03 Global Quality and International Quality Standards

Chapter 3
Global Quality and International

Quality Standards
S. Thomas Foster, Jr.
Boise State University
PowerPoint
prepared by
Dave Magee
University of Kentucky
Lexington Community College
2004 Prentice-Hall
Chapter Overview
Managing Quality for the Multinational Firm

Quality Improvement: The American Way
The Malcolm Baldrige National Quality Award
Quality Improvement: The Japanese Way
Quality Improvement: The European Way
ISO 9000:2000
Are Quality Approaches Influenced by Culture?
Managing Quality: An Integrative Approach; 2nd Edition
2004 Prentice-Hall
Slide 1-2
Managing Quality for the MNF

Slide 1 of 4
Mechanisms That Firms Use In Globalizing

Licensing
By licensing, a U.S. corporation can allow foreign firms to sell
in restricted markets while using the design of the original
designer.
Partnering
Firms also seek international markets through joint ventures or
partnering.
Globalization
Globalization means that a firm fundamentally changes the
nature of its business by establishing production and marketing
facilities in foreign countries.
We refer to these firms as multinational corporations.
2004 Prentice-Hall
Slide 1-3

Slide 2 of 4
Global Factors That Affect Quality-Related Decisions

Physical
Environment
Task
Environment
Quality
Management
Social
Environment
Figure 3.3
2004 Prentice-Hall
Slide 1-4

Slide 3 of 4
Exporting
Another means of entering international markets is to not
globalize but become an exporter.
Exporters produce their products and ship them
internationally.
Firms that are entrepreneurial in nature and plan their
exports effectively tend to have higher quality
For exporting firms, quality leads to lower price and
greater export success
2004 Prentice-Hall
Slide 1-5

Slide 4 of 4
Export Quality Model

Firm
Characteristics
Product
Strategy
Figure 3.4
Performance
Low
LowPrice
Price
Entrepreneurship
Entrepreneurship
High
HighQuality
Quality
Export
ExportPlanning
Planning
Standardization
Standardization
Export
ExportSuccess
Success
Promotion
Promotion
2004 Prentice-Hall
Slide 1-6
Malcolm Baldrige National Quality

Award
Slide 1 of 11
Malcolm Baldrige National Quality Award

The award is open to small (less than 500 employees) and
large firms (more than 500 employees) in the
manufacturing and service sectors.
It is not open to public-sector and not-for-profit
organizations.
There can be only two winners per category each year,
which limits the number of yearly awards to six.
Additional information on the Baldrige award

www.NIST.gov
2004 Prentice-Hall
Slide 1-7

Award
Slide 2 of 11
Key Characteristics of the MBNQA

The criteria focus on business results. Companies must
show outstanding results in a variety of areas to win.
The Baldrige criteria are nonprescriptive and adaptive.
Although the focus on the Baldrige is on results, the means
for obtaining these results are not prescribed.
The criteria support company-wide alignment of goals and
processes.
The criteria permit goal-based diagnosis. The criteria and
scoring guidelines provide assessment dimensions.
2004 Prentice-Hall
Slide 1-8

Award
Slide 3 of 11
Baldrige Award Framework
Figure 3.5
Organizational Profile:
Environment, Relationships and Challenges
2
Strategic
planning
5
HR develop. &
management
7
Business
results
1
Leadership
3
Customer and
market focus
6
Process
management
4
Information and analysis
2004 Prentice-Hall
Slide 1-9

Award
Slide 4 of 11
MBNQA Categories
Category 1
Category 2
Award criteria for

leadership. The extent to
which top management is
involved in creating and
reinforcing goals, values,
directions, customer
involvement and other
issues.
Focuses on how the

company establishes
strategic directions and
how it sets it tactical
actions plans to implement
the strategic plans.
Concerned with methods,
measures, deployment,
and evaluation.
2004 Prentice-Hall
Slide 1-10

Award
Slide 5 of 11
MBNQA Categories
Category 3
Category 4
Addresses the customer

and market focus. The
processes for listening to
and learning from
customers and markets
must be evaluated,
improved, and kept
current.
Information and analysis

relates to the firms
selection, management,
and use of information to
support company
processes and to improve
firm performance.
2004 Prentice-Hall
Slide 1-11

