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Define strategic quality management within the NHSBT and how it informs the formulating of the strategic vision, and evaluate how the processes and the various stakeholders should contribute to make that vision a reality. Explore the concept of customer value and identify measurements of customer value, the techniques associated with it and the relevance of customer loyalty.
The National Blood Service became a national service in 1993. Prior to 1993, there were 14 blood centres in England all collecting testing and distributing blood and blood products. In October 2005, the service was merged with UK Transplant and named The National Health Service - Blood and Transplant (NHSBT). It became established as a Special Health Authority. There were numerous synergies and clear opportunities to cut duplication and to reduce costs to the NHSBT consists. (NHSBT Intranet 2010)
The NHSBT comprises of 15 centres within the UK. These 15 centres are split into three regions. These are South West region, Northern region and South East and London region, each with a main super centre supplying the satellite centres throughout each of the three regions.
The NHSBT was set up to manage all blood services in England and North Wales. Its customers are the Donors who donate the blood and the patients, via the hospital blood banks, who receive it. The NBS is the sole supplier of blood and blood products to all NHS and private hospitals and also provides a range of specialist diagnostic and tissue services some of which it is also the sole supplier for.
The NBS benchmark themselves against other industries. Organizations operating in different sectors do not have to meet the same customer requirements, but they do have to meet (or exceed) whatever those customer requirements are.
The NBS is not accredited against ISO 9001:2000, but is licensed by the government. Retention of this license requires a Quality Management System that includes a robust Customer service/satisfaction programme modeled on the ISO standard.
Strategic Quality Management
WHAT DOES SQM MEAN TO THE NHSBT
In order to survive, organisations have to focus on profit
This can be achieved by a clear and transparent strategy that is directed by the senior management team and driven by the operational side of the organisation. However, before the NHSBT can effectively and efficiently implement the strategy, it has to ensure the quality of its internal processes. All the internal processes in an organization are inextricably linked. So if there is a problem with one process this will subsequently have an impact further down the line. One major stumbling block for the NHSBT is that each process is seen as a single system, and not an interconnecting set of processes that make up a larger system. Therefore when corrective action or root cause analysis or even business process reengineering takes place, the focus is on only the small part odf the process which is deemed to be failing , the management has to focus on not only the specific work process which is being looked at but also on other work processes likely to be impacted by changes in the reengineered process .
All strategies have one thing in common; each must combine all department personnel in a single organisational unit to promote a consistent constancy of purpose Wacker (1989 p. 67). Constancy of purpose as described by Deming (Goetsch and Davis 2010 p i ) is to "Create constancy of purpose for continual improvement of products and service to society, allocating resources to provide for long range needs rather than only short term profitability, with a plan to become competitive, to stay in business, and to provide jobs.". However, top managements understanding that mixed strategy will be detrimental to quality efforts is critical for quality improvement, since a mixed strategy will lead to cross purpose working within the organisation. Wacker (1989 p. 67).
Garvin introduced the framework of strategic quality management emphasizing that quality must be defined from the customer's point of view. He further elaborated it by stating that quality should be linked with profitability on both the market and cost sides. It should be linked with the strategic planning process requiring organization-wide commitment Tummala, V.M. and Tang, C.L. (1996 p. 10)
Garvin introduced the term and elaborated it in terms of five elements, he did not define it in a compact form. Juran, on the other hand, defined SQM as a systematic approach for setting and meeting quality goals throughout the company Tummala, V.M. and Tang, C.L. (1996 p. 11). The BSI Standards define SQM as "a management philosophy and company practices that aim to harness the human and material resources of an organization in the most effective way to achieve the objectives of the organization" Tummala, V.M. and Tang, C.L. (1996 p. 11). Srinidhi, B. (1998 p 42). Describe SQM as the integration of the principles of quality management into the three steps of strategic planning. The three steps are as follows:
Define a vision or a desired state. A future state.
Formulate a change management process
Deployment of the chosen strategy.
