A Quality Strategy Karachi September, 2010 Alan Power [email protected] In Association with Octara.

A Quality Strategy

Karachi

September, 2010

Alan [email protected]

In Association with Octara

My Personal History

• Management Development & Training (ICL & TSB)• Mainstream Personnel (UDT & Mortgage Express)• General Management (TSB Homeloans)• Quality Management (Lloyds Banking Group)

– EFQM Assessor

– BQF Assessor

– Jury Member, Quality Scotland Foundation & Excellence South West

TSB HomeloansSome Successes

• Established as a centralised home loans operations in 1990

• Loan assets increased from £3.4 billion to £10 billion by 1996

• Productivity improved by 127%• Staff morale improved to 97% satisfaction• Customer satisfaction averaged 98.6%• Winner of the Quality Scotland Foundation Award

for Business Excellence 1996

19 Apr 2023 [email protected]

Agenda

QUALITY

• What is it?

• Does it work?

• Is it here to stay?

• What are the key components?

• Where do I start?

• How do I access support?

Quality

What is it?

Does it work?

Porsche – approach to quality

1991 - 1992 :Porsche were in a Crisis Situation

• 1990 profit of $10 million on sales of $3.1 Billion

• 1992 loss of $154 million on sales of $1.6 billion

• Sales not looking to rebound in the short term 1-2 years

• Company set to go under within 18 months

Porsche - Actions Taken

• Appoint the first CEO from outside of the Porsche family

• Wendelin Wiedeking came from auto parts industry

• Wiedeking makes the decision to use external consultants

• Toyota’s consulting wing is engaged

Paint / Body I & R

5-10 years skilled

Mechanical I & R

5 – 10 years skilled

Final I & R 20 years skilled

I = Inspectors R = Re-workers

Pre-Delivery

Inspection Centre 5 – 15 years

Pre-Delivery

Inspection Centre 5 – 15 years

CUSTOMERCUSTOMER

General I & R3-5 years

skilled

General I & R3-5 years

skilled

Production line worker 0-3 years






PRODUCTION LINE

Toyota’s General Observations

• The product that was delivered to the customer was a “quality product” (though still had much higher warranty costs than Toyota and Lexus)

• The change / revolution they needed was in the operational areas

• They needed to move from an industry of “checking” to a right first time process philosophy

Toyota’s Operational Observations

• Porsche had never in the history of the company built a car first time fault free

• Porsche “plan” to get it “wrong” every day• They had, built a system of checking and skilled

inspectors to find the faults• Built a system and skilled workforce to re-work

the faults• Developed checking and reworking in to the

career path for their “high performance” staff

Comparison with Toyota

• Checking and reworking had become an industry in Porsche

• All the highly skilled staff were removed from the actual process

• In Toyota they plan to get it right

• They get it right and self inspect early in the process not at the end

• The highly skilled guys are in the process “coaching and improving.”

Operational Performance: Post Lean

1991 1995 1997

Hours to build 911 with no engineering changes

120 hrs 76 hrs 45 hrs

Average defects per vehicle at end of line

105 45 25

Full cycle time from welding to finished car

6 wks 5 days 3 days

Work in progress inventories 17 days

4.2 days

3.2 days

Directors, managers, supervisors in Porsche ops

328 226 212

Summary

• Porsche took circa 30% out of their operational costs over 3 years

• 1993 loss of DM 239 million on sales of DM 1.9 billion• 1995 profit of DM 2 million on sales DM 2.6 billion• Productivity doubled in the period while defects

dropped by 75%• July 27 1994 a Carrera rolled off the production line

error free at final inspection, the first time in the companies 44 year history.

Is it here to stay?

Business Excellence/Quality Management

A short history


Developments in Japan

• Marshall Aid• Dr W Edwards

Deming• The ‘vital’ visit of

1950• The Deming Prize for

industry• The Deming Prize for

schools.19 Apr 2023 [email protected]

What are the key components?

