中国经济管理大学 MBA课堂笔记：《品质管理学》：Global Supply Chain Quality and International Quality Standards
Global Supply Chain Quality and International Quality Standards
中国经济管理大学/中國經濟管理大學
Global Supply Chain Quality and International Quality Standards
Chapter Outline:
Managing Quality for the Multinational Firm
Quality Improvement:
The American Way
The Japanese Way
The European Way
The Chinese Way
ISO 9000:2008
Are Quality Approaches Influenced By Culture?
Overview
The task of managing quality is affected by increased globalization. This chapter discusses the opportunities and obstacles created by globalization. The differences between regions of the world also include discussions of various quality approaches that have been developed in those regions and the awards that act as quality barometers within each.
In an increasingly globalizing economy, it is important to understand the approaches that various nations use to improve quality. It is clear that the trend is toward greater participation in a global economy. As a result, the worker of the future will need to adapt to approaches having roots in other cultures.
In this chapter, the global economy was discusses and the role quality plays in that world economy. We considered different quality models from different regions. From an integrative perspective, it is reasonable to borrow from all these models if that will help your firm perform better. The underlying theme in the chapter is the importance of learning from other cultures to compete effectively.
Discussion Questions
1. What are the advantages or disadvantages of licensing as a means of gaining access to foreign markets?
Through licensing, a firm expands its market and retains earnings made in a foreign market. With markets as large as
The disadvantages however can be large also. The firm shares its profits with a foreign firm, rather than selling the product or service itself in the foreign country.
2. What are the advantages and disadvantages of globalization? Provide an example of a firm that has engaged in globalization. What are some of the potential advantages and disadvantages of globalization for this particular organization?
The primary advantage of globalization is that a firm retains all of the profits from the sale of its products or services in a foreign country. This is a significant advantage when one thinks about the potential of a foreign market like
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As Figure 3-3 illustrates, the physical environment, the technical environment and the social environment affect quality. These factors are dependent upon the local culture to a great degree.
The primary disadvantage of globalization is that it is complicated and forces a firm to in essence "set up shop" in a foreign country. By going abroad, a firm's significantly change the physical environment, the task environment, and the societal environment in which they operate. This may result in a number of challenges, ranging from becoming familiar with a foreign culture to determining how to get the raw materials that a firm needs to manufacture its product to a foreign destination. IBM is an example of a company that engages in globalization. IBM manufactures products in many countries of the world. The major advantage to globalization for IBM is that it vastly increases the number of potential customers for its computer hardware products. However IBM’s dark-suit culture may be considered foreign in many parts of the world.
3. What motivates
Malcolm Baldrige was Secretary of Commerce from 1981 until his death in July 1987. Baldrige was a proponent of quality management as a key to this country’s prosperity and long-term strength. He took a personal interest in the quality improvement act that was eventually named after him and helped draft one of the early versions. In recognition of his contributions, Congress named the award in his honor.As Figure 3-6 on page 60 illustrates, the Baldrige award recognizes the interrelationship between the various facets of the organization.
There is great prestige in winning the Baldrige award. Firms that do not win the award but receive a site visit from Baldrige examiners, often include in their company brochures and other promotional material mention of themselves as being "Baldrige Qualified." The Baldrige Award, or even being Baldrige Qualified, helps firms attract high-quality suppliers, customers, and other stakeholders.
The attention to quality that being involved in the Baldrige award helps a firm establish a culture of quality and helps a firm rally its employees around quality improvement efforts.
4. Category 3 of the Baldrige criteria focuses on the importance of the customer in assessing the quality of the products and services that a firm sells. Why do you think the authors of the Baldrige criteria included this category? How is the customer important in assessing the quality of the products and services that a company sells?
