Transcript Managing Quality Integrating the Supply Chain

Chapter 3
Global Supply Chain
Quality and
International Quality
Standards
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3-1
Global Supply Chain Quality and
International Quality Standards
Chapter 3







Managing Quality for the Multinational Firm
Quality Improvement: The American Way
Quality Improvement: The Japanese Way
Quality Improvement: The European Way
ISO 9000:2000
Quality Improvement: The Chinese Way
Are Quality Approaches Influenced by Culture?
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3-2
Global Supply Chain Quality and
International Quality Standards
1- Managing Quality for the Multinational Firm

Because of globalization,
companies are facing more
challenges.

Firms seek to be global to
gain new markets.
U.S. Trade 1960–2010
Source: U.S. Department of Commerce
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3-3
Global Supply Chain Quality and
International Quality Standards
1- Managing Quality for the Multinational Firm
There are variety of mechanisms that firms use in globalizing:

Licensing: a US corporation can allow foreign firms to sell in restricted
markets while using the design of the original designer. It involves the
sale of some product with another trademark in different countries.

Partnering: this agreement is often reached when 2 firms have
technology, products or access to markets that each other wants.

Globalization: an approach to capture international markets. It consists
of changing the nature of a firm business by establishing production and
marketing facilities in foreign markets. These firms encounter changes
in:

Physical Environment: firms locate themselves near or far away from natural
resources.
U.S. Trade 1960–2010
Source: U.S. Department of Commerce
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3-4
Global Supply Chain Quality and
International Quality Standards
Managing Quality for the Multinational Firm


Task Environment: firms find themselves having to deal with complex
regulatory structures when establishing operations in foreign countries.
Firms should understand international law.
Ex: regulations concerning tobacco vary a great deal from one country to
another.

Social Environment: it refers to cultural factors such as language, business
customs, customer preference…
Exporter: Firms produce their products and ship them
internationally. Exportation has a high shipping costs, but
helps avoid problems.
U.S. Trade 1960–2010
Source: U.S. Department of Commerce
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3-5
Global Supply Chain Quality and
International Quality Standards
1- Managing Quality for the Multinational Firm
Global Factors that Affect Quality-related Decisions
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3-6
Global Supply Chain Quality and
International Quality Standards
1- Managing Quality for the Multinational Firm

Example of Changing the Physical Environment:
Wages and Costs in Mexico (Average Hourly Compensation
for Manufacturing Workers in U.S. Dollars)
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3-7
Global Supply Chain Quality and
International Quality Standards
Managing Quality for the Multinational Firm
Export Quality Model
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3-8
Global Supply Chain Quality and
International Quality Standards
2- Quality Improvement: The American Way

The Baldrige Performance Excellence
Program: the success of this model influenced
international practice. It applies on small and large
firms in the manufacturing, health care, education
not-for-profit, and service sector.

Focuses on business results: firms should
show outstanding results concerning
performance, customer satisfaction…

No prescriptive and adaptable: the criteria of
the results do not specify which tools or
techniques a company should use to improve.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
The Baldrige Award
3-9
Global Supply Chain Quality and
International Quality Standards
2- Quality Improvement: The American Way

Supports company-wide alignment of goals
and processes: alignment between strategic
goals and operational plans helps foster a
learning-based system.

