IKEA is a privately-held, international home products retailer that sells flat pack furniture, accessories,
and bathroom and kitchen items in their retail stores around the world. The company, which
pioneered flat-pack design furniture at affordable prices, is now the world's largest furniture retailer.
IKEA was founded in 1943 by 17-year-old Ingvar Kamprad in Sweden and it is owned by a Dutchregistered foundation controlled by the Kamprad family. The company which was originated in
Småland, Sweden, distributes its products through its retail outlets. As of August 2009, the chain has
301 stores in 37 countries, most of them in Europe, North America, Asia and Australia.
The IKEA Concept began when Ingvar Kamprad, an
entrepreneur from the Småland province in southern Sweden,
had an innovative idea. In Småland, although the soil is thin
and poor, the people have a reputation for working hard, living
frugally and making the most out of limited resources. So
when Ingvar started his furniture business in the late 1940s,
he applied the lessons he learned in Småland to the home
furnishings market. Ingvar's innovative idea was to offer home
furnishing products of good function and design at prices
much lower than competitors by using simple cost-cutting
solutions that did not affect the quality of products. Ingvar
used every opportunity to reduce costs, and he scraped and
saved in every way possible - except on ideas and quality. The name IKEA comes from the initials of
Ingvar Kamprad, I and K, plus the first letters of Elmtaryd and Agunnaryd, which are the names of the
farm and village where he grew up.
Despite its Swedish roots, IKEA is owned and operated by a complicated array of not-for-profit
for-profit corporations. The IKEA corporate structure is divided
divided into two main parts: operations and
franchising. Most of IKEA's operations, including the management of the majority of its stores, the
design and manufacture of its furniture, and purchasing and supply functions are overseen by INGKA
Holding, a private, for-profit
profit Dutch company. Of the IKEA stores in 36 countries, 235 are run by the
INGKA Holding.. The remaining 30 stores are run by franchisees outside of the INGKA Holding.
INGKA Holding is not an independent company, but is wholly owned by the Stichting
Foundation, which Kamprad established in 1982 in the Netherlands as a tax-exempt,
tax exempt, not-for-profit
foundation. The Ingka Foundation is controlled by a five-member
five member executive committee that is chaired
by Kamprad and includes his wife and attorney.
hile most IKEA stores operate under the direct purview of Ingka Holding and the Ingka Foundation,
the IKEA trademark and concept is owned by an entirely separate Dutch company, Inter IKEA
Systems. Every IKEA store, including those run by Ingka Holding, pays
pays a franchise fee of 3% of the
revenue to Inter IKEA Systems. The ownership of Inter IKEA Systems is exceedingly complicated
and, ultimately, uncertain. Inter IKEA Systems is owned by Inter IKEA Holding, a company registered
in Luxembourg. Inter IKEA Holding,
ng, in turn, belongs to an identically named company in the
Netherlands Antilles that is run by a trust company based in Curaçao. The owners of this trust
company are unknown (IKEA refuses to identify them) but are assumed to be members of the
In Australia, IKEA is operated by two companies. Stores located on the East Coast including
Queensland, New South Wales, and Victoria are owned by INGKA Holding. Stores elsewhere in the
country including South Australia and Western Australia are owned by Cebas Pty Ltd. Like
elsewhere, all stores are operated under a franchise agreement with Inter IKEA Systems.
The IKEA vision, business idea and market positioning statement provide a framework for all IKEA
marketing communication worldwide.
The IKEA vision is "To create a better everyday life for the many
people." To meet this vision IKEA provides many well-designed,
functional products for the home. It prices its products low so that as
many people as possible can afford to buy them.
However, in creating low prices IKEA is not willing to sacrifice its
principles. ‘Low price but not at any price’ is what IKEA says. This
means it wants its business to be sustainable. IKEA supplies goods
and services to individuals in a way that has an overall beneficial effect
on people and the environment. Customers all over the world have
responded positively to IKEA’s approach.
The business idea is "To offer a wide range of well designed, functional home furnishing products at
prices so low that as many people as possible will be able to afford them."
The market positioning statement is "Your partner
ner in better living. We do our part, you do yours.
Together we save money."
The IKEA Concept is based on offering a wide range of well designed, functional home furnishing
products at prices so low that as many people as possible will be able to afford them. Rather than
selling expensive home furnishings that only a few can buy, the IKEA Concept makes it possible to
serve the many by providing low-priced products that contribute to helping more people live a better
life at home. The IKEA Concept guides the way IKEA products are designed, manufactured,
transported, sold and assembled. All of these factors contribute to transforming the IKEA Concept into
Fundamental activities such as eating, sleeping, storing items, socialising and so on create a demand
for furniture and practical products that solve essential human needs. The IKEA product range meets
these needs by offering a wide range of well-designed, functional home furnishing products at prices
so low that as many people as possible will be able to afford them. The IKEA range includes products
for every part of the home.
1. Design- While most retailers use design to justify a higher price, IKEA designers work in
exactly the opposite way. Instead they use design to secure the lowest possible price. IKEA
designers design every IKEA product starting with a functional need and a price. Then they
use their vast knowledge of innovative, low-cost manufacturing processes to create functional
products, often co-ordinated in style. Then large volumes are purchased to push prices down
even further. Most IKEA products are also designed to be transported in flat packs and
assembled at the customer's home. This lowers the price by minimising transportation and
storage costs. In this way, the IKEA Concept uses design to ensure that IKEA products can
be purchased and enjoyed by as many people as possible.
2. Function- The many people have many needs. They live with kids. They need more storage.
They have to make the most out of a small space. So IKEA designers are always seeking
new ways to improve people's lives - without emptying their wallets. But how can good design
and function be combined with good quality, all at a low price? It starts with focusing on
what's important. Will an expensive finish on the back of a shelf or under a table-top improve
the function? Absolutely not. So IKEA designers do not do it, because a product is of no use
to the customer if it is not affordable.
3. Low Price- Low price is a prerequisite for the IKEA Concept to realise the IKEA vision - "to
create a better everyday life for the many people". As the IKEA Concept aims to serve "the
many people", the IKEA product range needs extremely low price levels. IKEA designers do
their part to keep prices low by using production capabilities from other areas in unique and
previously unimagined ways - like having a shirt factory produce furniture upholstery. Or using
leftover materials from the production of one product to create an entirely new one. IKEA
customers also contribute to keeping prices low. They select and pick up the products
themselves, transport them home and then assemble them themselves. And they can enjoy
them already later that day.
IKEA stores are usually very large blue buildings with few windows and
yellow accents. They are designed around a "one-way" layout which
leads customers along "the long natural way." This layout is designed to
encourage the customer to see the store in its entirety (as opposed to a
traditional retail store, which allows a consumer to go right to the section
where the goods and services needed are displayed) although there are
often shortcuts to other parts of the showroom.
