Transforming Corporate Performance: Measuring and Managing the Drivers of Business Success

By Michael A. Milgate | Go to book overview

7
Strategic Quality
Measurement
Frameworks and
Approaches

STRATEGIC QUALITY MEASUREMENT

Key Questions and Issues

Over the past 15 years, there has been a heated debate on the question of whether total quality management (TQM) and quality, along with their parallel systems and measures, pay off through improved business performance.

At SGS-THOMSON Microelectronics, a French semiconductor manufacturer, the rerunning of four years of complex ratios and results from the period 1991-1995 enabled it to estimate the minimum direct impact of TQM to have been worth 4 percent of sales annually Over this period, around 60 percent of performance improvements were proven to be linked to TQM practices, whereas the other 40 percent would have occurred regardless of whether TQM had been introduced. It stands to reason that, in less than four years, at least $300 million from TQM implementation has gone straight to the bottom line. TQM principles guide all decisions and activities, from strategies, policies, operations, self-assessment, and corporate behaviors to daily business management.

The SGS-THOMSON case study in this chapter shows how the review, auditing, and measurement of quality against breakthrough or continuous improvement goals and targets is of strategic significance. Quality has also achieved strategic significance for electronics multinational Motorola, arguably TQM's international role model, which

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