Principle number seven, relationship management for sustained success.
Organizations manage their relationships with interested parties such as suppliers, interested parties
are the businesses stakeholders.
They are the people who are concerned with the activities of the business.
Different interested parties are going to have different levels of importance and they're going to have
different levels of power and influence.
So depending on the situation and depending on the interested party, there has to be a plan to manage
your relationship with this party.
And when you're doing this, you're going to be looking for opportunities to improve your KMS.
Let's take the example of your suppliers, so it's in your interest to have a good relationship with
them.
Maybe they can offer you better discounts, better credit terms, and maybe you can improve the terms
of your your dealings.
The primary focus of a quality management system is to attain customer satisfaction and meet the requirements.
But there are many, many interested parties who have at varying levels of power and influence over
the organization.
For example, the shareholders, although shareholders also have the objective of customer satisfaction
because that would mean more profit.
They also want better dividends.
They want to increase the value of their shares, and a company is going to have a dividend policy so
the company has to manage their relationship with their shareholders and ensure that their interests
are being met as well, and that there is good and open communication with them, and that they're informing
them about the important ongoing of the organization.
So maybe they decide to enhance customer satisfaction and pay out fewer dividends this year.
So they have to appropriately communicate this with the shareholders so that the shareholders are happy
and the value of stock doesn't suddenly fall because everyone's selling their shares.
You have your relationship with the government and different regulators and authorities say, for example,
if you're not in compliance with something, you have to have a way to inform the authorities so you
don't get fined and you have to inform them and you have to work with them and come up with a way and
a plan for you to meet that compliance obligation.
You also have things like managing your relationship with suppliers and other partners.
You want to make sure that you have effective communication in place, that you're making good decisions
and that you're taking advantage of different opportunities that are available.
Having a good relationship with your supplier might get you greater discounts.
It might get you better credit terms, and it will reduce risk so you won't be worried about where you're
going to get your material from.
Having a good relationship with partners is also going to be useful.
Perhaps it'll ensure that you have a place to sell your product.
Maybe it can get you improved terms in future contracts and so on.
Managing your relationship with different interested parties is going to help you understand the opportunities
and constraints associated with various interested parties is going to open channels of communication
and make things clearer.
So, for example, if you have a good relationship with your supplier, it's more likely that they're
going to give you the thing that you need.
Then it's more likely that they're going to meet your requirements accurately if they fully understand
what your requirements are.
It can help you in obtaining more valuable information.
For example, communication with the government, maybe they'll provide you with some information.
There's going to be useful in your decision making.
Maybe they'll inform you about some future changes in the laws and legislations that are coming up,
and that's going to enable you to prepare for that.
By achieving effective communication and by maintaining a relationship with your suppliers and your
partners, you can ensure that you collectively respond to changes in a timely manner and that you pool
your resources and your knowledge to solve problems together.
She can also communicate with other similar businesses and find solutions to problems together, and
this once again is going to allow people to share their knowledge with each other and to develop good
relations.
This is going to cultivate an environment of innovation and development.
When dealing with interested parties, you have to have a look at the needs and expectations of each
of the relevant parties and make.
A list of these, then you have to think about which ones of these are relevant to the organization
and which ones of these are going to become compliance obligations.
You'll also have to find out where the opportunities and risks are.
Those interested parties that have a greater influence on the organization to have more relevance to
the activities of the organization.
Those are the interested parties that you want to focus on.
You want to develop better relationship with these interested parties so that you can carry out your
operations more effectively.
This means that you have to plan communication and you have to create objectives and goals when dealing
with these different interested parties.
So whenever you have an engagement, you going to think about the goals and objectives of engagement
and you can think about whether or not these are being met.
The actions that you took, were they effective or not?
For example, when negotiating with suppliers, if you're dealing with them and you've been working
with them for a number of years, you're going to have collected some evidence about the payments you
make.
Right?
So you're going to show them that, hey, you pay on time and you can ask them for more credit.
You can ask them to receive the extra goods and show them that you pay on time and that you want better
terms and you want to buy more goods on credit and so forth and so on.
When you're dealing with interested parties, you want to gather information and collect evidence and
make sure that your dealings with them are based on some sound facts.
So, for example, you're dealing with your workforce now, your workforce is an important interested
party.
If you have an unhappy workforce that have a lot of issues, you want to listen to them and take the
appropriate action to address their needs and expectation.
Therefore, you can look at their requests and look at their claims and see if you see if they can verify
that with some evidence.
So, for example, the workers are complaining about lots of injuries and not enough time for breaks.
You can find some way to assess that.
You can look at the industry standards.
You can interview the employees and collect data and see if this is an opinion the shared by many people
or just or if they're just a few people complaining about this issue.
Maybe some workers are complaining about the workload.
Once again, you can do some research and find out whether maybe they're just a handful of people who
are complaining about a specific problem.
And when you compare that to the entire percentage of your workforce, you find that most of the employees
are happy with the work they're doing and they don't have this complaint.
So based on your findings, based on some research, you can then manage your relationship with this
interested party with these employees.
Maybe you can negotiate some better working conditions.
You can provide better health care.
Maybe you can increase their wages and so on.
Furthermore, once you engage with these different interested parties once again with the example of
workers, maybe you'll find that upon review, you'll find that they're actually performing really well
and that that improvement in their performance deserves some recognition and some type of benefits,
so they'll be motivated to continue to work hard and improve their performance.
So this way you're going to get recognition and they know if they work harder, they're going to get
something out of it.
This was previously called mutually beneficial supplier relationships.
Also, the fifth principle of the eight quality principle system approach to management no longer exists
in the seven principles of quality management.
The previous definition of mutually beneficial supplier relationships was an organization, and its
suppliers are interdependent and a mutually beneficial relationship enhances the ability of both to
create value.
The seven principle definition states for sustained success organizations manage their relationships
with interested parties, such as suppliers.
There are many, many stakeholders involved in any organization.
You have the managers, the employees, the shareholders, the government, the customers, the suppliers,
the competitors, just to name a few.
So the managers, what they have to do is they have to develop their relationships with different interested
parties and they have to come up with new ideas.
New opportunities, and they have to deal with the consequences of various adverse events and discover
new ways that they can deal with the risks, developing a strong relationship with your business partners
with your suppliers is very important.
You want to make sure that your suppliers are reliable businesses.
You want to source your materials or your products from reliable people who can deliver the products
and services according to your requirements and according to your policies and your standards.
This is why it's important to assess the quality of the service that you're receiving, and it's important
to evaluate the terms and conditions of your agreements and to review these.
So your commitment to quality has to be implemented by your suppliers and your suppliers are outside
your direct control and influence.
You're not actually going to be directing the work done in the actual plant if your suppliers.
Therefore, you have to develop a good relationship with them, and you have to make sure that your
quality standards are being met and that you getting the best prices and the terms and agreements are
favorable when possible.
You might even want to visit one of your suppliers and make sure that they are implementing your quality
standards if that's included in your agreement.
When you have this type of flow of information and this type of communication, you can look upstream
and downstream from your current operations, and you can come up with new ways and new ideas of delivering
value to the customer.
So you can look at downstream from your operations and see how your product is reaching the end user.
And you can find out what the problems are and try to cultivate a growth mindset and try to solve those
problems with your business partners.
Furthermore, you can look at your suppliers and be clear about your expectations and your requirements,
and you can come up with new ideas of developing better products and cutting costs and providing more
value to the customer.