Ishikawa’s second point is:
2. The first step in quality is to know the requirements of the customer.
Deming, Juran, Feigenbaum and Parasuraman, Zeithamel, and Berry. All directly address the customer. Figure 2-5 directly places Customer Role” at the Core of Quality Management
The Baldrige Awards’ category 3 directly speaks to the importance of the Customer:
To be successful in serving the customer, firms must understand the product and service attributes that are important to the customer. This is documented as well as how the firm assesses the relative importance of product or service features. The processes for listening to and learning from customers and markets also must be evaluated, improved, andkept current with changing business needs.
5. Category 5 of the Baldrige criteria focuses on workforce. Why do you think the authors of the Baldrige criteria included this category? Why is human resource management an important consideration in quality planning and management?
Baldrige’s category 5 directly addresses the Workforce:
The workforce is to be enabled to develop and use its full potential, aligned with company objectives. This involves developing an internal environment conducive to full participation and personal growth, including human resources development. This initiative is directed toward process and performance improvement. Employees must be empowered to understand and respond to changes in customer needs and requirements. To facilitate this learning, skill sharing and open communication with employees are necessary to provide a cohesive work system. The applicant outlines the systems in place that provide compensation, recognition, and workforce engagement.
The traditional economic definition for production defines the tools of production as
Land
Labor
Obviously without labor, production is impossible. The humanistic movement that started approximately 100 years ago recognizes the importance of an effective Human Resource policy. All of modern management theory, Maslow’s Hierarchy of needs, theories X, Y and Z, directly address the importance of the employee and the need to be inclusive and supportive.
6. Do you believe the Baldrige should include a category for not-for-profit organizations? If so, what adjustments should be made in the Baldrige criteria to make it applicable for this category?
The differences between a for-profit and a not-for-profit organization are vast. On page 57, the text outlines the purpose of the award:
The criteria focus on business results. Organizations must show outstanding results in areas such as financial performance, customer satisfaction, customer retention, product performance, service performance, productivity, supplier performance, and public citizenship
Given that not-for-profits tend to be service oriented, there are quite a few items that can be applied to the not-for-profit. The statement is also made that, the Baldrige criteria are non-prescriptive and adaptable. However the point must be made that a for-profit organization has a formal criteria for evaluating success, profit. The Baldrige Award is based upon maximizing profit. How does this apply to an organization that does not have profit as an evaluation tool?
7. If you were the CEO of a manufacturing firm, would you encourage your firm to apply for the Malcolm Baldrige award? Why or why not?
Even if a company is not selected for the award, the intensive investigation will supply invaluable information.
There is a three-stage process for the award. Figure 3-7 shows that at each step, a feedback report is given to the candidate. Baldridge examiners write this report, each of whom is an expert in his or her field.
Just participating in the process is a positive experience. The worst case would be a firm not being selected for the consensus review, Stage 2. This is a totally win-win situation.
8. If you were presented the opportunity to be a Baldrige examiner, would you accept it? Why or why not? Make your answer as substantive as possible.
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. An individual could learn a tremendous amount by being a Baldrige examiner, through the process of examining the firms that apply for the award. However, the downside of being a Baldrige examiner is the tremendous time commitment involved. According to Chapter 3, Baldrige examiners must be willing to give up approximately 10% of their time during an entire year to fulfill their responsibilities. In addition, Baldrige examiners are not paid. As a result, it takes a special type of person that is willing to give up as much time and loss of income that is necessary to be an effective Baldrige examiner.
9. How can firms use lean production to improve quality? Is lean production a useful concept for both service and manufacturing organizations?
There are two primary ways that firms can use JIT to improve quality. First, JIT is comprised of a group of techniques or systems focused on optimizing quality. Second, JIT is a philosophy that helps rally the members of an organization around the themes of reducing waste and improving quality. JIT is a useful concept for both service and manufacturing organizations. Although JIT originated in a manufacturing setting, its basic principles and philosophies are equally applicable in a service setting.
The focus of lean production is eliminating waste. Shingo’s Seven Wastes identifies the characteristics of waste as seen in Table 3-5.
