Master of Business Administration-MBA Semester 4 OM0016 QualityManagement Assignment Set- 1 Q1.

. Elucidate a relationship between strategy and data quality. Ans: Correlation Between Strategy and Data Quality Organisations are turning to be more dependent on data; nearly every modern organisation depends upon data and creates huge quantities of data. So, to meet the requirements of the organisation, a comprehensive data management program is necessary. But data is distinctive from other resources and requires diverse management techniques. Organisational framework required to tackle the above concerns often does not exist. Hence, it is necessary to develop a comprehensive data quality strategy that can address many of these issues. For example, as with many organisations, formal data quality strategy was not documented for the New Zealand Ministry of Health. A planned data quality framework was later introduced which informed the overall development of a data quality strategy for the Ministry of Health. All results of the development of the strategy were documented for each collection of data. And it enabled internal members to access all the information about data collection. The documents are: Guidelines for the usage of data and original purpose for the collection Roles and responsibilities Results of assessment of collection using data quality framework Action plan for quality improvement Current and previous data quality initiatives The data was available both on paper and Web. As defined by Joseph Juran, Data are of high quality, if they are fit for their intended uses in operations, decision-making and planning. Data are fit for use if they are free of defects and possess desired features. Hence, a data quality strategy in an organisation is a must to define the level of quality required to make the data useful. The data quality strategy also needs to look forward to the future potential uses of the data.

Q2. Briefly describe Deming's 14 points philosophy. Elucidate Juran's trilogy in brief. Ans: Demings 14 points Deming strongly believed that quality is the responsibility of the management. He derived the fourteen points that can be applied to both small and large organisations, to the manufacturing or service industry. They also apply to a department within a company. The Demings fourteen points are summarised as follows. 1. "Create constancy of purpose towards improvement". Substitute short-term response with long-term planning. 2. "Adopt the new philosophy". The significance is that the management should actually adopt his philosophy, rather than just expecting the workforce to do so. 3. "Cease dependence on inspection". If variance is reduced, there is no need to check manufactured items for defects, because there would not be any. 4. "Move towards a single supplier for any one item." Multiple suppliers mean variation between raw materials. 5. "Improve constantly and forever". Always strive to reduce variation. 6. "Institute training on the job". If people are not properly trained, they will not work the same way, and this will bring in variation. 7. "Institute leadership". Deming differentiates leadership and supervision. The latter is number and target based. 8. "Drive out fear". Deming considers management as counter- productive in the long term, because it keeps workers from acting in the organisation's best interests. 9. "Break down barriers between departments". Another central idea to TQM is the concept of the 'internal customer', that each department serves other departments that use its output, but not the management. 10. "Eliminate slogans". Another central idea to TQM is that it is not people who make mistakes; instead it is the process they are working within. 11. "Eliminate management by objectives". 12. "Remove barriers to pride of workmanship". Other problems outlined within an organisation reduce worker satisfaction. 13. "Institute education and self-improvement".

14. "The transformation is everyone's job". Juran's trilogy It consists of Quality planning, Quality control and Quality improvement. Dr. Jurans pillars for the trilogy are as follows: 1. Quality planning Identify customers Determine customer requirements Develop a product that can meet the customer requirements Develop processes Determine process controls 2. Quality control Evaluate actual performance Compare actual performance to quality goals Act (process improvement) on the difference between actual performance and the goals 3. Quality improvement Prove the need for improvement and identify specific projects for improvement Diagnose to discover causes Provide remedies Prove that the remedies are effective Provide control to maintain the gain Dr. Jurans philosophy underlined that in order to deliver quality products and services; every part of the organisation must be passionately involved, from market studies and research to customer service. It also requires a concentrated effort of management, statistics and technology that coordinate together throughout the company and must be planned and organised accordingly.

