excellence, stimulating innovation, and building knowledge and capabilities.” Baldrige National Quality Program Statement on Visionary Leadership
  3. 3. Learning Objectives <ul><li>Understand Deming’s 14 Obligations of Top Management </li></ul><ul><li>Explain the Malcolm Baldrige National Quality Award </li></ul><ul><li>Describe “Six Sigma” applications to the hospitality industry </li></ul><ul><li>Describe common themes among quality gurus </li></ul>
  4. 4. The History of Managing for Quality <ul><li>Industrial Revolution transforms the U.S. </li></ul><ul><li>Auto companies develop mass production </li></ul><ul><li>Duplication/strong marketing change U.S. advantage </li></ul><ul><li>GM dominates the industrial world </li></ul>
  5. 5. The History of Managing for Quality (cont.) <ul><li>After WWII, customers demand product differentiation </li></ul><ul><li>Most U.S. companies did not recognize shift in expectations </li></ul><ul><li>Japanese took advantage through incremental improvements </li></ul><ul><li>Deming’s move to Japan created surge in Japanese auto production </li></ul>
  6. 6. Quality Gurus <ul><li>W. Edwards Deming </li></ul><ul><li>Joseph M. Juran </li></ul><ul><li>Armand Feigenbaum </li></ul><ul><li>Philip Crosby </li></ul><ul><li>Karou Ishikawa </li></ul><ul><li>Genichi Taguchi </li></ul>
  7. 7. Dr. W. Edwards Deming <ul><li>Introduced quality improvement in post-WWII Japan </li></ul><ul><li>Presented long-term process manufacturing improvement strategies to Ford Motor Company </li></ul><ul><li>Building the skills and knowledge of associates “98%” of the quality challenge </li></ul><ul><li>Introduced teamwork concepts </li></ul><ul><li>Creation of a culture of quality within a company at the heart of philosophy </li></ul>
  8. 8. Deming’s 14 Obligations of Top Management <ul><li>Create constancy of purpose for improvement of products and services </li></ul><ul><li>Adopt the new philosophy </li></ul><ul><li>Cease dependence on inspection to achieve quality </li></ul><ul><li>End the practice of awarding business on the basis of price tag alone </li></ul>
  9. 9. Deming’s 14 Obligations of Top Management (cont.) <ul><li>Improve, constantly and forever, every process for planning, production, and service </li></ul><ul><li>Institute training on the job </li></ul><ul><li>Adopt and institute leadership </li></ul><ul><li>Drive out fear </li></ul>
  10. 10. Deming’s 14 Obligations of Top Management (cont.) <ul><li>Break down barriers between staff areas </li></ul><ul><li>Eliminate slogans, exhortations, and targets for the work force </li></ul><ul><li>Eliminate numerical quotas and goals for the work force and management </li></ul>
  11. 11. Deming’s 14 Obligations of Top Management (cont.) <ul><li>Remove barriers that rob people of pride of workmanship </li></ul><ul><li>Institute a vigorous program of education and self-improvement for everyone </li></ul><ul><li>Put everybody in the company to work to accomplish the transformation </li></ul>Source: Out of Crisis by W. Edwards Deming. Copyright 1982 by W. Edwards Deming. Reprinted by permission of MIT Press.
  12. 12. Dr. Joseph M. Juran <ul><li>Philosophy that quality requires: </li></ul><ul><ul><li>Commitment and action from top management </li></ul></ul><ul><ul><li>Training in the management of quality </li></ul></ul><ul><ul><li>Quality improvements at a revolutionary rate </li></ul></ul><ul><li>Transforms financial planning, control, and improvement into quality planning, control, and improvement </li></ul><ul><li>Quality Control Handbook (1951) details philosophy in Ten Steps to Quality Improvement </li></ul>
  13. 13. Juran's 10 Steps to Quality Improvement <ul><li>Create awareness of and commitment to improve </li></ul><ul><li>Establish improvement goals via input from cross-functional sources </li></ul><ul><li>Rally the people in the organization around the common goal of improving quality </li></ul><ul><li>Train associates by creating a quality-focused learning organization </li></ul>
  14. 14. Juran's 10 Steps to Quality Improvement (cont.) <ul><li>Continuously learn and improve as problems are solved and projects completed </li></ul><ul><li>Regularly communicate progress </li></ul><ul><li>Recognize those who contribute to improving quality </li></ul>
  15. 15. Juran's 10 Steps to Quality Improvement (cont.) <ul><li>Communicate results </li></ul><ul><li>Measure progress toward the goals of improving quality </li></ul><ul><li>Integrate improvement into organizational systems </li></ul>Source: “Ten Steps to Quality Improvement” from Juran’s Quality Control Handbook by Joseph M. Juran. Used by permission of the McGraw-Hill Companies.