Permits goal-based diagnosis: By assessing
approach, deployment, and results in several
areas, firms are able to assess their current
strenghts and areas for improvement. Once
areas for improvement are identified, these
can prioritized and tackled one by one.
The Baldrige Award
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 10
Global Supply Chain Quality and
International Quality Standards
Quality Improvement: The American Way
The Baldrige model consists of
seven interrelated
categories:
1.
Category 1: Leadership:
evaluate to what extent
management is involved in
reinforcing goals, values,
customer involvement…
2.
Category 2: Strategic
planning: focuses on how the
company establishes
strategic directions and
tactical action plans.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 11
Global Supply Chain Quality and
International Quality Standards
Quality Improvement: The American Way
1.
2.
Category 1: Leadership:
Category 2: Strategic planning:
3.
Category 3: Customer Focus: the company should be successful in
serving the customer.
4.
Category 4: Measurement, Analysis and Knowledge Management:
relates to the firm’s selection, management and use of information to
support and improve company performance.
5.
Category 5: Workforce Focus: the goal of the company is to use the
full potentiel of its workforce.
6.
Category 6: Operations Focus: it includes customer focus, work
system, design for services and products…
7.
Category 7: Results: consists of graphs and tables that demonstrate
the results of the firm.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 12
Global Supply Chain Quality and
International Quality Standards
Quality Improvement: The American Way
The Baldrige Process
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 13
Global Supply Chain Quality and
International Quality Standards
Quality Improvement: The American Way
The Baldrige Process:
1st stage:
1.
1st step is eligibility determination: for Baldrige only firms chartered in
US are eligible for National Institute of Standards and Technology. Once
eligibility is established , the applicant send the application to NIST.
2.
2nd step is Review: the applicant is subject to the 1st round review of
Baldrige examiners.
3.
3rd step is Consensus: during this phase, between 5 and 8 examiners
participate in a conference to determine a consens
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 14
Global Supply Chain Quality and
International Quality Standards
Quality Improvement: The American Way
The Baldrige Process:
2nd Stage

4th step is Consensus review: once consensus reached, the judges receive
consensus report.

5th step is Judge site visit: applicants with a high scoring granted a site visit.
3rd Stage

6th step is site visit review: 4 to 6 examiners of judges visit the firm for one
week: 2 to 3 days in the form and 2 to 3 days in the hotel to write the report. The
report consist of: strengths, area for improvement…

7th step is review and recommand winners: the feedback report include the
scoring summary, the individual scoring range, the scoring distribution, the
examiner comments.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 15
Global Supply Chain Quality and
International Quality Standards

Quality Improvement: The American Way
Even if a company is not selected for the award, the
intensive investigation will supply invaluable
information.

Being a Baldrige examiner is a very prestigious and
time-consuming distinction. The job is intensive and
requires a dedication to the end-product. It is also
performed gratis – for no pay.

Baldrige examiners must be willing to give up approximately
10% of their time during an entire year to fulfill their
responsibilities
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 16
Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way
Deming Prize
Policy
Deployment
New Product Development
Maintenance and Improvement
Management System
Information Analysis
Human Resources Development
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 17
Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way
Lean Production
Anything that does not add value for the customer
should be eliminated
Group of techniques or systems focused on optimizing
quality processes
A productive system whose focus is on optimizing
processes through the philosophy of continual
improvement
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 18
Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way
Shingo’s seven wastes
1.
2.
3.
4.
5.
6.
7.
Waste of overproduction
Waste of waiting
Waste of transportation
Waste of processing itself
Waste of stocks
Waste of motion
Waste of making defective products
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 19
Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Japanese Way
Japanese Total Quality Control (TQC)






Visibility
In-process Inspection
N = 2 Technique
Total Involvement of the workforce
The five S’s
Preventive Maintenance
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 20
Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The European Way
European Quality Award

Leadership

Strategy

People

Partnerships and Resources

Processes, Products, and Services

Customer Results

People Results

Society Results

Key Results
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 21
Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The European Way
European Quality Award
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 22
Comparision
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008
 Focus is for companies to document their quality
systems in a series of manuals to facilitate trade through
supplier conformance
Registration states a quality system is in place and being
adhered to
Standards are very broad and nonspecific, so they can
be adapted to many different industries and cultures
Recognized international quality standard that
businesses can follow
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 24
Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008
Three Standards:
1. ISO 9000:2008—Quality management systems:
Fundamentals and vocabulary
2. ISO 9001:2008—Quality management systems:
Requirements
3. ISO 9004:2008—Quality management: Guidelines for
Performance Improvement
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 25
Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008
ISO 9000:2008 Five Clauses:
1.
2.
3.
4.
5.
Quality Management System
Management System
Resource Management
Product Realization
Measurement Analysis and
Improvement
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 26
Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008
ISO 9000:2008 Five Clauses:
1. Quality Management System
General Requirements- establish, document,
implement, and maintain a quality management system
and continually improve its effectiveness in accordance
with the requirements of the international standard
Documentation Requirements- include a quality
policy and quality objectives; a quality manual;
documented procedures; documents to ensure effective
planning, operation, and control of processes; and
records required by the international standard.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 27
Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008
ISO 9000:2008 Five Clauses:
2. Management System
Top management shall ensure that customer
requirements are determined and are met with the aim of
enhancing customer satisfaction
Management shall establish a quality policy
Management shall ensure that quality objectives shall be
established
Management shall ensure that responsibilities and
authorities are defined and communicated.
Management shall review the quality management
system at regular intervals
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 28
Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008
ISO 9000:2008 Five Clauses:
3. Resource Management
 Determine and provide needed resources
 Workers will be provided necessary education,
training, skills, and experience
 Determine, provide, and maintain the infrastructure
needed to achieve conformity to product
requirements
 Determine and manage the work environment
needed to achieve conformity to product
requirements
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 29
Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008
ISO 9000:2008 Five Clauses:
4. Product Realization




