Quality as a strategic weapon

What happens after strategies are formulated?

The next to last in the strategic management process is implementation no matter how good a strategic plan is, it cannot succeed if it is not implemented properly. Top management leadership is a necessary ingredient in a successful strategy. So, too, is a motivated group of middle and lower level managers to carry out senior management’s specific plans. Many of the issues related to implementing strategy will be discussed later. How effective have the strategies? What adjustments, if any, are necessary? The concepts and techniques that we introduce can be used to assess the results of strategies and to correct significant deviations.

An increasing number of organizations are applying quality practices to build competitive advantage. To the degree that an organization can satisfy a customer’s need for quality, it can differentiate itself from the competition and attract and hold a loyal customer base. Moreover constant improvement in the quality and reliability of an organization’s products or services can result in a competitive advantage others cannot steal. Product innovations, for example offer little opportunity for sustained competitive advantage. Because usually they can be quickly copied by rivals But incremental improvement is something that becomes an integrated part of an organization’s operations and can develop into a considerable cumulative advantage.

How can Benchmarking help promote quality?

Benchmarking involves the search for the best practices among competitors or non-competitors that lead to their superior performance. The basic idea underlying benchmarking is that management can improve quality by analyzing and then copying the methods of the leaders in various fields. As such, benchmarking is a specific form of environmental scanning.

In 1979, Xerox undertook what is widely regarded as the first benchmarking effort in the United States. Until then, the Japanese had been aggressively copying the success of others by traveling around, watching what others were doing, and then using their new knowledge to improve their products and processes. Xerox’s management couldn’t figure out how Japanese manufacturers could sell midsized copiers in the United States for considerably less than Xerox’s production costs. So the company’s head of manufacturing took a team to Japan to make detailed study of its competition’s costs and processes. The team got most of their information from Xerox’s own joint venture, Fuji Xerox, which knew its competition well. What the team found was shocking. Their Japanese rivals were light years of Xerox in efficiency. Benchmarking these efficiencies was the beginning of Xerox’s recovery in the copier field. Today, in addition to Xerox, companies such as Southwest Airlines, Dupont, Alcoa, Kraft, Toyota, Eastman Kodak, and Motorola use benchmarking as a standard tool in their for quality improvement.

To illustrate benchmarking in practice, let’s look at an application at Gujarat Ambuja Cements. Narotam Sekhsaria has been benchmarking output and efficiency of his cement plants against global companies in an ongoing effort that has firmly entrenched the obsession with efficiency in the mindset of his employees. Sekhsaria claims that Gujarat Ambuja’s cost of production is not just the lowest in the country, but amongst the lowest in the world.

The goal of Motorola’s ongoing benchmarking is to determine and continually monitor the best practices of firms throughout the United States, Asia, and Europe. By measuring its products and practices among world class operations, Motorola improves the quality of its products, such as the wireless communications systems installed in the 1,250 police cruisers of the Los Angeles Police Department, shown.