MGT 449 Quality Management

1
MGT 449 Quality Management Productivity
Joseph Lewis Aguirre
2
WS1 Total Quality Management
Define total quality management (TQM).
Compare and contrast traditional management
styles with quality-focused management styles.
Identify the impact of globalization on quality
management.
3
Quality Legends

• W. Edwards Deming's Electronic Network
• Joseph Juran
• David P. Langford
• Philip Crosby
• Peter Senge
• William Glasser Institute
• Dr. Stephen R. Covey
• Willard Daggett--
• Larry Lezotte

4
History of TQ

• Pioneers of TQ
• Introduction to Continuous Improvement
• 1940 World War II Economic Impact
• 1950 US Has Zero Competition
• 1960 Complacency

5
History of TQ

• 1970 Paralysis
• 1980 Wake-Up
• 1990 Action and Successes
• 2000 and Beyond?

6
Definition of TQ

• Employee Empowerment
• Data Measurement
• Process Improvement
• Quality Focus

7
Definition of TQ

• Customer Focus
• Level of Acceptable Quality
• Six Sigma Concept

8
Effects of Poor Quality

• Fiscal Issues
• Employee Issues
• Customer Issues

9
Globalization and Quality

• Global sourcing
• Supply chain issues
• Selling in foreign countries

10
WS2 STRATEGIC PLANNING AND CUSTOMER SATISFACTION
Determine the relationship between an
organization's process improvement plan and its
strategic plan. Express the importance of
leadership in relation to quality. Describe
the strategic role of TQM in manufacturing,
service, government, and non-profit
organizations. Provide examples of techniques
and tools to measure customer satisfaction.
11
WS3 PROCESS ANALYSIS
Identify various types of processes.
Describe how process analysis can be useful in
quality improvement. Utilize quality
management tools to collect and present data.
Recommend quality improvement strategies based
upon data collected.
12
WS4 PROCESS IMPROVEMENT MODELS METHODS
Define variation. Explain the importance of
variation in total quality management.
Identify models and methodologies used for
organizational process improvement.
13
WS5 TOTAL QUALITY IMPLEMENTATION
Summarize the requirements for implementing a
quality process. Outline the steps necessary
to adopt a quality management system in an
organization.
14
TQM - According to Dilbert
15
Incremental VS Continuous Improvement

• Traditional approaches to improving performance
  focused on incremental improvement. Continuous
  improvement (CI) under TQM assumes that
  performance can be elevated on a constant basis.

16
Incremental VS Continuous Improvement
17
Decision Making Framework
GOALS
PROBLEMS
OPPORTUNITIES
OBJECTIVES
EVALUATION
IMPLEMENTATION OPTIONS
RELATIVE TIME SPAN
18
Decision Making Framework
Information Characteristics
Decision Structure
Pre specified Scheduled Detailed Frequent
Historical Internal Narrow Focus
Business Professionals
Operational Management Efficient, do thing
right
Structured
Tactical Management Business Unit Managers
-Effective, right thing
Ad Hoc Unscheduled Summarized Infrequent Forward
looking External Wide Scope
Semi Structured
Strategic Management Executives, Directors
-Transformation
Un Structured
RELATIVE TIME SPAN
19
Information Age Paradox

• "Despite the existence of more and better
  information than ever before, time pressure
  prevents decision makers from gathering all that
  they need and from sharing it,"
• -- Peter Tobia, author, "Decision Making in the
  Digital Age Challenges and Responses,"

20
Values

• Honesty
• Customers
• Employees
• Safety
• Competitors
• Revenue
• Profits
• Alliances
• New Products
• New Markets

