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Section I - Management and Leadership (18 Questions)

25. 1B-2a Benchmarking - Part 3

So, after looking at the steps for benchmarking, let's now look at benchmarking challenges. If benchmarking was that easy, if everyone could do it and compare with the best in class and become the best in class, then there would not be any best in class because everyone would be the best. That doesn't happen. So there are some challenges—not that every organisation or individual can overcome them and become best in class. So let's look at some of the challenges in benchmarking. The first and most important is management support. Management should be interested in spending time, money, and resources on benchmarking. That's the first challenge. Following that, your benchmarking should be in line with the organization's strategy. You can't just pick any process and start benchmarking it. Only the processing activities required by your strategy are benchmarked.

Then, due to a lack of resources, I can most likely connect with management support. So if you have management support, you probably shouldn't have a lack of resources. Again, assembling the right team is dependent on management support. Getting a suitable and willing partner Now that you want to benchmark with the best in class, why would that best-in-class company be willing to share that information with you? You need to have some reason. You need to have some give and take.

So that's another big challenge: the best-in-class organisation should be willing to share their information with your organization. And then, after all these things, your organisation should be willing to change. Because benchmarking is probably okay; you do something and make an action plan, but then you or your organisation should be willing to make those changes. Some of those changes may be difficult, but your organisation should be prepared to meet the challenge, meet the requirement, or meet the action plan; that is what benchmarking is all about. So, these are a few challenges for benchmarking. So with this, we complete one deployment technique, which is benchmarking. The next one is stakeholder analysis, identifying and analysing stakeholders' needs. Let's see that in the next video.

26. 1B-2b Stakeholder Analysis

So Currently, we are looking at deployment techniques for quality management systems. There are several techniques in this. We previously learned about benchmarking and saw how organisations use benchmarking to determine which companies are the best in class and how those processes are implemented. Moving on to the second toolin deployment, stakeholder analysis, Let's start with the stakeholders in your organisation before we get into stakeholder analysis. Any organisation will have a number of stakeholders. Stakeholders are people who are interested in your organization.

So ISO 9001 refers to these people as "interested parties." So we will talk about what ISO 9001 requires with regards to interested parties that we will see in the next slide. But right now, let's focus on who the stakeholders are or who the interested parties are. So if you look at this picture here, in which I have shown this picture in the form of a sphere, a number of layers are there. So if you look at the innermost layer, which is owners and managers, those are the people who are sort of an inner core of stakeholders who have a lot of interest in the success of the organization. Those are the core people. Following that are suppliers, customers, employees, and partners, all of whom are invested in the success of this company, your company. Then there are local community associations, the media, and finally the general public.

So These stakeholders will vary from organisation to organization. In some organisations, some people will have more interest. If this is something related to public health, then the general public would not be in the outer sphere. If it is a public health care company, they will have a larger stake in it. So, depending on your organization, you might want to list down who the stakeholders are, who the interested parties are, and what their interests are. So that can help you understand how to put a quality management system in place. On the next slide, let's look at the specific requirements of ISO 9001 with regard to interested parties or stakeholders. So, here is clause number 4.2 of ISO 9001-20-15. So, clause four states that both parties understand each other's needs and expectations. So this is something that organisations need to do before they set up their quality management system. They need to understand the needs and expectations of interested parties.

So So what does this clause require? So, if we look at clauses A and B of these four, this will tell us that organisations need to determine the interested parties that are relevant to the quality management system. So that's something about which we talked earlier, that organisations need to identify who the interested parties are. And the point is that the requirements of these interested parties that are relevant to the quality system necessitate that this organisation determine what these people require, what these interested parties require, and what their requirements are. So these are two important things in regards to interested parties or stakeholders when it comes to ISO 9001. Now, when we say stakeholder analysis, let's understand that not all stakeholders are equally interested. And as you would have seen in the sphere that we saw earlier, managers and owners are the core.

So They are more interested than the general public, who is less interested. That was one typical example, and as I said, that example might change from case to case. But then, once you have listed down all the stakeholders, you will realise that some of these are more interested in your organisation, some are less interested, and on the other hand, some are more powerful. and some are less powerful. Some can make a big change. And we can create a cross matrix here based on interest and power. So, if you look at the cross matrix, and then look at the top right corner, that is key players. As a result, key players are those who are more interested in and have more power. Who are the people in your organisation who have more power and are more interested? Let's take, for example, the owner or the manager.

So They are the people who are more interested in that, and then they have more power to make any change. Coming to the top left quarter, top left, is latent. Latent are those stakeholders who have more power? They have a lot of power, but they are less interested. Those could be the sleeping partners, people who are less interested, but they have a lot of power in the organisation to make those changes. But they don't work on a day-to-day basis. They have no effect on daily activities. So those are latent stakeholders. I'm coming to the bottom one. On the bottom right, we have defenders. Defenders are those who are interested in your organisation but don't have any power. Some of the environmental groups could fall into this category and be interested in your organization, but they don't have power. So they can only have an indirect influence by coming from the bottom left, which is apathetic.

