1
Instructor Reserve Case Solutions
Quality in Practice
Building Business Excellence in Hungary
Latent needs are one of the challenging issues that Westel, and other telecommunications
companies, in general, must address. Customers and other stakeholders are often not aware of
their needs and the possibilities for use of technology because the technology changes so
rapidly. In order to manage this, Westel needs (and has developed) a systematic process for
determining shareholder needs, customer needs, and employee and partner needs. This
requires use of sophisticated customer/stakeholder surveys; help lines; and tracking,
information management, and data mining systems.
It is doubtful if the results for these Hungarian firms could have been realized without using
self-assessment methods that were described in the case. Continuous improvement requires
integration of the firm’s strategic focus and plans with action planning and an on-going
process for improvement. Without the identification of opportunities for improvement
(OFI’s), it is difficult to design, track, and complete projects needed for systematic
improvement.
In small countries, such as Hungry, it is gratifying to see the results that can come out of a
“national quality award” system. After winning their national quality awards, all three of
these companies went on to higher levels of quality awards, including two that won the
EFQM, which is equivalent to the Baldrige Award. Thus it is very important to have such
country awards (which may be seen as similar to state awards in the U.S.) in order to provide
incentives and tangible evidence of excellence in the quality journey.
Six Sigma Integration at Samsung
Samsung Electronics Co. (SEC) was refocusing its strategy on developing internal resources,
especially its people, as well as putting innovation first in its development and design of
products and services. The difficulties that may have been encountered included: leadership
support for a Six Sigma initiative (possibly an attitude of: Why do we need that? – we’re
already using numerous quality approaches successfully), changing from a control structure
to one with increasing reliance on teamwork and training, and “rolling out” the new focus to
a multinational workforce. SEC had used a number of quality tools and techniques for
process and product improvement, so the quality emphasis was already a part of the
corporate culture. Six Sigma was added to upgrade these techniques and improve SEC’s
competitive position in world markets.
The Baldrige Framework for Performance Excellence 2
SEC obvious had a number of opportunities for Six Sigma projects within its supply chain.
These could include: “design for Six Sigma” in product development, improving
procurement processes to reduce costs, a variety of manufacturing process and quality
improvement projects, adopting approaches to speed delivery of parts and reduce logistics
costs, projects for “design for Six Sigma” in marketing campaigns, efforts to improve
customer focus and service for sales, and improvement of customer service and complaint
management processes in the customer service area.
Cases
I. TecSmart Electronics
1. TecSmart Electronics’ strengths (abbreviated) may be numbered for identification, as
follows:
Senior leaders set company objectives and guide cross-functional teams to review and
develop individual plans.
Senior leaders participate in quarterly communication meetings with all employees to discuss
company issues and answer questions.
Senior leaders teach courses in TecSmart University; meet with customers, suppliers, and
benchmarking partners; and are actively engaged in professional and community
organizations.
The company collects operational data in every department and evaluates its information.
TecSmart has set Six Sigma goals for most of its processes.
All employees are trained in a 5-step problem solving process.
Inputs to the strategic planning process include customer feedback, market research, and
benchmarking information from customers, suppliers, competitors, and industry leaders, etc.
The CEO reviews progress every month.
TecSmart uses over a dozen different processes to gather customer information, and validates
the information.
All employees receive customer relationship training.
All complaints are handled by the Vice President of Sales and resolved within 2 days.
Customer satisfaction data is acquired from sales representatives, etc. and these data are
reviewed and compared by the executive team during the strategic planning process.
TecSmart uses self-managed work groups where employees make most day-to-day decisions
while managers focus on coaching and process improvement.
The average employee receives 72 hours of internal quality/service-related training.
Employees have been surveyed each year to gauge how effectively the company has
implemented Deming’s 14 Points.
Cross-functional teams guide product development, which includes four interim reviews by
executive management.
New product introduction teams work with design engineers and customers to ensure that
design requirements are met and SPC is used to monitor variation, provide a basis for
corrective action, and optimize processes.
The Baldrige Framework for Performance Excellence 3
Quality is assessed through internal audits, employee opinion surveys, and customer
feedback.
Suppliers are involved in early stages of a product development program and quality
requirements for suppliers have been identified.
When related to Deming’s new version of his 14 points we can see:
1. Create a Statement of Purpose. TecSmart has a focus on quality, service, and value. This
is also reinforced by #1 and #2. By making plans (#1), and cascading them down the
organization, the leadership team can focus on the three key values. By holding quarterly
communication meetings (#2), senior leaders can reinforce their statement of purpose.
2. Learn the New Philosophy. A dedication to learning is shown in #3, #7, and #13. The best
way to learn is to teach something, as the executives do in #3. They are also learning as they
gather inputs for the strategic planning process in #7. Finally, in #13, provision is made not
only for training, but learning through the quality/service-related training sessions.
3. Understand Inspection. Inspection is not explicitly addresses, but items 4, 5, 6, and 8,
among others, show that decisions based on facts, which can involve inspection, are routinely
made.
4. End Price Tag Decisions. The basis on which decisions are made for purchasing parts and
services is not discussed. However, item #18 states that suppliers are involved in early stages
of a product development program. That implies that there is a close working relationship
between the company and suppliers, and that cost concerns are discussed and worked out to
minimize quality issues.
