Practicing Continuous Improvement in the Classroom An Individual Journey toward Teaching Excellence Sid Sytsma, Professor of Statistics and

Quantitative Methods College of Business - Ferris State University

Most faculty members who have heard about Total Quality Management (TQM) or Continuous Quality Improvement (CQI) probably understand it to be some Japanese management technique used by businesses to get better quality products. Some may even know that it involves meeting customer needs. Probably very few college faculty members, other than those directly involved in teaching CQI, have had the opportunity to learn CQI philosophy and methodology and the tremendous implications CQI has for improving virtually any process, including the teaching/learning process. For the purposes of this paper, we will use the terms TQM and CQI interchangeably. The aims of this paper are to provide a historical perspective on the quality movement, to explain what the philosophy and practices of continuous improvement are all about, to describe areas in which universities have successfully adopted continuous improvement models, to explore the concept of "the customer" in the context of higher education, to suggest ways of utilizing a continuous improvement philosophy to improve classroom teaching and student learning, and to suggest ways that a university can support individual faculty in this effort. The Quality Movement -- A Historical Perspective The concept of quality has been with us since the beginning of time. As early as the creation of the world described in the Bible in Genesis, God pronounced his creation "good"-- e.g., acceptable quality. Artisans' and craftsmen's skills and the quality of their work are described throughout history. Typically the quality intrinsic to their products was described by some attribute of the products such as strength, beauty or finish. However, it was not until the advent of the mass production of products that the reproducibility of the size or shape of a product became a quality issue. Quality, particularly the dimensions of component parts, became a very serious issue because no longer were the parts hand-built and individually fitted until the product worked. Now, the mass-produced part had to function properly in every product built. Quality was obtained by inspecting each part and passing only those that met specifications. This was true until 1931 when Walter A. Shewhart, a statistician at the Hawthorne plant at Western Electric published his book Economic Control of Quality of Manufactured Product (Van Nostrand, 1931). This book is the foundation of modern statistical process control (SPC) and provides the basis for the philosophy of total quality management or continuous process improvement for improving processes. With statistical process control, the process is monitored through sampling. Considering the

results of the sample, adjustments are made to the process before the process is able to produce defective parts. W. Edwards Deming, then in his 30's, worked as Walter Shewhart's assistant and protg. Western Electric (now AT&T) was the first American firm to adopt this revolutionary approach to improving quality. At about the same time, Shewhart also developed a neverending approach toward process improvement called the Shewhart Cycle (also known in Japan as the Deming Cycle and most frequently today in the United States as the PlanDo-Check-Act or PDCA Cycle). This approach emphasizes the continuing, never-ending nature of process improvement.

The PDCA cycle is really a simple feedback loop system. PLAN--A plan is developed to improve a process. DO--The plan is tested in a small field test. CHECK--The results of the test are assessed. ACT--If successful, the plan is implemented. The improvement process begins again and the cycle is repeated. The repetition of the PDCA cycle, with each cycle producing improvement, leads us to the term continuous improvement. During the early stages of World War II, America had a substantial problem with military ordnance (bombs, bullets, torpedoes, etc.). A team, called the whiz kids--including Shewhart, was put together as an attempt to improve ordnance performance. The team was highly successful in further refining SPC and utilizing it to improve the quality of weaponry. After World War II, Deming and Shewhart presented lectures on SPC and the wartime refinements to it to American engineers and managers involved in manufacturing. Many engineers who heard were convinced and adopted the SPC philosophy. Most managers were more interested in meeting the world-wide pent-up demand for products and concentrated on making more product rather than better product. Thus, the management implications were largely ignored in America. Both Deming and Shewhart were selected to go to Japan and participate in Japanese reconstruction efforts. They presented their lectures in Japan. The Japanese managers and engineers listened and adopted the philosophy. Within five years they had internalized the philosophy. By the early 1970's, the United States had begun to feel the competition. By the early 1980's the quality gap between Japan and the United States had become critical. In 1982, Deming published his books Out of the Crisis and The New Economics for Industry, Government, and Education which laid out his application of process control and improvement theory to management. The concepts in these books are summarized in what is known as Deming's 14 Points. The 14 Points have become the centerpiece of the quality philosophies of many companies. Deming has two contemporaries who also have contributed greatly to the philosophical development of the quality improvement movement--Joseph M. Juran and Philip B. Crosby. Although their perspectives and

approaches are somewhat different, their philosophies have more similarities than differences and all are rooted in the philosophy of continuous process improvement. Today, most organizations that have successfully internalized a philosophy of continuous improvement have followed the approach of Deming, Juran, or Crosby. These organizations include manufacturing, service, health, education, military and government agencies. As a result of continuous improvement, America is once again becoming competitive. TQM/CQI Philosophy and Practices Today, a TQM-based management philosophy includes not only the core TQM/CQI concepts but also supporting concepts directly related to continuous improvement. These supporting concepts are natural extensions of, supportive of, and in many cases prerequisite to, successful implementation of a TQM/CQI philosophy in an organization. Central Core Concepts The concept of a system and systems analysis Process variability, including common cause and special cause variation Statistical process control and control charts to identify special cause variation PDCA cycle to improve processes continuously by reducing common cause variation Tools to identify the root cause problems of processes and to assist in implementing new processes Supporting Concepts Emphasis on customers, both internal and external, and their needs Employee issues including: Empowerment Teams, including cross-functional and self-directed teams The value of employees Emphasis on education and training The Concept of a System Deming (1986, p. 319) defines a system as the entire organization. Deming's system is composed of management; management philosophy; employees; citizens of the country; all facets of government, including laws, taxes, trade barriers, et cetera; foreign governments; customers; shareholders; suppliers; environmental constraints; and banks and other financial entities. He believed strongly that the components of the system should work together like a symphony orchestra. He even believed that competitors formed part of the system and so taught the Japanese in the early 1950's. This is probably a major reason for the synchronization and cooperation of Japanese industry and America's difficulty in penetrating that market today. Processes and Process Variability

The concept of process variability forms the heart of statistical process control. For example, if a basketball player shot free-throw in practice, and the player shot 100 freethrow every day, the player would not get exactly the same number of baskets each day. Some days the player would get 84 of 100, some days 67 of 100, some days 77 of 100, and so on. All processes have this kind of variation or variability. This process variation can be partitioned into two components. Natural process variation, frequently called common cause or system variation, is the naturally occurring fluctuation or variation inherent in all processes. In the case of the basketball player, this variation would fluctuate around the player's long-run percentage of freethrows made. Whereas, special cause variation is typically caused by some problem or extraordinary occurrence in the system. In the case of the basketball player, a hand injury might cause the player to miss a larger than usual number of freethrows on a particular day. Statistical Process Control Shewhart's discovery, statistical process control or SPC, is a methodology for charting the process and quickly determining when a process is "out of control" (e.g., a special cause variation is present because something unusual is occurring in the process). The process is then investigated to determine the root cause of the "out of control" condition. When the root cause of the problem is determined, a strategy is identified to correct it. The investigation and subsequent correction strategy is frequently a team process and one or more of the TQM process improvement tools are used to identify the root cause. Hence, the emphasis on teamwork and training in process improvement methodology. It is management's responsibility to reduce common cause or system variation as well as special cause variation. This is done through process improvement techniques, investing in new technology, or reengineering the process to have fewer steps and therefore less variation. Management wants as little total variation in a process as possible--both common cause and special cause variation. Reduced variation makes the process more predictable with process output closer to the desired or nominal value. The desire for absolutely minimal variation mandates working toward the goal of reduced process variation. The PDCA cycle, repeated many times, provides the mechanism for accomplishing continuing variation reduction or continuous improvement. Customer Focus A major tenet of TQM/CQI philosophy is the emphasis on the customer. This customer focus occurs because customers define what quality is in a product or service. External customers are those who buy or consume the final product. Internal customers are those in the production system who depend on others and other processes upstream from them. If Process A produces material for Process B, then Process B is an internal customer of Process A. If A's quality declines, it most certainly will affect B's quality. Employee Issues

A final principle of TQM/CQI is the emphasis on the value of the employee. For continuous improvement to work, people must work together in teams and they must know how to solve problems and make decisions. They are empowered to make processrelated decisions because they are closest to the process and know it best. This means employees need new skills--team-leading skills, problem-solving skills, decision-making skills, and personal interaction skills. This requires a significant continuing investment in education and training. Employees with these skills are valuable and are treated as such-with the respect and dignity commensurate with being a highly valued part of the organization. College and University Adoption of Continuous Improvement Models Many colleges and universities across the United States have adopted or are adopting the philosophy of continuous improvement in portions of their operations. This includes community colleges, for-profit post-secondary institutions, four-year colleges, and large public and private universities. In Michigan, these include the University of Michigan, Wayne State University, and Western Michigan University. All have made major commitments and are beginning to see improvements in processes across their campuses. Several other colleges and universities are just beginning the process. In these institutions, virtually all of the TQM/CQI activities are taking place in areas within "business" types of processes. Activities such as parking services, financial aid, registration, telecommunications operations, and dining services are typical initial process improvement targets. In all of these, clearly the student is the primary external customer, and the fundamental aim of the quality improvement process is to improve the quality of service and product to the primary customer. Of course many other processes are being improved as well, such as administrative payroll or staff parking. Focusing on processes such as these only indirectly impact the student. However, improvements in these areas affect the general quality of life on the campus, the morale of the staff, the culture of the university, and consequently the attitudes of the people in the organization toward their student customers. These organizations have made a conscious and public decision to get better and better at what they do and how they treat people. They have made a decision to change from their existing cultures to a culture in which people are valued. Change has become a way of life, processes are analyzed and reengineered, process performance is measured regularly, and the resulting quality gains are celebrated. The public celebration of the quality gains made is an important ingredient in moving the university culture toward one that embraces the continuous improvement philosophy. The quality improvement gains documented in many of these early attempts at process improvement in these universities are in some cases extremely large. When one talks to the process improvement teams, they are genuinely excited about what they have

accomplished and are eager to share their experiences with others. The excitement generated in many of these organizations is contagious and becomes a major factor in improving the culture. Given both the commitment of many universities to continuous improvement and their stated missions focusing on teaching and learning, one would expect that organized attempts to improve the teaching/learning process would abound. Unfortunately, this does not appear to be true. Only a very small proportion of articles in the TQM/CQI literature in higher education are concerned with the application of continuous improvement models to the teaching/learning process. The Concept of the Customer in Higher Education Universities have a variety of customers. One definition of customer is that of "a buyer of a product or service." Students take classes, consume meals, sleep in residence halls, buy books and use many services for which they pay tuition and fees. The student certainly fits this definition of the word customer. The businesses and professions that employ the graduates are also customers, as is the general public. Universities have an almost infinite variety of internal customers as well. As we have seen, internal customers of a service are those individuals or entities whose product or service depends on that service. For example, the payroll department is a customer of the computer center because without the computer and the computer center the payroll does not get produced. The dean's office is a customer of the accounting department because the dean's office needs timely, accurate financial information to make appropriate decisions. Most frequently, external customers have the freedom to choose their supplier, and in fact, do so. This is, for the most part, not true for internal customers. They are stuck. They must use their service provider, because it is their only option. This lack of competition frequently breeds contempt for internal customers. When one begins to treat a person or entity as an external customer, one's attitude toward that person or entity changes. A customer is important. A customer is vital to the survival of the organization. The customer can choose another supplier if the quality of the service or the product is inferior or deteriorates. One of the most important aspects of the TQM/CQI-focused organization is that departments begin to treat other departments as important customers by trying to meet the customer's needs and time schedules. This simple concept has an absolutely revolutionary effect on the relationships that exist within a traditional organization. The idea of the student being the customer of a professor is a concept that takes many faculty members a while to assimilate. Certainly the student/faculty relationship is obviously far more complex than that of a simple customer-supplier relationship. Yet, clearly one dimension of this relationship involves the student as customer. The student is

buying the professor's course and has the unmistakable right to expect certain things for his/her money: relevant course content, fairness, access, expertise, and a reasonable learning situation. If a faculty member views the student as a customer, it is likely that the faculty member will become more tolerant, more interested in implementing ways to improve the learning process, more accessible, and more student-friendly. Many faculty members say that the student is not the customer, but is the product. However, upon closer review, it becomes evident that the student is not the product; the product is the learning of the students. Learning is a team effort between the professor and the student. Jointly, they produce a product--the learning of the student. Both parties are responsible participants in that process. Utilizing a Continuous Improvement Philosophy to Improve Classroom Teaching and Student Learning Clearly, the teaching and learning that take place within a course is a process, albeit a complex one. The product of the process is the learning of the student (Tribus,undated). Primary team members in the process are the professor and the student. Many other team members also exist in this complex system, including librarians, other faculty members, tutors, lab assistants, and other students. The businesses, industries, and professions served are also team members because they help to identify relevant course content. Maintenance and custodial personnel are team members because they have a direct effect on the quality of the learning environment. The professor, based on his/her experience and expertise, develops the plan for learning and a process that results in student mastery of the course material. When we apply modern SPC analysis to student performance data derived from a typical college course, we find enormous variation compared to most manufacturing processes. The situation is similar to what existed in manufacturing in the pre-Shewhart days. Quality is obtained, like the pre-Shewhart days in manufacturing, by inspection. Those who do well on tests are graded acceptable and are passed. Those who do not perform acceptably are scrap--rejected totally, or are reworked. Society can no longer afford this wasteful model! We must consider alternatives to many of our current educational practices. For example, we could change our current grading practices to reflect the opportunity for improvement, such as retakes on tests, mastery learning, and outcomes-based evaluation. adopt the philosophy that all students can learn and that our goal is to develop teaching/learning strategies that will lead us toward zero defects--no failures (Crosby, 1984). believe that intelligence is the rate of learning and that natural variability exists in this --process like all others and can be accounted for in appropriate teaching/learning strategies. consider published outcomes and guarantees in courses--for example, in a typing course if a student buys 35 words/minute and only achieves 25 words/minute, he/she can retake the course at no cost.

examine policies at the university that inhibit a CQI model (e.g., registration only three times per year, the need for streamlined methods to award incomplete (I) or in process (IP) grades, the need for variable credit, and course length alternatives to meet customer needs, et cetera). For most faculty members today, the primary instructional process is based on the lecture. They learned the material this way, as did the person they learned it from, and likewise, the instructors before them This process continues in spite of the fact that most faculty members know that the lecture is one of the least effective ways to deliver instruction, even when it is done extremely well. Why haven't educators made more successful attempts to improve the teaching/learning process? There are many reasons. Some faculty members see few reasons to change; most feel they are doing just fine. are far better talking about change in others than about making changes in themselves. do not know how to change; they have been taught no credible alternatives to their old ways. fear giving up the power that they now feel they have. are by nature poorly conditioned to take risks. simply don't care. Faculty members have been much more interested in learning new content than in learning to improve their teaching. This has a striking parallel to the differences between the United States and Japan in how research and development funds are expended. Historically in the United States, we have spent about 2/3 on new product research and 1/3 on new process research (Thurow, 1993). In Japan, those two figures are reversed. The result is that Japan can produce comparable product much more inexpensively than the United States can because of superior manufacturing technology. The point is that expenditures pay off. In colleges and universities, most teaching faculty members are selected for their content expertise not their content delivery expertise. Most faculty research, faculty travel, and faculty consulting relates to content expertise, not to the effective sharing of that content with others. Most universities have not made significant investments in omnibus attempts to improve the teaching/learning process nor have their faculty invested their own time and effort to do it individually. Many faculty members have never even taken a course in how to teach; some scoff at the very idea. It is time to rethink our traditional ideas of what teaching and learning are all about. It is time to apply what we know about process improvement to the teaching/learning process. Process improvement theory and practice has stood the test of time. It is successfully used in process improvement worldwide. It can be used to improve the process of teaching and learning in the classroom as well.

It is easier to apply CQI philosophy in the classroom than it is to apply it in practically any other place on earth. This is because of the flexibility and control that professors have in configuring their courses. If professors want to use a CQI philosophy, they can just do it. They don't even need to ask permission. It can be an individual journey toward teaching excellence. What attitudes are necessary to utilize this methodology to improve classroom instruction? An open mind A willingness to change A willingness to learn some new things--none of which are rocket science--about continuous improvement: SPC, CQI/TQM theory, process improvement tools, planning tools A willingness to take some minor risks and give up some control A willingness to carefully monitor/assess/evaluate the teaching/learning process A willingness to assume a new role--that of learning facilitator-- in the teaching/learning process A willingness to learn about some new instructional techniques and how to use them effectively A willingness to try new and innovative teaching/learning strategies; discarding those that prove to be ineffective and keeping and improving those that work What will be the likely effect? A new spirit in the classroom A reduced emphasis on grades; an increased emphasis on learning and outcomes Higher expectations by students of what they can learn Students leaving the class wanting to continue to learn An increase in student performance with reduced variation Teams helping each other learn; teams helping the professor to continue to learn How can one get started? Read some of the articles cited in the references at the conclusion of this paper. The undated Tribus and Barr articles are particularly worthwhile. Research the topic for yourself. Be as concerned about the teaching/learning process as you are about your course content. Talk to faculty members who are trying different strategies of instruction. Discover the effect these strategies have had on these faculty members' classes. Educational research clearly shows that only a few instructional strategies will lead to large (greater than two standard deviations) increases in student learning. These include the use of a mastery learning model with reteaching and retesting, instructor or peer tutoring, collaborative/participative learning (e.g., teams), and the uses of new technologies such as multimedia and the Internet. Just do it. Try a new method for teaching a course topic. You needn't do a whole course. Remember, improvement comes step by step. Apply the PDCA model. Measure the resulting student learning. If you feel it works and can be further refined, continue to do

so. If it clearly doesn't work, try something else. Ask the students if something is working or not and what they think might work. Use their ideas. After all, they are the customers. Ways in Which a University can Support Individual Faculty Members in This Effort One of the most wonderful things that could happen in a university would be for all professors to adopt a continuous improvement model--a very personal decision. Clearly, this is highly unlikely. If a university wants to support a high level of TQM/CQI in the classroom and increase the probability that individual faculty members choose to adopt a continuous improvement approach to teaching and learning, the university must change its behavior. Climate, resources, and rewards are prerequisites to long-term success in this endeavor. Climate Many faculty members would be encouraged to pursue a TQM/CQI approach to teaching/learning if a continuous improvement model was being practiced consistently within the rest of the university. For a substantial cross-section of faculty members to adopt the new philosophy in the classroom, credible examples of success in other areas would increase the probability of acceptance. For this to happen, the institution must make a long-term commitment to the philosophy; otherwise, adoption would be but a small fraction of what could be possible. For a TQM/CQI philosophy to be adopted by a professor requires some risk taking. For faculty members to take risk, a climate must exist in which risk-taking is encouraged. This means that faculty members must trust the leadership and that the leadership must exhibit a genuine interest in what is happening with individual faculty members. Faculty members must feel valued and must believe that what they are doing is important to the college or university leadership. Support Resources For faculty to adopt a continuous improvement model in teaching/learning, education and training is essential. The following topics are prerequisite: Knowledge of continuous improvement theory and practice Using quality tools to improve teaching and learning Knowledge of which instructional techniques and strategies work in different instructional situations. Training on how to select the most appropriate technique for a particular topic and audience and how to effectively utilize that technique Measuring the performance of instructional processes How can this be accomplished? A teaching and learning center with the appropriate expertise, the right funding, and a mission centered on a continuous improvement model for teaching and learning can be

the focal point for faculty members to change their learning/teaching paradigms and to successfully implement a continuous improvement model in their classroom. For such a center to be successful, the following ingredients must be present: The mission of the teaching and learning center must be centered on the continuous improvement of teaching and learning, and focused on disseminating techniques that work with students. The expertise in the center must be viewed as expert by the university community. The center must be adequately funded so that faculty with needs outside the expertise of the center can have their needs met elsewhere with funding from the center. The center should rely on existing faculty expertise and organized support clusters comprised of faculty who are at various stages of the continuous improvement process to assist newcomers in learning what TQM/CQI is all about. The center should rely on existing faculty expertise and organized support clusters comprised of faculty who are using particular teaching techniques effectively to advise instructors who would like to use a new teaching technique. The center must have state-of-the-art facilities, including computer resources with ties to electronic instructional resources outside the university, and staffed with personnel who know how to access these resources to solve a particular problem. The center must be customer-focused and practice the TQM/CQI philosophy in its own management and operation. Rewards Probably the most important reward to a teacher is intrinsic--that of making a difference in the life of a student. And that, frankly, is what is going to motivate most faculty to get involved. If applying this methodology can improve learning, faculty are going to be more successful in what they do. Success is its own reward. Public celebrations of successes are important too (With thanks and appreciation, October 17, 1995). This includes recognition of teams that have improved products, and recognition of faculty who have documented major gains in improvement in student learning, not just the best one or ones--all of them. It's the commitment to the process that's important. The more gains there are to celebrate, the further the institution has moved in a positive direction. The gains, and their celebration, are ultimately what change the culture and improve the institution as a whole. The question of prizes, stipends, or salary increases to reward people for continuous improvement is a complex topic with many ramifications. There is no published research that I have found that demonstrates that monetary rewards cause improved performance among professors. It seems obvious, however, that an organization that values continuous improvement should reward people for their attempts at implementing it. Organizations should not claim that continuous improvement is important and then reward their employees for something else. Some Concluding Thoughts

Our goal, as educators, must be to change our teaching/learning process from one which is dependent on inspection to obtain quality to one in which the teaching/learning process itself guarantees quality. Application of the TQM/CQI philosophy can move us toward that goal. Adoption of CQI/TQM in the classroom will occur on two levels--individual faculty adoptions and large-scale institutional adoptions. Individual Faculty Adoption If a professor chooses to adopt the new philosophy, he/she can do it quickly. Learning about TQM/CQI is not difficult. Adopting new teaching strategies and monitoring them is well within the expertise of any faculty member. Every faculty member has the power to begin implementation in the classroom tomorrow. The toughest part is making the decision to change. Just do it. Institutional Adoption Obviously, a genuine institutional CQI adoption will provide the greatest gains. There are three reasons for this. First, more faculty will adopt the new philosophy and begin the continuous improvement journey. Second, the body of knowledge and expertise both in continuous improvement techniques and in effective teaching/strategies will be greater and consequently the gains will be greater and more rapid. Third, institutional adoption brings institutional resources to bear on the effort. This makes a systems approach to the effort possible, leading to synchronization and coordination of efforts and, therefore, greater gains. Because the knowledge and skills in basic courses are prerequisite to the learning that is possible in the more advanced courses (a true supplier/customer model), the potential gains possible from an integrated systems approach to teaching/learning are potentially very large. If a university wishes to move its organization toward a culture that embraces positive change, the leadership of the university must lead the way. Leaders, including members the governing board and senior administrators, must not only "talk the talk," but they must "walk the talk." They must not only talk quality, they must demonstrate it in their management style (Glasser, 63-64). In addition, and perhaps most importantly, the university leadership must have the trust and respect of the university community (Glasser, 18-24). Adopting a TQM/CQI model institutionally requires the courage to make the change, the commitment to see it through, the financial resources necessary to make it possible, and the willingness to lead by example. References Aguayo, R. (1990). Dr. Deming: The American Who Taught the Japanese about Quality. New York: Lyle Stuart.

