Strategic Quality And

Systems Management
1
 LO2: Be Able To Understand The
Importance Of Managing Quality In
An Organization

2
 Objectives
After studying this Section you should be able to:
1. Explain the importance of effective quality
management in achieving organisational objectives.

2. Evaluate the success of existing quality management

processes in meeting an organisation’s overall
strategic management objectives.

3
SCIENTIFIC DEFINITIONS

4
 Quality
As a preview for the definition we should all remember
that quality is a critical component of an operations
management that reveals grade to which a good or service
meets the demands and requirements of customers. Means
that the quality is a major part of any functional level of
work in any organization to make the operation worthy and
to hit the mark (objectives) on a constant frequency. 5
 Quality
On another hand, it is very important for the strategic
corporate level to keep the whole organization running, but
how?
Simply when we are studying the process of quality; we are
observing the functional factor of the quality, but when we
will discuss the quality as a culture in the organization, then
the strategic level is the one who is involved. 6
 Importance of Quality
Quality management is considered as the outer coating for
any successful operational management so as to produce a
demandable product, which exists into the needs, wants
and expectations ranges of different kinds and types of
segments in different countries and cultures, Quality
management should prevail and should also dominate the
whole organization’s cultures, traditions and manners. 7
 Importance of Quality
However, in order to understand that importance, we have
to do a couple of tasks. The first one is to understand the
history of evolution of the quality, and the second one is
to know who did that (Quality Gurus) as examples, from
where we will move to discuss some models, definitions
and theories; to have eventually a final conclusion of how
far is quality important for an organization. 8
 Evolution of Quality : Timeline &
History (1920s)
• Some of the initials of quality management were
established as the values of scientific management
swept through U.S. industry.
• Businesses clearly separated the processes of planning
and carrying out the plan, and union opposition arose
as workers were deprived of a voice in the conditions
and functions of their work. 9
 Evolution of Quality : Timeline &
History (1920s – 1930s)
• Some experiments in the late 1920s showed how worker
productivity could be impacted by participation.

• Some others developed the methods for statistical

analysis and control of quality and that was in the 30s.

10
 Evolution of Quality : Timeline &
History (1950s)
• Quality started to have new methods for statistical
analysis and control of quality to Japanese engineers
and executives. This can be considered the origin of
TQM.
• While some other interested people taught the concepts
of controlling quality and managerial breakthrough.
11
 Evolution of Quality : Timeline &
History (1950s)
• Some books started to talk about Total Quality Control, as
a indication for the present understanding of TQM,
was published.
• The theory of the zero defects showed up & paved the
way for quality improvement in many companies.

12
 Evolution of Quality : Timeline &
History (1968)
• The Japanese named their approach to total quality
company wide quality control. It is around this time that
the term quality management systems arises.
• Kaoru Ishikawa’s synthesis of the philosophy
contributed to Japan’s ascendancy as a quality leader.

13
 Evolution of Quality : Timeline &
History (Today)
• TQM is the name for the philosophy of a broad and
systemic approach to managing organizational quality.
• Quality standards such as the ISO 9000 series and
quality award programs such as the Deming Prize and
the Malcolm Baldrige National Quality Award specify
principles and processes that comprise TQM.
14
 Quality Gurus & Their
Contributions
In Order to recognize the meaning of Quality in a right
way and to know its movement through times phases, we
need to look at the beliefs of some individuals (Quality
Gurus) who have formed the evolution of TQM (Total
Quality Management). Their ideas and educations have
contributed to our knowledge and understanding of
quality today. Their individual contributions could be
summarized in following table as from the “Focus” point
of view.
15
Quality Gurus & Their
Contributions

16
 Examples For Quality Gurus
1. Dr. Walter Shewhart

Dr. Shewhart established the Plan, Do, Check, Act (PDCA)

cycle (known as “Plan-Do-Study-Act” in some circles) as
well as theories of process control and the Shewhart
transformation process.

