MATERI 2

GLOBAL QUALITY
Chapter 3
Global Quality and International
Quality Standards

S. Thomas Foster,
Jr.
Boise State
University
PowerPoint
prepared by
Dave Magee
University of Kentucky
Lexington Community College
©2004 Prentice-Hall
Chapter Overview

 Managing Quality for the Multinational Firm

 Quality Improvement: The American Way
 The Malcolm Baldrige National Quality Award
 Quality Improvement: The Japanese Way
 Quality Improvement: The European Way
 ISO 9000:2000
 Are Quality Approaches Influenced by Culture?
 Managing Quality for the MNF
Slide 1 of 4

 Mechanisms That Firms Use In Globalizing

 Licensing
 By licensing, a U.S. corporation can allow foreign firms to sell
in restricted markets while using the design of the original
designer.
 Partnering
 Firms also seek international markets through joint ventures or
partnering.
 Globalization
 Globalization means that a firm fundamentally changes the
nature of its business by establishing production and marketing
facilities in foreign countries.
 We refer to these firms as multinational corporations.
 Managing Quality for the MNF
Slide 2 of 4

Global Factors That Affect Quality-Related

Decisions
Task
Environment:
Physical -Strukturekonomi
Environment: - skill karyawan
-sumberdaya alam Quality - kompensasi
- Tenaga kerja Management -teknologi

Social
Environment:
-Bahasa
-Adat istiadat
Figure 3.3
-Preferensi konsumen
-Pola komunikasi
Managing Quality for the MNF
Slide 3 of 4

 Exporting
 Another means of entering international markets is
to not globalize but become an exporter.
 Exporters produce their products and ship them
internationally.
 Firms that are entrepreneurial in nature and plan
their exports effectively tend to have higher quality
 For exporting firms, quality leads to lower price and
greater export success
Managing Quality for the MNF
Slide 4 of 4

Export Quality Model Figure 3.4

Firm Product
Performance
Characteristics Strategy

Low Price

Entrepreneurship

High Quality
Export Planning
Standardization Export Success

Promotion
Malcolm Baldrige National Quality Award
Slide 1 of 11

 Malcolm Baldrige National Quality Award

 The award is open to small (less than 500 employees)
and large firms (more than 500 employees) in the
manufacturing and service sectors.
 Itis not open to public-sector and not-for-profit
organizations.
 There can be only two winners per category each
year, which limits the number of yearly awards to six.
 Additional information on the Baldrige award
 www.NIST.gov
Malcolm Baldrige National Quality Award
Slide 2 of 11

 Key Characteristics of the MBNQA

 The criteria focus on business results. Companies must
show outstanding results in a variety of areas to win.
 The Baldrige criteria are nonprescriptive and adaptive.
Although the focus on the Baldrige is on results, the
means for obtaining these results are not prescribed.
 The criteria support company-wide alignment of goals
and processes.
 The criteria permit goal-based diagnosis. The criteria
and scoring guidelines provide assessment dimensions.
Malcolm Baldrige National Quality Award
Slide 3 of 11

Baldrige Award Framework Figure 3.5

Organizational Profile:
Environment, Relationships and Challenges

2 5
Strategic HR develop. &
planning management
7
Business
1 results
Leadership

3 6
Customer and Process
market focus management

4
Information and analysis
Malcolm Baldrige National Quality Award
Slide 4 of 11

MBNQA Categories
Category 1 Category 2

Award criteria for Focuses on how the

leadership. The extent to company establishes
which top management is strategic directions and how
involved in creating and it sets it tactical actions
reinforcing goals, values, plans to implement the
directions, customer strategic plans. Concerned
involvement and other with methods, measures,
issues. deployment, and
evaluation.
Malcolm Baldrige National Quality Award
Slide 5 of 11

MBNQA Categories

Category 3 Category 4
Information and analysis
relates to the firm’s
Addresses the customer and
selection, management, and
market focus. The processes
use of information to
for listening to and learning
support company processes
from customers and markets
and to improve firm
must be evaluated,
performance.
improved, and kept current.
Malcolm Baldrige National Quality Award
Slide 6 of 11

MBNQA Categories

Category 5 Category 6

Deals with human resources Examines the key aspects of

focus. The workforce is to process management. This
be enabled to develop and includes customer-focus in
use its full potential, design, delivery process
aligned with company design for services and
objectives. products, support
processes, and processes
relating to partners.
Malcolm Baldrige National Quality Award
Slide 7 of 11

