Quality Management Principle #7 – Relationship Management

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“For sustained success, an organization manages its relationships with interested parties, such as suppliers.”

Relationship-management

Rationale

“Interested parties influence the performance of an organization. Sustained success is more likely to be achieved when the organization manages relationships with all of its interested parties to optimize their impact on its performance. Relationship management with its supplier and partner networks is of particular importance.”

Explanation

This is the last of the Seven principles of Quality management.

An interested party is a person or group that has a stake in the success or performance of an organization. Interested parties may be directly affected by the organization or actively concerned about its performance. Interested parties can come from inside or outside of the organization. Examples of interested parties include customers, owners, partners, suppliers, employees, unions, bankers, or members of the general public.

Interested parties are also referred to as stakeholders. Relation management with interested parties meaning sharing knowledge,vision,values, understanding and suppliers are not treated as adversaries.The organization establishes a relationships that balance short-term gains with long term considerations. There is pooling of expertise and resources with partners. The Organization identifying and selecting key suppliers.

There is clear and open communication with the stake holders. There is sharing of information and future plans. The organization establishes a joint development and improvement activities. The organization inspiring,encourages and recognize improvements and achievement by suppliers.

Some organizations have very complex supply chains such as the automotive industry, so it is important that these organisations learn to work together with their suppliers for mutual benefit. Good example of this is Toyota however who has a good relationship with their suppliers. They work hand in hand with them to try to design new products and processes and pay a fair price for quality products, these suppliers are loyal to Toyota and work hard to help Toyota to achieve their goals.

Every organization takes use products and services delivered by its suppliers. And every organization works more effectively when it has beneficial relationships with its suppliers built on trust, sharing knowledge and integration. The supplier ought to be a partner not adversary.

If a customer – supplier relationship is not optimize for high performance then in the end all will suffer, just like the different processes within your organizations systems have to be aligned, your suppliers must also be aligned with your overall business aims. Involving your key suppliers in your future strategy is crucial for the sustained success.

Realizing that you need others to succeed. Determining relevant interested parties and working well with them will improve your overall performance.

  • Determining relevant interested parties (such as suppliers, partners, customers, investors, employees, and society as a whole) and their relationship with the organization.
  • Determining and prioritizing interested party relationships that need to be managed.
  • Establishing relationships that balance short-term gains with long-term considerations.
  • Pooling and sharing information, expertise and resources with relevant interested parties.
  • Measuring performance and providing performance feedback to interested parties, as appropriate, to enhance improvement initiatives.
  • Establishing collaborative development and improvement activities with suppliers, partners and other interested parties.
  • Encouraging and recognizing improvements and achievements by suppliers and partners.

 

The Key Benefits

  • Enhanced performance of the organization and its interested parties through responding to the opportunities and constraints related to each interested party
  • Common understanding of goals and values among interested parties
  • Increased capability to create value for interested parties by sharing resources and competence and managing quality-related risks
  • A well-managed supply chain that provides a stable flow of goods and services

Now that you have familiarized yourself with all of the Seven Quality Management Principles, learn how to use these principles in the next article ……

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