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1THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Chapter 1Chapter 1
Introduction to Quality
2THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Modern Importance of QualityModern Importance of Quality
“The first job we have is to turn out quality
merchandise that consumers will buy and keep
on buying. If we produce it efficiently and
economically, we will earn a profit, in which
you will share.”
- William Cooper Procter
3THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality Assurance
...is any action directed toward providing
customers with goods and services of
appropriate quality.
4THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
History of Quality Assurance (1 of 2)History of Quality Assurance (1 of 2)
• Skilled craftsmanship during Middle Ages
• Industrial Revolution: rise of inspection and
separate quality departments
• Statistical methods at Bell System
• Quality control during World War II
• Quality management in Japan
5THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
History of Quality Assurance (2 of 2)History of Quality Assurance (2 of 2)
• Quality awareness in U.S. manufacturing industry during 1980s: “Total Quality Management”
• Malcolm Baldrige National Quality Award (1987)
• Quality in service industries, government, health care, and education
• Current and future challenge: keep progress in quality management alive
6THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Contemporary Influences on
Quality• Parterning
• Learning systems
• Adaptability and speed of change
• Environmental sustainability
• Globalization
• Knowledge focus
• Customization and differentiation
• Shifting demographics
7THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Definitions of QualityDefinitions of Quality
• Transcendent definition: excellence
• Product-based definition: quantities of product attributes
• User-based definition: fitness for intended use
• Value-based definition: quality vs. price
• Manufacturing-based definition: conformance to specifications
8THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality PerspectivesQuality Perspectives
CustomerCustomer
DistributionDistribution
productsproducts
and and
servicesservices
needsneeds
transcendent &transcendent &
productproduct--basedbased useruser--basedbased
manufacturingmanufacturing--
basedbased
valuevalue--basedbased
MarketingMarketing
DesignDesign
ManufacturingManufacturing
Information flowInformation flowProduct flowProduct flow
9THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer-Driven QualityCustomer-Driven Quality
• “Meeting or exceeding customer
expectations”
• Customers can be...
– Consumers
– External customers
– Internal customers
10THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Total Quality
• People-focused management system
• Focus on increasing customer satisfaction and reducing costs
• A systems approach that integrates organizational functions and the entire supply chain
• Stresses learning and adaptation to change
• Based on the scientific method
11THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Principles of Total Quality
• Customer and stakeholder focus
• Participation and teamwork
• Process focus and continuous
improvement
...supported by an integrated organizational
infrastructure, a set of management practices,
and a set of tools and techniques
12THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer and Stakeholder Focus
• Customer is principal judge of quality
• Organizations must first understand
customers’ needs and expectations in order
to meet and exceed them
• Organizations must build relationships with
customers
• Customers include employees and society at
large
13THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Participation and Teamwork
• Employees know their jobs best and therefore, how to improve them
• Management must develop the systems and procedures that foster participation and teamwork
• Empowerment better serves customers, and creates trust and motivation
• Teamwork and partnerships must exist both horizontally and vertically
14THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Process Focus and Continuous
Improvement
• A process is a sequence of activities
that is intended to achieve some result
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Continuous Improvement
• Enhancing value through new products and
services
• Reducing errors, defects, waste, and costs
• Increasing productivity and effectiveness
• Improving responsiveness and cycle time
performance
16THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Deming’s View of a
Production SystemSuppliers of
materials and
equipment
Receipt and test
of materials
Design and
RedesignConsumer
research
ABCD
Production, assembly
inspection
Tests of processes, machines, methods
Distribution
Consumers
INPUTS PROCESSES OUTPUTS
17THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Learning
• The foundation for improvement …Understanding why changes are successful through feedback between practices and results, which leads to new goals and approaches
• Learning cycle:– Planning
– Execution of plans
– Assessment of progress
– Revision of plans based on assessment findings
18THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Infrastructure, Practices, and
Tools
Leadership Strategic HRM Process Data andLeadership Strategic HRM Process Data and information information
Planning mgt.Planning mgt. managementmanagement
Performance TrainingPerformance Training
appraisalappraisal
Trend chartTrend chartToolsTools
PracticesPractices
InfrastructureInfrastructure
19THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
TQ Infrastructure
• Customer relationship management
• Leadership and strategic planning
• Human resources management
• Process management
• Data and information management
20THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Competitive AdvantageCompetitive Advantage
• Is driven by customer wants and needs
• Makes significant contribution to business success
• Matches organization’s unique resources with opportunities
• Is durable and lasting
• Provides basis for further improvement
• Provides direction and motivation
Quality supports each of these characteristics
21THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality and ProfitabilityQuality and Profitability
Improved quality
of design
Higher perceived
value
Increased market
share
Higher
prices
Increased
revenues
Improved quality
of conformance
Lower
manufacturing and
service costs
Higher profitability
22THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Evidence that Quality Impacts
Business Results
• General Accounting Office study of Baldrige Award applicants
• Baldrige stock study (see www.quality.nist.gov)
• Hendricks and Singhal study of quality award winners
• Performance results of Baldrige Award winners
23THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
GAO TQ Model
Product andservice quality
Customersatisfaction
Leadership forcontinuousimprovement
Quality systems andemployee involvement
Competitiveness
Organizationbenefits
Reliability
On-time delivery
Error/defects
Overall satisfaction
Customer retention
Complaints
CostsCycle timeTurnoverSatisfaction
Safety & health
Productivity
Market share
Profits
24THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Three Levels of Quality
• Organizational level: meeting external
customer requirements
• Process level: linking external and
internal customer requirements
• Performer/job level: meeting internal
customer requirements
25THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality and Personal ValuesQuality and Personal Values
• Personal initiative has a positive impact
on business success
• Quality begins with personal attitudes
• Quality-focused individuals often exceed
customer expectations
• Attitudes can be changed through
awareness and effort (e.g., personal
quality checklists)
26THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Chapter 2Chapter 2
Total Quality in
Organizations
27THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Growth of Modern
Quality Management
Manufacturingquality
Improvedproduct designs
Servicequality
Performanceexcellence
28THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Systems Thinking
• A system is the functions or activities within an organization that work together for the aim of the organization.
• Subsystems of an organization are linked together as internal customers and suppliers.
• A systems perspective acknowledges the importance of the interactions of subsystems, not the actions of them individually.
29THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Manufacturing Systems (1 of 2)
• Marketing and sales
• Product design and engineering
• Purchasing and receiving
• Production planning and scheduling
• Manufacturing and assembly
• Tool engineering
30THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Manufacturing Systems (2 of 2)
• Industrial engineering and process design
• Finished goods inspection and test
• Packaging, shipping, and warehousing
• Installation and service
31THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality in Business Support
Functions for Manufacturing
• General management
• Finance and accounting
• Human resource management
• Quality assurance
• Legal services
32THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality in Services
• Service is defined as “any primary or
complementary activity that does not
directly produce a physical product – that is,
the non-goods part of the transaction
between buyer (customer) and seller
(provider).”
33THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Critical Differences between
Service and Manufacturing (1 of 2)
• Customer needs and performance standards
are more difficult to identify and measure
• Services requires a higher degree of
customization
• Output is intangible
34THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Critical Differences between Service
and Manufacturing (2 of 2)
• Services are produced and consumed
simultaneously
• Customers are often involved in actual
process
• Services are more labor-intensive than
manufacturing
• Services handle large numbers of transactions
35THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Components of Service
System Quality
• Employees
• Information technology
36THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
The Ritz-Carlton Hotel Co.
37THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality in Health Care
• Joint Commission on Accreditation of
Healthcare Organizations (JCAHO)
• National Committee for Quality Assurance
(NCQA)
• Institute for Healthcare Improvement (IHI)
• 1999 expansion of the Baldrige Award to
nonprofit health care organizations
38THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality Issues in Health Care
• Avoidable errors
• Underutilization of services
• Overuse of services
• Variation in services
39THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality in Education
• Koalaty Kid program
• 1999 expansion of the Baldrige Award to nonprofit education organizations
• Success stories
– Mt. Edgecumbe High School
– Brazosport ISD
– Hunderton Central Regional HS
– Pinellas County Schools
40THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Higher Education
as a Production SystemDesign and
RedesignConsumer
research
Suppliers:families, high
schools, colleges,
business
Customers:business, families,
society, students
Inputs:students
faculty
Processes
Teaching, counseling,
scientific research
Outputs:able students
new knowledge
41THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality in the Public Sector
• Quality in the Federal Government
• State and Local Quality Efforts
42THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Chapter 3Chapter 3
Philosophies and
Frameworks
43THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Leaders in the Quality Revolution
• W. Edwards Deming
• Joseph M. Juran
• Philip B. Crosby
• Armand V. Feigenbaum
• Kaoru Ishikawa
• Genichi Taguchi
44THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Who’s Who?
ab
c
Deming ____
Juran ____
Crosby ____
45THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Deming Chain Reaction
Improve quality
Costs decrease
Productivity improves
Increase market share with better
quality and lower prices
Stay in business
Provide jobs and more jobs
46THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Deming’s System
of Profound Knowledge
• Appreciation for a system
• Understanding variation
• Theory of knowledge
• Psychology
47THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Systems
• Most organizational processes are cross-
functional
• Parts of a system must work together
• Every system must have a purpose
• Management must optimize the system
as a whole
48THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Variation
• Many sources of uncontrollable variation exist in any process
• Excessive variation results in product failures, unhappy customers, and unnecessary costs
• Statistical methods can be used to identify and quantify variation to help understand it and lead to improvements
49THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Theory of Knowledge
• Knowledge is not possible without theory
• Experience alone does not establish a theory, it only describes
• Theory shows cause-and-effect relationships that can be used for prediction
50THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Psychology
• People are motivated intrinsically and
extrinsically
• Fear is demotivating
• Managers should develop pride and joy
in work
51THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Deming’s 14 Points (Abridged) (1 of 2)
1. Create and publish a company mission
statement and commit to it.
2. Learn the new philosophy.
3. Understand the purpose of inspection.
4. End business practices driven by price alone.
5. Constantly improve system of production
and service.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear and create trust.
52THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Deming’s 14 Points (2 of 2)
9. Optimize team and individual efforts.
10. Eliminate exhortations for work force.
11. Eliminate numerical quotas and M.B.O.
Focus on improvement.
12. Remove barriers that rob people of pride
of workmanship.
13. Encourage education and self-improvement.
14. Take action to accomplish the transformation.
www.deming.org
53THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Juran’s Quality Trilogy
• Quality planning
• Quality control
• Quality improvement
www.juran.com
54THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Phillip B. Crosby
Quality is free . . . :
“Quality is free. It’s not a gift, but it is free. What
costs money are the unquality things -- all the
actions that involve not doing jobs right the first
time.”
55THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Philip B. Crosby
Absolutes of Quality Management:
• Quality means conformance to requirements
• Problems are functional in nature
• There is no optimum level of defects
• Cost of quality is the only useful measurement
• Zero defects is the only performance standard
www.philipcrosby.com
56THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
A.V. Feigenbaum
• Three Steps to Quality
– Quality Leadership, with a strong focus
on planning
– Modern Quality Technology, involving
the entire work force
– Organizational Commitment, supported
by continuous training and motivation
57THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Kaoru Ishikawa
• Instrumental in developing Japanese
quality strategy
• Influenced participative approaches
involving all workers
• Advocated the use of simple visual
tools and statistical techniques
58THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Genichi Taguchi
• Pioneered a new perspective on quality based
on the economic value of being on target and
reducing variation and dispelling the
traditional view of conformance to
specifications:
No Loss LossLoss
Tolerance
0.500 0.5200.480
59THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Deming Prize• Instituted 1951 by Union of Japanese Scientists
and Engineers (JUSE)
• Several categories including prizes for individuals, factories, small companies, and Deming application prize
• American company winners include:
Florida Power & Light, and
AT&T Power Systems Division
60THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Malcolm Baldrige
National Quality Award• Help improve quality in U.S.
companies
• Recognize achievements of excellent firms and provide examples to others
• Establish criteria for evaluating quality efforts
• Provide guidance for other U.S. companies
Malcolm Baldrige,
former U.S. Secretary
of Commerce
61THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Criteria for Performance
Excellence• Leadership
• Strategic Planning
• Customer and Market Focus
• Information and Analysis
• Human Resource Focus
• Process Management
• Business ResultsBaldrige
Award trophy
62THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
The Baldrige Framework –
A Systems Perspective
4
Information and Analysis
5
Human Resource
Focus
3
Customer & Market Focus
7
Business Results
7
Business Results
2
Strategic Planning
1
Leadership
6
Process Management
Organizational Profile:
Environment, Relationships, and
Challenges
63THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Receive Applications
Judges Select for
Consensus Review?
Judges Select for
Site Visit Review?
Stage 1
Independent Review
Stage 2
Consensus Review
Stage 3
Site Visit Review
Stage 4
Judges Recommend Award
Recipients to
NIST Director/DOC
Feedback report
to applicant
Feedback report
to applicant
Feedback report
to applicant
No
No
Baldrige Award Evaluation Process
64THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
The Baldrige Award
Scoring System• Three evaluation dimensions - Approach,
Deployment, and Results
• Scoring is linked to the importance to the
applicant’s business
• Scoring guidelines (Table 3.5)
65THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Feedback Report
• Strengths - approaches or results that
demonstrate effective response to the
Criteria
• Opportunities for improvement - how
the applicant can better address the
purposes of the Criteria, or issues that
require clarification
66THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Self Assessment and the Baldrige
National Quality Program
A primary goal of the Program is to encourage many organizations to improve on their own by equipping them with a standard template for measuring their performance and their progress toward performance excellence.
Boeing Airlift & Tanker
Programs – 1998 winner
67THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Growth of State Award Programs
Based on the Baldrige
68THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality Awards Around the World
Programs in place
No programs
69THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
ISO 9000:2000
• Quality system standards adopted by
International Organization for Standardization
in 1987; revised in 1994 and 2000
• Technical specifications and criteria to be used
as rules, guidelines, or definitions of
characteristics to ensure that materials,
products, processes, and services are fit for
their purpose.
70THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Objectives of ISO Standards (1 of 2)
• Achieve, maintain, and continuously improve
product quality
• Improve quality of operations to continually
meet customers’ and stakeholders’ needs
• Provide confidence to internal management
and other employees that quality
requirements are being fulfilled
71THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Objectives of ISO Standards (2 of 2)
• Provide confidence to customers and other
stakeholders that quality requirements are
being achieved
• Provide confidence that quality system
requirements are fulfilled
72THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Structure of ISO 9000 Standards
• 21 elements organized into four major
sections:
– Management Responsibility
– Resource Management
– Product Realization
– Measurement, Analysis, and Iimprovement
See Table 3.7
73THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
ISO 9000:2000 Quality
Management Principles1. Customer Focus
2. Leadership
3. Involvement of People
4. Process Approach
5. System Approach to Management
6. Continual Improvement
7. Factual Approach to Decision Making
8. Mutually Beneficial Supplier Relationships
74THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Chapter 4Chapter 4
Focusing on Customers
75THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Importance of Customer
Satisfaction and Loyalty
• “Satisfaction is an attitude; loyalty is a behavior”
• Loyal customers spend more, are willing otpay higher prices, refer new clients, and are less costly to do business with.
• It costs five times more to find a new customer than to keep an existing one happy.
76THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
American Customer
Satisfaction Index• Measures customer satisfaction at national
level
• Introduced in 1994 by University of Michigan and American Society for Quality
• Continual decline in index from 1994 through 1998 with a small improvement into 2000 suggests that quality improvements have not kept pace with consumer expectations
77THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
ACSI Model
of Customer SatisfactionPerceived
quality
Customer
complaints
Perceived
valueCustomer
satisfaction
Customer
expectations Customer
loyalty
78THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer-Driven Quality Cycle
measurement and feedback
Customer needs and expectations
(expected quality)
Identification of customer needs
Translation into product/service specifications
(design quality)
Output (actual quality)
Customer perceptions (perceived quality)
PERCEIVED QUALITY = ACTUAL - EXPECTED
79THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Leading Practices (1 of 2)
• Define and segment key customer groups
and markets
• Understand the voice of the customer
(VOC)
• Understand linkages between VOC and
design, production, and delivery
80THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Leading Practices (2 of 2)
• Build relationships through commitments,
provide accessibility to people and
information, set service standards, and
follow-up on transactions
• Effective complaint management processes
• Measure customer satisfaction for
improvement
81THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Key Customer Groups
• Organization level– consumers
– external customers
– employees
– society
• Process level– internal customer units or groups
• Performer level
– individual internal customers
82THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Identifying Internal Customers
• What products or services are produced?
