Global Quality Symposium

The Critical Success Factors of Organisational Quality Practices
by Toto H. Subagyo Global Quality Symposium Kartika Chandra Hotel, Jakarta 8-9 September 2003
Profit through Quality

Profit Sales
Operating Cost
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ths@garuda-indonesia.com

Profit Quality Improvement Sales
Increased PROFIT through Quality improvement absorbs less incremental operating cost than through organising more Sales.
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Operating Cost

Sales
Customer Satisfaction Quality Improvement
CUSTOMER SATISFACTION through Quality improvement carries its own acceleration resulting in increased sales at minimum incremental cost.
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Current thinking . . .
. . . in business suggests that organisations must continuously improve quality of their products and services, their processes, and their people. Failure to improve in all three areas leads to stagnation and the decline of any business.
Source: Earl Naumann and Steven H. Hoisington, Customer Centered Six Sigma: Linking Customers, Process Improvement, and Financial Results (Milwaukee, Wisconsin: ASQ Quality Press, 2001).
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Otherwise . . . ?
Quality Practices ~ Firms Performance

QUALITY
Conformance Reduced Waste Lower Costs Improved Asset Utilisation Improved Margin IMPROVED PROFITABILITY Greater Productivity Perceived Greater Value Increased Market Share Revenue Growth
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Quality Definition
. . . quality of a product is the ability of the product to satisfy the requirements of the customer as well as the industrys standard.
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Quality Definition (cont.)

the definition of quality should not be associated with product quality alone but also , more importantly, with a process in which the quality of the product can only be ensured by the process.
Quality Management
. . . managing a process of delivering quality to satisfy the requirements of customer and industry standards, in which particular management techniques and organisation commitment through employees involvement are necessary.
Quality Practices in Airlines Operations
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The Airlines Operations function

. . . to get people and goods to their destination, based on the schedule that it publishes , the operations function flight and ground operations and aircraft line maintenance, will become the focus of this study.
The Airlines Operations function (cont.)

Also, because this function is a core activity of an airlines operational process, it can make a contribution to the success or failure of delivering quality in the product and direct service to the customer.
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The Operational Function

Marketing, sales and services make decisions about marketing policy, so as to define the market sector and demand, and develop the product specification, with reference to the ability of the production systems. Engineering and maintenance keep the companys equipment in condition to provide safe and saleable air transportation. Flight and ground operations are responsible for developing flight operation policies, procedures, and techniques that have as their purpose the safe, efficient, and progressive operation of aircraft.
Three Elements of Organization
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Three Elements of Organization

Customer - are served and accommodated in interaction with the operatives, with or without using the equipment and facilities. Equipment and Facility - includes the aircraft itself, aircraft ground support equipment, flight loading/unloading equipment, and airport terminal and ramp facilities related to the requirements of the flight concerned. Operatives - persons who handle the various types of airline equipment, facilities, passengers and goods. C.E.O
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Desk Research
Quality Management Studies; Saraph et al.. (1989), Flynn et al.. (1991), Porter & Parker (1993), Black & Porter (1995), and Ahire et al.. (1996).
Airlines Case Studies; - British Airways (Bank, 1992; Heskett

et al., 1997), Singapore Airlines (Yun et al., 1996), KLM Royal Dutch Airlines (Ran and Sluis, 1997), Scandinavian Airlines System (Azhashemi and Ho, 1999), Southwest Airlines (Bunz and Maes, 1998; Laszlo, 1999), Federal Express (Binney, 1992), Malaysia Airlines (Zaid, 1994), and Japan Air Lines (Rosander, 1985).
7 Critical Success Factors & 3 Organizational Context Variables

1. 1. 1. 1. 1. 1. 2. Customer Relationship Process Orientation & Technique Motivation and Skill Information Utilization & Analysis Interdepartmental Interaction Technology & Market Turbulence Awareness Management Behaviour COMMITMENT
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1. 2. 3.
Past quality performance External quality demand Management knowledge PERFORMANCE DEMAND KNOWLEDGE
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7 CRITICAL SUCCESS FACTORS 1. Customer Relationship 2. Process Orientation & Techniques
Organisational Quality Practices Model
3. Motivation and Skills 4. Information Utilisation & Analysis 5. Interdepartmental Interaction 6. Technology & Market Turbulence Awareness 7. Management Behaviour
Industry s Standar d Customer s Requireme nt

3 ORG.. CONTEXT Past Performance Quality Demand
Organisatio n Performanc e Satisfacti on Level
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Knowledge ths@garuda-indonesia.com
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1. Customer Relationship
ensure that what the organisation processes is what the customer wants and expects, such as quality planning, product and service design, supplier involvement and customer relationships.
2. Process Orientation & Technique

ensures efficient work across various related functions within the organisation, such as organisational structures, process management, management systems, quality technology and teamwork structures.
3. Motivation and Skill

ensure the persistence efforts of the organisations employees in pursuing quality in their work or daily activities, such as training, employee relations, empowerment, and organisation working culture.
4. Information Utilization & Analysis

make each function within the organisation aware of their weaknesses and strengths, as well as actions to be taken regarding the continuity and effectiveness of the organisations process chain as a whole, such as quality data and reporting, communication, measurement systems, and benchmarking.
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5. Interdepartmental Interaction
determine the ease of the flow of work from one function to another within the organisation, such as interdepartmental connectedness and conflict.
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6. Technology & Market Turbulence Awareness

enhance the employees awareness in pursuing quality for their product and service, such as awareness of changing market demand and the development of technology in the industry.
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7. Management Behaviour
makes a driver for the other factors above, such as the role of management leadership, top management support and quality achievement rewards.
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Three Organizational Context

Past quality performance is a variable that will influence the orientation to conduct quality management programmes. It will determine which factors should be emphasised in the quality improvement programme.
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Three Organizational Context (cont)

External quality demand is the area of quality of product or services to be improved in order for the organisation to remain in business. It will determine the quality requirement for the output of the operational functions.
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Three Organizational Context (cont)

Management knowledge is a variable that will influence how management lead process quality improvement within the organisation. It will determine commitment of the organisations staff and the management, in particular.
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Terima Kasih
GATE
Garuda Aviation Training and Education

Global Quality Symposium

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The Critical Success Factors of Organisational Quality Practices

Profit through Quality

Profit through Quality

Profit through Quality

Customer Satisfaction Quality Improvement

Quality Practices ~ Firms Performance

Quality Definition (cont.)

Quality Practices in Airlines Operations

The Airlines Operations function

The Airlines Operations function (cont.)

The Operational Function

Three Elements of Organization

Three Elements of Organization

Airlines Case Studies; - British Airways (Bank, 1992; Heskett

7 Critical Success Factors & 3 Organizational Context Variables

7 CRITICAL SUCCESS FACTORS 1. Customer Relationship 2. Process Orientation & Techniques

Organisational Quality Practices Model

Industry s Standar d Customer s Requireme nt

Organisatio n Performanc e Satisfacti on Level

2. Process Orientation & Technique

3. Motivation and Skill

4. Information Utilization & Analysis

6. Technology & Market Turbulence Awareness

Three Organizational Context

Three Organizational Context (cont)

Three Organizational Context (cont)

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