Global Quality Symposium

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The Critical SuccessThe Critical SuccessFactors of OrganisationalFactors of Organisational

Quality PracticesQuality Practicesbyby

Toto H. SubagyoToto H. Subagyo

Global Quality SymposiumGlobal Quality Symposium

Kartika Chandra Hotel, JakartaKartika Chandra Hotel, Jakarta

8-9 September 20038-9 September 2003


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19 March 2012 [email protected] 3

Profit through QualityProfit through Quality

OperatingOperating

CostCostAA

PP

ProfitProfit

SalesSales

BB

QualityQuality

ImprovementImprovement

Increased PROFIT through Quality improvement absorbs lessIncreased PROFIT through Quality improvement absorbs less

incremental operating cost than through organising more Sales.incremental operating cost than through organising more Sales.


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Profit through QualityProfit through Quality

CustomerCustomer

SatisfactionSatisfaction

Quality ImprovementQuality Improvement

SalesSales

CUSTOMER SATISFACTION through QualityCUSTOMER SATISFACTION through Quality

improvement carries its own acceleration resultingimprovement carries its own acceleration resulting

in increased sales at minimum incremental cost.in increased sales at minimum incremental cost.


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Current thinking . . .Current thinking . . .

. . . in business suggests that. . . in business suggests that organisationsorganisationsmust continuously improvemust continuously improvequalityquality ofof

theirtheirproductsproducts andand servicesservices, their, theirprocessesprocesses,,and theirand theirpeoplepeople. Failure to improve in all. Failure to improve in allthree areas leads to stagnation and thethree areas leads to stagnation and thedecline of any business.decline of any business.

Source:Source:

Earl Naumann and Steven H. Hoisington,Earl Naumann and Steven H. Hoisington, Customer Centered Six Sigma: LinkingCustomer Centered Six Sigma: LinkingCustomers, Process Improvement, and Financial ResultsCustomers, Process Improvement, and Financial Results (Milwaukee, Wisconsin: ASQ(Milwaukee, Wisconsin: ASQQuality Press, 2001).Quality Press, 2001).


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Otherwise . . . ?Otherwise . . . ?


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Quality Practices ~ FirmQuality Practices ~ Firms Performances Performance

IMPROVED PROFITABILITYIMPROVED PROFITABILITY

ImprovedImproved

AssetAsset

UtilisationUtilisation

ImprovedImproved

MarginMargin

LowerLower

CostsCosts

GreaterGreater

ProductivityProductivity

ReducedReduced

WasteWaste

RevenueRevenue

GrowthGrowth

GreaterGreater

ValueValue

IncreasedIncreased

MarketMarket

ShareShare

QUALITYQUALITY

ConformanceConformance PerceivedPerceived


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Quality Definition (cont.)Quality Definition (cont.)

the definition of quality should not bethe definition of quality should not be

associated with product quality aloneassociated with product quality alone

but also , more importantly, with abut also , more importantly, with a

process in which the quality of theprocess in which the quality of the

product can only be ensured by theproduct can only be ensured by the

process.process.


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Quality ManagementQuality Management

. . . managing a process of delivering. . . managing a process of delivering

quality to satisfy the requirements ofquality to satisfy the requirements of

customercustomerandand industry standardsindustry standards, in, in

which particularwhich particularmanagementmanagement

techniquestechniques and organisationand organisation

commitment throughcommitment through employeesemployees

involvementinvolvement are necessary.are necessary.


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Quality Practices inQuality Practices in

Airlines OperationsAirlines Operations


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The Airlines Operations functionThe Airlines Operations function

. . . to get people and goods to their. . . to get people and goods to their

destination, based on the schedule that itdestination, based on the schedule that it

publishespublishes ,,

the operations function flight and groundthe operations function flight and ground

operations and aircraft line maintenance,operations and aircraft line maintenance,will become the focus of this study.will become the focus of this study.


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The Airlines Operations function (cont.)The Airlines Operations function (cont.)

Also, because this function isAlso, because this function is a core activitya core activity

of an airlineof an airlines operational processs operational process,,

it can make a contribution to the success orit can make a contribution to the success or

failure offailure ofdelivering quality in the productdelivering quality in the product

and direct service to the customer.and direct service to the customer.


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The Operational FunctionThe Operational Function

Marketing, sales and servicesMarketing, sales and services make decisions aboutmake decisions aboutmarketing policy, so as to define the market sector andmarketing policy, so as to define the market sector anddemand, and develop the product specification, withdemand, and develop the product specification, with

reference to the ability of the production systems.reference to the ability of the production systems. Engineering and maintenanceEngineering and maintenance keep the companyskeep the companys

equipment in condition to provide safe and saleable airequipment in condition to provide safe and saleable airtransportation.transportation.

Flight and ground operationsFlight and ground operations are responsible for developingare responsible for developingflight operation policies, procedures, and techniques thatflight operation policies, procedures, and techniques thathave as their purpose the safe, efficient, and progressivehave as their purpose the safe, efficient, and progressiveoperation of aircraft.operation of aircraft.


