STRATEGIC QULAITY PLANNING

1. STRATEGICQULAITYPLANNING Phil Campbell and Anthony Redferin

2. What is Strategic Planning? • Strategy is a plan for achieving a goal. • Designed to support organizations mission and goals. • Provides focus for decision making. • Utilizes tactics to accomplish goals • “how to”

3. What is Strategic Quality Planning? • To develop and achieve the organization's vision in a manner that is consistent with its mission and values.

4. What is Strategic Quality Planning? • SQP involves every member of the organization in developing a common understanding of: • the organization's customers and their needs and expectations • how customer's expectations is measured • how customer's needs are met through purposeful activity or systems • the values, mission, and vision or desired future state of the organization • the goals of the organization • how to link plans to systems for organization-wide design,improvement, alignment, and implementation activities • how to execute annual plans • how to review the process and results of annual plans and how to act upon the knowledge gained

5. How Does SQP Help an Organization? • The output of strategic quality planning is improved organizational performance. • The improved performance takes these three forms. • Quantitative improvement of several organization wide indicators, and several subsystem-level indicators. • Qualitative improvements within the organization and in relationships with systems outside the organization. • Improvement in the companies overall strategic quality planning process.

6. When Should SP Be Used? • Anytime an organization is facing on of the following: • originated to respond to a major issue, but lately interest in the organization has diminished • losing money and community interest, but continues with activities similar to those of 10 years ago • members are leaving the organization to join other organizations with similar purposes • the organization is now operating very smoothly, but you wonder if it will be in five years.

7. Generic SP Model 1.  Review of the mission and values. 2.  State of the organization: review of key financial, customer, employee and quality data & trends. 3. Review of target customers, products and/or services and trends (political, financial, technical, etc.). 4. Gap analysis: where are we now vs. where do we want to go. 5. SWOT: strengths, weaknesses, opportunities and threats. 6. Goals and initiatives to accomplish those goals 7. Project plan(s): owners, teams, schedule, resources needed. 8. Design and review of departmental and team plans. 9. Progress reviews by executives.

8. Important Aspects of Strategic Management • Content Variables: • Time • Leadership • Quality Costs • Differentiation Through Quality • Focus Through Quality • Process • Focused-Choice Model

9. Two Components of Time • Time to Achievement • Long-term goals • No “quick fix” • Speed of Improvement • Slower is Better • Slow change allows learning to occur • Discourages distortion of the system and the data

10. Leadership • Leader organizes, plans, controls, communicates, teaches, advises, and delegates. • Need to share responsibility. • Influences group toward achieving superordinate goals. • Benefits the group not the individual. • Must be willing to share power. • Must be worthy of trust. • Must listen to employees suggestions. • Must have long term commitment to quality.

11. Quality • Quality is strategic. • Quality is good business and ethical. • High quality reflects care for customers. • Unethical to ship defective products to customers. • Improves customer and employee perception of organization. • Increases sales and market share.

12. Quality Costs • Prevention costs: associated with preventing defects and imperfections from occurring. Includes training, quality planning, process engineering, and other costs associated with assuring quality. • Appraisal Costs: direct costs of measuring quality (lab testing, inspection, test equipment and materials, losses due to destructive tests, and assessments for ISO 9000 or other awards).

13. Quality Costs Cont. • Failure Costs: • Internal: associated with on-line failure. • External: associated with product failure after customer takes possession of the product.

14. Differentiation Through Quality • Products differ from competition through the eyes of the customer. • Achieved by customer perception of quality. • Ex. Lexus, Infinity, Rolex, Bose

15. Focus Through Quality • Shifting focus to specific clients. • Targeting specific niches within the market. • Ex. Curves, Porche, Prowler

16. Forced-Choice Model • Used to demonstrate integrated quality planning. • Simple and Useful. • Useful for organizations that are inexperienced in strategic planning.

17. Steps in Forced-Choice Model • 6-12 members of upper management are sent to a retreat. • Organizational assessment is performed to identify strengths and weaknesses. • Environmental assessment is performed to evaluate position in the marketplace. • Alternative strategies are developed by executives at a wrap-up session.

18. Forced-Choice Model Organization’s Position Environmental Assessment 1. Statement of Mission 6. Broad economic assumptions 2. Interrelated set of financial and nonfinancial objectives 7. Key government and regulatory issues 3. Statement of strengths and weaknesses . 8. Major technological forces 9. Significant market opportunities and threats 4. Forecast of operational needs 5. Major future programs 10. Explicit strategies of competitors 11. Strategic options Requirements for implementing options Contingency plans

19. STRATEGIC PLANNING What it is and how to implement it.

20. STRATEGIC PLANNING • Quality process • Aid to a Business plan • Roadmap to an objective

21. BENIFITS IN IT USES • Focus Awareness • Analyze Recognize impact • Company's potentials Opportunities and potential threats. • Change Management review • Attainable objectives A need for information • Growth Poor performance • Operational problems Communications • Road map Internal coordination • Budgets and short-range plans Security