Baugher, K. (September 1993 and October 1993). Using student teams to improve teaching and learning. TQM in Higher Education. Barr, R. A. and Tagg, J. (December, 1995). From teaching to learning--a new paradigm for undergraduate education. Change Magazine. 13-25. Bateman, G. and Roberts, H. (November, 1993). TQM for professors and students. TQM in Higher Education. Brassard, M. (1993). The Memory Jogger+. Meuthuen, MA:GOAL/QPC. Chaffee, E. and Sherr, L. (1992). Quality: Transforming Postsecondary Education. ASHE-ERIC Higher Education Report No. 3. Washington, D. C.: The George Washington University, School of Education and Human Development. Cornesky, R. (1993). The Quality Professor. Madison, WI: Magna Publications. Cornesky R., McCool S., Byrnes L., Weber R. (1991). Implementing Total Quality Management in Higher Education. Madison, WI: Magna Publications, Inc. Crosby, P. (1984). Quality Without Tears: The Art of Hassle-Free Management. New York: McGraw-Hill. Deming, W. E. (1986). Out of the Crisis. Cambridge, MA: Massachusetts Institute of Technology, Center for Advanced Engineering Study. Deming, W. E. (1993). The New Economics for Industry, Government, Education. Cambridge, MA: Massachusetts Institute of Technology, Center for Advanced Engineering Study. Feigenbaum, A. V. (1983). Total Quality Control 3rd ed. New York: McGraw-Hill. Glasser, W. (1995). The Control Theory Manager. New York: HarperCollins Publishers. Holecek, D. and Hadgraft, R.G. (1993). Can TQM work in a civil engineering department? proceedings of the 5th Annual Conference of the Australasian Association for Engineering Education. 284-289. Hillmer, S. C. (January, 1994). A problem-solving approach to teaching business statistics. paper presented at the Winter Meeting of the American Statistical Association. Ishikawa, K. (1985). What Is Total Quality Control? The Japanese Way. Englewood Cliffs, NJ: Prentice-Hall. Juran, J. M. (1989). Juran on Leadership for Quality. New York: The Free Press.

Kachurick, J. (February, 1994). TQM empowers students. TQM in Higher Education. Kimbler, D. L. (undated). Teaching while using TQM methods.http:\\www.deming.eng.clemson.edu/pub/tqmbbs/education/teachtqm.txt Lamkin, J. (May, 1994). TQM in the classroom: converting a course to quality. TQM in Higher Education. Lezotte, L. (1992). Creating the Total Quality Effective School. Okemos, MI: Effective School Products Products, Inc. With thanks and appreciation (October 17, 1995). M-Quality Expo '95 Program. p.10. Moore, D. R. (Jan/Feb, 1993). TQM and radical change in education. Journal for Quality and Participation. Orsini, J. N. (May, 1985). The quality-productivity connection. The United States Banker. Scherkenback, W. W. (1986). The Deming Road to Quality and Productivity: Road Maps and Road Blocks. Washington, D.C.:CEEP Press. Schoenfeld, C. (July, 1993). Listen to the people you serve. TQM in Higher Education. Shewhart, W. A. (1931). Economic Control of Quality of Manufactured Product. New York: Van Nostrand-Reinhard. reprinted by the American Society for Quality Control, Milwaukee, WI (1980). Stubblefield, J. (November, 1995). Satisfying the ultimate user. TQM in Higher Education. Teeter, D. and Lozier, G. (1993). Pursuit of Quality in Higher Education: Case Studies in Total Quality Management. San Francisco: Jossey-Bass Publications. Thurow, L. (1993). Head to Head: The Coming Battle Among Japan, Europe, and America. New York: Warner. Tribus, M. (October, 1994). New ideas come more easily to those accustomed to change. TQM in Higher Education. Tribus, M. (undated). Total quality management in schools of business and engineering. http:\\www.deming.eng.clemson.edu/pub/tqmbbs/education/busengtq.zip Walker, S. (September, 1995). Applying SPC to the ABCS. Public Sector Quality Report.

REVEALING EXAMPLES: DEMING'S QUALITY MANAGEMENT TRAINING Deming's Philosophy of Quality Management Dr. Terry Halwes Common sense informs us that quality is expensive. Psychologists who study skilled action refer to this as the "speed/accuracy tradeoff": you can work faster, but only at the expense of reduced accuracy; you can be more accurate, but only by taking time to be more careful. To create manufactured products of higher quality, for example, you must hire more experienced, better trained (and higher paid) workers or give them more time to do the work, inspect the finished pieces more carefully, and so on. However, we now know that by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while increasing customer loyalty). The management systems philosophy of Dr. W. Edwards Deming, an American physicist and statistician who taught in Japan during the decades following World War II, is already familiar to nearly all Japanese adults and to many Americans. Japan's most valued quality award, the Deming Prize, is named for him. Several other American consultants also contributed to the effort, and the Japanese, with their help, created a system out of what had been several more or less unconnected insights. Then, in the early 80s, this "Quality Revolution" came back to America, sparked by an NBC News White Paper If Japan Can...Why Can't We?. It tells how the Japanese captured the world auto and electronics markets by following Deming's advice to practice continual improvement and think of manufacturing as a system, not as bits and pieces. Workers work in the system, which management created or allowed to continue. Management must work on the system to improve the process. With instruction, workers can be enlisted in this improvement. To study the processes that make up their system, management must involve those who actually use those processes -- the people who actually do the work. The people who build the product or provide the service are the only people who really understand the processes that management has assigned them. The role of management changes from giving orders and giving out punishments and rewards, to leading and supporting the workers in improving quality. If the workers are to succeed in studying the processes they use and in creating ways of improving them, they must have several kinds of support. For example, they must be given the understanding that change is possible and that management is committed to supporting them in studying and improving the system; they must receive training in their new job -- training in process improvement and in other skills they will need, as well as in Deming's philosophy of management; and their suggestions must be put into effect and the results studied. (An inappropriate suggestion must be discussed openly -- also, further training may be indicated.)

In Deming's presentation the changes that must be made by management, if any transformation is to succeed, are known as the Fourteen Points. As an example, Point 3 is: "Cease dependence on mass inspection." Inspecting a product as it comes off the line and either scrapping or reworking the defective items is expensive. "In effect, a company is paying workers to make defects and then to correct them. Quality comes not from inspection but from improvement in the process" (Mary Walton, Deming Management At Work, p. 17). Along with making changes according to the Fourteen Points, management must avoid or remove each of Seven Deadly Diseases, along with several Obstacles. Dr. Deming feels that the Obstacles, like "Hope for instant pudding" (sudden improvement accomplished by "affirmation of faith") are somewhat easier to cure than the Deadly Diseases, such as "Lack of constancy of purpose," "Emphasis on short-term profits," " Mobility of management." Sadly, though, several of the Diseases and Obstacles are exactly what American business schools teach. The Books, Web pages and videos listed in Resources for Learning About Quality Management give clear discussions of the Fourteen Points, the Deadly Diseases and the Obstacles, and the process-improvement tools. Here, though, our attention turns now to what happens once the various aspects of Deming's system are understood. A lot of work, that's what happens! Putting Deming's philosophy into effect makes many jobs harder, not easier. The saving grace is that the work is much more interesting and more enjoyable; everyone may have begun working harder, but they will tend to be less tired. "By managing the process, you free up people to do what they want to do anyway. It's like being in a phone booth. You can turn around, but you can't move very far. Management's job is to continue to move the walls back." (Quote from Bob Dorn, chief engineer at G.M's Cadillac division; The New York Times, Sunday, January 26, 1992, business section, in the article "Take This Job And Love It.") The organization's "culture" will change dramatically. Competition among individuals and among departments will be replaced with cooperation. Inter- and intra-personal tension will be reduced, and the ability to use intelligence to benefit oneself and others will be enhanced. The training everyone has been receiving will have included an invitation to "first, pick the low hanging fruit" (using the colorful Japanese phrase). Some opportunities for improvement may be relatively easy to spot, and the benefit to the system of making the change may also be easy to document. Every individual will then have a chance to see that the new system is working. Unfortunately, the supply of low-hanging fruit will surely be limited; sooner or later, more difficult problems will have to be addressed. However, the effort to reach higher will make the group more flexible, more agile; difficult today, easier tomorrow.

As everyone begins to understand more and more deeply not only that the transformation to producing quality is working, but how it is working, it will naturally tend to spread. Suppliers will tend to be selected for their willingness and ability to join in. Customers will be invited to help out with the problem-solving efforts. The teams will become more and more fed up with the meager supply of well - educated potential employees, and efforts will begin to extend the transformation to the institutions that are responsible for education and training. The government, the churches, medical facilities, service agencies of all sorts -- even competitors can be invited to participate in developing and continually improving a healthy society. Deming's book, Out Of The Crisis (p. 246), William G. Hunter tells the story of a group of mechanics working for the city of Madison, Wisconsin. They developed a plan for preventive maintenance and presented evidence of the savings expected to the Mayor. His response was "You know how to find problems, you know how to solve them, and you wish to solve them. We should get out of your way and let you do it. I am very impressed with what you have shown us here today, and we are going to extend these methods to other departments in the city." Later offered payment for taking Deming's seminar and working on improvements on their own time, they answered "No, thanks. We are doing this stuff on the Deming Way because we are really interested. It is important to us. We are not doing it to get paid."

SPC Tools - Control charts Processes that are not in a state of statistical control show excessive variations exhibit variations that change with time A process in a state of statistical control is said to be statistically stable. Control charts are used to detect whether a process is statistically stable. Control charts differentiates between variations that is normally expected of the process due chance or common causes that change over time due to assignable or special causes Control charts: common cause variations Variations due to common causes have small effect on the process are inherent to the process because of: the nature of the system the way the system is managed the way the process is organised and operated can only be removed by making modifications to the process changing the process are the responsibility of higher management Control charts: special cause variations Variations due to special causes are localised in nature exceptions to the system considered abnormalities often specific to a certain operator certain machine certain batch of material, etc. Investigation and removal of variations due to special causes are key to process improvement Note: Sometimes the delineation between common and special causes may not be very clear Control charts: how they work The principles behind the application of control charts are very simple and are based on the combined use of run charts hypothesis testing The procedure is sample the process at regular intervals plot the statistic (or some measure of performance), e.g.

mean range variable number of defects, etc. check (graphically) if the process is under statistical control if the process is not under statistical control, do something about it

What is Quality? David Straker This article first appeared Quality World, the journal of the Institute for Quality Assurance -- part 1 -- part 2 -- part 3 -- part 4 --- Print-friendly one-page --

The domain of the quality professional has changed. From its humble beginnings in manufacturing, it is now expected, along with other infrastructure professions, such as IT, HR and finance, to contribute at the organisational level. Unlike those other professions, quality expertise can be hard to define, perhaps because there are many views of what business-level quality means. David Straker considers current definitions of quality and offers a new one, considering its ramifications for the quality profession. At its simplest level, quality answers two questions: What is wanted? and How do we do it? Accordingly, qualitys stomping ground has always been the area of processes. From the bread and butter of ISO 9000, to the heady heights of TQM, quality professionals specify, measure, improve and re-engineer processes to ensure that people get what they want. So where are we now? There are as many definitions of quality as there are quality consultants, but commonly accepted variations include: conformance to requirements - Crosby fitness for use - Juran the totality of characteristics of an entity that bear on its ability to satisfy stated and implied need - ISO 8402:1994

quality models for business, including the Deming Prize, the EFQM excellence model and the Baldrige award So what is wrong? Philip Crosbys definition is easily toppled: if requirements are wrong, then failure is guaranteed. His focus is the domain of QA where, without a specification, quality cannot be measured and thus controlled. You cannot have zero defects if you do not have a standard against which to measure defectiveness. This reflects the early days, where quality was clearly about product. Quality control, and later QA, was our domain - we didnt care about customers; the research and design department was responsible for designing the job and sales and marketing for selling it. But those halcyon days of definitive specifications and jobs for life are long gone. Though Juran takes a step further down the value chain, to the use of the product or service (at which point customers had forced their way into the frame), he still presupposes that we can fully understand how the product will be used, which is a great challenge (and not always possible). As Deming himself said, some things are unknown and unknowable. ISO 8402 recognises this uncertainty with its implied need. It uses the word entity as opposed to the product or service definition of its earlier (1986) version, indicating a broadening uncertainty. Nonetheless, it suffers again from a simplistic, single-minded focus - all we need to do is to figure out what is wanted and then deliver it. The quality models are a step further into broader business. Here, although processes are important, quality is much more about people: customers are there, but so too are stakeholders - employees, partners, suppliers, shareholders and society. Perhaps wisely, the models avoid nailing down a specific definition of quality, leaving us without a definition that encompasses a broader business view. ISO9000:2000 steps in this direction also, talking about customer and other interested parties, but leaves the definition of quality at a rather generalised degree to which a set of inherent characteristics fulfils requirements. Next --> syque.com 2002-2004 What is Quality? David Straker -- part 1 -- part 2 -- part 3 -- part 4 --- Print-friendly one-page -Initial problems

Lets face it, quality is difficult to define. We want to be precise, to create a quality definition, yet language is limited. Nor does it help that our domain has expanded from the relatively- constrained factory floor into the open realms of a broader business context, and beyond that, to environmental and social domains. The IQA dallies with all of the above definitions on its website (www.iqa.org), demonstrating the difficulty of naming quality. In the end, it plumps for a customer focus of quality that ranges throughout the product/service chain: this is still is not enough. The perception of quality as almost impossible to define, is not confined to our profession; in 'The Timeless Way of Building', architect Christopher Alexander calls it the quality without a name. In the same way that we know a good room when we use one, but cannot define exactly what makes it good, we can name its attributes of quality, but cannot define quality itself. One way to find a good definition of anything is to take a broader view. Alexander does this in his definition of a pattern language for architecture, which reduces the whole of building and town design to 252 simple rulesets. So can we find a new definition for quality by looking at the bigger picture? A new beginning Now for the audacious part: having knocked the existing definitions of quality and acknowledged that definition is not easy, lets try it nonetheless. In the words of Susan Jeffers, we should feel the fear and do it anyway. The focus of our definition will remain in the general business arena. This is where most of us make our living. What if we follow the early quality mandate and ensure that we meet requirements? Of course, we can go out of business by producing goods that do not sell. So, strike the product/requirements-only focus. What if we gave customers everything they wanted? What if they were totally delighted? Sounds good. But what if it cost us so much that we failed to make a profit? Again, we would go out of business. We need customers and products and services to satisfy them, but this is not enough. Why are businesses started? - To meet the needs of the people who start them, of course. So we must also meet the needs of the owners of companies, not all of whom are interested solely in money. Bill Hewlett and Dave Packard started HP to make a difference to society while having fun with the electronic engineering that was their passion. But they were aware that they had to make a profit to pay for their higher goals. Public companies are less egalitarian and have to toe the line that analysts and shareholders demand, which means a return on investment. Effectiveness and efficiency are words we often use to define quality. Effectiveness is about meeting requirements, usually of customers. Efficiency is doing this at a minimal cost, which meets shareholders needs. Could we just focus on these? Skip the carpets and cafeterias; pay people the absolute minimum. Perhaps not, as in these times of hypercompetitiveness and scarce talent, your people are your most important asset. Employees have both needs and legs, and if the former are not met, the latter get into action; when you ask too much of your people, those with get up and go are the first to do just that.

We can be effective and efficient and still go out of business as our best employees leave and the rest repay our lack of care for them with a lack of care for us. There are still people who can drive us out of business, from uncooperative suppliers and partners to environmental pressure groups and punitive governments. Where is the common thread? The phrase most commonly heard is going out of business. Deming recognised this when he pointed out that survival is optional. This is all somewhat negative, so lets turn it around and say: Quality means staying in business What is Quality? David Straker -- part 1 -- part 2 -- part 3 -- part 4 --- Print-friendly one-page -Testing the definition A good definition will withstand all kinds of serious criticism. What about those people who need things? Staying in business means keeping them all reasonably happy, so this works. What about growth? This is an interesting question: why do so many companies seek to grow constantly? If shareholders demand growth, and will take their money elsewhere otherwise, then it is still about staying in business. If our competitors grow, we need to grow to stay in the game. Growth can be a management trap: if it leads to over-extension or unmanageable diversity, such that the business fails, this is not a quality situation. To quote Ricardo Semler1: The biggest myth in the corporate world is that every business needs to keep growing to be successful. Thats baloney. The ultimate measure of a business success, I believe, is not how big it gets, but how long it survives. One of the frustrations we meet in quality is the focus on longer-term company survival; we know that products containing defects will lead to dissatisfied customers. We know that incomplete customer knowledge impairs our ability to correct external problems and repair internal processes. But we come up constantly against managers who are working on short-term problems, such as getting a delivery out today or pacifying an angry customer on the phone. So who is right, given our new definition of quality? The answer is both. Our perspectives may be different and we can both benefit from sharing one another's concerns, but we both want to stay in business, which means focusing on both the short- and long-term. How do we stay in business? If quality means staying in business, how do we do that? Perhaps there is no single, simple answer, but by exploring the issue, including going back-to-basics, we can take a few steps in the right direction.

