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Irwin/McGraw-Hill 1
Definition:Total Quality Management
Total Quality Management (TQ, QM or TQM) and Six Sigma (6) are sweeping “culture change” efforts to position a company for greater customer satisfaction, profitability and competitiveness.
TQM may be defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer.
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Irwin/McGraw-Hill 2
Quality Descriptions
Design Quality (Features)
vs.
Conformance Quality
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Irwin/McGraw-Hill 3
Conformance Quality• Meeting Our Customer’s Requirements
• Doing (the Right) Things Right the First Time;Freedom from Failure (Defects)
• Consistency (Reduction in Variation)
• Continuous Improvement
• Quality in Everything We Do
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Irwin/McGraw-Hill 4
Quality Management History
Frederick Winslow Taylor wrote Principles of Scientific Management in 1911
Walter A. Shewhart used statistics in quality control and inspection, and showed that productivity improves when variation is reduced (1924); wrote Economic Control of Manufactured Product in 1931
W. Edwards Deming and Joseph M. Juran, students of Shewhart, went to Japan in 1950; began transformation from “shoddy” to “world class” goods
In 1960, Dr. K. Ishikawa formalized “quality circles” - the use of small groups to eliminate variation and improve processes
In the late ‘70’s and early 80’s: - Deming returned from Japan to write Out of the Crisis, and began his famous 4-day seminars in the United States - Phil Crosby wrote Quality is Free - NBC ran “If Japan can do it, why can’t we?” - Motorola began 6 Sigma
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Irwin/McGraw-Hill 5
Quality Management History
“On the assembly line at the Ford Motor Company in 1923, most of the workers producing Model T’s were immigrants and could not speak English. Many were also illiterate. Workers learned their trade by modeling the actions of other workers. They were unable to plan, problem-solve, and make decisions. As a result, the Taylor scientific school of management flourished, and MBAs and industrial engineers were invented to do this work. Today, however, the workforce is educated. Workers know what is needed to improve their jobs, and companies that do not tap into this significant source of knowledge will truly be at a competitive disadvantage.”
Joseph M. Juran (1991)
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Irwin/McGraw-Hill 6
Quality Management History
“Knowledge-worker productivity is the biggest of the 21st-century management challenges. In the developed countries, it is their first survival requirement. In no other way can the developed countries hope to maintain themselves, let alone to maintain their leadership and their standards of living.”
Peter F. Drucker (1999)
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Irwin/McGraw-Hill 7
Quality Management History
Deming’s 14 Points 1. Create constancy of purpose for improvement 2. Adopt a new philosophy 3. Cease dependence on mass inspection 4. Do not award business on price alone 5. Work continually on the system of production and service 6. Institute Modern methods of training 7. Institute modern methods of supervision of workers 8. Drive out fear 9. Break down barriers between departments10. Eliminate slogans, exhortations, and targets for the work force11. Eliminate numerical quotas12. Remove barriers preventing pride of workmanship13. Institute a vigorous program of education and retraining14. Take action to accomplish the transformation
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A Quality Management System Is…
A belief in the employee’s ability to solve problems
A belief that people doing the work are best able to improve it
A belief that everyone is responsible for quality
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Irwin/McGraw-Hill 9
Quality Management History
Deming’s Concept of “Profound Knowledge”
Understanding (and appreciation) of Systems- optimizing sub-systems sub-optimizes the total system - the majority of defects come from systems, the responsibility of
management (e.g., machines not in good order, defective material) Knowledge of Statistics (variation, capability, uncertainty in data, etc.)
- to identify where problems are, and point managers and workers toward solutions Knowledge of Psychology (Motivation)
- people are afraid of failing and not being recognized, so they fear how data will be used against them
Theory of Knowledge- understanding that management in any form is a prediction, and is
based on assumptions
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Elements for Success Management Support/Involvement Mission Statement Proper Planning Customer and Bottom Line Focus Measurement Empowerment/Shared Leadership Teamwork/Effective Meetings Continuous Process Improvement Dedicated Resources/Training
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Irwin/McGraw-Hill 11
Benchmarking1. Identify those processes needing
improvement. 2. Identify a firm that is the world leader in
performing the process (Library & WWW).3. Contact the managers of that company
and make a personal visit to interview managers and workers.