17
 Examples For Quality Gurus
2. Dr. W. Edwards Deming
Dr. Deming developed his complete philosophy of
management, which he summarized into his “fourteen
points” and the “seven deadly diseases of management”.
He advanced the state of quality, originally based on work
done by Shewhart with his explanations of variation, use
of control charts. Deming greatly helped to focus the
responsibility of quality on management and popularized
the PDCA cycle, which led to it being referred to as the
“Deming Cycle”. 18
 Examples For Quality Gurus
3. Dr. Joseph M. Juran
Dr. Juran developed the quality trilogy – quality planning,
quality improvement, and quality control. Quality
management plans quality improvements that raise the level
of performance, which then must be controlled or
sustained at that level in order to start the cycle again.
19
 Examples For Quality Gurus
4. Armand V. Feigenbaum
Mr. Feigenbaum developed the idea of total quality control
based on three steps to quality consisting of quality
leadership, modern quality technology, and an
organizational commitment to quality.
5. Dr. Kaoru Ishikawa
Dr. Ishikawa developed the Ishikawa diagram, also known
as the fishbone or cause-effect diagram. He was known for
popularizing the seven basic tools of quality and the
philosophy of total quality. 20
Fishbone (Cause – Effect) Diagram

21
 Examples For Quality Gurus
6. Dr. Genichi Taguchi
Dr. Taguchi developed the “Taguchi methodology” of
robust design, which focused on making the design less
sensitive to variation in the manufacturing process, instead
of trying to control manufacturing variation. This idea of
“designing in quality” has become an important tenant of
six sigma today. 22
 Examples For Quality Gurus
7. Shigeo Shingo
Shigeo Shingo developed lean concepts such as Single
Minute Exchange of Die (SMED) or reduced set-up times
instead of increased batch sizes, as well as Poka-Yoke
(mistake proofing) to eliminate obvious opportunities for
mistakes. He also worked with Taiichi Ohno to refine Just-
In-Time (JIT) manufacturing into an integrated
manufacturing strategy, which is widely used to define the
lean manufacturing used in the Toyota production system
(TPS). 23
 Examples For Quality Gurus
8. Philip B. Crosby
Philip B. Crosby was the quality guru that developed the
idea of “quality is free” which asserts that implementing
quality improvement pays for itself through the savings
from the improvement, increased revenue from greater
customer satisfaction, and the improved competitive
advantage that results. He popularized “zero defects” to
define the goal of a quality program as the elimination of
all defects and not the reduction of defects to an
acceptable quality level. 24
 Examples For Quality Gurus
9. Dr. Eliyahu M. Goldratt
Dr. Goldratt developed the Theory of constraints which
focuses on a single element in a process chain as having the
greatest leverage for improvement (i.e., “1% can have a
99% impact”). This compares to the Pareto principle which
states that 20% of the factors have an 80% effect on the
process. 25
 Examples For Quality Gurus
10. Taiichi Ohno
Last of the Top Ten Quality Gurus we will discuss is
Taiichi Ohno. He developed the seven wastes (muda),
which are used in lean to describe non-value-added activity.
He developed various manufacturing improvements with
Shigeo Shingo that evolved into the Toyota Production
System. 26
 Product Quality & Service Quality
So, what kind of quality would the organization need to
achieve the expanding and the sustainability of the demand
for the final product or service that the organization offers.
The answer here turns to be easy, which is that depends on
what is the organization offering whether it is a product as
goods or a service or both together.
27
 Product Quality & Service Quality
Service is evaluated to be of high quality if the service
provided is suitable for the job at hand. Dissimilar to the
sale of a product, the delivery of a service needs the direct
interaction of the customer and service provider. As a
result, service quality is often assessed using qualitative
measures.
28
 Product Quality & Service Quality
In that product quality implies an organization's ability to
produce low-cost products at a high volume, quantitative
tools are frequently used to measure product quality.
Product quality assessment tools evaluate the degree to
which a product follows to its formal specifications. These
specifications may include customer business requirements
and performance, technical and supervisory requirements.29
 The 5 Gaps Model
It is a way of analysis, by which we seek to know which
weakness point do we have in the quality level of a service
that an organization is offering. This model could be
simplified in the following:
• GAP 1: Gap between consumer anticipation and
management perception: arises when the management
or service provider does not correctly observe what the
customers wants or needs. 30
 The 5 Gaps Model
• GAP 2 : Gap between management perception and
service quality specification: this is when the
management or service provider might correctly
perceive what the customer wants, but may not set a
performance standard.
• GAP 3: Gap between service quality specification and
service delivery: may arise relating to the service
personnel. This could arise due to there being poor
training, inability or disinclination to meet the set
service standard. 31
 The 5 Gaps Model
• GAP 4 : Gap between service delivery and external
communication: consumer anticipations are highly
prejudiced by declarations made by company
representatives and advertisements. The gap arises
when these assumed anticipations are not fulfilled at the
time of service delivery.
• GAP 5: Gap between expected service and experienced
service: this gap arises when the consumer misinterprets
the service quality.
32
 Benchmarking
A benchmark is a standard, against which the act of an
association or an investment management could be
measured. Generally, wide-ranging market and market-
segment stock and link indexes are used for this drive.
When evaluating the performance of any investment, it's
important to compare it against an appropriate benchmark.
For example, In the financial field, there are dozens of
indexes that analysts use to gauge the performance of any
given investment including the S&P 500, the Dow Jones
industrial Average and the Russell 2000 Index. 33
 Best Practices
Best practices is a term that can be applied broadly and
across industries. In the world of business the term 'best
practice' is used in joining with all from project
management to review functions, to explain a best or most
effective way of finishing a business task. For example,
with the emerge of numerous quality control systems arose
the need for a way to apply measurable benchmarks and
communicate ways to quickly implement new standards of
distinction across an organization.
34
 Best Practices
These new standards are usually achieved by outlining a
problem, calculating the problem, measuring the problem,
testing the problem, and then implementing best practices
as an improvement measure and a solution to the problem.
These best practices in process improvements can help
quality control managers share what others have learned
across functions and teams, using a common language.