MBNQA Categories

Category 7

Documents the results of

the other six categories and
requires a series of tables
and graphs that
demonstrate the
operational and business
results of the firm.
Malcolm Baldrige National Quality Award
Slide 8 of 11

 The Baldrige Process

 The first step is eligibility determination.
 The completed application is sent to the National Institute
of Standards and Technology (NIST).
 The application is reviewed by examiners and then by
judges, who will determine whether the application will be
given a consensus score by the examiners.
 Firms that are granted Baldrige site visits sometimes refer
to themselves as “Baldrige Qualified.”
 The site visit consists of a team of 4 to 6 examiners visiting
a company over a period not to exceed one week.
 One of the most important outcomes is examiner feedback.
Malcolm Baldrige National Quality Award
Slide 9 of 11

Baldrige Evaluation Process Figure 3.6

Stage 2 Stage 3
Receive applications Consensus review Site visit review

Select for site visit? Review and

Stage 1
Judges Yes
recommend winners
Independent review
Judges
No
No Yes
Feedback
Select for report to Feedback Feedback
consensus review? Yes applicant report to report
Judges applicant

No

Feedback
report to
applicant
Malcolm Baldrige National Quality Award
Slide 10 of 11

 Feedback Report
 Scoring summary is a synthesis of the most important
strengths and areas for improvement.
 Individual scoring range provides insight concerning
the relative areas of strength and areas for
improvement.
 Scoring distribution provides the percentage of
applicants for a particular year scoring in each of the
eight scoring bands.
 Examiner comments give feedback concerning the
organization.
Malcolm Baldrige National Quality Award
Slide 11 of 11

 Being a Baldrige Examiner

 Appointment to the board of Trustees for the MBNQA
Board of Examiners is a very prestigious designations.
 Examiners are unpaid volunteers, and must be willing
to give up approximately 10% of their year to serve as
an examiner.
 State Awards
 Full-Baldrige approach
 Baldrige-lite approach
 Multilevel approach
Quality Improvement: The Japanese Way

 Deming Prize
 Awarded to individuals and groups who have
contributed to the field of quality control.
 OtherJapanese Contributions to Quality
Thought
 Juran stated that the genius of the Japanese was in
their ability to maintain a focus on the minutia and
detail associated with process improvement.
 There are several uniquely Japanese contributions
that are a part of the Japanese approach to
production and service.
Deming Prize for Quality
Slide 1 of 7

 Deming Prize
 The Deming Prize for quality was established in 1951 by
the Japanese Union of Scientists and Engineers (JUSE).
 Three categories of awards
 Deming Application Prize for Division
 Deming Application Prize for Small Business
 Quality Control Award for Factory
 There is no limit on the number of companies that can
receive the award in a given year.
 The Deming Prize is much more focused on processes
than is the Baldrige.
Deming Prize for Quality
Slide 2 of 7

 Deming Categories
 Policy

 Organization and Operations

 Collecting and Using Information
 Analysis

 Planning for the Future

 Education and Training
 Quality Assurance
 Quality Effects

 Standardization

 Control
Deming Prize for Quality
Slide 3 of 7

Deming Categories

Policy Org. and Operations

The first category of the The organization and

Deming Prize addresses operations portion of the
the areas of management Deming application
of quality policy, quality requires the applicant to
formation, policy document processes for
correctness and clarifying authority and
consistency, and related responsibility, and related
topics. topics.
Deming Prize for Quality
Slide 4 of 7

Deming Categories

Information Analysis

The information that is The analysis category of

collected for this item the Deming Prize covers
includes information that the areas of selection of
is gathered on the outside priority problems and
and inside. themes, correct use of
analytical methods, and
use of statistical methods.
Deming Prize for Quality
Slide 5 of 7

Deming Categories

Planning for the Future Education & Training

To plan well for the Applicants document plans

future, firms must and accomplishments
understand their present relating to education and
condition well, which is training.
the documentation
required for this category.
Deming Prize for Quality
Slide 6 of 7

Deming Categories

Quality Assurance Quality Effects

As discussed in Chapter 1, Quality effects relate to

quality assurance has to do the documentation of
with the design of products benefits, outcomes, and
and the new product results of quality
development process. improvement.
Deming Prize for Quality
Slide 7 of 7