4. Analyze data
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Baldrige Award Criteria Framework
Organizational Profile:Environment, Relationships, and Challenges
1Leadership
2StrategicPlanning
3Customer andMarket Focus
5Human Resource Development & Management 7
Business Results
6 ProcessManagement
Information, Analysis, and Knowledge Management
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Irwin/McGraw-Hill 13
Malcolm Baldrige NationalQuality Award (2004)
1.0 Leadership (120 points)
2.0 Strategic Planning (85 points)
3.0 Customer and Market Focus (85 points)
4.0 Information and Analysis (90 points)
5.0 Human Resource Focus (85 Points)
6.0 Process Management (85 points)
7.0 Business Results (450 points)
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Irwin/McGraw-Hill 14
Categories for the Baldrige Award
Manufacturing companies or subsidiaries that: produce and sell manufactured products or
manufacturing processes or produce agricultural, mining, or construction
products. Service companies or subsidiaries that sell
service Small businesses Education Institutions Health Care Organizations Non-Profit (new)
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Irwin/McGraw-Hill 15
Characteristics of a Baldrige Award Winner
The companies formulated a vision of quality and how they would achieve it.
Senior management was actively involved. Companies carefully planned and organized
their quality effort to insure effective initiation. They vigorously controlled the overall process. Studies have shown MBA Winners’ success.
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Irwin/McGraw-Hill 16
ISO 9000 Series of standards agreed upon by the
International Organization for Standardization(ISO)
Adopted in 1987 More than 100 countries A prerequisite for global competition? ISO 9000 directs you to:
document what you do and then do as you documented.
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Irwin/McGraw-Hill 17
ISO 9000 Series 9001
Model for Quality Assurance in Design, Production Installation, and Servicing.
9002 Model for Quality Assurance in Production
and Installation 9003
Model for Quality Assurance in Final Inspection Test
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Irwin/McGraw-Hill 18
Three Forms of Certification
1. First party: A firm audits itself against ISO 9000 standards.
2. Second party: A customer audits its supplier.
3. Third party: A "qualified" national or international standards or certifying agency serves as auditor.
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Irwin/McGraw-Hill 19
ISO 9000 versus the Baldrige Award
Which should we pursue first?
What are the differences between the two?
Do you have to be ISO 9000 certified before going for the Baldrige Award?
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Irwin/McGraw-Hill 20
ISO 9000 versusthe Baldrige Award
Baldrige
ISO 9000
QS 9000
Evans and Lindsay The Management and Control of Quality, Southwestern Books, p536.
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Irwin/McGraw-Hill 21
Costs of Quality: Categories Appraisal costs
Prevention costs
Internal failure costs
External failure costs
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Irwin/McGraw-Hill 22
The 1-10-100 Rule
1
10
100
Defects caught at their source cost the organization $1. Defects caught outside of the source department but within the organization cost $10. Defects that reach the external customer cost $100!
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Irwin/McGraw-Hill 23
Cost of Poor Quality Category Examples
Failure – Costs – Internal Prevention CostsRe-shipping Quality AdministrationUnnecessary Travel Time Quality PlanningRe-picking/Picking Quality Systems DesignUnpacking/Storing Returns Calibration and MaintenanceRe-order Time Production/Inspection EquipmentCrediting Time Vendor Assessment
Quality TrainingFailure Costs – External Appraisal CostsLoss of Sales Incoming Test and InspectionComplaints In-Process InspectionReturns Final InspectionWarranty Claims Sampling Procedures
Quality Audits
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Irwin/McGraw-Hill 24
COPQ Projections
$
Appraisal Costs
External Failure Costs
Internal Failure Costs
Prevention Costs
$ Saved
Total CostUsing a COPQ
System
Total CostWithout Using
A COPQSystem
Months
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Irwin/McGraw-Hill 25
Process Flow ChartNo, Continue…
Buffer:Material Received from
Supplier
Inspect Material for
Defects Defects found?
Return to Supplier for
Credit
Yes
Can be used to find quality problems.
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Irwin/McGraw-Hill 26
Input-Output Analysis
Suppliers Inputs Sub-Processes Outputs Customers
S COPIMeasures
From Flowchart
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Irwin/McGraw-Hill 27
Example SIPOC - Specifying Equipment Selection and Installation Procedures at Coca-Cola USA
SuppliersCustomersCoca-Cola Fountain
OutputsEquipment Selection GuideEquipment Sales ManualsTechnology Cost/ Benefit MatrixInstallation GuidelinesInstallation Time StandardsInstallation Rating SystemInstallation Design Guidelines
InputsTechnical InformationTechnical QuestionsCustomer Input
ProcessDeveloping Installation Cost Reduction ProgramsDeveloping Equipment Selection Policies and ProceduresDesigning Installation Policies and Procedures
CustomersBurger KingMcDonald’sPrestigeCoca-Cola FountainEquipment Suppliers
MeasuresNumber of Entities Using GuidelinesInstallation Audit RatingsSurvey of Users Effectively Using Selection Guidelines
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Irwin/McGraw-Hill 28
Pareto Analysis
80% of the problems may be attributed to 20% of thecauses.