• Who uses these products and services?
• Who do employees call, write to, or answer
questions for?
• Who supplies inputs to the process?
83THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
AT&T Customer-Supplier Model
Requirements
and feedback
Requirements
and feedback
Your
Suppliers
Your
Processes
Your
CustomersInputs Outputs
84THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer Segmentation
• Demographics
• Geography
• Volumes
• Profit potential
85THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Key Dimensions of Quality• Performance – primary operating characteristics
• Features – “bells and whistles”
• Reliability – probability of operating for specific time and conditions of use
• Conformance – degree to which characteristics match standards
• Durability- amount of use before deterioration or replacement
• Serviceability – speed, courtesy, and competence of repair
• Aesthetics – look, feel, sound, taste, smell
86THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Key Dimensions of Service Quality
• Reliability – ability to provide what was promised
• Assurance – knowledge and courtesy of
employees and ability to convey trust
• Tangibles – physical facilities and appearance of
personnel
• Empathy – degree of caring and individual
attention
• Responsiveness – willingness to help customers
and provide prompt service
87THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Kano Model of Customer Needs
• Dissatisfiers: expected requirements
• Satisfiers: expressed requirements
• Exciters/delighters: unexpected
features
88THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer Listening Posts
• Comment cards and formal surveys
• Focus groups
• Direct customer contact
• Field intelligence
• Complaint analysis
• Internet monitoring
89THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Tools for Classifying
Customer Requirements
Affinity diagram Tree diagram
90THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer Relationship
Management
• Accessibility and commitments
• Selecting and developing customer contact
employees
• Relevant customer contact requirements
• Effective complaint management
• Strategic partnerships and alliances
91THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Measuring Customer Satisfaction• Discover customer perceptions of business
effectiveness
• Compare company’s performance relative
to competitors
• Identify areas for improvement
• Track trends to determine if changes result
in improvements
92THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Example: The Olive Garden• The Lobby
– Was the lobby staff friendly and did they
welcome you to the restaurant?
– Were you seated in a timely, efficient
manner?
• The Table Area
– Was your table area clean when you were
seated?
• The Server
– Was your server attentive and there when
you needed him/her?
– Was your server knowledgeable and able to
answer your questions about our food and
beverages?
– How was the pace of your meal?
• The Food
– How would you rate the taste of
your food?
– Please rate the temperature of your
food, hot food being piping hot.
– Please rate your visit on the value
for the money.
– Overall, how would you rate your
visit
– Would you recommend this Olive
Garden to a close friend or relative?
Scale: 1 = poor ….5 = excellent
93THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Example: The Olive Garden• Open-ended questions:
– What one thing did you like most about your
visit?
– What one thing could we do to improve your
experience at The Olive Garden?
• Survey form provides address, 800 number,
FAX, and TDD number for hearing
impaired
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Performance-Importance Analysis
Performance
Importance
Low High
Low
High
Who cares? Overkill
Vulnerable Strengths
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Difficulties with Customer
Satisfaction Measurement
• Poor measurement schemes
• Failure to identify appropriate quality dimensions
• Failure to weight dimensions appropriately
• Lack of comparison with leading competitors
• Failure to measure potential and former customers
• Confusing loyalty with satisfaction
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Customer and Market Focus
in the Baldrige CriteriaThe Customer and Market Focus category examines how an
organization determines requirements, expectations, and
preferences of customers and markets; and how it builds
relationships with customers and determines the key factors
that lead to customer acquisition, satisfaction, and retention,
and to business expansion.
3.1 Customer and Market Knowledge
3.2 Customer Relationships and Satisfaction
a. Customer Relationships
b. Customer Satisfaction Determination
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Chapter 5Chapter 5
Leadership and Strategic
Planning
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Leadership
• The ability to positively influence
people and systems to have a
meaningful impact and achieve results
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Strategic Planning
• The process of envisioning an
organization’s future and developing
the necessary procedures and
operations to achieve that future.
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The Baldrige “Leadership Triad”
Leadership
Strategic Planning
Customer andMarket Focus
Operations
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Executive Leadership• Defining and communicating business directions
• Ensuring that goals and expectations are met
• Reviewing business performance and taking appropriate aciton
• Creating an enjoyable work environment
• Soliciting input and feedback from customers
• Ensuring that employees are effective contributors
• Motivating, inspiring, and energizing employees
• Recognizing employee contributions
• Providing honest feedback
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Core Leadership Skills
• Vision
• Empowerment
• Intuition
• Self-understanding
• Value congruence
Dale Crownover, President, Texas Nameplate Co.
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Leading Practices - LeadershipLeading Practices - Leadership
• Create a customer-focused strategic vision and clear quality values
• Create and sustain leadership system and environment for empowerment, innovation, and organizational learning
• Set high expectations and demonstrate personal commitment and involvement in quality
• Integrate quality values into daily leadership and management and communicate extensively
• Integrate public responsibilities and community support into business practices
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Leadership Theories• Trait approach
• Behavioral approach
• Contingency (situational) approach
• Role approach
• Emerging theories: – Attributional theory
– Transactional theory
– Transformational leadership theory
– Substitutes for leadership theory
– Emotional intelligence theory
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Zenger-Miller
Leadership Competencies• Setting or sharing a vision
• Managing a change
• Focusing on the customer
• Dealing with individuals
• Supporting teams and groups
• Sharing information
• Solving problems, making decisions
• Managing business processes
• Managing projects
• Displaying technical skills
• Managing time and resources
• Taking responsibility
• Taking initiative beyond job requirements
• Handling emotions
• Displaying professional ethics
• Showing compassion
• Making credible presentations
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Leadership SystemLeadership System
• Refers to how decisions are made,
communicated, and carried out at all levels;
mechanisms for leadership development,
self-examination, and improvement
• Effectiveness of leadership system depends
in part on its organizational structure
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Common Organizational Structure
Customers
Customerteam
Customerteam
Customerteam
Systems and support services
Executive steering committee
CEO
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Leadership and Public
Responsibilities
• Ethics
• Health, safety, and environment
• Community support
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Strategic PlanningStrategic Planning
Formal strategy includes:Formal strategy includes:
• Goals to be achieved
• Policies to guide or limit action
• Action sequences, or programs,
that accomplish the goals
““A strategy is a pattern or plan that integrates an A strategy is a pattern or plan that integrates an
organizationorganization’’s major goals, policies, and action s major goals, policies, and action
sequences into a cohesive whole.sequences into a cohesive whole.””
James Quinn James Quinn
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Tasks Accomplished
by Strategic Planning
Tasks Accomplished
by Strategic Planning• Understand important customer and operational
requirements
• Optimize use of resources and ensure bridging
between short-term and longer-term
requirements
• Ensure that quality initiatives are understood at
all organizational levels
• Ensure that work organizations and structures
will facilitate accomplishment of strategic plan
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Leading Practices -
Strategic Planning
Leading Practices -
Strategic Planning• Active participation of top management,
employees, customers, suppliers
• Systematic planning systems for strategy
development and deployment, including
measurement, feedback, and review
• Use of a variety of external and internal data
• Align short-term action plans with long-term
strategic objectives, communicate them, and
track progress
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Strategic Planning ProcessStrategic Planning Process
Mission Vision Guiding Principles
Environmental assessment
Strategies
Strategic Objectives
Action Plans
Broad statements of direction
Capabilities and risks
Things to change or
improve
Implementation
Reason for existence Future intent Attitudes and policies
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Mission• Definition of products and services,
markets, customer needs, and distinctive competencies
• Solectron: “…to provide worldwide responsiveness to our customers by offering the highest quality, lowest total cost, customized, integrated, design, supply chain, and manufacturing solutions through long-term partnerships based on integrity and ethical business practices.”
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Vision• Where the organization is headed and what
it intends to be
– Brief and memorable - grab attention
– Inspiring and challenging - creates excitement
– Descriptive of an ideal state - provides guidance
– Appealing to all stakeholders - employees can identify with
• Solectron: “Be the best and continuously improve”
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Policy Deployment
(Hoshin Kanri)
Policy Deployment
(Hoshin Kanri)
• Top management vision leading to long-term
objectives
• Deployment through annual objectives and
action plans
• Negotiation for short-term objectives and
resources (catchball)
• Periodic reviewsSee Figure 5.7!See Figure 5.7!