Thus from the research it was concluded by Tummala, V.M. and Tang, C.L. (1996 p .11 that the following factors can be considered as contributing factors and fundamental to the development of strategic and operational strategies which will enable the organisation to continuously improve the quality of products and service. The factors are as follows:
strategic quality planning;
design quality, speed and prevention;
people participation and partnership; and
Implementation of SQM, while largely context-specific, still needs to conform to some fundamental principles to have a good chance of success. Srinidhi, B. (1998 p 65
The first of these principles is the notion of continuous improvement. Jha and Noori (1996 cited by Srinidhi, B. (1998 p 65 ) discuss the dynamics of continuous improvement. At the level of managerial attitudes, this translates to a continuous commitment for improvement. The second principle is that information and measurement are the enabling mechanisms for implementing SQM. The availability of information increases awareness and improves the probability of buy-in from employees. Srinidhi, B. (1998 p 66 ) Involvement and empowerment of all employees in SQM is the third principle. Admittedly, not all employees will fully support the strategic initiative but it is important that they are fully aware of what the strategic initiatives are, the justification for those strategic initiatives and why there might be a difference of view between them and the firm. This awareness can be developed only by their involvement in the strategy formulation process. Empowerment refers to the ability to take actions in furtherance of the strategy without lengthy approvals and bureaucratic obstacles. It is important to note that empowerment without the proper awareness and enabling information leads to chaos and should be avoided. Srinidhi, B. (1998 p 66)
Given these general principles, the actual implementation of SQM is context specific. It depends on the stage of development of the organization (new, growing, mature or declining), the type of industry (fast-changing, cyclical, stable), the current organizational philosophy and culture (centralized/ decentralized structure, financial measure-oriented/direct measure-oriented, top-down/empowered employees), the strategic importance associated by the management to quality and customer service issues (price or cost-based competition or quality-based product differentiation or speedy changes in technology) and the size and dispersion of the organization (small and single location to large multinationals with world-wide dispersion). Srinidhi, B. (1998 p 65 )
One of the main hurdles of implementing SQM is the departmentalization and fragmentation of organizations. Such a departmental structure with individual responsibility centers makes the administration of rewards and penalty easy. Unfortunately, it creates an internally focused and narrow departmental mindset among managers. Each manager is concerned only about his or her departmental measures and hands off the product to the next department. Srinidhi, B. (1998 p 67-68)This is clearly prevalent within the specialist patient services (SpS) directorate. expand
Nationalised industries such as the NHSBT with essentially monopoly markets have been seen as non-profit organisations and throughout their existence different governments have strived to establish acceptable and effective measures of performance. The NHS and the NHSBT's fundamental aim is to provide an unparalleled service to the nation and thus its attention can be focused on prevention and cure Thompson, J.L. (1991 p. 126).
The government funds the NHSBT, and at the major source of funds it has key influence on the strategy of the organisation. expand
The mission of any business is to explain directly its purpose for existing, its goals, and how it intends to obtain them. http://www.brainmass.com/homework-help/business/business-analysis/297179
Furthermore, the mission of the NHSBT is to satisfy all customers by offering the best prices, customer service and best product available. The vision is to make the NHSBT a world class service.
Managing quality requires effective leadership to outline a clear vision of the improvement process based on customer requirements. Just as an effective leader is crucial to the implementation of quality processes, human resources development is also an essential aspect in an organizations ability to create an environment conducive for superior quality (Hanson, 2005 cited by brainmass.com (n.d.).Â Â
This interpretation of TQM as continuous improvement is very much of an operational nature. If this is how it is perceived, then it is seen as being separate from the strategic issue and only of operational if perhaps 'tactical' benefit. Leonard, D. and McAdam, R. (2001 P. 440). By using QM as the catalyst for integration with corporate strategy, the result could be the creation of a strategic approach that is more sensitive to customer and competitive requirements and one that becomes the central focus of corporate decision-making Murphy, W.H. and Leonard, D. (2009 p. 211).
What has been determined is that a strong functional or procedural attitude to TQM prevails which links it to strategic issues. While this is necessary to allow TQM to function and bemanaged in the organization, in many cases the policy is only to impact on operational or production issues. In many of the organizations the TQM policy is not well aligned with strategic issues. Leonard, D. and McAdam, R. (2001 P. 443). As discussed by Leonard, D. and McAdam, R. (2001 p. 443) TQM assists the implementation of the strategy in ensuring that operational objectives are met in meeting the corporate goals
Figure.££££ - Strategic management of quality. Perrott,B. (2002 p. 164
The figure above attempts to show how quality management could be integrated into the planning and
decision-making process. Viewing quality from a strategic rather than an operational perspective. This will ensure that benefits from quality improvements flow through to strategic dimensions.
Strategic QM (SQM) occurs once leaders develop a systematic approach for setting and meeting quality goals throughout the company. SQM is the apex of the broader system of managing quality (Juran, 1989 cited by Murphy, W.H. and Leonard, D. (2009 p. 211). SQM has been called 'a comprehensive and strategic framework linking profitability, business objectives and competitiveness to quality efforts with the aim of harnessing human, material and information resources organization-wide in continuously improving products or services that will allow the delivery of customer satisfaction' Murphy, W.H. and Leonard, D. (2009 p. 211).
In moving to customer focused planning, high-performance companies are making the provision of customer value the organization's primary strategic intent Chapman, Murray and Mellor (1997 p 435).