What is business? While we are rushing in where angels fear to tread, perhaps we should scrutinise what we mean by business. At its most fundamental, business is barter: I will swap you two sheep for one cow; I will invest in your business if you give me a good chance of getting rich quicker than the bank. What makes barter work is that we value things differently, for example - I have plenty of sheep but no milk. Business is not so much barter as value exchange. If business were just about customers and ourselves, it would be easy. We would find what they wanted, make it and sell it to them. But it is not that simple: our problems begin when we find we are at the crossroads of many exchanges of value. There are shareholders, employees, customers, suppliers, partners and governments, all engaged in a complex web of value exchange. To make things worse, we cannot make all of the people happy all the time. With a limited pool of resources, we try to keep customers happy, while being profitable enough for shareholders, while paying our suppliers (eventually), while paying for the new employee rest rooms. Sorry folks, but there is not enough cash to go around. Like any paymaster, we will need to make some tough decisions. Staying in business then, means playing a dynamic balancing game, optimising value exchange, with an awareness of the very real resource limitations with which we work. This gives us a second level of detail we can use for our quality definition: Quality means optimising the whole system of value exchange

<-- Previous -- Next --> syque.com 2002-2004 Success through Understanding What is Quality? David Straker -- part 1 -- part 2 -- part 3 -- part 4 --- Print-friendly one-page -What does this mean for quality? Casting a keen quality eye over this revised definition may lead to a certain queasiness. Optimising means making compromises but we have technology: remember Mr Pareto

and his law, and Jurans vital few. We are not counting defects but units of value, in terms of value created and of the levels and types of value required to keep each player in the game. A simple conceptual model is to imagine everyone putting coins into a central pot and then taking them out again at a later time. As long as there is money in the pot, and there are people to play, the game continues. Staying in business means keeping the game going. A consideration within this game is that some players can easily leave. When they are critical value contributors (as customers often are), they can demand a higher level of value in return. This can lead to low-value customers which many of us tolerate under the customer is always right banner. What we sometimes forget is that if someone is taking too much out of the pot, they can be asked to leave. If quality is making this game work, then quality professionals need to understand the game. It does not mean abandoning our concern for customers and products: far from it. But it does mean optimising the system so that the whole thing continues to operate. Blind quality is what killed TQM in many companies. Why should I map my processes? Because it is the right thing to do. Why do I need to empower everyone? - Because it works. The revised view of quality proposed here pushes against such mantras. Thus, one more defining statement is: Quality means understanding and optimising the whole system of value exchange

If we are to accept this definition, the most important result is that it changes the what we must do as quality professionals. We must act on the words: understanding, optimising, system, value and exchange. It means understanding how things truly work, both individually and as systems. It means understanding people, what they value and how they effectively trade with others. And it means working out how these imperfect systems can be optimised so our businesses thrive. An ancient Chinese emperor once asked his wise counsellors advice for the greatest thing that could happen. The counsellor said: Grandfather dies, father dies, son dies. The emperor was shocked at such a morbid suggestion until he realised that changing this sequence would bring a far greater sadness. The same applies to our companies, which are often much like our children. We can change and advise them in many ways, but the greatest thing we can do is to give them the strength to outlive us.

References 2 Harvard Business Review, September/October, 2000

<-- Previous syque.com 2002-2004 What is Quality? Definitions and Contrasts During the last four decades, the Japanese have successfully utilized quality tools and methodologies as part of a successful effort to become a leading nation in the manufacture of a vast array of electronic, automotive, and other goods. Prior to the 1950s, Japan was not known for production of quality, but their quality has continuously improved until today many American firms are using Japanese products as a standard against which to measure. How did this situation occur? How did the Japanese move to such a leadership position? And what can we learn from this multi-decade progression from low to high quality? The term quality means different things to different people. For example, a quality automobile may be one which has no defects and works exactly as we expect. Such a definition would fit with an oft-repeated definition by J.M Juran (1988): "Quality is fitness for use." However, there are other definitions widely discussed. Quality as "conformance to specifications" is a position that people in the manufacturing industry often promote. Why? Presumably because manufacturing can do nothing to change the design; hence this definition. Others promote wider views (Gitlow et al., 1989 or Ozeki and Asaka, 1990), which include the expectations that the product or service being delivered 1) meets customer standards, 2) meets and fulfills customer needs, 3) meets customer expectations, and 4) will meet unanticipated future needs and aspirations. Still others simply ignore definitions and say "I'll know quality when I see it." It seems that we all 'know' or 'feel' somehow what quality is. A product or service that exceeds our preconceived idea about the quality of that product or service is likely to be judged as having "high quality." It is equally clear that the best of a group of bad products is not likely to be perceived as a quality product. Definitions of Quality 1. Customer-Based Fitness for use, meeting customer expectations. 2. Manufacturing-Based Conforming to design, specifications, or requirements. Having no defects. 3. Product-Based The product has something that other similar products do not that adds value.

4. Value-Based 5. Transcendent

The product is the best combination of price and features. It is not clear what it is, but it is something good...

The table above shows some definitions of quality summarized from a textbook by Hunt (1992). Which of these definitions are most relevant to the examples presented in this course? Probably, all are relevant. We will examine tools and methods which can be used to improve a process, add value through brainstorming about new features, decrease costs, and help products conform to design specifications. Definitions 2, 3, and 4 are the definitions traditionally associated with quality in America. That is, a product should have no defects, be something people will want, and can be purchased at a reasonable price. The first definition is more interesting, however. Customer-driven products force industry to look outside itself and to create products that people want, not what design engineers think people want. Finally, and the most interesting, is the 'Je ne sais quoi' answer: I do not know what it is, but if I'm delighted, I'll buy it! Which of these definitions matches the Japanese approach to quality? The answer is probably all! Less expensive products, with required features at reasonable cost, no (or few) defects, and often things that we did not know we wanted are all hallmarks of products delivered by the Japanese to American consumer markets. Quite often, the products simply fail less and work better than American products. Why? Probably because of continuous improvement! Once products are created in Japan, they are continuously improved; this technique has also been successful in improving quality in America, but is not yet as dramatic as the improvements in Japanese products over the years. The case for use of quality tools and methodologies is that these tools help people work to improve quality at all levels. In the upcoming modules, we will see that many efforts have been made to create tools for multiple purposes. Some have succeeded, some failed, but all have contributed to the body of knowledge that is now being created that should ultimately result in the production of high quality products throughout the industrial world. Currently, deep understanding of the quality process is immature, but we are slowly getting there. Five Ways of Looking at Quality Definitions This list comes from Dr. David M. Dilts, PhD, CMA. Professor, Dept. of Mangement Sciences, Faculty of Engineering and Professor, School of Optometry, Faculty of Science at University of Waterloo, Waterloo, Ontario, Canada. I. Transcendent Definition: "Quality is neither mind nor matter, but a third entity independent of the twoeven through Quality cannot be defined, you know what it is." (R.M. Pirsig, Zen and the Art of Motorcycle Maintenance, pp.185-213).

"a condition of excellence implying fine quality as distinct from poor quality Quality is achieving or reaching for the highest standard as against begin satisfied with the sloppy or fraudulent." (B.W. Tuchman, "The Decline of Quality," New York Times Magazine, 2 November 1980, p.38). II. Product-Based Definition: "Differences in quality amount to differences in the quality of some desired ingredient or attribute." (L. Abbott, Quality and Competition, pp.126-127). "Quality refers to the amounts of the unpriced attributes contained in each unit of the priced attribute." (K. B. Leifler, "Ambiguous Changes in Product Quality," American Economic Review, December 1982, p.956). III. User-Based Definition: "Quality Consists of the capacity to satisfy wants." (C. D. Edwards, "The Meaning of Quality," Quality Progress, October 1968, p.37) "Quality is the degree to which a specific product satisfies the wants of a specific consumer." (H.L. Gilmore, "Product Conformance Cost," Quality Progress, June 1974, p.16). "Quality is any aspect of a product, including the services included in the contract of sales, which influences the demand curve." (R. Dortman and P.O. Steiner, "Optimal Advertising and Optimal Quality," American Economic Review, December 1954, p.831). "In the final analysis of the marketplace, the quality of a product depends on how well it fits patterns of consumer preferences." (A.A. Keuhn and R.L. Day, "Strategy of Product Quality," Harvard Business Review, November-December 1954, p.831). "Quality consists of the extent to which a specimen [a product-brand-model-seller combination] possesses the service characteristics you desire." (E.S. Maynes, "The Concept and Measurement of Product Quality," in Household Production and Consumption, p.542). "Quality is fitness for use." (J.M. Juran, ed., Quality Control Handbook, p2). IV. Manufacturing-Based Definition: "Quality [means] conformance to requirements." (P.B. Crosby, Quality Is Free, p.15). "Quality is the degree to which a specific product conforms to a design or specification." (Gilmore, June 1974, p.16). V. Value-Based Definition:

"Quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost." (R.A. Broh, Managing Quality for Higher Profits, 1982, p.3). "Quality means best for certain customer conditions. These conditions are (a) the actual use and (b) the selling price of the product." (A.V. Feigenbaum, Total Quality Control, p.1). Other References Juran, JM. (1988) Gitlow, et. al. (1989) Ozeki, and Asaka. (1990) Hunt. (1992)

What Is Quality

What Is Quality Quality is an essential and distinguishing attribute of something or someone; "the quality of mercy is not strained"Shakespeare.

What Is Quality? The quality that comes out of a process is affected by the quality of what goes in and what happens at every step along the way. It follows that we must build quality into every step, process, and system to produce quality in the outcome. To do this, we must collaborate with internal and external suppliers and communicate with internal and external customers to determine their needs.

According to one Definition What Is Quality, attainment of quality in products and services at competitive prices requires an emphasis on doing the right things (products and services that reflect target features based on the needs of intended customers) and doing the right things right (using efficient processes).

What is Quality assurance ISO 9000? Quality assurance ISO 9000 is the generic term for a series of standards sponsored by the International Organization for Standardization which specify the quality systems to be established by manufacturing and service firms.

What is Quality Indoor air? Quality Indoor air problems are not limited to homes. In fact, many office buildings have significant air pollution sources. Some of these buildings may be inadequately ventilated. For example, mechanical ventilation systems may not be designed or operated to provide adequate amounts of outdoor air. Finally, people generally have less control over the indoor environment in their offices than they do in their homes. As a result, there has been an increase in the incidence of reported health problems.

What is Quality Software Assurance? Quality Software Assurance /Software Quality Assurance involve the entire software development process - monitoring and improving the process, making sure that any agreed-upon standards and procedures are followed, and ensuring that problems are found and dealt with. It is oriented to 'prevention'.

What is Quality? Well-known Definition of Quality includes:

"Conformance to requirements" (Crosby)

"The efficient production of the quality that the market expects" (Deming)

"Fitness for use"; "product performance and freedom from deficiencies" (Juran)

"The total composite product and service characteristics of marketing, engineering, manufacturing, and maintenance through which the product and service in use will meet the expectations of the customer" (Felgenbaum)

"Anything that can be improved" (Imal)

"Meeting or exceeding customer expectations at a cost that represents value to them" (Harrington)

The ISO Quality Management Toolkit: the definitive resource for Quality Management Projects Click Here Customers who bought the ISO Quality Management Toolkit also bought: The Balanced Scorecard Toolkit The Service Level Agreements Toolkit The Supply Chain Management Toolkit The Change Management Toolkit The Process Management Toolkit The Six Sigma Toolkit The Help Desk Toolkit The Knowledge Management Toolkit The CRM Toolkit The Disaster Recovery Toolkit

What is Total Quality Management? Mostly abbreviated as TQM Success in our modern business world depends greatly on the right approach to manage a business. Businesses have to deal with tough competition and new technological challenges. Quality of Product and Service becomes more important. One promising Approach is Total Quality Management. Total Quality Management (TQM) is defined as: a Management method relying on the cooperation of all members of an organisation. A Management method that centers on Quality and on the long-term success of the organisation through the satisfaction of the Customers, ass well as the benefit of all its members and society. Structure of TQM according to these definitions:

TQM is seen as the most comprehensive approach to Quality thinkable for an enterprise. The pillars of Total Quality Management are T Q M T stands for Total It is the Integration of the Staff, Suppliers, Customers and other Stakeholders. Away from Party-specific Thinking to a more holistic approach. Q stands for Quality

It is the Quality of the work and the process of the Enterprise leading to Quality of Products. M for Management It stresses the leadership task "Quality" and the Quality of leadership. From a scientific point of view TQM can count as school of Leadership. From the enterprises point of view TQM can be seen as a Leadership Model. Diagram 2 demonstrates the foundational pillars of TQM:

Website:http://www.kwaliteg.co.za Home Profile Products Resources Contact What Is Total Quality Management

What Is Total Quality Management? TQM incorporates the concepts of product quality, process control, quality assurance, and quality improvement. Consequently, it is the control of all transformation processes of an organization to better satisfy customer needs in the most economical way. Lets see What Is Total Quality Management from another perspective. TQM is based on internal or self-control, which is embedded in each unit of the work system (technology and people). Pushing problem solving and decision-making down in the organization allows people who do the work to both measure and take corrective action in order to deliver a product or service that meets the needs of their customer.

Managers and experts disagree about how to effectively apply TQM to their organizations and hence differing in describing What Is Total Quality Management. Some advise that customer satisfaction is the driving force behind quality improvement; others suggest quality management is achieved by internal productivity or cost improvement programs. In other applications, TQM is considered a means to introduce participative management.

What Is Total Quality Management in other words? TQM is a mindset and a set of well proven processes for achieving the mindset. The mindset is that everyone in your organization understands what their customers expectations are and they meet those expectations every time.

Understanding and meeting customer expectations is a challenging proposition and requires processes that support continuing progress toward the goal of meeting customer expectations the first time, every time to understand What Is Total Quality Management and how to achieve it. There is a great deal of value to you if your organization adopts this mindset, right through the whole organization. You will have satisfied customers who will want to continue doing business with you. A satisfied customer is the least expensive way to generate revenue and profit.

Your operating costs will be kept at a minimum because your employees will not be occupied with customer service problems, rework, etc. You should expect to see a 10% savings in your operating costs after six months using the David Butler explaining What Is Total Quality Management process, if you have a manufacturing company. If you are in a service business you should expect 20% reduction in operating overhead due to the higher personnel component of your business.

Until very recently Americans in general have emphasized the "cost of non-conference", and the importance of employees meeting the agreed upon requirements for each process and to understand What Is Total Quality Management. Leopold Vansina, president and founder of the International Institute of Organizational and Social Development, cautions that such efforts are based on the (faulty) assumption that processes and tasks that lead to the desired quality are already understood. However, he states, control of the production process will not likely help a business increase its market share when the product or service does not meet customer requirements. The ISO Quality Management Toolkit: the definitive resource for Quality Management Projects Click Here Customers who bought the ISO Quality Management Toolkit also bought: The Balanced Scorecard Toolkit The Service Level Agreements Toolkit The Supply Chain Management Toolkit The Change Management Toolkit The Process Management Toolkit The Six Sigma Toolkit The Help Desk Toolkit The Knowledge Management Toolkit The CRM Toolkit The Disaster Recovery Toolkit

Software Quality Lecture 2 What is Quality? Course Guide August 1999 Page 1 of 5

Lecture 2 What is Quality?

Objectives
The purpose of this lecture are to offer a number of different views of quality and how each of these relates to different views of software and software quality.

Our Definition of Quality

For this course, the definition of quality that we have chosen is:

Conformance to requirements, both explicit and implicit.

This is just one view of quality. In this lecture we will be considering several other views.

Garvin1s Five Views of Quality

Who do you think is the best footballer in the Premier League? How would you define best? It is far easier to identify the best team in the Premier League because there is league system that awards points for wins and draws. But does the best team necessarily consist of the best players? What is my ideal car? Well, I long for a Ferrari 550 Marinello (in red, of course). Is the Ferrari 550 Marinello a quality car? In the sense that embodies all that I desire in a car (performance, looks, comfort, image, sheer style, etc), yes. There is some ideal car that Im measuring other cars against and the Ferrari 550 Marinello comes closest to my ideal. Others might prefer a Rolls-Royce, a Bentley, a Bristol or an Aston Martin. This is what Garvin calls the Transcendent View of quality. The Ferrari 550 Marinello comes closest to my ideal in software quality terms we strive towards an ideal, but we may never be able to achieve it. But if all I want is a car to take me to the supermarket on Saturday mornings, my Ferrari will do the job, but then so will a Ford Fiesta. So is the Fiesta a quality car? Well it does the job and taking into account running costs, some might argue that a Fiesta is more fit for purpose than the Ferrari. This is what Garvin calls the User-Based View. If you are a user and if all you want to do is a simple analysis of sales figures on a month-by-month basis, then Microsofts Excel is probably fit for purpose; if you want to carry out some sophisticated computation, then it probably isnt fit for purpose. Garvins Product-Based View looks at inherent product characteristics, for example build quality. The Subaru Impreza came out on top for mechanical, electrical and bodywork 1 D. Garvin, What does Product Quality Mean?, Sloan Management Review, Vol 4, 1984.
Software Quality Lecture 2 What is Quality? Course Guide August 1999 Page 2 of 5

reliability in a recent J D Power survey for BBCs Top Gear programme. Some have argued that building in quality in this way can ramp up the overall manufacturing cost. Others, such as Philip Crosby, have argued that that by putting in the investment during manufacture, savings can be made later by not having to fix defects (costs of failure) and from the enhanced reputation that such a product achieves (Quality is Free). This is a particularly important view for software developers because of the high costs of software maintenance. Recent surveys suggest that developers count on the 80:20 rule for estimating effort required for software maintenance: 20% of the effort goes into developing a system, and 80% into its maintenance (Pfleeger2). Pfleeger goes onto report that in a survey carried out by Lientz and Swanson3, 25% of the effort of software maintenance goes into preventive and corrective maintenance. In other words as much effort goes into trying to correct and prevent errors after a piece of software goes into operation as went into designing and constructing it in the first place. If the

software has been built to a high standard in the first place, we should save on maintenance costs later, not to mention saving on the costs of failure, for example the $500M of the Ariane 5 disaster. If the Product-Based View of quality asks, are we building the product right?, the Manufacturing View asks are we building the right product? The Manufacturing View is concerned with conformance to specification. Using our example of motor cars, we have to ask whether the car is built to a specification. Of course every manufacturer will have a specification for their products if for no other reason that it would not be possible to build a production line to assemble them without one. All Formula 1 racing cars have to conform to a very detailed specification (see http://www.fia.com/homepage/selection-a.html for details). This specification is rigidly enforced by FIA stewards and teams will be penalised if they deviate from it in the slightest detail. It should be noted, however, that mere conformance to 2 Shari Pfleeger, Software Engineering: Theory and Practice, Prentice Hall, 1998. 3 B. P. Lientz & E. B. Swanson, Problems in Application Software Maintenance, Communications of the ACM, 24 (11): 763 769, 1981.
Development 20% Perfective Maintenance 40% Adaptive Maintenance 20% Corrective Maintenance 17% Preventive Maintenance 3% Development Perfective Maintenance Adaptive Maintenance Corrective Maintenance Preventive Maintenance

Software Quality Lecture 2 What is Quality? Course Guide August 1999 Page 3 of 5

specification will not result in products with higher reliability or fewer faults. Im sure that we can all come up with examples of cars, and other products (including software products) which have poor reputations. Whereas the user of a system will largely be interested in the User-Based View, the client (the person who pays for the development) will be more interested in the Product-Based and Manufacturing Views. Garvin offers one other view of quality: the Value-Based View. This is about providing as much quality as the customer is willing to pay for. In the car industry this is of major concern to manufacturers of the smaller mass produced cars. Many manufacturers allow customers to specify their own cars. For example, ABS required, but not electric windows. In software terms this is like buying the standard edition of a software package, rather than the professional edition with all the bells and whistles. Some car models have a very good reputation for value for money, for example the Nissan Micra. Others reputations, for example, Lada, although inexpensive, have not fared so well, and are still regarded as cheap and nasty. Surprisingly perhaps, Formula 1 engines are built to survive the Grand Prix race and no more. Building a very strong engine can increase its weight; in order to make the cars competitive, they must be lightweight, but making the engine too light weight might result in an increased danger of an engine blowing up. The F1 constructors have to find the compromise between engine performance and reliability over the length of a Grand Prix race. In the software industry, the Value-Based View manifests itself in the eternal triangle of cost versus functionality versus time to deliver. What this tells us that is that it is possible to satisfy two of the three factors, but not all three. The Product-Based and Value-Based Views present us with another dilemma: do we build up to a standard, or down to a cost? Much will depend on the type of application (safety critical, mission critical, general purpose, etc), the clients (budget, expectations, IS strategy etc), the users (expectations, expertise, experience, etc) and the development team (culture,

experience, etc). The User-Based and Manufacturing Views can be thought of as Explicit and Implicit system requirements. The explicit requirements are those things that the system must do, eg maintain customer records, move railway level crossing barrier up or down, add x and y, etc. Implicit requirements those desirable properties of software that the user and client take for granted, things they expect but dont specifically ask for, eg wheels not falling off when you hit a pot hole in the road, spare parts still available after 6 months, paint not peeling off after a heavy downpour, etc. We will be discussing implicit requirements in greater depth in lecture 3.

