value insights

Strategic Quality Stages- Valutrics

Strategic quality requires that quality be defined as more than simply the absence of
defects or the reduction of variation. These quality definitions are internally focused.
Quality must be defined from the customer’s perspective:
• It is not those who offer the product but those whom it serves—the customers, users,
and those who influence or represent them—who have the final word on how well
a product fulfills needs and expectations.
• Satisfaction is related to competitive offerings.
• Satisfaction, as related to competitive offerings, is formed over the product lifetime,
not just at the time of purchase.
• A composite of attributes is needed to provide the most satisfaction to those whom
the product serves.
In other words, quality is a comparison between your product and those offered by oth-
ers, a comparison made by people outside of your firm. This means that quality cannot
be defined by the internal focus that still dominates the quality profession. The methods
described in section I.H of this chapter, formerly the sole domain of the marketing func-
tion, become part of the quality profession’s toolkit. In addition, focus shifts from price
to life-cycle costs, which include expenditures on service and maintenance after the pur-
chase. Customer complaints, customer lifetime value, and a number of other issues sud-
denly become the concern of senior management and the quality professional.
This new, broader, strategic perspective to quality is embraced by top management
because overwhelming evidence indicates, despite the great expense involved, it pays
handsome dividends. Quality is clearly a competitive weapon. Once this is established the
logical conclusion is “if firms with a clear quality advantage earn better market returns,
then it makes sense to beat our competitors by offering higher levels of quality than they
do.” This is the premise that drives strategic quality management.
This is a radical departure from traditional quality assurance. Traditional quality assur-
ance seeks to detect or prevent defects, i.e., departures from internally developed and
imposed requirements. The strategic approach is a commitment to a process of continu-
ous improvement relative to competitors or external norms. Such a dramatic change of
focus requires the participation of the entire company, it can’t simply be delegated to spe-
cialists in the quality department. Companywide commitment involves top management
because organizational forms must change, e.g., cross-functional management of the qual-
ity function, horizontal structures, etc.


The new approach also places new demands on quality professionals. Technical expert-
ise remains desirable, but in addition the quality professional must also understand the
company’s strategic goals. The activities in the quality department change from a focus on
inspection, auditing and procedure writing to education and training, goal setting, and
consulting support to internal departments. The role shifts from that of policeman to that
of general management. The opportunity is enormous, as is the challenge.
To facilitate the new perspective, quality is now included as an explicit part of the strat-
egy development process. Annual goals are set for quality improvement and made specif-
ic and actionable. Goals normally take into account the customer’s perspective and are
also matched against the expected performance of competitors. Both internal cost of qual-
ity measures and external customer-related quality measures are included.
Of course, the strategic approach doesn’t ignore the previously learned body of knowl-
edge of quality. SPC, design review, and all of the earlier innovations are incorporated into
the approach. These techniques and practices help to improve product quality and reduce
total cost. Also, some customer expectations can be translated into internal requirements,
which provide operational definitions for employees. Strategic quality management is an
extension of the traditional scope of quality control, not a replacement.


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