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INTEGRATING TQM IN POLICY AND STRATEGY

The Development of Policy and Strategy

Strategic Management – The systematic analysis of the factors associated with customers and
competitors (the external environment) and the organization itself (the internal environment) to provide
the basis for maintaining optimum management practices. The objective of strategic management is to
achieve better alignment of corporate policies and strategic priorities.

Core competency – something that an organization does so well that it can be viewed as a competitive
advantage.

Competitive advantage – It is any aspect of the organization that contributes directly and significantly to
increasing customer demand by achieving superior value and is difficult for others to replicate.

Components of Strategic Management

 Strategic Planning – This process involves developing a written plan with the following
components: an organizational vision, an organizational mission, guiding principles, broad
strategic objectives, and specific tactics.
 Strategic Execution – This is the implementation of strategies identified in the strategic plan,
monitoring progress toward their achievement, and adjusting the plans as necessary.

Strategic Planning Process

 SWOT Analysis – An organization must conduct a SWOT analysis in order to find a plan that will fit
between its internal situation (strengths and weaknesses) and its external situation (opportunities
and threats). The strategic plan should be designed in such a way that exploits the organization’s
strengths and opportunities; and overcomes weaknesses and threats.
o Strength – This is any characteristic or capability that gives the organization a competitive
advantage. Examples of strengths may include good reputation in the marketplace, cost
leadership, strong management teams, or efficient technological process.
o Weakness – This is any characteristic that puts the organization at a competitive
disadvantage. Examples of weaknesses are obsolete practices or facilities, products with
decreasing demand, weak financial position, and poor quality of products and services.
o Opportunities – These represent potential avenues to grow and gain a sustainable
competitive advantage. Some opportunities that organizations may have include
availability of new customers, removal or barriers that inhibit growth, failure of
competitors, and new online technologies that enhance productivity or quality.
o Threats – This is a phenomenon in an organization’s business environment that has the
potential to put the organization at a competitive disadvantage. Such threats may include
the entry of lower-cost competitors, slowdown in market growth, poor supplier relations,
and potentially damaging demographic changes.
 Develop the vision – The vision is the organization’s guiding force, or the dream of what it wants
to become. Everything that a company does must help the organization achieve its vision. A vision
statement must be:

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o Future-focused – An effective vision describes the business’ desired future. It gives a clear
picture of what the business will look like in five (5) to 10 years’ time, and sets the context
for action.
o Directional - A vision provides direction and clarifies where the organization is going. This
means that the vision needs to be specific enough to influence decisions and broad
enough to allow innovations toward the vision.
o Clear – The vision must be clearly articulated and understood. Clarity of vision allows
individuals in the organization to have a shared sense of what’s important and what’s not.
o Relevant – An effective vision is grounded in the firm’s past. It must be relevant to the
organization and the times; its history, culture, and values. A vision that connects what
has happened in the past to the desired future will be perceived as credible.
o Purpose-driven – A vision should provide a more meaningful sense of purpose than having
more locations or beating the competition. The vision should allow people to feel that
they are part of something bigger than themselves.
o Values-based – A vision must connect people to the organization’s core values. Values are
the beliefs or ideals that the organization shares. A vision implies a set of beliefs that must
support the actions need to execute the vision.
o Challenging – A vision set a high standard for the organization. It represents a future that
is beyond what is possible today. It is the highest level goal that unites and tests an
organization.
o Unique – A vision recognizes what is different about an organization. A vision is unique
when it declares what makes the organization stand out and why it matters. It must clarify
the activities the firm will and will not pursue, the capabilities it would develop, and the
market position it would occupy.
o Vivid – An effective vision describes the future in such a way that is easy to imagine. It
allows people to have a mental image of what it would feel to work in the future
organization and how the customers would engage in the future organization.
o Inspiring – An effective vision engages people to commit to a cause. A vision must appeal
to the heart and minds of people.
 Develop the mission – The mission is a written declaration of an organization’s core purpose and
focus that normally remains unchanged over time. The mission describes who the organization is
and why it exists. Several guidelines can be followed when formulating the
o Describe the who, what, and where of the organization, and make sure that the who
component describes the organization and its customers;
o Be brief, yet comprehensive. One (1) paragraph is enough to describe the organization’s
mission.
o Choose wording that is simple, easy to understand, and descriptive.
o Avoid statements that declare how the mission will be accomplished. The “how” of the
mission will be discussed in the strategies part of the strategic plan.
 Develop the guiding principles – These are principles or precepts that guide an organization in its
operations in all circumstances, irrespective of changes in its goals, strategies, type of work, or
top management. The guiding principles establish the parameters or framework within which the
company is free to pursue its mission. When ethical dilemmas arise, the guiding principles will
help employees prioritize.