Award
Slide 6 of 11
MBNQA Categories
Category 5
Category 6
Deals with human

resources focus. The
workforce is to be enabled
to develop and use its full
potential, aligned with
company objectives.
Examines the key aspects

of process management.
This includes customerfocus in design, delivery
process design for services
and products, support
processes, and processes
relating to partners.
2004 Prentice-Hall
Slide 1-12

Award
Slide 7 of 11
MBNQA Categories
Category 7
Documents the results of
the other six categories
and requires a series of
tables and graphs that
demonstrate the
operational and business
results of the firm.
2004 Prentice-Hall
Slide 1-13

Award
Slide 8 of 11
The Baldrige Process

The first step is eligibility determination.
The completed application is sent to the National Institute of
Standards and Technology (NIST).
The application is reviewed by examiners and then by
judges, who will determine whether the application will be
given a consensus score by the examiners.
Firms that are granted Baldrige site visits sometimes refer to
themselves as Baldrige Qualified.
The site visit consists of a team of 4 to 6 examiners visiting
a company over a period not to exceed one week.
One of the most important outcomes is examiner feedback.
2004 Prentice-Hall
Slide 1-14

Award
Slide 9 of 11
Baldrige Evaluation Process
Figure 3.6
Receive
Receiveapplications
applications
Stage
Stage22
Consensus
Consensusreview
review
Stage
Stage33
Site
Sitevisit
visitreview
review
Stage
Stage11
Independent
Independentreview
review
Select
Selectfor
forsite
sitevisit?
visit?
Judges
Judges
Review
Reviewand
and
recommend
winners
recommend winners
Judges
Judges
No
Select
Selectfor
for
consensus
consensusreview?
review?
Judges
Judges
Yes
Feedback
report to
applicant
Yes
No
Feedback
report to
applicant
Yes
Feedback
report
No
Feedback
report to
applicant
2004 Prentice-Hall
Slide 1-15

Award
Slide 10 of 11
Feedback Report
Scoring summary is a synthesis of the most important
strengths and areas for improvement.
Individual scoring range provides insight concerning the
relative areas of strength and areas for improvement.
Scoring distribution provides the percentage of applicants
for a particular year scoring in each of the eight scoring
bands.
Examiner comments give feedback concerning the
organization.
2004 Prentice-Hall
Slide 1-16

Award
Slide 11 of 11
Being a Baldrige Examiner

Appointment to the board of Trustees for the MBNQA
Board of Examiners is a very prestigious designations.
Examiners are unpaid volunteers, and must be willing to
give up approximately 10% of their year to serve as an
examiner.
State Awards
Full-Baldrige approach
Baldrige-lite approach
Multilevel approach
2004 Prentice-Hall
Slide 1-17
Quality Improvement: The Japanese

Way
Deming Prize
Awarded to individuals and groups who have contributed to
the field of quality control.
Other Japanese Contributions to Quality Thought

Juran stated that the genius of the Japanese was in their
ability to maintain a focus on the minutia and detail
associated with process improvement.
There are several uniquely Japanese contributions that are a
part of the Japanese approach to production and service.
2004 Prentice-Hall
Slide 1-18
Deming Prize for Quality

Slide 1 of 7
Deming Prize
The Deming Prize for quality was established in 1951 by
the Japanese Union of Scientists and Engineers (JUSE).
Three categories of awards
Deming Application Prize for Division
Deming Application Prize for Small Business
Quality Control Award for Factory
There is no limit on the number of companies that can

receive the award in a given year.
The Deming Prize is much more focused on processes than
is the Baldrige.
2004 Prentice-Hall
Slide 1-19

Slide 2 of 7
Deming Categories
Policy
Organization and Operations
Collecting and Using Information
Analysis
Planning for the Future
Education and Training
Quality Assurance
Quality Effects
Standardization
Control
2004 Prentice-Hall
Slide 1-20

Slide 3 of 7
Deming Categories
Policy
The first category of the
Deming Prize addresses
the areas of management
of quality policy, quality
formation, policy
correctness and
consistency, and related
topics.
Org. and Operations