35
 Best Practices
Best practices can also be used as a benchmark to share
and compare business performance outside of the
company. This is particularity helpful with functional
groups in different organizations within the same industry.
Some firms are well known for certain processes or ideas. ,
but some best practices are considered trade secrets in
some other companies. 36
 Quality Phases
To be more precious in our explanation, we should
illustrate how things goes inside any organization from the
quality point of view to get things achieved. For example, a
strategic business objective such as enhancing the
innovation skills among all employees to ensure that the
organization will always have a plenty stock of new ideas
and new solutions to lead the track instead of to be behind.
Actually, things will go gradually upon three main phases as
follows.
37
 Quality Phases
1. Quality will be a yes or no decision by monitoring the
final product only and to proceed to identify the slip
ups units to avoid them from going to the market upon
a sample concept of choice. However, this phase
turned to be non-sufficient enough to ensure that
quality is working in a proper way to reduce waste and
to optimize the maximum gains of the products and its
features upon a marketing scale. It was just a quality
control phase.
38
 Quality Phases
2. Then the second phase comes as an upgrade to the
first, to enable the quality concept from interfering the
production, the supply chain even some marketing and
sales processes to act on a preventive concept avoiding
making any deviations. In addition, this phase enabled
the quality to gain more authorities and to be more
eligible to occur a change in Quality. It is the quality
assurance after the quality control.

39
 Quality Phases
3. However, after a while things turned with extra-
unveiled factors that affect the effectiveness of quality
in achieving all strategic objectives for example the
health and food habits for the employees that could
affect their modes and accordingly their capabilities of
production. That is why some of the organizations that
are working under the umbrella of the total quality
management are forcing their employees to join gyms
practices programs and to be valued in the appraisal
reports. 40
 Quality Phases
However, any quality management regardless its grade of
interfere inside any organization is totally essential to
achieve the organization’s objectives even it was briefly
presented as a quality control away from the processes and
or away from the culture and traditions generalized among
the organization.
41
 CLASS ACTIVITY

Open Discussion individually or in group work:

• Explain the importance of effective quality management

in achieving organisational objectives.

42
 Prove Its’ Worthy!
In order to prove that worthy of the quality management
we have to check out a proper example of success that
achieved its strategic objectives using the proper quality
tools.
So, Back to Nissan’s climate and its Nissan Revival Plan in
1999; we can find the following.
43
 Nissan
Since the NRP was launched in 1999 quality management
is taking the proper consideration it should receive inside
Nissan. Moreover, implementation in all processes starting
from the designs until the final products testing. In
addition, upon this quality philosophy Mr. Ghosn was
dedicated to many processes himself to ensure that the
quality will prevail the outer guideline of the whole actions
series. In addition, we can simply identify that the main
three levels of quality are running quite well inside Nissan
as follows. 44
 Nissan
1. In the quality control level, we can see clearly that the
quality control is applying a strict 100% driving test
after the SOP (Supplying On Production) phase
enabling a strict withdraw authority in case of any
defections were exposed.

45
 Nissan
2. In the quality assurance level, we can see that Nissan
implemented almost a complete zero mistake quality
assurance system that starts from the SOP preparation
phase passing in accompany with the production in the
SOP till the final FQIA (Field Quality Investigation
Analysis) after the selling process, we can easily figure
out the following effective processes such as: 46
 Nissan

• ANPQP: Alliance New Product Quality Procedure.

• ASES: Alliance Supplier Evaluation Standard.

