MGT 453
according to deming, is the quality control department responsible for quality?
no, the job of the QC department is to provide insights...
can employees control common causes of variation?
no, they can only control what is external to the system; they should not be held accountable for common causes of variation
does deming support management by objective
no; he thinks objectives like those numerical quotas should be removed
are special causes of variation inherent to the system
no; special causes of variation are external to the system
2 most important drivers of service quality
*people* (cust contact w employee & caring for employees) *technology* (access to technology and company info to do the job)
what are some critical differences between service and manufacturing
+customer needs and performance standards are more difficult to identify and measure +services require more customization +output is intangible +services are produced and consumed simultaneously +customers are often involved in actual process +services are more labor-intensive than manufacturing +services handle large numbers of transactions
what happened with deloittes performance management system before the change
they had yearly objectives, manager project ratings, single year-end rating at consensus meetings
how much money was lost for J&J regarding the recall
they have already committed $280 million to the issue but the total could amount to billions after paying for new hips
dissatisfiers
"must haves" - expected requirements that cause dissatisfaction if not present
exciters/delighters
"never thought of" unexpected features like free cookies at hotel desk
satisfiers
"wants" expressed as requirements
how does TQM disagree with economic model of the firm
*different goals: profit maximization vs customer satisfaction *each employee is self-interested in the short term in EMF vs TQM employees are working the long term interest of all
how did SPC extend to become TQM
-more decision-making and control by managers -more horizontal integration and teamwork vertically -focuses on entire company (all customers) -has objectives and philsophies
if the customer is satisfied with the "whole" experience with the product, then you have a quality product
-quote by executive director of global quality strategy at general motors
what are the top 3 statements from deloittes high performing teams
1. "my coworkers are committed to doing quality work" 2. "the mission of our company inspires me" 3. "I have the chance to use my strengths every day"
what are the 4 elements of the system of profound knowledge
1. appreciation for a system 2. understanding variation 3. theory of knowledge 4. psychology
how did nummi create the new third culture
1. force great enough to unfreeze and organization (plus TPS and nummis dedication to employees) 2. joint venture deciding who was responsible for day to day management 3. going slow, learning as they went, ambiguity
recent study by corporate executive board uses these three words to describe the current state of performance evaluation
1. inaccurate (2/3 of employees receiving highest scores are not actually highest performers) 2. ineffective (don't really improve employee performance by more then 3-5%) 3. inadequate (23% of HR surveyed by the firm say theyre satisfied with the firms performance evals)
what are the 4 distinctive features of total quality management
1. intellectual origins (the theoretical basis is stats) and spc is at the core 2. sources of innovation (TQM - industry and gov not business schools, while modern management is business schools) 3. national origins (TQM is truly global while others are not) 4. dissemination process (TQM is populist and led by smaller companies... ceo isnt main driver)
customer-focused organizations focus on 4 key processes:
1. making sincere commitments to customers 2. ensuring quality customer contact 3. selecting and developing customer contact employees 4. managing complaints and service recovery
4 principles of Nummis new culture
1. management and labor recognized *interdependent futures* 2. employees felt safe and secure 3. production system formed interdependent relationships to create a *healthy work environment* 4. production system managed to transform the stress and conflict of everyday life into trust and mutual respect
3 major components of Deloitte's new system of management reviews
1. new compensation structure 2. snapshot per project 3. weekly checkins ("radically frequent")
deloitte's 3 objectives of their new performance management system
1. recognize performance 2. able to see performance (avoid rater effect) 3. fuel performance
how can Deming's 14 points be summarized and what is this basis called
4 elements called System of Profound Knowledge
what is 100*2 - 150 =
50. congrats it's the 50th term already and has there been any content to learn yet idk
how many formal perspectives are there about quality
6
what % of business comes from existing customers
65
businesses with ______ % customer retention rate are twice as profitable as those at ________%
98, 94
plan-do-study-act (PDSA)
A framework for problem solving and improvement activities (this supports Deming's 5th point of continuous improvement)
how do you manage customer relationships
CRMs help a lot (salesforce)
which company was the first known to be super good at mass production
Ford with the model T
who was the key client cited in the J&J article about the recalls of the hips
Lance Corporal Cody Perkins from the military
how to measure customer satisfaction and engagement
Product attributes Service attributes Image attributes Overall satisfaction measures Competitive comparisons