Crosbys View of Quality

Philip Crosby4 argues that quality means conformance to requirements. So if a Ferrari 550 Marinello conforms to all its specified requirements, then it is a quality car. But then, by the same token, if a Lada conforms to all the specified requirements of a Lada, then it too is a quality car! What Crosby offers is an objective test of quality, but the problem for the software engineer is that much of the quality requirements of a piece of software are implicit or implied. For example, clients and users expect the software to be easily modifiable, they do not expect the software to behave as though its specification was written on tablets of stone. 4 Philip Crosby, Quality is Free: the Art of Making Quality Certain, Signet Books, 1982.
Software Quality Lecture 2 What is Quality? Course Guide August 1999 Page 4 of 5

Whereas when you buy a car, you have a much better idea of what to expect and many implicit requirements of cars, such as safety features and reliability are covered in law. The problem seems to be that quality is still very much a subjective term, and we often apply the transcendent view, which Crosby rejects. Linda Macaulay5 cites Kano et al6s three types of requirement: Normal requirements: these are what we typically get just by asking clients and users what they want. Expected requirements: these are often so basic the clients and users may not think to mention them until we fail to deliver them. Their presence in the system meets expectations, but does not satisfy customers. Their absence however is very disappointing. You would be very disappointed if you had bought some software that ran perfectly well under Windows 95, but will not run under Windows NT. Exciting requirements: The presence of these provoke the reaction Wow. It even does this . Features can succeed in satisfying clients and users so well that they boast about their software. This view is closely related to explicit and implicit requirements discussed earlier. But what about the exciting requirements? If they had not been specified would that detract from the quality of the software? It depends if you are the user they might well enhance your opinion of the software, but if you are the client and are having to pay for something you didnt ask for, probably it would diminish your opinion of the software.

McCalls Model of Quality

Another model of quality offered by McCall considers software quality from three perspectives (see figure below).
Product Revision Product Transition Product Operations

Product Revision McCall considers three dimensions to this perspective: Maintainability - Can I fix it?

 Flexibility - Can I change it? Testability - Can I test it? 5 Linda Macaulay, Requirements Engineering, Springer, 1996 6 Kano, N., Seraku, N., Takahashi, F. & Tsuji, S., Attractive and Must-Be-Quality (in Japanese), Hinshitsu, Vol 14, No 2, 1984.
Software Quality Lecture 2 What is Quality? Course Guide August 1999 Page 5 of 5

Product Transition Again McCall considers three dimensions to this perspective: Portability will I be able to use it on another machine? Reusability will I be able to reuse some of the software in other applications? Interoperability will I be able to interface it with other components? Product Operations Here McCall considers five dimensions to this perspective. Correctness does it do what I want? Reliability does it do it accurately all of the time? Efficiency will it run as well as it can? Integrity is it secure? Usability is it easy to use? Clearly each of these perspectives is important for software quality, but in this course we will be mainly concentrating on Product Revision. We will be discussing software quality in an environment where requirements are not clearly understood by the user and where a prototyping development life cycle is used. Code will need to be easily created, changed, tested and fixed hence our concentration on Product Revision. It should be added, however, that we will also be considering the other perspectives from time to time.

Plan, Do, Check & Act Cycles Introduction

82 people have rated this page an average of 4.26 out of five stars. See their suggestions and questions. Cycles of change lecture Introduction Objectives Problem formulation

Describe the process Gather data Suggest changes Check progress Show and tell Examples What do you know? Heard a good one? Slides FAQ More

Total Quality Management has a rich history outside of health care. Within health care, Total Quality management (TQM) started recently but gained wide popularity quickly. From a handful of early advocates, TQM has grown to encompass almost all health care organizations. The rapid growth of TQM has led to many different variations of its implementation. Sometimes, what is called TQM in one organization is radically different from another organization. But all variations of TQM share some common steps. One approach was suggested by Batalden and colleagues (see Journal on Quality Improvement 1994, 20, 4:167-180). We have adapted the steps suggested by these authors. While we present a step by step approach, you are free and encouraged to deviate from these steps. In this regard, Batalden and colleagues write:
"At any point, it is possible - and may be desirable - to step out of the prescribed step and begin an improvement trial using a Plan-do-check and act (PDCA) method. The worst that might happen is that the experiment may fail. If the trial is small scale, little harm would have been done, the need for a new change trial would have been identified, and learning would have been advanced."

Objectives

Describe the TQM implementation process. List the six steps of the TQM process as presented in this course. Describe five strategies for improving the problem definition. Explain how these three TQM tools are used: fishbone charts, flow charts and storyboards.

Discuss the importance of using media to promote TQM initiatives.

Problem Formulation
TQM is organized around specific problems within the organization. Clinical decision constitutes 80% of health care costs. Nevertheless, TQM often focuses on non-clinical decisions. It is important to improve the central problems of an organization and not the most convenient ones. The problem has to be real, significant, and important to the majority of customers. Of course, any problem should be solved and any defect should be improved. But given the resources available, it is important to focus on the more important problems first.

A brief story
A person had lost his key in a dark alley. He was looking for the key in the main street. When asked why he is looking there, he said because there is light here. How could I find my way in a dark alley? In problem solving you get a choice, do what is convenient and miss the boat or sweat it out and handle the tough central problems of the organization.

Some poor ways of defining problems

Arnold Kaluzny, Curtis McLaughlin and David Kibbe report in Quality Management in Health Care (1992, 1, 1: 37-44) a number of strategies used for implementing TQM.
"Seduction. Phased implementation focusing on only administrative and support activities, hoping that physicians will be enticed by intellectual curiosity. Procrastination. Phased implementation involving all units of the organization on a schedule, usually with an outside consulting firm providing initial leadership training, including the board and senior staff, but leaving clinical activities until late in the process. Grafting. Adding continuous quality improvement activities to existing quality assurance activities. Benign neglect. Advocates or "champions" for continuous quality improvement projects, including physicians, within the organization develop continuous quality improvement projects clandestinely or without formal management approval or support."

These strategies are not effective. They focus your attention on "what is" and not "what should be done." The best way, in our view, is to let

the data tell you what are the central problems. By bench marking the organization, management can compare the organization to other comparable institutions. Data on the performance of the organization can be used to identify key problem areas. If the problem involves clinical processes, then involve the clinicians. To involve the clinicians highlight for them the intellectual exercise, the benefits that may emerge, other clinicians who have worked on TQM, and the need for team work. Let the data dictate what problems get addressed first. Do not choose the problems that are easy to do, as that is not likely to be productive.

Much can go wrong

While little attention is paid to the art of defining a problem, it remains one of the most important steps in solving a problem. Often teams work for years on a problem that was defined in a matter of days. Spend some time and care in defining the problem right so that you will not solve the wrong problem or an inconsequential problem. If you want a real world example click here to listen to confessions of a frustrated manager.

Decision Traps
Russo JE, and Schoemaker JH in their book Decision Traps identify the following issues that may affect problem definition:
"Plunging in. Failing to gather sufficient information and jumping to conclusion about the nature of the problem. Frame blindness. Setting out to solve the wrong problem because you have created a mental framework for your decision, with little thought, that causes you to overlook the best options or lose sight of important objectives. Overconfidence in your judgment. Failing to collect key factual information because you are too sure of your assumptions and opinions. Short sighted short cuts. Relying inappropriately on rules of thumb such as implicitly trusting the most readily available information or anchoring too much on convenient facts. Shooting from your hip. Believing that you can keep straight all of the information that you have discovered. Fooling yourself. Failing to interpret the feedback you are receiving, either because you are protecting your ego or because you are tricked by hindsight. Group failure. Assuming that with many smart people involved, good choice will follow automatically, and therefore failing to mange the group decision making process. Not keeping track. Assuming that experience will make its lessons available automatically, and therefore failing to keep systematic records to track the results of your decisions."

Given all that can go wrong with defining a problem it is important to

take time and do it right.

What should be done?

There is little data on what is the most effective method for problem definition. But some advice can be obtained from the research in this area.
Define a problem without suggesting a solution. People often define the problem in a way that it strongly or actually suggests a solution. This prevents the team from searching all possible options. For example, one hospital was experiencing problems with patients failing to show for scheduled therapy sessions. If the problem is defined as delays in dispatching therapists, then other avenues for solving the problem (e.g., making sure the patient is in the room when therapy is needed.) may not be examined. Avoid suggesting any solutions, blaming anyone for the problem, or focusing attention on any profession. Define the problem in terms of the patient experience. Do not define the problem in terms of the process involved. Thus, "we are having a problem with crashes in our information system" is a poor definition. While, "patients wait too long for admission" is a better definition because it allows the exploration of other causes besides the information system. The solution, for example, may end up having paper admission forms. If you define the problem in terms of the customer's experience, you automatically remove embedded solutions to the problem. Here is another example: "The competition is driving us out of business." This seems like a good statement of the problem but it is not. It is not in terms of the customer's experience. Try: "Our customer's are choosing the competition over us." Define the problem in at least two different ways. A problem can be stated as "Few patients get admitted quickly." or as "Many patients wait long before admission." This may seem a mere play with words but it has much impact on the solutions generated. How you define the problem affects what ideas the team comes up with. The first problem statement focuses on the number of patients, the other focuses on long wait time. The solutions that come to mind may be different. Here is an example how subtle changes in a question can change the response. If you ask a person to tell you whether interest rates will be above 14 in the next year and then to estimate the rate. You get one answer. If you ask whether interest rates will be above 8 in the next year and to estimate the rate, you get an entirely different answer. Leading questions confuse everyone, even some of the most experienced people. This example shows how a subtle change in a question can lead to a major change in the response. Likewise a subtle change in the problem statement can lead to examination of entirely new set of solutions. Rely on data. Define the problem and show the data for the problem. Show how much the data should change for the problem to be considered successfully addressed. Verify that the problem is real. Verify that the problem is important for the organization as a whole, i.e. it will affect the organization's survival, market share, income or expense. All problems should be solved, but more important ones should be solved first. Be specific. General statements could be best reserved for organizational goals or visions. Problems must be specific and attached to particular processes. A statement "Most of our beds are empty. We are having a low market share." is not a good problem definition as it (1) does not define the problem in terms of patient experiences, and (2) does not give enough details to focus our attention on a specific process in the organization. Compare this with "Ob-GYN patients choose another hospital for their second child and do not come back here." This is more specific and is put in terms of customer's

experiences.

Question the obvious. Question everything. And you shall find real problems.

Describe the process

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Why?
The first step in solving a problem is to understand it. When poor outcomes occur, we need to understand the process that leads to it. This section describes two ways of understanding processes. The first is known as flow charting and lists events and how they lead to one another. The second is known as listing routines and lists events in the process sequentially as they occur. Both approaches document the process. Both are useful for communicating the team's understanding to others. Both create a shared understanding of the process among the team members. Often team members are surprised at how much more goes into a process besides what they knew. Flow charting is a visual step that when communicated through story boards reassures employees that the team has understood the process.

How to do a flow chart?

Flow charting is time consuming. A lot more than people believe. Part of the problem is that processes are complicated and charting them takes time. Another part is that team members each have a different picture of the process and they need to exchange their views about the process. The literature on group effectiveness can be used to reduce the time it takes to create a process chart.

Here are the steps for flow charting a process.

Ask each team member to individually construct a flow chart of the process. The literature on group processes shows that when individuals work on ideas before bringing them to the group two things happen. First, ideas do not get to be evaluated prematurely as idea generation and evaluation are separated. Second, ideas are judged on their merit not based on who said what. Here are some guidelines about creating charts for individual team members. Use common notations. Show a step in the process as a box and show a decision in the process as a diamond. Break the chart into an overview and several details of specific processes. It is not possible to anticipate all possibilities. Keep the flow chart to 80-90% of events in the process. Chart what is the process and not what it should be or how it was supposed to be. Charting what the process should be introduces new areas of disagreement. The group facilitator takes the input from individual team members and builds one process chart that reflects all of the ideas presented using the terminology of the team members. If you do not have a group facilitator, you should ask each team member to put his ideas on stick-on pads and during the first part of the meeting attempt to arrive at a consensus on the process flow. The group facilitator presents the integrated charts as his/her poor attempt at constructing a flow chart and asks for revisions. The idea is to separate the idea from who generated it so that ideas will be judged based on their merits and not personalities involved. Also, data shows that group discussion at this time helps clarify many issues and in the absence of the group discussion the quality of the chart will suffer. Discuss parts of the chart. Move along from part to part till all segments are discussed. Do not force consensus. Accept that there may be genuine disagreements about what is the process. Post the chart to the story board. This makes sure that others can comment on the chart and correct obvious deficiencies. In addition, it will serve as a notice of things to come. It creates expectations. It helps prepare employees to be receptive to the recommendations of the team. Employees are more likely to accept a recommendation when they have a sense that the process was understood before solutions were proposed.

How to list routines?

An alternative to flow charting is to make lists of periodic events and work routines. Such lists are simpler to make but do not have a visual component. Despite this shortcoming, such lists may be just as useful in understanding a process. They are especially helpful in focusing the group's attention on repetitive tasks and work norms. Periodic lists are based on the principle that any system or process is best understood in terms of its steady states; that is in terms of events that keep recurring. Work is not a random heap of events. Some events reoccur and are referred to as routines. System Analysts refer to these reoccurring events as the steady state of the

system. Systems are changed by changing the steady state of the system. By listing periodic events, a person can see the steady state for his or her work. The focus shifts from fringe or rare events to central and repetitive elements of a work process. The focus shifts to the small percent of activities that describe most of the observed outcomes. By listing periodic events, the work process and structure is revealed. There are many recurring events at work. Any given work process, starts with employees coming to work and ends with them leaving. In between patients arrive, information is exchanged, reports are made, meetings are kept, and numerous other activities are accomplished. The purpose of listing work routines to identify the key activities that occur within a process. The first step is to list the periodic events. It is not that non-routine events do not matter, they do; but the impact of routines events is by definition more frequent. If routine events can be understood, a big part of work process is understood. In order to list periodic events, the most useful tool is to follow a patient through the process and list discrete events that happen. Listing routines is easy because it lists events in the sequence they occur. In contrast flow charts list events in the way they influence each other, which may not be the sequence they occur. The exercise of listing routines can be more difficult than it appears. Some activities, like answer phone calls from patients, seem to follow clear patterns. Patients tend to call more on Monday mornings. Frequency of calls drops around meal time. Other activities, like disputes among employees, are not so typical and may not necessarily reoccur with a clear frequency. It is important to include all periodic events, even if they do not always occur at the same frequency. For activities with variable periods, record the average time of reoccurrence. This exercise is difficult because the variability in process activities must be distilled and ignored. We acknowledge that events do not necessarily occur at fixed intervals. This makes the task of recognizing what is routine and what is rare one-time event difficult. Even more difficult is identifying events that occur with irregular frequencies. But the benefit is that when the exercise is finished, a person should be able to understand the work process much better. The steps in constructing a list of periodic events are as follows:

1. Identify work process. Label the process and define its boundaries. 2. Walk with several patients through the process and make a list of routines and less frequent events within the process. Use enclosed form. 3. Check the depth of the list. It is not helpful to list very broad events (e.g. patients show, providers care for patients, patients leave) is a list of sorts but not very informative. Enough details should be present that could help understand what leads to process outcomes. 4. Check accuracy of the list. The accuracy of the list is checked by carrying the list around and checking that events listed do occur and no other major event does occur. Another way of checking the accuracy of the list is to share it with others who

have independently observed the event.

Gather data
Experience could mislead us. Often people generalize from one single experience. This is a mistake. For learning to occur, you need to look for patterns across experiences. People often do not do that. Consider the following situation.
Your son comes in with an A in math. What is your reaction. Are you going to congratulate him or are you going to examine if there is a pattern of poor grades. Of course you are going to congratulate him. But scientifically there is no proof that this grade is not a chance event. It could have been that all students got an A through an easy exam. Attributing the grade to the skill of your son, is a jump of faith that you like to take but for which you may not have any data. Waiting for patterns provides the data.

There is a fundamental difference between scientific inquiry and survival. In science, we learn from mistakes. We make a hypothesis and then look for data that will prove it wrong. But, in life, we survive by avoiding mistakes. We cannot systematically look forward to making mistakes. We may learn a lot but we may not survive to take advantage of the learning. So we often avoid mistakes. This creates a problem. We are never sure if the experiences we avoided could have led us to other conclusions. Learning from one's experiences is tricky. In this regard, Russo JE, and Schoemaker PJH write in their book on Decision Traps (Doubleday, 1989): "Learning from experience is not automatic. It requires profound skills. Experience, after all, provides only the data, not knowledge. It offers the raw ingredients for learning. And people can turn it into knowledge only when they know how to evaluate the data for what they really say. People do not learn as easily from experience as you might expect even intelligent highly motivated people. ... Why don't people learn from their experience? For one, the data we receive can usually be interpreted in different ways. And even when the evidence is clear enough that we should learn from it, we are naturally biased to interpret it in a way that preserves our positive image. ... Because we like to believe that we caused successful outcomes and we like to rationalize that we were not responsible when things turned out badly, most people

suffer from an attrition bias that can destroy useful feedback. In short we believe that our successes are due to skill and our failures due to bad luck. Data is needed to correct our experiences and insights. Data is also needed for communicating the problem and its solution to others. Without data there is no arbitrator among the various ideas. Different professions will claim solutions that in reality do not work to resolve the problem for the customer. In the end, data is the only way that different professions can become focused on the customer's experiences. Gathering data is time consuming. There are short cuts.
One way is to sample. Sampling allows one to collect data from a sub-set of the customers and infer the experience of all customers. To sample effectively, you should choose the customers you survey randomly. Another way is to rely on experts' opinions. People often say that opinions are subjective and should not be relied upon. Is this reasonable? If by subjective we mean unreliable and idiosyncratic, then the answer is "No. Opinions can be more accurate than observations made by ourselves." When expert opinions are based on (1) their direct experience of the system, (2) shared across different experts, then opinions may be quite reliable. Consider who is more qualified to notice changes in the process. A person familiar with the process or you. In any case, because of money and time issues sometimes there is no time to directly observe changes in the process. In these circumstances, one can rely on opinions of employees familiar with the process if significant improvements have been made.

Sometimes, you just have to gather the data so that you can make your case for people outside the team.

Suggest Changes
There should be an organized approach for collecting ideas, listing them and evaluating them. Often people express an idea and evaluate it immediately afterwards. Research shows that brainstorming ideas before evaluating them is more productive: more ideas are expressed and better ideas are expressed. One tool often used for collecting ideas before evaluating them is referred to as a fish-bone diagram. Team members brainstorm major causes that can lead to the problem. Then for each main cause, they brainstorm specific causes. The list of causes of the problem is arranged like the bones of a fish. The x axis ends with the statement of the problem. Additional lines are drawn at

45 degree angle to the x axis for each additional main cause. All the causes are listed along these additional slanted lines. When many lines are drawn the picture looks like a fish bone hence the name fish bone diagram.

Check progress
Many proposals fail to solve the problem at hand. It is important to gather data concerning how the intervention has solved the problem. Such data can be used to alert the team that a successful solution has been found. If the data does not show that the problem has been solved, the team needs to continue examining other solutions. Pilot testing and gathering data on improvement is also useful for helping other employees believe in the team's recommendations. Learning organizations need to allow for testing new ideas, even if these ideas are subsequently discarded. Without trying, that is without accepting that you will occasionally fail, no learning can occur.

What should be done?

Teams should decide on the solution they wish to implement. One way to do so is through the process called estimate-talk-estimate. In this process, team members individually rank the options available. They then discuss the options. And, finally they re-rank the options again. The option that receives the best ranking is tried first. The estimatetalk-estimate process has been found to be superior to arriving at the best option through talking, or to rank ordering the options without talking. When data is collected, it is important to examine whether the process performance has changed over time. By examining the process over time, one examines the data before and after the intervention. One way to do so is through control charts. Control charts, especially risk adjusted control charts, are discussed in depth in subsequent lectures. After control charts have been constructed, attach them to the story board so that employees can begin to see the data.

