TQM & OpEx 5ed
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Chapter 5
Partnerships & Resources
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Partnering and collaboration
• Organisations increasingly recognise the need to establish mutually beneficial
relationships in partnerships
• The philosophies behind TQM and “Excellence” lay down principles and
guidelines to support them
• How partnerships are planned and managed must be in line with overall
policies and strategies and support the operation of the processes
• Establishing effective partnerships requires attention to: strategic alignment,
customer focus, decision making & governance, communications &
transparency and investment & improvement
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Partnering collaboration radar
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Global outsourcing and the secret of safe
sourcing
• The top two reasons organisations select global suppliers are the pursuit of new
markets and reducing cost
• Yet poor quality quickly, quietly, and devastatingly demolishes the benefits of
any new market gains or cost reductions
• The difficulty of managing quality increases in direct relation to the distance
between an organisation and its partners, so a good ‘assurance’ model is needed
• Three key areas of opportunity and risk that are common across both global insourcing and outsourcing are: managing performance & exposure to risk, getting
organised for success and delivering better value from the supply chain
• Reliance upon a single source of supply can be risky so an organisation must
establish whether it is at risk
• To strengthen sourcing security in terms of quality, timeliness and cost, by
sourcing a second supplier: decide the selection criteria; make an initial selection;
toughen up the criteria & make a short list; conduct site visits, make a final
selection & choice
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Sample set of sourcing criteria
Factor
Business size and scale
Geography
Business relationship
Business maturity & capability
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Spectrum
Spectrum
Small
Single plant locations
Spectrum
Upper tier
Global footprint
Simple contract
Business partnership
Capability
Capability + maturity
The role of purchasing in
partnerships
• The prime objective of purchasing is to obtain the correct equipment, materials,
and services in the right quantity, of the right quality, from the right origin, at
the right time and cost
• Purchasing also acts as a ‘window-on-the-world’
• The purchasing system should be documented and assign responsibilities,
define the means of selecting suppliers, and specify the documentation to be
used
• Improving supplier performance requires from the suppliers’ senior
management commitment, education, a policy, an assessed quality system, and
supplier approval
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Just-in-time (JIT) management
• JIT fits well under the TQM umbrella and is essentially a series of operating
concepts that allow the systematic identification of problems, and tools for
correcting them
• JIT aims to produce or operate, in accordance with customer requirements,
without waste, immediately on demand
• Some of the direct techniques associated with JIT are batch or lot size reduction,
flexible workforce, Kanban cards, mistake proofing, set up time reduction,
standardized containers
• The development of long-term relationships with a few suppliers or ‘coproducers’ is an important feature of JIT; these exist in a network of trust to
provide quality goods and services
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Resources
• All organisations assemble resources to support operation of the
processes and deliver the strategy; these include finance,
buildings, equipment, materials, technology, information and
knowledge
• Investment and/or funding is key for future development of all
organisations and often determines strategic direction; financial
goals and performance will, therefore, drive strategies and
processes
• Use of a “balanced scorecard” approach with continuous appraisal
helps in understanding the long-term impact of financial
decisions
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Resources continued
• In the management of buildings, equipment and materials,
attention must be given to utilization, security, maintenance,
inventory, consumption, waste and environmental aspects
• Technology plays a key role in most organizations and management
of existing alternative and emerging technologies need to be
identified, evaluated and deployed to achieve organizational goals
• There are clear links between the introduction of new or the
replacement of old technologies and process re-design/engineering
• The roll out of any new systems also involves people across the
organization and good communications are vital
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Collaborative business relationships (BS
44000)
• BS 44000 provides a strategic framework to establish and improve collaborative
relationships in organisations of all sizes to ensure they are effective, optimised and
deliver enhanced benefits to the stakeholders
• BS 44000 outlines different approaches to collaborative working that can be
successful in businesses of all sizes and sectors
• It shows how to eliminate the known pitfalls of poor communication by defining
roles and responsibilities, and creating partnerships that add value to a business
• The standard lists the benefits of using the approach, including defining roles and
responsibilities to improve decision making processes, sharing cost, risks, resources
& responsibilities, providing staff with wider training opportunities, and building
better relationships that lead to quicker results
• BS 44000 also gives ‘ten top tips’ for implementation
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John Oakland
Robert Oakland
Michael Turner
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