Mckinsey Quality Management System – a Survey

I usually don’t read articles from Mckinsey, because I’ve found that the content is produced by non-industry people, making the writing seem superficial and, in general, lack meaning. That’s a broad statement, so let me qualify: except this one. I, do, however, find a lot of value in Mckinsey PowerPoint Templates. Some of their industry consultants have done some neat things with lean, like reducing delays with lean for an airline company.

Mckinsey launched an interesting Quality Management System survey, which aims to measure the strength of the qualitative factors in your organization – on whether there is a strong enough infrastructure and focus on quality in your company. In their words,

The recent trends of the global economy have shown that quality of products/services will play more and more of a critical role for a companies future. More demanding and informed costumers, fiercer competition, significant pressure on cost and a stronger reputational risk make quality a key aspect to staying and winning in the market. Many studies confirm that a well-structured and effective quality system is the must-have element to drive excellence in quality.

The survey approaches quality in four major areas:

1. Quality strategy and KPI system how the company sets aspirations on quality and executes its business to meet customer expectations
2. Functional quality processes how the individual functions contribute to the overall quality performance by ensuring robustness and continuous improvement of all processes of the value chain
3. Quality organization and governance how organization and related processes enable quality performance
4. Quality mindset and capabilities how the importance of quality is efficiently conveyed both internally and externally

The survey is actually very good. You can find it on the Mckinsey internal site, but you must be a subscriber of Mckinsey Quarterly (so no link provided).

Regardless, read the question below and self-evaluate. The questions are good and do point to structural areas for improvement.

Below are the survey questions for which you might rate your own experience in your company against. The result of the survey will give your an outcome of either (1) Lagging, (2), Deficit, (3) Good, (4) Leading on the four areas below.

• Quality strategy and KPI system
• Functional quality processes
• Quality organization and governance
• Quality mindset and capabilitites

Quality Strategy and KPI System

Choose one answer below:

1. In my company customer requirements on quality are …

• Not regularly measured through customer surveys, insufficient data exists
• Not regularly measured through customer surveys, but some internal knowledge exists
• Regularly measured through customer surveys, but not for all segments/products
• Systematically measured through extensive use of customer surveys
• I don’t know

2. In my company the number of key performance indicators (KPI) tracked for quality is …

• 3 – 5. They are only financials at a global level (e.g., warranty cost, cost of recalls, quality budget)
• 3 – 5 financials (e.g., warranty cost, cost of recalls, quality budget) plus 3 – 5 operational (e.g., number of recalls, % of scrap, number of investigations/ noncompliancy) at a global level
• 5 -10 financials (e.g., warranty cost, cost of recalls, quality budget) plus 5 -10 operational at a global level (e.g., number of recalls, % of scrap, number of investigations/ noncompliancy) and for the main departments
• More than 10 financials (e.g., warranty cost, cost of recalls, quality budget) plus more than 15 operational, both reactive and preventative, cascaded down from global to department/site level
• I don’t know

3. In my company the accountability for quality KPIs is …

• Not clearly assigned to any functional area/department
• Assigned to some functional areas/departments, but not to individual managers
• Consistently deployed and assigned to all functional areas/departments, where some managers are individually responsible
• Consistently deployed and assigned to all functional areas/departments, where all employees feel responsible to improve them
• I don’t know

4. In my company quality targets …

• Are mainly focused on regulatory compliance and do not include customer requirements
• Include some key customer requirements beside regulatory compliance
• Fully cover customer requirements and regulatory compliance
• Are fully comprehensive and based on a deep understanding of cost-quality trade-offs
• I don’t know

5. In my company the quality goal tracking through KPIs is …

• Yearly. Not systematic in terms of data consolidation and communication of results. Performance discussions/reviews are not in place
• Quarterly with regular updates, consolidation process is mainly manual. Regular performance discussions/reviews for top management are in place
• Monthly through an IT-based system transparent to most employees. Regular performance discussions/reviews for line management are in place
• Weekly through an IT-based system transparent to all employees, who participate in regular performance discussions/reviews
• I don’t know

6. In my company the direct quality cost as a percentage of sales (i.e., warranty + goodwill cost/sales) is …

• More than 8 %
• Between 6 an 8 %
• Between 4 and 6%
• I don’t know

Functional Quality Processes

7. In my company production plants and facilities are …

• Less than 25% quality certified (with ISO or other certification programs)
• Between 25 and 50% quality certified (with ISO or other certification programs)
• Between 50 and 75% quality certified (with ISO or other certification programs)
• All quality certified (with ISO or other certification programs)
• I don’t know

8. In my company the quality process in product development is …

• Not officially formalized. The concept of quality-gates is not in place or hardly applied
• Based on quality-gates. Rules for passing Q-gates are not always clear or thoroughly followed
• Based on quality-gates. Strict and clear rules for passing Q-gates are implemented and usually followed
• Based on quality-gates. The R&D process is continuously reviewed and improved
• I don’t know

