Define performance management system

1. Define performance management system
Before discussing company-wide Quality Management systems, it is necessary to define
the definition of Quality Management (QM). Many organizations and other groups of
individual people have attempted to define QM. There are several different operational
definitions of quality that are commonly used in many industries. The most common
definition of QM is that, it is an integrated approach to achieve and sustain high quality
output, focusing on the maintenance and continuous improvement of processes and defect
prevention at all levels of the organization, in order to meet or exceed customer
expectations. Quality management can be classified into two broad categories, industry-
specific QM and non-industry specific QM. For example, some QM programs such as
ISO 14000,AS9100, QS 9000, and TL 9000 are industry specific and others, including
Lean management, Six Sigma, TQM, and ISO 9000:2000, are company-wide quality
management programs. Our objective in this article is to compare the company-wide
quality management systems, before comparing the systems, let me illustrate the high
level view of the company-wide QM systems.
The Lean QM program mainly focuses on removing non-value-added activities from
processes and services in an organization. Japanese engineers, primarily Taiichi Ohno
and Shigeo Shingo, developed an approach called the Toyota production system, which
the Western world calls Lean management. The main components of the Lean quality
management system are called the 5S system: sort, set in order, shine, standardize, and
sustain. Similar to the principles of Lean management, Six Sigma has drawn intense
interest from the business communities. It was developed by Motorola in the 1980s and
was popularized by General Electric's chief executive officer (CEO) Jack Welch and
others in the 1990s. It is a data-driven approach for process improvement. Using
statistical tools and mathematical modeling in Six Sigma, one can reduce the defect rate
between 3.4 per million and 2 per billion. The framework, called DMAIC (define: define
the scope of the problem, measure: collect the data to analyze the problem, analyze:
determine the root cause, implement: implement the solution to the problem, and control:
monitor and make it defect free), is the heart of Six Sigma.
Similar to Lean management and Six Sigma, a considerable number of companies have
applied TQM, which is another quality management system and is the subject of many
books and research papers. It is not a new concept, but it is an extension of a company-
wide quality concept from Japan. Researchers have identified several definitions for
TQM. The commonly known definition of TQM is that, it is an ongoing process whereby
top management takes whatever steps necessary to enable everyone in the organization in
the course of performing all duties to establish and achieve standards which meet or
exceed the needs and expectations of their customers, both external and internal. TQM is
a never-ending process to satisfy both the internal and the external customers and the
customer focus in all activities in an organization. It uses statistical tools to make defect-
free processes. The core ideas presented by Deming, Juran, Crosby, and Ishikawa are the
key elements of TQM. ISO 9000 is another powerful QM system similar to Lean
management, Six Sigma, and TQM which is designed for all industries worldwide to

2. support continuous improvement. It is a set of international standards and guidelines
developed by a technical committee composed of experts from business and other
organizations around the world to promote QM in organizations. There are five ISO
standards: ISO 9000, ISO 9001, ISO 9002, ISO 9003, and ISO 9004. ISO 9000:2000 is
the most comprehensive and it provides a model for quality assurance in design,
development, production, installation, and services.
I'm sure that, you can understand the high-level overview of company wide QM systems.
Let us compare the systems now.
Lean Management focuses on process flow. It assumes that eliminating waste can
improve performance. Commonly noted benefits of Lean are improving productivity;
quality and flexibility. But the importance of using statistical analysis was not valued in
Lean.
Six Sigma assumes that focusing on process performance can improve operational
efficiency which can improve customer satisfaction. The assumption of this approach is
that, variation exists in all processes and analyzing this variance can improve
performance. There are two kinds of variation in any process. One is normal variation
and other is abnormal variation. Six Sigma talk about normal variation but not abnormal
variation. This is a common criticism of using Six Sigma.
Unlike Lean and Six Sigma, TQM focuses on all activities. This approach would assume
quality is everyone's responsibility. All employees in an organization should put their
best efforts to improve the quality of their products. It focuses on long term results which
require lot of co-ordination.
Finally ISO. It is a detailed document oriented approach for quality. It is a kind of inward
looking approach. The factors affecting business such as environment analysis, market
demands, and business demands are not considered.
Numerous surveys of the above mentioned QM programs have been conducted around
the world since 1990. Each QM system begins its quality journey from a different
perspective and drives toward the common goal of customer satisfaction. Some
organizations integrate one quality system into other to get maximum benefits from the
quality management programs. The important lesson for any organization to learn is that,
by just picking up a company-wide QM system and starting to implement them will not
bring fruitful results. Organizations should use Deming's Plan-Do-Check-Act approach to
implement any QM system. Considering organizational needs; customizing QM program
to meet the needs; conducting some sort of pilot testing to fine tune the approach before
full-scale implementation would bring maximum benefits. But do not forget to fine tune
the approach further by evaluating the results before standardizing your company specific
company wide QM program.
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