Boston Matrix

1. Boston Matrix

2. Putting Quality First Can quality once again be the first priority and drive competitive advantage? David Hoyle Hon FCQI. CQP

3. Positive views from Linkedin Yes if we are talking about big Q Qualityis the only thing an organization needs to do Quality first, yes of course Companies havelittle choice otherthan toget quality right Ford made Quality Job#1 Putting quality first sustains delivery of business results

4. Negative views from Linkedin Profit comes first Safety comes first Neither come first, there has to be a balance Quality has never been first Putting quality first could be damaging Putting quality first is conceptually flawed

5. The resultant issues Quality? Big Q or Systems Approach? Quality and profit? Balancing priorities? Quality First?

6. Quality?

7. the need, requirement or expectation Standard Superior quality Satisfactory quality The performance level reached Inferior quality Time Definition The degree to which a set of inherent characteristics fulfils requirements (ISO 9000) (Zone of acceptability) The gap between achievement and expectation

8. Quality, safety, & reliability • Quality characteristics • permanent distinguishing feature related to a requirement (need or expectation) • Safety and reliability are quality characteristics of a product, process, system etc • If safety, reliability or any other characteristic is critical it would be a top priority but doing so does not subordinatequality

9. Quality, price & delivery • Price and delivery are assigned characteristics. • Rolls Royce Phantom..........."After the price is forgotten quality endures" • Product quality, price quality and delivery quality

10. Point 1 • Putting quality first is not about putting conformity above design or product above process, or one characteristic above another; its about fulfilling expectations

11. Big Q, TQM or Systems Approach?

12.  Q Service Process Distribution Alliances Profit Product Marketing Demand Increase Consumption       Q Q Q Q Q Q    Q Q Q Increase health risk Employment Life System Increases body weight Virtuous and vicious circles

13. Rights and responsibilities • Every business has a right to seize opportunities to make money providing it’s legal • With rights come responsibilities • No business should knowingly put life, property or the environment at risk • But until there is irrefutable evidence businesses are not compelled to act

14. Competitive advantage • Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors.

15. Q Competition Q Q Q Q Q National culture Research Social infrastructure Personal fitness Health care Education Q Government Drivers of competitive advantage Education system Social infrastructure Health & fitness Domestic competition Research Culture

16. Quality of what? goods, service, process, distribution, system, profit, alliances, employment, life, marketing, education, personal fitness, competition, research, culture, government……… Without association with an object discussion about quality is meaningless; it causes assumptions to be made by the parties involved that get in the way of effective communication Behaviour Actions & Decisions Work

17. Point 2 • Within any given system are many variables. Prioritizingthe quality of any one variable to the detriment of others may lead to undesirable consequences.

18. Point 3 • Satisfying customers in the short term is not profitable in the long term if you are selling them a product or a service that will ultimately do them harm

19. Quality and profit?

20. X Unsustainable strategy Output Money making process

21. Process Output: Class 1 eggs Input Output Money making process Sustainable strategy

22. The source & function of profit • Profit comes from creating and adding value. • Profit is the result of what you do not the reason for doing it. • It’s needed to cover the risks and invest in the future. • To GET, you must first GIVE or to reap you must first sow • We have allowed the financial system to becomemaster, not servant, of industry

23. Productivity is key • Interest rates, exchange rates & labour rates are not barriers to competitive advantage • The only meaningful concept of competitiveness at the national level is productivity. • Productivity depends on both the quality and features of products (which determine the prices that they can command) and the efficiency with which they are produced. (M Porter 1990) Productivity depends on both the quality of products and the efficiency with which they are produced. (M Porter 1990)

24. Balancing priorities?

25. Stakeholder Needs MISSION Customers Investors Employees Suppliers Society Objectives Objectives Objectives Objectives Objectives Deriving objectives How can we fulfil all requirements and stay in business?

26. Adjusting objectives • Customers • let our customers find the faults • Suppliers • Delay paying invoices until they threaten legal proceedings • Employees • Delay pay rise until next year and only pay those we want to keep if they hand in their notice • Society • Don’t comply with certain regulations until we are compelled to do so • Investors • Pay smaller dividend and pay bonus to directors instead

27. Customers Investors Employees Suppliers Society Constraints Objectives/Constraints Constraints Constraints Constraints Who do we work for? MISSION Satisfy customers in a way that meets the needs of other stakeholders in the long term Without customers none of the others stakeholders exist for long