The NBS is not accredited against ISO 9001:2008, but is licensed by the goverments healthcare agency the Medicines and Healthcare products Regulatory Agency (MHRA). Retention of this license requires by law that the organisation implement a Quality Management System (QMS) that includes a robust Customer focus and service programme modelled on the ISO standard.
Figure 1: Model of a process based quality management system
Source: BS EN ISO9001:2008
Changing or instituting a customer service culture requires not only senior management commitment, but also a clear and cohesive customer service strategy. Very often, major long lasting improvements need a fundamental transformation in the company requiring re-training of the staff and a possible cultural change Hague, P. and Hague, N. (n.d.).
Measuring Customer satisfaction requires adequate resources. These must be sanctioned by senior management and the process must be implemented by a 'top down' approach. Cultural changes to an organisation require the backing of senior management to ensure any costs and actions required in improving customer service can be implemented. Hague, P. and Hague, N. (n.d.).
Management should assure people that the efficacy of providing high quality therapeutic products and services are of benefit to the patients, and that the financial benefits in providing good customer satisfaction are of benefit to the organisation.
It's no secret that the future belongs to companies that best understand their customers and who deliver on the promise to meet customers' needs. Issues that affect customer satisfaction, like loyalty, repeat purchases and lifetime value, must regularly be analyzed - especially in today's competitive environment. Icrsurvey (n.d.)
This must be a long-term commitment. Companies who only use customer service survey results as a report of "how we did last month" will not develop an adequate customer service ethos. Customer-focused organizations, such as the NBS, need to respond to Customer Survey information to improve customer service & loyalty continuously. For many organisations in the public sector CS will itself be the main measure of success. Elias (2006) If an organization does not measure CS, it probably will not manage CS very well. That which is measured gets managed.
The benefits of measuring Customer service/satisfaction within the NBS are extensive, from the satisfaction of the donors to the satisfaction of the hospitals and the improvements to health of the patients who receive the product or service. Indeed part of the NHSBT's motto is 'we strive to meet the needs of all our customers.'
Donors need to be treated and managed as customers. Comprehensive Customer Satisfaction surveys need to be implemented to find out what the donor expects from the service and how the NBS is performing in relation to their expectations. Donor loyalty, retention and recruitment are required to provide enough blood to satisfy increasing clinical demand. Customer loyalty plays a vital role for any successful business. This loyalty is not given easily, especially in an emotive field like blood donation. The NHSBT has to understand what makes customer both satisfied and unsatisfied. A customer retention strategy will be based on 'doing what matters most to the customers' and this can be guided only by Customer Satisfaction measurement. Against a background where donors are donating less frequently and lapsing at a faster rate than they can be replaced, the need to seek and act on donor opinion has never been greater. The need to understand what aspects of the service the donors like and those donors don't is paramount if the NHSBT are to retain donor loyalty.
Simply collecting data on customer perspective is no sufficient - the process must be followed through, to check how the data is analyzed (ISO 9001:2008 clause 8.4), and what conclusions are made with respect to the effectiveness of the QMS.
After creating and conducting the survey, the results will be analysed. The analysis process starts by performing statistical tests to reveal relationships or differences in customer ratings of the performance on different product and service attributes, and how they affect overall satisfaction. These steps require strict attention to detail and, in some cases, knowledge of statistics and computer software packages. How these steps are conducted will depend on the scope of the study, capabilities, and the audience to whom the work will be directed.  The data will be generated in two ways, quantitative & qualitative. The quantitative data will come from the customer satisfaction surveys & the qualitative data from the forums with the hospital blood bank managers.
The results from the quantitative data will be analysed statistically, this allows the NBS to translate responses into meaningful information to get the most out of the data, but this data may give little scope for interpretation or personal views. The only drawback with quantitative data is the possible return rate, the fact is that questionnaires can get lost or are simply ignored.
The quantitative data generated will be analyzed using numerous methods.
Statistical tests and comparative analysis are used to determine whether or not customer attitudes or specific performance measures have changed and if so, whether or not the changes are statistically significant  . There are multiple tools used to analyze the data from the customer satisfaction surveys and determine whether customer satisfaction is improving or deteriorating. Some of the most common tools used are:
Correlation Analysis  - This measures the degree of linear relationship between two variables. This type of analysis is typically used for customer satisfaction surveys. This can be useful to produce a "derived importance versus satisfaction" map (appendix 1)
Regression Analysis14-This is a useful method for assessing the relative importance of attributes when customers are unable or unwilling to directly state their views. It examines the extent to which the satisfaction or performance ratings the customers give the company on each of the attributes are related to customers' overall satisfaction. (Appendix 1)
Pareto analysis  - is a useful tool to identify the top reasons for customer dissatisfaction. With this information the NBS know which problems to address first to get the most improvement most quickly. Pareto analysis is based on the premise that 80% of problems are due to 20% of the possible causes. These 20% are the "vital few" problems a process improvement focuses on. A Pareto analysis is a sorted histogram with two features added. One is the cumulative distribution curve. Second, the vital few are identified (Appendix 1)
Matrix Approaches  - Another key tool is that of direct comparison of satisfaction levels/ratings of service quality factors and the importance attached to each. As show in Figure 5, this approach will allow the NBS to identify and focus action upon elements falling into the bottom right quadrant. These are variously called quadrant, matrix and performance-importance grid approaches. (Appendix 1)
SQM needs to address two aspects of the customers and markets. Increasingly, there are settings in which the customer does not know and has no means of knowing what satisfies him or what he actually needs. In these situations, the expectations of the customer need to be actively managed rather than passively accepted. Srinidhi, B. (1998 p 64).
