Tqm ch 03

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  • CRI Steering committee of 4 sets directions, frequent interaction with employees, review performance daily, formal monthly evaluations and OFIs
  • Tqm ch 03

    1. 1. Chapter 3 Information Analysis and Information TechnologyTHE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 1
    2. 2. Information Analysis And Information Technology • Quality programs are dependent on good information systems, chief information officers have the opportunity to plan an intergal and highly visible role in shaping the quality of the corporation. • The Information Analysis Category examines an organization’s information management and performance measurement systems and how the organization analyzes performance data and information. 1 Measurement and Analysis of Organizational Performance 2 Information Management( Data Availability, Hardware and Software) 2THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    3. 3. Reasons of Implication • If you don’t measure results, you can’t tell success from failure • If you can’t see success, you can’t reward it – and if you can’t reward success, you are probably rewarding failure • If you can’t recognize failure, you can’t correct it 3THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    4. 4. Organizational Implication 4THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    5. 5. Decision Making • The ability to how quickly decisions are made, communicated, and carried out at all levels, for this it is very important how efficiently information will exchange with subordinates, peers, customer, suppliers or bosses. Effectiveness of decision making are essential for competitive advantage. 5THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    6. 6. Process Flow Measurement Data Analysis Information 6THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    7. 7. Use of Information and Analysis Validation Prediction Customer Measurements Requirements Control Processes Results Design Measurement supports executive performance review and daily operations and decision making. 7THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    8. 8. Benefits of Information Management • Understand customers and customer satisfaction • Provide feedback to workers • Establish a basis for reward/recognition • Assess progress and the need for corrective action • Reduce costs through better planning 8THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    9. 9. Empirical Survey Results • Measurement-management companies are more likely to: – be in top third of industry financially – complete organizational changes successfully – reach clear agreement on strategy – enjoy favorable cooperation and teamwork – have more employee empowerment – have a greater willingness to take risks 9THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    10. 10. Example: Federal Express • “We measure everything. Then…we prioritize what processes are key to the company.” • Most data collection systems are automated, making it fast and easy. • Seeks internal measures that are predictors for external measures. 10THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    11. 11. Example: Ritz-Carlton • “We only measure what we must. But, we make sure that what we measure is important to our customers.” • 50% marketing and financial data; 50% quality-related productivity data. • Cost of quality is top priority. Are improvements important to customers, providing a good return, and done quickly? 11THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    12. 12. Leading Practices (1 of 2) • Develop a set of performance indicators that reflect customer requirements and key business drivers • Use comparative information and data to improve overall performance and competitive position • Involve everyone in measurement activities and ensure that information is widely visible 12THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    13. 13. Leading Practices (2 of 2) • Ensure that data are reliable and accessible to all who need them • Use sound analytical methods to conduct analyses and use the results to support strategic planning and daily decision making • Continually refine information sources and their uses within the organization 13THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    14. 14. Balanced Scorecard 1. Financial perspective 2. Internal perspective 3. Customer perspective 4. Innovation and learning perspective Leading Lagging measures measures 14THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    15. 15. Key Types of Business Performance Measures • Customer satisfaction measures • Financial and market performance measures • Human resource measures • Supplier and partner performance measures • Company-specific measures 15THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    16. 16. Example: Wainwright Industries • Safety • Internal customer satisfaction • External customer satisfaction • Six sigma quality (manufacturing defects) • Business performance 16THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    17. 17. Common Quality Measures • Nonconformities (defects) per unit • Errors per opportunity • Defects per million opportunities (dpmo) 17THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    18. 18. Importance of Comparative Data • Comparative data: industry averages, best competitor performance, world- class benchmarks • Helps recognize the need for improvement • Provides motivation to seek improvement 18THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    19. 19. Linkages to Strategy Key business drivers Strategies and (key success factors) action plans Measures and indicators 19THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    20. 20. Process-Level Measurements • Does the measurement support our mission? • Will the measurement be used to manage change; that is, actionable? • Is it important to our customers? • Is it effective in measuring performance? • Is it effective in forecasting results? • Is it easy to understand and simple? 20THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    21. 21. Creating Effective Performance Measures • Identify all customers and their requirements and expectations • Define work processes • Define value-adding activities and process outputs • Develop measures for each key process • Evaluate measures for their usefulness 21THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    22. 22. The Cost of Quality (COQ) • COQ – the cost of avoiding poor quality, or incurred as a result of poor quality • Translates defects, errors, etc. into the “language of management” – $$$ • Provides a basis for identifying improvement opportunities and success of improvement programs 22THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    23. 23. Quality Cost Classification • Prevention • Appraisal • Internal failure • External failure 23THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    24. 24. Quality Cost Management Tools • Cost indexes • Pareto analysis • Sampling and work measurement • Activity-based costing 24THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    25. 25. Return on Quality (ROQ) • ROQ – measure of revenue gains against costs associated with quality efforts • Principles – Quality is an investment – Quality efforts must be made financially accountable – It is possible to spend too much on quality – Not all quality expenditures are equally valid 25THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    26. 26. Managing Data and Information • Validity – Does the indicator measure what it says it does? • Reliability – How well does an indicator consistently measure the “true value” of the characteristic? • Accessibility – Do the right people have access to the data? 26THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    27. 27. Analysis • Statistical summaries and charts • Basic Trends over time • Comparisons with key benchmarks • Aggregate summaries and indexes • Cause-and-effect linkages and correlations (interlinking) • Data mining Advanced 27THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
    28. 28. Interlinking • Quantitative modeling of cause and effect relationships between external and internal performance criteria customer satisfaction * * rating * * * time on hold (telephone) 28THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

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