ANAGEMENT

1. Q UALITY M ANAGEMENT CUSTOMER&COMPETITIVEINTELLIGENCE FOR PRODUCT, PROCESS, SYSTEMS & ENTERPRISE EXCELLENCE

2. What is Quality?“To Satisfy Customer’s Requirements Continuously”

3. What isQualityManagement?“To Achieve Quality at Low Cost.”

4. What isTotal Quality Management?“To Obtain Total Quality by Involving Everyone’s Daily Commitment.”

5. What is TQM? Concern for employee involvement and development Management by Fact Constant drive for continuous improvement and learning. Organisation response ability Passion to deliver customer value / excellence Result Focus Partnership perspective (internal / external) Actions not just words (implementation) Process Management

6. Customer Satisfaction Shareholder Satisfaction Employee Satisfaction LEARNING AND TQM Learning ProcessImprovement Quality Improvement

7. Approach Management Led Scope Company Wide Scale Everyone is responsible for Quality Philosophy Prevention not Detection Standard Right First Time Control Cost of Quality Theme On going Improvement BASIC PRINCIPLES OF TQM

8. FOUR KEY PRINCIPLES • Measure quality so you can affect it • Focus on a moving customer • Involve every employee • Think long term - Act short term

9. THE CASE FOR QUALITY 1 Success of competitors who take quality seriously 2 Rising expectations of customers 3 Quality differentiates companies from the competition 4 Narrowing of supplier bases by quality conscious companies .

10. THE CASE FOR QUALITY 5 Growing evidence that growth in market share comes from sustained quality. 6 Cost advantages 7 High cost of catastrophic failure 8 Inspection poor substitute for right first time

11. What is the Objective ofTotal Quality Management? The Objective of TQM is to Improve Continuously Each and Every Activity in the Company, Focusing on the Customer. Quality is: Defined by the Customer!!!

12. Five Principles of aNew Culture • The TQM philosophy derives from one foundational idea: everything must be geared towards customer satisfaction, the engine which drives the company and on which its future survival depends. • The quality of a product or a service is the value assigned to it by customers, that is, the amount they are prepared to pay. That’s all. • Anything which is not in line with this expectation, anything unnecessary or redundant should be discarded.

13. Five Principles of aNew Culture • TQM aims to trim this non-value added “fat” by complete overhaul of the management system, using continual improvement as a guideline. • To this end, people must be empowered and must become part of cohesive work systems; they must be given the means to do what they do best: in addition to nails, they must also be given a hammer.

14. Cultural Principles • The processes, that is the operating procedures at all levels of the company, must be thoroughly brought under control and optimized. The consistency of the whole is more important than the optimization of each individual unit. • Management must be guided by this concern for consistency.

15. Cultural Principles • This synergy makes it possible to better control the three elements of Quality, Cost and Delivery (QCD) which are the three components of a response tailor-made to meet customer expectations. • This applies within the company as well, where the customer-supplier relationship is fundamental in each link of the chain. • Anything which is not customer-driven, within or outside the company, is merely waste.

16. What is a Process? • A process is a set of successive operations targeting a specific result. • It involves input (data, materials, products in various stages of completion) from suppliers or previous processes, which it transforms and transmits either to a process downstream, or to a customer. • In other words, a process is a series of tasks performed with specific resources.

17. In-House Customers andOutside Customers • The expectations of the outside customer, the buyer or user of the product, may be seen in the context of in-house customer / supplier relationships, which play a vital role in improving company performance. • The in-house supplier is the product, service or advice, which represents the end-product of one stage in the process. • The in-house customer is the office, shop or service which carries out the next stage.

18. In-House Customers andOutside Customers • Each acts as supplier and customer with respect to and for the other. • A HOUSE DIVIDED AGAINST ITSELF CANNOT STAND PRINCIPLE: This relationship encourages useful activity. • GET YOUR OWN HOUSE IN ORDER PRINCIPLE: The in-house customer / supplier relationship is one of the keys to satisfying the outside customer.

19. The Customer is theUltimate Judge of Value • Customers assign a value to the product or service in accordance with their needs and desires, either expressed or implicit. • In exchange for this value, they pay and often go into debt, and this constitutes the sole source of income for the business. • We need to move away from a strategy based on marketing products to one based on delighting customers. • We need to know how to anticipate their needs, even to the point of influencing the ways their needs change. • We have to provide customers with the service and the reliability they expect at a competitive price with the timing and conditions which are most convenient for them.

20. 2. Search for a “Lean” Approach • Improving output means serving customers better, faster, and less expensively by consuming fewer resources. • Anything which does not contribute either directly or indirectly to customer satisfaction must be eliminated. • Identify and eliminate everything except that which is “lean” or “just enough” in all sectors and all levels of activity with the goal of continual improvement: • causes of rework, • poorly calculated investments, • excessive inventory, • skills under-utilized or poorly utilized. • This step will lead to a streamlining or an overhaul of all processes.

