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Introduction

This chapter focuses on how TQ contributes to business strategy


and its implementation. It will,
-Describe the importance of quality
-Discuss the role of information in strategic planning and quality
focused decision,
-Explain what is Hoshin planning, and
-Describe the role of quality in strategy formulation and
implementation.

A few example of companies involve in strategic planning are


also given the highlight.
Strategic Planning
“A strategy is a pattern or plan that integrates
an organization’s major goals, policies, and
action sequences into a cohesive whole.”
James Quinn

Formal strategy includes:


• Goals to be achieved
• Policies to guide or limit action
• Action sequences, or programs,
that accomplish the goals 2
Tasks Accomplished
by Strategic Planning
• Understand important customer and
operational requirements
• Optimize use of resources and ensure bridging
between short-term and longer-term
requirements
• Ensure that quality initiatives are understood
at all organizational levels
• Ensure that work organizations and structures
will facilitate accomplishment of strategic plan
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Leading Practices -
Strategic Planning
• Active participation of top management,
employees, customers, suppliers
• Systematic planning systems for strategy
development and deployment, including
measurement, feedback, and review
• Use of a variety of external and internal data
• Align short-term action plans with long-term
strategic objectives, communicate them, and
track progress
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Strategic Planning
in the Baldrige Criteria
The Strategic Planning Category examines how an organization
develops strategic objectives and action plans. Also examined
are how chosen strategic objectives and action plans are
deployed and how progress is measured.
2.1 Strategy Development
a. Strategy Development Process
b. Strategic Objectives
2.2 Strategy Deployment
a. Action Plan Development and Deployment
b. Performance Projection

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Strategic Planning Process
Reason for existence Future intent Attitudes and policies

Mission Vision Guiding Principles

Environmental assessment Capabilities and risks

Strategies Broad statements of direction

Strategic Objectives Things to change or improve

Action Plans Implementation

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Mission
• Definition of products and services, markets,
customer needs, and distinctive competencies
• Solectron: “…to provide worldwide
responsiveness to our customers by offering
the highest quality, lowest total cost,
customized, integrated, design, supply chain,
and manufacturing solutions through long-
term partnerships based on integrity and
ethical business practices.”

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Vision
• Where the organization is headed and what
it intends to be
– Brief and memorable - grab attention
– Inspiring and challenging - creates excitement
– Descriptive of an ideal state - provides
guidance
– Appealing to all stakeholders - employees can
identify with
• Solectron: “Be the best and continuously
improve”
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Guiding Principles
  
Definition

Broad philosophy that guides an organisation


throughout its life in all circumstances,
irrespective of changes in its goals, strategies,
type of work, or the top management.
TQM and Strategic Planning in
Branch-Smith Printing Division
Malcolm  Baldrige National Quality Award 2002 Award
Recipient, Small Business Category
Branch-Smith Printing’s focus on the importance of quality and
on meeting customer needs is highlighted in its strategic
objectives: to continuously improve business results, become the
partner of choice for its customers, and become the employer of
choice.
To achieve these objectives, the company uses a comprehensive
strategic planning process and incorporates continuous
improvement processes throughout the organization.
Policy Deployment
(Hoshin Kanri)
• Top management vision leading to long-term
objectives
• Deployment through annual objectives and
action plans
• Negotiation for short-term objectives and
resources (catchball)
• Periodic reviews

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HOSHIN KANRI
Hoshin kanri is a method devised to capture and cement
strategic goals as well as flashes of insight about the
future and develop the means to bring these into reality.

Also called Policy Deployment or Hoshin Planning, it is


a Strategic planning/Strategic management methodology,
based on a concept popularised in Japan by Professor
Kaoru Ishikawa in the late 1950s when he said that each
person is the expert in his or her own job and Japanese
TQC (Total Quality Control) is designed to use the
collective thinking power of all employees to make their
organisation the best in its field.
The hoshin planning process basically consists of the following
steps:
1) identification of critical business issues that the organization
faces;
2) establishment of business objectives to address these issues;
3) definition of the company's over-all goals;
4) development of strategies that support the over-all goals;
5) definition of sub-goals or tactics that support each strategy;
6) establishment of metrics or indicators for measuring process
performance; and
7) establishment of business fundamental measures. 

The first 3 steps of this process are handled by top management,


with the defined over-all goals supported by the rest of the
organization through steps 4-7.
HOSHIN PLANNING
PROCESS
5 TQM Deployment Mistakes - And How
To Avoid Them
There are five problems in TQM deployments, which, if not
handled well, will derail a deployment effort. By recognizing
these mistakes and working to avoid them, a team can stay on
track.
Problem #1: Leadership Indifference
Support and commitment for a TQM deployment from the
leadership of an organization is the key driver for success.
Leadership must walk the talk and continuously emphasize
the importance of TQM at all forums. Support should be
forthcoming not only from senior leadership, but also from
leadership at all levels in the organization. No amount of
good intentions, resources, effort or time will make up for
missing sustained leadership support.
Problem #2: Faulty Deployment Strategy
A deployment strategy helps to align organizational business
goals to expected deployment results and to maintain the
sustenance of TQM in the organization.  Lack of alignment
may cause confusion among the key stakeholders and
associates about the value of the entire effort; this gap delays
deployment in many organizations.
Problem #3: Stress on Training and
Certification
Training and certification are important aspects of an
overall TQM deployment effort because they build
competency within the organization. But sometimes
teams are more focused on training and certification
goals, and fail to support project execution. Without
adequate mentoring and coaching support after their
initial training, Belts may select projects simply to meet
the certification targets or projects may be inordinately
delayed.
Problem #4: Incorrect Project
Selection
A lack of focus on project selection and prioritization
can lead to projects that lack data or business focus or
projects focused on process areas that are outside the
Green Belts’ and Black Belts’ realm of control. This
results in delayed or scrapped projects, and quick
disillusionment among the Green Belts and Black
Belts.
Problem #5: Segregating the Effort
Every individual member of an organization has a
stake in its growth and progress; therefore, each is
responsible for contributing to and facilitating a
successful deployment. Yet sometimes deployment
teams fail to communicate the benefits of the TQM
deployment to the key stakeholders. Often only the
deployment team will make formal goals relating to
TQM results.

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