Summary Operational Excellence

1 Introduction
CONSIST OF:
 Quality in time
 TQM in organizations
 Founders of TQM

1.1 In time …
 1900>
Goods = rare > no sales problems
 1940> more specialisation
 Until 1960> more statistics to detect defaults
 Tot 1970> more rules and customer reports
 Tot 1980> customer as an individual becomes important
There is a big change compared with 1900 (Where the quality was not important, just happy we had
the product) today more important is what the product does, why I use it (the quality) because we
have too much of everything.

1.1.1 What is quality? 5 Approaches
 TRANSCENDENTAL APPROACH
- Quality is defined by image= subjective
 PRODUCT- APPROACH
- Quality defined by characteristics of a product
- =measurable
- E.g. Volvo tried to objectivize that it’s a good car
 USER-APPROACH
- Quality is defined by the expectation of the customer versus his experience = difficult
to measure
- Quality = marketing instrument
- Fitness for use; what do i need it for – how do i experience it
 PRODUCTION ORIENTATED APPROACH
- Quality defined by the scrap rate of the production process
- Waste in product (scraps) and in time (how do we optimize the process)
 VALUE DETERMINATION APPROACH
- Quality is determined by the price-quality ratio
- Different way; you can say I want a certain quality, but I also have a budget.
- < the highest quality for an honest price >

1.1.2 Quality vs. Reliability
 QUALITY
- Meet expectation of the customer at moment of purchase (today; does it fulfil my
requirements, is the product good, … )
 RELIABILITY
- Meet the expectation of the customer during a period after the purchase ( = time of
usage)
- How long in the future is this product quality wise being okay, how long it can last.


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,1.1.3 3 phases … striving for quality in organizations
PHASE 1: REALIZE
Realize what your customer wants and not
what you want.
 Produce according to standard
conditions
 ! Even though they might be
different from customers’
expectations!




PHASE 2: INTERNAL PHASE
 Attention for processes
 Strive for process control
(technically, not yet
organizational wise)
In order to working on quality, you have to
change your processes for the ending product.
You already know what you need but now you
need to work on it
Central question? What is specifically needed
to get the quality we need?
PHASE 3: INTEGRATION PHASE
 Attention customer service
 Quality within organization gets attention
 Logistics depth gets a responsibility
 Every worker gets the task of quality!
Once you have the quality – never lose the focus of the customer  requirements of the quality of the
customer changes every day
Solution? Get feedback from your customer

1.1.4 5 aspects of TQC “Total quality control”
QUALITY CONTROL
 Quality control CONCERNS the whole organization (not
only production) > TQM
 Quality is not only technically a problem anymore,
- It’s now an Organizational issue


It concerns it the whole organization  e.g. motor breaks down of a
regular car after 2 years – mostly they point at the production BUT very often not the case and this is wrong
thinking pattern can also be of the supplier for example. E.g. factory of chocolate found metal in their chocolate
and looked to the production while it was the supplier its fault




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,QUALITY MANAGEMENT
 WHAT? Put down the quality goals+ the road + means to reach the goals.
Boss at the top has the mission/vision - he has to set the goals, the road to take
QUALITY SYSTEM
 WHAT? The existence of an organisational structure where responsibilities, procedures and
processes are described.
 HOW? Quality manual
 ! Quality is never finished!
There are a lot of systems and a lot of tools to use  Choose between more freedom or stricter?
QUALITY COSTS
 COSTS? Quality is investing to avoid costs in the future
 Quality cost money, but not working on quality will cost you more – also depends of the sort
customer (how much quality do they want?)
SECURITY QUALITY
 Continuously evaluate
 Define quality plan
 Check regularly if you reach what you set as a goal
- Is the goal too high? Check the reports, reset your goals

1.2 The place of TQM in the organization
1.2.1 Processes
PRIMARY PROCESSES
 Processes that add value to the organisation
 Are the operational = sales, purchase and production
SECONDARY PROCESSES OR SUPPORTING PROCESSES
 Service processes that cause costs
- Logistic, bookkeeping department, HR department
 More and more outsourced= outsourcing
 Always smart goals!!
 If there are too wide; you can’t say or define to someone that you did a good job
OTHER PROCESSES
 Besturen= to drive
- the boss; he drives – he says the road – with vision mission/goals
 Beheersen (verbeterprocessen) = to master
- All the managers of the different processes, not the same as drive!! – they work towards the
goal
- There is a feedback from the master to the driver (called verification)
 Financial processes: org. infrastructure




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, 1.2.2 Primary processes > strive quality
Primary processes consist of purchase, sales and production
 They add value to the process
We look at:
 Quality management of purchase
 Quality management of production
 Quality management of sales
PURCHASE DEBT AND QUALITY
TASK? Provide the raw materials
What is important in his job?
 Time, Different types of blue, quantity, quality, price, …
What they do to work on quality  sourcing policy
 = Purchase action to sustain purchase
- Always ask different prices and compare different qualities
- > check up to supplier = necessary
 Means for quality improvement
- JIT
- make or buy
- co makership relation (bv school and internship))
- single sourcing
Volvo goes not to different supplier he picks one supplier (and supplier only one
customer) and then he can set the rules, the products, and you are
dependent of each other so not a lot will go wrong
PRODUCTION AND QUALITY
LEAN AND MEAN PRODUCTION
 WHAT? teaching the people in the factory how to be as sustainable/effective
- GOAL? Don’t lose time and money
- E.g. in a factory that they line on the floor how to walk/ how to find stuff, they use
flowcharts
- WHO? 6 sigma people do that
 Old days: down size / cost reduction
 Now: value stream mapping (take away overload activities)
- = perfection of the cooperation of processes
- = higher the added value of products and services
SO: look for sources of waste!
SALES AND QUALITY
 Customer service activity
 (See this later)




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