lecture 1c – global issues global supply chain quality international standards awards & prizes...

LECTURE 1C – GLOBAL ISSUESGlobal Supply Chain Quality

International Standards

Awards & Prizes

SJSU Bus 142 - David Bentley 1

Multinational Supply Chains

• Licensing• Partnering• Globalization


JAPANESE QUALITY


Japanese Quality

• Postwar (WW II) activity• Deming Prize• Lean operations and quality• Shigeo Shingo (7 wastes)• The 5 S’s


Postwar Japan

• Limited natural resources• Reduced production capacity• Strategy for developing international trade based on

quality and efficient production• Assistance from U.S. occupation forces• Recognition of Deming’s contribution


Deming Prize Background

• Awarded by Japan: Union of Japanese Scientists and Engineers (JUSE)

• First awarded in 1951• Named after W. Edwards Deming • Categories

• Deming (Application) Prize• Sub-categories until 1995

• Divisions (until 1994)• Small businesses (until 1994)

• Deming Prize for Individuals• Deming Grand Prize


Deming Award Areas

• Deming (Application) Prize winners• Most winners before 2001 were Japanese

• U.S. winners: Florida Power & Light (1989), AT&T Power Systems (1994), Sanden International (2006)

• Most winners since 2001 Indian (22), Thai (10)

• Individual Prize winners• All Japanese

• Deming Grand Prize Japan Quality Medal 1970-2011• Most Japanese until 2002, now India, Thailand


Deming Categories – 1

• Policy• Organization and operations• Collecting and using information• Analysis• Planning for the future


Deming Categories – 2

• Education and training• Quality assurance• Quality effects• Standardization• Control


Lean Operations

• Emphasis on value• Focus on elimination of waste• Development of tools and techniques over time• The Toyota Production System


Toyota Production System

• Taiichi Ohno (1912 - 1990)• “Father of the Toyota Production System”• System also known as “Lean Manufacturing”• Toyota executive and consultant to suppliers

• Shigeo Shingo (1902 – 1990)• External consultant to Toyota• Poka-Yoke (mistake proofing)• Setup reduction (SMED)


Shingo’s 7 Wastes

1. Waste of overproduction

2. Waste of waiting

3. Waste of transportation

4. Waste of processing itself

5. Waste of stocks

6. Waste of motion

7. Waste of making defective products


The 5 S’s(Organizing / Eliminating Waste)

1. Seiri (“Separating”): get rid of unnecessary

2. Seiton (“Sorting”): orderly workplace

3. Seiso (“Cleaning”): eliminate hidden problems

4. Seiketsu (“Standardizing”): locations and processes

5. Shetsuke (“Sustaining”): discipline in maintaining the other 4


Other Japanese Characteristics

• Involvement of all workers in the company• Quality Circles - Kaoru Ishikawa (1915-1989) (as

implemented in the U.S.)• Limited authority• Focus within department• Often seen as added work• Ongoing

• Preventive maintenance• Deming Individual Prize Winner (1952)


AMERICAN QUALITY


American Quality

• Preoccupation with quantity for years• Reliance on inspection (“Quality Control”)• Effect of oil embargos in the 1970s• Malcolm Baldrige Award• President’s Quality Award (PQA) (???)• Six Sigma


Malcolm Baldrige Award source:

Wikipedia

• Awarded by US Dept. of Commerce (National Inst. of Standards and Technology)• 1987 congresional legislation• Named after Malcolm Baldrige (Howard Malcolm “Mac” Baldrige - American industrialist and former Secretary of Commerce)

• Promotes awareness of performance excellence• Awarded in business, education, health care, non-profit sectors


Baldrige Award Areas

• Original award areas: Manufacturing, Service, Small Business

• Education added in 2001• Health care added in 2002• Non-profit added in 2007• Local winners

• Granite Rock (1992)• Solectron Corp. (1991, 1997)



Recent Winners

Manufact Service SmallBusiness

Health Care Education Non-Profit

2009 Honeywell MidwayUSA 1)Heartland Health2)Atlanti Care

VA Cooperative Studies

2010 1)MEDRAD2)Nestlé Purina

1)Studer Group2)Freese/Nichols3)K&N Mgmt

Advocate Good Sam Hospital

Montgomery County Public Schools

2011 1)Schneck Med Ctr2)H Ford Health Sys3)SoothcentralFoundation

ConcordiaPublishing

2012 Lockheed Missiles

MESA N. Miss. Health Svcs City of Irving TX

2013 Baylor Reg’l Med Ctr.Sutter Davis Hospital

Pewaukee School Dist.