Assy.Instruct.
Freq
uenc
y
Design Purch.Training
Other
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Irwin/McGraw-Hill 29
Run Chart
0.440.460.48
0.50.520.540.560.58
1 2 3 4 5 6 7 8 9 10 11 12
Time (Hours)
Dia
met
er
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Irwin/McGraw-Hill 30
HistogramFr
eque
ncy
Data Ranges
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Irwin/McGraw-Hill 31
Scatter Diagram
02468
1012
0 10 20 30
Hours of Training
Def
ects
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Irwin/McGraw-Hill 32
Checksheet (data collection)
Billing Errors
Wrong Account
Wrong Amount
A/R Errors
Wrong Account
Wrong Amount
Monday
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Irwin/McGraw-Hill 33
Cause & Effect Diagram
Effect
ManMachine
MaterialMethod
Environment
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Irwin/McGraw-Hill 34
Fishbone Analysis:Existing Hiring Process Problems
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Irwin/McGraw-Hill 35
Control Charts
970
980
990
1000
1010
1020
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
LCL
UCL
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Irwin/McGraw-Hill 36
Customer SurveyWors
tBest
Are We On Time? 5 4 3 2 1
Are We Courteous? 5 4 3 2 1
Does The Product Work?
5 4 3 2 1
Is It Cost Effective? 5 4 3 2 1
Overall Rating?
General Comments:
5 4 3 2 1
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Irwin/McGraw-Hill 37
Example Customer Survey Results - Quantas Airways
Survey of Frequent Flier Needs – Order of Priority:
1. No lost baggage 12. Assistance with connections2. No damaged baggage 13. Being kept informed of delays3. Clean toilets 14. Transport to cities4. Comfortable seats 15. Accurate arrival info 5. Prompt baggage delivery 16. Well-organized boarding6. Ample leg room 17. Quick/friendly airport check-in7. Good quality meals 18. Self-service baggage trolleys8. Prompt reservation service 19. On-time arrival9. Friendly/efficient cabin crew 20. Provision of pillows/rugs10. Clean and tidy cabin 21. Assistance with customs11. Comfortable cabin temp 22. On-time departures
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Irwin/McGraw-Hill 38
Continuous Improvement Process
Orlando RemanufacturingAnd
Distribution Center
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Irwin/McGraw-Hill 39
Remanufacturing Procedures
Clean– Ice Chest– Parts– Tower Assembly
Remanufacturing
– Load Test Ice Bin by Drain
– Evaluate Cold Plate
Remove– Cup Rest– Splash Plate– Drain Pan– Valves– Mounting Blocks
Flush Out
– Install Clamps at Each Tubing End
– Install Tubing to Mounting Block Fittings
– Put’ O ’rings on Fittings
Inspect Soda Manifold
Requisition Needed Parts
Prepare Rear Tower Panel on Woodgrain Units for Sabre Vinyl
– Repair Dents– Sand– Clean Surface
Reassembly
Polish Stainless Steel Surfaces That Will Be
Visible
Leak Test Drain Pan
Test Junction Box– Continuity– Correct Secondary
Voltage
Apply Sabre Vinyl
Install New Beverage Tubing and Rubatex
Install Drain Pan, Drain Fittings and Hose
Install Cup Rest
Install Valve Mounting Plate
Install and Connect Valve Wiring Assembly
Install Valve Mounting Blocks
Install Valves
Install Sabre Valve Covers, Nozzles and
Decals
Install Lid
Install Tube Protector on Inlets
Install Splash Plate
Send to QA
Hold for Write-off if Bin Leaks or Circuits are
Unusable
Remove– Product Hoses,
Tower and Disassemble
– Flush Cooling Circuits
– Inspect Fittings
Sanitize Cooling Circuits
Drill and Tap New Mounting Holes for Broken Hardware
– Impact and Evaluate Fittings
– Inspect Legs
Clean Electrical Junction Box
– Check for Frayed Wires
– Tape Connections
Install Tower Structure Onto Drain Pan Riser
Install Drain Pan Riser Onto Ice Chest Assembly
Disassembly and Cleaning
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Irwin/McGraw-Hill 40
Phase 1: Internal Kickbacks
To BeRemanufa
c-tured Equipment
Tear Down
And WashRemanu-facture
Reassembly
FinalClean-up
QA
Unit NotOK
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Irwin/McGraw-Hill 41
Five Most Common Reasons For Returns From QA
Missing/Wrong Part
Dirt/ Rust DefectivePart
Leaks PoorInsulation
January-May (61 units)
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Irwin/McGraw-Hill 42
Reasons for Returns from QA- Weighted Average
Leaks Dirt/ Rust StainlessSteel
Missing/Wrong Part
DefectivePart
PoorInsulation
Weighted Avg. = % Occurring X Defect Cost (0-10, Based on Time to Repair)
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Irwin/McGraw-Hill 43
Why Dirt?Materials Cleaning
Compounds watered down
Need Larger Wire Brushes
People Need More
Training More Attention
to Detail – Do it Right the First Time
Environment Dust/Humidity Poor Lighting
Space Limitations
Measurement QA Manager
Fixes Some Things Without Informing the Technicians
Methods Need to Rinse
Parts off after Sandblasting
Need Better Procedure for Determining What to Remanufacture Based on its Condition
Machines Best tools for $$?