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 Develop the broad strategic objectives – The broad strategic objectives represent actual targets
the organization aims at and will expend energy and resources to achieve. The broad objectives
apply to the whole organization, not to individual departments within the organization. The
strategic objectives must have the following characteristics:
o Broadly stated
o Show what the organization wants to accomplish
o In accordance with the guiding principles
o Tied directly to the vision and mission
o Focused on one issue at a time
o Specific enough to be measured
 Develop the specific tactics (action plan) – The action plan includes activities undertaken to
accomplish the broad objectives. They must follow the SMART objectives (specific, measurable,
attainable, relevant, and time bound). The management should be able to assign the action plan
to specific individuals or groups. Additionally, these tactics must be bound to the broad objectives.

Guidelines in Executing the Strategic Plan

 Communicate – Make sure all stakeholders understand the plan and how they fit into it.
 Build capabilities – Make sure all stakeholders have the skills needed to carry out their
assignments and responsibilities in the plan.
 Eliminate administrative barriers – Executing new strategies may have corresponding changes in
administrative procedures. The organization must recognize how changes in the strategic
direction would affect the operations of the business, and adjust accordingly.
 Identify advocates and resisters – There would be advocates and resisters in the strategic plan. If
the plan succeeds, the resisters would become advocates. Therefore, it is crucial to execute the
plan in a way that will have the maximum chance of succeeding. The management can give the
initial tasks of the strategic plan to the advocates, because they are the ones who would like to
see the plan though. However, eventually, all employees must play a part in the execution of the
strategic plan.
 Exercise strategic leadership – It is important that managers at all levels set a positive example by
showing they believe in the strategic plan, ensuring that all decisions are based on the action that
best supports the strategic plan, and allocating resources based on priorities established in the
strategic plan.
 Be flexible and improvise – Plans may change based on circumstances. Therefore, strategic plans
must be viewed as flexible guidelines rather than a plan that is impossible to deviate from.
 Monitor and adjust as needed – The organization must be able to make necessary adjustments
when roadblocks are encountered.

Partnerships and Supplier Collaboration

Partnering – a long-term commitment between two (2) or more business entities for the purpose of
attaining specific goals and objectives. Partnerships are also formed to attain specific goals and objectives
by maximizing the effectiveness of each participant’s resources. It is based on trust, dedication to common
goals and objectives, and understanding of each other’s expectations and values. Benefits include
improved quality, increased efficiency, lower costs, increased opportunity for innovation, and continuous
improvement of products and services.

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Potential partnership participants

 Employees – Partnering with employees is also referred to as internal partnering. This can be
between the management and the employee, between teams in the organization, or between
employees. Internal partnering means creating an environment and establishing mechanisms
within it that bring managers and employees, teams and individual employees together in
mutually supportive alliances that maximize the human resources of an organization. The purpose
of internal partnering is to use the full potential of the workforce and focus it on the continuous
improvement of quality.
 Suppliers – The goal of partnering with suppliers is to create and maintain a loyal, trusting, and
reliable relationship that will allow both partners to win, while promoting the continuous
improvement of quality, productivity, and competitiveness.
 Customers – Partnerships with customers are formed because it is the best way to be competitive.
Customers know what they want and need. It would be less costly to design products using the
customers’ feedback from the start rather than redesigning them later.
 Competitors – Partnerships with competitors are usually done by smaller businesses. Partnering
with competitors offers several advantages: sharing technologies, expanding the market for both,
up-sell related products, practice benchmarking, expanding core competencies, and learning from
each other.

Types of Sourcing
 Sole – The business is forced to use only one supplier. Partnerships between the organization and
the supplier is necessary to ensure the satisfaction of the end user.
 Multiple – the use of two (2) or more suppliers for an item. These suppliers are chosen for their
price, quality, and delivery of materials. The rationale behind multiple sourcing is that
competition between the suppliers will result in lower costs, and better quality and service.
However, the competition can also have negative effects in supplier relationships.
 Single – This is a planned decision to select one supplier for an item even though several sources
are available. It results in long-term contracts and a partnering relationship. The organization can
achieve benefits such as reduced cost, complete accountability, supplier loyalty, and a better end
product with less variability.