So Apathetics are those who are uninterested and have no power. Power and interest levels are both low. One example would be the general public in the vicinity of your organization. So this is something that you can do to understand who your stakeholders are and where they fall in this quadrant. And based on that, you can take action. Based on that, you can develop your quality management system so that it meets the needs and expectations of these stakeholders. So this was the second Toolin Quality Management System deployment. So the next tool in this series of quality management system deployments would be the performance measurement tools. In that, we will be talking about performance measurement, and we will be talking about the balanced scorecard as an important tool there. Let's move on to the next video.

27. 1B-2c Performance Measures - Balanced Score Card

In the quality management system deployment techniques So far, we have talked about two tools. First, we talked about benchmarking, and then we talked about stakeholder analysis. The third Toulouse deployment is performance measurements.

So So once you are implementing a quality management system, you need to have some measures, some performance measures, so that you can see how your processes are performing, how your work is performing, and whether it is getting better or worse. So for that, you need performance measures. We have financial measures most of the time. So, how is the company doing? As a result, financial measurements are most likely the most commonly used parameter for performance measures. How much is the earnings per share, how much is the gross earning, and how much is the sale?

So Those are the most common measures. But then, in addition to that, you need to have a greater number of measures so that you can evaluate the performance of the organisation across the spectrum—across other things as well, not just the financial. For example, you could make money for a year. But then that might not help the organisation in the long term because the company might be putting too much focus on making profit and not enough on developing people so that they are trained and the processes are working better. So if a company starts losing track of all the parameters and just looks at the financial one, then in the long run, that might not be a good thing for the organization. So we need to have a bigger and broader spectrum of performance measures, not just the financial ones. One internal matrix that we could have is yield.

So So, in performance yield, you can calculate how much of component X and component Y leads to components. So that could be your processing yield. This is done mostly in the case of process industries. And then you could have a defect rate. How high is the defect rate? Well, the defect rate was 5%; now it's 3%. That can help you understand whether the processes are improving or not. Another measure could be the average time to answer a call. If you are a service organization, you are responding to phone calls from customers. How much time on average do you take to respond to a call or resolve an issue? Something could be related to scheduling. You can have some performance measures related to scheduling, such as how many orders you are delivering on time.

So So there could be a number of performance measures. But then, to make this thing systematic, a balanced scorecard was developed. Let's talk about the balanced scorecard on the next slide. So, a balanced scorecard is a method of measuring an organization's performance from all perspectives, not just financial or quality ones. So here you look at the organisation from a much broader perspective. The balanced scorecard concept was developed by Robert S. Catalan and David P. Norton. So they wrote a book and propagated the concept of the balanced scorecard. In this section, you examine the organisation through four lenses, or perspectives.

So Financial is one, customer is another, internal business processes is a third, and learning and growth is a fourth. So what we could have in financial terms—let's say in financial terms—are things related to cost, related to saving, related to payments, and related to productivity. That's something we can have related to finance. That is a financial viewpoint from the customer's point of view. Delivery time—whether we deliver things on time or not—quality—the level of service that we provide to the customer—are examples of customer perspectives. And then you are looking at the measurements related to internal business processes; these could be your quality management system, your information management system, or how your processes are working. So those would be looking at internal business processes.

So The fourth perspective, or length, through which you must examine the organisation is learning and growth. How much money is spent or how much emphasis is placed on learning to ensure that employees learn new techniques and knowledge? This could also include how much effort is put into continuous improvement efforts in the organisation and how much planning is done to ensure that people do their jobs better. So that would be something related to learning and growth. Instead of focusing solely on the financial side or one aspect of the organization, this provides a much broader perspective, allowing you to ensure that your organisation is growing in all areas rather than just one.

So So once you have evaluated or defined the specific measurements for all four categories, you can summarise that into some sort of single parameter. In the case of finance, let's say we talked about cost, savings, payments, productivity, and whatever measurements we established, you combine all those measurements and form sort of a single measurement that will give you a big sort of a dashboard, a high-level dashboard, that tells you that as far as financial measurements are concerned, OK? In this particular example, the company is on the good side of that customer.

So That is also in the "green" range, indicating that everything is in order. We are taking care of customer delivery time, we are taking care of quality, and we are taking care of customer satisfaction. So the customer part of the balanced scorecard is doing well in this particular example, and then in this example, if you look at that, it says that internal processes are in yellow. That means there are things related to internal processes.

So This could be some poor remarks in your external audit, where the auditor would have found a number of deficiencies in your internal processes. So that would put the needle on the yellow side, saying that this is the area the organisation needs to focus on. And let us not forget about learning and development. If you understand that not much effort has been done in regards to training, to continual improvement, and to the growth of employees, As a result, this needle is highlighted in red in this example.