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The Seven Management
and Planning Tools
The Seven Management
and Planning Tools
• Affinity diagrams
• Interrelationship digraphs
• Tree diagrams
• Matrix diagrams
• Matrix data analysis
• Process decision program charts
• Arrow diagrams
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Leadership in the Baldrige Criteria
The Leadership Category examines how an organization’s senior leaders address values, directions, and performance expectations, as well as a focus on customers and other stakeholders, empowerment, innovation, and learning. Also examined is how the organization addresses its responsibilities to the public and supports its key communities.
1.1 Organizational Leadership
a. Senior Leadership Direction
b. Organizational Performance Review
1.2 Public Responsibility and Citizenship
a. Responsibilities to the Public
b. Support of Key Communities
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Strategic Planning
in the Baldrige CriteriaThe Strategic Planning Category examines how an
organization develops strategic objectives and action
plans. Also examined are how chosen strategic objectives
and action plans are deployed and how progress is measured.
2.1 Strategy Development
a. Strategy Development Process
b. Strategic Objectives
2.2 Strategy Deployment
a. Action Plan Development and Deployment
b. Performance Projection
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Chapter 6Chapter 6
Human Resource Practices
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Toyota Georgetown• “We’ve got nothing, technology-wise, that
anyone else can’t have. There’s no secret
Toyota Quality Machine out there. The
quality machine is the workforce -- the team
members on the paint line, the suppliers, the
engineers -- everybody who has a hand in
production here takes the attitude that we’re
making world-class vehicles.”
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Human Resource ParadigmsOld Thinking New Thinking
People are part of the process
Process requires external control
Managers have to
control whatpeople do
People design andimprove processes
Workers who run theprocess control it
Managers must obtain
commitment of workers
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Key Activities in HRM
• Determine organization’s HR needs to build a high-performance workplace
• Assist in design of work systems
• Recruit, select, train & develop, counsel, motivate, and reward employees
• Act as liaison with unions & government
• Handle other matters of employeewell-being
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Leading Practices (1 of 2)
• Integrate HR plans with overall strategic
objectives and action plans
• Design work and jobs to promote organizational
learning, innovation, and flexibility
• Develop effective performance management
systems, compensation, and reward and
recognition approaches
• Promote cooperation and collaboration through
teamwork
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Leading Practices (2 of 2)
• Empower individuals and teams to make decisions
that affect quality and customer satisfaction
• Make extensive investments in training and
education
• Maintain a work environment conducive to the
well-being and growth of all employees
• Monitor extent and effectiveness of HR practices
and measure employee satisfaction
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Strategic Perspective• HR plans should be linked to business
strategy and aligned with business needs
• Key choices
– Planning
– Staffing
– Appraising
– Compensating
– Training and development
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High Performance Work Systems
Work and Job
Design
Employee
Involvement
Suggestion
systems
Empowerment
Training and
Education
Teamwork and Cooperation
Compensation
and
recognition
Health and safety
Flexibility
Innovation
Knowledge and skill
sharing
Organizational
alignment
Customer focus
Rapid response
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Designing High Performance
Work Systems
• Work design - how employees are
organized in formal and informal units
(departments, teams, etc.)
• Job design - responsibilities and tasks
assigned to individuals
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Work Design Issues
• Performer/job level: initiative and
motivation
• Process level: cooperation and
teamwork
• Organizational level: well-being; link
to strategy
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Hackman/Oldham Model
Core jobcharacteristics
Criticalpsychological
states
Outcomes
Skill variety
Task identity
Task significance
Experienced
meaningfulness
of work
Autonomy
Feedbackfrom job
Experienced
responsibility
Knowledge of
actual results
High motivation
High satisfaction
High work
effectiveness
Moderators
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Employee Involvement• Employee Involvement - any activity by which
employees participate in work-related decisions
and improvement activities, with the objectives
of tapping the creative energies of all employees
and improving their motivation
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Levels of Employee Involvement
1. Information sharing
2. Dialogue
3. Special problem
solving
4. Intra-group problem
solving
5. Inter-group problem
solving
6. Focused problem
solving
7. Limited self-direction
8. Total self-direction
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Advantages of EI• Replaces adversarial
mentality with trust
and cooperation
• Develops skills and
leadership abilities
• Increases morale and
commitment
• Fosters creativity and
innovation
• Helps people understand quality principles and instilling them into the organization’s culture
• Allows employees to solve problems at the source
• Improves quality and productivity
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Empowerment• Giving people authority to make decisions
based on what they feel is right, to have
control over their work, to take risks and
learn from mistakes, and to promote
change.
“A sincere belief and trust in people.”
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Successful Empowerment
• Provide education, resources, and encouragement
• Remove restrictive policies/procedures
• Foster an atmosphere of trust
• Share information freely
• Make work valuable
• Train managers in “hands-off” leadership
• Train employees in allowed latitude
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Training and Education
• Quality awareness
• Leadership
• Project management
• Communications
• Teamwork
• Problem solving
• Interpreting and using
data
• Meeting customer
requirements
• Process analysis
• Process simplification
• Waste reduction
• Cycle time reduction
• Error proofing
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Teams
• Team - a small number of people with
complementary skills who are committed to a
common purpose, set of performance goals, and
approach for which they hold themselves mutually
accountable
• Effective teams are goal-centered,
independent, open, supportive,
and empowered
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Types of Teams
• Quality circles
• Problem solving teams
• Management teams
• Work teams
• Project teams
• Virtual teams
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Functions of Teams
Implementsolutions
Identifyproblems Select
problem
Collectdata
Focus attention
Find causesDevelop
solutions
Pick bestsolution
Developfollow-up
planSolve
Identify
Analyze
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Self-Managed Teams
• Empowered
• Plan, control, improve
work processes
• Set own goals and inspect
own work
• Schedule & review
performance
• Prepare budgets &
coordinate work
• Order materials, keep
inventory, & deal with
suppliers
• Acquire any needed
training
• Hire replacements or
discipline members
• Take responsibility for
quality
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Ingredients for
Successful Teams (1 of 2 )
• Clarity in team goals
• Improvement plan
• Clearly defined roles
• Clear communication
• Beneficial team behaviors
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Ingredients for
Successful Teams (2 of 2)
• Well-defined decision procedures
• Balanced participation
• Established ground rules
• Awareness of group process
• Use of scientific approach
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Compensation and Recognition• Compensation
– Merit versus capability/performance based plans
– Gainsharing
• Recognition
– Monetary or non-monetary
– Formal or informal
– Individual or group
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Effective Recognition
and Reward Strategies
• Give both individual and team awards
• Involve everyone
• Tie rewards to quality
• Allow peers and customers to nominate and
recognize superior performance
• Publicize extensively
• Make recognition fun
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Managing HR
in a TQ Environment
• Recruitment and Career Development
• Motivation
• Performance Appraisal
• Measuring Employee Satisfaction and
HRM Effectiveness
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Motivation• An individual’s response to a felt need
• Theories
– Content Theories: Maslow; MacGregor;
Herzberg
– Process Theories: Vroom; Porter & Lawler
– Environmentally-based Theories: Skinner;
Adams; Bandura, Snyder & Williams
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Performance Appraisal• How you are measured is how you perform!
• Conventional appraisal systems
– Focus on short-term results and individual
behavior; fail to deal with uncontrollable
factors
• New approaches
– Focus on company goals such as quality and
behaviors like teamwork
– 360-degree feedback; mastery descriptions
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Measuring Employee
Satisfaction and Effectiveness
• Satisfaction
– Quality of worklife, teamwork, communications,
training, leadership, compensation, benefits,
internal suppliers and customers
• Effectiveness
– Team and individual behaviors; cost, quality, and
productivity improvements; employee turnover;
suggestions; training effectiveness
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TQ and Labor Relations
• Union-management cooperation
• National Labor Relations Board
(NLRB) rulings on employee
participation programs
• Current legislative proposals and
actions
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Human Resources
in the Baldrige Award Criteria
The Human Resource Focus Category examines how an organization motivates and enables employees to develop and utilize their full potential in alignment with the organization’s overall objectives and action plans. Also examined are the organization’s efforts to build and maintain a work environment and an employee support climate conducive to performance excellence and to personal and organizational growth.