Ecology Cutting Edge Image Fun Growth Family Capit
al Quality Social Capital Location
Hedonism Risk Collaboration Centralization Creativ
ity Other
21
ORGANIZATIONAL EFFECTIVENESS
ENVIRONMENT
CLIMATE
Marketplace
Other Teams
Enthusiasm
STRUCTURE
Competition
Accountability
Reward System
GOALS
Reporting Relationships
Values
Clarity
Commitment
Collaboration
Mission Philosophy
Stress
Feedback System
Decision Making
Behavior Norm
Flexibility
Trust
Competition
Culture
Involvement
Pressures
22
Generalized System
Environment
System
Components, Relationships, Boundaries,
Interfaces, Constraints
23
Modem Communications System
00100010101000110001111111000110001
Message
Message Received
Destination
Info Source
Noise
24
Generalized Communications System
00100010101000110001111111000110001
Message
Message Received
Destination
Info Source
Noise
25
Modem Communications System
00100010101000110001111111000110001
Message
Message Received
Destination
Info Source
Noise
26
Decision Making Framework
Information Characteristics
Decision Structure
Pre specified Scheduled Detailed Frequent
Historical Internal Narrow Focus
Business Professionals
Operational Management Efficient, do thing
right
Structured
Tactical Management Business Unit Managers
-Effective, right thing
Ad Hoc Unscheduled Summarized Infrequent Forward
looking External Wide Scope
Semi Structured
Strategic Management Executives, Directors
-Transformation
Un Structured
RELATIVE TIME SPAN
27
Globalization
Joseph Lewis Aguirre
28
Globalization of Technology
"New information technologies are integrating the
world in global networks of  instrumentality.
The first historical steps of informational
societies seem to characterize them by the
preeminence of  identity as their organizing
principle." Manuel Castells, The Rise of the
Network Society (The Information Age Economy,
Society and Culture, I) (Cambridge, MA Oxford,
UK Blackwell, 1996)
29
Globalization of Technology

• Global cities as points for flows of labor,
  capital, information, and technology.
•  
• Aren't we talking about networks of cities when
  we talk about "globalization"? Where are
  non-urban regions without an infrastructure in
  the idea of the "global"?
• Saskia Sassen, Globalization and its Discontents
  (New York The New Press, 1998)  

30
Globalization of Technology
Parallel view with Wriston's Law "capital goes
where it's wanted and stays where it's well
treated". All types of capital follow this law
financial, intellectual, cultural. Globalization
is really the networked matrix of capital
concentrations in cities.
31
Globalization of Technology

•  
• The new economy in the United States.
• Use of the Internet in China.
• The expanding markets in Latin America.
• Internet-fostered rivalry between the United
  States and Europe

32
Globalization of Technology

• Globalization and  positioning of arguments
• globalization discussed from what socially
  grounded perspective?
• from where about whom?    
• Example Chinese model of education with direct
  parental involvement students now left alone to
  use computers and the Internet without parental
  control.
• - An effect of globalization?

33
Globalization of Technology

• The use of the Net to communicate local, ethnic,
  religious, and national cultures to a worldwide
  and international audience optimistic
  multiculturalism, where anyone with access can
  participate.
• The worldwide diffusion of dominant cultures
  through the global marketplace .. as another case
  of  hegemony, cultural imperialism.

34
Globalization of Technology (cont)

• The goals of global access and ubiquity of the
  Net require dealing with two forces, one toward
  technology development and diffusion, the other
  toward governmental and institutional controls
  over international interconnectivity.
• International business and worldwide Internet
  ecommerce, promoted by transnational
  corporations, for access to friction-free
  worldwide markets.

35
Globalization of Technology (cont)

• The general homogenization or "internationalizatio
  n" of culture, favoring Western developed nations
  and their languages and values.
• In the political economy of communications, the
  movement toward worldwide access to
  communications technology and connectivity across
  territorial boundaries.

36
Globalization of Technology Paradox
Paradox of global localization making local
identity politics a global issue through the
Internet. Local identity groups using the
technologies of globalization to promote
political interests.   For example, the Taliban
in Afghanistan. (See www.taliban.com ) with a
Netscape pop-up advertising window!).
37
Globalization of Technology Paradox
COLA WARS Global Resistance Coca-Cola Employe
es 1 FT, 1PT 39,000 HQ Shared house in
CA Atlanta 2004 Revenues 60,000 21.96
B Countries of operation 2 gt200 CEO Amit
Srivastava Neville Isdell CEOs Compensation Own
expenses 3.74 million
Source WSJ 06-07-05
38
Knowledge Explosion
The need for intelligent information management
is clear.
39
Global Technological Revolution