• SSC: Supplier Score Card.

• NQA: Nissan supplier Quality Award.

47
 Nissan
Finally, we can find the GSQM (Global Supplier Quality
Meeting), noting that all these processes ensure the
complete quality assurance of the Nissan Renault Alliance.
While another process such as RCEP (Reliability
Comparison Evaluation Program) that is checking and
analyzing all related information to the deterioration and
durability quality (Nissan’ ’s Quality Management , 2007),
beside a long list of quality assurance procedures and
processes that brings yearly lots of KAIZEN actions.
48
 KAIZEN
Kaizen is a philosophy and exercise that seeks upgrading in
productivity as a continuing gradually and systematic
process. Kaizen is a Japanese expression means "change for
the better." The perception of kaizen incorporates a wide
range of ideas. It involves making the work environment
more efficient and effective by creating a team atmosphere,
improving everyday procedures, ensuring employee
satisfaction, and making a job more fulfilling, less tiring and
safer.
49
 Total Quality Management “TQM”
Total Quality Management (TQM) is the continuous
process of reducing or eliminating errors in manufacturing,
streamlining supply chain management, improving the
customer experience, and ensuring that employees are up-
to-speed with their training. Total quality management aims
to hold all parties involved in the production process
accountable for the overall quality of the final product or
service. TQM was developed by William Deming, a
management consultant whose work had great impact on
Japanese manufacturing. 50
 Total Quality Management “TQM”
While TQM shares much in common with the six sigma
improvement process, it is not the same as Six Sigma.
TQM focuses on ensuring that internal guidelines and
process standards reduce errors, while six sigma looks to
reduce defects.
Noting that TQM is in many industries, including, but not
limited to, manufacturing, banking and finance, and
medicine. And all Involved departments can include
administration, marketing, production and employee
training. 51
 Six Sigma
Six Sigma is a quality-control program established in 1986
by Motorola that stresses cycle-time improvement and the
decrease of industrial shortcomings to a level of no more
than 3.4 per million. As of 2016, Six Sigma has grew into a
more general business-management philosophy focused on
meeting customer requirements, improving customer
retention, and improving and sustaining business products
and services. Six Sigma is appropriate to all industries, and
a number of vendors, including Motorola itself, offer Six
Sigma training; special certifications include yellow belt,
green belt and black belt. 52
2 Big Improvement Processes in
Comparison

53
 Back To Nissan
3. One final level is also implemented in Nissan on a
higher scale to makes an encouraging climate prevailing
the whole corporate to ensure that the total quality
management definition is applicable in Nissan for
example in Japan, Nissan has applied flexible working
preparations to allow employees to efficiently balance
between work and family tasks. 54
 Nissan
3. Arrangements to support employees of both genders
strike an appropriate work-life stability include “Family
Support Leave,” “which allows an employee to take
time off for a wedding, the birth of a child, etc.…;
reduced working hours and home-based telecommuting
for employees to provide childcare or nursing care”
(NISSAN MOTOR COMPANY SUSTAINABILITY REPORT , 2013). 55
 Nissan
So firmly, we can tell that the existing quality processes are
fruitful in enabling Nissan meeting its own organizational
objectives in a total effectiveness coverage, noting that this
quality management occurs costs but Nissan totally
recognizes the importance of spending these costs that
prevent another internal and external failure costs.
Meanwhile still a differentiation limit between what was
planned and the existing successes pops up, but in Nissan,
it did not exceed 10%, as Nissan declared that they have
almost achieved 90% from its customer’s expectations. 56
 Final Evaluation Task
Is to implement a risk assessment on the status of the
organization that achieves improvements due to a certain
quality improvement program.
In Nissan and according to the risk analysis report of
Nissan 2015, “Quality Risk Management” framework has
been newly developed from fiscal 2009. While quality-
related risks have consistently been assessed and dealt with
for new models.
The new framework represents a higher-level system to
ensure successful quality management, 57
 Final Evaluation Task
For both ongoing and future projects. Appraisal involves
an objective evaluation of whether risk exists and the level
of such risk for the company and the assignment of
responsible persons based on the level for follow-up
activities.
These processes are implemented by the Quality Risk
Management Committee, chaired by an executive tasked
with heading this activity, twice a year.

the current state of Nissan’s risk management “www.nissan-global.com”

58
 CLASS ACTIVITY

Open Discussion individually or in group work:

• Evaluate the success of existing quality management

processes in meeting an organization's overall strategic

management objectives.
59
Thanks

60