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Why Leaks?
People Use
Wrong Clamps
Don’t Crimp Properly
Forget to Connect
Machines Bad Dispenser
Design Need Rims That
Make it Easier to Install Tubing
Environment High
Temperatures in Warehouse
Poor Lighting
Methods Softening
Tubing with Water that’s Too Hot
Need to Check Units for All Possible Ways They Could Leak
Materials Bad Tubing “O” Rings Out
of Spec “O” Rings
Too Old (Dry)
Measurement No Testing for
Leaks Prior to QA
Need to ID by Mfr./Model Which Units Leak the Most
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PDCA Cycle (Deming Wheel)
1. Plan a change aimed at improvement.
1. Plan
2. Execute the change.
2. Do
3. Study the results; did it work?
3. Check
4. Institutionalize the change or abandon or do it again.
4. Act
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What is Six Sigma?•A sweeping culture change effort to position a company for greater customer satisfaction, profitability and competitiveness (developed by Motorola in the late 1970’s)• A goal of near perfection in meeting customer requirements• A comprehensive and flexible system for achieving, sustaining and maximizing business success; uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving and reinventing business processes
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Six Sigma DMAIC Process
Measure
Control
Define
Analyze
Improve
Define: Define who your customers are, and what their requirements are for your products and services – Their expectations. Define your team goals, project boundaries, what you will focus on and what you won’t. Define the process you are striving to improve by mapping the process.
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Six Sigma DMAIC Process
Measure
Control
Define
Analyze
Improve
Measure: Eliminate guesswork and assumptions about what customers need and expect and how well processes are working. Collect data from many sources to determine speed in responding to customer requests, defect types and how frequently they occur, client feedback on how processes fit their needs, how clients rate us over time, etc. The data collection may suggest Charter revision.
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Six Sigma DMAIC Process
Measure
Control
Define
Analyze
Improve
Analyze: Grounded in the context of the customer and competitive environment, analyze is used to organize data and look for process problems and opportunities. This step helps to identify gaps between current and goal performance, prioritize opportunities to improve, identify sources of variation and root causes of problems in the process.
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Six Sigma DMAIC Process
Measure
Control
Define
Analyze
ImproveImprove: Generate both obvious and creative solutions to fix and prevent problems. Finding creative solutions by correcting root causes requires innovation, technology and discipline.
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Six Sigma DMAIC Process
Measure
Control
Define
Analyze
Improve
Control: Insure that the process improvements, once implemented, will “hold the gains” rather than revert to the same problems again. Various control tools such as statistical process control can be used. Other tools such as procedure documentation helps institutionalize the improvement.
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Six Sigma DMADV Process
Measure
Validate
Define
Analyze
Design
Design: Develop detailed design for new process. Determine and evaluate enabling elements. Create control and testing plan for new design. Use tools such as simulation, benchmarking, DOE, Quality Function Deployment (QFD), FMECA analysis, and cost/benefit analysis.
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Six Sigma DMADV Process
Measure
Validate
Define
Analyze
Design
Validate: Test detailed design with a pilot implementation. If successful, develop and execute a full-scale implementation. Tools in this step include: planning tools, flowcharts/other process management techniques, and work documentation.