The sequence first involves going
through furniture showrooms
making note of selected items. Then
the customer collects a shopping
cart and proceeds to an open-shelf
warehouse for smaller items
(Market Hall). Then the customer
visits the furniture warehouse (Self
Serve) where they collect previously noted showroom products in
flat pack form. Sometimes they are directed to collect products
from an external warehouse on the same site or at a site nearby.
Finally they take their products to the cashier's station to make
payment. Newer IKEA stores, make more use of glass, both for
aesthetic and functional reasons. Skylights are also now common
in the Self-serve warehouses. More natural light reduces energy
costs, improves worker morale and gives a better impression of
Whilst the original design involved the warehouse on the lower level and
the showroom and marketplace on the upper, today most stores globally
have the Showroom upstairs with the marketplace and warehouse
downstairs. Additionally, some stores are single level. Some stores
maintain separate warehouses to allow more stock to be kept on-site at
any given time, although this occasionally results in challenges in finding
the items, as well as a perception of having to queue in line twice.
Single-level stores are found predominantly in areas where the cost of
land would be less than the cost of building a 2-level store – examples
include the store in Saarlouis, Germany and Haparanda, Sweden. Some
stores also have dual level warehouses and machine controlled silos
which allow large quantities of stock to be accessed throughout the
Most IKEA stores offer an "as-is"
area at the end of the warehouse
just prior to the cashiers.
Returned, damaged and formerly
showcased products which are
not in new condition or taken out
of the IKEA product range are
displayed here, and sold with a
significant discount, but also with
a "no-returns" policy. Most IKEA stores communicate the IKEA
policy on environmental issues in the "as-is." In the United
Kingdom, this is referred to as "Bargain Corner."
The vast majority of IKEA stores are located outside of city centres, primarily because of land cost
and traffic access. Several smaller store formats have been unsuccessfully tested in the past (the
"midi" concept in the early 90s, which was tested in Ottawa and Heerlen with 9,300 m , or a
"boutique" shop in Manhattan).
1. Timings- An important feature of many IKEA stores is their long opening hours. Many IKEA
stores are in operation 24 hours a day with restocking and maintenance being carried out
throughout the night. However, public opening hours tend to be much longer than most other
retailers, with stores open well into the evening in many countries. In the UK for example,
almost all stores are open past 8pm with opening times often around 9-10am. Ikea Croydon
has one of the longest opening hours worldwide being open from 10am 12 Midnight Monday
2. Restaurants- Many stores include restaurants
serving traditional Swedish food such as
potatoes with Swedish meatballs, cream sauce
and lingonberry jam, although there are
variations. Besides these Swedish staples, hot
dogs and drinks are also sold, the latter for
around 5 SEK (approx $1 USD), along with a
few varieties of the local cuisine, and
beverages such as lingonberry juice. Also
items such as Prinsesstårta — Princess cake
are sold as desserts. Refills of coffee, tea, and
soft drinks are free of charge, even in countries
where this is uncommon in other restaurants.
3. Grocery Store- Many stores also have a minishop selling Swedish-made, Swedish-style groceries,
such as Swedish meatballs, packages of gravy and
various Scandinavian cookies and crackers, as well as
salmon and salmon roe.
Child Care- Many stores have a play area, named
Småland, for children aged 3 to 10 years (may
vary). The service is offered completely free of
charge. Parents drop off their children at a gate to
the playground, and pick them up after they arrive
at another entrance. Parents are also given free
pagers by the on-site staff; the staff will set off these
pagers should a child need his/her parents sooner
than expected. The area mostly features things
such as slides, seesaws, cartoons, a ball pit, etc.
Much of IKEA's furniture is designed to be
assembled by the consumer rather than being sold
pre-assembled. IKEA claims this permits them to
reduce costs and use of packaging by not shipping
air; the volume of a bookcase, for example, is
considerably less if it is shipped unassembled
rather than assembled. This is also a practical point
for many of the chain's European customers, where
public transport is commonly used; the flat-pack
distribution methods allow for easier transport via
public transport from the store to a customer's
home for assembly.
IKEA contends that it has been a pioneering force
in sustainable approaches to mass consumer
culture. Kamprad refers to the concept as
"democratic design," meaning that the company
applies an integrated approach to manufacturing
and design. In response to the explosion of human
population and material expectations in the 20th
and 21st century, the company implements
economies of scale, capturing material streams and
creating manufacturing processes that hold costs
and resource use down, such as the extensive
use of particle board. The intended result is
flexible, adaptable home furnishings, scalable
both to smaller homes and dwellings as well as
large houses. IKEA has also expanded their
product base to include flat-pack houses, in an
effort to cut prices involved in a first-time buyer's
IKEA products are identified by single word names. Most of the names are Swedish in origin.
Although there are some notable exceptions, most product names are based on a special naming
system developed by IKEA in conjunction with Colin Edwards (international naming expert and
Upholstered furniture, coffee tables, rattan furniture, bookshelves, media storage, doorknobs:
Swedish placenames (for example: Klippan)
Beds, wardrobes, hall furniture: Norwegian place names
Dining tables and chairs: Finnish place names
Bookcase ranges: Occupationss
Bathroom articles: Scandinavian lakes, rivers and bays
Kitchens: grammatical terms, sometimes also other names
Chairs, desks: men's names
Materials, curtains: women's names
Garden furniture: Swedish islands
Carpets: Danish place names
Lighting: terms from music, chemistry, meteorology, measures, weights, seasons, months,
days, boats, nautical terms
Bedlinen, bed covers, pillows/cushions: flowers, plants, precious stones
Children's items: mammals, birds, adjectives
Curtain accessories: mathematical and geometrical terms
Kitchen utensils: foreign words, spices, herbs, fish, mushrooms, fruits or berries, functional
Boxes, wall decoration, pictures and frames, clocks: colloquial expressions, also Swedish
For example, DUKTIG (meaning: good, well-behaved) is a line of children's toys, OSLO is a name of
a bed, BILLY (a Swedish masculine name) is a popular shelf, DINERA (meaning: (to) dine) for
tableware, KASSETT (meaning: cassette) for media storage. One range of office furniture is named
EFFEKTIV (meaning: efficient), SKÄRPT (meaning: sharp or clever) is a line of kitchen knives.
Because IKEA is a worldwide company working in several countries with several different languages,
sometimes the Nordic naming leads to problems where the word means something completely
different to the product. While exotic-sounding names draw attention, e.g., in anglophone countries, a
number of them call for a snicker. Notable examples include "Jerker" desk and "Fartfull" workbench.
Also, the most recent new product, Lyckhem (meaning bliss). The products are generally withdrawn,
probably after someone pointed at blunders, but not before generating some news.
Company founder Ingvar Kamprad, who is dyslexic, found that naming the furniture with proper
names and words, rather than a product code, made the names easier to remember.
IKEA publishes an annual catalogue. First published in
Swedish in 1951, the catalogue is now published in 55 editions,
in 27 languages for 36 countries, and is considered to be the
main marketing tool of the retail giant, consuming 70% of the
company's annual marketing budget.
