Class Notes (1,033,508)
CA (592,162)
York (41,806)
MGMT (743)
MGMT 1000 (158)
Lecture 4

MGMT 1000 Lecture Notes - Lecture 4: Total Quality Management, Cash Flow, Statistical Process Control

9 pages69 viewsFall 2013

Course Code
MGMT 1000
Jean Adams

of 9
MGMT 1000 Notes
Week 4
Engaging Customers: Products and Services and the
Importance of Quality
DyKnow Notes
Key Lessons:
oNew product development (NPD)
oproduct lifecycle
ocost-quality curve
oquality mindset vs. quality programs (i.e. the affect a product change has from
the perspective of various stakeholders)
ocase: perfection or bust
ogenerating new value and maintaining customer support.
IBM “Live” case study – the importance of collaboration,
oeating your own dog food – using their own technology
oGuest Speaker, Alistair Rennie, General Manager IBM Collaboration
oIBM lotus Live: -it enables businesses to move at a faster pace and dedicate more
time and effort to important things, rather than the redundant (Alistair said this)
ogives a business huge competitive advantage b/c the time it takes to set-up meeting and
so forth can be done in that moment
oIBM Workers definition of Social Business:
oSocial Business is the world of possibility that occurs when all of the energy and
opportunities that have been generated around consumer-side models such as Facebook
and Twitter are focused, and brought to bear on business challenges. enable sales
forces, new ways to discover expertise, new ways to understand your organization’s
culture, new ways to establish brand trust with your customers, and much more.
Why are enterprises investing in social platforms?
owant to capture and re-use knowledge
omaintain human connections across a disparate workforce, potential customers,
and potential partners
oParticularly in North America, remote and mobile work is becoming the norm as
two-thirds of the workforce works remotely at least occasionally
oThe pressure to modernize systems to meet new workforce demands. Highly
empowered, tech-savvy individuals are entering the workforce, joining the 40
million Gen Yers already in the workplace
4.1Use the rules of one situation to reinvent another
many creative breakthroughs can be achieved by acting as if you were
involved in a related, but different situation
often strangers have the best insights on problems because they take a
fresh look
apply the rules that make one situation effective to another situation
ex. when reinventing hospitals, think about how 5 star hotels are
designed; use those ideas to exceed the expectations of patients
summary of the technique:
oselect a problematic situation that needs change
oget outside by selecting a very different situation which you can
learn from
oidentify the rules and best practices in the new situation that make it
oapply the rules to your problematic situation
4.2Developing new products and services
- Creative reference points: a creative way to generate new
product/service ideas is integrating key design principles from three of four
completely different products and services outside your field
oExample of Swatch, Swiss company famous for turning watches
into fashion accessories
use creative reference points to find breakthroughs
summary of the technique:
oselect a problem and think of a creative reference point
oidentify the key design principles that you want to use or avoid in
developing your new product/service
ointegrate the best ideas to create a unique product/service
oex. when designing a chain of senior’s residences (the problem),
you consider the pros and cons of a fun fair (creative reference
point) such as fun and excitement, lots of activities or crowds of
people and laughing children (these are the key principles that you
want to use or avoid). Use those pros and cons when thinking of
ideas for your problem.
4.3Promote quality and continuous learning as core values
a commitment to quality and continuous improvement can reduce costs,
increase profits, and help create corporate cultures where learning is a
way of life
Quality Revolution
the old logic was that if you wanted to increase the quality of a product,
the costs of production would have to increase since quality is expensive
and difficult to achieve
new logic suggests that when you focus on increasing the quality, you
actually reduce the costs of production because poor quality is expensive
it’s a vicious loop: poor quality production systems -> low productivity ->
lots of defects and waste materials -> annoyed customers -> few new
customers -> business has to spend more on marketing because of the
poor sales -> end result is low quality and poor profitability
to be effective, the pursuit of quality has to be a mindset, not just a
technique; it also has to break bureaucratic boundaries
ex. pulling the cord at Toyota – every employee takes responsibility for
improving the quality and effectiveness of actions. This philosophy is
called kaizen. If any worker sees a problem on the production line they
can “pull a cord” to stop the machines. Then, they all collaborate to fix the
problems and improve the quality.
quality problems are systemic – the quality of a product depends not only
on the work you do, but also the quality of the supplies, the quality of your
equipment, etc.
Quality is fundamental: Dissatisfied customers drag down companies.
solutions are also systemic; a mindset of quality should be present in all
areas of your business because one faulty area can drag the whole thing
You can't achieve "quality" just by adopting the latest program or technique.
There has to be something much deeper because quality knows no
4.4New Product Development tutor2u
The overall product failure rate is 60%
Failure-rates for house and grocery store products approach 80%
NPD is a process designed to develop, test, and consider the viability of
products which are new to the market
develop new products to defeat/keep up with competition, maintain
competitive advantage, bring in new customers, create cash cows for the
future, etc.
can be completely innovative products, into an old market, an old product
into a new market, or a new product into a new market
strategic stage: firm assesses current portfolio, opportunities, and threats;
then they determine what type of product would fit in with their corporate
1. idea generation (R&D, employees, customers, competitors,

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.