what must every system have
a purpose
affinity diagram
This technique allows large numbers of ideas to be sorted into groups for review and analysis; organizing large volumes of information efficiently and identifying natural patterns or groups of information (example was communication, effective services, and loan products)
can you prevent special causes of variation
YES; common cant be prevented since naturally no process is perfect
SPC
a process used to monitor standards, make measurements, and take corrective action as a product or service is being produced; "a tool for systematically analyzing variations and defects"... this eventually transformed/evolved into tqm
about how many years behind were service organizations in implementing quality
about 10 years
perceived quality is a comparison of ___ to _____
actual quality to expected quality
characteristics of effective commitments to customers
addresses the principal concerns of customers, free of conditions that might weaken customers' trust and confidence, communicated clearly and simply to customers
quality assurance
any *planned and systematic* activity directed toward providing consumers with products of appropriate quality, along with the confidence that products meet consumers' requirements (defined by early pioneers of quality from Western Electric's inspection department that were transferred to the bell telephone laboratories)
internal customers
anyone who receives goods or services from someone else within an organization (assembly supplies another department)
what is the national origins of TQM
began in the US, but was developed in japan and then diffused from there (*truly global*)
when in american history did interest in quality grow at exponential rates?
between 1980s and 2000
external customers
business-to-business
invisible hand
buying necessary parts and services from independent firms
why is customer segmentation good
can't satisfy all the same customers with same products/services, segmenting into natural groups makes it easier to respond to their needs, allows prioritization, helps company align internal processes according to the most important customer expectations or their impact on shareholder value
why is inspecting quality at the end of the line a bad thing
causes a lot of products to be defected (wasteful), might not know exactly what went wrong/where, wasted resources from value-added activities on more products than necessary
does deming think a leader should be a judge or a coach
coach, letting people contribute their full potential
define process
collection of interacting components that transform inputs into outputs toward a common aim called a mission statement
the example we discussed in class about the pilot driving to the wrong runway was a common or special cause of variation
common because it was inherent to the system
points of divergence between american and japanese cultures at nummi
communitarian belief vs individualism, finding common ground, cultural exchanges/communication/joking together
what is a problem with mass production that lean toyota supply chain doesnt deal with
competition among suppliers rather than working together... and the suppliers have little opportunity to suggest improvements in the production design since its so separate (high inventory costs)
what was the key to mass production at ford
complete and consistent interchangeability of parts and the simplicity of attaching them to each other... making production more efficient by having the assembler perform only a single task with a continuous flow of an assembly line
manufacturing perspective
conformance to specifications (within the error or size tolerances); this is a good way to *measure* quality since it's quantifiable
types of customers
consumers, external customers, internal customers
kaizen
continuous improvement (huge in Toyota)
what is at the core of deming's philosophy
continuous improvement in product and service quality; reducing uncertainty and variability in design manufacaturing and service processes driven by leadership
why is pdsa circle on an uphill slope
continuous improvement is forever an uphill progression
does cooperation or competition work better according to deming in an organization
cooperation -- employees getting along with each other, working together, and getting all on the same page is a huge accomplishment
TQM focuses on _______
creating long term value for employees, customers, and shareholders
touchpoints
critical moments when customers interact with the organization and its offerings
what is six sigma
customer-focused, results-oriented approach to business improvement
ways to segment customers
demographics, geography, volumes, vital few/useful many, profit potential (NPV)
what are the two ways that quality drives profitability
design quality -differentiated product -improved firm reputation -improved perceived product value -commanding higher price -achieve greater market share, but at the cost of reduced short-term profitability conformance quality -lower costs through savings in rework, scrap, repair, or warranty expenses
whats the minimum for a company to have according to kano's model of customer requirements
dissatisfiers AND satisfiers
kano model of customer requirements
dissatisfiers, satisfiers, exciters
suboptimization
divisions doing what is best for themselves, not the system as a whole-- this is not good according to deming's theory of management
rather than what the manager "thinks" about their people, managers are asked what they would "________" with them
do