5.1 Work Systems
5.2 Employee Education, Training, and Development
5.3 Employee Well-Being and Satisfaction
a. Work Environment
b. Employee Support and Satisfaction
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Chapter 7Chapter 7
Process Management
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Wisdom from Texas Instruments
“Unless you change the process, why would
you expect the results to change”
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Scope of Process ManagementScope of Process Management
• Process Management: planning and
administering the activities – design,
control, and improvement – necessary to
achieve a high level of performance
• Four types of key processes
– Design processes
– Production/delivery processes
– Support processes
– Supplier processes
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AT&T Process
Management Principles
• Focus on end-to-end process
• Mindset of prevention and continuous
improvement
• Everyone manages a process at some level
and is a customer and a supplier
• Customer needs drive the process
• Corrective action focuses on root cause
• Process simplification reduces errors
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Control vs. ImprovementControl vs. Improvement
Controlled
processImprovement
Time
New zone
of control
Out-of-control
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Leading Practices (1 of 2)Leading Practices (1 of 2)
• Translate customer requirements and internal
capabilities into product and service design
requirements early in the process
• Ensure that quality is built into products and services
and use appropriate tools during development
• Manage product development process to enhance
communication, reduce time, and ensure quality
• Define, document, and manage important
production/delivery and support processes
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Leading Practices (2 of 2)Leading Practices (2 of 2)
• Define performance requirements for suppliers and ensure that they are met
• Control the quality and operational performance of key processes and use systematic methods to identify variations, determine root causes, and make corrections
• Continuously improve processes to achieve better quality, cycle time, and overall operational performance
• Innovate to achieve breakthrough performance using benchmarking and reengineering
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Product Development ParadigmsProduct Development Paradigms
Traditional Approach
• Design the product
• Make the product
• Sell the product
Deming’s Approach
• Design the product
• Make it with
appropriate tests
• Put it on the market
• Conduct consumer
research
• Redesign with
improvements
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Product Development ProcessProduct Development Process
Idea
generation
Idea
generation
Conceptdevelopment
Conceptdevelopment
Product &
process design
Full-scale
production
Full-scale
production
Product
introduction
Product
introduction
Market
evaluation
Market
evaluation
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Quality EngineeringQuality Engineering
• System Design
– Functional performance
• Parameter Design
– Nominal dimensions
• Tolerance Design
– Tolerances
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Loss Functions
loss lossno loss
nominaltolerance
loss loss
Traditional
View
Taguchi’s
View
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Taguchi Loss Function Calculations
L(x) = k(x - T)2
Example: Specification = .500 ± .020
Failure outside of the tolerance range costs $50
to repair. Thus, 50 = k(.020)2. Solving for k
yields k = 125,000. The loss function is:
L(x) = 125,000(x - .500)2
Expected loss = k(σ2 + D2) where D is the deviation
from the target.
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Design ObjectivesDesign Objectives
• Cost, Manufacturability, Quality,
Public Concerns
• Tools and Approaches
– Design for Manufacturability
– Design for Environment
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Streamlining Product DevelopmentStreamlining Product Development
• Competitive need for rapid product development
• Concurrent engineering - a process in which all major functions involved with bringing a product to market are continuously involved with the product development from conception through sales
• Design reviews
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House of Quality
Technical requirements
Voice of
the
customer
Relationship
matrix
Technical requirement
priorities
Customer
requirement
priorities
Competitive
evaluation
Interrelationships
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Quality Function Deployment
technical
requirements
component
characteristics
process
operationsquality plan
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Motorola’s Approach
to Process Design1. Identify the product or service
2. Identify the customer
3. Identify the supplier
4. Identify the process
5. Mistake-proof the process
6. Develop measurements and control, and
improvement goals.
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Evaluating a Process
• Are steps arranged in logical sequence?
• Do all steps add value? Can some be eliminated or added? Can some be combined? Should some be reordered?
• Are capacities in balance?
• What skills, equipment, and tools are required at each step?
• At which points might errors occur and how can they be corrected?
• At which points should quality be measured?
• What procedures should employees follow where customer interaction occurs?
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Projects
• Project initiation – direction, priorities,
limitations, and constraints
• Project plan – blueprint and resources
needed
• Execution – produce deliverables
• Close out – evaluate customer satisfaction
and provide learning for future projects
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Basic Components of ServicesBasic Components of Services
• Physical facilities, processes, and
procedures
• Employee behavior
• Employee professional
judgment
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Key Service DimensionsKey Service Dimensions
Customer contact and interaction
Labor intensity
Customization
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ControlControl
• The continuing process of evaluating process
performance and taking corrective action when
necessary
• Components of control systems
– Standard or goal
– Means of measuring accomplishment
– Comparison of results with the standard as a basis
for corrective action
A well-controlled system is predictable
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After Action Review
1. What was supposed to happen?
2. What actually happened?
3. Why was there a difference?
4. What can we learn?
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Supplier and Partnering ProcessesSupplier and Partnering Processes
• Recognize the strategic importance of
suppliers
• Develop win-win relationships through
partnerships
• Establish trust through openness and
honesty
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Supplier Certification Systems
• “Certified supplier” – one that, after
extensive investigation, is found to
supply material of such quality that
routine testing on each lot received is
unnecessary
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Benefits of Effective Supplier
Process Management
• Reduced costs
• Faster time to market
• Increased access to technology
• Reduced supplier risk
• Improved quality
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Process Improvement
• Productivity improvement
• Work simplification
• Planned methods change
• Kaizen
• Stretch goals
• Benchmarking
• Reengineering
Traditional
Industrial
Engineering
New approaches from
the total quality
movement
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Kaizen
• Gradual and orderly continuous
improvement
• Minimal financial investment
• Involvement of all employees
• Exploit the knowledge and experience
of workers
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Agility• Flexibility – the ability to adapt
quickly and effectively to changing requirements
• Cycle time – the time it takes to accomplish one cycle of a process
• Benefits
– Improve customer response
– Force process streamlining and simplification
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Breakthrough Improvement• Discontinuous change resulting from innovative
and creative thinking
• Benchmarking – the search of industry best
practices that lead to superior performance
– Competitive benchmarking
– Process benchmarking
– Strategic benchmarking
• Reengineering – radical redesign of processes
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Process Management
in the Baldrige Award Criteria
The Process Management Category examines the key
aspects of an organization’s process management,
including customer-focused design, product and service
delivery, key business, and support processes. This Category encompasses all key processes and all work units.
6.1 Product and Service Processes
a. Design Processes
b. Production/Delivery Processes
6.2 Business Processes
6.3 Support Processes
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Chapter 8Chapter 8
Performance Measurement
and Strategic Information
Management
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Information Management• If you don’t measure results, you can’t tell
success from failure
• If you can’t see success, you can’t reward it –
and if you can’t reward success, you are
probably rewarding failure
• If you can’t recognize failure,
you can’t correct it
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Process FlowMeasurement
Data
Analysis
Information
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CustomerRequirements
Measurements
Processes ResultsDesign
Control
Prediction
Validation
Use of Information and Analysis
Measurement supports executive performance review
and daily operations and decision making.
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Benefits of
Information Management
• Understand customers and customer
satisfaction
• Provide feedback to workers
• Establish a basis for reward/recognition
• Assess progress and the need for corrective
action
• Reduce costs through better planning
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Empirical Survey Results • Measurement-management companies are
more likely to:
– be in top third of industry financially
– complete organizational changes successfully
– reach clear agreement on strategy
– enjoy favorable cooperation and teamwork
– have more employee empowerment
– have a greater willingness to take risks
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Example: Federal Express
• “We measure everything.
Then…we prioritize what
processes are key to the
company.”
• Most data collection systems are
automated, making it fast and
easy.
• Seeks internal measures that are
predictors for external measures.
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Example: Ritz-Carlton• “We only measure what we must.
But, we make sure that what we
measure is important to our
customers.”
• 50% marketing and financial data;
50% quality-related productivity
data.
• Cost of quality is top priority. Are
improvements important to
customers, providing a good return,
and done quickly?