The Global Response

• Excellence & Self-Assessment– Baldridge– EFQM

• Lean Thinking– Identifying & eliminating waste

• Six Sigma– Motorola

European Excellence Model

People

Partnerships& Resources

Policy &Strategy

Leadership

Enablers

PeopleResults

SocietyResults

CustomerResults

KeyPerformance

Results

Results

Processes

Innovation and Learning19 Apr 2023 [email protected]

•identifying communication needs•developing communication policies,strategies and plans based on need•developing and using a variety ofcommunication channels•sharing best practiceand knowledge

How to use the model

People

Partnerships & Resources

Policy &Strategy

Leadership

PeopleResults

SocietyResults

CustomerResults

KeyPerformance

ResultsProcesses

…planned, managed and improved

…identified, developed and sustained

... involved and empowered

…and the organisation have a dialogue

…rewarded, recognised and cared for

Lean Thinking

The Toyota Production System

(TPS)

Lean Thinking?

http://www.amazon.com/Lean-Thinking-Corporation-Revised-Updated/dp/0743249275/ref=sr_1_1?ie=UTF8&s=books&qid=1257376817&sr=8-1

http://www.amazon.com/Machine-That-Changed-World-Revolutionizing/dp/0743299795/ref=pd_sim_b_1

Exercise

Pass the ball

exercise

The 7 Wastes‘TIMWOOD’

• The waste of Transporting

• The waste of Unnecessary Inventory

• The waste of Unnecessary Motions

• The waste of Waiting

• The waste of Overproduction

• The waste of Over Processing

• The waste of Defects28 August, 2008 [email protected]

Waste of Talent

EffortEffort

PerformancePerformance

HeroesFoot

Soldiers

WalkingWounded

Terrorists

++----

++

(well poisoners)

19 Apr 2023

Quality Control

Does is it add value or is it a WASTE of time?


Inspection Exercise

How many “f” s in the following text?

Piccadilly “Number One”

cigarettes are made from the finest

rich matured Virginia leaf, grown

in districts famous for the smoothness

and flavour of their tobaccos.

THE HOUSE OF PICCADILLY, LONDON

19 Apr 2023

exercise

[email protected]

Quality Control


5 Key PrinciplesThere are five key principles that we focus upon with Lean:

1. Specify value

2. Identify the value stream

3. Create Flow

4. Create Pull

5. Strive for Perfection

People, Motivation, Workload & Culture

GEMBAThe point where value is created

Specifying value

To specify Value, you need to ask:

• Who is the customer?• What do they value in the service or

product that you provide?• What influences their ‘buying decision’?

The cost of value

Alternatively - ask yourself the question:

“Is this an activity that a customer would be prepared to pay for?”

To identify value and non value you need to understand the process

• Follow a product or service from beginning to end and ‘map’ it

• Identify those actions that add value and those that don’t

• Redesign the process

• Standardise and document.

Activity Map

Swim Lane Map

5 days

10 days

4

Cross-Functional Map

Value Stream Map

Branch

Branch Interview

room

CICACSearch

CICACreview

BusinessCentre

ART Qualitative

check

NSUOpen

accountNSU Order

New cards etcCICAC

5 mins

10 mins

5 mins

1 day

2 mins 18 mins

1 day

25 mins

1 day

15 mins

1 day

15 mins 5 mins

1 day 1 day

3 mins

3days

Customer

Branch allocates interview room / time

and commences A/C opening paperwork

Branch initiates Co. house search

WIP50

Units

WIP20

Units

20% Failure rate – 5 day potential wait 8% failure rate – 4 day potential wait

Sits in ‘in tray’

Business centreCompletes A/C

Openingpaperwork

Batch 1

Batch 1 Batch 1 Batch 1 Batch 1 Batch 1 Batch 1 Batch 1

Batch 1

How long does it take to open a Business Account?

Waitfor

Service

Total Lead Time (ideal world) – 12 DaysTotal Lead Time (actual) – 25+ daysTotal Processing Time – 1hour 28 minutes

5% complianceCheck, archive

CICAC initiate

search

3 days

CICAC reviewsearch

by TNTby TNTby TNTby TNT

WIP25

Units

System cannotgenerate

collateral on thesame day

by TNT

Customer receives Card 3 days

later

1.74% value added !

Types of process maps


Supplier Input Process Output Customer

Process Name Process Purpose

Step 1: the basic processes/work stations

The process starts in the top left with the supplier and ends in the top right with the customer.The process has three main steps which are placed in between running from left to right.

Step 2: Flow type and inventory

The work is pushed through the process at every step. You have noticed that inventory is building up in the warehouse awaiting transport between Site A and Site B and between process steps at Site B.