The organization and
operations portion of the
Deming application
requires the applicant to
document processes for
clarifying authority and
responsibility, and
related topics.
2004 Prentice-Hall
Slide 1-21

Slide 4 of 7
Deming Categories
Information
The information that is
collected for this item
includes information that
is gathered on the outside
and inside.
Analysis
The analysis category of
the Deming Prize covers
the areas of selection of
priority problems and
themes, correct use of
analytical methods, and
use of statistical methods.
2004 Prentice-Hall
Slide 1-22

Slide 5 of 7
Deming Categories
Planning for the Future
To plan well for the
future, firms must
understand their present
condition well, which is
the documentation
required for this
category.
Education & Training

Applicants document
plans and
accomplishments relating
to education and
training.
2004 Prentice-Hall
Slide 1-23

Slide 6 of 7
Deming Categories
Quality Assurance
Quality Effects
As discussed in Chapter 1,
quality assurance has to
do with the design of
products and the new
product development
process.
Quality effects relate to

the documentation of
benefits, outcomes, and
results of quality
improvement.
2004 Prentice-Hall
Slide 1-24

Slide 7 of 7
Deming Categories
Standardization
Control
The systems of setting

standards, monitoring
performance against the
standards, and revision of
standards are
documented.
The applicants describe

how they are using SQC,
control points, control
items, statistical thinking,
and the current state of
control in the company.
2004 Prentice-Hall
Slide 1-25
Other Japanese Contributions to

Quality
Slide 1 of 7
Lean Production
Japanese Total Quality Control (TQC)
Visibility
In-Process Inspection
N = 2 Technique
Total Involvement of the Workforce
The Five Ss
2004 Prentice-Hall
Slide 1-26

Quality
Slide 2 of 7
Lean Production
Two views emerge in the literature that pertain to Lean
(a.k.a. just-in-time (JIT) manufacturing).
The first view of Lean is a philosophical view of waste
reduction. This view asserts that anything in the process
that does not add value for the customer should be
eliminated.
The second view of Lean is a systems view stating the JIT
is a group of techniques or systems focused on optimizing
quality processes.
2004 Prentice-Hall
Slide 1-27

Quality
Slide 3 of 7
Japanese Total Quality Control

Just as the Japanese Lean approach requires attention to
detail in every aspect of the process, so does the TQC
approach.
This attention to detail runs deep in the Japanese culture.
2004 Prentice-Hall
Slide 1-28

Quality
Slide 4 of 7
Visibility
Problems must be made visible before they can be
addressed.
Andon or warning lights
Line-stop authority
In-Process Inspection
All work is inspected at each stage of the process.
Workers inspect their own work.
2004 Prentice-Hall
Slide 1-29

Quality
Slide 5 of 7
N = 2 Technique
The N = 2 technique is an alternative to acceptance sampling.
Usually, an acceptance sampling plan involves rules such as:
If 2 or fewer defects, accept the lot.
If more than 2 defects, reject the lot.
Total Involvement of Workforce

Horizontal deployment means that all departments are involved
in quality.
Vertical deployment means that all levels of management and
workers are actively involved in quality.
2004 Prentice-Hall
Slide 1-30

Quality
Slide 6 of 7
The Five Ss. The five Ss are a sequential process that

companies follow to literally clean up their acts. The
Ss are:
Seri: organizing by getting rid of the unnecessary.
Seiton: neatness that is achieved by straightening offices and
work areas.
Seiso: cleaning plant and equipment to eliminate dirtiness
that can hide or obscure problems.
Seiketsu: standardizing locations for tools, files, equipment,
and all other materials.
Shetsuke: discipline in maintain the prior four Ss.
2004 Prentice-Hall
Slide 1-31

Quality
Slide 7 of 7
Quality Circles
Are natural work teams made up of workers that are
empowered to improve processes they use.
Preventive Maintenance (PM)

The idea behind this concept is that the worst condition a
machine should ever by is on the day you purchase it.
2004 Prentice-Hall
Slide 1-32
Quality Improvement: The European

Way
ISO 9000:2000
Is the European standard for quality that has been expanded
worldwide.
European Quality Award (EQA)

The highest level is the EQA for the most accomplished
applicant in a given year.
The second level given is the European Quality Prize for
other firms that meet the award criteria.
2004 Prentice-Hall
Slide 1-33
European Quality Award