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Leading Practices (1 of 2)
• Develop a set of performance indicators that reflect customer requirements and key business drivers
• Use comparative information and data to improve overall performance and competitive position
• Involve everyone in measurement activities and ensure that information is widely visible
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Leading Practices (2 of 2)
• Ensure that data are reliable and accessible
to all who need them
• Use sound analytical methods to conduct
analyses and use the results to support
strategic planning and daily decision making
• Continually refine information sources and
their uses within the organization
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Balanced Scorecard
1. Financial perspective
2. Internal perspective
3. Customer perspective
4. Innovation and learning perspective
Leading
measures
Lagging
measures
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Key Types of Business
Performance Measures
• Customer satisfaction measures
• Financial and market performance measures
• Human resource measures
• Supplier and partner performance measures
• Company-specific measures
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Example: Wainwright Industries
• Safety
• Internal customer satisfaction
• External customer satisfaction
• Six sigma quality (manufacturing
defects)
• Business performance
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Common Quality Measures
• Nonconformities (defects) per unit
• Errors per opportunity
• Defects per million opportunities
(dpmo)
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Importance of Comparative Data
• Comparative data: industry averages,
best competitor performance, world-
class benchmarks
• Helps recognize the need for
improvement
• Provides motivation to seek
improvement
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Linkages to Strategy
Key business drivers
(key success factors)
Strategies and
action plans
Measures and indicators
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Process-Level Measurements
• Does the measurement support our mission?
• Will the measurement be used to manage
change; that is, actionable?
• Is it important to our customers?
• Is it effective in measuring performance?
• Is it effective in forecasting results?
• Is it easy to understand and simple?
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Creating Effective
Performance Measures
• Identify all customers and their requirements
and expectations
• Define work processes
• Define value-adding activities and process
outputs
• Develop measures for each key process
• Evaluate measures for their usefulness
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The Cost of Quality (COQ)• COQ – the cost of avoiding poor quality,
or incurred as a result of poor quality
• Translates defects, errors, etc. into the
“language of management” – $$$
• Provides a basis for identifying
improvement opportunities and success
of improvement programs
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Quality Cost Classification
• Prevention
• Appraisal
• Internal failure
• External failure
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Quality Cost Management Tools
• Cost indexes
• Pareto analysis
• Sampling and work measurement
• Activity-based costing
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Return on Quality (ROQ) • ROQ – measure of revenue gains against
costs associated with quality efforts
• Principles
– Quality is an investment
– Quality efforts must be made financially
accountable
– It is possible to spend too much on quality
– Not all quality expenditures are equally valid
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Managing Data and Information
• Validity – Does the indicator measure what it says it does?
• Reliability – How well does an indicator consistently measure the “true value” of the characteristic?
• Accessibility – Do the right people have access to the data?
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Analysis• Statistical summaries and charts
• Trends over time
• Comparisons with key benchmarks
• Aggregate summaries and indexes
• Cause-and-effect linkages and
correlations (interlinking)
• Data mining
Basic
Advanced
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Interlinking• Quantitative modeling of cause and effect
relationships between external and internal
performance criteria
customer
satisfaction
rating
time on hold (telephone)
* ** * *
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Information and Analysis
in the Baldrige Award Criteria
The Information and Analysis Category examines an
organization’s information management and performance
measurement systems and how the organization analyzes performance data and information.
4.1 Measurement and Analysis of Organizational
Performance
a. Performance Measurement
b. Performance Analysis
4.2 Information Management
a. Data Availability
b. Hardware and Software Quality
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Chapter 9Chapter 9
Statistical Thinking
and Applications
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Statistical Thinking
• All work occurs in a system of
interconnected processes
• Variation exists in all processes
• Understanding and reducing variation
are the keys to success
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Sources of Variation
in Production Processes
Materials
Tools
Operators MethodsMeasurement
Instruments
HumanInspectionPerformance
EnvironmentMachines
INPUTS PROCESS OUTPUTS
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Variation
• Many sources of uncontrollable variation
exist (common causes)
• Special (assignable) causes of variation
can be recognized and controlled
• Failure to understand these differences
can increase variation in a system
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Importance of Understanding
Variation
time
PREDICTABLE
?UNPREDECTIBLE
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Two Fundamental
Management Mistakes
1. Treating as a special cause any fault,
complaint, mistake, breakdown, accident
or shortage when it actually is due to
common causes
2. Attributing to common causes any fault,
complaint, mistake, breakdown, accident
or shortage when it actually is due to a
special cause
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Note to Instructors
• The following slides can be used to guide a
class demonstration and discussion of the
Deming Red Bead experiment using small
bags of M&M’s® Chocolate Candies, from
a suggestion I found on a TQ newsgroup
several years ago. The good output (“red
beads”) are the blue M&Ms, with the
instructor playing the role of Dr. Deming.
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We’re Going into Business!!!
We have a new global customer and have to start
up several factories. So I need teams of 5 to do
the work:
1 production worker
2 inspectors
1 Chief Inspector
1 Recorder
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Production Setup
1. Take the bag in your left hand.
2. Tear a 3/4” opening in the right corner.
(only large enough for one piece at a
time)
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Production Process
1. Production worker produces 10 pieces
and places them on the napkin.
2. Each inspector, independently, counts
the blue ones, and passes to the Chief
Inspector to verify.
3. If Chief Inspector agrees, s/he tells
the recorder, who reports it to me.
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Do it right
the first
time!
Be a Quality Worker!
Take Pride inTake Pride inTake Pride inTake Pride in
Your Work!Your Work!Your Work!Your Work!
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Lessons Learned
• Quality is made at the top.
• Rigid procedures are not enough.
• People are not always the main source of
variability.
• Numerical goals are often meaningless.
• Inspection is expensive and does not
improve quality.
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Statistical Methods
• Descriptive statistics
• Statistical inference
• Predictive statistics
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Review of Key Concepts
• Random variables
• Probability distributions
• Populations and samples
• Point estimates
• Sampling distributions
• Standard error of the mean
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Important Probability
Distributions
• Discrete
– Binomial
– Poisson
• Continuous
– Normal
– Exponential
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Central Limit Theorem
• If simple random samples of size n are
taken from any population, the
probability distribution of sample means
will be approximately normal as n
becomes large.
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Sampling Methods
• Simple random sampling
• Stratified sampling
• Systematic sampling
• Cluster sampling
• Judgment sampling
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Sampling Error
• Sampling error (statistical error)
• Nonsampling error (systematic error)
• Factors to consider:
– Sample size
– Appropriate sample design
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Design of Experiments
• A test or series of tests to compare two or more methods to determine which is better, or to determine levels of controllable factors to optimize the yield of a process or minimize the variability of a response variable.
• Factorial experiment
– Analysis of all combinations of factor levels to understand main effects and interactions
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Excel Descriptive Statistics Tool
• Tools…Data Analysis… Descriptive Statistics
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Excel Histogram Tool
• Tools…Data Analysis…Histogram
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Process Capability
• The range over which the natural variation
of a process occurs as determined by the
system of common causes
• Measured by the proportion of output that
can be produced within design
specifications
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Types of Capability Studies
• Peak performance study - how a process
performs under ideal conditions
• Process characterization study - how a
process performs under actual operating
conditions
• Component variability study - relative
contribution of different sources of variation
(e.g., process factors, measurement system)
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Process Capability Study
1. Choose a representative machine or process
2. Define the process conditions
3. Select a representative operator
4. Provide the right materials
5. Specify the gauging or measurement method
6. Record the measurements
7. Construct a histogram and compute descriptive
statistics: mean and standard deviation
8. Compare results with specified tolerances
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Process Capability
specification specification
specification specification
natural variation natural variation
(a) (b)
natural variation natural variation
(c) (d)
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Process Capability Index
Cp = UTL - LTL
6σ
Cpl, Cpu }
UTL - µ
3σ
Cpl = µ - LTL
3σ
Cpk = min{
Cpu =
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PROCESS_CAPABILITY.XLS
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Chapter 10Chapter 10
Quality Improvement
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Traditional Economic Model
of Quality of Conformance
Total cost
Cost due to
nonconformanceCost of
quality
assurance
“optimal level” of quality100%
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Modern Economic Model
of Quality of Conformance
Total cost
Cost due to
nonconformanceCost of
quality
assurance
100%
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Problem Solving
• Problem: any deviation between what “should be” and what “is” that is important enough to need correcting– Structured
– Semistructured
– Ill-structured
• Problem Solving: the activity associated with changing the state of what “is” to what “should be”
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Quality Problem Types
1. Conformance problems
2. Unstructured performance problems
3. Efficiency problems
4. Product design problems
5. Process design problems
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Problem Solving Process
1. Redefining and analyzing the
problem
2. Generating ideas
3. Evaluating and
selecting ideas
1. Implementing ideas
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The Deming Cycle
Plan
DoStudy
Act
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Juran’s Improvement Program
• Proof of the need
• Project identification
• Organization for breakthrough
• Diagnostic journey
• Remedial journey
• Holding the gains
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Bethesda Hospital Model
Start
Reviewcurrent
situation
Describe process
Explorecause theories
Collect andanalyze data
Improvement?
