Quality Progress - March 2018 - 36

F E AT U R E

QUALITY IMPROVEMENT

FIGURE 2

Customer satisfaction and
perception of value

Developing metrics for a
value realization process
Quality of
deliverables

Rework

Schedule
management

Schedule
performance index

Cost
management

Cost performance index

Relationship
management

Time spent with customer
at start of project

Key drivers
(processes)

Key metrics

In short, fit between activities supports the organization's competitive advantage and makes it sustainable,
and strategic fit between activities creates pressure to
improve operational effectiveness.
5. Monitor and improve.
When the system of processes malfunctions, the activity
or activities that caused the malfunction can be traced
and corrected or improved. Malfunctioning also means
increased cost, delayed product or service delivery, and
customer inconvenience.
Strategic fit between activities creates pressure to
improve operational effectiveness, and continuous improvement initiatives produce immediate customer value.
After an organization establishes a sustainable competitive advantage, its quality professionals must expand
their scope to include this concept.

Internal audits

Strategic positioning adds many challenges to an internal
audit program and the execution of the audit process.
Recall the ABC Engineering example. The Canadian
branch embraced small and emerging markets, but ABC
Engineering didn't. In some cases, a mature organization
may set a standalone business unit to pursue a growth
opportunity. Accordingly, the quality professional must

36 QP

March 2018 ❘ qualityprogress.com

audit different business units with different resources,
processes and values, which must be considered during
audit planning and checklist development.
Also, not all business units can be assessed according
to the criteria of the mainstream business. The good
news is the QMS will create consistency between all
business units and supporting functions.
There are three steps to auditing a process for alignment with strategic positioning:
1. Know the strategic objectives.
2. Identify the processes that drive the objectives.
3. Develop a set of metrics that measure the performance of the key processes.
The audit output will assess the performance of the
audited processes in supporting the organization's strategy and identify areas of improvement. Figure 2 shows an
example of this sequence in a project-based organization.
If an organization's strategic goal is to increase
customer satisfaction by X%, for example, that can be
translated into operational activities performed by each
project team as follows: The client is satisfied when it
receives value in return for the money it paid. The client
recognizes this value when the contractor understands
its requirements and delivers quality deliverables on time
and on budget.
To achieve that, the key drivers (processes) are:
customer relationship management, product quality
management, schedule management and cost management. Accordingly, the key metrics are:
+ Time spent with the customer at the start of the
project.
+ Rework (time or cost).
+ Schedule performance index = earned value/planned
value.
+ Cost performance index = earned value/actual cost, in
which earned value is the value of the work completed.

Customer survey

Customer satisfaction and loyalty levels are strong indicators of an organization's alignment with its strategy.
The two main indexes are:
1. Customer satisfaction index. The weighted average
rating of the product or service attributes that drive
customer satisfaction.
2. Advocacy loyalty index. The average of overall satisfaction, intention to repurchase the product or service,
and willingness to refer.
The customer satisfaction index reflects the output


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Table of Contents for the Digital Edition of Quality Progress - March 2018

Seen and Heard
Expert Answers
Progress Report
Mr. Pareto Head
Career Coach
My Quality Story
In the Right Direction
A Different Kind of BBQ
Gaining Ground
Impeding Progress
Innovation Imperative
Statistics Spotlight
Standard Issues
Marketplace
Footnotes
Back to Basics
Quality Progress - March 2018 - INTRO
Quality Progress - March 2018 - cover1
Quality Progress - March 2018 - cover2
Quality Progress - March 2018 - 1
Quality Progress - March 2018 - 2
Quality Progress - March 2018 - 3
Quality Progress - March 2018 - 4
Quality Progress - March 2018 - 5
Quality Progress - March 2018 - Seen and Heard
Quality Progress - March 2018 - 7
Quality Progress - March 2018 - Expert Answers
Quality Progress - March 2018 - 9
Quality Progress - March 2018 - Progress Report
Quality Progress - March 2018 - 11
Quality Progress - March 2018 - 12
Quality Progress - March 2018 - Mr. Pareto Head
Quality Progress - March 2018 - Career Coach
Quality Progress - March 2018 - 15
Quality Progress - March 2018 - My Quality Story
Quality Progress - March 2018 - 17
Quality Progress - March 2018 - In the Right Direction
Quality Progress - March 2018 - 19
Quality Progress - March 2018 - 20
Quality Progress - March 2018 - 21
Quality Progress - March 2018 - 22
Quality Progress - March 2018 - 23
Quality Progress - March 2018 - A Different Kind of BBQ
Quality Progress - March 2018 - 25
Quality Progress - March 2018 - 26
Quality Progress - March 2018 - 27
Quality Progress - March 2018 - 28
Quality Progress - March 2018 - 29
Quality Progress - March 2018 - 30
Quality Progress - March 2018 - 31
Quality Progress - March 2018 - Gaining Ground
Quality Progress - March 2018 - 33
Quality Progress - March 2018 - 34
Quality Progress - March 2018 - 35
Quality Progress - March 2018 - 36
Quality Progress - March 2018 - Impeding Progress
Quality Progress - March 2018 - 38
Quality Progress - March 2018 - 39
Quality Progress - March 2018 - 40
Quality Progress - March 2018 - 41
Quality Progress - March 2018 - 42
Quality Progress - March 2018 - 43
Quality Progress - March 2018 - Innovation Imperative
Quality Progress - March 2018 - 45
Quality Progress - March 2018 - 46
Quality Progress - March 2018 - 47
Quality Progress - March 2018 - Statistics Spotlight
Quality Progress - March 2018 - 49
Quality Progress - March 2018 - 50
Quality Progress - March 2018 - 51
Quality Progress - March 2018 - 52
Quality Progress - March 2018 - 53
Quality Progress - March 2018 - Standard Issues
Quality Progress - March 2018 - 55
Quality Progress - March 2018 - 56
Quality Progress - March 2018 - 57
Quality Progress - March 2018 - Marketplace
Quality Progress - March 2018 - 59
Quality Progress - March 2018 - Footnotes
Quality Progress - March 2018 - 61
Quality Progress - March 2018 - 62
Quality Progress - March 2018 - 63
Quality Progress - March 2018 - Back to Basics
Quality Progress - March 2018 - cover3
Quality Progress - March 2018 - cover4
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