• Bits
• Boxes
• Bandwidth

40
Global Technological Revolution - Origin

• Major advances in information and communications
  technologies (ICT)
• Digital storage and processing of information
  (information)
• Satellite and optical fiber transmission of
  information (communications)

41
Cyberization interface to all bits and process
information

• Coupling to all information and information
  processors
• Pure bits e.g. printed matter
• Bit tokens e.g. money
• State places, things, and people
• State physical networks

42
Library Volume Growth 10X in 150 years
43
Transformation of Business and Markets

• In 1999 in Costa Rica, Malaysia and Singapore,
  high-tech exports exceeded 40 of the total

44
Transformation of Business and Markets
45
Revolution in Learning and Knowledge Sharing

• From 199597
• Scientists in the United States co-authored
  articles with scientists from 173 other
  countries
• Scientists in Brazil with 114, in Kenya with 81,
  in Algeria 59.

46
Revolution in Learning and Knowledge Sharing

• The six largest internet-based distance-learning
  universities in the world are located in
  developing countries -- Turkey, Indonesia, China,
  India, Thailand and Korea

47
Global Information Flow
48
Global Information Flow
49
Communities Empowered in New Ways

• Governance redefined
• Globalization of civil society
• The Philippines electronic advocacy network set
  up in response to impeachment trial

50
Wealth and Economic Growth Creation

• E-commerce, business conducted over the
  Internet, totaled 45 billion as recently as 1998
  and an estimate in January 2000 projected it
  could explode to over 7 trillion as early as
  2004.

51
Digital Divide
Joseph Lewis Aguirre
52
Digital Divide

• Between countries the global digital divide
• Between groups of people within countries - the
  domestic digital divide

53
Phones and Electricity

• 2 billion people lack access to reliable
  electricity
• As much as 80 of the world's population has
  never made a phone call

54
Phones and Electricity

• More telephones in New York City than in all of
  rural Asia
• In the entire continent of Africa, there are a
  mere 14 million phone lines -- fewer than in
  either Manhattan or Tokyo.

55
Internet Accounts and Hosts

• More Internet accounts in London than all of
  Africa
• One in two Americans is online, compared with
  only one in 250 Africans. 

56
Internet Accounts and Hosts
http//www.riverdeep.net/current/2002/01/011402t_d
ivide.jhtml
,
57
Internet Accounts and Hosts

• Of all the Internet users worldwide, 60 per cent
  reside in North America, where a mere five per
  cent of the world's population reside 
• Wealthy nations comprise some 16 per cent of the
  world's population, but command 90 per cent of
  Internet host computers.

58
Digital Divide PCs

• Developed states 311.2 per 1,000
• Globally 70.6 PCs per 1,000
• South Asia 2.9 per 1,000
• Sub-Saharan Africa 0.75 per 1,000

59
Digital Divide BW

• The vast capacity of the Internet is distributed
  highly unevenly throughout the world.
• By late 2000 the bulk of Internet connectivity
  linked the US with Europe (56 Gbps) and, to a
  lesser extent, the US with the Asia-Pacific
  region (18 Gbps).
• Africa had extremely little bandwidth reaching
  Europe (0.2 Gbps) and the USA (0.5 Gbps)

60
Digital Divide Costs

• Internet access costs (as a percentage of average
  monthly income)
• US 1 to 2 percent
• Uganda over 100 percent
• Bangladesh 191 percent

61
Digital Divide Costs

• Access costs (ISP, and telephone call costs) are
  almost four times as expensive in the Czech
  Republic and Hungary as in the United States
• In Bangladesh a computer costs the equivalent of
  eight years average pay

62
Digital Divide Technical Training

• McConnell International "E-Business report
• Europe (including Eastern Europe) and Latin
  America rated well
• Middle East and Africa needed to significantly
  develop their human capital
• Asia had a mixed scorecard