Q3. Describe the evolution of Six Sigma in General Electric. Explain the advantages and disadvantages of Six Sigma in brief. Ans: The recognised benchmark for Six Sigma implementation is General Electric (GE). The effort by General Electric in particular, was driven by the former CEO Jack Welch. He brought significant media attention to the concept and made Six Sigma a popular approach to quality improvement. In the mid-1990s, quality emerged as a concern of many employees at GE. Jack Welch invited Larry Bossidy, then CEO of Allied Signal, who has extraordinary success with Six Sigma, to talk about it at a corporate executive council meeting. The meeting drove the attention of GE managers and, as Welch stated, I went nuts about Six Sigma and launched it, calling it the most determined task the company has ever taken. To ensure success, GE changed its incentive compensation plan so that 60% of the bonus was based on financials and 40% on Six Sigma, and provided stock option grants to employees in Six Sigma training. In their first year, they trained 30,000 employees at a cost of $200 million and got back about $150 million in savings. From 1996 to 1997, GE increased the number of Six Sigma projects from 3,000 to 6,000 and achieved $320 million in productivity gains and profits. By 1998, the company has generated $750 million in Six Sigma savings over and above their investment, and would receive $1.5 billion in savings the next year. GE cites Six Sigma with a ten-fold increase in the life of CT scanner X-ray tubes, a 400% improvement in return on investment in its industrial diamond business, a 62% reduction in turnaround time at railcar repair shops, and $400 million in savings in its plastics business. One of the key learning GE discovered was that Six Sigma is not only for engineers. Welch observed the following: Plant managers can use Six Sigma to reduce waste, improve product consistency, solve equipment problems or create capacity. Human resource managers need it to reduce the cycle time for hiring employees. Regional sales managers can use Six Sigma to improve forecast reliability pricing strategies or pricing variation. For that matter, plumbers, car mechanics, and gardeners can use it to better understand their customers needs and tailor their service offerings to meet customers wants. After many years of implementation, Six Sigma has become a vital part of GEs company culture. In fact, as GE continues to acquire new companies, integrating Six Sigma into different business cultures is a significant challenge. Six Sigma is a priority in acquisitions and addressed early in the acquisition of process. Advantages of Six Sigma

The following are the benefits of Six Sigma: Six Sigma is influenced by the customer and thus aims to achieve maximum customer satisfaction and minimum defects. It targets customer delight and new innovative ways to exceed the customer expectations. Implementation of Six Sigma methodology leads to increase in profit and decrease in costs. Thus improvements attained are directly related to financial results. Six Sigma is successfully implemented in every business category including return on sales, return on investment, employment growth and stock value growth. Six Sigma targets variation in processes and focuses on the process improvement instead of final outcome. Six Sigma is a potential methodology as compared to other quality programs as it focuses on prevention on defects rather than fixing it. It is thoughtful to the entire business processes and training is integral to the management system where the top down approach ensures that every good thing is capitalised and every bad thing is quickly removed. Disadvantages of Six Sigma Though SIX Sigma is a very beneficial concept, it does have some drawbacks. The following are the disadvantages of Six Sigma: The Six Sigma critics are being arguing about applicability of Six Sigma. They suggest that the quality standards should be according to specific task and measuring 3.4 defects per million as standard leads to more time in areas which are less profitable. Six Sigma emphasises on the rigidity of a process which essentially contradicts innovation and kills creativity. An innovative method means deviations in production, redundancy, unusual solutions and insufficient study which are opposite to Six Sigma principles. People contend that Six Sigma is simply a re-branding of continues improvement techniques and tools. Hence it promotes outsourcing of improvement projects with lack of accountability. Six Sigma implementation continuously require skilled work force. Therefore, control and employee dedication are hard to accomplish if it is not implemented regularly. While changing over the theoretical concepts into practical applications there are lot of real time barriers which needs to be resolved.

Q4. What were the improvements made to QMS? Why do think management responsibility is an essential requirement of QMS? Ans: Improvements made to Quality Management Systems One of the changes made between 1994 and 2000 in the ISO 9000 family of quality management system standards is the language used. Table depicts a simple count of the number of times certain words are found in each of the versions of ISO 9001. These reflect the main forces of the new standard: Increased customer focus Process approach (at the expense of procedural documentation) Continuous improvement Skill-based approach to human resource management

Change in Vocabulary in ISO 9001:2000

The adoption of a process approach reflects the changes in management thinking and improved process management delivers a better performance in most organisations. The standard now clearly recognises the process-oriented nature of many organisations. It also addresses all important areas such as risk assessment, relationship and interactions between departments, the internal customer/supplier chains and the critical one of capability. Therefore, the revised standard is a major step forward from the earlier versions. It pays main attention to the management of people, an area which many organisations have neglected in their past quality initiatives, particularly those concerned with documenting quality systems.