when was scientific management and quality control first implemented
early 1900s... assembly line mass production began
points of convergence between japanese and american cultures
employment security, consensual decision making, discipline
quality control
evaluation of a process to determine if corrective action is needed to ensure that a requisite level of quality is achieved, often through some type of *inspection or measurement* activity (defined/invented by H.J. Heinz)
Transcendent (Judgmental) Perspective
excellence ex: rolex watches sight of luxury and can't be defined precisely, but "you know it when you see it"
customer-focus practices graph showing excitement, performance and basic are in which order
excitement curve on top, performance straight like at x=y, basic is below the x axis and beneath performance
t or f: quality is inversely related to quantity
false
t or f: "those who think" vs "those who do" is a common differentiator when TQM is integrated
false: TQM doesn't think about it like that, but rather the supervisor becomes more of a helper/facilitator who shares the overall goals of the team
t or f: TQM implementation is a straight-forward process
false: TQM is a ~revolutionary~ philosophy that requires radical and pervasive change within a firm
true or false: decisions at Nummi were made in a very democratic and polite manner by taking a vote
false: decisions were made via consensual conversations.. open discussions with compromises
t or f: it costs double to find a new customer than to keep an existing customer happy
false: it costs FIVE TIMEs as much to find a new customer
t or f: modern management theories regarding the economic model of the firm agree with total quality management
false; a lot of modern management theories developed by business schools like the economic model of the firm disagree with the techniques of total quality management, so companies have to make huge changes to integrate TQM
t or f: there is one solid definition of quality that has been agreed upon
false; quality is a subjective term for which each person has his or her own definition
T or F: Toyota has always found success in the US
false; they faced obstacles at the beginning because the US was demanding a wide range of vehicles
true or false: deming believes that optimization of every area in an organization leads to optimization of the entire organization
false; you have to look at the system as a whole, and might have to suboptimize certain parts to get the best overall outcome/quality
user perspective
fitness for intended use, or how well the product performs its intended function; ex - a cadillac and honda civic both service different needs and groups of customers.
what is Deming's general philosophy
focusing on continuous improvements in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by leadership of top management
little q
focusing solely on manufacturing quality
8 key forces that will influence the future of quality
global responsibility, consumer awareness, globalization, increasing rate of change, workforce of the future, aging population, twenty-first century quality, innovation
what are some reasons that TQM may fail
goal disagreement, lack of upper management focus, employee skepticism about organizational commitment, clashes with other programs
what is the source of innovation for TQM
government or industry (not leading business schools)
deming says there shouldnt be quotas or numerical goals.... but what about budgets and goals and targets that he says there can be??
he says that you can have big goals and overall objectives that are *reasonable* with *resources* and *methods* to accomplish those
higher quality leads to ______ which leads to long term_______
higher productivity, competitive strength
what's a managers job at nummi
honor opposing forces, draw them together, reconcile them in decision-making process
how can you describe the third culture of Nummi
hybrid of the best of american and japanese culture
how to design satisfaction surveys
identify purpose, identify customer (internal vs external), determine who should conduct, select appropriate survey instrument, design questions and responses to achieve actionable responses
just wondering how this is already the 89th term
ikr riley chill
whats the order of deming's chain reaction
improve quality, reduce cost, increase productivity, capture market, stay in business, provide jobs and more jobs
what caused a quality crisis in the US and when was it
increase in global competition of higher quality foreign products in 1980; eventually the US began its own growth of product quality awareness in manufacturing industries
what are some implications of SPC
individual operator rather than quality control engineer is best played to identify variation and take remedial action... more operator involvement and also manufacturing is viewed as a single integrated system with production chain as a supplier-customer relationship
is intrinsic or extrinsic motivation more powerful according to Deming
intrinsic; pay is not a motivator
how did toyota overcome the initial skepticism from the union
invited them to apply for the new plant, included some of the union in the management team, recognized them as they built the new agreements, allowed for employment for life, consensual decision making, nummi's no-layoff policy, flat wage structure that depended on the full company success, less bureaucracy by having only 2 job titles
what does a performance snapshot allow that other evaluations do not
it allows deloitte to quickly capture performance at a single moment in time
why are stakeholders so upset with the recall for J&Js hips?
