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A Case for Quality
Let’s start paraphrasing a case that Conner made:
The Quality movement has little to teach you….
…….but it has much to remind you
So what is it we have to ‘remind’ them of?
Learning & GrowthHow will we
sustain our ability to change and improve
Internal ProcessTo satisfy our stake
holders & customers, what business processes
must we excel at
CustomerTo achieve our
vision, how should we appear to
our customers
FinanceTo succeed
financially, how should we appear to
our stakeholders
Strategies Clarify Strategic Objectives Identify CSFs Identify Critical Success Factors Identify KPIs
Critical Success Factors ≡ KPIs
Balanced Scorecard
Cause and Effect
Kaplan and Norton
The Way Organizations Work
Increase Profits by 10%
Reduce churn (turnover)
Managing Director
Increase customer satisfaction
Reduce hold times
SVP, Operations
Director, Customer Service
Director, IT
VP, Marketing
Faster access to all customer information
Eliminate disparate systems
Project Manager
Customer Value Proposition
Value Product/Service Attributes Image Relationship= ++
Price Quality TimeFunctionality
Kaplan and Norton
Marketing Mix
Price
Product /Service
Place
Promotion
Clark 2000
Quality Attributes
(Value Propositions)
Price
Quality Attributes
(Value Propositions)
Product /Service
People, Processes,Proactive Customer Service
Place
Promotion
Marketing Mix
Clark 2000
Relationship between Process and Project
Measured during projects
ProcessMetrics
Different Roles of our People
Employee Influence on Customers: which should influence the appropriate Employee selection, rewards, performance, and training requirements.
Isoteds: Finance, HR, IT, Quality.
No direct contact with customers, but as support providers their
contribution is crucial to the organization.
Influencers: Product Groups, Development Groups.
No direct contact with customers but are often involved with traditional
elements of marketing mix.
In-frequent or no Customer contact
Modifiers: Switchboard Operator, HD Coordinators, Dept Secretaries.
No direct contact with customer but still needs to be responsive to customer.
Contactors: Sales and Marketing, Customer Service.
Responsible for building relation-
ships. Need personality to be responsive to customers.
Frequent or periodic Customer contact
Not directly involved with the marketing mix
Involved with the marketing mix
Judd
Image
Expectations
Perceivedquality of
“hardware”
Perceivedquality of
“humanware”
Perceivedvalue
Customersatisfaction
Customerloyalty
Customer Satisfaction
ECSI
These measure the infrastructure an organization must build to create long term growth and improvement, and include measurements of people, systems and organizational procedures.
Examples include employee satisfaction, retention, training and skill sets; information system capabilities; alignment of procedures to recognize employee incentives in line with organizational success, etc.
These include measures such as customer satisfaction, customer retention, new customer acquisitions, customer profitability, and market share, in targeted customer and market segments.
Learning & Growth ResultsCustomer’s Results
These include measures of the critical business processes that have the greatest impact on customer satisfaction and in achieving the financial objectives (20:80 key work).
Examples include product design and product development (innovation) and manufacturing, marketing and post sales service (operations).
Internal Business Process ResultsFinancial Results
Balanced Scorecard
These include measures that indicate whether a company’s strategy, implementation, and execution are contributing to the bottom line improvement. Financial objectives can be measured by operating income, ROCE, sales growth, revenue generation.
Kaplan and Norton
Customer Satisfaction
HOSTAGESNo where else to go
Trapped due to lack of competition or high switching costs
BELIEVERSLoyal
APOSTLESSpeak out for you
MERCENARIES
Satisfied but not loyal,price sensitive
DEFECTORSDissatisfied,
may become…..
TERRORISTSSpeak out against you
Hi
MedRepeat Business
Hi=+10OK=0Lo = -10
(Jones and Sasser)
time
bu
sin
ess
go
alManagement of Change
Typical outcome of change
gap(spring back)
Quality is judged by customers. Thus quality must take into account all the product and service features and characteristics that contribute value to the customers and lead to customer satisfaction, preference, and retention.
Value and satisfaction may be influenced by many factors throughout the customer’s overall purchase, ownership and service experience.
These factors (values) include the company’s relationship with the customers that helps build trust, confidence, and loyalty.
Malcolm Baldrige National Quality Award
Quality Management
is a prerequisite for the
quality of products and services
Europe’s 500 study 1996
ofof
“Planning without awareness of what your competitors are doing is like flying a plane over the Alps in heavy fog without any instrument controls”
Benchmarking
Jan Howard
The preceding slides remind us how:
Strategic planning can identify critical success factors that, through effective policy deployment, give sustained improvement to our value proposition.
Effective leveraging and linking of the marketing mix impacts product positioning and our quality value proposition.
By designing customer service around the marketing mix we can build and maintain customer relationships which can lead to improved customer satisfaction.
Through managing processes, we can identify our capabilities, and through active benchmarking, we can identify capabilities of our competitors.
Through monitoring objective results, and involving our people, we can plan and manage effective change.
Important the quality and commitment of management is to all of the above.
Business Systems
Deming’s definition of a system:
A network of interdependent components that work together to try to accomplish the aim of the system
Kaplan and Norton’s definition of a system:
A set of processes and practices used to align and control an organization.
The Way Organizations Work
Increase Profits by 10%
Reduce churn (turnover)
Managing Director
Increase customer satisfaction
Reduce hold times
SVP, Operations
Director, Customer Service
Director, IT
VP, Marketing
Faster access to all customer information
Eliminate disparate systems
Project Manager
USA Results% improvements of award winners when compared with benchmarked
companies
European Results% improvements of award winners when compared with benchmarked
companies
Stock price 36% Share value 36%
Sales Operating income 48% Sales 17%
Sales 37% Sales over Assets 5%
Total assets 42% Capital Expenditure Over sales 4%
Employees 16% Assets 20%
Return on sales 8% Total cost over Sales 1.4%
Return on assets 3%
Demonstrable Results
( Singhal / Hendricks) ( CQE)
During a survey of CEOs and top executives, when asked:
‘does quality contribute to the bottom line or not’,
99% of the 603 respondents said they believe quality contributes to the bottom line.
When asked why quality contributes, respondents most often mentioned increased revenue through repeat business, referrals and customer loyalty; less rework; and savings on labor and materials.
Greg Weiler, ASQ project leader - 2004
ECONOMIC CASE FOR QUALITY
A Case for Quality
has already been made……..
but senior management may not have heard it yet!
The Topic of this Presentation
Thank You
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