Malcolm Baldrige National Quality Award

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Malcolm Baldrige National Quality Award

• SCM 494
• Dr. Ron Tibben-Lembke

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Malcolm Baldrige

• August 20, 1987 Award created
• 1981-87 Malcolm Baldridge secretary of Commerce.
  Died in rodeo accident
• Proponent of quality management as key to US
  economic survival
• Helped draft early version of quality act
• Champion roper National Cowboy Hall of Fame
• July 25, 1987 N. California rodeo
• Horse threw him, fell on him, and crushed him

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Categories

• Manufacturing
• Service
• Small Business
• Education (added 1999)
• Health Care (added 1999)
• Nonprofit (2005)

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Why Apply?

• Fame and fortune
• 300 hours spent looking at your application?
• 50 page report strengths, weaknesses
• Free consulting from really good people
• 2,000 application fee
• 20k for site visit expenses

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Companies that have one

• Wallace Co., won in 1990, bankruptcy protection
  in 1992
• Houston, TX, pipes, valves for oil chemical
  plants
• 2 competitors closed up, customers bought their
  inventory
• Highly leveraged
• 1991 IBM Rochester bad year in 1992
• 1990 Cadillac closed plants over low sales,
  labor costs

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Winners

• 1992 ATT Universal Card 2 years old 3-5 years
  of data?
• Nuclear plant with history of safety violations
• Solectron won twice

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Application process

• Self-Assessment, Application turned in
• Consensus Review Initial screen by independent
  Board of Examiners (8)
• Site Visit Review by teams of examiners
• Verify information, get questions answered
• Written summary of strengths, areas for
  improvement
• 300 volunteer examiners
• U.S.-Based companies only
• Winners agree to spread the word about quality

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Preparing the Application

• Organizational profile describes org. and
  challenges
• Maybe need more information, identified problems,
  work on those first
• Category teams info data on area
• Action plan for improvement
• Senior leaders, champions, teams evaluate how to
  improve process for future

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10-step Process

• Boundaries of org. to be assessed
• Champions for each area
• Decide format scope for self-assessment
• Senior leaders, champions prepare Org. Profile
• Organizational profile describes org. and
  challenges environment
• Common understanding of what is important
• System for improvement, strategic challenges
• Go directly to 9 develop implement
  improvement plan

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10-step process

• Practice self-assessment with champions
• Use Item 1.1 Criteria for Performance Excellence
• See if meeting goals, on track
• Champions select category teams
• 3-5 enthusiastic team members, different levels
• Maybe outside organization being studied
• Read the criteria, gather data, write an analysis
• Explain how approaches used throughout org.

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10-step process

• Share findings among teams, stengths weaknesses
• Prioritize key strengths and areas to improve
• Develop and implement action plan for improvement
• Who will lead each step, what is to be
  accomplished, progress dates, how progress will
  be measured
• Evaluate and improve your self-assessment and
  action process

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Core Values and Concepts

• Visionary leadership (and ethics)
• Customer-driven excellence
• Organizational and personal learning
• Valuing employees and partners
• Agility
• Focus on the future
• Managing for innovation
• Management by fact
• Social responsibility
• Focusing on results and creating value
• Systems perspective

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Areas

• Leadership
• Strategic Planning
• Customer and Market Focus
• Measurement, Analysis, and knowledge management
• Human Resource Focus
• Process Management
• Business Results

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2004 Categories and Items Point Values

• 1 Leadership 120
• 2 Strategic Planning 85
• 3 Customer and Market Focus 85
• 4 Measurement, Analysis, and Knowledge Management
  90
• 5 Human Resource Focus 85
• 6 Process Management 85
• 7 Business Results 450
• 7.1Customer -Focused Results 75
• 7.2 Product and Service Results 75
• 7.3 Financial and Market Results 75
• 7.4 Human Resource Results 75
• 7.5 Organizational Effectiveness Results 75
• 7.6 Governance and Social Responsibility Results
  75
• TOTAL POINTS 1000

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Leadership

• Examines how senior executives guide the company
  and how the company addresses its
  responsibilities to the public and practices good
  citizenship.1.1 Organizational Leadership 70
• 1.2 Social Responsibility 50

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Strategic planning

• Examines how the company sets strategic
  directions and how it determines key action
  plans.
• 2.1Strategy Development 40
• 2.2 Strategy Deployment 45

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Customer and market focus

• Examines how the company determines requirements
  and expectations of customers and markets.
• 3.1Customer and Market Knowledge 40
• 3.2 Customer Relationships and Satisfaction 45

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Information and analysis

• Examines the management, effective use, and
  analysis of data and information to support key
  company processes and the companys performance
  management system.
• 4.1Measurement and Analysis of Organizational
  Performance 45
• 4.2 Information and Knowledge Management 45

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Human resource focus

• Examines how the company enables its workforce to
  develop its full potential and how the workforce
  is aligned with the companys objectives.
• 5.1 Work Systems 35
• 5.2 Employee Learning and Motivation 25
• 5.3 Employee Well-Being and Satisfaction 25

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Process management

• Examines aspects of how key production/delivery
  and support processes are designed, managed, and
  improved.
• 6.1V alue Creation Processes 50
• 6.2 Support Processes 35

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Business results

• Examines the companys performance and
  improvement in its key business areas
• customer satisfaction,
• financial and marketplace performance,
• human resources,
• supplier and partner performance, and
• operational performance.
• The category also examines how the company
  performs relative to competitors.
• better market performance, gains in market share,
  and customer retention and satisfaction

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Quality Competitions in Japan

• Deming Prize (Japan)
• Named after noted quality expert
• Established in 1950
• Florida Light Power, ATT
• New prize in Japan

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Other Awards

• Rajiv Ghandi award India, 1991
• 40 US states have prizes
• Many state winners win BNQA

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Is Baldrige a U.S. version of Japans Deming
award?

• The basic purposes of both awards are the same
• to promote recognition of quality achievements
  and
• to raise awareness of the importance and
  techniques of quality improvement.
• However, the Baldrige Award
• focuses more on results and service,
• relies upon the involvement of many different
  professional and trade groups,
• provides special credits for innovative
  approaches to quality,
• includes a strong customer and human resource
  focus, and
• stresses the importance of sharing information.

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Baldrige vs. ISO 9000

• Purpose of MBNQA to enhance US competitivenes
• Promotes quality awareness, recognizes
  achievements of US companies
• Vehicle for sharing success strategies
• ISO covers less thatn 10 percent of the Baldrige
  award criteria
• Many apply, few are selected
• MBNQA not required for business

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Six Sigma, ISO, BNQA

• Six Sigma
• concentrates on measuring product quality and
  improving process engineering.
• drives process improvement and cost savings.
• ISO 90012000 Registration
• is a product/service conformity model for
  guaranteeing equity in the marketplace.
• concentrates on fixing quality system defects
  and product/service nonconformities.
• Baldrige Criteria for Performance Excellence
• focus on performance excellence for the entire
  organization in an overall management framework.
• identify and track all-important organizational
  results customer, product/service, financial,
  human resource, and organizational effectiveness.