63
Fact Sheet

• Global Perspective
• There are an estimated 429 million people online
  globally
• 429 million represents only 6 of the worlds
  entire population.
• 41 of the global online population is in the
  United States Canada
• 27 of the online population lives in Europe, the
  Middle East and Africa(25 of European Homes are
  online)
• 20 of the online population logs on from Asia
  Pacific(33 of all Asian Homes are online)
• Only 4 of the worlds online population are in
  South America
• The United States has more computers than the
  rest of the world combined
• (Source First Quarter 2001 Global Internet
  Trends, Neilsen/Netratings)

64
Fact Sheet (Cont)

• Among highly developed nations
• 61 of Internet connections are in Sweden
• Spain trails the list with only 20 of its homes
  connected.
• The Pew Internet and American Life Project
  published in Whos Not Online that 57 of those
  not online have no intention of going online. 33
  of those people have chosen to not go online.
  Among the biggest reasons were lack of need
  (40) no computer (33) no interest (25) lack
  of knowledge for use (25) and general cost
  involved (16).
• U.S. Perspective
• In fall of 2000, the U.S. Department of Commerce
  found that
• 51 of all U.S. homes had a computer 41.5 of
  all U.S. homes had Internet access
• White (46.1) and Asian American Pacific
  Islander (56.8) households continued to have
  Internet access at levels more than double those
  of Black (23.5) and Hispanic (23.6) households.
  
• 86.3 of households earning 75,000 and above per
  year had Internet access compared to 12.7 of
  households earning less than 15,000 per year.
• Nearly 65 of college graduates have home
  Internet access only 11.7 of households headed
  by persons with less than a high school education
  have Internet access.
• Rural areas, though still lagging behind urban
  areas, had surpassed inner-cities in Internet
  availability and use

65
International Institutional Responses

• infoDeV - Global program managed by the World
  Bank. Seeks to help developing economies fully
  benefit from modern information systems
• SDNP - assist developing countries in acquiring
  the capacity to access and to contribute to
  solutions for sustainable development via the
  medium of information and communication
  technologies
• DOI Digital Opportunity Initiative, a
  public/private partnership of Accenture
• DOT Force - Digital Opportunity Task Force
• drafted at the G-8s Okinawa Summit. Published
  Digital Opportunities for All in May, 2001.

66
Personal Challenges in Knowledge Management

• Application of technology to business functions
  requires critical personal development and
  adaptation.
• Key concepts in this process are as follows
• Structure influences behavior.
• Structure in human systems is subtle.
• Leverage often comes from new ways of thinking.
•  

67
Digital Divide

• Between countries the global digital divide
• Between groups of people within countries - the
  domestic digital divide

68
Phones and Electricity

• 2 billion people lack access to reliable
  electricity
• As much as 80 of the world's population has
  never made a phone call

69
Phones and Electricity

• More telephones in New York City than in all of
  rural Asia
• In the entire continent of Africa, there are a
  mere 14 million phone lines -- fewer than in
  either Manhattan or Tokyo.

70
Internet Accounts and Hosts

• More Internet accounts in London than all of
  Africa
• One in two Americans is online, compared with
  only one in 250 Africans. 

71
Internet Accounts and Hosts

• Of all the Internet users worldwide, 60 per cent
  reside in North America, where a mere five per
  cent of the world's population reside 
• Wealthy nations comprise some 16 per cent of the
  world's population, but command 90 per cent of
  Internet host computers.

72
Digital Divide PCs

• Developed states 311.2 per 1,000
• Globally 70.6 PCs per 1,000
• South Asia 2.9 per 1,000
• Sub-Saharan Africa 0.75 per 1,000

73
Digital Divide BW

• The vast capacity of the Internet is distributed
  highly unevenly throughout the world.
• By late 2000 the bulk of Internet connectivity
  linked the US with Europe (56 Gbps) and, to a
  lesser extent, the US with the Asia-Pacific
  region (18 Gbps).
• Africa had extremely little bandwidth reaching
  Europe (0.2 Gbps) and the USA (0.5 Gbps)

74
Digital Divide Costs

• Internet access costs (as a percentage of average
  monthly income)
• US 1 to 2 percent
• Uganda over 100 percent
• Bangladesh 191 percent

75
Digital Divide Costs

• Access costs (ISP, and telephone call costs) are
  almost four times as expensive in the Czech
  Republic and Hungary as in the United States
• In Bangladesh a computer costs the equivalent of
  eight years average pay