The catalogue is distributed both in stores and by mail. Most of
the catalogue is produced by IKEA Communications AB in
IKEA's hometown of Älmhult, Sweden where IKEA operates the
largest photo studio in northern Europe at 8,000 square metres
in size. The catalogue itself is printed on chlorine-free paper of
10-15% post-consumer waste.
IKEA has launched a loyalty card programme called "IKEA Family." The
distinctive orange card is free of charge and can be used to obtain
discounts on a special range of products found in each IKEA store. In
particular, it gives 25% off the price of commissioned ranges of IKEA
products on presentation of the card. The card also gives discounts on
food purchased in the restaurant and the Swedish Food Market. In
conjunction with the card, IKEA also publishes and sells a printed
quarterly magazine titled IKEA Family Live which supplements the card
and catalogue. The magazine is already printed in thirteen languages
and an English edition for the United Kingdom was launched in
February 2007. It is expected to have a subscription of over 500,000.
The IKEA brand is the sum total of the emotional and rational
values that consumers associate with the IKEA trademark
and the reputation of our company. The brand image is the
result of over 50 years work by IKEA co-workers at all levels
all over the world.
The overall task of IKEA marketing communication is to build the IKEA brand and inspire people to
come to the stores. The IKEA concept builds on a relationship with the consumer. Nine key messages
are used within the IKEA marketing communication to build this relationship. These are
The IKEA concept is based on the market positioning statement. "We do our part"
focuses on their commitment to product design, consumer value and clever solutions.
By using inexpensive materials in a novel way and minimising production, distribution
and retail costs, their customers benefit from low prices.
The IKEA product range is developed to be extensive to have something that appeals
to everyone and to cover all functions in the home. The products are modern not trendy
so they are practical enough for everyday use.
IKEA is the home furnishing specialist- IKEA products are functional and appealing;
they enable people to improve their home life through practical solutions to everyday
Low price is not appealing unless it represents good value for money. This is where
IKEA is able to make a real difference. IKEA is committed to having a good relationship
with our suppliers and so we are able to purchase good quaility, economically produced
designs that are bought in bulk to keep costs down. By making all their furniture flat
packed they cut down on transportation and assembly costs.
Function - IKEA products are based on a functional approach to design. IKEA design
means products that are attractive, practical and easy to use. They don't have
unnecessary features, they give genuine solutions for specific home furnishing needs
and are made of the most suitable materials for their purpose.
The right quality- IKEA products are subjected to rigorous tests to make sure that they
meet national and international safety standards.
Convenient shopping- The IKEA store offers "everything under one roof", most of it
available for immediate take-away. IKEA offers service where they need it, but allows
customers to make most of the decisions themselves. This means that they need to
make it easy to choose the right products by displaying them correctly, describing them
accurately and having a simple returns policy.
A day out for the whole family- IKEA aim to look after thier customers by planning for
their needs. Not only do they provide inspiration and ideas, but they also encourage
people to touch, feel and use the products on display to see how they would fit into their
own home. They have new products arriving all the time, seasonal themes, play areas
for children, special events and a great value family restaurant.
Swedish IKEA, - The key IKEA messages all have their roots in the Swedish origin of IKEA.
Swedish furniture is light and fresh yet unpretentious. The warm welcoming Swedish style has
become a model of simplicity, practicality, and informality that is now world renown.
IKEA has a long tradition in marketing communication focusing primarily on printed media which has
proven its values and success to the company over the years. Other media now being used to an
increasing degree include TV, radio, and internet based communication.
The IKEA marketing mix consists of 4 different areas of focus.
1. The IKEA product range is our starting point. All other marketing communication is used to
amplify the product range.
2. The store is the IKEA retailer’s primary medium for presenting and communicating the range,
its low price and the IKEA concept.
3. The IKEA catalogue is the main marketing tool with around 70% of of the annual marketing
budget being spent on this alone. It is produced in 38 different editions, in 17 languages for 28
countries. 110 million catalogues were circulated last year - three times higher than that of the
Bible, with 13 million of these being available in the UK.
4. The IKEA advertising, PR and other types of communication are complements to the
IKEA range; store and catalogue are used to spearhead the penetration of our target market.
Although IKEA household products and furniture are designed
in Sweden, they are largely manufactured in developing
countries to keep down costs. With suppliers in 50 countries,
roughly 2/3 of purchasing is from Europe with about 1/3 from
Asia. A small amount of products are produced in North
America. Comparatively little production actually takes place
in Sweden, though it still remains the fourth-largest supplier
country (behind China, Poland and Italy). China accounts for
about 2.5 times as much supply as Sweden. For most of its
products, the final assembly is performed by the end-user
For IKEA, distribution is an important part of the equation of creating home
furnishing articles at prices which are as low as possible. Today
approximately 10,000 IKEA products are manufactured by 1,600 suppliers
and transported to 186 IKEA stores around the world, often via one of the
company’s 27 centra l warehouses and distribution centres. At IKEA,
distribution is all about making the route from the manufacturer to the
customer as short as possible.
In the early days of IKEA, the “warehouse” was a shed on Elmtaryd Farm in
the south of Sweden where the founder of the company, Ingvar Kamprad,
lived with his parents. In those days products were despatched from Elmatryd
with the help of the county milk van that visited the farm each day. Things have changed a bit since
then, however. Today IKEA operates 27 distribution centres in a total of 16 countries. From here IKEA
products are delivered to 186 stores around the world – 165 IKEA Group stores and a further 21
stores operated by other franchisees.
Large volumes + flat packs = low costs
IKEA works in various ways not only to rationalise and simplify distribution, but also to minimise the
impact this part of the business has on the environment. The secret is to calculate as exactly as
possible how many products will be needed to satisfy demand. This eliminates any unnecessary costs
for production and warehousing.
The hallmarks of IKEA distribution are:
A global distribution network
The aim, of course, is to make sure that the right products are always available at the store when the
customers wish to buy them.
Better efficiency means lower prices
The fact that IKEA products are sold packed fl at means that they can be transported with greater
efficiency. By minimising “wasted space” it is possible to transport and store more packages at a time.
And by increasing what is known as “the filling rate” in containers etc. (in other words, reducing the
amount of wasted space), the cost of transporting each item goes down. One good example of this is
HOTT kettle. Making better use of the available space by stacking some of the kettles upside down
makes it possible to fit ten kettles into a box instead of just six. As a result, less packaging materials
are needed and distribution costs are kept lower.
More deliveries by rail in future
Today 60 percent of all IKEA freight is transported by road, 20 percent by rail and 20 percent by sea.