5. Improve Constantly. A process is in place to train employees in a 5-step problem solving
process (#6), and new processes are documented and variation in ongoing processes is
monitored for corrective action (#16).
6. Institute Training. As stated earlier, training and learning seem to be built into the “fabric”
of the company, such that executives teaching courses at TecSmart University (#3).
Customer relationship training is also required for all employees (#9). Also, in #13, provision
is made for 72 hours of training on service/quality topics, and sales, engineers, office staff,
and managers must all be trained.
7. Teach and Institute Leadership. Leadership is evident in objective-setting (#1),
communication and teaching (#2 and 3), planning (#7), complaint resolution (#10), and
middle management coaching (#12).
8. Drive Out Fear and Innovate. While driving out fear is not specifically addressed, it seems
likely that the quarterly communication sessions (#2) with top management, employee
empowerment (#12) through self-managed teams, and the annual employee surveys (#14)
would do a great deal to reduce or eliminate fear.
9. Optimize the Efforts of Teams and Staff. Teams and staff have been organized and are used
constantly as indicated by items 1, 4, 6, 7, 12, 15, 16, and 18.
10. Eliminate Exhortations. Goals are set (#5) and measurement processes are used
extensively (#8 and #11), but exhortations are never mentioned.
The Baldrige Framework for Performance Excellence 4
11. Eliminate Quotas and MBO; Institute Improvement; and Understand Processes. Again,
no mention is made of quotas or MBO. Understanding of the need for improvement, and to
know the characteristics of processes abounds.
12. Remove Barriers. #12 states that “Hourly workers can make process changes with the
agreement of only one person, and sales people are authorized to travel wherever they feel it
necessary for customer service.”
13. Encourage Education. Learning, training, and education seem to all be inter-related at
TecSmart. Nothing was explicitly stated about education, however.
14. Take Action. The company has taken action to institute quality on a number of fronts,
already.
2. TecSmart Electronics’ strengths (abbreviated – see above) can also be classified according to
the Baldrige criteria, as follows.
The seven categories in the Baldrige Criteria for Performance Management include:
1. Leadership. Items 1, 2, 3, and 7.
2. Strategic Planning. Items 1 and 7.
3. Customer and Market Focus. Items 8, 9, 10, 11, 15, and 17.
4. Measurement, Analysis, and Knowledge Management. Items 4, 5, 7, 8, 11, 16,
and 17.
5. Human Resource Focus. Items 1, 6, 9, 12, and 14.
6. Process Management. Items 4, 8, 16, and 18.
7. Business Results. Items 2, 3, 4, 7 and 17.
3. It’s difficult to find “obvious” opportunities for improvement because TecSmart
Electronics has so many “obvious” strengths. However, strategic planning (Category 2)
appears to be an area where some improvement could take place. No mention is made of how
goals are set, benchmarks are chosen, or cycles of improvement in the planning process take
place. Also, other than managers who are involved in professional and community
organizations, no mention is made of how the company addresses social responsibility
obligations. In addition, goal setting for financial objectives is not mentioned. In Business
Results (Category 7), no mention is made of processes used to track business results, or how
they are compared with internal trends and external benchmarks. Also, there are no
references to measurement of social responsibility results versus goals.
II. Catalan Bar and Grille
1. How do these practices fit into the Baldrige criteria?
Josh seems to have some good Baldrige-based ideas about how to begin building in quality
2. In what categories and items?
The Baldrige Framework for Performance Excellence 5
Note that some items appear more than once since they may relate to two or three categories.
The seven categories in the Baldrige Criteria for Performance Management and Josh’s ideas
relating to each of them include:
Leadership.
Develop efficient methods for disposal of grease and recyclable goods, and participate in
programs such as Junior Achievement. (Social Responsibility)
Strategic Planning.
Design the menu and food presentation to clearly differentiate from competitors.
Have weekly shift meetings to relay information about current issues and generate ideas for
process improvements. Review this information at monthly management meetings and
quarterly planning sessions.
Incorporate all stakeholders into planning activities, including employees, customers,
investors, and suppliers.
Customer and Market Focus.
Measurement, Analysis, and Knowledge Management.
Use an Enterprise Resource Planning system to manage information, along with a Customer
Relationship Management module to process customer intelligence. This system will help to
generate accurate forecasts of demand and manage the supply chain.
Learn about industry best practices for supply chain management and work with suppliers to
The Baldrige Framework for Performance Excellence 6
Train and empower the staff.
Process Management.
Have weekly shift meetings to relay information about current issues and generate ideas for
process improvements. Review this information at monthly management meetings and
quarterly planning sessions.
Make teams the central focus of all jobs and allow all staff to process customer requests; for
example, a busser can order an additional beverage without first getting a server to process
the transaction.
3. What aspects of the Baldrige criteria are lacking?
The three areas that may initially need more work are leadership, strategic planning, and
business results. Josh needs some leadership assistance in the form of a board of directors
that should include people with expertise in as many of the criteria as possible. They can give
4. What other things should he consider doing?
He should consider developing a focus group of customers so that he can test out reactions to
5. Students should be encouraged to visit their local restaurant association for more
information. This will serve the dual purpose of raising their awareness that such trade
The Baldrige Framework for Performance Excellence 7
organizations exist and will also help them to gain a more in-depth understanding of a