Baldrige Award Categories

• Leadership• Strategic planning• Customer and market focus• Information and analysis• Human resource focus• Process management• Business results


Six Sigma Quality - 1

• Latest popular approach to Quality• Overall objective is to find and eliminate causes of

defects in manufacturing and service processes• ± 6 standard deviations (6) from the process mean =

0.0003% defects

• Represents a goal 6 ….. 6 ….. 6


Six Sigma Quality - 2

•Concept developed at Motorola by Bill Smith

• Best in class = General Electric• Certification from ASQ on processes to support Six

Sigma• Many consulting and training firms on how to implement

Six Sigma


Six Sigma at GE

• “The central idea behind Six Sigma is that if you can measure how many ‘defects’ you have in a process, you can systematically figure out how to eliminate them and get as close to ‘zero defects’ as possible.”

Making Customers Feel Six Sigma Quality


Other Awards & Prizes

• President’s Quality Award [PQA] (US) (???)• European Foundation for Quality Management (Europe) (see next slide)

• National Quality Institute (Canada)• Business Excellence Award (Australia)• Etc., etc., etc.


European Quality Award


“Value” of Awards & Prizes

• Shows effort• May largely be dependent on money spent• Used in advertising (e.g., Cadillac – 1990)• Might not reflect customer view


CHINESE QUALITY


Chinese Quality

• Historic high quality of porcelain, silk, etc.• Growth in manufacturing in last 15 years• Little infrastructure for appraising and certifying quality of

subcontractors and suppliers in past years• Recent recalls: pet food, toys, tires, toothpaste, etc.• But… making rapid strides in quality


ISO STANDARDS International Organization for Standardization (ISO)


ISO Basics

• Network of national standards bodies in 162 countries• Based in Geneva, Switzerland• Seeks consensus for international standards• Who can propose new standards?


“Old” ISO 9000 Standards

• ISO 9000 (series)• ISO 9001(design, develop, produce, install, service)• ISO 9002 (no design and development)• ISO 9003 (final inspection and testing)• ISO 9004 (QMS application guidelines)


Current ISO Standards

• ISO 9000 family – “Quality management”• ISO 9001:2008 (QMS - Requirements)

• ISO 14000 family – “Environmental management”• ISO 19011:2012 (Guidelines on Quality and/or

Environmental Management Systems Auditing)


Related ISO Standards

• ISO 10005:2005 (Quality management – Guidelines for quality plans)

• ISO 10006:2003 (Quality management – Guidelines to quality in project management)

• ISO 10007:2003 (Quality management – Guidelines for configuration management)

• ISO/DIS 10012:2003 (Quality assurance requirements for measuring equipment)

• ISO 10014:2006 (Guidelines for managing the economics of quality)

• ISO 10015:1999 (Guidelines for training)


ISO 9000 Principles

1. Customer focus

2. Leadership

3. Involvement of people

4. The process approach

5. A systems approach to management

6. Continual improvement

7. Factual approach to decision making

8. Mutually beneficial supplier relationship


ISO Registration Process


Evolution of ISO 9000 Series

Source: Wikipedia SJSU Bus 142 - David Bentley 36

ISO/TS 16949:2009

• Replaced QS9000 in 2006• Particular requirements for the application of ISO 9001• ~ 30% of 100 auto manufacturers use• Applied throughout entire supply chain• Design, production, assembly, servicing


ISO Registration (Certification)

• What’s been good• Focus on quality• Demonstrates effort

• What was bad (mostly fixed in ISO 9000:2000)• Became mechanical• Emphasized conformance to documentation, not meeting

QUALITY• Didn’t include customer view


lecture 1c – global issues global supply chain quality international standards awards & prizes...

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