Less than one percent is air freighted. The aim is to constantly increase the proportion of goods
transported by rail. Within the next three years 40 percent of all IKEA freight within Europe will be
moved by rail. For some years now, all the freight companies working with IKEA have been required
to provide statistics for a so called “Environmental Performance Sheet” that details how their
operations impact on the environment. This enables IKEA to keep a check on these companies’
environmental work and to monitor what measures they are introducing to reduce the use of fuel and
The INGKA Foundation is officially dedicated to
promoting “innovations in architecture and interior
design.” With an estimated net worth of $36 billion, the
foundation is unofficially the world’s largest charitable
organization, beating out the much better known Bill and
Melinda Gates Foundation, which has a net worth of
approximately $33 billion.
Despite its enormous wealth, the Ingka Foundation
does very little charitable giving. Detailed information
about its grantmaking is unavailable, as foundations in
the Netherlands are not required to publish their records.
But IKEA has reported that in 2004-2005, the Ingka
Foundation's donations were concentrated on the Lund
Institute of Technology in Sweden, and the Lund
Institute reported the receipt of $1.7 million grants from the foundation during both of those years. By
way of comparison, the Gates Foundation made gifts of more than $1.5 billion in 2005.
Notwithstanding the Ingka Foundation's lack of concerted philanthropic activity, IKEA is involved in
several international charitable causes, particularly in partnership with UNICEF. These include:
In the wake of the 2004 Boxing Day Tsunami, IKEA Australia agreed to match dollar for dollar
co-workers donations and donated all sales of the IKEA Blue Bag to the cause.
After the Pakistan earthquake of 2006, IKEA gave 500,000 blankets to the relief effort in the
IKEA has provided furniture for over 100 "bridge schools" in Liberia.
In the 2008 Sichuan earthquake in China, IKEA Beijing sold an alligator toy for 40 yuan
(US$5.83, €3.70) with all income going to the children in the earthquake struck area
IKEA also supports American Forests to restore forests and reduce pollution.
Links with Education In 2008 IKEA was a supporter of the Design Wales Ffres Awards, providing a
creative brief for undergraduate design competition.
In September 2005 IKEA Social Initiative was formed to
manage the company’s social involvements on a global level.
IKEA Social Initiative is headed by Marianne Barner. The
main partners to IKEA Social Initiative are UNICEF and Save
On the 23rd of February 2009 at the ECOSOC event in New
York, UNICEF announced that IKEA Social Initiative has
become the agency’s largest corporate partner, with total
commitments of more than 180 million USD.
Examples of involvements:
IKEA through IKEA Social Initiative contribute €1 to UNICEF and Save the Children from each
soft toy sold during the holiday seasons, raising a total of €16.7 million so far.
IKEA Social Initiative provided soft toys to children in cyclone affected Myanmar.
Starting in June 2009, for every Sunnan solar-powered lamp sold in IKEA stores worldwide,
IKEA Social Initiative will donate one Sunnan with the help of UNICEF.
In 1990, IKEA invited Karl-Henrik Robèrt, founder of The Natural Step, to address its board of
directors. Robert's system conditions for sustainability provided a strategic approach to improving the
company's environmental performance. This led to the development of an Environmental Action Plan,
which was adopted in 1992. The plan focused on structural change, allowing IKEA to "maximize the
impact of resources invested and reduce the energy necessary to address isolated issues." The
environmental measures taken, include the following:
Replacing polyvinylchloride (PVC) in wallpapers, home textiles,
shower curtains, lampshades, and furniture—PVC has been
eliminated from packaging and is being phased out in electric
minimizing the use of formaldehyde in its products, including
producing a model of chair (OGLA) made from 100% postconsumer plastic waste;
introducing a series of air-inflatable furniture products into the
product line. Such products reduce the use of raw materials for
framing and stuffing and reduce transportation weight and
volume to about 15% of that of conventional furniture;
reducing the use of chromium for metal surface treatment;
using wood from responsibly-managed forests that replant and
maintain biological diversity;
using only recyclable materials for flat packaging and "pure"
(non-mixed) materials for packaging to assist in recycling.
introducing rental bicycles with trailers for customers in Denmark.
More recently, IKEA has stopped providing plastic bags to customers, but
offers reusable bags for sale. The IKEA restaurants also only offer
reusable plates, knives, forks, spoons, etc. Toilets in some IKEA restrooms have been outfitted with
dual-function flushers. Most stores only offer paper plates and plastic knives, forks, and spoons. IKEA
has recycling bins for compact fluorescent lamps (CFLs), energy saving bulbs, and batteries. In 2001
IKEA was one of the first companies to operate its own cross-border freight trains through several
countries in Europe. In August 2008, IKEA also announced that it had created IKEA GreenTech, a
€50 million venture capital fund. Located in Lund (a college town in Sweden), it will invest in 8-10
companies in the coming five years with focus on solar panels, alternative light sources, product
materials, energy efficiency, and water saving and purification. The aim is to commercialise green
technologies for sale in IKEA stores within 3–4 years.
AND SIX SIGMA
Edited by Tauseef Aized
Total Quality Management and Six Sigma
Edited by Tauseef Aized
Aleksandar Vujovic, Zdravko Krivokapic, Jelena Jovanovic, Svante Lifvergren, Bo Bergman,
Adela-Eliza Dumitrascu, Anisor Nedelcu, Erika Alves dos Santos, Mithat Zeydan, Gülhan Toğa,
Johnson Olabode Adeoti, Andrey Kostogryzov, George Nistratov, Andrey Nistratov,
Vidoje Moracanin, Ching-Chow Yang, Ayon Chakraborty, Kay Chuan Tan, Graham Cartwright,
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Total Quality Management and Six Sigma, Edited by Tauseef Aized
Artificial Intelligence Tools and Case Base Reasoning
Approach for Improvement Business Process Performance 3
Aleksandar Vujovic, Zdravko Krivokapic and Jelena Jovanovic
Improving ‘Improvement’ by Refocusing Learning:
Experiences from an –Initially- Unsuccessful
Six Sigma Project in Healthcare 23
Svante Lifvergren and Bo Bergman
Project Costs and Risks Estimation Regarding
Quality Management System Implementation 41
Adela-Eliza Dumitrascu and Anisor Nedelcu
What Quality Management Allied to Information
Can Do for Occupational Safety and Health 69
Erika Alves dos Santos
Reducing Mirror Slippage of Nightstand with
Plackett-Burman DOE and ANN Techniques 101
Mithat Zeydan and Gülhan Toğa
Redesigning the Service Process for Total Quality in
Government Hospitals: Evidence from Kwara State 117
Johnson Olabode Adeoti
Some Applicable Methods to Analyze and
Optimize System Processes in Quality Management 127
Andrey Kostogryzov, George Nistratov and Andrey Nistratov
Competence Education and Training for Quality 197
Six Sigma 217
The Integration of TQM and Six-Sigma 219
Qualitative and Quantitative Analysis
of Six Sigma in Service Organizations 247
Ayon Chakraborty and Kay Chuan Tan
Lean Six Sigma – Making It ‘Business as Usual’ 287
Graham Cartwright and John Oakland
Total quality management, now a well known idea, is a philosophy of management for
continuously improving the quality of products and processes. The idea is that the
quality of products and processes is the responsibility of everyone who is involved
with the development and/or use of the products or services. TQM involves
management, workforce, suppliers, and even customers, in order to meet or exceed
customer expectations. The common TQM practices are cross-functional product
design, process management, supplier quality management, customer involvement,
information and feedback, committed leadership, strategic planning, cross-functional
training, and employee involvement. Six Sigma is a business management strategy
which seeks to improve the quality of process outputs by identifying and removing
the causes of defects and minimizing variability in manufacturing and business
processes. A six sigma process is one in which 99.99966% of the products
manufactured are statistically expected to be free of defects. TQM’s focus is general
improvement by approaching the problem collaboratively and culturally whereas Six
Sigma utilizes the efforts of many departments, generally with a statistical approach. It
makes use of measuring and analyzing data to determine how defects and differences
could be minimized to the level where there are 3.4 defects per million cycles/products.