  16. 16. Baldrige Core Values and Concepts <ul><li>Leadership </li></ul><ul><li>Strategic planning </li></ul><ul><li>Customer and market focus </li></ul><ul><li>Measurement, analysis, and knowledge management </li></ul>
  17. 17. Baldrige Core Values and Concepts (cont.) <ul><li>Human resource focus </li></ul><ul><li>Process management </li></ul><ul><li>Business results </li></ul><ul><ul><li>Customer-focused results </li></ul></ul>
  18. 18. Baldrige Core Values and Concepts (cont.) <ul><ul><li>Product and service results </li></ul></ul><ul><ul><li>Financial and market results </li></ul></ul><ul><ul><li>Human resource results </li></ul></ul><ul><ul><li>Organizational effectiveness results </li></ul></ul><ul><ul><li>Governance and social responsibility results </li></ul></ul>
  19. 19. Baldrige Criteria for Performance Excellence Framework
  20. 20. According to the Baldrige Criteria <ul><li>Leadership occurs when the senior executives help others understand customer requirements for quality products and services </li></ul><ul><li>Performance Excellence Process (PEP) engages organization and requires total commitment from all </li></ul>
  21. 21. Strategic Planning <ul><li>Optional, but it provides important information </li></ul><ul><li>Addresses questions such as: </li></ul><ul><ul><li>Why do we exist as an organization? </li></ul></ul><ul><ul><li>Where are we going as an organization? </li></ul></ul><ul><ul><li>What are the restraints that will temper our decisions? </li></ul></ul>
  22. 22. Baldrige Award in the Food and Hospitality Industry <ul><li>Application submitted </li></ul><ul><li>Evaluated by a team from several industries </li></ul><ul><li>Organization’s quality evaluated for a week </li></ul>
  23. 23. VANO Manager Beliefs <ul><li>Visual Appearance/Accounting Numbers Only </li></ul><ul><li>A sales transaction is just a number </li></ul><ul><li>The level of internal and external customer satisfaction does not impact profit </li></ul>
  24. 24. VANO Manager Beliefs <ul><li>Quality is solely the visual appearance of the facility </li></ul><ul><li>Profit is the difference between sales and costs </li></ul><ul><li>Today’s profit is the primary objective, no matter what </li></ul>
  25. 25. The Ritz-Carlton Manager Beliefs <ul><li>Produce a work environment that: </li></ul><ul><li>Helps people live better </li></ul><ul><li>Treats people with dignity </li></ul><ul><li>Involves people in the planning of work that affects them to maximize the pride and joy they derive from their work </li></ul>
  26. 26. The Ritz-Carlton Manager Beliefs <ul><li>Management concentration on internal customers enables associates to take care of external customers </li></ul><ul><li>Internal customers trained, given all necessary information about service/product, provided with necessary tools/resources </li></ul><ul><li>Internal customers involved in planning process, share management’s vision, trust management, and are recognized for their efforts </li></ul>
  27. 27. Armand V. Feigenbaum <ul><li>“ Cost of nonconformance” philosophy </li></ul><ul><li>Refined the concept of work process flow </li></ul><ul><li>Approach to quality is driven by those who purchase products and services </li></ul><ul><li>Philosophy of managing and improving quality in the form of six key points </li></ul>
  28. 28. Feigenbaum's Six Key Points <ul><li>Total Quality Control (TQC) is a system </li></ul><ul><li>Quality Control (QC) is a management tool </li></ul><ul><li>Quality affected by technological and human factors (most important) </li></ul>
  29. 29. Feigenbaum's Six Key Points (cont.) <ul><li>QC impacts all aspects of production </li></ul><ul><li>Operating costs of quality: prevention, appraisal, internal failure, and external failure </li></ul><ul><li>6. Quality is controlled in the entire process, not simply after production is completed </li></ul>
  30. 30. Philip Crosby <ul><li>ITT Corporation’s first Vice President of Quality </li></ul><ul><li>“ Zero defects” concept as part of the Crosby Complete Management System </li></ul><ul><li>By focusing on prevention, it is less expensive to “do things right the first time” and the achievement of quality is relatively easy </li></ul>