So So that will give an indication that something needs to be done with regards to learning and growth. So this can give you a very high-level dashboard, sort of a structure that management can look into, and then you can go into details of that. So, if learning and growth are shown, and you go into the details, you will see which parts of learning and growth are in poor condition and something needs to be done. So this was our third tool, which was performance measures. In performance measures, we talked about a balanced scorecard.

28. 1B-2c Performance Measures - Leading vs Lagging Indicators

So currently, we are talking about performance measurement as a tool for quality management system deployment. And in that context, we learned about the balanced scorecard earlier. And in the balanced scorecard, we look at four things that you can use to monitor an organization. In regards to performance measures, we need to talk about one more thing here, which is leading versus lagging indicators. So whenever you set up some performance measures in the organisation to see how things are going, that could either be a leading indicator or that could be a lagging indicator.

So Assume you looked at the organization's profitability to see how much profit it was making; how would you know if things were going well or poorly? You will see that once the time has passed. So at the end of the quarter, you will see whether the company has done well or poorly in the previous quarter. So that measurement would be a lagging indicator. Lagging is an aftereffect of an event that occurs after time has passed. Then if you can measure something that would be a lagging indicator, let's say defect rate, So, for example, if you take 100 pieces, you check them, inspect them, and then you find out that five of these 100 pieces are defective and 95 pieces are good.

So So you find out that the defect rate is 5%. But when do you measure a 5% defect rate? You are the only ones who know that the defect rate is 5% if you have already manufactured and inspected the item. So that is also a lagging indicator. On the other hand, a leading indicator is something you can measure before things go wrong or right. Earlier, when we talked about the balanced scorecard, we talked about learning and employee growth. That was one parameter or way to look at the organization. So the training is a leading indicator. A "leading indicator" means that if you look at the training you have provided so far, you can sort of predict how things will be in your organisation in the coming time. Whenever you have measurements, you need to make sure that you have a balance of leading and lagging indicators.

So The problem with the leading indicator is that these are guests. You can sort of assume that if this is the current status, that's what we predict. That is the issue with the leads—they are not guaranteed. They are difficult to decide, and they are difficult to select. But they are important because they help you take action before things go wrong. That's the benefit of a leading indicator. Lagging indicators, on the other hand, are very simple to choose. You can always look at postmarks to see how things went. So you can always find out based on these lagging indicators. However, lagging indicators provide you with the specific, correct information. That is what has actually happened. So whenever you choose your indicators and performance measures in your quality management system, Make sure that you have a balance of both leading and lagging indicators.

29. 1B-2d Project Management - Gantt Chart - Part 1

So far, we've looked at three deployment techniques in the quality management system. We started with benchmarking, then looked at stakeholder analysis and talked about performance measurements. And now we are looking at the fourth tool in the deployment of a quality management system. And this is a set of tools related to project management. We will discuss the Gantt chart, the critical path method, and the CPM in these project management tools.

So And third, there are the programme evaluation and review techniques and resource allocation. Let's start with the Gantt chart, which is one of the simplest tools in this set of four tools here. So let's look at the Gantt chart on the next slide. So, a Gantt chart is a type of bar chart. So you have a bar chart where you have a number of bars. Each of these bars represents one activity. And what these bars show is the start and finish dates of that particular activity, so you get the whole summary on a sort of single sheet. There are several activities to consider if you want to implement a quality management system, for example. These activities could be looking at the system you have, looking at the gap evaluation, finalizing it with a third party or a consultant, then looking at the documentation of your quality management system and updating your documentation.

So Once you update your document, you then need to train your people. After that, you conduct an internal audit, collect all of the findings, and then invite external parties to participate. So there are a number of activities in this particular deployment of the quality management system in the organization. So how do you manage that? How do you put all these activities on a single chart showing time, that is, when to start what? so that you know whether your programme is going as per plan or there is any delay. And if there is any delay, do you need to put in some extra resources? So that's something that you will be learning in the project management techniques and specifically in the Gantt chart here. So, here is one example of the Gantt chart that I have made in Microsoft Excel. So, if you go to Microsoft Excel, there is a built-in template in the latest version of Excel that can help you make this sort of Gann chart. So in this Gann chart, if you see that this is a slightly complex Gann chart, what I will do is make a simple Gann chart.

So On the next slide, I will hand draw that. But let's look at this Gantt chart here. So what does this gain chart show? Is this showing these are the activities, from activity 1234 up to 17? So there are 17 activities. What's the planned start date? So this begins on the first day. What's the activity duration? So that's five. So if you look at this, This five-day activity begins on day one and concludes on day five. And then, when this actually started, it actually started on time.

So What's the actual duration? Instead of five days, this activity took us four days. And what's the percent completion? All of this can be represented as a bar on a Gann chart. So let's say in this Gann chart, if you are at this stage, let's say on day four, you evaluate that. So, on day four, draw a line here and you'll see that the activities on the left were supposed to take place. Then you can see the progress of that. These are things that are in the works for the future. So you can see that whether everything is working as planned or not, this one is a slightly complex gradient chart with a much simpler version of that. Let's hand it over.

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