Show and Tell

Effective change requires clear communications. One way to communicate effectively to large number of employees is through mass media. Internal marketing efforts are an example of using mass media to change employee behavior and to improve adoption of new innovations. In these efforts, a central theme is used to sell larger more complex issues. In addition, various media are used to reach as many employees as possible. Effective use of media could include newsletters, video tapes, e-mail, voice mail, written letters, and other communications. The purpose of a story board is to summarize and visually present the process, the solution and the impact of the solution on the problem. It serves as a mass communication medium to employees outside the immediate project team. It also serves the project team as a documentation of their progress to date. Because there are many projects underway in the same organization, it is important to use a uniform story board style and size. Story boards is a form of public reporting. Public reporting is necessary for the success of innovations. It accelerates the rest of the organization's awareness of the project. Story boards is a form of celebrating success of individual projects and in this manner providing a positive environment for change. Here are brief steps to follow if you are constructing a story board.
Divide the story board into the following sections: Statement of the problem. (Placed across the top of the story board using a 48 by 4 inches banner.) Description of the problem, the bench marking data, and the team assigned. (Placed in the left hand corner 12 by 12 inches.) Process flow chart. (Placed to the right of the description in a space of 12 by 36 inches.) Fish bone diagram. (Placed underneath description of the problem in a space of 12 by 12 inches.) Control chart. (placed underneath the process chart in a space of 12 by 36 inches.) Conclusions. (Placed as a banner across the bottom using a space 8 by 48 inches wide.)

Would you like an easy click and go process of creating a story board? If so choose among one of the following options:
View the template as Power Point show , view as html or Download the story board template

Hang a blank story board where most employees can see. Add sections as they become available. The idea is to generate a sense of anticipation and unfolding as the story is told. Organize the story well. Write little and show more. Have fun in the design and content. Include some pictures of team members working together on the board. Leave the story board up for several months even after the innovation has been adopted. Data shows that post-sales activities help improve adoption of innovations. A continued exposure to a story board will remind employees of why the innovation was adopted. Allow for input to the team from employees who are examining the story board. When story boards unfold, employees have comments to make. Let team members receive these comments and modify the story board to reflect the employees concern.

Many TQM projects fail to create a story board. Or if they do, they create the board only after the fact. I believe this is a mistake and these projects are not taking advantage of an important communication tool. When you make the story board on the first day of the project, it begins to tell that something is up. As time goes on, it unfolds a story about what the team is up to. The climax of the story is reached when the control chart is posted showing the improvement. Story boards are the team's public minutes. It helps integrate the rest of the employees in the deliberations. Unfortunately, many old style managers are not comfortable with taking advantage of mass communication tools, like a story board. But younger and newer managers who have grown accustomed in multi-media communications are more comfortable and maybe more likely to use story boards. If you are doing a personal project, story boards help keep you focused over time. Please post your personal story board as elements are completed. Post it in a place you often see (on the refrigerator, on your office wall, etc.) and invite people to comment about it.

What do you know?

1. 2.

Please complete an assessment Report on an example problem statement

Analyze Data
To help you get ready for a number of control chart assignments coming up later in the course, we ask that you become more proficient in using Excel. 1.
In cells A1, through A4 enter the following data: 25, 50, 75 and 100. Calculate the sum, count, standard deviation and average of the data. See how this is done.

Email your work to the instructor.

Slides and Narrated Lectures

To assist you in reviewing the material in this lecture, please see:

Listen to lecture on cycles of change. See slides. Listen to lecture on typical improvement. See slides.

Narrated lectures require use of Flash.

Examples

Read about recent applications of continuous quality improvements in health care. Report of additional applications one year later. Conduct a pre-arranged search of Medline database for examples of quality improvement. On a 28,800 baud modem, this search took less than 2 minutes. Search is free. Medline database includes peer review published reports. Researchers solicited nominations for successful examples of clinical quality improvement teams from quality leaders in the network. After collecting data from the nominees (e.g., team reports, storyboards, charts, graphs, and bibliographies), the researchers developed a project report with 15 case studies. This report, after expert review, is now available to the public. Other examples of use of Plan, Do, Check and Act (PDCA) model can be found in published literature. Read about 92 improvement efforts. Alemi and colleagues examined 92 improvement efforts and documented the steps in improvement and the time it takes to go through them. You may also wish to review slides for typical improvement project. You can also listen to a lecture on typical improvement.

Suggested Changes
In this section, you can review suggestions made by you and others regarding how to improve this lecture.

Comments: I thought this lecture overall was much better organized than the first lecture. The reasonings for each step were very clear and the examples were quite helpful. I agree with many of the other students that the fish-bone diagram seems like a rather difficult to understand concept. Other than that everything was great. This comment was left on 9/20/2006 12:09:39 AM. Comments: Very good lecture with good examples on identifying problems clearly. I did not understand the section on the article by Kaluzny, Mclaughlin and Kibbe in Quality Management in Healthcare. That was a bit confusing. This comment was left on 9/12/2006 10:47:16 PM. Comments: Very good lecture with good examples on identifying problems clearly. I did not understand the section on the article by Kaluzny, Mclaughlin and Kibbe in Quality Management in Healthcare. That was a bit confusing. This comment was left on 9/12/2006 10:47:07 PM. Comments: In the objectives of this lecture is states the three TQM tools used are fishbone charts, flow charts, and storyboards. In the What do you know section of PDCA the first question asks for you to list the ten steps in TQM and what tools are used for each step. I spent a long time looking for tools for each step and when I checked the correct responses the answers for the ten steps did not list tools, and some of the ten listed just the step. I think this is a poorly worded question. Another student also made this comment at an earlier time. This comment was left on 6/4/2006 10:12:10 PM. Comments: In the objectives of this lecture is states the three TQM tools used are fishbone charts, flow charts, and storyboards. In the What do you know section of PDCA the first question asks for you to list the ten steps in TQM and what tools are used for each step. I spent a long time looking for tools for each step and when I checked the correct responses the answers for the ten steps did not list tools, and some of the ten listed just the step. I think this is a poorly worded question. Another student also made this comment at an earlier time. This comment was left on 6/4/2006 9:14:13 PM. Comments: We actually have this process at my place of employment. Good lecture. This comment was left on 3/8/2006 6:18:51 PM. Comments: Thsi was a great class! This comment was left on 3/8/2006 6:18:08 PM. Comments: The instructor was very patient and spent the appropriate

time with each of us. This comment was left on 3/8/2006 6:14:54 PM. Comments: Defining the problem from the customer's experience is a powerful method of making sure that problems are successfully resolved. This comment was left on 11/23/2005 7:35:35 AM. Comments: I liked the examples the instructor provided. This comment was left on 9/27/2005 3:37:29 PM. Comments: Great lecture, the only thing that could improve this lecture is to show us how to calculate /find standard deviation, count and average. This comment was left on 9/23/2005 12:15:14 AM. Comments: You may want to give an example of a problem where this process would not work. It would be helpful in completing part two of the assessment. This comment was left on 9/21/2005 11:39:36 AM. Comments: The lecture was well explained, but did not teach us how to find standard deviation, count and average. It talked about sum but not the others. This comment was left on 9/20/2005 6:22:07 PM. Comments: Listening to the lecture was a "bit" confusing, however, I got more clarity when I read through "read more". The lecture presentation could have more ellaborate notes. This comment was left on 9/20/2005 4:39:05 PM. Comments: This is a valuable lecture and served as great review for me. The literature reviews are very useful. This comment was left on 9/20/2005 4:38:01 PM. Comments: The lecture was great in using real work place examples and sceniros. A lot can be learned and implemented. The material makes you stop and think about how you are doing the change cycles in you organization. This comment was left on 9/18/2005 1:14:27 PM. Comments: very good lecture examples made it easier to understand This comment was left on 6/23/2005 3:25:39 PM. Comments: I liked the examples given throughout the steps of the PCCA process. They were specific to health care and made the process seem like something that clinicians could easily become involved in. This comment was left on 6/15/2005 5:37:26 PM. Comments: The link to typical improvement project was already linked and presented in the last lecture-leading change. This comment was left on 6/12/2005 2:21:26 PM.

Comments: After spending a lot of time trying to answer the "what do you know?" question regarding the 10 steps of TQM and the tools used for each I was frustrated after I submitted my answers and received your answers. Could you reword the question in regard to the word "tool"? I felt like I was missing something in the readings because I wasn't sure what tools you were referring to. Please let me know if you need clarification of this question. This comment was left on 6/10/2005 3:33:53 PM. [1/4]

More
1. 2.
For a Fishbone diagram template, click here. What is the difference between six sigma and the steps presented here? Six sigma is a process that attempts to reduce defects or errors to near zero, It has a strong emphasis on use of control charts, but it includes many other statistical and non-statistical techniques. It does not have a set of management principles beyond striving for perfection, and relying on data and thus it is compatible with the steps described in this section. Many people have hypothesized that as quality improves market share increases and cost of production drops. Obviously there is some saving or improvement for each project. But the real question is not whether there are cost savings in individual projects but whether these savings translate to better outcomes for the entire organization. Charles Waxer analyzed 4 nonhealthcare organizations to see if there was proof of organization wide savings. He found 1.2% to 4.5% savings across the entire organization. Alemi and colleagues examined costs in 72 improvement efforts in health care and found that a minority attempt to reduce cost and even a smaller group succeed in reducing costs. Less than 2% of projects examined reported success in reducing cost of care. See also an annotated bibliography on the relationship between cost and quality of health care. Hayes and Childress provide a tutorial on creating a storyboard. See: Fairy tales of storyboarding. J Nurses Staff Dev 1999 Nov-Dec;15(6):260-2 . Here is a bibliography on creating story boards. Many alternatives to continuous quality improvement exist. One example is to change through bankruptcy courts. Another example is re-engineering, where employees are forced to change by changing the underlying process. Still another example is organizational development, where the focus is on improving employee's experience of work. There are different ways of implementing continuous quality improvement:. Almost everyone who has written in the field has suggested some variation. But a sample of writers suggesting steps in change are: Shewhart, Deming, Juran, and Crosby. You may also want to look at Six Sigma, and Lean Thinking. There are two distinct methods of planning or problem solving. Some, like Total Quality Management, are focused on "what is" and how to improve it. Others, like IDEAL system design, are focused on "what could be" and how to reach it. In the IDEAL system design one generates solutions before understanding the constraints of the process in detail. In this way, one's imagination is not restricted with "what is" but with "what could be." Only after a solution is selected, then one reviews the real process, to see how the solution should be adjusted to fit the constraint of the work flow. For more detail see Nadler G. Work System Design. New York: Irwin 1970. Both the IDEAL System design and the CQI process try to come up with practical

3.

4. 5.

6.

7. 8.

solutions, both fit the solutions to the features of the underlying process, but in the IDEAL System design this is done at the end while in the CQI it is done at the beginning. Does it really matter, when we examine the real life constraints? Yes it does. In research conducted on different methods of planning, data showed that brainstorming about the ideal solutions and fitting it to reality at a later stage leads to more effective ideas than a focus on what is a realistic solution. See Nutt PC. An experimental comparison of the effectiveness of three planning methods. Management Science 1977, 23 (5): 499 - 511. Total Quality Management has a rich history outside of health care. From a handful of early advocates, TQM has grown to encompass almost all health care organizations. Agency for Health Care Quality and Research.

9. 10. American Society for Quality, Health Care Division 11. Institute for Healthcare Improvement 12. National Coalition on Health Care (NCHC) 13. National Institute of Standards and Technology (NIST) on Health Care 14. Baldrige National Quality Award 15. Redick EL. Applying FOCUS-PDCA to solve clinical problems. Dimens Crit 16.
Care Nurs 1999 Nov-Dec;18(6):30-4. This article describes one method of step-by-step problem solving and how to apply it to a clinical situation Hayes SK, Childress DM. Fairy tales of storyboarding. J Nurses Staff Dev 1999 Nov-Dec;15(6):260-2. Tutorial on how to create a storyboard. Bibliography on creating story boards.

17. 18. For more on patient safety, click here. 19. Madison (WI) Area Quality Improvement Network 20. Quality in Europe 21. Pubmed Medline With Clinical Search Filters 22. British Medical Journal Abstracts 23. The Online Quality Resources Guide 24. Other Quality-related Email Lists 25. The American Productivity and Quality Center (APQC) 26. QualiNet 27. Association for Quality and Participation (AQP) 28. The Quality Assurance Institute 29. The USDA's TQM Website 30. Quality Online Forum's Website 31. The International Quality & Productivity Center 32. University of Texas Quality Center 33. International Organization for Standardization 34. The Process Improvement Website 35. The Philip Crosby Website 36. Quality Digest Magazine's Website 37. The Quality Management Principles Website 38. The American Productivity and Quality Center (APQC) 39. Curious Cat Connections on process improvement in health care 40. Click here for a brief tutorial about process charts made by quality engineers. 41. Click here for University Hospital of Cleveland does process charts. 42. See guidelines for understanding variations.

Frequently Asked Questions

Ask a question and we will answer it within the next 48 hours. If you have no questions, please review the answer to the questions asked by others: Question: WHAT TOOLS ARE USEFUL IN EXAMINING INTERNAL PROCESS Answer: Two tools are particularly useful in examining internal work processes: flow chart diagrams and list of routines. An introduction to these tools are provided in this page. This question was asked on 10/3/2006 11:33:10 PM and answered on 10/4/2006 11:03:20 PM. Question: How are we to go about obtaining a copy of another student's report in order to do the commenting on it? Answer: See your syllabus under September 12th assignments for the course 586 This question was asked on 9/20/2006 12:38:47 AM and answered on 9/21/2006 9:04:53 PM. Question: How do I find out other students contact info so I can add them to my Instant Messenger list? Answer: See your syllabus under September 12th assignments This question was asked on 9/20/2006 12:28:16 AM and answered on 9/21/2006 9:04:24 PM. Question: In the "what do you know" sections how is this graded? Are we graded on correct answers, or graded on completing required assignments? If we miss one, how much weight does that carry? Thanks Answer: Each question is weighted equally This question was asked on 9/12/2006 2:31:53 PM and answered on 9/12/2006 10:00:54 PM. Question: How can I draw a process chart? is process chart a Workflow diagram? Answer: Yes a process chart is a work flow diagram. Details for how to draw these charts is available on page 66 of the following book: http://gunston.doit.gmu.edu/healthscience/708/personalimprovement/ThinkingPersonWeightLoss.pdf This question was asked on 5/14/2006 7:02:47 AM and answered on 5/22/2006 11:14:11 AM. Question: what is the purpose and key elements of TQM in the business?how does it affect in business,competitors, and customers? Answer: Total Quality Management is a process for improving quality of a business product in order to increase market share. It tries to accomplish this goal by changing business processes and not by asking employees to exert more effort or blame each other. The idea is to set up a system in which a better product can be produced and in the process increase business market share This question was asked on 12/3/2005 8:02:39 AM and answered on 12/6/2005 5:07:26 PM. Question: what is focus-pdca? Answer: FOCUS is an acronym for the words find, organize,clarify, understand, and select. PDCA is an acronym for plan, do, act, and check results. For more information see http://scholar.google.com/scholar?hl=en&lr=&c2coff=1&q=%28FOCUS %29+pdca&btnG=Search This question was asked on 10/12/2005 6:40:02 AM and answered on 10/12/2005 7:12:27 PM. Question: Is there ever an instance in TQM in which the focus should be on "what is" as opposed to

"what should be done"? Answer: In implementing change, after envisioning what you want, there is always a point in which you need to examine what is there now and what needs to be changed. See also discussion under rapid improvement where the implication of different planning methods are discussed. This question was asked on 10/9/2005 12:28:07 PM and answered on 10/10/2005 8:32:02 AM. Question: How do we plot the upper control limit on the chart? Answer: THe PDCA assignment did not have a problem using an UCL. However to have an UCL show on a chart you need to have a column with the UCL in each cell for each row of data.THen you highlight the observation column and the UCL column, then choose the chart type and the data now will show as lines on the graph. This question was asked on 9/24/2005 7:47:02 PM and answered on 9/25/2005 2:23:37 PM. Question: Can you ellaborate more on how you determine the problem based on patient experience? How do you exactly narrow down your problem to all patient experiences? Answer: You let patients in their own voice talk of the problem. Suppose we have a problem of miscommunication between our ICU nurses and physicians. This is a very poor statement of the problem because it blames some provider. Instead suppose we investigate further and find out that patients experience this problem in terms of confusing instructions. If that is the case, then it is better to ask a patient to describe how he/she feels about the instructions he/she has received. The solution eventually maybe improving communications but the problem does not mention this at all. It focuses on what the patients experience and not what the employees do. This question was asked on 9/19/2005 10:23:43 PM and answered on 9/20/2005 9:23:55 PM. Question: From reading the lecture I noticed that using flow chart is used only to capture current process. Which mean how the process is currently handled? Do you think that same group who is looking to this step of process should also develop flow chart for future process? How the process will be handled after changes has been implemented? Thanking you Answer: Yes of course. Flow charts can be used to depict how the future process will be. This will give a great deal of information about what aspect of current processes will be changed This question was asked on 9/19/2005 6:40:51 PM and answered on 9/19/2005 9:21:26 PM. Question: I dont have a question but I wanted to comment on the lecture. I believe that Plan, Do, Check, and Act Cycles could work in any work related situation and I think it is a very interesting concept. The lecture was very easy to understand as well. Answer: Glad to hear it. This question was asked on 9/19/2005 3:33:14 PM and answered on 9/19/2005 9:20:19 PM. Question: How can you differenciate between quality improvement activities and quality assurance in an organization? In my organization QI is done through QA. Answer: I would have to know more about what the QA Dept. does. QA was the term used several years ago for quality work where the basic premise was to trend data and to assure quality by the data being directionally correct. In the past data was trended (QA) but not improved through QI activities. This question was asked on 9/18/2005 1:08:34 PM and answered on 9/18/2005 6:20:41 PM. Question: How can you differenciate between quality improvement activities and quality assurance in an organization? In my organization QI is done through QA. Answer: I would have to know more about what the QA Dept. does. QA was the term used several years ago for quality work where the

basic premise was to trend data and to assure quality by the data being directionally correct. In the past data was trended (QA) but not improved through QI activities. This question was asked on 9/18/2005 1:08:34 PM and answered on 9/18/2005 6:21:06 PM. Question: How does one go about collecting data and not blaming (ex: Patients are delayed going to surgery because chart is not completed (MD not completing?) Answer: Data is factual. In the case presented you can do chart review and collect information about ALL the reasons for delay going to surgery. If it turns out the greatest delay is because the MD is not completing the chart that needs to be stated in percent along with the percent of other reasons. While collecting the data collect physician names so in the next drill down you know if there is a problem with physicians in general or with only particular physicians. The process change would be different depending on the cause. Present the facts with opinion and others will see the truth. This question was asked on 6/26/2005 12:05:55 PM and answered on 6/26/2005 6:12:10 PM. Question: To describe the process we can use either flow chart or listing routines. You said that listing routines doesn't give you the visual picture of how these routines influence the other. In the personal improvement lecture you said that after listing routines you need to draw a cycle of routines. Wouldn't that give you the visual look and shows the influence?Wouldn't listing routines be more suffecient than flow chart if you follow it with the cycle? and why didn't you include the cycle step in this lecture? Answer: Yes the the picture of the cylce of routines is a viaual that can help you see more clearly the influences. THe point is taht you can use multiple ways to show the flow of a cycle. This question was asked on 6/11/2005 8:30:58 AM and answered on 6/11/2005 10:44:53 PM. Question: I don't understand the "what do you know?" question regarding which tool(s) are used for each of the 10 steps of TQM? What is your definition of tool? Answer: Tools stand for any thing or steps that are needed to improve a process. They are listed in the Change Cycles powerpoint. "Tools" is a term used in process improvement to describe the mechanisms of improvement. This question was asked on 6/10/2005 2:48:19 PM and answered on 6/11/2005 10:41:52 PM. Question: I'm not clear in PDCA cycle. DO in PDCA cycle means gather data to set solution to solve problem, and Act step is that it is using the solution to solve the problem. Is it correct? Answer: Prior to PDCA you would have collected data and decided what pproblem or procees to change. P - plan the interventions to change the process; D - do the change; C - collect the data and analyze the data to see if it effected change; A - intstitute the intervention on a large scale if it was succcessful, if it was not successful plan another cycle of change. This question was asked on 6/9/2005 4:42:24 AM and answered on 6/11/2005 10:36:02 PM. Question: I read in this lecture that there are two ways to describe your process. One of the ways is to list routines. I read that listing routines give you the events sequentially but eleminates the visual part. In the personal improvement project you mentioned that after we list the routines we can draw a cycle diagram to show how each routine influences the other. Don't we get the visual benefit by creating this cycle? and why didn't you include this step after listing routines in the process improvement project? Is it only used for personal improvement projects? Answer: Yes, you do get the visual effect from drawing the the cycle. The visual diagram can look different for different types of process change. The cycle diagram , the flow chart, the process flow, and the storyboard are all ways to visually understand a process improvement. This question was asked on 6/7/2005 10:41:48 PM and

answered on 6/11/2005 10:32:28 PM. Question: Are there certain problems for which flow charting is a more suitable method than listing routines? If so, what types of problems lend themselves more easily to flow charting than listing routines and vice versa? Answer: It is really a personal preference. For system changes flow charting the process is probably more acceptable and understood. THere really is not that much difference between the two methods. In each case you are listing the process in order of occurrence of events. This question was asked on 6/5/2005 2:31:04 PM and answered on 6/11/2005 10:48:02 PM. [1/3] This page is part of the course on Quality, the lecture on PDCA Cycles. It was last edited on 05/12/2003 by Farrokh Alemi, Ph.D. Copyright protected.

what is marketing?
What is marketing? There are many different definitions of marketing. Consider some of the following alternative definitions: The all-embracing function that links the business with customer needs and wants in order to get the right product to the right place at the right time The achievement of corporate goals through meeting and exceeding customer needs better than the competition The management process that identifies, requirements efficiently and profitably anticipates and supplies customer

Marketing may be defined as a set of human activities directed at facilitating and consummating exchanges Which definition is right? In short, they all are. They all try to embody the essence of marketing: Marketing is about meeting the needs and wants of customers; Marketing is a business-wide function it is not something that operates alone from other business activities; Marketing is about understanding customers and finding ways to provide products or services which customers demand To help put things into context, you may find it helpful to often refer to the following diagram which summarises the key elements of marketing and their relationships:

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key terms
Marketing Orientation Market Analysis Market Segmentation Market Research Marketing Mix Marketing Strategy

What is Marketing?
Marketing includes sales, but encompasses much more. It is fundamental to the successful creation, distribution, promotion, and pricing of goods, services and ideas in all business and non-profit organizations. As business has evolved, marketing has changed from a selling orientation to a broader customer orientation. Today, marketing is more and more focused on the development and implementation of competitive strategies ("game plans"). It is the marketer's responsibility to understand changes in customer needs and to get the right products to the market at the right time. The survival of companies depends on it.

