The 21st century has presented many challenges for the leaders and management of private and public-sector organisations. We live in a turbulent world where organisations must continually transform if they are to deliver sustained value to their shareholders and stakeholders. All too easily in this highly-connected world, hard-earned competitive advantages and reputation can slip away. One such competitive advantage is the sustained delivery of “stand-out” quality products and services. We have all benefited from the improvements in quality that have been achieved over the last 50 years, yet we still live in a world where poor quality in the public and private sectors is reported and, more recently it appears, with increasing frequency.
Failure to manage quality in this fast-moving world is clearly damaging the reputations and financial returns of some major global brands and corporations. The procurement profession reports increasing concern at the risks to the quality of products and services sourced. Failure is not just restricted to the delivery of products and services either – the way that some major change is being mismanaged is also damaging the reputations of some high-quality brands.
The Oakland Institute for Business Research and Education, in collaboration with the Leeds University Business School and Valueneer in Germany, have formed a research team to examine these issues. We have carried out an initial on-line survey of over 140 global companies.
What are the issues for top management in the 21st Century?
The on-line survey produced statistically significant results which showed that:
- CEOs and executive teams are better at demonstrating leadership, commitment and setting strategy than ensuring the implementation of quality management.
- To reduce high-profile failures and recalls of products, CEOs and executive teams need to demonstrate leadership, commitment and set strategy AND be good at implementing quality management
- Leadership, commitment, clear quality vision, quality aligned in strategy and continuous improvement are shown, with statistical significance, to help reduce the number of major failures or recalls and the costs of poor quality.
- Vigilance in promoting risk-based approaches is not enough without effective quality planning and a culture of fact-based decision-making.
- There is a need to prioritise improvement on standardisation of quality/risk management processes and interfaces with supply chains and procurement.
- There is better governance of supply chain risk and higher standing of quality, procurement and supply chain management in companies that have quality and supply chain management functions represented in the Boardroom.
- Interfaces between the CEO, Supply Chain Management and Quality Management at board level are crucial for maintaining quality and reducing supply chain risks.
It is apparent then that top managers in some organisations seem to have lost sight of good quality, reliability, supply chain and procurement practices. However, the research team believe there are exemplar companies out there which know how to create the right cultures and management capabilities to run businesses well. Hence, further study of a sample of exemplar companies should allow us to develop existing and new frameworks that will address the whole set of requirements to assist top management regarding quality and supply chains. The next stage of our research will elicit specific examples or real-life experiences of managing quality and supply chains well in the 21st century, from three different top management perspectives; CEO, head of quality, and head of supply chain.
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