1. The Malcolm Baldrige National Quality Assurance Award The Quest for Excellence Eric Santostefano

2. Agenda • What is the Malcolm Baldrige National Quality Award? • Malcolm Baldrige, the man • Reasons for establishment of the award • How award helps an organization • How organization is chosen • Seven key areas to winning, and relative point values • Real world example; Dana Corporation-Spicer Driveshaft Division • Quick exercise

3. What Is the Malcolm Baldrige Quality Award? • Program established in 1987 by congress • Raised awareness of the importance of quality and performance in business • Award is given annually to companies in the manufacturing and service sectors

4. Malcolm Baldrige • Secretary of Commerce from 1981 to 1987 • He was a very big proponent of quality management at a time when quality was not a large issue • He helped draft one of the early versions of the Quality Improvement Act • In recognition of his contributions in showing the importance of quality, the award was named after him.

5. Reasons for the Establishment of the Malcolm Baldrige Quality Award • Government officials saw that quality improvement was no longer an option for American business, but a necessity • Many businesses did not think quality was an important issue • Others knew that it was important, but did not know where to begin the improvement process

6. How Can the Award Be Used to Help an Organization? • The criteria for winning the award are very demanding and simply trying to align a company to them is highly beneficial • It can be used as a motivational tool for workers to rally behind a common goal • Simply by competing for the award an organization sees the importance of quality in their business

7. How an Organization Is Chosen As a MBNQA Winner • 55% of evaluation is based on how the organization is run, 45% on the basis of performance • Every major part of the organization is accessed • Continuous improvement and reevaluation is very important

8. Seven Key Areas Specific to Winning the Award • Leadership • Strategic Planning • Customer and Market Focus • Information and Analysis • Human Resources Development and Management • Process Management • Business Results

9. Point Values for the Seven Key Areas of Evaluation • 110 points – Leadership • 80 points – Strategic Planning • 80 points – Customer and Market Focus • 80 points – Information Analysis • 100 points – Human Resources • 100 points – Process Management • 450 points – Business Results

10. The Board of Examiners • Independent board researches each competing organization, and follows the specific criteria previously mentioned • Site visits consist of 4-6 examiners • Examiners are all volunteers • Appointment to the Board of Examiners is a very prestigious honor

11. Real World Example: What It Takes to be a Malcolm Baldrige Award Winner • Dana Corporation-Spicer Driveshaft Division: 2000 Award Winner in Manufacturing Division • Company’s quality policy—“Dedicated to total quality and continuous improvement”—guides the entire business • Customer complaints have dropped steadily, from 6.8 per million units shipped in 1995 to about 2.8 in 2000, and since 1996, Spicer Driveshaft has not lost a single customer.

12. Exercise • How many companies are given the MBNQA each year? a. 4 b. 8 c. 6 • How much are the board of examiners paid for their position? • How many key areas of each company are examined by the board during review? a. 10 b. 3 c. 9 d. 7

13. Exercise Answers • 1. C; 6 companies are given the award each year • 2. Nothing; the board is a group of volunteers of experts from industry, education, government and non-profit organizations • 3. 7; there are seven key areas each with a relative number of points adding to the total score

14. Summary • MBNQA is a program established in 1987 to raise the awareness of quality in American business • Named after Malcolm Baldrige for his contributions in showing importance of quality • Simply aligning to criteria of award is very beneficial to the success of any organization • Seven key areas specific to winning the award • Prestigious board of examiners serve on a volunteer basis to select the winners each year • Winning companies must have a total quality management system built into their yearly strategy

15. Bibliography Baldrige National Quality Program. www.quality.nist.gov Foundation for the Baldrige National Quality Award. www.baldrigefoundation.org Discover Free Quality. www.freequality.org OISM 470W Class Notes. Chapter 3. Thomas Foster, Jr. and F. Chelko.