22. WHY A COMPANY MIGHT USE SP(some examples) • BROADSCOPE • St Luke Hospital • California's Higher Education • NARROWSCOPE • Incentive Marketer • Subscription Marketer • General Motors

23. ST LUKES • Its fit within the network • Deal with new and changing Regulations • Integrate new technologies with existing facilities • Maintain financial stability and viability • How to satisfy it's customers • Patients, students, staff, community • What relationship it should have with its partners • Suppliers, physicians, maintenance

24. CALIFORNIA HIGHER EDUCATION • Increasing demand for higher education concurrent with a decline in government funding • changing student demographics multiple cultures. • New models of higher education. • Keeping elements of a "traditional" model • Lack of consensus in state government • Economic transformation

25. SUBSCRIPTION MARKETER • Marketer of subscription services of magazines was looking to expand its market beyond its current sweepstakes-based direct mail channel • By teaming up with a USPS approved provider of the USPS move-related material (including the Mover's Guide, Welcome Kit and Movers Guide. com). By offering a free service, the Company was able create a new channel within which to offer their subscription services.

26. INCENTIVE MARKETER • It's incentive programs had become mature through its current channel of telemarketers to its Retailers and Distributors. • The solution was to reach the untapped market of Fortune 1000 companies through creation of a Corporate Direct Sales organization

27. GENERAL MOTORS • Determine how to merge two U.S. Divisions and coordinate activity with European operations.

28. DEFINITION • Strategic planning is the PROCESS by which the GUIDING MEMBERS of an organization ENVISION its future and develop the necessary PROCEDURES AND OPERATIONS to achieve that future.

29. THE OBJECTIVES • Who are we • Where are we • Where do we want to go • How do we get there

30. THE OUTCOMES • A Mission Statement and Values Statement • A Vision Statement, representing the future in a five-year time horizon • A five-year Strategic Plan, linking organizational goals and objectives to departmental and individual goals and objectives • An implementation and follow-up plan

31. MISSION AND OBJECTIVES • What the firm is all about ideals that do not change referred to collectively as business vision. • It is normally expressed as a mission statement and has the following components:

32. MISSION AND OBJECTIVES • Core values • Values that are central to the firm independent of the industry environment and management fads. • examples • would be • excellent customer service • pioneering technology • creativity • integrity • social responsibility

33. ENVIRONMENTAL SCAN • internal analysis of the firm • Analysis of the firms industry • PEST Analysis

34. MISSION AND OBJECTIVES • Core purpose • the reason the firm existence • Visionary goals • future milestone the firm wants to achieve.

36. PEST Analysis • Political • Economic • Social • Technological

37. PEST Analysis • Political Factors • Tax policy • employment laws • environmental regulations • trade restriction and tariffs • political stability

38. PEST Analysis • Economic Factors • potential customers and the firms cost of capital • economic growth • interest rates • exchange rates • inflation rate

39. PEST Analysis • Social Factors • include demographic and cultural aspects • health consciousness • population growth rate • age distribution • career attitudes • emphasis on safety

40. PEST Analysis • Technological Factors • affect the barrier for entry and exit • R&D Activity • Automation • Technology incentives • Rate of technological change

41. SWOT Analysis The SWOT analysis provides information that is helpful in matching the firms resources and capabilities to the competitive environment in which it operates, As such it is instrumental in strategy formulation and selection the following diagram shows how a SWOT analysis fit into an environment scan

42. SWOT Analysis • STRENGTHS • a firms strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage • patents • strong brand names • good reputation among customer • cost advantage from proprietary know-how • exclusive access to high grade natural resources • favorable access to distribution networks

43. SWOT Analysis • WEAKNESSES • lack of patent protection • a weak brand name • poor reputation among customers • high cost structure • lack of access to the best natural resources • lack of access to key distribution channels • excess manufacturing capacity

44. SWOT Analysis • OPPORTUNTITIES • as unfulfilled customer need • arrival of new technologies • loosening of regulations • removal of international trade barriers

45. SWOT Analysis • THREATS • shifts in consumer tastes away from the firms products • emergence of substitute products • new regulations • increased trade barriers

46. STRATEGY FORMULATION • Select a strategy that matches strengths to the opportunities while addressing weakness and external threats • to obtain competitive advantage over its rivals • cost • differentiation

47. STRATEGY IMPLEMENTATION • Implementation • organization of the firms resources and motivation programs • , budgets and procedures I • communication is important in implementation also

48. EVALUATION & CONTROL • Define parameters to be measured • define target values for those parameters • perform measurements • compare measured results to the pre-defined standard • make necessary changes

50. QUALITY METHODOLOGIES • Statistical Quality Control • Six Sigma • Balanced Scorecard • Deming /Shewhart Cycle • Others