Boston Matrix
What was supposed to
happen?
Why was there a
difference?
What actually happened?
(Did we get hurt?)
What have we learnt?
Actions?
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
 David Hoyle 2012
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
Putting Quality First
Can quality once again be the
first priority and drive
competitive advantage?
David Hoyle Hon FCQI. CQP
Positive views from Linkedin
Yes if we are
talking about
big Q
Companies have little
choice other than to
get quality right
Ford made
Quality Job#1
 David Hoyle 2012
Quality is the only thing
an organization needs to
do
Quality first,
yes of course
Putting quality first
sustains delivery of
business results
Negative views from Linkedin
Profit comes
first
Neither come
first, there has
to be a balance
Putting quality
first could be
damaging
 David Hoyle 2012
Safety comes
first
Quality has
never been
first
Putting quality first
is conceptually
flawed
The resultant issues
Big Q or
Systems
Approach?
Quality?
Quality
and
profit?
Balancing
priorities
?
 David Hoyle 2012
Quality
First?
Quality?
 David Hoyle 2012
Definition
The degree to which a set of inherent
characteristics fulfils requirements (ISO 9000)
the need, requirement or expectation
Standard
Superior quality
Satisfactory quality
(Zone of
acceptability)
Inferior quality
The performance level reached
Time
The gap between achievement and expectation
 David Hoyle 2012
Quality, safety, & reliability
Quality characteristics
– permanent distinguishing feature related
to a requirement (need or expectation)
Safety and reliability are quality
characteristics of a product, process,
system etc
If safety, reliability or any other
characteristic is critical it would be a
top priority but doing so does not
subordinate quality
 David Hoyle 2012
Quality, price & delivery
Price and delivery are assigned
characteristics.
Rolls Royce Phantom..........."After the
price is forgotten quality endures"
Product quality, price quality and
delivery quality
 David Hoyle 2012
Point 1
Putting quality first is not about
putting conformity above design or
product above process, or one
characteristic above another; its
about fulfilling expectations
 David Hoyle 2012
Big Q, TQM
or
Systems
Approach?
 David Hoyle 2012
Virtuous and vicious circles
Service


Distribution 
Q
Marketing
Q
Q Product 
Q

Q
Process
Demand
Increase
Consumption
QProfit
Q
System
 David Hoyle 2012
Q
Life
Increase health
risk
QAlliances
Q
Employment
Increases body weight
Rights and responsibilities
 Every business has a right to seize
opportunities to make money providing it’s
legal
 With rights come responsibilities
 No business should knowingly put life,
property or the environment at risk
 But until there is irrefutable evidence
businesses are not compelled to act
 David Hoyle 2012
Competitive advantage
Competitive advantage occurs when
an organization acquires or develops
an attribute or combination of
attributes that allows it to
outperform its competitors.
 David Hoyle 2012
Drivers of competitive
advantage
Education system
Q Education
Social infrastructure
Q Social infrastructure
fitness
Health & fitness
Q Personal
Health care
Domestic competition
Q Competition
Research
Q Research
Culture
Q National culture
Government
 David Hoyle 2012
Q
Quality of what?
goods,
service,
process,
system,
Without
association
withdistribution,
an object discussion
profit,
alliances,
employment,itlife,
marketing,
about quality
is meaningless;
causes
education, personal fitness, competition,
assumptions to be made by the parties
research, culture, government………
involved that get in the way of effective
communication
Work
Behaviour
Actions
& Decisions
 David Hoyle 2012
Point 2
Within any given system are many
variables. Prioritizing the quality of
any one variable to the detriment of
others may lead to undesirable
consequences.
 David Hoyle 2012
Point 3
Satisfying customers in the short
term is not profitable in the long
term if you are selling them a product
or a service that will ultimately do
them harm
 David Hoyle 2012
Quality and
profit?
 David Hoyle 2012
Money making process
X
 David Hoyle 2012
Unsustainable
strategy
Output
Money making process
Sustainable
strategy
Process
Output:
Class 1 eggs
Input
 David Hoyle 2012
Output
The source & function of profit
 Profit comes from creating and adding
value.
 Profit is the result of what you do not the
reason for doing it.
 It’s needed to cover the risks and invest in
the future.
 To GET, you must first GIVE or to reap you
must first sow
 We have allowed the financial system to
become master, not servant, of industry
 David Hoyle 2012
Productivity is key
 Interest rates, exchange rates & labour
rates are not barriers to competitive
advantage
 The only meaningful concept of
competitiveness at the national level is
productivity.
 Productivity
Productivity depends
depends on
on both
both the
the quality
quality of
and features
of products
(which
products
and the
efficiency
with determine
which they
the produced.
prices that(Mthey
can 1990)
command) and the
are
Porter
efficiency with which they are produced.
(M Porter 1990)
 David Hoyle 2012
Balancing
priorities?
 David Hoyle 2012
Deriving objectives
Stakeholder Needs
MISSION
Customers
Investors
Employees
Suppliers
Society
Objectives Objectives Objectives Objectives Objectives
How can we fulfil all requirements and stay in business?
 David Hoyle 2012
Adjusting objectives
 Customers
– let our customers find the faults
 Suppliers
– Delay paying invoices until they threaten legal
proceedings
 Employees
– Delay pay rise until next year and only pay those we
want to keep if they hand in their notice
 Society
– Don’t comply with certain regulations until we are
compelled to do so
 Investors
– Pay smaller dividend and pay bonus to directors instead
 David Hoyle 2012
Who do we work for?