Organisations making the transition from the 1994 version to ISO 9002:2001 are finding how important are the management of skills, including those of the auditors (external as well as internal). A mindset change is required from the procedures-based approaches which led to changes in mechanistic and bureaucratic systems. With understanding, commitment and the right attitude, particularly in the senior management, a quality management system can support a dynamic organisation. It also helps to achieve its aim and objective through a thorough understanding of the hows. The ISO 9000:2000 family of standards is now much more associated with the EFQM Excellence Model in terms of the spontaneous appealing: direction-process-people-performance structure. Managerial responsibility plays a very important role in the QMS. It is essential to retain and manage the system components. Customer needs/requirements The organisation must focus on customer needs and specify them as defined requirements for the organisation. The aim of this is to achieve customer assurance in the products and/or services provided. It is also necessary to ensure that the defined requirements are clearly understood and amply met. Quality policy The organisation must define and publish its quality policy, which forms an element of the corporate policy. Complete commitment is required from the senior management to ensure that the policy is communicated, understood, implemented and maintained at all levels in the organisation. It should, therefore, be authorised by top management and signed by the chief executive, or equivalent signatories. Quality objectives and planning Organisations must publish quality objectives and define the responsibilities of each function and level in the organisation. A manager reporting to top management, with the necessary authority, resources, support and ability must be given the responsibility to coordinate, implement and maintain the quality management system. He must also resolve any problem and ensure prompt and effective corrective action. This includes responsibility for ensuring proper handling of the system and reporting on needs for improvement. Those who control sales, service operations, warehousing, delivery and reworking of non-conforming product or service processes must also be identified. Management review Management reviews of the system must be carried out by top management at defined intervals, with records to indicate their actions. The effectiveness of these actions must be considered during subsequent reviews. Reviews include data on the internal quality audits,

customer feedback, product conformance analysis, process performance and the status of preventive, corrective and improvement actions. Quality manual The organisation must prepare a quality manual that is appropriate. It must include the following: A quality policy Definition of the quality management system; its scope, exclusions and more. Description of the interaction between different processes of the quality management system Documentation of procedures required by the QMS In the quality manual for a large organisation it is convenient to indicate the existence and contents of other manuals containing the details of procedures and practices in operation in specific areas of the system. Control of quality records Quality records must demonstrate conformance to requirements and effective operation of the quality management system. Quality records from suppliers also need to be controlled. This includes record identification, collection, indexing, access, filing, storage and disposition. In addition, the retention time of quality records must be established.

Q5. Explain the goals and programs of strategic plan. What are the reasons of failure of the strategic plans? Ans: Goals are specific immediate or ultimate time-based measurements to be achieved by implementing strategies in quest of the companys objectives. For example, to achieve sales of Rs.3 million in two years time, goals should be quantifiable, reliable, practical and realisable. They can relate to factors like market (sizes and shares), goods, funds, prosperity, operation and competency. A goal should be able to: Describe a future end-state desired outcome that is encouraging of the mission and vision. Shape the way ahead in actionable conditions. Applicable where there are obvious choices about the future.