Six Sigma can easily be integrated into quality management efforts. Integrating Six
Sigma into the TQM program facilitates process improvement through detailed data
analysis. Using the Six Sigma metrics, internal project comparisons facilitate resource
allocation while external project comparisons allow for benchmarking. Thus, the
application of Six Sigma makes TQM efforts more successful. In today’s highly
competitive environment, organizations tend to integrate TQM and six sigma to gain
maximum benefits. This volume is an effort to gain insights into new developments in
the fields of quality management and six sigma and is comprising of articles authored
by renowned professionals and academics working in the field. Both beginners and
veterans in the field can learn useful techniques and ideas from this volume.
Professor and Chairman,
Department of Mechanical Engineering-KSK campus,
University of Engineering and Technology, Lahore,
Artificial Intelligence Tools and Case Base
Reasoning Approach for Improvement Business
Aleksandar Vujovic, Zdravko Krivokapic and Jelena Jovanovic
Additional information is available at the end of the chapter
Contemporary and every day more perfect information achievement, becomes available for
everybody, and simply, very quickly become a necessity. It is necessary that organizations
use information technology as a tool for developing a sense of learning, acquire and use
knowledge. Information tools should not be use like tools for automation of existing
processes. There should be another aspect or already obsolete category. With this aspects,
thinking and attitudes, it can be said that we living in the century of knowledge and that we
have already overcome period of information technology which should be, simply,
implemented like support in the way for achieving knowledge.
This informational environment has been recognized in the world and because of there are
significant rising in the use of artificial intelligence tools. There is evidence that is a great
number of eligible to use and easily available software for needs of the development of such
as systems in the field of artificial intelligence. Also, in  states that investment and
implementation of artificial intelligence show significant results, particularly in attempt of to
get higher profit. The artificial intelligence, like the word itself says is the area that deals
with the development of systems that mimic human intelligence and a man with tend to
replace him in some activities based on knowledge. That is way for over viewing problem of
human absence, cost of services, disinclination of people to provide knowledge and similar.
Specified conditions, particularly from the standpoint of the necessities of knowledge, and
also the fact that in area of research topic for the purposes of quality management systems,
there are evident gap [2, 3-10, 11]. That facts justifying the author's striving to be in this
research and accept to use artificial intelligence tools for developing systems oriented to
knowledge. These views and attitudes were in agreement: that there is no correct
programming software that has a strong base of knowledge that could assist in
© 2012 Vujovic et al., licensee InTech. This is an open access chapter distributed under the terms of the
Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits
unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
4 Total Quality Management and Six Sigma
identification of a problem, that has not developed a single expert system that deals with the
measurement, evaluation, corrective and preventive action to improve organizational
performance and the like [12, 13-16, 10]. It is also an incentive to be based on such analogies
create a foundation set up and entered the field of artificial intelligence in order to obtain
knowledge as one of the most important factors for creating competitiveness in the market
Everything above can be understand like introduction for developing an research whit main
aim for developing a system in the field of artificial intelligence that would be based on the
analysis in the quality management system and that has given recommendations for
achieving business excellence and improve the financial performance of the organization.
The main parts and activities of that research stay in the basis of this chapter.
2. The main targets, methods and contribution
Based on the introduction and results of researching literature source and practice, in the
scope of this research, it can be set up main targets, and that are:
to find (regardless of size or type of organization) area in organization which have
priority from the standpoint of improvement,
to establish new concept of Degree of Readiness and Coefficient of Significance which
can show intensity and type of action which should be provide in direction of
achieving business excellence and
to develop and testing in real condition an expert system for improvement business
process performances even those of financial character base on analogy with human
In this sense, it can be use science method for inductive and deductive way of deciding and
concluding. First one was used for collecting, estimating and analyzing of experimental
data, or to making general knowledge by using specific knowledge and particular facts. The
second one was used for applying and checking specific conclusion in real condition.
Also, like science approaches it was used: analogy method, expert decision and “ex post
facto” or previous case and facts.
Beside that, many other methods and tools were conducted like: knowledge discovery in
data base, data mining, case base reasoning-CBR, object oriented programming, artificial
intelligence tools, Analytic Hierarchy Process-AHP, expert choice, testing in real condition,
Visual Basic and Select Query Language.
Through a detailed analysis of literature sources and software, it was found evident gap in
applying artificial intelligence tools for improvement business process performances based
on Quality Management System-QMS and especially in experience of other and case
reasoning. In this research, analogy between human body function and process oriented
organization were established, and areas in organization which is prior from the standpoint
of improvement were identified. Two unique data bases and significant number of company
and data, make original experimental value and bases for research. Also, new concept of
Artificial Intelligence Tools and Case Base
Reasoning Approach for Improvement Business Process Performance 5
Degree of Readiness and Coefficient of Significance for achieving business excellence stay in
the basis of new expert system for achieving business excellence. By applying this expert
system, especially on prior area, employees should drive they process performances to
excellent condition, even those of financial character. Also, many actions for improvement
with appropriate coefficients which show theirs intensity where found. This action should
be understood also like preventive action for strengthening organizational condition to
avoid some failure in the system. This expert system was tested in real conditions in one
very successful organization which will be participant in competition for European Award
for business excellence. This test and verification showed that the system could be useful
and also the efficient and effective
3. Experimental research, areas for research and reasons for developing
The basic facts of this research are attempted to define two levels of experimental data. The
first level of the data is related to quality management systems and nonconformities that
have emerged. This is a basic level of data which reflects the situation in the quality
management systems and identify critical places that are subject to improvement. The base
of these data is unique and consists of the 1009 nonconformities (cases), identified in over
than 350 organizations. If we know that in our area in the field of competent certification
body has, approximately 500 certificates, then the number of 350 is about 70% of the total
number. That fact points out to the significance of sample for analysis.
The term nonconformities refer to any non-conformance of requirements of ISO 9001,
nonconformity non-fulfilment of a requirement . During the external audits of quality
management system, competent and trained auditors can identify several types of
nonconformities (Figure 1). We are using most significant data from highest level of
pyramid at which were collected at the level of many country like external estimation and
evaluation of they performance and condition.