MISSION
Customers
Investors
Employees
Suppliers
Society
Objectives/ Constraints Constraints Constraints Constraints
Constraints
Satisfy
customers
in anone
way that
meets
thestakeholders
needs of other
stakeholders
Without
customers
of the
others
exist
for long
in the long term
 David Hoyle 2012
Redefining objectives
 Design, produce and market a range of new
products that meet defined customer needs by
Dec 2016 in a way that:
– Captures 30% of the market (Suppliers/Investors)
– Delivers a 7% profit (Investors/Employees)
– Consumes 25% fewer resources than the product it
replaces (Society/Investors)
– Is free of defects and occupational injuries and
illnesses from the start (Employees)
– Reduces emissions to atmosphere by 30% (Society)
– Creates employment in the local community (Society)
 David Hoyle 2012
Point 4
Putting quality first is not about
putting anything second, its about
knowing which is the objective and
which the constraint and achieving
the objective in a way that satisfies
the constraints
 David Hoyle 2012
Quality
First?
 David Hoyle 2012
Reputation
Reputations are hard to win and easy to loose
 Providing fault free products that possess
the features customers want
– World leader
 Providing products that possess most of
the features customers want but which
might be faulty
– Average player
 Providing faulty products that don’t possess
the features customers want but appear as
if they do
– Rogue trader
 David Hoyle 2012
Quality first principle in USA
80
yrs Ford
later 1910
Ford declares as one of
Henry
its guiding
principles
in Q101,was
that
For Henry
Ford, quality
the
Quality
comes
first in
number
one priority
manufacturing his cars. He felt
that
if onecustomer
of his cars
broke downthe
“To
achieve
satisfaction,
on a customer,
that he
was
quality
of our products
and
services
personally
to
blame.
“It
was
our
must be our number one priority.”
duty to see that his machine was
put into shape again at the
earliest possible moment”.
 David Hoyle 2012
Quality first principle in
Germany
Robert Bosch 1919
It has always been an unbearable
thought to me that someone should
inspect one of my products and find it
inferior. I have therefore always tried
to ensure that only such work goes out
as is superior in all respects.
 David Hoyle 2012
Quality first principle in USA
Alfred P Sloan 1925
We have elected, as a large
corporation, to build quality products
sold at fair prices …however we must
admit that such a policy throws the
added responsibility upon our sales
departments to get the cost of
quality plus a profit on quality
 David Hoyle 2012
Quality first principle in USA
Newport News Shipbuilding circa
1940
We will build good ships here;
at a profit if we can, at a loss if
we must, but always good ships
 David Hoyle 2012
Quality first principle in UK
Bill Haydon VP Manufacturing
Ford Europe 1984 postponed the
launch of the twin cam engine by
two years because the quality
wasn’t up to Japanese quality
levels of 5 defects per 100
engines.
 David Hoyle 2012
Quality first principle in Japan
Kaoru Ishikawa 1981
The pursuit of short-term profit,
loses competitiveness and
ultimately long-term profit whereas
putting "quality first" increases
profits in the long-run.
Masaaki Imai 1986
If you take care of the quality, the
profits will take care of themselves
 David Hoyle 2012
Quality first principle in Japan
today
It’s an attitude of mind
It’s a fundamental management
concept
It’s not a big issue because its
acknowledged by all people in all
levels of the company.
 David Hoyle 2012
Who puts quality first
 David Hoyle 2012
 David Hoyle 2012
Quality first is a principle
Ignore
principle
you may
A guidethis
to action;
not and
a rule,
berequirement
endangering
life, endangering
When
quality or
is objective.
made
the first
the
environment,
endangering
the
priority
alluseful
actions
andalldecisions
May
notinbe
under
jobs
of your
the
long
termcolleagues
needs andand
conditions.
expectations
of
all
stakeholders
jeopardising
long
term
profits
A violation ofthe
a principle
results
in
are
assured
ofconsequences.
the
company
 David Hoyle 2012
We have a choice
Do we
– compromise the quality of our work to
meet a delivery target or to save time
and money and thus increase short term
profits?
or
– make the quality of our work the first
priority then fathom out how we can
satisfy the constraints imposed by the
other stakeholders?
 David Hoyle 2012
Point 5
Not putting quality first is knowingly
producing work that is substandard
and charging the same price as if it
were work of an acceptable standard.
 David Hoyle 2012
Putting quality first or delivery first
You are put under pressure to deliver
a product to a customer knowing that
all the product requirements have not
been fulfilled
You run out of the approved material
and can’t get a delivery in time to
honour your commitment to your
customer but you do have an untested
alternative
 David Hoyle 2012
Putting quality first or cost first
You are notified about a batch of
defective product of relatively low value
and decide to scrap the lot. Then you are
notified of another batch, and then
another batch, the value now runs into
thousands.
You find that a subordinate manager is
rewarding production teams for record
runs related to volume/waste/delay and
during the run quality (incl safety) is not
considered
 David Hoyle 2012
Point 6
Making quality the first priority is
about a way of thinking, it’s a
principle that one can choose to adopt
but ignoring it when making choices
may have undesirable consequences
 David Hoyle 2012
Summary of Points
 Quality first is about fulfilling expectations.
 Prioritizing the quality of any one variable to
the detriment of others may lead to
undesirable consequences
 Satisfying customers in the short term is not
profitable in the long term if you are selling
them product that will ultimately do them
harm
 David Hoyle 2012
Summary of Points
 Quality first is about achieving the objective in
a way that satisfies the constraints
 Not putting quality first is knowingly producing
work that is substandard and charging the
same price as if it were work of an acceptable
standard
 Making quality the first priority is about a way
of thinking and getting everyone to think this
way creates a competitive advantage.
 David Hoyle 2012
Food for thought
There is an implication that if an
organization is certificated to
ISO 9001, it must have made a
commitment to make quality the
first priority
 David Hoyle 2012