 Put planned focus into the organisation specific ownership of the objective should be assigned to people within the organisation. Work well where things are changing fast. Goals should be apt for long-term environments that have limited choices about the future. Action plans The Action Plan identifies the specific steps undertaken to achieve the initiatives and strategic objective of the organisation. Each initiative has a sustaining Action Plan(s) attached to it. Action Plans are executed toward operations, actions and processes. They describe who does what, when it will be achieved, and how the organisation knows when such steps are accomplished. Action Plans necessitate the control of progress on objectives, for which measures are needed. The execution of Action plans in an organisation is in the following manner:

Execution of Action Plan Characteristics and execution of action plans Organisations face many challenges in todays unstable economy competitive battles, increased expenses, decreased margins and many other internal and external forces. In order to shore up their companies responses to these factors, todays leaders must be able to take the plans they place for their organisations and turn them into results. Unfortunately, too many companies struggle to bridge the gap between goals and results they create concrete and rational plans, but are unable to execute properly. Following is process of executing action plans: 1. Assigning responsibility for the successful completion of the Action Plans. The roles and responsibilities should be assigned clearly in definite terms.

2. Featuring all required steps to achieve the Initiative that the Action Plan is sustaining. The exact area of the action to be taken must be identified. 3. Establishing a time frame for the completion each steps. The exact time of undertaking the action should be defined. 4. Establishing the resources required to complete the steps. The financial concerns related to the need of the resources in order to accomplish an action should be identified. 5. Defining the specific actions (steps) that must be taken to implement the initiative. Determine the deliverables (in considerable terms) that should result from completion of individual steps. Identify in-process measures to ensure the processes used to carry out the action are working as intended. Define the expected results and milestones of the action plan. 6. Providing a concise status report on each step, whether completed or not. The communication process followed in the process must be recognised and the level of the implementation of the action plans should also be acknowledged. Action Plan execution requires that the organisation has answered the Who, What, How, Where, and When questions related to the project or proposal that impels strategic execution. Synchronisation with lower level sections, administrative and operating employees is important since they will execute the Action Plan in the form of specific work strategy. There are many reasons why strategic plans fail, especially due to: Failure to execute the four key organisational hurdles which are: Cognitive hurdle Motivational hurdle Capital hurdle Political hurdle Failure to comprehend the needs of the customer such as: The needs and the reasons for a want of a particular product Examine the real need for the product Inadequate or incorrect marketing research

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 Inability to forecast environmental reaction and factors Challenges from the competitors which include: Brand fighting Financial war/ Price Government interference Over-estimation of resource availability. The ability of the employees, equipment, resources and processes to handle the new strategy Failure to train new employee and develop innovative management skills. Failure to coordinate within the organisation. Failure to attain upper-level management commitment. Failure to involve the management right from the scratch. Failure to obtain sufficient company resources to complete a particular task in definite time period. Failure to attain employee commitment which includes: New strategy and ideas not well communicated to employees. No incentives provided to the workers to embrace the implementation of the new strategy. Under-estimation of time requirements. No critical path analysis done. Failure to follow the plan which includes: No adherence to the plans once the initial planning is over. No account of progress against the set plans and the planned strategies. Failure to manage alterations which includes: Inadequate understanding of the domestic confrontation to change. Lack of vision on the relationships between processes, expertise and organisation.

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 Inadequate information sharing among stakeholders.

Q6: What are the characteristics of Ideal indicator? What are the two Six Sigma models undertaken for Quality improvement? Ans: An ideal indicator should have the following key characteristics: (i) (ii) (iii) (iv) (v) (vi) indicator is based on standardised definitions, and described thoroughly and completely indicator is highly specific and sensitive, indicator is applicable and consistent; indicator distinguishes well the results obtained after the changes made to enhance the quality; indicator relates to evidently exclusive events for the user (example, if meant for service providers, it is relevant to service practice); indicator permits useful comparisons; andindicator is evidence-based.

Benefits of the Indicators for Quality Improvement: Brings assured indicators together into one place. Allows the management to benchmark and measure quality. Encourages teams to work together to improve services and the production. Six Sigma is another form for quality improvement. The phrase comes from its use in statistics of the Greek Letter (sigma) to signify Standard Deviation from the mean. Six Sigma is a measurement-based approach for process improvement and problem reduction in an organisation. This is undertaken through the use of two Six Sigma models: DMAIC and DMADV. DMAIC (define measure, analyse, improve, control) is an improvement system for existing processes looking for improvement. DMADV (define, measure, analyse, design, verify) is an improvement approach used to expand new processor products at Six Sigma quality levels.

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