  31. 31. Crosby's 14 Steps for Implementing Quality Improvements <ul><li>Management must commit to centering its quality focus on customers’ needs </li></ul><ul><li>Quality improvement teams with representatives from each department oversee improvement process </li></ul><ul><li>Measurement tools to establish baselines and find current and potential problems </li></ul><ul><li>Costs of quality are carefully defined and used as a management tool </li></ul>
  32. 32. Crosby's 14 Steps for Implementing Quality Improvements (cont.) <ul><li>Quality awareness and personal concerns heightened </li></ul><ul><li>by training in quality improvement principles </li></ul><ul><li>6. Once trained, corrective action is taken closest to the sources of defects and nonconformance </li></ul><ul><li>7. Zero defects planning analyzes the relevant activities using a committee </li></ul><ul><li>8. Associates educated about their roles in the quality improvement process </li></ul>
  33. 33. Crosby's 14 Steps for Implementing Quality Improvements (cont.) <ul><li>A zero defects day launches the quality improvement program company-wide and signals a change </li></ul><ul><li>Individuals and groups establish their own quality improvement goals </li></ul><ul><li>Associates inform management of obstacles faced and types of work environments needed </li></ul>
  34. 34. Crosby's 14 Steps for Implementing Quality Improvements (cont.) <ul><li>All who participate are recognized for their commitment to quality improvement </li></ul><ul><li>Quality councils spotlight quality and share information about the process of continuous improvement </li></ul><ul><li>The quality improvement process is continuous and never ends </li></ul>Source: Quality Is Free, by Philip Crosby. Used by permission of The McGraw-Hill Companies
  35. 35. Karou Ishikawa <ul><li>Quality circles </li></ul><ul><li>Uniquely described the customer as both internal and external </li></ul><ul><li>Promoted the necessity of a company-wide shared vision </li></ul>
  36. 36. Genichi Taguchi <ul><li>Taguchi Loss Function to calculate the costs associated with a lack of quality </li></ul><ul><li>When a deviation from quality occurs, there is a resulting economic loss that follows in geometric proportion </li></ul><ul><li>The effect of the loss is cumulative and dramatic </li></ul>
  37. 37. Modern Day Quality Efforts <ul><li>The quality effort was a major topic in the U.S. during the 1970s-1980s </li></ul><ul><li>U.S. auto industry loses large market share due to deteriorating quality </li></ul><ul><li>Japanese gain ground by auto quality improvement </li></ul><ul><li>U.S. realizes Japanese success based on quality improvement process management </li></ul><ul><li>Ford Motor takes action with 1980s “Quality Is Job One” initiative </li></ul>
  38. 38. Modern Day Quality Efforts (cont.) <ul><li>Managing for quality was a journey; some expected immediate success </li></ul><ul><li>Japan’s culture was more compatible to managing for quality </li></ul><ul><li>U.S. management-results oriented; Japanese management-process oriented </li></ul><ul><li>Quality of the process leads to quality outcomes </li></ul>
  39. 39. Six Sigma <ul><li>Pioneered by Motorola in the 1980s </li></ul><ul><li>Sigma (∂) is referenced when measuring how far from perfection a product deviates </li></ul><ul><li>Six Sigma = 3.4 errors per million opportunities </li></ul><ul><li>Indicates 99.9997% (rather than 100%) perfect </li></ul><ul><li>Shows how a process is performing </li></ul><ul><li>The fundamental goal of Six Sigma is to improve the process through DMAIC </li></ul>
  40. 40. DMAIC/DMADV <ul><li>DMAIC: a process that Defines, Measures, Analyzes, Improves, and Controls existing processes </li></ul><ul><li>DMADV: a process that Defines, Measures, Analyzes, Defines, and Verifies </li></ul>
  41. 41. Starwood Hotels & Resorts Worldwide, Inc. <ul><li>First lodging company to adopt Six Sigma in 2001 </li></ul><ul><li>If a hotel’s room service delivers only about 68% of the meals on time, the process of delivery scores only a “2 sigma” </li></ul><ul><li>To become a Six Sigma room service, there would have to be on time service delivery 99.9997% of the time </li></ul><ul><li>Continuous data-driven approach to improving a process </li></ul><ul><li>Helps raise productivity, which increases profitability </li></ul>
  42. 42. Voice of the Customer (VOC) <ul><li>VOC is the process of gathering, analyzing, and integrating guest input back into the organization’s decision making </li></ul><ul><li>VOC includes the gathering of input from present guests regarding products and services </li></ul><ul><li>VOC also includes the voices of potential guests, staff members, and suppliers </li></ul>