28. Redefining objectives • Design, produce and market a range of new products that meet defined customer needs by Dec 2016 in a way that: • Captures 30% of the market (Suppliers/Investors) • Delivers a 7% profit (Investors/Employees) • Consumes 25% fewer resources than the product it replaces (Society/Investors) • Is free of defects and occupational injuries and illnesses from the start (Employees) • Reduces emissions to atmosphere by 30% (Society) • Creates employment in the local community (Society)

29. Point 4 • Putting quality first is not about putting anything second, its about knowing which is the objective and which the constraint and achieving the objective in a way that satisfies the constraints

30. Quality First?

31. Reputation Reputations are hard to win and easy to loose • Providing fault free products that possess the features customers want • World leader • Providing products that possess most of the features customers want but which might be faulty • Average player • Providing faulty products that don’t possess the features customers want but appear as if they do • Rogue trader

32. Quality first principle in USA 80 yrs later Ford declares as one of its guiding principles in Q101, that Quality comes first “To achieve customer satisfaction, the quality of our products and services must be our number one priority.” Henry Ford 1910 • For Henry Ford, quality was the number one priority in manufacturing his cars. He felt that if one of his cars broke down on a customer, that he was personally to blame. “It was our duty to see that his machine was put into shape again at the earliest possible moment”.

33. Quality first principle in Germany • Robert Bosch 1919 It has always been an unbearable thought to me that someone should inspect one of my products and find it inferior. I have therefore always tried to ensure that only such work goes out as is superior in all respects.

34. Quality first principle in USA Alfred P Sloan 1925 We have elected, as a large corporation, to build quality products sold at fair prices …however we must admit that such a policy throws the added responsibility upon our sales departments to get the cost of quality plus a profit on quality

35. Quality first principle in USA Newport News Shipbuilding circa 1940 • We will buildgood ships here; at a profit if we can,at a loss if we must, but always good ships

36. Quality first principle in UK • Bill Haydon VP Manufacturing Ford Europe 1984 postponed the launch of the twin cam engine by two years because the quality wasn’t up to Japanese quality levels of 5 defects per 100 engines.

37. Quality first principle in Japan • Kaoru Ishikawa 1981 The pursuitof short-term profit, loses competitiveness and ultimatelylong-term profit whereas putting "quality first" increases profits in the long-run. • Masaaki Imai 1986 Ifyou take care of the quality, the profits will take care of themselves

38. Quality first principle in Japan today • It’s an attitude of mind • It’s a fundamental management concept • It’s not a big issue because its acknowledged by all people in all levels of the company.

39. Who puts quality first

41. Quality first is a principle Ignore this principle and you may be endangering life, endangering the environment, endangering the jobs of your colleagues and jeopardising the long term profits of the company When quality is made the first priority in all actions and decisions the long term needs and expectations of all stakeholders are assured • A guide to action; not a rule, requirement or objective. • May not be useful under all conditions. • A violation of a principle results in consequences.

42. We have a choice • Do we • compromise the quality of our work to meet a delivery target or to save time andmoney and thus increase short term profits? • or • make the quality of our work the first priority then fathom out how we can satisfy theconstraints imposed by the other stakeholders?

43. Point 5 • Not putting quality first is knowingly producing work that is substandardand charging the same price as if it were work of an acceptable standard.

44. Putting quality first ordelivery first • You are put under pressure to deliver a product to a customer knowing that all theproduct requirements have not been fulfilled • You run out of the approved material and can’t get a delivery in time to honour yourcommitment to your customer but you do have an untested alternative

45. Putting quality first or cost first • You are notified about a batch of defective product of relatively low value and decide toscrap the lot. Then you are notified of another batch, and then another batch, the valuenow runs into thousands. • You find that a subordinate manager is rewarding production teams for record runsrelated to volume/waste/delay and during the run quality (incl safety) is notconsidered

46. Point 6 • Making quality the first priority is about a way of thinking, it’s a principle that one can choose to adopt but ignoring it when making choices may have undesirable consequences

47. Summary of Points • Quality first is about fulfilling expectations. • Prioritizingthe quality of any one variable to the detriment of others may lead to undesirable consequences • Satisfying customers in the short term is not profitable in the long term if you are selling them product that will ultimately do them harm

48. Summary of Points • Quality first is about achieving the objective in a way that satisfies the constraints • Not putting quality first is knowingly producing work that is substandardand charging the same price as if it were work of an acceptable standard • Making quality the first priority is about a way of thinking and getting everyone to think this way creates a competitive advantage.

49. Food for thought • There is an implication that if an organization is certificated to ISO 9001, it must have made a commitment to make quality the first priority