9. In my company the approach to ensure high quality of supplied parts is …

• Not standardized or formalized. Quality is generally verified locally when parts are received
• Standardized within some key functions. Suppliers are selected based on quality performance and audits are regularly performed
• Standardized based on a cross-functional supplier strategy. Supplier selection based on quality performance is a common practice
• Standardized based on a cross-functional supplier strategy. Supplier certification/selection based on quality is part of the company culture
• I don’t know

10. In the manufacturing process of my company …

• Few formal quality procedures are in place to protect quality (e.g., incoming parts control, equipment control, quality checks)
• Quality procedures exist for the key production processes. They are mainly developed by local plants with little or no revision
• Quality procedures are standardized across most of the sites. Periodic reviews are in place to ensure continuous improvement
• Quality procedures are standardized across all sites. Periodic reviews include cross-functional input and review of past changes
• I don’t know

11. In my company the customer feedback is …

• Received by sales department and simply logged and clustered as positive or negative
• Received by sales and channeled centrally for analysis. Guidelines are sometimes deployed back to sales force
• Channeled centrally through a standard process for analysis, clear recommendations are derived for concerned functions
• Channeled centrally for analysis and enriched with sales force insights. Clear recommendations are derived for all functions
• I don’t know

12. In my company the way to process customer complaints/repairs is …

• Not standardized. Diagnosis and corrective actions are mainly carried out on an individual/local basis with no formal follow-up
• Standardized only for classification and treatment of major and well-known defects
• Standardized for classification and treatment of all defects, including newly surfacing ones
• Highly standardized. Detection and eradication of new defects is rapid and efficient
• I don’t know

Quality Organization and Governance

13. In my company the highest ranked person responsible for quality reports to …

• Anybody below a Business Unit functional head
• The head of operations within a Business Unit or equivalent
• The CEO of a Business Unit, the head of Operations (COO), or equivalent
• The CEO/President or equivalent
• I don’t know

14. In my company line managers …

• Show little attention to quality within their own area of responsibility
• Take care of quality of some key activities, but mainly on an individual basis
• Are very careful of quality aspects for all critical processes within their area of responsibility
• Are held accountable for all implemented quality processes/methods along the entire value chain
• I don’t know

15. In my company the evaluation process for employees in quality functions is …

• Not formalized and does not take into account quality capabilities or quality success cases
• Clearly formalized incorporating quality skills for all employees, but career path opportunities in quality remain limited
• Clearly formalized incorporating quality skills for all employees, career paths include quality functions and tasks
• Clearly formalized and quality is a fundamental evaluation criteria. Most senior managers have or had a role in quality
• I don’t know

15. In my company decisions on quality issues are …

• Made without specific preparation. There is no follow up on implementation of decisions taken
• Made in a dedicated Committee, organized on an “ad hoc” basis. Follow-up on previous decisions is not systematic
• Made on a monthly basis in a dedicated Committee. Follow up on implementation of previous decisions is part of the agenda
• Highly standardized. Detection and eradication of new defects is rapid and efficient
• I don’t know

16. In my company the incentive system for employees …

• Does not include quality targets
• Includes 1 or more global quality KPIs (e.g., warranty costs, number of recalls)
• Includes at least 1 KPI based on individual contributions to quality in addition to 1 or more global KPIs
• Beside 1 or more global quality KPIs a significant share of variable pay is linked to individual contribution to quality
• I don’t know

Quality Mindset and Capabilities

17. In my company the corporate vision/policy on quality …

• Is not formalized or is not clearly communicated and visible
• Exists at Corporate level and is displayed with posters in some departments
• Exists at Corporate level and is clearly communicated through posters in each department
• Is clearly understood by each employee. It is frequently communicated in innovative ways
• I don’t know

18. In my company the average skill level on quality of employees is …

• Poor
• Average
• Good
• Excellent
• I don’t know

19. In my company individual suggestions to improve quality are …

• Not leveraged
• Sometimes collected
• Regularly collected
• Regularly encouraged, collected and rewarded
• I don’t know

20. In my company internal communication on quality …

• Happens mostly on an ad-hoc basis, mainly when quality issues come up
• Is not aligned across the whole company. It includes in most cases written media (e.g., newsletters, posters)
• Is aligned across the whole company. Sometimes interactive approaches are used as well
• Is a key element of the overall quality communication plan, including a comprehensive set of interactive tools
• I don’t know

21. In my company external communication …

• Does not stress quality as a differentiating factor for marketing campaigns
• Are used to make some customer segments understand the level of quality of products/services
• Leverages quality as an important influencing factor for most customer segments
• Uses quality as a key influencing and differentiating factor for all customer segments
• I don’t know