Develop processes needed for product realization
Determine requirements as specified by customers
Plan and control the design and development for its products
Ensure that purchased product conforms to specified
purchase requirements
 Plan and carry out production and service under controlled
conditions
 Determine the monitoring and measurements to be
undertaken and the monitoring and measuring devices
needed to provide evidence of conformity of product to
determined requirements
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 30
Global Supply Chain Quality and
International Quality Standards
ISO 9000:2008
ISO 9000:2008 Five Clauses:
5. Measurement Analysis and Improvement
Plan and implement the monitoring, measurement, analysis,
and improvement process as needed
Monitor information relating to customer perceptions
Ensure that product that does not conform to requirements is
identified and controlled to prevent its unintended use or
delivery
Determine, collect, and analyze data to demonstrate the
suitability and effectiveness of the quality management system
Continually improve the effectiveness of the quality
management system
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 31
Global Supply Chain Quality and
International Quality Standards
IS0 9000:2008
ISO 9000:2008 Eight Principles:
1. Customer focus
2. Leadership
3. Involvement of people
4. The Process approach
5. A systems approach to management
6. Continual Improvement
7. Factual Approach to Decision Making
8. Mutually beneficial supplier
relationship
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 32
Global Supply Chain Quality and
International Quality Standards
IS0 9000:2008
An Example of the ISO Registration Process
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 33
Global Supply Chain Quality and
International Quality Standards
IS0 9000:2008
ISO 14000:
 International standard for environmental compliance
 Adoption in many countries is slow
 Firms with little environmental exposure will
adopt ISO 14000 first
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 34
Global Supply Chain Quality and
International Quality Standards
IS0 9000:2008
ISO 14000 Eight Elements











General Requirements
Environmental Policy
Planning
Environmental Aspects
Legal and other Requirements
Objectives and Targets
Environmental Management
Programs
Implementation and Operation
Structure and Responsibility
Training, Awareness, and
Competence
Environmental Management
System Audit
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.










Communication
Environmental Management
System Documentation
Document Control
Operational Control
Emergency Preparedness and
Response
Checking and Corrective Action
Monitoring and Measurement
Nonconformance and Corrective
and Preventative Action
Records
Management Review
3 - 35
Global Supply Chain Quality and
International Quality Standards
Quality Improvement-The Chinese Way
 Socialist market economy
 Low quality goods due to:
 Low Education of
Workers
 Lack of Experience
 Unfamiliar with Goods
 Short-term Workers
 GUANXI or Influence
 Personal
Relationships
 Bribery
Total Volume of Trade between the United
States and China
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 36
Global Supply Chain Quality and
International Quality Standards
Are Quality Approaches Influenced by Culture?
 United States
 Command-and-Control Oriented
 Results Oriented
 Japanese
 Based on Ethic of Consistency
 Emphasis on Reduction of Waste
 Europeans
 adopted broad standards that can be adapted to
the diverse nation-states in the European Union
 Satisfy Employees
 Care for the Environment
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 37
Global Supply Chain Quality and
International Quality Standards
Chapter Summary
Managing Quality for the Multinational Firm
Quality Improvement: The American Way
Quality Improvement: The Japanese Way
Quality Improvement: The European Way
ISO 9000:2000
Quality Improvement: The Chinese Way
Are Quality Approaches Influenced by
Culture?
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 38
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or
otherwise, without the prior written permission of the publisher.
Printed in the United States of America.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
3 - 39