Ch2 JAD Breakthrough and Beyond.pdf - Juran Institute

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20 CHAPTER Two THE BASIC TASK OF MANAGEMENT: THE JURAN TRILOGY 21 the supplier and customer). All organizational and individual performance is dedicated to that end (or should be). • Products can be hard goods, services (work done for someone else), or information (data, software, etc.). Products are produced by means of processes. • A process is a sequence of tasks or events that creates an output-a product: goods, services, or information. Processes include everything involved in each step: people, techniques, software, machines, tools, raw materials, facilities, procedures, management practices, etc. • A customer is one who receives the output of a process or any step in the process. A client is a special kind of customer who pays for what is received. Customers do not necessarily pay, although they may. There are two basic types of customers: external (located outside of your organization) and internal (located within your organization). Each type of customer has needs that must be met if the organization is to serve its purpose. Usually, in a world-class organization, meeting the needs of internal customers is a prerequisite for being able to meet the needs of external customers. Management must devote its energy to meeting both sets of needs, with equal vigor and dedication. • A high-quality product is one that meets the needs of its customers at the lowest cost (minimum waste and maximum consistency). Quality is measured by determining the extent to which these two criteria are met. Observing the two possible characteristics of the outputs of a process-product features (good characteristics) and deficiencies (bad characteristics) makes this determination. It follows that the job of managers (leaders) is to produce high-quality products by putting in place all the necessary means to do this. The necessary means are described in the principles of the trilogy. • Process outputs can embody both product features and deficiencies. • Product features are the characteristics, or properties, of a product that meet specific needs of specific customers. For a person who purchases an automobile for personal use, the needs are the benefits sought from the automobile: transportation, style, status, and comfort. The associated product features are what specifically about the product meets each need. For the needs just listed, the product features may be a capacity of six passengers, power, top speed, acceleration, range, aerodynamic design, price, leather bucket seats, and premier sound system. For a patient in a hospital, desired benefits (needs) may include quick admission, comfortable bed, and curing the ailment. The associated (service) features might be pre-admission by phone in advance of checking in, scientifically designed power-adjustable bed, and a recovery with no infection, no relapse, and no repeated treatment. Product features are what make the customer happy and give satisfaction. Product features are what produce sales and repeat demand. • Deficiencies are things that are wrong with the product-or the process. Examples of deficiencies are specific defects, excessive time cycles, and excessive costs. Defects include errors, omissions, the need for reworking or scrapping a product, etc. Defects make customers unhappy and produce dissatisfaction. Defects result in a loss of profitability because of the costs of poor quality (unnecessary waste) that eat into the bottom line and can reduce or prevent sales. NOTE: Satisfaction and dissatisfaction are not opposites. They are separate dimensions of customer reaction. Reducing dissatisfaction does not produce satisfaction; it merely reduces dissatisfaction. Increasing satisfaction does not decrease dissatisfaction; it merely increases satisfaction. Therefore, you cannot make customers who are dissatisfied by defects in your product less dissatisfied and happier by giving them more product features. For example, you can't make people happy with their unreliable cell phone service by granting them a large amount of free air time. They'll be pleased with the free time, but they'll still be unhappy with the lousy phone service. J
22 CHAPTER Two THE BASIC TASK OF MANAGEMENT: THE JURAN TRILOGY 23 The Juran Trilogy is a management system for producing ideal product features and minimum deficiencies at lowest possible costs. Following the Trilogy permits an organization to maximize customer satisfaction (by economically producing ideal product features) and minimize dissatisfaction (by reducing or eliminati,ng deficiencies and the costs of poor quality-waste-associated with deficiencies). Embedded in the Trilogy principles is the concept that work gets done; that is, products are produced by means of multifunctional processes. The production of a product is the ultimate result of inputs and outputs at each successive step in a spiral of functional activities. In manufacturing, for example, the spiral may travel through functions such as sales, design, test, procurement, storage and retrieval, production and inventory control, operations, packaging, shipping, customer service, and so on. The production process is theoretically seamless, and travels from beginning to end of the spiral and then repeats the cycle over and over. Although the spiral is seamless, in practice, it is not always observed to operate that way. When one attempts to observe organizational processes, one encounters some strange sights. One strange sight is that a typical organization is organized into a group of relatively vertical functional silos, each devoted to providing a specific organizational function: procurement, design, sales, production, transportation, trainirig, human resources, and the like. Each function has its own manager, its own budget, and its own goals. It may have its own norms and customs, and its own language. People residing in a given silo look to the manager of that silo for guidance and direction, and have a tendency to view their job in terms of the tasks they perform on behalf of their own function. Often, the organization reward system reinforces all this. This state of affairs is strange because the processes by which the organization's ultimate products are produced move across multiple functions. Nevertheless, it is rare to observe multifunctional management structures to control the whole process as it moves across the fiefdoms of the functional managers. Cost accounting prpcedures typically track functional, not multi-functional costs, even though the major costs of poor quality (waste) occur multi- or cross-functionally. One observes multi-functional processes being managed functionally! All this can result in delays, confusion, bad feelings, unreliable enmmunication, and uncoordinated activity, not to mention unnecessarily high costs and other barriers to efficiency and effectiveness. Fortunately, there is an emerging trend toward multifunctional accounting and managing, but it is by no means universal. Clearly, management has,ajob to do to untangle the organization from this disconnect between performance and structure that produces a steady stream of poor quality and unnecessary waste. When managers follow the principles of the trilogy, they can do the job. THE BASIC TASKS OF MANAGEMENT According to the Juran Trilogy, management performs three basic tasks. First, it sets goals (strategic and operational goals and quality goals for products and processes), and puts in place the means to attain those goals. The process for setting organizational goals is called strategic planning and quality planning (product and process design). The umbrella term "planning" is used to designate activities that are carried out in preparation for taking action. Planning establishes, among other things, specific standards/specifications for specific products or processes. Financial planning, a similar exercise, sets out the financial goals and the means to achieve them and results in a budget (a financial plan). Second, management prevents or corrects unwanted "bad" change. This process is known as control. More precisely, control consists of measuring actual performance, comparing it to the target or standard, and taking action on the (bad) difference. Control maintains the standards, requirements, and specifications set in planning. The goals of control are stability, repeatability, and consistency.
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