Deming Categories

Standardization Control

The systems of setting The applicants describe

standards, monitoring how they are using SQC,
performance against the control points, control
standards, and revision of items, statistical thinking,
standards are documented. and the current state of
control in the company.
Other Japanese Contributions to Quality
Slide 1 of 7

 Lean Production
 Japanese Total Quality Control (TQC)
 Visibility
 In-Process Inspection
N = 2 Technique
 Total Involvement of the Workforce
 The Five Ss
Other Japanese Contributions to Quality
Slide 2 of 7

 Lean Production
 Two views emerge in the literature
that pertain to Lean (a.k.a. just-in-
time (JIT) manufacturing).
 The first view of Lean is a
philosophical view of waste
reduction. This view asserts that
anything in the process that does not
add value for the customer should be
eliminated.
 The second view of Lean is a systems
view stating the JIT is a group of
techniques or systems focused on
optimizing quality processes.
Other Japanese Contributions to Quality
Slide 3 of 7

 Japanese Total Quality

Control
 Justas the Japanese Lean
approach requires attention to
detail in every aspect of the
process, so does the TQC
approach.
 Thisattention to detail runs
deep in the Japanese culture.
Other Japanese Contributions to Quality
Slide 4 of 7

 Visibility
 Problems must be made visible before they can be
addressed.
 Andon or warning lights
 Line-stop authority
 In-Process Inspection
 All work is inspected at each stage of the process.
 Workers inspect their own work.
Other Japanese Contributions to Quality
Slide 5 of 7

N = 2 Technique
 TheN = 2 technique is an alternative to acceptance
sampling.
 Usually, an acceptance sampling plan involves rules such as:
 If 2 or fewer defects, accept the lot.
 If more than 2 defects, reject the lot.
 Total Involvement of Workforce
 Horizontal deployment means that all departments are
involved in quality.
 Vertical
deployment means that all levels of management
and workers are actively involved in quality.
Other Japanese Contributions to Quality
Slide 6 of 7

 The Five S’s. The five Ss are a sequential process

that companies follow to literally “clean up their
acts.” The Ss are:
 Seri: organizing by getting rid of the unnecessary.
 Seiton: neatness that is achieved by straightening offices
and work areas.
 Seiso: cleaning plant and equipment to eliminate
dirtiness that can hide or obscure problems.
 Seiketsu: standardizing locations for tools, files,
equipment, and all other materials.
 Shetsuke: discipline in maintain the prior four Ss.
Other Japanese Contributions to Quality
Slide 7 of 7

 Quality Circles
 Are natural work teams made up of workers that are
empowered to improve processes they use.
 Preventive Maintenance (PM)
 The idea behind this concept is that the worst
condition a machine should ever by is on the day you
purchase it.
Quality Improvement: The European Way

 ISO 9000:2000
 Isthe European standard for
quality that has been expanded
worldwide.
 European Quality Award (EQA)
 The highest level is the EQA for
the most accomplished
applicant in a given year.
 The second level given is the
European Quality Prize for other
firms that meet the award
criteria.
European Quality Award
European Quality Award Model Figure 3.7

People People
management satisfaction

Policy and Customer Business

Leadership strategy Processes
satisfaction results

Impact on
Resources
society

Enablers Results
ISO 9000:2000
Slide 1 of 11

 Worldwide Impact
 On a worldwide basis, ISO 9000:2000 has had a much
more significant impact than any of the quality awards
in terms of the number of companies that have
implemented the approach..
 Focus of ISO 9000:2000
 The focus of ISO 9000:2000 is for companies to
document their quality systems in a series of manuals
to facilitate trade through supplier conformance.
 ISO
 Organization for International Standards
ISO 9000:2000
Slide 2 of 11

 Three Standards
1.ISO 9000:2000 - Quality management systems -
Fundamentals and vocabulary.
2.ISO 9001:2000 - Quality management systems -
Requirements.
- These are used for internal implementation,
contractual purposes, or for third-party registrations.
3.ISO 9004:2000 - Quality management - Guidelines for
Performance Improvement
- These include continual improvement and enhancing
overall performance.
ISO 9000:2000
Slide 3 of 11

 ISO 9001:2000 consists of 5 clauses.