Distribution of nonconformities depends on the rules that define the certification body itself.
However, for the purposes of this research is used classification which is the most common
in the literature, which is favour by the authoritative schools in the world in the field of
management system and that is clearly recommended by European guidelines in the subject
area, which is split into three levels. The first level is the disagreements that are evaluated as
insignificant deviations from the standards and requirements which are interpreted as an
oversight or random error. The other two categories are interpreted as nonconformities that
represent a great deviation from the essential requirements, which are reflected in the
frequent discrepancies in individual requirements, representing a deviation that brings into
doubt the stability of the management system and threatening the operations of the
Data base of nonconformities which is under consideration in this research contains only
nonconformities in the domain of the other two categories, and that giving greater
importance to this research and gives greater significance results.
6 Total Quality Management and Six Sigma
Figure 1. Data source (highest level of data significance)
Non-conformances are identified in accordance with the structure requirements defined in
the ISO 9001 standard as follows:
Quality management systems: 4.1 general requirements, 4.2 documentation
Management responsibility (module 5): 5.1 management commitment, 5.2 customer
focus, 5.3 quality policy, 5.4 planning, 5.5 responsibility, authority and communication,
5.6 management review,
Resource management (module 6): 6.1 provision of resource, 6.2 human resources, 6.3
infrastructure, 6.4 work environment,
Product realization (module 7): 7.1 Planning of product realization, 7.2 customer related
processes, 7.3 design and development, 7.4 purchasing, 7.5 production and service
provision, 7.6 control of monitoring and measuring devices,
Measurement, analysis and improvement (module 8): 8.1 general, 8.2.1 customer
satisfaction, 8.2.2 internal audit, 8.2.3 monitoring and measurement of processes, 8.2.4
monitoring and measurements of product, 8.3 control of nonconforming product, 8.4
analysis of data, 8.5 improvement.
Artificial Intelligence Tools and Case Base
Reasoning Approach for Improvement Business Process Performance 7
Accordingly, for example in the field of 8.2.1 from the standpoint of the appearance of nonconformances organizations have a significant and frequent or large deviations in the sense
that it does not follow the information about the observations of users, it did not define the
methods for obtaining this information, they do not have strong communication with
customers and similar. Or for example in the field of 8.2.3 with the observed aspect,
organizations do not apply appropriate methods for monitoring and performance
measurement processes, have not mechanisms for implementation of corrective measures in
cases that have not achieved the planned performance of processes and the like.
This data will be used like the basis of CBR approach or approach where it is possible to
make significant conclusion in the sense of main target of this research. This approach is
shown in figure 2.
Figure 2. Case based approach
The second level of data consist data from evaluation organizations that participated in the
competition for the quality award based on European Quality Award criteria. This database
is unique, as well as in the previous case. Data were transferred in encoded form in order to
secure the identity of the organization. Data were collected in 100% extent (34 organizations)
and thus are significant and give a real picture of the situation in our organizations. These
data are used for comparison with previous, basic level data. That is way for making
improvement or exalt from basic level on the level of business excellence and way for
making knowledge which reproduce expert system on his output. That is also comply with
literature more existent attitude, and natural way that organization should first implement
8 Total Quality Management and Six Sigma
Quality Management System and after that system which is based on Total Quality
Management concept [22, 23-26, 27].
In order to show the current directions and trends in the field of development of software
for quality, and to select under researched areas in the field of software quality, it was
conducted a detailed review and analysis of a total of 143 software. All necessities
information for that analysis are available in site (http://www.qualitymag.com) where are
publish updated software items which are related to quality. The results of the analysis are
shown in the figure 3.
Statistical analysis and control
Control of documentation
Figure 3. Results of analysis of existent software for quality
On the x axis diagrams are shown the software ability and orientation. Obviously is that the
software in the field of quality is usually oriented to the control of documentation, statistical
control and analysis, six sigma model, concept of total quality management, FMEA and
QFD methodology, corrective action, flowchart and process mapping. However, there are
specific tools for automation: the implementation of the quality management system
Artificial Intelligence Tools and Case Base
Reasoning Approach for Improvement Business Process Performance 9
documentation, description of information flow, implementation methods and techniques of
quality, and more. Therefore, it can be concluded that there is no software that is based on
the application of artificial intelligence tools in the sense of the definition of preventive
actions for the purpose of improving the process. The greatest number of software is related
to the application of statistical methods in the process of monitoring and improving quality.
It is obviously that a large number of software is based on total quality management
systems concept. The facts point out present approach which we develop in this research
and also justify further research in this area. It is interesting that a large number of software
are base on the corrective actions and on the other hand there is not any registered software
that has application for output preventive action what is, of course, main recommendation
of ISO 9000 series. This fact also gives stimulus in terms of development of software that
emphasis to the prevention. That approach is unique in the field of software for quality and
makes this research more significant.
Beside this analysis, in this research were analyzed huge amounts of available books in
order to point out the justification of applying expert system. Expert systems are different
from other artificial intelligence systems in that, they attempt to explicitly and
unequivocally embody expertise and knowledge with the software . Expert systems are
also identified as one of the most commercial branches and in most number of projects used
artificial intelligence tools [29, 30]. For example, it is estimated that in the first half of 21st
century, even 75% of all legal documents be written with the assistance of expert systems
. Also expert systems will be of vital importance for measuring the quality of products
and services [32-34]. Expert systems are an area of special importance with rise trends in
modern business conditions [35, 36-38]. They have special significance in a highly developed
countries where is actual knowledge based economy. This research highlight trends,
significance and justification of developing and implementing expert systems.
Main idea and approach for developing expert system come from analogy between human
body functions and process in some organization which was organized based on process
modelling from ISO 9000 respect. This approach is present on figure 4.
This research tries to deal with perfection of functioning of the human body compare with a
process modelling structures of the implemented quality management system. The
challenge made in this way, tried to create a system that is universal for all sizes of
organization, which incorporates a large number of gathered data, in fact a large number of
experiences, in order to get a better image of the system status. This should be added to the
primary goal which is to develop a model for improvement of management system,
oriented to achieve BE according to show off how to maintain and improve the performance
of the human body. However, the goal is also, to develop a system for measuring
performance and capacity of each activity in the QMS, in order to obtain a true picture of the
systems and capabilities in order to define the areas where improvements should be made,
with clearly defined intensity of improvement. On the basis, thus established the analogy is
made to compare elements of implemented QMS to the systems that have applied for
Quality award for BE as a system with high performance.