European Quality Award Model
People
management
Leadership
Policy and
strategy
Figure 3.7
People
satisfaction
Processes
Resources
Enablers
Customer
satisfaction
Business
results
Impact on
society
Results
2004 Prentice-Hall
Slide 1-34
ISO 9000:2000
Slide 1 of 11
Worldwide Impact
On a worldwide basis, ISO 9000:2000 has had a much more
significant impact than any of the quality awards in terms of
the number of companies that have implemented the
approach..
Focus of ISO 9000:2000

The focus of ISO 9000:2000 is for companies to document
their quality systems in a series of manuals to facilitate trade
through supplier conformance.
ISO
Organization for International Standards
2004 Prentice-Hall
Slide 1-35
ISO 9000:2000
Slide 2 of 11
Three Standards
1. ISO 9000:2000 - Quality management systems Fundamentals and vocabulary.
2. ISO 9001:2000 - Quality management systems Requirements.
- These are used for internal implementation, contractual
purposes, or for third-party registrations.
3. ISO 9004:2000 - Quality management - Guidelines for
Performance Improvement
- These include continual improvement and enhancing
overall performance.
2004 Prentice-Hall
Slide 1-36
ISO 9000:2000
Slide 3 of 11
ISO 9001:2000 consists of 5 clauses.
Clause 4: Quality Management System

Clause 5: Management System
Clause 6: Resource Management
Clause 7: Product Realization
Clause 8: Measurement, Analysis and Improvement
2004 Prentice-Hall
Slide 1-37
ISO 9000:2000
Slide 4 of 11
ISO 9001:2000 Clause 4

Quality Management System
Includes development, design, implementation, and
maintenance of quality management documents.

Management System
Outlines managements responsibility in developing and
maintaining a quality management system.
2004 Prentice-Hall
Slide 1-38
ISO 9000:2000
Slide 5 of 11

Resource Management
This includes providing needed resources, personnel,
facilities, and the environment necessary to get the work done.

Product Realization
These are all of the requirements, including processes,
documents, customer requirements, specifications, designs,
and quality processes needed to produce a product.
This includes selecting and developing suppliers in a way that
ensures that purchased components satisfy requirements.
2004 Prentice-Hall
Slide 1-39
ISO 9000:2000
Slide 5 of 11

Measurement, Analysis and Improvement
This has to do with analyzing process data and using the data
to improve operations and service to the customer.
This includes performing internal audits and monitoring and
measuring processes and products.
Also included are corrective action preventive action for
improvement.
2004 Prentice-Hall
Slide 1-40
ISO 9000:2000
Slide 6 of 11
Underlying Quality Management Principles
Customer Focus
Leadership
Involvement of People
The Process Approach
A Systems Approach to Management
Continual Improvement
Factual Approach to Decision Making
Mutually Beneficial Supplier Relationship
2004 Prentice-Hall
Slide 1-41
ISO 9000:2000
Slide 7 of 11
ISO 9000:2000 Registration Process
Step 1: Inquiry
Step 2: Contract with registrar
Step 3: Phase 1 audit
Step 4: Certification audit
Step 5: Process audits (optional)
Step 6: Final certification audit
Step 7: Rolling certification (surveillance) audits
2004 Prentice-Hall
Slide 1-42
ISO 9000:2000
Slide 8 of 11

Step 1: Inquiry
Client contacts registrars
to investigate the terms
for registration and
makes a selection.
Step 2: Contract with

registrar
Registration steps are
determined and a price
is negotiated. A preassessment or gap
analysis may be done.
2004 Prentice-Hall
Slide 1-43
ISO 9000:2000
Slide 9 of 11

Step 3: Phase 1 audit
Registrar performs an
onsite audit of the
documented quality
system against the
applicable standard.
Step 4: Certification
audit
Every element of the ISO
9000 standard is audited
several times during the
registration process.
During each 3-year
period, 100% of the
organization is audited.
2004 Prentice-Hall
Slide 1-44
ISO 9000:2000
Slide 10 of 11

