4. Stakeholder Groups
Stakeholders are anyone who has in interest in the welfare and operation of a
company.
Examples: stockholders, customers, suppliers, company management, employees and
their families, society, etc.
Internal Company Processes
Society
Society
Suppliers
Customers
Stockholders or Owners
Management & Employees
5. Aligning Goals with Stakeholder Needs
Top management has to worry about more than just increasing stockholder value!
Strategic goals may be determined for:
Short term or long term emphasis (Americans vs. the World)
Profit (maximum profit = not a thing, because internal interests)
Cycle times (competitive advantage!)
Marketplace response (performance measure)
Resources (performance measure)
6. Stakeholder Quality Benefits
Supplier Benefits Community Benefits
• Job opportunities
• Organizations which pay property
taxes, enhance property value of
surrounding neighborhoods,
engender community pride,
practice good business ethics,
produce products that protect
public health, etc.
• Safe products for the consumer
• Products that are energy efficient
Employee Benefits
• Job security
• Better likelihood of pay increases
• Enhancement of KSAs
• More prestige/respect from
management and peers
• Predictability in work assignments
• Reduced cycle times which improves
workflows
• Greater pride of workmanship
• Fewer confrontations between
departments
• Better communications and
information flow
• Opportunity to build long term
relationships
• Mutually beneficial training
opportunities
• Greater likelihood of shared
beneficial information
• Association w/ end product with
a good reputation
• More predictability/certainty of
future orders, scheduling, and
shipping
• Financially viable customers for
products/services
7. Stakeholder Quality Benefits (Continued)
Customer Benefits
• Better reputation in the business community
• Increased market share/stock price
• Greater profitability without raising prices
• Ability to charge premium prices because of
superior quality
• Greater ability to pay/train employees
• Greater capacity/flexibility to handle change
• More pride at all organizational levels
• More customer loyalty
• Ability to weather tough economic times
Organizational Benefits
• Higher quality products
• Products that are easier to use,
more reliable, less expensive and
offer a greater value
• A supplier that can respond
quickly to needs and offers better
service
• Warranties that are honored
• Quicker corrective action
responses
• Better individual treatment
Stockholder Benefits
• Increased stock value
• Better ROIs
• More widely respected business
investment
• Investment stability
• More timely, accurate, and thorough
annual reports
• Investment in a company with a
greater capacity to handle change
• Investment in a company with a
strong focus on the future
• An organization with a
demonstrated ability to improve
8. Sample Question:
Of all of an organization’s stakeholder groups, which would be considered the
most removed from internal processes?
a. Society
b. Customers
c. Suppliers
d. Customers
9. Sample Question:
The relevant stakeholders in an important project would typically include which of
the following?
a. Hourly employees and stockholders
b. Potential competitors and BNQA award winners
c. Potential suppliers and potential competitors
d. Owners and user terrorists
10. Sample Question:
From an external customer’s standpoint which of the following stakeholders is
responsible for poor product quality?
a. The stockholders of the producing company
b. The suppliers of the producing company
c. All employees of the producing company
d. Society taken as a whole
12. A management model; Includes voluntary compliances as well as mandatory
compliance requirements.
MBNQA or BNQA may be mentioned in test questions, it’s just an acronym for
(Malcolm) Baldrige National Quality Award. No worries.
The Baldrige journey is about learning how to achieve:
Effectiveness
Sustainability
Innovation
World-class results
Baldrige Criteria for Performance Excellence
Integrated processes
Organizational learning
A national network to support and
sustain your organization
13. Baldrige Criteria
The BQNA eligibility categories include education, health care, manufacturing,
nonprofit/government, service, and small business.
Seven Baldrige Criteria Categories:
Leadership (120 points)
Strategic Planning (85 points)
Customer Focus (85 points)
Measurement, Analysis, and Knowledge Management (90 points)
Workforce Focus (85 points)
Operations Focus (85 points)
Results (450 points)
Total Points: 1000
14. Sample Question:
The Baldrige National Quality Award application is divided into how many key
categories of criteria?
a. 7
b. 19
c. 20
d. 24
15. Sample Question:
There are seven BNQP criteria areas. Which of the following have the heaviest
weighting?
a. Customer Focus & Workplace Focus
b. Knowledge Management & Customer Focus
c. Results & Operations Focus
d. Workplace Focus & Strategic Planning
17. Philip B. Crosby
Contributions to Quality:
“Zero Defects”
Senior Management Involvement
4 Absolutes of Quality Management
Quality Cost Measurements
“Quality is conformance to requirements.”
1928 - 2001
18. Philip B. Crosby
”Do It Right First Time” or “Zero Defects”
Manufacturing companies spend approx. 20% of their revenues doing things wrong and
doing them over again.
Strong emphasis on the top-down approach: workers aren’t primarily responsible for
poor quality, that responsibility resides with management.
The goal is to apply Prevention Management in every area, this is aided by viewing ALL
work as a process or series of actions conducted to produce a desired result.