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Three Elements of OrganizationThree Elements of Organization

CCustomer -ustomer - are served and accommodated in interaction with theare served and accommodated in interaction with theoperatives, with or without using the equipment and facilities.operatives, with or without using the equipment and facilities.

EEquipment and Facility -quipment and Facility - includes the aircraft itself, aircraft groundincludes the aircraft itself, aircraft ground

support equipment, flight loading/unloading equipment, and airportsupport equipment, flight loading/unloading equipment, and airportterminal and ramp facilities related to the requirements of the flightterminal and ramp facilities related to the requirements of the flightconcerned.concerned.

OOperatives -peratives -persons who handle the various types of airlinepersons who handle the various types of airlineequipment, facilities, passengers and goods.equipment, facilities, passengers and goods.

C . E . OC . E . O


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Desk ResearchDesk Research

Quality Management Studies;Quality Management Studies; - Saraph et al.. (1989),Flynn et al.. (1991), Porter & Parker (1993), Black & Porter (1995),

and Ahire et al.. (1996).

Airlines Case Studies;Airlines Case Studies;- British Airways (Bank, 1992; Heskettet al., 1997), Singapore Airlines (Yun et al., 1996), KLM Royal Dutch

Airlines (Ran and Sluis, 1997), Scandinavian Airlines System

(Azhashemi and Ho, 1999), Southwest Airlines (Bunz and Maes,

1998; Laszlo, 1999), Federal Express (Binney, 1992), Malaysia

Airlines (Zaid, 1994), and Japan Air Lines (Rosander, 1985).


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7 Critical Success Factors & 37 Critical Success Factors & 3

Organizational Context VariablesOrganizational Context Variables1.1. CCustomer Relationshipustomer Relationship

1.1. ProcessProcess OOrientation &rientation &TechniqueTechnique

1.1. MMotivation and Skillotivation and Skill1.1. InforInformmation Utilization &ation Utilization &

AnalysisAnalysis

1.1. IInterdepartmental Interactionnterdepartmental Interaction

1.1. Technology & MarketTechnology & MarketTTurbulence Awarenessurbulence Awareness

2.2. ManageManagementment BehaviourBehaviour

COMMITMENTCOMMITMENT

1.1. Past qualityPast qualityperformanceperformance

2.2. External qualityExternal quality demanddemand

3.3. ManagementManagement knowledgeknowledge

PERFORMANCE DEMANDPERFORMANCE DEMANDKNOWLEDGEKNOWLEDGE


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2. Process2. Process OOrientation &rientation &

TechniqueTechnique ensures efficient work across variousensures efficient work across various

related functions within therelated functions within the

organisation, such asorganisation, such as organisationalorganisational

structuresstructures,,process managementprocess management,,

management systemsmanagement systems,, qualityquality

technologytechnology andand teamwork structuresteamwork structures..


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4. Infor4. Informmation Utilization & Analysisation Utilization & Analysis

make each function within themake each function within the

organisation aware of their weaknessesorganisation aware of their weaknesses

and strengths, as well as actions to beand strengths, as well as actions to betaken regarding the continuity andtaken regarding the continuity and

effectiveness of the organisationeffectiveness of the organisations processs process

chain as a whole, such aschain as a whole, such as quality data andquality data andreportingreporting,, communicationcommunication,, measurementmeasurement

systemssystems, and, andbenchmarkingbenchmarking..


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5.5. IInterdepartmental Interactionnterdepartmental Interaction

determine the ease of the flow of workdetermine the ease of the flow of work

from one function to another withinfrom one function to another within

the organisation, such asthe organisation, such as

interdepartmental connectedness andinterdepartmental connectedness and

conflictconflict..


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6. Technology & Market6. Technology & Market TTurbulenceurbulence

AwarenessAwareness enhance the employeesenhance the employees awareness inawareness in

pursuing quality for their product andpursuing quality for their product and

service, such asservice, such as awareness of changingawareness of changing

market demandmarket demand andand the development ofthe development of

technologytechnology in the industry.in the industry.


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7. Manage7. Managementment BehaviourBehaviour

makes a driver for the other factorsmakes a driver for the other factors

above, such asabove, such as the role of managementthe role of management

leadershipleadership,, top management supporttop management support

andand quality achievement rewardsquality achievement rewards..


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Three Organizational Context (cont)Three Organizational Context (cont)

External qualityExternal quality demanddemand is the area ofis the area of

quality of product or services to bequality of product or services to be

improved in order for the organisation toimproved in order for the organisation toremain in business. It will determineremain in business. It will determine thethe

quality requirement for the outputquality requirement for the output of theof the

operational functions.operational functions.


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Three Organizational Context (cont)Three Organizational Context (cont)

ManagementManagement knowledgeknowledge is a variable thatis a variable that

will influence how management leadwill influence how management lead

process quality improvement within theprocess quality improvement within theorganisation. It will determineorganisation. It will determine

commitment of the organisationcommitment of the organisations staffs staff

and the managementand the management, in particular., in particular.


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Terima Kasih

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