Step 5: Process audits
(optional)
The client may choose
business processes for
auditing to the
applicable standard,
allowing the client to
learn and experience the
registrars auditing
methods.
Step 6: Final certification

audit
Once the clients
documented quality
system has met the
applicable standard, the
registrar will conduct an
audit to determine the
systems effective
implementation.
2004 Prentice-Hall
Slide 1-45
ISO 9000:2000
Slide 11 of 11

Step 7: Rolling
certification audits
The registrar returns on
either 6 month or
annual cycle.
Sometimes referred to
as surveillance audits.
2004 Prentice-Hall
Slide 1-46
ISO 14000
ISO 14000
A series of standards that provide guidelines and a
compliance standard for environmental compliance.
ISO 14001
The compliance standard for ISO 14000, Environmental
Management Systems.
Uses the same basic approach as ISO 9000:2000 with
documentation control, management system auditing,
operational control, control of records, management policies,
audits, training, statistical techniques, and corrective and
preventive action.
2004 Prentice-Hall
Slide 1-47
Are Quality Approaches Influenced

By Culture?
Quality Approaches are
Influence by Culture
The US approach
has historically been
command-andcontrol oriented.
The Japanese
approach is based on
an ethic of
consistency and
emphasis on
reduction of waste.
The Europeans have

adopted broad
standards that can be
adapted to the diverse
nation states of the EC.
2004 Prentice-Hall
Slide 1-48
Summary
Managing Quality for the Multinational Firm

Quality Improvement: The American Way
The Malcolm Baldrige National Quality Award
Quality Improvement: The Japanese Way
Quality Improvement: The European Way
ISO 9000:2000
Are Quality Approaches Influenced by Culture?
2004 Prentice-Hall
Slide 1-49
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2004 Prentice-Hall
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Chapter 3

Global Quality and International

Managing Quality for the Multinational Firm

Managing Quality: An Integrative Approach; 2nd Edition

Managing Quality for the MNF

Mechanisms That Firms Use In Globalizing

Managing Quality for the MNF

Global Factors That Affect Quality-Related Decisions

Managing Quality: An Integrative Approach; 2nd Edition

Managing Quality for the MNF

Managing Quality: An Integrative Approach; 2nd Edition

Managing Quality for the MNF

Export Quality Model

Malcolm Baldrige National Quality

Malcolm Baldrige National Quality Award

Additional information on the Baldrige award

Managing Quality: An Integrative Approach; 2nd Edition

Malcolm Baldrige National Quality

Key Characteristics of the MBNQA

Managing Quality: An Integrative Approach; 2nd Edition

Malcolm Baldrige National Quality

Baldrige Award Framework

Managing Quality: An Integrative Approach; 2nd Edition

Malcolm Baldrige National Quality

Award criteria for

Focuses on how the

Managing Quality: An Integrative Approach; 2nd Edition

Malcolm Baldrige National Quality

Addresses the customer

Information and analysis

Managing Quality: An Integrative Approach; 2nd Edition

Malcolm Baldrige National Quality

Deals with human

Examines the key aspects

Managing Quality: An Integrative Approach; 2nd Edition

Malcolm Baldrige National Quality

Managing Quality: An Integrative Approach; 2nd Edition

Malcolm Baldrige National Quality

The Baldrige Process

Malcolm Baldrige National Quality

Managing Quality: An Integrative Approach; 2nd Edition

Malcolm Baldrige National Quality

Managing Quality: An Integrative Approach; 2nd Edition

Malcolm Baldrige National Quality

Being a Baldrige Examiner

Managing Quality: An Integrative Approach; 2nd Edition

Quality Improvement: The Japanese

Other Japanese Contributions to Quality Thought

Managing Quality: An Integrative Approach; 2nd Edition

Deming Prize for Quality

There is no limit on the number of companies that can

Deming Prize for Quality

Deming Prize for Quality

Managing Quality: An Integrative Approach; 2nd Edition

Org. and Operations

Deming Prize for Quality

Managing Quality: An Integrative Approach; 2nd Edition

Deming Prize for Quality

Managing Quality: An Integrative Approach; 2nd Edition

Education & Training

Deming Prize for Quality

Quality effects relate to

Managing Quality: An Integrative Approach; 2nd Edition

Deming Prize for Quality