How Important is Marketing?

Marketing is very important. Almost a third of all Americans work in marketing-related activities. According to the U.S. Government Occupational Outlook Handbook, employment in marketing should increase faster than the average of all occupations through the year 2005. Increasing globalization, technical improvements, and higher living standards bring consumers a growing choice of products and services, each of which has to be marketed. http://www.cob.sjsu.edu/mkt/Marketing/whatismarketing.htm

To answer the question of "Why Brand?", first one

must understand "What is branding?". Some see branding as a luxury reserved for the big guys with fat budgets, or equate it with the downfall of the dotcoms who spent all their efforts on "branding." They couldn't be more wrong. Branding is the foundation for all successful marketing. It is not simply an advertising gimmick, nor a fad. A brand is the combined set of impressions and expectations that a customer has as a result of the interactions with the company, its products and services over time. Everything you say and do establishes your brand. If you are not aware of your brand and manage it effectively, your customers and competitors will define it for you. This means that you need to take a proactive stance on developing your brand so that your customers will know why they should chose your company, it's products and services over a competitor. By understanding your unique brand, you can influence the impressions that the market receives in all media -your service performance, even the physical environment of your offices as well as any communications that you develop and set forth. These impressions must be clear, concise and consistently sustained over time. When we think of brands, we generally think of logos that represent brands. The familiar Coca Cola bottle and the red and white lettering are very distinctive. Yet the Coke brand is more than just the logo. It represents the entire experience. Brands are the promise that the company makes to its customers, a promise for consistency in everything they do.

Brand As Promise
Consumers make choices based on familiarity. They will buy a product that they are sure will deliver what they expect. Familiarity with and preference for a product stems from having used it previously and being satisfied, or from an impression about the product or service gained

 2002 BigPond Marketing All Rights Reserved.

From Wikipedia, the free encyclopedia

Jump to: navigation, search There are other articles with similar names; see Innovation (disambiguation).

Look up Innovation in Wiktionary, the free dictionary. The classic definitions of innovation include: 1. the process of making improvements by introducing something new 2. the act of introducing something new: something newly introduced (The American Heritage Dictionary). 3. the introduction of something new. (Merriam-Webster Online) 4. a new idea, method or device. (Merriam-Webster Online) 5. the successful exploitation of new ideas (Dept of Trade and Industry, UK). 6. change that creates a new dimension of performance Peter Drucker (Hesselbein, 2002) In economics, business and government policy,- something new - must be substantially different, not an insignificant change. In economics the change must increase value, customer value, or producer value. Innovations are intended to make someone better off, and the succession of many innovations grows the whole economy. The term innovation may refer to both radical or incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem. Innovation is an important topic in the study of economics, business, technology, sociology, and engineering. Since innovation is also considered a major driver of the economy, the factors that lead to innovation are also considered to be critical to policy makers. In the organisational context, innovation may be linked to performance and growth through improvements in efficiency, productivity, quality, competitive positioning, market share, etc. All organisations can innovate, including for example hospitals, universities, and local governments. While innovation typically adds value, innovation may also have a negative or destructive effect as new developments clear away or change old organizational forms

and practices. Organisations that do not innovate effectively may be destroyed by those that do.

Contents
[hide]

1 Conceptualizing innovation o 1.1 Innovation in organizations o 1.2 Technological concepts of innovation o 1.3 Economic conceptions of innovation o 1.4 Transaction cost and network theory perspectives 2 Types of innovation o 2.1 Disruptive vs. sustaining innovation o 2.2 Evolutionary innovation v Radical Innovation (sic) 3 Sources of innovation 4 Diffusion of innovations 5 Goals of innovation 6 Failure of innovation 7 Innovation management 8 Innovation funnel 9 Measures of innovation 10 Public awareness 11 See also 12 References 13 Innovation Policy Links 14 External links

[edit] Conceptualizing innovation

Innovation has been studied in a variety of contexts, including in relation to technology, commerce, social systems, economic development, and policy construction. There are, therefore, naturally a wide range of approaches to conceptualising innovation in the scholarly literature. Fortunately, however, a consistent theme may be identified: innovation is typically understood as the introduction of something new and useful, for example introducing new methods, techniques, or practices or new or altered products and services. It is useful, when conceptualizing innovation, to consider whether other words suffice. Recent authors point out that invention - the creation of new tools or the novel compilation of existing tools - is often confused with innovation. Many product and service enhancements may fall more rigorously under the term improvement. Change and creativity are also words that may often be substituted for innovation. What, then, is

innovation that makes it necessary to have a different word from these others, or is it a catch-all word, a loose synonym? Much of the current business literature blurs the concept of innovation with value creation, value extraction and operational execution. In this view, an innovation is not an innovation until someone successfully implements and makes money on an idea. Extracting the essential concept of innovation from these other closely linked notions is no easy thing. One emerging approach is to use these other notions as the constituent elements of innovation as an action: Innovation occurs when someone uses an invention - or uses existing tools in a new way - to change how the world works, how people organize themselves, and how they conduct their lives. Note in this view inventions may be concepts, physical devices or any other set of things that facilitate an action. An innovation in this light occurs whether or not the act of innovating succeeds in generating value for its champions. Innovation is distinct from improvement in that it causes society to reorganize. It is distinct from problem solving and is perhaps more rigorously seen as new problem creation. And in this view, innovation applies whether the act generates positive or negative results.

[edit] Innovation in organizations

A convenient definition of innovation from an organizational perspective is given by Luecke and Katz (2003), who wrote: "Innovation . . . is generally understood as the introduction of a new thing or method . . . Innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services. (p. 2)" Innovation typically involves creativity, but is not identical to it: innovation involves acting on the creative ideas to make some specific and tangible difference in the domain in which the innovation occurs. For example, Amabile et al (1996) propose: "All innovation begins with creative ideas . . . We define innovation as the successful implementation of creative ideas within an organization. In this view, creativity by individuals and teams is a starting point for innovation; the first is necessary but not sufficient condition for the second". (p. 1154-1155). For innovation to occur, something more than the generation of a creative idea or insight is required: the insight must be put into action to make a genuine difference, resulting for example in new or altered business processes within the organisation, or changes in the products and services provided. A further characterization of innovation is as an organizational or management process. For example, Davila et al (2006), write:

"Innovation, like many business functions, is a management process that requires specific tools, rules, and discipline." (p. xvii) From this point of view the emphasis is moved from the introduction of specific novel and useful ideas to the general organizational processes and procedures for generating, considering, and acting on such insights leading to significant organizational improvements in terms of improved or new business products, services, or internal processes. Through these varieties of viewpoints, creativity is typically seen as the basis for innovation, and innovation as the successful implementation of creative ideas within an organization (c.f. Amabile et al 1996 p.1155). From this point of view, creativity may be displayed by individuals, but innovation occurs in the organizational context only. It should be noted, however, that the term 'innovation' is used by many authors rather interchangeably with the term 'creativity' when discussing individual and organizational creative activity. As Davila et al (2006) comment, "Often, in common parlance, the words creativity and innovation are used interchangeably. They shouldn't be, because while creativity implies coming up with ideas, it's the "bringing ideas to life" . . . that makes innovation the distinct undertaking it is." The distinctions between creativity and innovation discussed above are by no means fixed or universal in the innovation literature. They are however observed by a considerable number of scholars in innovation studies.

[edit] Technological concepts of innovation

The OECD defines Technological Innovation in the Oslo Manual (1995) as: Technological product and process (TPP) innovations comprise implemented technologically new products and processes and significant technological improvements in products and processes. A TPP innovation has been implemented if it has been introduced on the market (product innovation) or used within a production process (process innovation). TPP innovations involve a series of scientific, technological, organisational, financial and commercial activities. The TPP innovating firm is one that has implemented technologically new or significantly technologically improved products or processes during the period under review. A 2005/6 MIT survey of innovation in technology found a number of characteristics common to innovators working in that field. 1) they are not troubled by the idea of failure, 2) they realise that failure can be learned from and that the 'failed' techology can later be re-used for other purposes, 3) they know innovation requires that one works in advanced areas where failure is a real possibility, 4) innovators are curious about what is

happening in a myriad of disciplines, not only their own specialism, 5) innovators are open to third-party experiments with their products, 6) they recognise that a useful innovation must be "robust", flexible and adaptable, 7) innovators delight in spotting a need that we don't even know we harbor, and then fulfilling that need with a new innovation, and as such 8) innovators like to make products that are immediately useful to their first users.

[edit] Economic conceptions of innovation

Joseph Schumpeter defined economic innovation in 1934: 1. The introduction of a new goods that is one with which consumers are not yet familiaror of a new quality of a goods. 2. The introduction of a new method of production, which need by no means be founded upon a discovery scientifically new, and can also exist in a new way of handling a commodity commercially. 3. The opening of a new market, that is a market into which the particular branch of manufacture of the country in question has not previously entered, whether or not this market has existed before. 4. The conquest of a new source of supply of raw materials or half-manufactured goods, again irrespective of whether this source already exists or whether it has first to be created. 5. The carrying out of the new organization of any industry, like the creation of a monopoly position (for example through trustification) or the breaking up of a monopoly position Schumpeter's focus on innovation is reflected in Neo-Schumpeterian economics. Innovation is also studied by economists in a variety of contexts, for example in theories of entrepreneurship or in Paul Romer's New Growth Theory.

[edit] Transaction cost and network theory perspectives

According to Regis Cabral (1998, 2003): "Innovation is a new element introduced in the network which changes, even if momentarily, the costs of transactions between at least two actors, elements or nodes, in the network."

[edit] Types of innovation

Scholars have identified at a variety of types of innovation, including for example:

Business Model innovation involves changing the way business is done in terms of capturing value e.g. Compaq vs. Dell, hub and spoke airlines vs. Southwest, and Hertz/Avis vs. Enterprise.

Marketing innovation is the development of new marketing methods with improvement in product design or packaging, product promotion or pricing. Organizational innovation involves the creation or alteration of business structures, practices, and models, and may therefore include process, marketing and business model innovation. Process innovation involves the implementation of a new or significantly improved production or delivery method. Product innovation, involves the introduction of a new good or service that is new or substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension. Service innovation, is similar to product innovation except that the innovation relates to services rather than to products Supply chain innovation where innovations occur in the sourcing of input products from suppliers and the delivery of output products to customers

For example, financial innovation occurs as new financial products and services are developed, combining basic financial attributes (risk-sharing, liquidity, credit) in innovative ways, as well as exploiting the weaknesses of tax law. To address problems or capitalise on opportunities, new financial products and services are developed, new business models emerge, and business processes are adapted and improved. Financial innovation, therefore, may be seen in general to involve most of the above mentioned types of innovation.

[edit] Disruptive vs. sustaining innovation

Main article: disruptive technology

How low-end disruption occurs over time. In addition to dividing innovations into types, innovation is often characterized by its impact on existing markets or businesses. Sustaining innovations allows organizations to continue to approach markets the same way, such as the development of a faster or more fuel efficient car. Disruptive technology on the other hand, significantly changes a market or product category, such as the invention of a cheap, safe personal flying machine that could replace cars.

Prof. Clayton M. Christensen of the Harvard Business School, maintained a database of innovative changes in the production and sale of hard-disks from 1975 to 1995. There were 116 new technologies introduced, 111 of them were sustaining in nature, and every established firm in the industry was able to copy or replicate those innovations with 100% success. (Sustaining innovations also tend to be evolutionary.) In contrast there were 5 disruptive innovations. None of the disruptive products involved any new technology, yet for the established firms in the industry the adoption rate in the disruptive technologies was zero. See "Leading for Innovation" Hesselbein, (2002), page 204. For the leading firms, the new technologies offered their existing customers little advantage. The success of the disruptive technology often promised lower profit margins to established firms. The decision makers values and the goals of the firm forbid giving serious consideration to technologies that will destroy an established market. These disruptive technologies were adopted by small firms that were not established in the market, and for whom adoption of the disruptive innovation represented new opportunity.

[edit] Evolutionary innovation v Radical Innovation (sic)

Similarly, incremental innovation is evolutionary innovation, a step forward along a technology trajectory, or from the known to the unknown, with a high chance of success and low uncertainty about outcomes. Radical innovation, on the other hand, involves larger leaps of understanding, perhaps demanding a new way of seeing the whole problem, probably taking a much larger risk than many people involved are happy about. The chances of success are difficult to estimate. There may be considerable opposition to the proposal and questions about the ethics, practicality or cost of the proposal may be raised. People may question if this is, or is not, an advancement of a technology or process.

[edit] Sources of innovation

There are two main sources of innovation. The traditionally recognized source is manufacturer innovation. This is where an agent (person or business) innovates in order to sell the innovation. The other source of innovation, only now becoming widely recognized, is end-user innovation. This is where an agent (person or company) develops an innovation for their own (personal or in-house) use because existing products do not meet their needs. Eric von Hippel has identified end-user innovation as, by far, the most important and critical in his classic book on the subject, Sources of Innovation. Innovation by businesses is achieved in many ways, with much attention now given to formal research and development for "breakthrough innovations." But innovations may be developed by less formal on-the-job modifications of practice, through exchange and combination of professional experience and by many other routes. The more radical and revolutionary innovations tend to emerge from R&D, while more incremental innovations may emerge from practice - but there are many exceptions to each of these trends.

Regarding user innovation, rarely user innovators may become entrepreneurs, selling their product, or more often they may choose to trade their innovation in exchange for other innovations. Nowadays, they may also choose to freely reveal their innovations, using methods like open source. In such networks of innovation the creativity of the users or communities of users can further develop technologies and their use. Whether innovation is mainly supply-pushed (based on new technological possibilities) or demand-led (based on social needs and market requirements) has been a hotly debated topic. Similarly, what exactly drives innovation in organizations and economies remains an open question.

[edit] Diffusion of innovations

Main article: diffusion of innovations Once innovation occurs, innovations may be spread from the innovator to other individuals and groups. This process has been studied extensively in the scholarly literature from a variety of viewpoints, most notably in Everett Rogers' classic book, The Diffusion of Innovations. Rogers proposed that the life cycle of innovations can be described using the s-curve or diffusion curve. The s-curve maps growth of revenue or productivity against time. In the early stage of a particular innovation, growth is relatively slow as the new product establishes itself. At some point customers begin to demand and the product growth increases more rapidly. New incremental innovations or changes to the product allow growth to continue. Towards the end of its life cycle growth slows and may even begin to decline. In the later stages, no amount of new investment in that product will yield a normal rate of return. The s-curve is derived from half of a normal distribution curve. There is an assumption that new products are likely to have "product Life". i.e. a start-up phase, a rapid increase in revenue and eventual decline. In fact the great majority of innovations never get off the bottom of the curve, and never produce normal returns.

Innovative companies will typically be working on new innovations that will eventually replace older ones. Successive s-curves will come along to replace older ones and continue to drive growth upwards. In the figure above the first curve shows a current technology. The second shows an emerging technology that current yields lower growth but will eventually overtake current technology and lead to even greater levels of growth. The length of life will depend on many factors.

[edit] Goals of innovation

Programs of organizational innovation are typically tightly linked to organizational goals and objectives, to the business plan, and to market competitive positioning. For example, one driver for innovation programs in corporations is to achieve growth objectives. As Davila et al (2006) note, "Companies cannot grow through cost reduction and reengineering alone . . . Innovation is the key element in providing aggressive top-line growth, and for increasing bottom-line results" (p.6) It is not surprising, therefore, that companies such as General Electric and Procter & Gamble have embraced the management of innovation enthusiastically, with the primary goal of driving growth and, consequently, improving shareholder value. In general, business organisations spend a significant amount of their turnover on innovation i.e. making changes to their established products, processes and services. The amount of investment can vary from as low as a half a percent of turnover for organisations with a low rate of change to anything over twenty percent of turnover for organisations with a high rate of change. The average investment across all types of organizations is four percent. For an organisation with a turnover of say one billion currency units, this represents an investment of forty million units. This budget will typically be spread across various functions including marketing, product design, information systems, manufacturing systems and quality assurance. The investment may vary by industry and by market positioning. One survey across a large number of manufacturing and services organisations found, ranked in decreasing order of popularity, that systematic programs of organizational innovation are most frequently driven by: 1. 2. 3. 4. 5. Improved quality Creation of new markets Extension of the product range Reduced labour costs Improved production processes

6. Reduced materials 7. Reduced environmental damage 8. Replacement of products/services 9. Reduced energy consumption 10. Conformance to regulations These goals vary between improvements to products, processes and services and dispel a popular myth that innovation deals mainly with new product development. Most of the goals could apply to any organisation be it a manufacturing facility, marketing firm, hospital or local government.

[edit] Failure of innovation

Attaining goals must be the ultimate objective of the innovation process. Unfortunately, most innovation fails to meet organisational goals. Figures vary considerably depending on the research. Some research quotes failure rates of fifty percent while other research quotes as high as ninety percent of innovation has no impact on organisational goals. One survey regarding product innovation quotes that out of three thousand ideas for new products, only one becomes a success in the marketplace. Failure is an inevitable part of the innovation process, and most successful organisations factor in an appropriate level of risk. Perhaps it is because all organisations experience failure that many choose not to monitor the level of failure very closely. The impact of failure goes beyond the simple loss of investment. Failure can also lead to loss of morale among employees, an increase in cynicism and even higher resistance to change in the future. Innovations that fail are often potentially good ideas but have been rejected or shelved due to budgetary constraints, lack of skills or poor fit with current goals. Failures should be identified and screened out as early in the process as possible. Early screening avoids unsuitable ideas devouring scarce resources that are needed to progress more beneficial ones. Organizations can learn how to avoid failure when it is openly discussed and debated. The lessons learned from failure often reside longer in the organisational conscientiousness than lessons learned from success. While learning is important, high failure rates throughout the innovation process are wasteful and a threat to the organisation's future. The causes of failure have been widely researched and can vary considerably. Some causes will be external to the organisation and outside its influence of control. Others will be internal and ultimately within the control of the organisation. Internal causes of failure can be divided into causes associated with the cultural infrastructure and causes associated with the innovation process itself. Failure in the cultural infrastructure varies between organisations but the following are common across all organisations at some stage in their life cycle (O'Sullivan, 2002): 1. Poor Leadership

2. 3. 4. 5.