Step 3: information flow

Step 4: quantification and measures

Step 5: improvement opportunities

Future state map

But before you start, clean up the mess!

Workplace Organisation

The 5Ss

What a mess!

28 August, 2008 [email protected]

Find the file!


Is everything I need here?

Find the order!

47

Think Break

19 Apr 2023

Where is the frying pan?

[email protected]

The 5SsOr the 5Cs and the meaning in English

• Seiri – sort – cleanup

• Setion – set in order - configure, orderliness or organisation

• Seiso – shine – clean and check – maintenance

• Seiketsu – standardise – conformity

• Shitsuke – sustain – custom & practice – training and routine


Visual Control

15-51

Visual Controls

Six Sigma

Variation

Normal distribution

57 60 63 66 69 72 75 78 81

Height of adult males (inches)


X-bar R chartActivity Characteristic Standard Sample size and frequency

Loan applications Working days to process Maximum 5 Five per day

Distribution of X

frequency

12 1

r 11 0

ab 10 1

-X 9 3

8 6

na 7 6

eM 6 10

5 16

4 22

3 18

2 14

1 3

Total 100

Remarks

Re-calculate excluding 20 June

X-bar-bar = 4.36 R-bar = 4.37

R

UCLx-bar = 6.88 LCLx-bar = 1.84 sigma hat = 1.88

eg Standard - X-bar-bar 5.5 - 4.36

n Sigma = ----------------------------- + 1.5 = ------------ + 1.5 = 2.1

a sigma hat

R

Yield =

Standard - X-bar-bar 5.5 - 4.36

Cpk = ----------------------------- = ------------ = 0.20

3 sigma hat

X-bar-bar = R-bar = sigma hat = R-bar / d2 =

UCLx-bar = X-bar-bar + A2 R-bar =

LCLx-bar = X-bar-bar - A2 R-bar =

Constants

n A2 D3 D4 d2

2 1.880 N / A 3.268 1.1283 1.023 N / A 2.574 1.6934 0.729 N / A 2.282 2.0595 0.577 N / A 2.114 2.326

Stan Bennett Sheet number: LA WD 01 06Process Improvement Chart X-bar/R Process owner: Tony Bendell Chart owner:

Fri 8

9.87.206 4 5

Mon 11

Tue 12

Wed 13

Thu 14

June 2001

UCLR = 9.2

X1 6

Tue 19

Wed 20

Mon 4

Tue 5Wed

6Thu

7

8 8 4

X4

X3

34 15

7

20

7 32 10 2 3

25

X5

Total X

X-bar 4.4

22

1 5 4

6.8

R

4416

21

4.2

5

X2

Wed 27

Thu 28

Fri 29

6

Thu 21

Fri 22

Mon 25

Tue 26

Fri 15

Mon 18

6 3 9 34 4 2 2 4 2 8 3 4 3 4 3 5 34 7 3 4 4 7 5 2 7 2 1 8 4 4 3

4 4 6 5 39

4 12 6 22 3 5 25 93 5 54 6 6 5 5 8 2 3 5 2

5 3 6 25 3 3 3 4 7 4 5 4 5 2 8

4.2 4.2 3.84.6 3.2 5.6 4.67.6

18 24 19 27 19 19 38 21 21 1923 16 28 23

3.0 4.0 5.0 3.6 4.8 3.8 5.4 3.8 3.8

7 6 2 4 4 2 7 3 3 3 4 10 5 4 5 7 3 3 6

2.004.654.52

LCLR = D3 R-bar = N / A

UCLR = D4 R-bar =

1.84

1.88

3 x 1.88

72.6%

0

1

2

3

4

5

6

7

8

9

0

2

4

6

8

10

12

Wednesday 20 J une.

12 day case.

Papers misfiled.

Filing codes clarified.

Clerks re- instructed.

Calculating SigmaExample

1. Number of units processed N = 500

2. Total number of defects D = 57

3. Number of opportunities O = 3

4. Defect per million opportunities

1,000,000 x {57/(500 x 3)} = 38,000

5. Look up table Sigma = 3.3


Aim: To tackle problems using a method with a structured approach.

Output: A logical definition of a problem & implementation of solutions using root cause analysis.