Generate solutions
Plan
Do
Check
Improvement?
Actyes
no
yes
no
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Crosby Quality Improvement
Program1. Management
commitment
2. Quality improvement team
3. Quality measurement
4. Cost of quality evaluation
5. Quality awareness
6. Corrective action
7. Zero defect committee
8. Supervisor training
9. Zero defects day
10. Goal setting
11. Error cause removal
12. Recognition
13. Quality councils
14. Do it over again
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Creative Problem Solving
• Mess Finding – identify symptoms
• Fact Finding – gather data; operational
definitions
• Problem Finding – find the root cause
• Idea Finding – brainstorming
• Solution Finding – evaluate ideas and
proposals
• Implementation – make the solution work
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Six-Sigma Quality
• Ensuring that process variation is half the
design tolerance (Cp = 2.0) while allowing
the mean to shift as much as 1.5 standard
deviations.
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Six-Sigma Metrics
• Defects per unit (DPU) = number of
defects discovered ÷ number of units
produced
• Defects per million opportunities
(dpmo) = DPU × 1,000,000 ÷opportunities for error
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k-Sigma Quality Levels
• Six sigma results in at most 3.4 defects per
million opportunities
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Six-Sigma Implementation
1. Emphasize dpmo as a standard metric
2. Provide extensive training
3. Focus on on corporate sponsor support
4. Create qualified process improvement
experts
5. Ensure identification of appropriate
metrics
6. Set stretch objectives
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GE’s Six-Sigma
Problem Solving Approach
1. Define
2. Measure
3. Analyze
4. Improve
5. Control
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Tools for Six-Sigma
and Quality Improvement
• Elementary statistics
• Advanced statistics
• Product design and reliability
• Measurement
• Process control
• Process improvement
• Implementation and teamwork
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The Seven QC Tools
1. Flowcharts
2. Check sheets
3. Histograms
4. Cause-and-effect diagrams
5. Pareto diagrams
6. Scatter diagrams
7. Control charts
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Flowcharts
• Shows unexpected complexity, problem areas, redundancy, unnecessary loops, and where simplification may be possible
• Compares and contrasts actual versus ideal flow of a process
• Allows a team to reach agreement on process steps and identify activities that may impact performance
• Serves as a training tool
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Run Chart
• Monitors performance of one or more processes over time to detect trends, shifts, or cycles
• Allows a team to compare performance before and after implementation of a solution to measure its impact
• Focuses attention on truly vital changes in the process
* **
* **
*
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Control Chart
• Focuses attention on detecting and
monitoring process variation over time
• Distinguishes special from common causes
of variation
• Serves as a tool for on-going control
• Provides a common language for discussion
process performance* *
*
* **
*
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Check Sheet
• Creates easy-to-understand data
• Builds, with each observation, a clearer
picture of the facts
• Forces agreement o the definition of each
condition or event of interest
• Makes patterns in the data become
obvious quickly xx
xxxxxx
x
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Pareto Diagram
• Helps a team focus on causes that have the
greatest impact
• Displays the relative importance of
problems in a simple visual format
• Helps prevent “shifting the problem” where
the solution removes some causes but
worsens others
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Histogram• Displays large amounts of data that are
difficult to interpret in tabular form
• Shows centering, variation, and shape
• Illustrates the underlying distribution of the data
• Provides useful information for predicting future performance
• Helps to answer the question “Is the process capable of meeting requirements?
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Cause and Effect Diagram
• Enables a team to focus on the content of a
problem, not on the history of the problem or
differing personal interests of team members
• Creates a snapshot of collective knowledge and
consensus of a team; builds support for solutions
• Focuses the team on causes, not symptoms
Effect
Cause
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Scatter Diagram
• Supplies the data to confirm a hypothesis
that two variables are related
• Provides both a visual and statistical means
to test the strength of a relationship
• Provides a good follow-up to cause and
effect diagrams*
* *
* *
*
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Poka-Yoke (Mistake-Proofing)
• An approach for mistake-proofing processes
using automatic devices or methods to avoid
simple human or machine error, such as
forgetfulness, misunderstanding, errors in
identification, lack of experience,
absentmindedness, delays,
or malfunctions
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Poka-Yoke Examples (from John Grout’s Poka-Yoke Page)
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Chapter 11Chapter 11
Quality Control
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Quality Control (QC)
• Control – the activity of ensuring conformance to requirements and taking corrective action when necessary to correct problems
• Importance
– Daily management of processes
– Prerequisite to longer-term improvements
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Designing the QC System
• Quality Policy and Quality Manual– Contract management, design control and
purchasing
– Process control, inspection and testing
– Corrective action and continual improvement
– Controlling inspection, measuring and test equipment (metrology, measurement system analysis and calibration)
– Records, documentation and audits
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Inspection/Testing Points
• Receiving inspection
• In-process inspection
• Final inspection
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Receiving Inspection
• Spot check procedures
• 100 percent inspection
• Acceptance sampling
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Acceptance Sampling
Lot received for inspection
Sample selected and analyzed
Results compared with acceptance criteria
Accept the lot
Send to production
or to customer
Reject the lot
Decide on disposition
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Pros and Cons
of Acceptance Sampling• Arguments for:
– Provides an assessment of risk
– Inexpensive and suited for destructive testing
– Requires less time than other approaches
– Requires less handling
– Reduces inspector fatigue
• Arguments against:
– Does not make sense
for stable processes
– Only detects poor
quality; does not help
to prevent it
– Is non-value-added
– Does not help suppliers
improve
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In-Process Inspection
• What to inspect?– Key quality characteristics that are related to
cost or quality (customer requirements)
• Where to inspect?
– Key processes, especially high-cost and value-added
• How much to inspect?– All, nothing, or a sample
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Economic Model
C1 = cost of inspection and removal of
nonconforming item
C2 = cost of repair
p = true fraction nonconforming
Breakeven Analysis: p*C2 = C1
If p > C1 / C2 , use 100% inspection
If p < C1 / C2 , do nothing
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Human Factors in Inspection
• complexity
• defect rate
• repeated inspections
• inspection rate
Inspection should never be a means of assuring
quality. The purpose of inspection should be to gather
information to understand and improve the processes
that produce products and services.
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Gauges and
Measuring Instruments
• Variable gauges
• Fixed gauges
• Coordinate measuring machine
• Vision systems
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Examples of Gauges
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Metrology - Science of
Measurement
• Accuracy - closeness of agreement between
an observed value and a standard
• Precision - closeness of agreement between
randomly selected individual measurements
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Repeatability and Reproducibility
• Repeatability (equipment variation) –variation in multiple measurements by an individual using the same instrument.
• Reproducibility (operator variation) -variation in the same measuring instrument used by different individuals
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Repeatability and
Reproducibility Studies
• Quantify and evaluate the capability of a
measurement system
– Select m operators and n parts
– Calibrate the measuring instrument
– Randomly measure each part by each operator
for r trials
– Compute key statistics to quantify repeatability
and reproducibility
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R&R Evaluation
• Under 10% error - OK
• 10-30% error - may be OK
• over 30% error - unacceptable
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Calibration
• Calibration - comparing a
measurement device or system to one
having a known relationship to
national standards
• Traceability to national standards
maintained by NIST, National Institute
of Standards and Technology
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Example of QC: HACCP System
1. Hazard analysis
2. Critical control points
3. Preventive measures with critical limits for each
control point
4. Procedures to monitor the critical control points
5. Corrective actions when critical limits are not met
6. Verification procedures
7. Effective record keeping and documentation
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Quality Control in Services
• Identify important quality
characteristics
– Time, errors, behavior
• Measure and collect data using check
sheets, check lists, or other means
• Take corrective action
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Chapter 12Chapter 12
Statistical Process Control
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Statistical Process Control (SPC)
• A methodology for monitoring a process to
identify special causes of variation and
signal the need to take corrective action
when appropriate
• SPC relies on control charts
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Common
Causes
Special
Causes
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Histograms do not
take into account
changes over time.