Poor Organisation Poor Communication Poor Empowerment Poor Knowledge Management

Common causes of failure within the innovation process in most organisations can be distilled into five types: 1. 2. 3. 4. 5. Poor goal definition Poor alignment of actions to goals Poor participation in teams Poor monitoring of results Poor communication and access to information

Poor goal definition requires that organisations state explicitly what their goals are in terms understandable to everyone involved in the innovation process. This often involves stating goals in a number of ways. Poor alignment of actions to goals means linking explicit actions such as ideas and projects to specific goals. It also implies effective management of action portfolios. Poor participation in teams refers to the behaviour of individuals and teams. It also refers to the explicit allocation of responsibility to individuals regarding their role in goals and actions and the payment and rewards systems that link individuals to goal attainment. Finally, poor monitoring of results refers to monitoring all goals, actions and teams involved in the innovation process. Innovation can fail if seen as an organisational process whose success stems from a mechanistic approach i.e. 'pull lever obtain result'. While 'driving' change has an emphasis on control, enforcement and structure it is only a partial truth in achieving innovation. Organisational gatekeepers frame the organisational environment that "Enables" innovation; however innovation is "Enacted" - recognised, developed, applied and adopted - through individuals. Individuals are the 'atom' of the organisation close to the minutiae of daily activities. Within individuals gritty appreciation of the small detail combines with a sense of desired organisational objectives to deliver (and innovate for) a product/service offer. From this perspective innovation succeeds from strategic structures that engage the individual to the organisation's benefit. Innovation pivots on intrinsically motivated individuals, within a supportive culture, informed by a broad sense of the future. Innovation, implies change, and can be counter to an organisation's orthodoxy. Space for fair hearing of innovative ideas is required to balance the potential autoimmune exclusion that quells an infant innovative culture.

[edit] Innovation management

Innovation management is the process of managing innovations (e.g. ideas) in organisations. The first stage in innovation is for someone to generate an idea. It is typically a technical insight into a product or process or thought about a service. In some cases ideas arises from observed problems either now or in the future. Ideas can also be stimulated by the goals of the organization or an opportunity that appears suddenly. Various stimuli can lead to the generation of an idea from reading magazines and observing problems to visiting other organizations and having informal discussions with colleagues. Idea generation leads to opportunity recognition where someone can see an opportunity for developing the idea into a new product, process or service. The opportunity recognition stage involves the idea evaluation stage where ideas are prodded and tested. Often ideas are improved, merged with other ideas and in many cases abandoned. An important test for an idea is that it matches the goals of the organization and available resources people and money. If an opportunity is recognised then the idea moves to a new stage where it can be developed further. The development phase may involve prototype development and marketing testing. Many ideas wait at the end of the development phase for market conditions to be right. There are currently many new products languishing in the laboratories of Philips and Nokia waiting for their moment to begin replacing or even disrupting existing technology. The final stage of the innovation process is realisation and in many cases exploitation where the customer makes the final evaluation.

[edit] Innovation funnel

The innovation funnel provides a solution for explicitly defining the information requirements for managing the innovation process. The funnel illustrates how innovation goals, innovation actions, innovation teams and innovation results interact with each other to create change in any organisation. The innovation funnel can be visualised as containing four arrows flowing around a funnel. Each arrow represents the flow of goals, actions, teams and results. Actions enter the wide mouth of the funnel and represent among other things, alternative ideas for change. These actions flow towards to the neck of the funnel where many will be eliminated. The neck of the funnel is constrained by two arrows goals and teams. These constraints loosen or tighten depending on the availability of teams and definition of the goals. Tightly defined goals can be visualised

as closing the neck of the funnel with the change of fewer ideas flowing through. The availability of more teams on the other hand can be visualised as opening the neck of the funnel and allowing more ideas to be worked on. The final arrow, results flows from the narrow end of the funnel and represents information concerning the results of execution of goals, actions and teams. This arrow flows back towards goals representing the impact of results on the process of defining and redefining goals. An important aspect of the innovation funnel is the associations generated between actions and both goals and teams. Ideas, for example, that cannot easily be associated with goals will find it difficult to proceed into the funnel. This has two effects. First, individuals and teams will focus on ideas they believe are in-line with established goals. Second, goals may be re-defined to accommodate good ideas. This is a natural learning process within an innovation community.

[edit] Measures of innovation

Individual and team-level assessment can be conducted by surveys and workshops. Business measures related to finances, processes, employees and customers in balanced scorecards can be viewed from innovation perspective (e.g. new product revenue, time to market, customer and employee perception & satisfaction). Organizational capabilities can be evaluated through various evaluation frameworks e.g. efqm (European foundation for quality management) -model. The OECD Oslo Manual from 1995 suggests standard guidelines on measuring technological product and process innovation. The Oslo Manual should be considered as complementary to the Frascati Manual from 1963. Other ways of measuring innovation has traditionally been expenditure on R&D (Research and Development) as percentage of GNP (Gross National Product). Whether this is a good measurement of Innovation has been discussed, and the Oslo Manual has incorporated some of the critique against earlier methods of measuring. This being said, the traditional methods of measuring still informs much policy decisions. The EU (the Lisbon agreement)has set as a goal that their average expenditure on R&D should be 3 % of GNP.

[edit] Public awareness

Public awareness of innovation is an important part of the innovation process. This is further discussed in the emerging fields of innovation journalism and innovation communication.

[edit] See also

Creative destruction Diffusion (anthropology) Individual capital Induced innovation

Ingenuity Open Innovation Patent Public domain Research Timeline of invention Toolkits for User Innovation TRIZ

[edit] References

Amabile, Teresa (1996). Creativity in Context. New York: Westview Press. Amabile, Teresa, Regina Conti, Heather Coon, et al. (October 1996). "Assessing the work environment for creativity". Academy of Management Review 39 (5): 1154-1184. Cabral, Regis (2003). Development, Science and, Heilbron, J. The Oxford Companion to The History of Modern Science. New York: Oxford University Press, 205-207. Cabral, Regis (1998). "Refining the Cabral-Dahab Science Park Management Paradigm". Int. J. Technology Management 16 (8): 813-818. DOI:10.1504/IJTM.1998.002694.. Chakravorti, Bhaskar (2003). The Slow Pace of Fast Change: Bringing Innovations to Market in a Connected World. Boston, MA: Harvard Business School Press. Chesbrough, Henry William (2003). Open Innovation: The New Imperative for Creating and Profiting from Technology. Boston, MA: Harvard Business School Press.. ISBN 157851-837-7. Christensen, Clayton M. (1997). The Innovator's Dilemma. Boston, MA: Harvard Business School Press. ISBN 0-06-052199-6. Davila, Tony, Marc J. Epstein and Robert Shelton (2006). Making Innovation Work: How to Manage It, Measure It, and Profit from It''. Upper Saddle River: Wharton School Publishing. ISBN 0-13-149786-3. Ettlie, John (2006). Managing Innovation, Second Edition. Butterworth-Heineman, an imprint of Elsevier. ISBN 0-7506-7895-X. (2004) Fagerberg, Jan, David C. Mowery and Richard R. Nelson The Oxford Handbook of Innovations. Oxford University Press. ISBN 0-1992-6455-4. (2002) Hesselbein, Frances, Marshall Goldsmith, and Iain Sommerville Leading for Innovation: And organizing for results. Jossey-Bass. ISBN 0-7879-5359-8. Luecke, Richard, Ralph Katz (2003). Managing Creativity and Innovation. Boston, MA: Harvard Business School Press. ISBN 1-59139-112-1. Mansfield, Edwin (1985). "How Rapidly Does New Industrial Technology Leak Out?". Journal of Industrial Economics 34 (2): 217223.. Nordfors, David (November 2004). "The Role of Journalism in Innovation Systems" (pdf). Innovation Journalism 1 (7). ISSN 1549-9049. OECD The Measurement of Scientific and Technological Activities. Proposed Guidelines for Collecting and Interpreting Technological Innovation Data. Oslo Manual. 2nd edition, DSTI, OECD / European Commission Eurostat, Paris 31 Dec 1995. O'Sullivan, David (2002). "Framework for Managing Development in the Networked Organisations". Journal of Computers in Industry 47 (1): 77-88. ISSN 0166-3615. Schumpeter, Joseph (1934). The Theory of Economic Development. Cambridge, MA: Harvard University Press. Scotchmer, Suzanne (2004). Innovation and Incentives. Cambridge, MA: MIT Press.

Silverstein, David, Neil DeCarlo and Michael Slocum (2005). INsourcing Innovation: How to Transform Business as Usual into Business as Exceptional. Longmont, CO: Breakthrough Performance Press. ISBN 0-9769010-0-5. Sloane, Paul (2003). The Leader's Guide to Lateral Thinking Skills. Kogan Page. Stein, Morris (1974). Stimulating creativity. New York: Academic Press. Utterback, James M., Fernando F. Suarez. (1993). "Innovation, Competition, and Industry Structure". Research Policy 22 (1): 121. von Hippel, Eric (2005). Democratizing Innovation. MIT Press. ISBN 0-262-22074-1. von Hippel, Eric (1988). The Sources of Innovation. Oxford University Press. ISBN 019-509422-0. Woodman, Richard .W., John E. Sawyer, Ricky W. Griffin (1993). "Toward a theory of organizational creativity". Academy of Management Review'' 18 (2): 293-321. Wolpert, John (2002). "Breaking Out of the Innovation Box". Harvard Business Review August.

[edit] Innovation Policy Links

Welcome to the DTI's Innovation Home Page - Department of Trade and Industry, UK. Innovation and Technology Policy - Organisation for Economic Co-operation and Development (OECD). European Union: o "Communication on Innovation policy: updating the Unions approach in the context of the Lisbon strategy" - The European Commission. o Innovation articles.

[edit] External links

Urban and Regional Innovation Research Unit KAM - the interactive database provides data on innovation and other pillars of the knowledge economy for more then 130 countries.

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Definition: Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises. BPR reached its heyday in the early 1990's when Michael Hammer and James Champy published their best-selling book, "Reengineering the Corporation". The authors promoted the idea that sometimes radical redesign and reorganization of an enterprise (wiping the slate clean) was necessary to lower costs and increase quality of service and that information technology was the key enabler for that radical change. Hammer and Champy felt that the design of workflow in most large corporations was based on assumptions about technology, people, and organizational goals that were no longer valid. They suggested seven principles of reengineering to streamline the work process and thereby achieve significant levels of improvement in quality, time management, and cost: 1. Organize around outcomes, not tasks. 2. Identify all the processes in an organization and prioritize them in order of redesign urgency. 3. Integrate information processing work into the real work that produces the information. 4. Treat geographically dispersed resources as though they were centralized. 5. Link parallel activities in the workflow instead of just integrating their results. 6. Put the decision point where the work is performed, and build control into the process. 7. Capture information once and at the source. By the mid-1990's, BPR gained the reputation of being a nice way of saying "downsizing." According to Hammer, lack of sustained management commitment and leadership, unrealistic scope and expectations, and resistance to change prompted management to abandon the concept of BPR and embrace the next new methodology, enterprise resource planning (ERP). LAST UPDATED: 06.15.2005 This article is about reengineering business processes. For software reengineering, see Reengineering (software). reengineering (or re-engineering) is the radical redesign of an organization's processes, especially its business processes. Rather than organizing a firm into functional specialties (like production, accounting, marketing, etc.) and looking at the tasks that each function performs, we should, according to the reengineering theory, be looking at complete

processes from materials acquisition, to production, to marketing and distribution. The firm should be re-engineered into a series of processes. The main proponents of re-engineering were Michael Hammer and James Champy. In a series of books including Reengineering the Corporation, Reengineering Management, and The Agenda, they argue that far too much time is wasted passing-on tasks from one department to another. They claim that it is far more efficient to appoint a team who are responsible for all the tasks in the process. In The Agenda they extend the argument to include suppliers, distributors, and other business partners. Re-engineering is the basis for many recent developments in management. The crossfunctional team, for example, has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. Also, many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management systems all owe a debt to re-engineering theory.

[edit] Criticisms of re-engineering

It has earned a bad reputation because such projects have often resulted in massive layoffs. This reputation is not all together warranted. Companies have often downsized under the banner of reengineering. Further, reengineering has not always lived up to its expectations. The main reasons seem to be that:

reengineering assumes that the factor that limits organization's performance is the ineffectiveness of its processes (which may or may not be true) and offers no means of validating that assumption reengineering assumes the need to start the process of performance improvement with a "clean slate", i.e. totally disregard the status quo according to Eliyahu M. Goldratt (and his theory of constraints) reengineering does not provide an effective way to focus improvement efforts on the organization's constraint.

There was considerable hype surrounding the book's introduction (partially due to the fact that the authors of Reengineering the Corporation reportedly bought numbers of copies to promote it to the top of bestseller lists). Abrahamson (1996) showed that fashionable management terms tend to follow a lifecycle, which for Reengineering peaked between 1993 and 1996 (Ponzi and Koenig 2002). While arguing that Reengineering was in fact nothing new (as e.g. when Henry Ford implemented the assembly line in 1908, he was in fact reengineering, radically changing the way of thinking in an organization), Dubois (2002) highlights the value of

signaling terms as Reengineering, giving it a name, and stimulating it. At the same there can be a danger in usage of such fashionable concepts as mere ammunition to implement particular reforms.

[edit] See also

Business Process Improvement Pattern process management Business process reengineering business philosophy Management Manufacturing GXL Process architecture

[edit] References

Business Process Redesign: An Overview in IEEE Engineering Management Review Abrahamson, E. (1996). Management fashion. Academy of Management Review, 21, 254-285. Champy, J. (1995) Reengineering Management, Harper Business Books, New York, 1995. Dubois, H.F.W. (2002) Harmonization of the European vaccination policy and the role TQM and reengineering could play, Quality Management in Health Care 10(2): pp. 47-57. Hammer, M. (1990)"Reengineering Work: Don't Automate, Obliterate", Harvard Business Review, July/Aug 1990, pp. 104-112. Michael Hammer, James A. Champy: (1993) Reengineering the Corporation: A Manifesto for Business Revolution, Harper Business Books, New York, 1993, ISBN 0-06-662112-7 Hammer, M. and Stanton, S. (1995) "The Reengineering Revolution", Harper Collins, London, 1995.

Ponzi, L and Koenig, M (2002) "Knowledge management: another management fad?" Information Research, 8(1)

Hansen, Gregory (1993) "Automating Business Process Reengineering", Prentice Hall

Ponzi, L and Koenig, M (2002) "Knowledge management: another management fad?" Information Research, 8(1) "Reengineering Reviewed", (1994) The Economist, 2 July 1994, pp 66. Geary A. Rummler, Alan P. Brache: Improving Performance: How to Manage the White Space in the Organization Chart, ISBN 0-7879-0090-7

Retrieved from "http://en.wikipedia.org/wiki/Reengineering" Categories: Management | Organizational studies and human resource management | Production and manufacturing | Theory of constraints
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The following is an article from our book entitled TQM In The Public Eye. The book is available directly from us. You can use the order form on our web site. Or for more information go to the book page here.

TQM-What Is It?
If you are reading this book, it is likely that you already know what we mean when we use the term Total Quality Management. Still, it's a good idea to define the term, and provide a brief overview. Certainly TQM can be defined in a number of ways, and the details of different approaches can vary somewhat. However, a good starting definition, drawn from Capezio & Morehouse is: "Total Quality management refers to a management process and set of disciplines that are coordinated to ensure that the organization consistently meets and exceeds customer requirements. TQM engages all divisions, departments and levels of the organization. Top management organizes all of its strategy and operations around customer needs and develops a culture with high employee participation. TQM companies are focused on the systematic management of data of all processes and practices to eliminate waste and pursue continuous improvement. " Perhaps a better way of understanding TQM is to compare a "TQM organization with what we might call a "traditional organizations". tet's look at a number of differences. 1. Customer-Driven vs. Company-Driven Traditional organizations tend to make their decisions based on what is most convenient for them, rather than what is wanted and expected by their customers. Being customer-based means gatf7ering information from customers/clients and modifying services and processes to meet those needs as well as possible. In government, this is not always easy, due to the conflicting responsibilities of a department, and the multiple customers/stakeholders involved in government situations. However, in many cases moving to a customer-driven organization can yield many positive results for government departments. 2. Long-Term vs. Short-Term Orientation Traditional organizations tend to think and plan with

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PROBLEM SOLVING PROCESS

"Follow a disciplined process and work to fix causes versus symptoms."

Home THE Human Element Concordant Decisions Problem Solving Methods Effective Meetings Conflict Management Customer Service Coaching Feedback

DESCRIPTION

The Team Problem Solving process, is a road map that guides individuals and groups solving problems. Participants learn a disciplined approach that leads to the full consideration of problems, causes, solutions, and implementation steps. This course is designed for any employee of an organization implementing a total quality managemen (TQM) initiative, and for anyone who wants an introduction to basic problem solving & quality concepts.

ORGANIZATIONAL BENEFITS

This course helps teams develop more cooperative working relationships as it teaches them team building skills they can use to solve problems while they drive for continuou improvement.

SKILL DEVELOPMENT
Understand how and when to use a Problem Solving Process Understand how to identify a problem Understand how to analyze a problem Understand how to find "Root Cause(s)" to a problem Understand how to generate solutions (ideas generation techniques) Understand how to design an implementation plan Understand how to successfully implement and monitor a plan

Understand how to measure and recycle your results Understand the steps required to properly Sponsor a problem solving group. Understand basic quality tools such as: o Pareto diagramming o Fishbone diagramming o Brainstorming o Criteria Rating o Gantt charts o Etc.

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Managing Quality
Provided by SME.com.ph

What is quality? Quality generally refers to a certain degree or level of excellence. The American National Standards Institute and the American Society for Quality Control defined quality as the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs. There are two main perspectives of defining quality, one from the customer and the other one from the producer or manufacturer. Quality of Design - quality from the point of view of customer and involves designing quality characteristics into a product. Quality of conformance -quality from the manufacturer's perspective and seeks to ensure that the product is produced according to design. To achieve QOC means improvement in the design of the equipment, materials, training, supervision and control. This quality definition serves as the basis for evaluating quality performance at the shop floor level. Why is quality important?

The world of manufacturing has changed dramatically over the past 20 years. The challenge for firms to become and to remain competitive has never been more pronounced. Bases for competition no longer just focus on cost, but on other key success factors such as quality, flexibility, delivery, service and innovation. Why do firms want to achieve quality? Firms with good quality can command a higher price and will be remembered by customers. But how does quality relate with profitability? What are the costs involved in achieving quality? Because of good quality in terms of product, service and process, companies employing quality management could enjoy market gains (higher market share and price advantage) as well as cost savings (lower costs of operations and services) that ultimately lead to better profits for the organization. What are the costs of quality? But achieving quality has certain costs. Costs to control quality - These include the costs to prevent the occurrence of defects and the costs of evaluating the firm's progress towards achieving zero defects. These also consist of the investment made by company on good quality materials, process, technology, and quality inspection. Costs of failure to control quality - These refer to the costs incurred if the firm fails to achieve its quality targets and customers get dissatisfied for a poor quality product or service. These include the costs of internal and external failure. How can quality be managed? Total Quality Management (TQM) is considered an important approach in managing quality. TQM derived its teachings mainly from the following disciplines -- Statistics, Organizational Theory, Strategic Management, and Industrial Organization. The efforts of the company employing TQM are targeted towards meeting cross-functional goals utilizing management techniques, productivity improvement efforts, and various problem solving tools and techniques in disciplined manner. The ultimate objective of TQM is to achieve customer satisfaction all the time. Presented below are 12 important considerations if your company is planning to adopt TQM: Are you committed to quality? Do you plan for quality? Is your company customer oriented? Does your company manage supplier quality? Are your people involved in quality? Do you train your employees on quality? Are your workplaces organized and orderly? Is quality integrated in your product design? Is quality integrated in your processes? Does your company measure and monitor quality? Does your company benchmark with the best?

 Does your company sustain its quality / productivity efforts?

REFERENCES: David A. Garvin, What Does Product Quality Really Mean? , Sloan Management Review , Fall 1984, page 37. Lloyd Elkidson, TQM's Role in Corporate Success: Analyzing the Evidence , National Productivity Review , Volume 14, Number 4, Autumn 1995, 25-38. Janet C. Vinzant and Douglas H. Vinzant, Strategic Management and TQM: Challenges and Choices , Public Administrative Quarterly , Summer 1996, pages 201-219.