Ten Conditions for the Evaluation and Selection of Suppliers (Ishikawa, 1985)
 The supplier knows the management philosophy of the organization.
 The supplier has a stable management system that is respected by others.
 The supplier maintains high technical standards and has the capability of dealing with future
technological innovations.
 The supplier can supply precisely those raw materials and parts required by the purchaser, and
those supplied meet the quality specifications.
 The supplier has the capability to meet the amount of production or can attain that capability.
 There is no danger of the supplier breaching corporate trade secrets.
 The price is right and the delivery dates can be met. The supplier is also easily accessible in terms
of transportation and communication.
 The supplier is sincere in implementing the contract provisions.
 The supplier has an effective quality system and improvement program.

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 The supplier has a track record of customer satisfaction and organization credibility.

Principles of Customer/ Supplier Relationships (Ishikawa, 1985)

 Both the customer and the supplier are fully responsible for the control of quality with mutual
understanding and cooperation between their quality systems.
 Both the customer and the supplier should be independent of each other and respect each other’s
independence.
 The customer is responsible for providing the supplier with clear and sufficient requirements so
that the supplier can know exactly what to produce.
 Both the customer and the supplier should enter into a non-adversarial contract with respect to
quality, quantity, price, delivery method, and terms of payments.
 The supplier is responsible for providing the quality that will satisfy the customer and submitting
the necessary data upon the customer’s request.
 Both the customer and the supplier should decide the method to evaluate the quality of the
product or service to the satisfaction of both parties.
 Both the customer and the supplier should establish in the contract the method by which they
can reach an amicable settlement of any disputes that may arise.
 Both the customer and the supplier should continuously exchange information that will improve
the product or service quality.
 Both the customer and the supplier should perform business activities such as procurement,
production and inventory planning, clerical work and systems so that an amicable and satisfactory
relationship is maintained.
 Both the customer and supplier, when dealing with business transactions, should always have the
best interest of the end user in mind.

Just-in-Time Management

Just-in-Time Management – It is a management philosophy that seeks to eliminate all forms of waste in
the manufacturing processes and their support activities. It permits the production of only what is needed,
only when it is needed, and only in the quantity needed. It is also known as lean management. JIT must
apply not only to the organization, but also to the suppliers.

Seven Wastes of JIT

 Transport – This refers to unnecessary movements of the people or parts between processes. It
is expensive and can cause product damage or deterioration.
 Inventory – These are raw materials, work in progress, or finished goods that do not add value to
the organization. It wastes resources through costs of storage and maintenance.
 Motion – This is the unnecessary movement of people, parts or machines within a process.
Workplaces should be designed for maximum efficiency.
 Waiting – These are people or parts that wait for a work cycle to be completed. Processes are
ineffective and time is wasted when one process waits to begin while another finishes. Instead,
the flow of operations should be smooth and continuous.
 Over-processing – This refers to processing beyond the standard required by the customer. Overly
elaborate and expensive equipment is also wasteful if simple machinery would work as well.
 Over-production – These are activities involved in producing sooner, faster or in greater quantities
than customer demand. It wastes money time, and space.

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 Defects – This refers to repetition or correction of a process. Inspection and review takes time and
costs money.

Kanban – It is a materials requirement planning technique, wherein work centers use cards when they
want to resupply products. It is a visual signal used to trigger an action.

REFERENCES
Ambler, G. (2013, February 3). 10 Characteristics of an Effective Vision . Retrieved from
georgeambler.com: http://www.georgeambler.com/10-characteristics-of-an-effective-vision/

Earley, T. (2014). 7 Wastes of Lean Manufacturing . Retrieved from leanmanufacturingtools.com:

http://leanmanufacturingtools.org/77/the-seven-wastes-7-mudas/

Goetch, D. (2012). Quality Management for Organizational Excellence: Introduction to Total Qulaity.
Esssex: Prentice Hall .

Oakland, J. (2014). Total Quality Management and OPerational Excellence: Text with Cases, Fourth
Edition. New York: Routledge.

Rouse, M. (2014, October ). Definition: kanban . Retrieved from whatis.techtarget.com :

http://whatis.techtarget.com/definition/kanban

Strategic Management . (2016). Retrieved from Business Dictionary :

http://www.businessdictionary.com/definition/strategic-management.html

What is Kanban? . (2015). Retrieved from leankit.com: http://leankit.com/learn/kanban/what-is-

kanban/

Zwilling, M. (2014, June 6). WIn-WIn: Strategically Partner With Your Top Competitors. Retrieved from
entrepreneur.com: http://www.entrepreneur.com/article/234522

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