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Department of Industrial Engineering and Management, Lappeenranta University of Technology, P.O. Box 20,
FIN-53851 Lappeenranta, Finland
b
R&D Center, Valtra Inc., P.O. Box 557, 40101 Jyvaskyl
a,
.
. Finland
Abstract
Due to the problematic characteristics and complexity of R&D, the applicability of Total Quality Management
(TQM) and quality award criteria in the assessment of a companys R&D process is very challenging. This study
concentrates especially on the application of the Malcolm Baldrige Quality Award (MBQA) Criteria to R&D
assessments at project level.
The applicability of quality award criteria in the assessment of R&D projects is rst discussed with the help of a
literature review at conceptual level. The meaning of different sub-areas of quality award criteria is analyzed from the
point of view of R&D activities and single projects. The measures, performance criteria and concrete measurable
aspects for R&D project evaluation are then derived on the basis of the analysis. In the empirical part of the study, the
analysis of the utilization of criteria for R&D project assessment is discussed from the viewpoint of a manufacturing
company that has successfully applied the Finnish National Quality Award Criteria based on the MBQA.
The study gives examples of the derivation of new R&D project measures from the quality award criteria framework.
r 2002 Elsevier Science B.V. All rights reserved.
Keywords: Total quality management (TQM); Quality award criteria; Self-assessment; R&D projects; Performance evaluation
1. Introduction
An important consequence of the introduction
of systematic approaches of quality management,
e.g. quality awards, is the increasingly widespread
use of their models and criteria for company selfassessment. Several similar types of national
criteria are used for assessment, e.g. the Malcolm
Baldrige Quality Award Criteria, the European
Foundation for Quality Management (EFQM)model, the Deming Prize and the Finnish National
*Corresponding author. Tel.: +358-5621-2670; fax: +3585621-2667.
E-mail address: ville.ojanen@lut. (V. Ojanen).
0925-5273/02/$ - see front matter r 2002 Elsevier Science B.V. All rights reserved.
PII: S 0 9 2 5 - 5 2 7 3 ( 0 2 ) 0 0 2 4 7 - 5
120
121
Fig. 1. Baldrige criteria for a performance excellence framework: a system perspective (National Institute of Standards and
Technology, 2000).
122
Table 1
2000 Criteria for performance excellenceitem listing (National Institute of Standards and Technology, 2000)
2000 categories/items
1
Point values
Leadership
1.1
Organizational leadership
1.2
Public responsibility and citizenship
85
40
Strategic planning
2.1
Strategy development
2.2
Strategy deployment
40
45
125
85
85
40
45
85
45
85
Process management
6.1
Product and service processes
6.2
Support processes
6.3
Supplier and partnering processes
85
55
15
15
Business results
7.1
Customer focused results
7.2
Financial and market results
7.3
Human resource results
7.4
Supplier and partner results
7.5
Organizational effectiveness results
115
115
80
25
115
Total
points
40
450
1000
123
are converted to numbers, and qualitative techniques are intuitive judgments (Pappas and Remer,
1985). According to Pappas and Remer (1985),
qualitative techniques are best suited for basic
research, semi-quantitative techniques for applied
research and quantitative techniques for product
development and improvements.
To better understand how the metrics vary,
Hauser and Zettelmeyer (1997) have introduced a
tier metaphor, which enables us to categorize a
diverse continuum of projects, programs and
explorations and focus on key characteristics.
Tier 1 is dened as basic research that attempts
to understand basic science and technology. Tier 1
explorations may have applicability to many
business units or may spawn new business units.
Tier 2 is dened as those activities that select or
develop programs to match the core technological
competence of the organization. Tier 3 is
dened as specic projects focused on the more
immediate needs of the customer, the business unit
and/or the corporation. For applied projects,
market outcome metrics are most relevant. In
their study, Hauser and Zettelmeyer present R&D
metrics, both qualitative judgments and quantitative measures, reported by interviewees, as well as
their relevancy for the Tiers. Integrated metrics
that contain an articulated but separable suite of
quantitative and qualitative techniques can be
exibly applied across all types of R&D (Werner
and Souder, 1997).
Project-level measurement results can be utilized
in several ways in R&D. Through measuring,
activities can be better diagnosed, and signicant
problem areas or bottlenecks which inuence the
overall effectiveness of projects can be clearly
detected. Cause and effect relationships in R&D
project performance should be claried in order to
understand the signicance of single projects for
the whole R&D. The performance should be
assessed in different phases of projects, and
therefore both leading and lagging indicators are
needed. Well-dened leading indicators can give
valuable information and early signals predicting
project success for project managers. The measures
of project outputs reveal the quality and overall
performance of the project. The measurement
results can be utilized for instance in more effective
124
MBQA Criteria
Meaning of
criteria for the
whole R&D
Meaning of
criteria for R&D
project
assessment
Derived
measurement
subjects
Development
needs of
present R&D
measures
125
Derived
potential
measures /
evaluation
methods
New measures
for R&D project
assessment
126
Table 2
The derivation process of R&D project-level measures in the leadership-category
MBQA
criteria
category
Measurement
subjects
Implementation of values?
Risk-taking capability?
(3) Companys direction (3) Direction of R&D and Contribution of a project to
the whole company?
the company objectives?
Derived potential
measures, evaluation
methods
Post-project review of
implementation of
values, e.g. reliability:
schedule-keeping
Amount of initiatives
Amount of people who
made initiatives
Amount of new ideas
to be implemented
Contribution of a project
to the sales increase objectives
Contribution of a
project to gain new
business segments
Number of days worked together with customers (for example in farms) in the project.
5. Conclusions
Approaches like the utilization of quality award
criteria are widely recognized as good starting
points for self-assessment in companies. Award
assessments and self-assessments may, however,
127
Table 3
Examples of derivation results from different MBQA categories
Leadership
Amount of people who made initiatives
Amount of ideas to be implemented per total amount of ideas
Contribution of a project to the sales increase objectives
Strategic planning
Categorized amount of reasons for changes in a project
Competence of project personnel vs. competence areas needed in a project (x% coverage)
Project management assessment of the fulllment of the strategy in a project (e.g. scale 15)
Assessment of resources and strategic competencies before and after the project
Customer and market focus
Ability of project personnel to enumerate the main markets and main customers
Contacts of project personnel and amount of visits to key customers sales ofces
Existence of collected customer need document (yes/no) and its clarity and scope
Number of project people who know the specication and have the specication document
Systematic satisfaction measurements of pilot customers
Amount of recurred complaints (because of the same issue)
Amount of realized customer requirements and requests stated in advanced executed customer surveys
Number of features based on fulllment of customer requirements
Number of present customers who change to the product of project and the speed of change
Information and analysis
Availability of measurement information for project personnel
Schedule objectives and schedule keeping in different phases of a project; Development of project lead time in similar types of
projects (project efciency index)
Quality and amount index of communication
Amount of problems/faults; prioritized most difcult problem areas
Human resource focus
Amount of initiatives per person
Number of days in further education
Development speed and level of a project team
Process management
Schedule keeping in a product process
Amount of problems in planning and support systems per day per user
Number of initiatives from subcontractors
Business results
New customers as a result of a project
Project net present value per total working hours of a project
Satisfaction of project partners
Amount of new applied technologies
Share of forecasted and realized results of projects from goals of company and its R&D
Schedule keeping
128
nies self-assessment and performance measurement of R&D are also potential topics for deeper
future studies.
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