Lean manufacturing is directed at reducing waste. On page 68, the text states that … anything in the process that does not add value for the customer should be eliminated. Given this view, quality problems cause scrap and rework and are wasteful
Following Shigeo Shingo’s philosophy, reducing waste directly increases quality.
10. Describe the concept of “visibility” in the context of the Japanese total quality approach. How does the concept of visibility help a firm identify problems in its production processes?
A noted example of the problems incurred by lack of vision is the Ford Pinto automobile.
In the 1970s, after Ford engineers discovered a design flaw in the Pinto that made it susceptible to fuel tank ruptures, analysts calculated how much it would cost to pay out death benefits to victims, compared with making the minor changes necessary to prevent exploding gas tanks.
The death benefits were cheaper, so they continued to manufacture defective cars, even as they lobbied US Congress to block new regulations that would require the changes regardless of cost. Hundreds of people died as a result.
The concept of visibility eliminates this problem. The Japanese empower any employee to stop the assembly line if a defect is observed. This allows attention to be focused on fixing the problem. This is a concept that has always been foreign to American industry. On page 69, the text makes the point that excess inventory, in fact, has the effect of hiding problems. Attention to lean manufacturing alleviates this.
11. In what sense does excess inventory act as a “security blanket” for manufacturing firms?
Excess inventory acts as a security blanket for a firm if the firm always has inventory readily available to substitute for parts that were scrapped or need to be reworked before they can be shipped. Having excess inventory is analogous to someone having excess money. If a person always has excess money available, it is easy to get into the habit of spending money foolishly or in a non-discerning manner. The same applies to excess inventory. If a firm has excess inventory readily available, there is no compelling motivation to eliminate scrap or rework. Conversely, if excess inventory is not available, there is a great incentive to eliminate scrap and rework.
12. Describe the concept of line-stop authority. If you were an operator in a production facility, would you want to have line-stop authority? Why or why not?
Line-stop authority pertains to the authority to stop a production line if a problem is identified. Line-Stop authority empowers the line worker. Quality control is now being conducted at the lowest possible level. A key point is that line-stop authority minimizes the possibility of quality problems persisting even though they have been identified. The alternative approach, off-line repair, does nothing to immediately solve the problem that caused the situation.
Key for this to function is having management aware of the positive effects of line-stop authority. If an employee fears retaliation for stopping the line, the entire process is non-functional.
13. Why is it a good idea for workers to inspect their own work?
It is a good idea for workers to inspect their own work for two reasons. First, if workers inspect their own work, they in effect become their own "inspectors," and must be satisfied with their own work before they pass it along the production line. Second, quality problems will be identified immediately, rather than several steps removed from an individual worker after additional effort has been put into a defective part. It is always cheapest to solve a quality problem at its origin, rather than waiting for someone downstream to catch it.
14. In what ways are the Malcolm Baldrige Award and the Deming Prize similar, and in what ways are they different?
Table 3-4 on page 67 address this point extremely well.
15. Is it appropriate to use the criteria for quality awards as a framework for organizational improvement and change? Why or why not?
Using the criteria for quality awards as the framework for organizational improvement forces change upon the corporate culture. If the corporate culture already emphasizes quality in a healthy way, a forced cultural change possibly does more harm than good.
However, the criteria for the awards contain the important elements that are necessary for quality improvement efforts. As a result, it provides firms a convenient checklist of activities to cover in their own quality improvement initiatives.
16. What are the major substantive differences between the quality awards discussed in the chapter and ISO 9000:2008? Are they intended for similar or entirely different purposes?
The focus of ISO 9000:2008 is for companies to document their quality systems in a series of manuals for the purpose of facilitating trade through supplier conformance.
The purposes of ISO 9000:2008 and the award programs are radically different. The purpose of ISO 9000:2008 is not to provide a framework for organizational improvement and change (although this can occur through the implementation of ISO 9000:2008). The focus of ISO 9000:2008 is for companies to document their quality systems in a series of manuals for the purpose of facilitating trade through supplier conformance.