76
Digital Divide Technical Training

• McConnell International "E-Business report
• Europe (including Eastern Europe) and Latin
  America rated well
• Middle East and Africa needed to significantly
  develop their human capital
• Asia had a mixed scorecard

77
Fact Sheet

• Global Perspective
• There are an estimated 429 million people online
  globally
• 429 million represents only 6 of the worlds
  entire population.
• 41 of the global online population is in the
  United States Canada
• 27 of the online population lives in Europe, the
  Middle East and Africa(25 of European Homes are
  online)
• 20 of the online population logs on from Asia
  Pacific(33 of all Asian Homes are online)
• Only 4 of the worlds online population are in
  South America
• The United States has more computers than the
  rest of the world combined
• (Source First Quarter 2001 Global Internet
  Trends, Neilsen/Netratings)

78
Fact Sheet (Cont)

• Among highly developed nations
• 61 of Internet connections are in Sweden
• Spain trails the list with only 20 of its homes
  connected.
• The Pew Internet and American Life Project
  published in Whos Not Online that 57 of those
  not online have no intention of going online. 33
  of those people have chosen to not go online.
  Among the biggest reasons were lack of need
  (40) no computer (33) no interest (25) lack
  of knowledge for use (25) and general cost
  involved (16).
• U.S. Perspective
• In fall of 2000, the U.S. Department of Commerce
  found that
• 51 of all U.S. homes had a computer 41.5 of
  all U.S. homes had Internet access
• White (46.1) and Asian American Pacific
  Islander (56.8) households continued to have
  Internet access at levels more than double those
  of Black (23.5) and Hispanic (23.6) households.
  
• 86.3 of households earning 75,000 and above per
  year had Internet access compared to 12.7 of
  households earning less than 15,000 per year.
• Nearly 65 of college graduates have home
  Internet access only 11.7 of households headed
  by persons with less than a high school education
  have Internet access.
• Rural areas, though still lagging behind urban
  areas, had surpassed inner-cities in Internet
  availability and use

79
Domestic and International Response
Joseph Lewis Aguirre
80
Socially Responsible Funds

• Avoiding weapons manufacturers, tobacco, alcohol,
  gabling.
• Womens Equity Fund -Advance status of women in
  the workplace
• Timothy Plan - Avoids companies contrary to
  Judeo-Christian principles
• Amana Funds - investment per Islamic principles
• MFS Union Standard - Pro labor issues.

81
Socially Responsible Funds

• Socially responsible funds perform no better than
  other funds.
• Socially responsible investors are not focused on
  short term performance.
• Expenses Minimum
• Neuberger Soc. Responsible 1.06 1,000
• New Covenant Bal. Income 1.13 500
• New Covenant Growth 1.13 500
• Parnassus Equity Income 0.99 2,000
• Pax World Balanced 0.95 250
• TIAA-CREF Social Choice 0.27 2,500
• Vanguard Calvert Index 0.25 3,000

• Source Morningstar Inc.

82
International Institutional Responses

• infoDeV - Global program managed by the World
  Bank. Seeks to help developing economies fully
  benefit from modern information systems
• SDNP - assist developing countries in acquiring
  the capacity to access and to contribute to
  solutions for sustainable development via the
  medium of information and communication
  technologies
• DOI Digital Opportunity Initiative, a
  public/private partnership of Accenture
• DOT Force - Digital Opportunity Task Force
• drafted at the G-8s Okinawa Summit. Published
  Digital Opportunities for All in May, 2001.