10 Total Quality Management and Six Sigma
Figure 4. Analogy with the human organism in order to improve organizational performance
To establish the analogy between the process modulated organizational structure and the
human organism, so as to create the system that is independent from organizational
functions and based only on the process model, following division of man functions was
made [39, 40]:
Willing functions (term “functions” is used in medical terminology, although it is equally
correct, to use a term “activities” in view of ISO 9000 standard terminology. For reasons of
consistent referencing and use of theories from the field of medicine, the author has chosen
to use the term functions.) are those dependent on man’s profession and performed by
man’s will. They are variable and dictated by a central control of the organism. For example,
when a worker at the construction site lifts his hand, it is not the same as when a referee at
the game lifts his hand and etc. Willing functions refer to functions of external motoric
Second category is made of unwilling or automated functions and their use is given by their
existence. There are functions that are same in all professions and all people (considering
that they exist, i.e. that human body is in good health) and do not depend on the man will
but are simply executed. For example, those are functions of secreting enzymes, hormones,
heartbeats, and similar, like ordinary body functions, and functions that cannot be
controlled [41, 42].
With such a ratio of functions in the human body, we can establish the analogy of the
system with implemented quality management system. Analogy in term of willing function
goes in direction to developed all data in to two category, production and service
organization and make some analyses, which is not subject of this research.
Artificial Intelligence Tools and Case Base
Reasoning Approach for Improvement Business Process Performance 11
In order to meet requirements of this research, only analogy in terms of unwilling functions
has been considered. The idea is to use all nonconformities (undependable of organization
type or size) and base on case base reasoning approach, make conclusion about readiness of
systems to making some top form.
3. Approach to developing expert system
At the market today, we can find many tools for creating expert systems. These systems can
be developed in a programmable environment through tools of type C + +, Visual Basic or
some other programs which are related to development of expert systems. However, today
are developed specialized tools for creating expert systems which allow a high degree of
automation in process of developing expert systems. There are called expert system shells.
From the standpoint of this research it was carried out choice of expert system shell from the
aspect of next four criteria [43-45, Personal communication with group for consulting from
London South Bank University, Business, Computing & Information Management, 2011):
During the election, it was analyzed 58 shells. All information about shells are available on
the Internet , and classified in a group of commercial shell. Detailed analyses were
conducted separately for each tool through analyzing belonging site. For evaluation on the
basis of the criteria it was adopted the scale of 1 to 5 where 1 is unsatisfactory grade.
According to defined criteria as a most distinguished tool for the needs of the research was
adopted ACQUIRE shell. That tool is non programming oriented and it has affordable price.
This is a tool that supports the work of the Windows operational environment. It has
possibility to develop all elements of expert system and supports forward, backward and
combined chaining. For the presentation of knowledge it can be used production rules, the
action table, or combined techniques. During a process of developing expert system, the role
of engineer for knowledge took up first author, and the role of one expert took up second
author. Also, as sources of knowledge were used following:
experience from eleven prestigious organizations in the world of field of quality
management systems, business excellence and organizational performance ,
guidelines from standards for improving organizational performance [47 ],
best practices from auditing of ISO 9001 oriented system ,
experience and practice of organizations that participated in the competition for the
Oscar of quality award ,
theory and principles of TQM ,
experiences that are listed in  and indicate the path to business excellence.
The expert systems are included and knowledge gained through many concrete practical
projects of quality management systems implementation, and many training on that topic.
That knowledge is next:
12 Total Quality Management and Six Sigma
knowledge that are specific to certain companies,
knowledge derived from specific experiences and on specific way of solving problem,
knowledge of those that are best for certain jobs and are passed special training,
knowledge of those that is proven in practice for the specific job and similar.
For the purposes of this research, expert system was develop for modules 5 (management
responsibility) and module 8 (measurement, analyses and improvement) of ISO 9001
standard. The reason for that is that these areas have the greatest importance in achieving
business excellence  and therefore they should be considerate from the standpoint of
improvement. Also, another reason is that module 8 has requirements that are oriented to
the improvement and that is essence and priority.
The idea of this research is to make the integration of decision support systems (DSS) which
is operate on first level of experimental data, and expert system. That is modern approach of
integration a number of tools with the aim of acquiring a larger volume of better knowledge
 and make system with higher level of intelligence. Today trends are integration expert
systems and traditional decision support systems which as output give data and
Integration of expert systems and decision support system can be achieved in two ways .
The purpose of this research is to use model which is present on figure 5. based on the
collection and analysis of data obtained at the output of the decision support system and it
provide important information like one of inputs for expert system and its knowledge base.
This is the model which is completely compatible with previous remarked analogy with
human body. This two approach stay in base of this analogy integrative model for
improvement business process performance.
Figure 5. Integrative approach for merging expert system like separate part of DSS components
Artificial Intelligence Tools and Case Base
Reasoning Approach for Improvement Business Process Performance 13
For the purposes of this research, we developed a decision support system in the MS Access,
Select Query Language and Visual Basic environment. This system is base on the first level
of experimental data, and like one of outputs it gives results which are present on figure 6
(for module 8).
Figure 6. Results of DSS systems for module 8-measurement, analysis and
Applying Pareto method and rules of 70/30 it can be identified area which is crucial from the
standpoint of improvement. Also, this system like support for making decision provides
written presentation of nonconformities which can be shown as experience of other
companies. That could be use like important data for the definition of knowledge in expert
system. In addition, this system provides, and comparative analysis with the period of the four
years before, which also has significance for the definition of knowledge in the expert system.
Connection between data from the first and data from the second level was achieved
through the introduction of the concept of "Degree of readiness (Si)" in achieving business
excellence, in accordance with the following expression:
S i N z % * K z , i=1,2,...,26
Degree of readiness for all type of organizations for all requests of ISO 9001
Power of a standard clause in terms of percentage. Nz = ƒ (number of
nonconformities from experimental database)
Coefficient of significance for achieving business excellence
That degree is applies to every single request of ISO 9001 and showing the willingness or
the ability of organizations (both manufacturing and service sector) to attain business
excellence in some areas. To find this degree, we are using method Analytic Hierarchy
Process (AHP) and corresponding software Expert Choice. Results are shown in table 1.
14 Total Quality Management and Six Sigma
Table 1. Review of the degree of readiness for all type organization in relation to every request of the
It is important to emphasize this because it was used and it is very important during
definition of preventive measures in terms of defining their priorities and "power". Also,
“power” of prevention was related with number of nonconformities in particular area. That
means, larger number of nonconformities, or larger number of experience, make possibilities
for defining more effective and efficient preventive action like output of expert system.
Through application of Pareto method, based on coefficient of significance following
requests were identified as the most significant for achieving business excellence:
- 821, 823, 85, 84, 54, 824, 56, 53, 71, 41, 51, 72, 55
At the same time, this is important areas, and have high level of priority for improvement
from the standpoint of achieving business excellence and it is very important for defining
preventive action of expert system and intensity of that action. If we take a look at the list of
"Coefficients of significance" for business excellence achieving, especially the most
important ones and perform comparison with the list of variables and their significance in
terms of: Business Process Reengineering (BPR), manufacturing strategy, benchmarking and
performance measurement, being the result of the appreciated research  and  it may
be found significant intercompatibility.