21. 3. Controlling theProcess Means Reducing Dispersion • Improving the process through greater control means first and foremost controlling dispersion in the quality of products and services offered. • This means adhering to a permanent standard of quality within the limits acceptable to the customer, either within the company or outside it. • Only then can we attempt to do even better by enhancing or modifying the process. • This is a preliminary step towards challenging existing processes.

22. 4. Involving and Empowering People • Employees are a company’s most precious resource and the only one which can take control of processes and identify and reduce anything which does not meet the “lean” or “just enough” standard. • Fort that reason, people must be involved and empowered and their value recognized. • Initiative and creativity must be developed in order to encourage problem-solving. • Human resource development involves acquisition of experience linked with a training component, which must focus on the importance of cooperation and team work as incentives for better quality, productivity and safety.

23. 5. The Spiral of Continual Improvement • The Goal of TQM is progress - not perfection - there is no ideal state which, once reached, will allow the company to rest from its endeavors. • What matters is the degree of progress achieved and its rapidity: progress is based on the S-PDSA Cycle (or, better, modified Deming Cycle) • Along with innovation, continual improvement focuses on solving problems and finding reliable solutions. • This includes daily progress in routine matters as well as large-scale cross-functional improvements, without necessarily resorting to additional investment.

24. Edgeman’s Modification of Deming’sS-PDSACycle DO ACT (implement) HOLD THE GAIN STUDY PLAN STANDARDIZE S-Establish Baseline Results

25. THE TQM CULTURE LISTENING TO THE CUSTOMER Quality Customer Satisfaction People Processes ReducingWaste Cost Progress Through S-PDSA Delivery MORE VALUE FOR CUSTOMER

26. The TQM Wheel Model UNIT OPTIMIZATION Suggestion Systems Self-Directed Work Teams Quality Circles 7 QC Tools / Statistics Cont. Imp.& Standardization I N T E G R A T I O N H O R I Z O N T A L Daily Control A L I G N M E N T Info. Systems V E R T I C A L Organ- izational Break- Through Cross Functional Mgt QCDP Customer Driven Master Plan Audit Tools Hoshin Planning Seven Manage- Ment & Planning Tools Customer/ Supplier Senior Executive Teams Vertical Teams & Horizontal Coordination Q.A./ QFD

27. Daily Control • Daily Control is the application of PDSA to daily incremental continuous improvement: • Hoshin Planning draws information from the ongoing data collection and analysis of the Daily Control process to identify broad system problems in which breakthrough is needed. • Once breakthroughs have occurred, they can become the focus of daily continuous improvement.

28. Cross-Functional Management • Cross-functional management concerns the systems by which functions & departments work together to achieve common organizational targets such as quality, cost, delivery & product (QCDP). • Quality Function Deployment (QFD) or “listening to the voice of the customer” can identify areas for planning breakthrough. • The Hoshin Planning process often requires cooperation across functions as well as vertical alignments.

29. Hoshin Planning The Destination that we MUST Reach Where We Are • Hoshin --- “That by which we navigate” - The organizational NORTH STAR. • Policy Management --- Policy Deployment • Focused Planning Hoshin Kanri

30. Hoshin Planning Definition • Hoshin Planning is that part of an organization’s strategic planning system which identifies, develops, deploys, audits, and modifies a specific plan to focus the organization’s efforts on the breakthroughs of developments required to achieve the strategic vision of the organization.

31. Hoshin Planning • Hoshin Planning is a method that captures and concretizes strategic goals and flashes of insight about the future and that develops the means to bring these into reality. • The intent of Hoshin Planning is to integrate an entire organization’s daily activities with its long term goals.

32. LEADERSHIP Customer-Driven Hoshin Planning CROSS-FUNCTIONAL MANAGEMENT Master Plan Sustainable Competitive Advantage CONTROL DAILY

33. UNIT OPTIMIZATION“Daily Control” • Within this arena are the so-called “Seven Traditional Tools of Quality”, even though there is not perfect agreement on what those seven tools are. Among these: • Histograms & Pareto Diagrams; • Scatter Diagrams; Boxplots; • Cause & Effect Diagrams; • Process Flow Diagrams; • Control Charts and Run Charts; • Check Sheets; and • Stem-and-Leaf Plots.

34. VERTICAL ALIGNMENT “Hoshin Planning” • Hoshin Planning • “Management & Planning Tools”: • Affinity Diagrams; • Brainstorming; • Nominal Group Technique; • Matrix Diagrams; • Radar Charts; • Force Field Analysis; • Prioritization Matrices.

35. HORIZONTAL INTEGRATION“Cross-Functional Management” • “Listening to the Voice of the Customer” or QUALITY FUNCTION DEPLOYMENT (QFD).