it could indicate there are greater quality control issues even though management was just calling the issues aberrations
why isn't SPC done on all products in large companies
it is too expensive and difficult
what is challenging about having quality in the service industry
it lags behind manufacturing in quality implementation, lacks the same aggressive foreign competition, and has high turnover rate in the jobs
why is quality important
it's uniquely positioned to accelerate organizational growth through better execution and alignment; provides voice of customer critical to developing innovative products and services; provides competitive edge
which emotion does deming think that all stakeholders should have including the workforce
joy. "joy in work" for all stakeholders is promoted by the system of profound knowledge
what should be substituted on the factory floor for the current status of quotas and work standards according to deming?
leadership! and guidance! and continuous improvement! yay
with deming's funnel experiment, which option worked best
leaving the funnel alone (rule 1)
what scales should be used to develop cust satisfaction survey
likert scales
big q
managing for quality in all organizational processes
customer perspective
meeting or exceeding customer expectations (including consumers, external customers and internal customers)
key dates of quality improvements
mid 1980s - 6 sigma by Motorola 1987 - iso 9000 quality standards 1988 - malcom bridge national quality award begins
what was the transformation in "the truth about customer experience"
moved from siloed functions and top-down innovation to cross-functional processes and empowered, bottom-up innovation -allowed better service experience for customers
are results achieved by setting objectives?
no
are common causes of variation easy to identify
no - they are difficult and can only be eliminated by redesigning the system since its "baked" in lol
is top down innovation a good thing?
no especially if its siloed
are there any processes that are perfect
no, all processes exhibit variation
solutions for leading tv provider's broken service delivery line
not to replace touchpoint management; Four Step Approach: 1. identify key journeys (top down and bottom up) 2. understand current performance 3. redesigning the experience and engaging the front line (cross-functional team to brainstorm new solutions) 4. sustaining scale by changing mind sets
communication is possible when people share __________
operational definitions (statistical clarifications of the terms people use to communicate with each other -- operationally defined when they agree)
does TQM start with top management or operators
operators
how do customer-focused organizations look at complaints
opportunities for improvement: Encouraging customers to complain Make it easy for customers to complain Effectively resolve complaints quickly Have well-defined processes for dealing with complaints Need to listen carefully to determine the customer's feelings and then respond sympathetically, ensuring that the complaint is understood Empower their front-line people to do whatever is necessary to satisfy a customer
how many recalls for J&J since 2010
over 50 voluntary recalls
what action did the FDA take to ensure quality for J&J
oversight at 3 of the J&J plants
what is the new Deloitte evaluation report called now that it's not a rating
performance snapshot
quality dimensions
performance, features, conformance, reliability, durability, serviceability, aesthetics, responsiveness, empathy, tangibles, assurance
why is organizational culture important
plays central role in company ability to adapt to constantly changing environment; ensures quality; reduces hierarchy battles, guides day to day behavior, "glue that holds organization together"
what is the dissemination process for TQM
populist, led by smaller companies, ceo is not primary driver within companies (people lead it)
the economic model of the firm focuses on ______
profit maximization
push or pull system at Nummi?
pull.. relied on just-in-time to be successful, tight link with customers, removing excess inventory, standardizing work
what is the difference between quality control and quality assurance
quality control is more about controlling quality through inspection or measurements, while quality assurance is the planned activities that are in the system
how do customers primarily judge/evaluate the quality of a service
quality of the human contact
Product Perspective
quantities of product attributes; ex: #of cell phone features or thread count
rater bias
rating in performance management evaluations according to the likes and dislikes of the rater... they hire people they expect to like and could rate the more personable people higher than others -if your manager is a tough rater, you might look worse than other people with more generous raters
value perspective
relationship of good product benefits to price... product is of high quality if it has similar benefits for a comparable price; (ex: better bundles)
how can the success of nummi be described
same outputs as other places with much higher quality and half the workforce... "mecca" of the auto industry in north america
what happened in the early 20th century with quality management
scientific management appeared which separated planning from execution (workers) from quality control (inspectors)... there were separate quality departments from manufacturing departments with indifferences to end quality; then Henry Ford, and then statistical methods/quality assurance
what are some characteristics of the workforce at Nummi
seasoned, experienced workforce who knew each other very well (trained by the japanese), tolerant culture that accepts and values different opinions, diversity (more the 50% minorities)
reasons for broken service-delivery chain
siloed nature of service delivery, insular cultures among functional groups, lost sight of what customers want
if a system *has* _____ causes of variation, it is considered *unstable*
special
a system is considered stable if there are no ____________ causes of variation
special (common will always exist since systems are never perfect)
data serves as the ________ for compensation rather than the _________ for compensation
starting point, ending point
what is SPC
statistic process control
what is the theoretical basis for Total Quality Management
statistics
according to the deloitte article, the best teams are _________ oriented
strengths (meaning that members feel theyre going their best work each day)
what was one of the huge barriers in velcro producing quality goods
supervisors were telling the operators to get the material out as fast as possible despite what operators noticed about the material quality
whats a feedback loop
taking actual outputs and feeding another step in the process.... we can determine whether the desired outputs were created and then try to close the gap between targeted and actual performance
types of requirements of engagements with customers
technical requirements (like answering phone every time and quickly) and behavioral requirements (like using customer's name when possible)
why did the quality program at Kodak fall apart
the TQM failed because it conflicted with the western management practices
which perspective of quality provides the basis for coordinating the entire value chain?
