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Elements of Strategic Management Integrating Quality into Strategic Management Quality and the Management Cycle Quality Policies Quality Goals Resources for Quality Activities Training for Quality Implementing Total Quality Obstacles to Achieving Successful SQM

Sanjit Sahu
Sujit Pawar

Sachin Raghuwanshi
Deepak Rautela

Strategic Quality Management (SQM)

SQM is the process of establishing long range Quality goals & define the approach to meet them SQM is decided is an Corporate Level Business Strategy

The strategy is decided for a longer span of time (5-10 years) SQM is decided to give the product/process of the company an unique competitive advantage over that of the competitors

Approach to implement SQM

Identification of customer needs (Quality)
SWOT analysis Gap analysis

Leadership by the upper management to develop quality goals & strategies

Translation of strategy into Annual business plan Implementation of strategy by line department

Employment of Strategy
Types of Strategy
Corporate Level strategy Decided by the top management with the aim to create a different level of identity for the company Business Level Strategy Strategy by different SBUs in their respective Business Units to achieve Corporate Strategy Functional Level Strategy Strategy by different Functional Heads in their respective departments to achieve Business Strategy

Business Strategy

Functional Strategy

Market Leadership Cost Leadership The internal qualitative work results in lowest cost of production Quality Leadership Results in highest level of customer perceived form of Quality (Cost, Quality, Flexibility, Speed, Reliability) Service Leadership Results in higher level of After Sales Service convenient to customer To increase the Strength & decrease the Weakness of the organization Order Winning factor It results in winning an order from the customer ahead of their competitors Eg :- Cell Phones, TISCO, The Taj Group, South-west Airlines

Why to adopt SQM

Steps to integrate Quality into Strategic Management

1. Identifying financial goals for a product/process 2. Identifying present Quality wrt that of competitors 3. Identifying key quality parameters affecting the purchase of the product 4. Comparison with the competitors in those parameters 5. Identifying unique competitive advantage on Quality 6. Identifying the internal results of Quality 7. Alternative quality goals wrt competitors 8. For a chosen goal, identifying departmental goals 9. Development of departmental plans 10. Identifying the resources required


Classic Management Cycle

Planning Organising Commanding Coordinating Controlling


Quality Policies Training Quality Goals


Deployment of Goals

Progress Review

Plans to meet goals

Measurement Feedback Resources

Organisational Structure

What is a Quality Policy?
Broad guide to action

Statement of principles

Precursor to procedure

Tailormade for each company

Clientele Leadership, Competitiveness or Adequacy Standard product or a service with the products as a part High reliability with higher initial price or lower one Optimization-Users cost or Manufacturers cost Quantification of reliability, maintainability Reliance on systems or people Supplier participation Participation of top management

No one set can fit all company activities
Levels of quality policy May lead to Vision Statement

Can be vague or specific

A goal is a statement of the desired result to be achieved within a specified time Goals may be created for breakthrough or control Examples of breakthrough goals: Quality leadership Opportunities to improve income Declining market share Cost reduction opportunities To improve image Examples of control goals: Holding specifications Holding failures Holding costs


Competitive assessment(where are we today) Vision(what we want to be) Strategic decision(How do we get there) Excellence model(how do we know, when we get there) Gap analysis(where are we versus where we want to be) Prioritize critical few(what do we need to tackle first) Develop tactical plans(how do we get there) Measurement(how are we doing) Competitive assessment(identify issues, where are we today)

Benchmarking is a reference point, it can be The specification Customer desires Competition Best in our industry Best in any industry The process involves: Determining characteristics to be benchmarked Determining organizations as benchmarks Collecting data Determining best in class Developing strategies including milestones Tracking progress against milestones

Division and subdivision of the goals until specific deeds to be done are identified Allocation of responsibility for doing these deeds

Provision of the needed resources: o In the short run, investment of resources can be a problem o Pilot teams yielding impressive results can demonstrate benefits of such investments o Annual budgeting should consider these projects and resources required for deployment

Training for Quality

Training is required for broad scope quality program Reason for the failure of training program

Failure to provide at the time of use Lack of participation of line mangers in designing training Preference for lecture method training Poor communication during training

Implementing Total Quality

Change in quality approach
Competitive pressure Customer dissatisfaction Increase in COPQ

Activities in prepare phase
Upper and middle management training Developing goals, plans and assignments

Activities in Start phase
Middle & lower management training Pilot projects Revision of management system for implementation Sustenance of new system

Activities in Expand phase
Implemented to other departments Finalizing the following Teams Measurement S/M Additional training Quality initiatives

Activities in Integrate phase
Finalization of goals Deployed @ different levels Quality role for all Regular audits

Alternative approaches
Quality circles Benchmarking Additional inspection SPC

As per average the entire implementation process would take 6 years. Results are visible within 2 years

Obstacles to Achieving Successful SQM

Lack of leadership by upper management Example Toyota (Toyoda & Taichi Ohno) TI Cycles of India (Ramprasad) Lack of infrastructure for quality Failure to understand for new system of quality Example. TI Cycles of India(Vendors) Failure to start small Example. Starbucks(Managers are free to make decisions) Reliance on specific techniques Underestimating the time and resources required