 Clause 4: Quality Management System
 Clause 5: Management System
 Clause 6: Resource Management
 Clause 7: Product Realization
 Clause 8: Measurement, Analysis and Improvement
ISO 9000:2000
Slide 4 of 11

 ISO 9001:2000 Clause 4

 Quality Management System
 Includesdevelopment, design, implementation, and
maintenance of quality management documents.
 ISO 9001:2000 Clause 5
 Management System
 Outlinesmanagement’s responsibility in developing
and maintaining a quality management system.
ISO 9000:2000
Slide 5 of 11

 ISO 9001:2000 Clause 6

 Resource Management
 This includes providing needed resources, personnel,
facilities, and the environment necessary to get the work
done.
 ISO 9001:2000 Clause 7
 Product Realization
 These are all of the requirements, including processes,
documents, customer requirements, specifications, designs,
and quality processes needed to produce a product.
 Thisincludes selecting and developing suppliers in a way that
ensures that purchased components satisfy requirements.
ISO 9000:2000
Slide 5 of 11

 ISO 9001:2000 Clause 8

 Measurement, Analysis and Improvement
 This has to do with analyzing process data and using
the data to improve operations and service to the
customer.
 Thisincludes performing internal audits and
monitoring and measuring processes and products.
 Also included are corrective action preventive action
for improvement.
ISO 9000:2000
Slide 6 of 11

 Underlying Quality Management Principles

 Customer Focus
 Leadership

 Involvement of People
 The Process Approach
A Systems Approach to Management
 Continual Improvement
 Factual Approach to Decision Making
 Mutually Beneficial Supplier Relationship
ISO 9000:2000
Slide 7 of 11

 ISO 9000:2000 Registration Process

 Step 1: Inquiry
 Step 2: Contract with registrar
 Step 3: Phase 1 audit
 Step 4: Certification audit
 Step 5: Process audits (optional)
 Step 6: Final certification audit
 Step 7: Rolling certification (surveillance) audits
ISO 9000:2000
Slide 8 of 11

ISO 9000:2000 Registration Process

Step 1: Inquiry Step 2: Contract with
registrar

Client contacts Registration steps are

registrars to determined and a
investigate the terms price is negotiated. A
for registration and pre-assessment or
makes a selection. gap analysis may be
done.
ISO 9000:2000
Slide 9 of 11

ISO 9000:2000 Registration Process

Step 3: Phase 1 audit Step 4: Certification
audit
Every element of the ISO
Registrar performs an
9000 standard is
onsite audit of the
audited several times
documented quality
during the registration
system against the
process. During each
applicable standard. 3-year period, 100% of
the organization is
audited.
ISO 9000:2000
Slide 10 of 11

ISO 9000:2000 Registration Process

Step 5: Process audits Step 6: Final
(optional) certification audit
The client may choose Once the client’s
business processes documented quality
for auditing to the system has met the
applicable standard, applicable standard,
allowing the client to the registrar will
learn and experience conduct an audit to
the registrar’s determine the
system’s effective
auditing methods.
implementation.
ISO 9000:2000
Slide 11 of 11

ISO 9000:2000 Registration Process

Step 7: Rolling
certification audits
The registrar returns on
either 6 month or
annual cycle.
Sometimes referred
to as surveillance
audits.
ISO 14000

 ISO 14000
A series of standards that provide guidelines
and a compliance standard for environmental
compliance.
 ISO 14001
 The compliance standard for ISO 14000,
Environmental Management Systems.
 Uses the same basic approach as ISO 9000:2000
with documentation control, management
system auditing, operational control, control
of records, management policies, audits,
training, statistical techniques, and corrective
and preventive action.
Are Quality Approaches Influenced By
Culture?
Quality Approaches are Influence by
Culture

The US approach The Japanese The Europeans have

has historically approach is based on adopted broad
been command- an ethic of standards that can be
and-control consistency and adapted to the diverse
oriented. emphasis on nation states of the
reduction of waste. EC.
Summary

 Managing Quality for the Multinational Firm

 Quality Improvement: The American Way
 The Malcolm Baldrige National Quality Award
 Quality Improvement: The Japanese Way
 Quality Improvement: The European Way
 ISO 9000:2000
 Are Quality Approaches Influenced by Culture?