Method:

Define, Measure, Analyse, Improve & Control (DMAIC)

Refer to p;rocessRefer to p;rocess

Define Measure Analyse Improve Control

Review Charter

Implement mistake proofing

Develop potentialsolutions

Identify potential rootcauses

Value StreamMap for deeperunderstanding

Validate Voice Of Customer & Voice of Business

Validate financial benefits

Identify highlevel Process Map (SIPOC)

Create communicationplan

Select & launchteam

Complete Improvement plan

Validate problem statement & goals

Implement Solution & Ongoing processmeasurements

Identify waysto apply learning (PIR)

Transfer control& monitoring toProcess Owner

Develop SOPs, training plan &process controls

Develop “To-Be”Value StreamMaps

Develop & Implement Pilotsolution

Confirm attainment of improvement goals

Develop full-scaleimplementationplan

Evaluate, select,& optimise best solutions

Confirm root cause effect onoutput

Estimate impactof root causeson key outputs

Prioritise rootcauses

Reduce list ofpotential rootcauses

DevelopOperationalDefinitions

Develop data collection plan

Validatemeasurementsystem

Collect baselinedata

Determine processcapability

Identify keyinput, process &output metrics

Agree Scope

Revalidate problem statement& goals

[email protected]

What is a ‘Belt’?

• Yellow Belt – a process worker who has the skills to support a 6 Sigma project within the scope of his own role

• Green Belt – a practitioner who may work full-time on a 6 Sigma project

• Black Belt – a highly skilled practitioner who will work full-time leading 6 Sigma projects

• Master Black Belt – one who trains other Black Belts.

[email protected]

Improving the Transformation Process

• Lean manufacturing– Elimination of waste (anything that does not add value to the final service, as recognised

by the customer) in all operational areas including customer relations, product design and supplier networks

– Aimed at waste, cycle time, reduction of work in progress, standardisation, cost reduction, flexibility and responsiveness

– A bias to action

• Six sigma– Improvement in the capability of business process to reduce variation in the final service

e.g. time and quality (often measured by errors)

– Aimed at complex problems, process capability, stability

– A bias to analysis

• Lean six sigma– A mix of both methodologies to establish throughout the organisation a set of rules and

procedures that work to continuously generate results


Where does it fit strategically?

Continuous Improvement – Lean &Kaizen

Top down – Dubai QASelf assessment

CultureCulture

Process Excellence – Lean & 6 Sigma

Quality Management

The Human Side of the Enterprise

People

• Measuring and monitoring employee competence

• Measuring and monitoring organisational culture

• Measuring and monitoring employee commitment.


Measuring and monitoring employee competence

Name: Alan Power0 25 50 75 100

COMPETENCY No Knowledge Appreciation Work under Experienced Expert - ScoreSupervision Worker Can teach

Applications Administration 75

Underwriting 50

Completions Processing 0

Further Advances 0

Telephony 50

Personal Index 35

Name: Paula Coniglio0 25 50 75 100

COMPETENCY No Knowledge Appreciation Work under Experienced Expert - Supervision Worker Can teach

Applications Administration 100

Underwriting 50

Completions Processing 25

Further Advances 25

Telephony 75

Personal Index 55Company Index 45

Organisational Culture Inventory

1

Conventional: rule bound conservative, bureaucratic

Avoidance: punish mistakes, shift blame, avoid taking risks

Oppositional: critical of ideas, confrontational

Power: non-participative control, expert compliance

Perfectionistic: preoccupied with detail, use detail to block new ideas or to beat others

The model reflects leadership styles in three groupings aggressive/defensive, passive/defensive and constructive.

Self-actualising: value creativity, quality and individual growth

Humanistic-Encouraging: involvement and participation

Affiliative: constructive and collaborative relations

Approval: wanting to be liked, telling boss only what he wants to hear

Dependent: hierarchical, do what told and refer upwards

Achievement: value setting and achieving challenging but realistic goals

Competitive: win-lose, besting, working against each other to win

How OCI is used in Lloyds Banking Group

• Too much - Aggressive/Defensive

– A competitive, win-lose organisation

– People oppose new ideas from others

– Use detail to challenge or block others

– Things get done through power & control.