19. Philip B. Crosby
Four Absolutes of Quality Management:
1. Quality means conformance to requirements.
2. Quality comes from prevention.
3. Quality performance standard is Zero Defects.
4. Quality measurement is the price of nonconformance.
20. Philip B. Crosby
Crosby’s 14 Steps to Quality Improvement:
1. Management Commitment
2. Quality Improvement Team
3. Measurement
4. Cost of Quality
5. Quality Awareness
6. Corrective Action
7. Zero Defects Planning
8. Employee Education
9. ”ZD” Day
10. Goal Setting
11. Error Cause Removal
12. Recognition of Good Work in the Quality
Process
13. Establish Quality Councils
14. Repetition
21. Dr. W. Edwards Deming
Contributions to Quality:
PDCA
Deming’s Chain Reaction
14 Points
7 Deadly Diseases
1900 - 1993
22. Dr. W. Edwards Deming
Plan-Do-Check-Act
Linear perceptions of work vs. cyclical perceptions of work
Deming’s Chain Reaction
23. Dr. W. Edwards Deming
The 14 Points of Top Management:
1. Create constancy of purpose toward
improvement of product and service.
2. Adopt the new philosophy.
3. Cease dependence on inspection to achieve
quality.
4. End the practice of awarding business on
basis of price tag.
5. Improve constantly and forever the system of
production and service.
6. Institute training on the job.
7. Institute leadership.
8. Drive out fear, so that everyone may work
effectively for the company.
9. Break down barriers between departments.
10. Eliminate slogans, exhortations, and targets
for the workforce.*
11. Eliminate work standards (quotas) on the
factory floor.
12. Remove barriers to pride of workmanship.
13. Institute a vigorous program of education
and self-improvement.
14. Put everybody in the company to work to
accomplish the transformation.
24. Dr. W. Edwards Deming
Seven Deadly Diseases that Management Must Cure:
1. Lack of constancy of purpose.
2. Emphasis on short-term profits.
3. Evaluation by performance, merit rating, or annual review of performance.
4. Mobility of management.
5. Running a company on visible figures alone.
6. Excessive medical costs.
7. Excessive warranty costs.
26. Dr. Joseph M. Juran
Contributions to Quality:
Quality Trilogy
Quality Cost Measurement
Pareto Analysis
1904 - 2008
27. Dr. Joseph M. Juran
CostofPoorQuality
Time
Quality Planning Quality Control
Quality
Improvement
Chronic Waste
New Zone of
Quality
Control
Original Zone of
Quality Control
Sporadic
Spike
Operations
Begin
28. Dr. Joseph M. Juran
Part I of the Trilogy: 6 Steps of Quality Planning
1. Verify the Goal.
2. Identify Customers.
3. Determine Customer Needs.
4. Develop Product.
5. Develop Process.
6. Transfer to Operations.
Measure
Verify the Goal
Identify Customers
Determine Customer Needs
Develop Product
Develop Process
Transfer to Operations
29. Dr. Joseph M. Juran
Part II of the Trilogy: Quality Control Feedback Loop
OK
Not OK
Measure Actual
Performance
Compare
to
Standard
Regulate
Process
Establish
Standard
30. Dr. Joseph M. Juran
Part III of the Trilogy: Quality Improvement Projects
The Six Steps of Quality Improvement:
1. Identify a Project.
2. Establish the Project.
3. Diagnose the Cause.
4. Remedy the Cause
5. Hold the Gains.
6. Replicate Results and Nominate New Projects.
33. Dr. Walter A. Shewhart
Contributions to Quality:
Assignable Cause vs. Chance Cause
Control Charts
Use of Statistics for Improvement
1891 - 1967
34. Dr. Kaoru Ishikawa
Contributions to Quality:
Fishbone (Cause and Effect Diagram)
Companywide Quality Control (CWQC)
Involves the participation of workers from the top to
the bottom of an organization from the start to the
finish of the product life cycle.
1915 - 1989
36. Sample Question:
When Deming encouraged the elimination of numerical quotas, he was
emphasizing which of the following?
a. Good workers already know what is expected.
b. Not to sacrifice quality for quantity.
c. That zero defects are unrealistic.
d. A detection system adds to rework.
37. Sample Question:
Crosby defines quality as ”conformance to requirements” and Juran defines quality
as “fitness for use.” Which of the following statements is correct?
a. Juran means that a product does not have to conform to requirements.
b. If a product conforms to requirements it will always be fit for use.
c. Fitness for use is almost always a tougher standard than conformance to requirements.
d. These are good examples of beauty lying in the eye of the beholder.
38. Sample Question:
Why does Juran suggest that chronic waste in an organization will often go
unnoticed by management?
a. Management is so engrossed in long term planning they lose touch with basics.
b. These wastes are built into the standards and become accepted.
c. Management is so concerned with control they fail to implement breakthrough projects.
d. Quality planning focuses on control items to the exclusion of improvement ideas.
39. Sample Question:
The quality management perspective, user perspective, and manufacturer’s
perspective are respectively associated with:
a. Juran, Deming, and Crosby
b. Deming, Crosby, and Juran
c. Deming, Juran, and Crosby
d. Crosby, Deming, and Juran
40. Sample Question:
Which of the following quality gurus align with their corresponding basic
orientation toward quality?
a. Crosby: Technical
b. Deming: Motivational
c. Crosby: Process oriented
d. Juran: Process driven