The ISO 9000 process might be described as:
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
Once this is in place, the quest for a quality award is appropriate
17. Describe the purpose and the intent of the ISO 9000:2008 program. What are the advantages of becoming an ISO 9000:2008-certified company? Are there any disadvantages?
ISO (International Organization for Standardization) is an international developer of standards for industry. These standards are in place to enable making the development, manufacturing, and supply of products and services more efficient, safer, and cleaner. They make trade between countries easier and fairer.
The international standards which ISO develops are very useful. They are useful to industrial and business organizations of all types, to governments and other regulatory bodies, to trade officials, to conformity assessment professionals, to suppliers and customers of products and services in both public and private sectors, and ultimately, to people in general in their roles as consumers and end users.
ISO standards contribute to making the development, manufacturing and supply of products and services more efficient, safer and cleaner. They make trade between countries easier and fairer.
Pursuit of ISO 9000 is expensive and time-consuming. The question that management must ask is: What is the value of the certification?
18. Describe the purpose and the intent of the ISO 14000 program.
ISO 14000 is an international standard for environmental compliance. The compliance standard is ISO 14001, Environmental Management Systems. ISO 14001 uses the same basic approach as ISO 9000:2008 with documentation control, management system auditing, operational control, control of records, management policies, audits, training, statistical techniques, and corrective and preventive action. In addition to these controls, ISO 14001 includes quantified targets, established objectives, emergency and disaster preparedness, as well as disclosure of environmental policy. The purpose and intent of the ISO 14001 program is to certify firms as adhering to certain environmental compliance norms.
19. What are the pros and cons for an American firm that is considering pursuing ISO 14000 certification? If you were the CEO of a manufacturing firm, would you pursue ISO 14000. Why or why not?
Environmental control has become a major international issue. The economic and political problems that might be raised if a firm pursues ISO 14000 are great. As a result of the self-study process incorporated in the ISO standard, firms can possibly discover violations (or variances from standards) regarding some environmental topics such as hazardous waste. Once these firms discover violations, they are required to report these variations to the U.S. EPA. Even if the firm subsequently cleans up its problems, it may be subject to fines and penalties, which may be severe enough to put a firm out of business. As a result, the ISO 14000 certification process is sometimes problematic for American firms.
20. Do you believe quality approaches are influenced by culture? How?
As stated at the end of the chapter, culture has a great influence on corporate tradition:
· American companies are results-oriented. They are driven by the bottom line. As a result, if an aspect of quality appears to be expensive, it might well be ignored.
· Japanese culture is based on an ethic of consistency and reduction of waste. They lie on a small island with minimal resources. Almost all raw materials must be imported. The expense of this is obvious.
· European culture has its roots in the old medieval guild system. The effect is a “work as art” ethic.
· China, which is still evolving as the economic powerhouse, slips slowly into a free market economy.
As the developing nations join the current marketplace, we can assume that their culture will affect their attitude toward quality.
Denver International Airport Becomes ISO 14001 Certified
Case Study Questions
1. What do you view as the benefits of ISO 14001 adoption and implementation?
ISO 14000 is an international standard for environmental compliance. The compliance standard is ISO 14001, Environmental Management Systems. ISO 14001 uses the same basic approach as ISO 9000:2008 with documentation control, management system auditing, operational control, control of records, management policies, audits, training, statistical techniques, and corrective and preventive action. In addition to these controls, ISO 14001 includes quantified targets, established objectives, emergency and disaster preparedness, as well as disclosure of environmental policy. The purpose and intent of the ISO 14001 program is to certify firms as adhering to certain environmental compliance norms.
Environmental control has become a major international issue. The economic and political problems that might be raised if a firm pursues ISO 14000 are great. As a result of the self-study process incorporated in the ISO standard, firms can possibly discover violations (or variances from standards) regarding some environmental topics such as hazardous waste. Once these firms discover violations, they are required to report these variations to the U.S. EPA. Even if the firm subsequently cleans up its problems, it may be subject to fines and penalties, which may be severe enough to put a firm out of business.