• About average - Passive/Defensive

– A lack of self-determination

– Sense of powerlessness

– People refer decisions upward

– People avoid taking risks and making mistakes

– Rule bound & bureaucratic organisation

• Not enough - Constructive Styles

– Achievement led

– Value in quality, creativity, growth and relationship behaviours

– Driver to be a value based business

5 4 3 2 1

Fast to change Slow and methodical

Entrepreneurial Stable steady

Proactive Reactive

Empowering Controlling

Democratic Autocratic

Open Secretive

Creative Traditional

19 Apr 2023 [email protected] 65

A Simple Approach to Culture AuditsHow Is It in Your Organisation?

Commitment

Employee Engagement

Engaged employees are…..

• More productive (by up to 43%)

• More profitable (by up to 200%)

• More customer focussed

• Safer

• Less likely to leave.


Yet, a Gallup survey shows…..

• Less than a third (29%) of employees are engaged

• More than half (54%) of employees are not engaged

• While 17% of employees are actively disengaged!


Lean Thinking

Productivity Measurement

Why measure productivity?

Without productivity measures how can you:• Know what to expect from your people?

• Compare the performance of teams and individuals?

• Make delivery promises?

• Plan your day – work allocation and crewing?

• Assess the impact of performance improvement initiatives?

• Carry out forecasting and planning?

• Cope with peaks and troughs of business?.

• Output per paid hour– good output ‘v’ paid hours

• Effectiveness– time spent processing ‘v’ time at work

• Efficiency– ‘actual’ time taken to produce good output compared to

‘expected’ time (i.e. the ‘should take’ time)

What can we measured?

Effectiveness =54

91x 100 = 59%

Calculating Effectiveness

Time spent walking in the right direction – doing the right thing

Effectiveness

Processing Time

54

Meetings & Training20

Other 17

Time spent in the office = 91

Processing Time

Time spent doing the right

thing

Efficiency =42

54

x 100 = 78%

Calculating Efficiency

Walking quickly

Efficiency

Output Produced

Useful‘Output’ produced

(hrs)

42Processing

Time54Time spent ‘processing’

42

126x 100 = 33%

Calculating Output per Paid Hour

Value for Money

Output per Paid

Hour

or

Processing Time54

Meetings & Training20

Other 17Processing Time Paid For 126 hrs

Absence 35

Value delivered

Output Produced 42

The Complexity of Performance

P = A x M x O

Quality ManagementCustomer Feedback

Net Promoter Score

&

Complaints Management

The Net Promoter Score


The "Net Promoter Score"

In the following test, we will go through ten surveys based on the "Net Promoter Net Promoter ScoreScore" paradigm.

The selected criterion is a zero-to-ten scale, according to the degree of agreement to the selected unique statement:

"Would you recommend Brand X to a friend or a colleague?" from 0 ="not at all likely" to 10="extremely likely".

"Would you recommend Brand X to a friend or a colleague?"

Net Promoter Score

A company’s net promoter score is defined as the percentage of customers who are promoters of the company or brand, minus the percentage who are detractors. Reichheld (2003) has observed this measure to correlate with a company’s rate of growth.

How likely are you to recommend this product/service/company to a friend or colleague?

Extremely Likely

Neutral Extremely Unlikely

Total Feedback

• The voice of the process

• The voice of your employees

• The voice of your customer.

Quality Management

A strategic approach

What Business are you in?

MISSION

How will you beat the

competition?

STRATEGY

What do you need to

do to pursue your strategy?

Business Processes

How will you organise

your processes?

Operating Model

How will you

monitor performance?

SCORECARDSCORECARDSCORECARD

How will you conduct

your business?

Stakeholders

What beliefs do you hold

about your stakeholders?

Beliefs

Prioritise Beliefs

What are the

opportunities & threats?

PEST Analysis

What are

your strengths?

To whom do your

values & ethics apply?

Organisational Capability

What could you

become in the future?

VISION

What needs to

be done to deliver the vision?

3-5 Year Plan

How will you action

your plan?

Policy Deployment

How will you

ensure compliance?

People Processes

VALUES ETHICS

How will beliefs guide people’s actions?

Making the time to understand

I don’t want to see any crazy salesmen - Can’t you seeI’ve got a battle to fight

So, what’s next for you?

What should be your approach?

&

How can Octara help & support?

A Quality Strategy Karachi September, 2010 Alan Power [email protected] In Association with Octara.

Documents

Transcript of A Quality Strategy Karachi September, 2010 Alan Power [email protected] In Association with Octara.