The concerned compatibility is especially reflected in the following variables, evaluated in
the relative research as highly significant for the following four projects, i.e.: customer
satisfaction, quality, employee satisfaction and personal growth, customer adaptability,
identification of top managers with BPR goals, strong process orientation, results
orientation, direct customer cooperation. On the other hand, the above mentioned four areas
Artificial Intelligence Tools and Case Base
Reasoning Approach for Improvement Business Process Performance 15
are considered as highly important for any market-oriented organization, thence it can be
concluded that organizations by strengthening their capacities in areas of presented
"Coefficients of significance" (especially the most important ones), are not only strengthened
in terms of the business excellence achieving as per European Award model, but also in the
stated four areas.
But some of these areas are much more important then other. Because that, the research
was further elaborated in order to indicate most important area for improvement and area
where should be focus attention and where should be provide very intensive action in
order to achieve best organizational condition and results. This research was conduct
from the standpoint of occurrence of nonconformities in all type of organisation
regardless of they size or type (both for manufacturing and service organisation). Parallel
the Pareto method (70/30) was carried out in that direction and based on that, it was
identified next areas:
- 56, 75, 62, 822, 74, 76, 54, 72, 85, 821, 55, 63
Now we are search for common requests (area) that are most important and where should
be oriented focus and where should be provide extensively action in terms of achieving
business excellence regardless of type or size of organization. And they are:
821 – customer satisfaction,
72 - customer related processes,
54 – planning,
85 – continual improvement,
56 – management review and
55 – responsibility, authority and communication.
This area is most important for defining output of expert system and for defining intensity
of action for improvement.
Objects were defined during the process of expert system developing. That were depend of
problem which should be solved, base on ISO 9001 oriented check list an based on
experience which can be find on DSS output. Base on results of DSS system, it is defined
value of the object and relation between them. In that way, it is created decision tree, which
is present on figure 7.
At the end, after starting the program, in a short time, system introduce user in a set of
dialog boxes. One of them is shown on figure 8.
Depend on the answers, expert system produce user’s report, like one which is presented on
Data obtained from this report, user can use and implement knowledge that an expert
system produces. However, users can improve performance of an organization in the field
where such as performance are on lower level. Also, it can be improvement performances of
other, non critical, area and can be reach level of business excellence.
16 Total Quality Management and Six Sigma
Figure 7. Decision tree
Figure 8. User’s dialog box
Artificial Intelligence Tools and Case Base
Reasoning Approach for Improvement Business Process Performance 17
Figure 9. User’s report
This expert system was developed in three iterative steps. Each of them resulted of the
improvement, for example improvement of the definition of objects, set the input data, the
relation between objects depending on the priorities of execution and more.
The expert system was implemented and tested in practical, real conditions in the
organization that has a clear commitment to participate in the competition for the European
Award for Business Excellence, also providing important measures in that direction.
Evaluation was done on the basis of technical and ergonomic characteristics based on
guidelines in standards ISO/IEC 9126/1:2001 for evaluation quality of software. The results
are shown in Table 2.
Fault of presented software
Benefit of new software
Influence on job organisation
Table 2. Results of expert system evaluation
Figures showed significant high mark by categories, and thus the total amount. Software
was evaluated positive in terms of technical characteristics and in terms of ergonomic. In
this sense, product has small time of response, it is compatible with most used operating
system, it has an excellent user’s oriented interface, and it has easy data entry and a good
18 Total Quality Management and Six Sigma
view of the output, installation is simple and the software is very competitive. Also, in this
sense, within the organization, it was carried out the reorganization of the priority areas
from the viewpoint of improvement, implemented preventive measures for the potentially
unstable areas and also applied the measures for the improvement (offered by this system)
leading to business excellence achieving.
4. Final considerations
Nowadays, very small number (a few per cent) of the scientific research activities in area of
quality management systems are based on topic of the collection and analysis of information
with aim to improvement business results. That fact justify author’s effort to make
preventive actions for improvement business performances through establishing synergy
between area of quality management and artificial intelligence like area which is strictly
oriented on producing knowledge. Also, through analysis of the available software for
quality management, it can be concluded that there are no any software from field of
artificial intelligence that was developed for quality management systems improvement.
That means that each further step in this direction brings positive scientific research results.
The research point out necessity of making connection between more software solutions and
tools in order to make the system with a higher level of intelligence. For this purpose, it is
best to apply the integration of decision support systems and expert system. That is best
world experience. With this approach it can be make system that producing knowledge and
that is greatest resource which can make organization more competitive and can ensure
improvement of organizations performances. Based on those facts in this research we
developed unique analogy integrative approach which stays in the basis of model for
improvement business process performance in the direction for achieving best
As the most important requests for achieving business excellences were identified requests
which are mostly related to: measurement, analysis and improvement (module 8 - ISO 9001)
and management responsibility (module 5-ISO 9001). The next area is most important for
excellence organizational condition and at the same time area where should make very
intensive action for improvement and strengthening: 821 – customer satisfaction, 72 customer related processes, 54 – planning, 85 – continual improvement, 56 – management
review and 55 – responsibility, authority and communication. It is interesting to highlight,
that all activities and process which is related with customer and achieving his satisfaction
and anticipation his needs, are in the focus and that should be direction and guidelines for
Also, it is shown that the strengthening, especially in these areas is used to lead to the
significant progress in terms of: business process reengineering, manufacturing strategy,
performance measurement and benchmarking, as very important aspects of market-oriented
This research present interesting and useful results which should be use for defining
measurement for improvement business performance in way for achieving business
Artificial Intelligence Tools and Case Base
Reasoning Approach for Improvement Business Process Performance 19
excellence. Those results are related with term of Degree of readiness which show part
(every request) of ISO 9001 certified model and they ability for achieving top business form.
Also, interesting results are present through values of Coefficient of significance. This two
indexes show direction about area and intensity of action which should be provide to make
best organisational condition.
In organizations that have specific information through database and information systems,
it is necessary to develop systems that will assist staff in decision making. These systems
provide data and output information on the basis of which, in accordance with the principle
of decision making base on fact, the employees make business decisions that certainly
contribute to improve organizational performance. However, in the today complex business
condition, organization must make stride from level of data and information to level of
knowledge. That is way for ensuring prestigious position on the market. That could be
achieving through development expert system base on expert knowledge and base on
output of decision support system.
This approach could be related with one modern approach, which calls case base reasoning.
This approach is base on experience of other companies, and that approach could be use for
defining preventive action. In this sense, it can be use a system that was developed in this
work. That system was testing in real condition and proved to be very useful and that
showed great level of efficiency and effectiveness for real business conditions. According to
process of testing and estimation, users of the system were put ratings that are present in
table 2. They indicate that this system can: make financial benefits, provide better
organisation of job, stimulate all employees to improving own process, synchronise function
in organisation, identify priority area for improvement, define intensity of action for
improvement, stimulate preventive versus corrective action, encourage better involvement
of new staff in to the activities, bring higher level of flexibility and other.
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