Control charts
can tell us when a
process changes
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Control Chart Applications
• Establish state of statistical control
• Monitor a process and signal when
it goes out of control
• Determine process capability
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Capability Versus Control
Control
Capability
Capable
Not Capable
In Control Out of Control
IDEAL
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Commonly Used Control Charts
• Variables data
– x-bar and R-charts
– x-bar and s-charts
– Charts for individuals (x-charts)
• Attribute data
– For “defectives” (p-chart, np-chart)
– For “defects” (c-chart, u-chart)
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Developing Control Charts
1. Prepare– Choose measurement
– Determine how to collect data, sample size, and frequency of sampling
– Set up an initial control chart
2. Collect Data– Record data
– Calculate appropriate statistics
– Plot statistics on chart
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Next Steps
3. Determine trial control limits
– Center line (process average)
– Compute UCL, LCL
4. Analyze and interpret results
– Determine if in control
– Eliminate out-of-control points
– Recompute control limits as necessary
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Typical Out-of-Control Patterns
• Point outside control limits
• Sudden shift in process average
• Cycles
• Trends
• Hugging the center line
• Hugging the control limits
• Instability
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Shift in Process Average
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Identifying Potential Shifts
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Final Steps
5. Use as a problem-solving tool
– Continue to collect and plot data
– Take corrective action when
necessary
6. Compute process capability
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Process Capability Calculations
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Excel Template
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Special Variables Control Charts
• x-bar and s charts
• x-chart for individuals
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Charts for Attributes
• Fraction nonconforming (p-chart)– Fixed sample size
– Variable sample size
• np-chart for number nonconforming
• Charts for defects– c-chart
– u-chart
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Control Chart Selection
Quality Characteristic
variable attribute
n>1?
n>=10 or computer?
x and MRno
yes
x and s
x and Rno
yes
defective defect
constantsamplesize?
p-chart withvariable samplesize
no
p ornp
yes constantsampling
unit?
c u
yes no
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Control Chart Design Issues
• Basis for sampling
• Sample size
• Frequency of sampling
• Location of control limits
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Pre-Control
nominal
value
Green Zone
Yellow Zones
Red
Zone
Red
Zone
LTL UTL
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SPC Implementation
Requirements
• Top management commitment
• Project champion
• Initial workable project
• Employee education and training
• Accurate measurement system
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Chapter 13Chapter 13
Reliability
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ReliabilityReliability
• Generally defined as the ability of a product
to perform as expected over time
• Formally defined as the probability that a
product, piece of equipment, or system
performs its intended function for a stated
period of time under specified operating
conditions
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Maintainability
• The probability that a system or product
can be retained in, or one that has failed
can be restored to, operating condition in
a specified amount of time.
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Types of Failures
• Functional failure – failure that occurs
at the start of product life due to
manufacturing or material detects
• Reliability failure – failure after some
period of use
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Types of Reliability
• Inherent reliability – predicted by
product design
• Achieved reliability – observed during
use
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Reliability Measurement
• Failure rate (λ) – number of failures
per unit time
• Alternative measures
– Mean time to failure
– Mean time between failures
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Cumulative Failure Rate Curve
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Failure Rate Curve
“Infant
mortality
period”
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Average Failure Rate
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Reliability Function
• Probability density function of failures
f(t) = λe-λt for t > 0
• Probability of failure from (0, T)
F(t) = 1 – e-λT
• Reliability function
R(T) = 1 – F(T) = e-λT
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Series Systems
RS = R1 R2 ... Rn
1 2 n
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Parallel Systems
RS = 1 - (1 - R1) (1 - R2)... (1 - Rn)
1
2
n
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Series-Parallel Systems
• Convert to equivalent series system
AA BB
CC
CC
DD
RRAA RRBB RRCCRRDD
RRCC
AA BB CC’’ DD
RRAA RRBB RRDD
RRCC’’ = 1 = 1 –– (1(1--RRCC)(1)(1--RRCC))
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Reliability Engineering
• Standardization
• Redundancy
• Physics of failure
• Reliability testing
• Burn-in
• Failure mode and effects analysis
• Fault tree analysis
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Reliability Management
• Define customer performance requirements
• Determine important economic factors and
relationship with reliability requirements
• Define the environment and conditions of product
use
• Select components, designs, and vendors that meet
reliability and cost criteria
• Determine reliability requirements for machines
and equipment
• Analyze field reliability for improvement
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Configuration Management
1. Establish approved baseline
configurations (designs)
2. Maintain control over all changes in the
baseline programs (change control)
3. Provide traceability of baselines and
changes (configuration accounting)
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MaintainabilityMaintainability
• Maintainability is the totality of design
factors that allows maintenance to be
accomplished easily
• Preventive maintenance reduces the risk
of failure
• Corrective maintenance is the response to
failures
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Design Issues
• Access of parts for repair
• Modular construction and
standardization
• Diagnostic repair procedures and
expert systems
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Availability
• Operational availability
• Inherent availability
MDTMTBM
MTBFAO
+=
MTTRMTBF
MTBFAO
+=
MTBM = mean time between
maintenance
MTD = mean down time
MTBF = mean time between
failures
MTTR = mean time to repair
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Chapter 14Chapter 14
Building and Sustaining
Total Quality
Organizations
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Why Adopt TQ Philosophy?
• Reaction to competitive threat to
profitable survival
• An opportunity to improve
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Selling the TQ Concept
1. Learn to think like top executives
2. Position quality as a way to address priorities of stakeholders
3. Align objectives with those of senior management
4. Make arguments quantitative
5. Make the first pitch to someone likely to be sympathetic
6. Focus on getting an early
win, even if it is small
7. Ensure that efforts won’t
be undercut by corporate
accounting principles
8. Develop allies, both
internal and external
9. Develop metrics for return
on quality
10. Never stop selling quality
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Corporate Culture and Change
• Corporate culture is a company’s value system and its collection of guiding principles
• Cultural values often seen in mission and vision statements
• Culture reflected by management policies and actions
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Baldrige Core Values
and Concepts
• Visionary leadership
• Customer-driven excellence
• Organizational and personal learning
• Valuing employees and partners
• Agility
• Managing for innovation
• Focus on the future
• Management by fact
• Public responsibility
and citizenship
• Focus on results and
creating value
• Systems perspective
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TQ vs. Traditional Management
• Organizational structures
• Role of people
• Definition of quality
• Goals and objectives
• Knowledge
• Management systems
• Reward systems
• Management’s role
• Union-management relations
• Teamwork
• Supplier relationships
• Control
• Customers
• Responsibility
• Motivation
• Competition
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Cultural Change
• Change can be accomplished, but it is difficult
• Imposed change will be resisted
• Full cooperation, commitment, and participation
by all levels of management is essential
• Change takes time
• You might not get positive results at first
• Change might go in unintended directions
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Common Mistakes
in TQ Implementation (1 of 3)
• TQ regarded as a “program”
• Short-term results are not obtained
• Process not driven by focus on customer, connection to strategic business issues, and support from senior management
• Structural elements block change
• Goals set too low
• “Command and control” organizational culture
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Common Mistakes
in TQ Implementation (2 of 3)
• Training not properly addressed
• Focus on products, not processes
• Little real empowerment is given
• Organization too successful and complacent
• Organization fails to address fundamental questions
• Senior management not personally and visibly committed
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Common Mistakes
in TQ Implementation (3 of 3)
• Overemphasis on teams for cross-functional
problems
• Employees operate under belief that more data are
always desirable
• Management fails to recognize that quality
improvement is personal responsibility
• Organization does not see itself as collection of
interrelated processes
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Building on Best Practices
• Universal best practices
– Cycle time analysis
– Process value analysis
– Process simplification
– Strategic planning
– Formal supplier certification programs
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Best Practices:
Infrastructure Design (1 of 3)
• Low performers
– process management fundamentals
– customer response
– training and teamwork
– benchmarking competitors
– cost reduction
– rewards for teamwork and quality
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Best Practices:
Infrastructure Design (2 of 3)
• Medium performers
– use customer input and market research
– select suppliers by quality
– flexibility and cycle time reduction
– compensation tied to quality and teamwork
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Best Practices:
Infrastructure Design (3 of 3)
• High performers
– self-managed and cross-functional teams
– strategic partnerships
– benchmarking world-class companies
– senior management compensation tied to
quality
– rapid response
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Self Assessment: Basic Elements
• Management involvement and leadership
• Product and process design
• Product control
• Customer and supplier communications
• Quality improvement
• Employee participation
• Education and training
• Quality information
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Implementing Total Quality:
Key Players
• Senior management
• Middle management
• Workforce
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Sustaining the Quality Organization
• View quality as a journey (“Race without a finish line”)
• Recognize that success takes time
• Create a “learning organization”– Planning
– Execution of plans
– Assessment of progress
– Revision of plans based on assessment findings
• Use Baldrige assessment and feedback
• Share internal best practices (internal benchmarking)