Effective Competitive Analysis

Adapted from content excerpted from the American Express OPEN Small Business Network

For your small business to succeed, you need to know almost as much about your competitors as you do about your own company and customers. Unfortunately, many small business owners make the mistake of waiting until a competitor has opened up shop across the street and is cutting into profits to find out who and what they're up against. A competitive analysis allows you to identify your competitors and evaluate their respective strengths and weaknesses. By knowing the actions of your competitors, you will have a better understanding of what products or services you should offer; how you can market them effectively; and how you can position your business. Competitive analysis is an ongoing process. You should always be gathering information about your competitors. Look at their Web sites. Read their product literature and brochures. Get your hands on their products. See how they present themselves at trade shows. Read about them in your industry's trade publications. Talk to your customers to see how they feel about competitive products or services. Click on the steps below to learn more about how to analyze your competitors: Step 1: Identify your competition Step 2: Analyze strengths and weaknesses Step 3: Look at opportunities and threats Step 4: Determine your position. Step 1: Identify your competition Every business has competitors, and you need to take the time to discern who your customers can approach to get a product or service that fills the same need as yours does. Even if your product or service is truly innovative, you need to look at what else your customers would purchase to accomplish this task. For example, you may be opening a Website that offers online Bingo. Your competition would be other Bingo sites, other Web gaming sites, the Bingo hall down the street, and any other businesses that are competing for the same leisure-time dollars. Begin by looking at your primary competitors. These are the market leaders, the companies who currently dominate your market. They are probably the ones who you find yourself bumping up against in your search for new customers. If you're a florist, it would be other florists in your neighborhood. If you're a computer consultant, it would be other consultants with the same specialty. Next, look for your secondary and indirect competitors. These are the businesses who may not go head-to-head with you, but who are targeting the same general market. Sticking with the florist example, it might be a small local rosesonly store, a national floral delivery service, or the flower/plant department of your local supermarket or discount store..

Finally, look at potential competitors. These are companies who might be moving into your market and who you need to prepare to compete against. For example, you might have an independent frozen yogurt stand; you will need to prepare to compete against national frozen yogurt franchises, even if they are not yet in your market. Back to top Step 2: Analyze strengths and weaknesses After you've figured out who your competitors are, determine their strengths and find out what their vulnerabilities are. Why do customers buy from them. Is it price? value? service? convenience? reputation? Focus as much on "perceived" strengths and weaknesses as you do on actual ones. This is because customer perception may actually be more important than reality. It's a good idea to do this strengths/weaknesses analysis in table form. Write down the names of each of your competitors. Then set up columns listing every important category for your line of business (price, value, service, location, reputation, expertise, convenience, personnel, advertising/marketing, or whatever else is appropriate to your type of company). Once you have this table set, rate your competitors, and be sure to put in comments as to why you've given them that rating. You might even want to put strengths in red and weaknesses in blue, so you can tell at a glance where each competitor stands. Back to top Step 3: Look at opportunities and threats Strengths and weaknesses are often factors that are under a company's control. But when you're looking at your competition, you also need to examine how well prepared they are to deal with factors outside their control. These are called opportunities and threats. Opportunities and threats fall into a wide range of categories. It might be technological developments, regulatory or legal action, economic factors, or even a possible new competitor. For example, a photo developing store needs to know how well its competitors are prepared to deal with the advent of digital photography. Or a company that sells over the Web should analyze how its competitors are prepared to deal with online security issues. Again, an effective way to do this is to create a table listing your competitors and the outside factors that will impact your industry. You will then be able to tell how they can deal with opportunities and threats. Back to top Step 4. Determine your position Once you figure out what your competitors' strengths and weaknesses are, you need to determine where to position your company vis a vis the competition. Some of this may be obvious from the results of your analysis, but it also pays to take a hard look at how your business operates. One of the most effective ways to do this is to create a strengths/weaknesses opportunities/threats analysis of your business. Rank your company in the same categories that you ranked your competitors. This will give you an even clearer picture of where your business fits in the competitive environment. It will also help you determine what areas you need to improve, and what characteristics of your business you should take advantage of to gain more customers. The bottom line: look for ways to leverage your strengths and take advantage of your competitors' weaknesses.

Supply chain management

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Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from pointof-origin to point-of-consumption. The term supply chain management was coined by consultant Keith Oliver, of strategy consulting firm Booz Allen Hamilton in 1982.

Contents
[hide]

1 Opportunities enabled by Supply Chain Management 2 Supply chain management problems 3 Activities/Functions o 3.1 Strategic o 3.2 Tactical o 3.3 Operational 4 Supply Chain Management 5 Supply Chain Business Process Integration 6 Supply Chain Management Components Integration 7 Literature 8 References 9 See also 10 External links

According to the CSCMP, a professional association that developed a definition in 2004, Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies."[1] Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can be created and solutions can be planned.

Some experts distinguish supply chain management and logistics management, while others consider the terms to be interchangeable. From the point of view of an enterprise, the scope of supply chain management is usually bounded on the supply side by your supplier's suppliers and on the customer side by your customer's customers. Supply chain management is also a category of software products.

[edit] Opportunities enabled by Supply Chain Management

The following strategic and competitive areas can be used to their full advantage if a supply chain management system is properly implemented.

Fulfillment. Ensuring the right quantity of parts for production or products for sale arrive at the right time.(Haag, Cummings, McCubbrey, et al., 2006, p. 46). This is enabled through efficient communication, ensuring that orders are placed with the appropriate amount of time available to be filled. The supply chain management system also allows a company to constantly see what is on stock and making sure that the right quantities are ordered to replace stock. Logistics. Keeping the cost of transporting materials as low as possible consistent with safe and reliable delivery. (Haag, Cummings, McCubbrey, et al., 2006, p. 46). Here the supply chain management system enables a company to have constant contact with its distribution team, which could consist of trucks, trains, or any other mode of transportation. The system can allow the company to track where the required materials are at all times. As well, it may be cost effective to share transportation costs with a partner company if shipments are not large enough to fill a whole truck and this again, allows the company to make this decision. Production. Ensuring production lines function smoothly because high-quality parts are available when needed. (Haag, Cummings, McCubbrey, et al., 2006, p. 46). Production can run smoothly as a result of fulfillment and logistics being implemented correctly. If the correct quantity is not ordered and delivered at the requested time, production will be halted, but having an effective supply chain management system in place will ensure that production can always run smoothly without delays due to ordering and transportation. Revenue & profit. Ensuring no sales are lost because shelves are empty.(Haag, Cummings, McCubbrey, et al., 2006, p. 46). Managing the supply chain improves a companys flexibility to respond to unforeseen changes in demand and supply. Because of this, a company has the ability to produce goods at lower prices and distribute them to consumers quicker than companies without supply chain management thus increasing the overall profit.

Costs. Keeping the cost of purchased parts and products at acceptable levels. (Haag, Cummings, McCubbrey, et al., 2006, p. 46). Supply chain management reduces costs by increasing inventory turnover on the shop floor and in the warehouse (&ldquo Supply chain management, 2006) controlling the quality of goods thus reducing internal and external failure costs and working with suppliers to produce the most cost efficient means of manufacturing a product. Cooperation. Among supply chain partners ensures 'mutual success.' (Haag, Cummings, McCubbrey, et al., 2006, p. 46). Collaborative planning, forecasting and replenishment (CPFR) is a longer-term commitment, joint work on quality, and support by the buyer of the suppliers managerial, technological, and capacity development. (Klassen, Krajewski, Ritzman, 2004, p.293) This relationship allows a company to have access to current, reliable information, obtain lower inventory levels, cut lead times, enhance product quality, improve forecasting accuracy and ultimately improve customer service and overall profits. The suppliers also benefit from the cooperative relationship through increased buyer input from suggestions on improving the quality and costs and though shared savings. Consumers can benefit as well through the higher quality goods provided at a lower cost.

[edit] Supply chain management problems

Supply chain management must address the following problems:

Distribution Network Configuration: Number and location of suppliers, production facilities, distribution centers, warehouses and customers. Distribution Strategy: Centralized versus decentralized, direct shipment, cross docking, pull or push strategies, third party logistics. Information: Integrate systems and processes through the supply chain to share valuable information, including demand signals, forecasts, inventory and transportation. Inventory Management: Quantity and location of inventory including raw materials, work-in-process and finished goods.

[edit] Activities/Functions
Supply chain management is a cross-functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end-consumer. As corporations strive to focus on core competencies and become more flexible, they have reduced their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other corporations that can perform the activities better or more cost effectively. The effect has been to increase the number of companies involved in satisfying consumer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply

chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and improving inventory velocity. Several models have been proposed for understanding the activities required to manage material movements across organizational and functional boundaries. SCOR is a supply chain management model promoted by the Supply-Chain Council. Another model is the SCM Model proposed by the Global Supply Chain Forum (GSCF). Supply chain activities can be grouped into strategic, tactical, and operational levels of activities.

[edit] Strategic

Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities. Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics. Product design coordination, so that new and existing products can be optimally integrated into the supply chain, load management Information Technology infrastructure, to support supply chain operations. Where to make and what to make or buy decisions Align Overall Organisational Strategy with supply strategy

[edit] Tactical

Sourcing contracts and other purchasing decisions. Production decisions, including contracting, locations, scheduling, and planning process definition. Inventory decisions, including quantity, location, and quality of inventory. Transportation strategy, including frequency, routes, and contracting. Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise. Milestone Payments

[edit] Operational

Daily production and distribution planning, including all nodes in the supply chain. Production scheduling for each manufacturing facility in the supply chain (minute by minute). Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers. Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers. Inbound operations, including transportation from suppliers and receiving inventory.

Production operations, including the consumption of materials and flow of finished goods. Outbound operations, including all fulfillment activities and transportation to customers. Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers. Performance tracking of all activities

[edit] Supply Chain Management

Nowadays, one of the few outcomes in the constantly changing business world is that organizations can no longer compete solely as individual entities. Increasingly, they must rely on effective supply chains, or networks, to successfully compete in the global market and networked economy (Baziotopoulos, 2004). Peter Druckers (1998) managements new paradigms, this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies. During the past decades, globalization, outsourcing and information technology have enabled many organizations such as Dell and Hewlett Packard, to successfully operate solid collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities (Scott, 1993). This inter-organizational supply network can be acknowledged as a new form of organization. However, with the complicated interactions among the players, the network structure fits neither market nor hierarchy categories (Powell, 1990). It is not clear what kind of performance impacts different supply network structures could have on firms, and little is known about the coordination conditions trade-offs that may exist among the players. From a systems point of view, a complex network structure can be decomposed into individual component firms (Zhang and Dilts, 2004). Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players. Therefore, the choice of internal management control structure is known to impact local firm performance (Mintzberg, 1979). In the 21st century, there have been few changes in business environment that have contributed to the development of supply chain networks. First, as an outcome of globalization and proliferation of multi-national companies, joint ventures, strategic alliances and business partnerships were found to be significant success factors, following the earlier Just-In-Time, Lean Management and Agile Manufacturing practices (MacDuffie and Helper, 1997; Monden, 1993; Womack and Jones, 1996; Gunasekaran, 1999). Second, technological changes, particularly the dramatic fall in information communication costs, a paramount component of transaction costs, has led to changes in coordination among the members of the supply chain network (Coase, 1998). Many researchers have recognized these kinds of supply network structure as a new organization form, using terms such as Keiretsu, Extended Enterprise, Virtual

Corporation, Global Production Network, and Next Generation Manufacturing System (Drucker, 1998; Tapscott, 1996; Dilts, 1999). In general, such structures, can be defined as a group of semi-independent organizations, each with their capabilities, which collaborate in ever-changing constellations to serve one or more markets in order to achieve some business goal specific to that collaboration (Akkermans, 2001).

[edit] Supply Chain Business Process Integration

Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. An example scenario: the purchasing department places orders as requirements become appropriate. Marketing, responding to customer demand, communicates with several distributors and retailers, and attempts to satisfy this demand. Shared information between supply chain partners can only be fully leveraged through process integration. Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems and shared information. According to Lambert and Cooper (2000) operating an integrated supply chain requires continuous information flows, which in turn assist to achieve the best product flows. However, in many companies, management has reached the conclusion that optimizing the product flows cannot be accomplished without implementing a process approach to the business. The key supply chain processes stated by Lambert (2004) are:

Customer relationship management Customer service management Demand management Order fulfillment Manufacturing flow management Supplier relationship management Product development and commercialization Returns management

One could suggest other key critical supply business processes combining these processes stated by Lambert such as: a. b. c. d. e. f. g. Customer service Management Procurement Product development and Commercialization Manufacturing flow management/support Physical Distribution Outsourcing/ Partnerships Performance Measurement

a) Customer service management process

Customer service provides the source of customer information. It also provides the customer with real-time information on promising dates and product availability through interfaces with the companys production and distribution operations. b) Procurement process Strategic plans are developed with suppliers to support the manufacturing flow management process and development of new products. In firms where operations extend globally, sourcing should be managed on a global basis. The desired outcome is a winwin relationship, where both parties benefit, and reduction times in the design cycle and product development is achieved. Also, the purchasing function develops rapid communication systems, such as electronic data interchange (EDI) and Internet linkages to transfer possible requirements more rapidly. Activities related to obtaining products and materials from outside suppliers. This requires performing resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage and handling and quality assurance. Also, includes the responsibility to coordinate with suppliers in scheduling, supply continuity, hedging, and research to new sources or programmes. c) Product development and commercialization Here, customers and suppliers must be united into the product development process, thus to reduce time to market. As product life cycles shorten, the appropriate products must be developed and successfully launched in ever shorter time-schedules to remain competitive. According to Lambert and Cooper (2000), managers of the product development and commercialization process must: 1. coordinate with customer relationship management to identify customerarticulated needs; 2. select materials and suppliers in conjunction with procurement, and 3. develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the product/market combination. d) Manufacturing flow management process The manufacturing process is produced and supplies products to the distribution channels based on past forecasts. Manufacturing processes must be flexible to respond to market changes, and must accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in minimum lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times, meaning improved responsiveness and efficiency of demand to customers. Activities related to planning, scheduling and supporting manufacturing operations, such as work-in-process storage, handling, transportation, and time phasing of components, inventory at manufacturing sites and maximum flexibility in the coordination of geographic and final assemblies postponement of physical distribution operations. e) Physical Distribution

This concerns movement of a finished product/service to customers. In physical distribution, the customer is the final destination of a marketing channel, and the availability of the product/service is a vital part of each channel participants marketing effort. It is also through the physical distribution process that the time and space of customer service become an integral part of marketing, thus it links a marketing channel with its customers (e.g. links manufacturers, wholesalers, retailers). f) Outsourcing/Partnerships This is not just outsourcing the procurement of materials and components, but also outsourcing of services that traditionally have been provided in-house. The logic of this trend is that the company will increasingly focus on those activities in the value chain where it has a distinctive advantage and everything else it will outsource. This movement has been particularly evident in logistics where the provision of transport, warehousing and inventory control is increasingly subcontracted to specialists or logistics partners. Also, to manage and control this network of partners and suppliers requires a blend of both central and local involvement. Hence, strategic decisions need to be taken centrally with the monitoring and control of supplier performance and day-to-day liaison with logistics partners being best managed at a local level. g) Performance Measurement Experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. By taking advantage of supplier capabilities and emphasizing a long-term supply chain perspective in customer relationships can be both correlated with firm performance. As logistics competency becomes a more critical factor in creating and maintaining competitive advantage, logistics measurement becomes increasingly important because the difference between profitable and unprofitable operations becomes more narrow. A.T. Kearney Consultants (1985) noted that firms engaging in comprehensive performance measurement realized improvements in overall productivity. According to experts internal measures are generally collected and analyzed by the firm including 1. 2. 3. 4. 5. Cost Customer Service Productivity measures Asset measurement, and Quality.

External performance measurement is examined through customer perception measures and best practice benchmarking, and includes 1) Customer perception measurement, and 2) Best practice benchmarking.

[edit] Supply Chain Management Components Integration

The management components of SCM: The SCM management components are the third element of the four-square circulation framework. The level of integration and management of a business process link is a function of the number and level, ranging from low to high, of components added to the link (Ellram and Cooper, 1990; Houlihan, 1985). Consequently, adding more management components or increasing the level of each component can increase the level of integration of the business process link. The literature on business process reengineering (Macneil ,1975; Williamson, 1974; Hewitt, 1994), buyer-supplier relationships (Stevens, 1989; Ellram and Cooper, 1993; Ellram and Cooper, 1990; Houlihan, 1985), and SCM (Cooper et al., 1997; Lambert et al.,1996; Turnbull, 1990) suggests various possible components that must receive managerial attention when managing supply relationships. Lambert and Cooper (2000) identified the following components which are:

Planning and control Work structure Organization structure Product flow facility structure Information flow facility structure Management methods Power and leadership structure Risk and reward structure Culture and attitude

However, a more careful examination of the existing literature (Zhang and Dilts, 2004 ;Vickery et al., 2003; Hemila, 2002; Christopher, 1998; Joyce et al., 1997; Bowersox and Closs, 1996; Williamson, 1991; Courtright et al., 1989; Hofstede, 1978) will lead us to a more comprehensive structure of what should be the key critical supply chain components, the branches of the previous identified supply chain business processes, that is what kind of relationship the components may have that are related with suppliers and customers accordingly. Bowersox and Closs states that the emphasis on cooperation represents the synergism leading to the highest level of joint achievement (Bowersox and Closs, 1996). A primary level channel participant is a business that is willing to participate in the inventory ownership responsibility or assume other aspects financial risk, thus including primary level components (Bowersox and Closs, 1996). A secondary level participant (specialized), is a business that participates in channel relationships by performing essential services for primary participants, thus including secondary level components, which are supporting the primary ones. Also, third level channel participants and components may be included, that will support the primary level channel participants, and which are the fundamental branches of the secondary level components. Consequently, Lambert and Coopers framework of supply chain components, does not lead us to the conclusion about what are the primary or secondary (specialized) level supply chain components ( see Bowersox and Closs, 1996, p.g. 93), that is what supply

chain components should be viewed as primary or secondary, and how should these components be structured in order to have a more comprehensive supply chain structure and to examine the supply chain as an integrative one (See above sections 2.1 and 3.1). Therefore, as a consequence of reviewing the literature (Stevens, 1989; Ellram and Cooper, 1993; Mills et al., 2004; Lewis and Talalayevsky, 2004; Hedberg and Olhager, 2002; Hemila, 2002; Vickery et.al., 2003; Yusuf et al., 2003; Handfield and Bechtel, 2001; Prater et al., 2001; Kern and Willcocks, 2000;; Bowersox and Closs, 1996; Christopher, 1992; Bowersox, 1989), Baziotopoulos (2004) suggests the following supply chain components, which are as follows (Fig.8): 1. For Customer Service Management: Includes the primary level component of customer relationship management, and secondary level components such as benchmarking and order fulfillment. 2. For Product Development and Commercialization: Includes the primary level component of Product Data Management (PDM), and secondary level components such as market share, customer satisfaction, profit margins, and returns to stakeholders. 3. For Physical Distribution, Manufacturing support and Procurement: Includes the primary level component of Enterprise Resource Planning (ERP), with secondary level components such as warehouse management, material management, manufacturing planning, personnel management, and postponement (order management). 4. For Performance Measurement: This includes the primary level component of logistics performance measurement, which is correlated with the information flow facility structure within the organization. Secondary level components may include four types of measurement such as: variation, direction, decision and policy measurements. More specifically, in accordance with these secondary level components total cost analysis (TCA), customer profitability analysis (CPA), and Asset management could be concerned as well. In general, information flow facility structure is regarded by two important requirements, which are a) planning and Coordination flows, and b)operational requirements. 5. For Outsourcing: This includes the primary level component of management methods and the companys cutting-edge strategy and its vital strategic objectives that the company will identify and adopt for particular strategic initiatives in key the areas of technology information, operations, manufacturing capabilities, and logistics (secondary level components).

[edit] Literature
Rolf G. Poluha: Application of the SCOR Model in Supply Chain Management. Youngstown, NY 2006, ISBN: 1-934043-10-9.

[edit] References

This article or section does not cite its references or sources.

You can help Wikipedia by introducing appropriate citations.

Lambert, D & Cooper, M. (2000). Industrial Marketing Management. Volume29, Issue 1 , January 2000, Pages 65-83

[edit] See also

APICS Beer Distribution Game Bullwhip effect Customer Driven Supply Chain Demand chain management distribution Information technology management Logistic engineering Logistics Liquid Logistics Management information systems Marketing Military Supply Chain Management Procurement Procurement outsourcing Reverse Auction Reverse logistics Strategic information system Supply Chain Security Supply chain Supplier relationship management Vendor Managed Inventory

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Categories: Cleanup from September 2006 | All pages needing cleanup | Articles lacking sources | Wikipedia spam cleanup | Commercial item transport and distribution | Supply chain management | Management | Marketing | Production and manufacturing | Distribution, retailing, and wholesaling
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