the customer perspective: its really about making sure the customer is getting what they want
what happened with Johnson and Johnson's dePuy ASR implants
the failure rate in the UK was as high as 49% after 6 years; patients were in pain and immobilized by joint dislocations, infections, and bone fractures -- voluntary recall by DePuy
assurance
the knowledge and courtesy of employees and their ability to convey trust
what happened with quality post ww2
the top priority of manuf was production and quantity; little interest in quality while relying on mass inspection; japanese products started gaining popularity
management tends to believe that the problems they face are with the workforce. what is the reality?
the workforce is handicapped by the system and the system belongs to management
what are deloitte's check ins like?
they are radically frequent and are about the daily responsibilities and tasks about *CURRENT, NEAR TERM* work to allow clarity and helps team member to do their best work the way the manager is envisioning
what did velcro do about their quality issues?
they installed an SPC system that pinpointed where in the production process improvement was needed; also manufacturing instated material review board, consisting of a rotating group of salaried and hourly people -- discussed problems, causes, and disposition
why did deloitte want a change from their old performance management system to a new one
they tallied it up, and found out they were spending 2 million hours yearly on their performance management and that most of those were conversations behind closed doors
what was happening with velcro's quality
they were inspecting quality into the products rather than manufacturing it
what is the purpose of inspection according to deming
to gather information (NOT to assure quality)
how do customers typically view quality
transcendent or product perspective
what are the formal perspectives on quality
transcendent; product; user; value; manufacturing; customer
what is the key to lean production at toyota
transfers the max # tasks and responsibilities to the workers actually adding value to the car on the line system detects defects and quickly traces every problem to once discovered to its ultimate cause
t or f: Exciters/delighters become satisfiers over time
true
t/f: cumulative experiences across multiple touchpoints are better than taking data from one perfect touchpoint
true... soon youll have too many touchpoints
t or f: nummi sent american workers to japan to be trained in TPS
true: 600 were sent
true or false: toyota's lean supply chain involves organizing suppliers into function tiers
true: the first tier is part of the product-development team, and the second tier is under the first and acts as the manufacturing specialist supplier
t or f: there is always common causes of variation
true: there is never a perfect process
consumers
ultimate buyers of goods and services
total quality management (TQM)
unyielding and continually improving effort by everyone in an organization to understand, meet, and exceed the expectations of customers
what are typical approaches to keeping customers
upgrade offers, discounted rate plans, save desks
which perspective of quality is usually meaningful to people who work in marketing?
user - they care about meeting the customer needs and wants and expectations
visible hand
vertical integration: obtaining needed materials, services and so forth from *internal* operating divisions... this could cause some struggles related to not focusing on key competencies
when did quality technology first start to accelerate
world war 2 when they needed less failure of war products... began to wane post war
loyal customers are likely to maintain loyalty when problems are resolved successfully or not?
yes they will be loyal again if resolved well
is quality in services a big deal?
yes, because more than 80% of the nonfarm employees work in service and more than 50% of jobs in manufacturing are service-related
why is understanding processes important
you can't improve quality without understanding the full end to end process