Once the expectations of the customers are managed, we need a process which incorporates the customer expectations in every decision that the firm makes. In other words, it is important to have a management system which continuously focuses managerial attention on the customer needs and expectations. SQM should address both these aspects of customer management. Customer satisfaction is a key indicator of perceived quality and such satisfaction, consistent with profitability, can only be achieved if: Srinidhi, B. (1998 p 64).
the customer expectations are such that the firm can satisfy them;
the expectations of at least one set of customers are such that other firms
cannot realistically satisfy them better than the firm in question; and
there is a system in place which translates customer expectations into
tangible managerial actions which can be implemented.
Achievement of all three of these criteria requires strategic analysis
although customer focus is revered, methods for developing a deeper understanding of the customers' situation are not sufficiently integrated into TQM. Lagrosen, S (2001 p 348)
One of the most significant attributes of TQM is the recognition that the customer
ultimately determines whether or not a product meets or exceeds a particular quality level. For this reason, the involvement of the entire organization to create value through meeting
customers' expectations is paramount throughout the Company. Creating loyalty through
continuous improvement is vital.
As in the case of the definition of SQM, the core concepts are identified from the significant contributing factors that are promoted by the quality gurus in one form or another in managing quality. As such the% should he fundamental in developing the strategic as well as operational strategies to improve continuously the quality of products or services. We identify them as customer focus, leadership, continuous improvement, strategic quality planning, design quality, speed and prevention, people participation and partnership, and fact-based Tummala, V.M. and Tang, C.L. (1996 p. 41).
As all the quality gurus stated, duality must be defined by the customer. The quality process is Cm continuous loop that begins, ends, and begins again with the customer. Thus the focus on quality must be from a process-driven discipline to a customer driven discipline. All product or service attributes that contribute value to the customer and lead to customer satisfaction need to be addressed. Tummala, V.M. and Tang, C.L. (1996 p. 41).
The importance of strategic quality management theory is paramount for successful quality improvement in products and services Wacker, J.G. (1989 p. 54) SQM should be the sole responsibility ofthe senior management team (SMT). The designation of the strategic planning team as also the SMT brings the senior management's attention specifically to strategic issues of quality. The SAT identifies the strategic importance of quality issues and incorporates them in the formulation of the overall business strategy Srinidhi, B. (1998 p 67)mention CSF's etc
SQM is now a necessary strategic differentiating process for a number of organizations facing increasing competition. SQM cannot be considered in isolation from overall strategic planning. It therefore becomes imperative to present both the SQM formulation and SQM deployment processes within the overall strategic business planning process Srinidhi, B. (1998 p. 68-69)
The most critical barrier to SQM implementation is the lack of top management involvement. It is not a project or a program that can be delegated to the lower echelons of management Srinidhi, B. (1998 p 68) As with TQM management commitment is crucial, but top management involvement is paramount to the success of the initiative.
Organisations lacking strong leader commitment and possessing a weak culture for service cannot reach the ideal of customer focus. A strong culture of strategic quality management dissemenated down from the higher echelons of the organisation, will enable the NHSBT to fulfil its potential in the unrelenting pursuit of customer focus. The results that are achieveable will propel the NHSBT from an organisation whom benchmark against the best into a worldclass organisation that is benchmarked against. This will only be achieved if the organisation incorporate quality management into the strategy. With the regulatory body the MHRA raising the bar with their expectations of quality. The NHSBT has had to act fast to change. This has been difficult, due to the nature of the infrastructure. This has basically diabled the organisation from becoming agile to change. This has been recognised by the senipr management team, but at a cost, where errors with internal processes and staff have cost the organisation in monetory terms and more importantly customer terms.
Our whole business is functional around our customers. It is about getting out into the marketplace and finding out what our customers need and giving our customers that. So therefore, it is corporate strategy and that is why it is not something separate. Leonard, D. and McAdam, R. (2001 p. 442)