  43. 43. Critical to Quality (CTQ) <ul><li>In Six Sigma terms, VOC data are collected and compared to the guests’ CTQ requirements </li></ul><ul><li>The gap between the requirements and the current quality levels of the hotel organization’s products and services is analyzed </li></ul><ul><li>After gap size is identified and quantified, the Six Sigma internal customer team can begin to focus on measuring, analyzing, improving, and controlling this gap using the DMAIC process </li></ul>
  44. 44. 5Nines Program <ul><li>Developed by Motorola to make systems more available </li></ul><ul><li>A commitment to total customer satisfaction </li></ul><ul><li>Refers to end-to-end availability 99.999% (5Nines) of the time (no more than five minutes of total downtime per year for customers) </li></ul>
  45. 45. Common Themes of the Gurus <ul><li>People in organizations that regularly improve quality have a vision of a future that is better than the present </li></ul><ul><li>Shared commitment to the quality vision through a common goal of continuous improvement </li></ul>
  46. 46. Common Themes of the Gurus (cont.) <ul><li>The organization is viewed as a system; progress toward improving quality is measured in a series of processes in the organization </li></ul><ul><li>The organization exists to meet the needs of both internal and external customers </li></ul>
  47. 47. Common Themes of the Gurus (cont.) <ul><li>Ongoing training of internal customers is essential </li></ul><ul><li>People want to share in the planning and creation of the organization’s vision and be recognized for their efforts in improving quality </li></ul><ul><li>Gurus’ consistent messages form the basis for any quality improvement program in any organization </li></ul>
  48. 48. Summary <ul><li>One must have a basic knowledge and appreciation of the history of quality to fully understand what needs to be done to manage and improve quality today </li></ul><ul><li>Today’s quality management and improvement efforts are built on the foundation laid by the quality gurus in the 20th Century </li></ul><ul><li>Companies taking quality to the next level are using this knowledge and these skills </li></ul>
  49. 49. Key Terms <ul><li>5Nines Program </li></ul><ul><li>Cost of Nonconformance </li></ul><ul><li>Critical to Quality (CTQ) </li></ul><ul><li>Crosby Complete Management System </li></ul><ul><li>Deming’s 14 Obligations of Top Management </li></ul>
  50. 50. Key Terms <ul><li>DMADV </li></ul><ul><li>DMAIC </li></ul><ul><li>Juran’s Ten Steps to Quality Improvement </li></ul><ul><li>Malcolm Baldrige National Quality Award </li></ul><ul><li>National Institute of Standards and Technology </li></ul>
  51. 51. Key Terms <ul><li>Six Sigma </li></ul><ul><li>Systems Perspective </li></ul><ul><li>Taguchi Loss Function </li></ul><ul><li>Total Quality Control (TQC) </li></ul>
  52. 52. Key Terms <ul><li>VANO Manager </li></ul><ul><li>Voice of Customer (VOC) </li></ul><ul><li>Work Process Flow </li></ul>
  53. 53. Relevant Web Sites <ul><li>Deming Electronic Network: http:// deming .eng. clemson . edu /pub/den/ deming _map. htm </li></ul><ul><li>Dr. Deming’s Site for Total Quality Management: http://www.well.com/user/ vamead / demingdist .html </li></ul><ul><li>Dr. Deming’s Main Website: </li></ul><ul><li>http://www. deming .org/ </li></ul><ul><li>Juran and Deming Article (by Phil Landesberg): http:// curiouscat .net/library/ pdf / inthebeginning . pdf </li></ul>
  54. 54. Relevant Web Sites <ul><li>Malcolm Baldrige Quality Award: http://www.emporia.edu/ibed/jour/jour14om/sarat.htm </li></ul><ul><li>Michigan Quality Award (Lighthouse): http://www.michiganquality.org/recog/Brochure/ </li></ul><ul><li>More Malcolm Baldrige Quality Award: http://www.quality. nist . gov / </li></ul><ul><li>Ritz-Carlton Hotel Company: </li></ul><ul><li>http://www. ritzcarlton .com/ </li></ul>
  55. 55. Relevant Web Sites (cont.) <ul><li>Ritz-Carlton Hotel Company’s Award Application Summary, 1999: http://www.quality.nist.gov/PDF_files/RCHC_Application_Summary.pdf </li></ul><ul><li>Six Sigma and Starwood Hotels and Resorts: http://www.starwood.com/development/fran_detail.html?category=OPSU&topNav=OS </li></ul><ul><li>Starwood Hotels and Resorts Worldwide, Inc. Web site: http://www.starwood.com/ </li></ul><ul><li>Who is Dr. Edwards Deming?: http://www. lii .net/ deming .html </li></ul>