83
Personal Challenges in Knowledge Management

• Application of technology to business functions
  requires critical personal development and
  adaptation.
• Key concepts in this process are as follows
• Structure influences behavior.
• Structure in human systems is subtle.
• Leverage often comes from new ways of thinking.
•  

84
References
Irvine, Matt, Global Cyberculture Reconsidered 
Cyberspace, Identity, and the Global
Informational City, 1999 retrieved June 23, 2005
from http//www.georgetown.edu/faculty/irvinem/a
rticles/globalculture.html Irvine, Matt,
Georgetown University, 1999, Globalization and
the Internetworked Worked World, retrieved June
23, 2005 from http//cct.georgetown.edu/curriculum
/505-99/globalization.html. Irvine, Matt, 2004,
Introduction to the Economics of Art and the Art
Market retrieved June 23, 2005 from
http//www.georgetown.edu/faculty/irvinem/visualar
ts/ArtMarket/ArtMarketEconomics.html.
85
Multinational Customer
Joseph Lewis Aguirre
86
 Business Management for The Multinational
Customer

• Globalization of technology is bringing diverse
  cultures together into a common business value
  chain raising with consequent issues
• The effects of cultural and language differences
  on consensus and collaboration.
• Standardization of business processes.
• Real-time status for business transactions.
• Maturity of the technological environment.
•  

87
Quality - Defined

• Quality is conformance to requirements
• -- Philip Crosby, Quality is Free 1979
• The totality of features and characteristics of a
  product or service that bear on its ability to
  satisfy stated or implied needs. --ASQC

88
Quality - Defined

• User-based In the eyes of the beholder
• Manufacturing-based Right the first time
• Product-based Precise measurement

89
Quality - Defined

• Conformance to valid customer requirements
• Goalpost View Acceptable as long as it is
  within acceptable limits
• A predictable degree of uniformity and
  dependability, at low cost and suited to the
  market.

90
Lose Function
Probability of size
Loss Function
91
TQM

• An emphasis on Quality that encompasses the
  entire company
• Continuous Improvement
• Employee empowerment, quality circles
• Benchmarking - best at similar activities, even
  if in different industries
• Just In Time - requires quality of suppliers
• TQM Tools - allow you to measure progress

92
Quality Dimension

• Quality of Design
• Quality characteristics suited to needs and wants
  of a market at a given cost
• Continuous, never-ending improvement
• Quality of Conformance
• Predictable degree of uniformity and
  dependability
• Quality of Performance
• How is product performing in the marketplace?

93
Quality Dimension

• Performance
• Aesthetics
• Special features convenience, high tech
• Safety
• Reliability
• Durability
• Perceived Quality
• Service after sale

94
Cost of Quality

• Internal failure costs before delivered to
  customers
• External failure costs after delivered
• Appraisal costs assessing conformance to
  standards
• Prevention Costs reducing potential for quality
  problems

95
Importance of Quality

• Lower costs (less labor, rework, scrap)
• Market Share
• Reputation
• Product liability
• International competitiveness

96
Quality Through History

• 1920s Bell Labs
• Acceptance Sampling
• Want to guarantee certain defective,
• How many do we need to sample?
• Supposedly 2 defective, we test 40 and 2 are
  bad, are more than 2 bad?

97
Quality Through History- Inspect

• Does not add value
• Inspectors distrusted by workers
• Increase quality and reduce need for inspectors
• Poka-yoke - mistake proof
• Have workers do own inspecting
• Before are inputs good?
• During process happening properly?
• After conforms to standards?

98
Quality Through History- Inspect

• k1 Cost of inspecting one item
• k2 Cost to dismantle, repair, reassemble and
  test a good or service that fails because of a
  bad input
• p average fraction defective of incoming
  materials
• If k1/k2 gt p inspect 0
• If k1/k2 lt p inspect 100
• If k1/k2 p either 0 or 100. If p is based on
  not a lot of data, use 100

99
W. Edwards Deming

• Statistics professor, specializing in acceptance
  sampling
• Went to Japan after WW II
• Helped Japanese focus on and improve quality
• System (not employees) is cause of poor quality
• Fourteen Points

100
Demings Paradigms

1. Intrinsic extrinsic motivation
2. Management needs to improve and innovate
   processes to create results
3. Optimize the system toward its aim
4. Cooperation is better than competition

101
Joseph Juran

• Went to Japan in 1951
• Quality begins by knowing what customers want
• 80 of defects are controllable
• Quality Planning
• Quality control
• Quality improvement

102
Philip B. Cosby

• Martin Marietta, ITT, starting in 1960s
• Quality is Free
• Management must be firmly behind any quality
  plans
• Do it right the first time