2. Is ISO registration useful for airports? Why or why not?
The answer this question is totally dependent on the airport, it’s location and it’s competition. Or is it? Do all airports basically function in a common manner where the business of the airport is concerned? Do the customers think that the business or running an airline and the airport will ever be standardized? Is standardization of the business processes even a good idea? As discussed in the chapter, cultural and environmental issues will play a role in an airport’s registration. However, what incentive does an airport have to obtain registration? In most cities there is only one airport, so will registration really bring in more customers, improve profits, or enhance corporate goodwill?
3. How can the benefits of ISO registration extend outside the company?
In the case of ISO 14000, improving environmental issues being caused by the company, will have major impacts on the surrounding environment and community. Less environmental waste can lead to improved health in surrounding neighborhoods and employees. Less use of scarce natural resources also benefits society in general.
Wainwright Industries: An Entirely New Philosophy of Business Based on Customer Satisfaction and Quality
Case Study Questions
1. In its pursuit of improved quality, Wainwright emphasized two sets of initiatives: one based on improvements in its manufacturing operations (i.e., just-in-time manufacturing, computer-aided design) and the other based on human resource management (i.e., employee empowerment, profit sharing). Why was it necessary for Wainwright to emphasize both of these sets of initiatives? How are they related?
Wainwright's dual emphasis on improvements in manufacturing operations and human resource management seems to be the ideal formula for improving an organization's overall quality related efforts. As mentioned in the previous two chapters, a key to the effective implementation of any quality related initiative is the skills and level of motivation of a company's employees. By focusing on this aspect of quality management, while at the same time initiating improved manufacturing techniques, Wainwright seems to have struck the perfect balance.
The key to this discussion is in the case itself:
The results of the company’s continuous improvement efforts are linked to five strategic indicators, including safety, internal customer satisfaction, external customer satisfaction, design quality, and business performance. The status of each of these criteria is tracked by “mission control,” a room set aside to document the company’s efforts. In mission control each customer’s satisfaction is documented with a plaque, a current monthly satisfaction rating, and a red or green flag indicating the customer’s status relative to objectives.
2. What is an egalitarian culture? How does the development of an egalitarian culture help a company like Wainwright Industries become more quality minded?
The case states the approach towards egalitarianism as:
The employees at Wainwright (including the CEO) now all wear the same uniform, eat in the same cafeteria, and park in the same parking lot. Office walls have literally been torn down and replaced with glass, based on the premise that if the managers can watch the frontline employees work, the frontline employees should be able to watch the managers work too. As a result of these changes, the managers of the company have become coaches and facilitators rather than supervisors and disciplinarians. This important change has helped facilitate the teamwork atmosphere that is supportive of high quality and total customer satisfaction.
The immediate response to this might be expresses as fear of this turning into a communal society. Marx said “From each according to his ability to each according to his need” Is this culture a possibility? Is there a danger of the new culture hurting individual initiative? The case also discusses Six Sigma. This methodology is discussed in detail later in the text.
3. Although quality is important for every product or service, it may be particularly important for the precision auto parts industry. Do you agree with this statement? Why or why not?
What is the difference between a Mercedes and a Chevrolet? Functionally they are identical. The both have the same basic parts; however, there is a large difference in cost between the two automobiles. A Rolex watch performs the same function as a Timex. The Rolex, however, is far more expensive than the Timex. Why?
In both cases we are paying for the precision that the branding provides. In World War II the German Tiger tanks were vastly superior to the American Sherman tank. They were better armored. They were far more reliable. They had superior firepower. However a Tiger Tank was expensive and manufacturing them was extremely labor and time intensive. The American tanks, in spite of their inferior quality were produced in much larger numbers.
Which tank is preferable from the point of view of the crewman in the tank? Does the Division commander perhaps have another opinion?
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