36. Quality Culture at AT&T:A Case Study

37. AT&T Cultural Change Mechanisms Focus From Traditional To Quality Plan Short-range budgets Future Strategic Issues Organize Hierarchy Participation/Emancipation Communication Top Down Top Down & Bottom Up Decisions Ad hoc/Crisis Management Planned Change Functional Parochial, Competitive Cross-Functions, Management Integrative Quality Fixing / One-Shot Preventive / Continuous Management all Functions & Processes

38. AT&T Quality Policy • Quality excellence is the foundation for the management of our business and the keystone of our goal of customer satisfaction. It is, therefore, our policy to: • Consistently provide products and services that meet the quality expectations of our customers. • Actively pursue ever-improving quality through programs that enable each employee to do his or here job right the first time.

39. AT&T Quality Principles • The customer comes first. • Quality happens through people. • All work is part of a process. • Suppliers are an integral part of our business. • Prevention is achieved through planning. • Quality improvement never ends.

40. Total Quality Management:“Turning Principles into Practice”AT&T’s Fundamental Total Quality Approach Process Supplier Management Customer Partnership and Improvement Focus Supplier Process Customer Vision & Direction: AT&T Quality Policy People Leadership & Involvement AT&T Quality Principles Values: AT&T Common Bond

41. AT&T Network Services Division (NSD)Quality Management System NSD VISION: We provide our customers the best network services in the world. NSD MISSION: The mission of NSD is to support the individual Business Units in the achievement of their goals by providing premises-to-premises network services, both now and for the future: *That are positively differentiated from our competitors in customer-perceived quality, reliability, innovation, timeliness, and performance *At a cost that is lower than our competitors *By a professional, motivated, customer- focused winning team.

42. Implementing the Total Quality Approach With NSD's Quality Management System Process Supplier Management Customer Partnership and Improvement Focus Supplier Process Customer Vision & Direction: AT&T Quality Policy People Leadership & Involvement NSD People AT&T Quality Principles CUSTOMERS Values: AT&T Common Bond Processes Leadership QMS

43. NSD Customer Identification Statement&Strategic Business Unit Customers. • Consumers and businesses are AT&T’s external customers. They ultimately consume and pay for the products & services we deliver. • The SBU’s are NSD’s internal customers. They supply us with the requirements for products and services, fund NSD for those services, and represent the voice of the external customer. • We aspire to evolve customer/supplier relationships within NSD, with its suppliers, and with the SBUs to a set of true partnerships, based upon the AT&T Common Bond. • Data Communication Services 800 & Business Application Services • Business Long Distance BCServices-Federal Systems • Consumer Long Distance Away from Home & Office • Directory Services Accessible Communications Services

44. NSD - Our Common Bond - People:We commit to these values to guide our decisions & behavior • Respect for individuals • Dedication to helping customers • Highest standards of integrity • Innovation • Teamwork • Utilize our human performance system as a key enabling mechanism for our quality management system (QMS). • Recognize & support behavior that is consistent with our QMS. • Foster an environment where people are skilled and supported to be successful. By living these values, AT&T aspires to set a standard of excellence worldwide that will reward our shareholders, our customers and all AT&T people.

45. Assessing & Improving NSD’s QMS with the PDSA Cycle Plan for Addressing Improvement Opportunities Plan NSD People Act on Results of Assessment Identify Improvement Opportunities Implement Improvement Plans Act Do Customers Processes Leadership QMS Study ASSESSMENT:AT&T CQA ISO 9001 AOS

46. QMS Information • Information, represented by arrows in the model: • Integrates the elements of QMS; • Permits fact-based decision making; • And must be: • Readily available; • Easily accessible; • Consistently presented; • Relevant & meaningful.

47. QMS Leadership • Create the vision; • Achieve the mission; • Live our common bond; • Establish quality policy; • Lead the planning process; • Set key goals / initiatives; • Champion deployment; • Measure progress; • Celebrate successes.

48. QMSProcesses • Manage by process; • Define goals; • Instill a spirit of continuous improvement; • Use Process Quality Management Improvement (PQMI) as the foundation; • Achieve excellence in customer relationship management; • Develop effective supplier management.

49. Process Management Roles & Responsibilities • Process Champion:ensures process efforts are linked with overall business strategies and goals and advocates process breakthrough initiatives for at least one QMS process. • Process Owner:provides process vision, commits to customers’ primary requirements and is ultimately accountable for results of at least one QMS process. • Process Leader:manages process on a daily basis, establishes process-specific goals, charts PMT activity, manages funding process and interfaces with customers and suppliers. • PMT Leader:leads effort to develop and implement initiatives to improve process capability and achieve process results. • PMT Member:analyzes and recommends improvements to the process. • Support Manager: manages the execution of current process and implements process improvement to achieve process results. • Process Associate:executes current process and implements process improvements to achieve process results.

50. Leadership Through ProcessChampions, Owners and Leaders Strategic & Operational Planning NSD People QMS & Organization Model Development and Implementation Customers Processes Leadership QMS Assessment Audit & Benchmarking Studies Implementation