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MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1
Chapter 3Chapter 3
Philosophies
and
Frameworks
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 2
Leaders in the Quality Revolution
W. Edwards DemingJoseph M. JuranPhilip B. CrosbyArmand V. FeigenbaumKaoru IshikawaGenichi Taguchi
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 3
Who’s Who?
ab
c
Deming ____
Juran ____
Crosby ____
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 4
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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 5
Key Idea
The Deming philosophy focuses on continual improvements in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of top management.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 6
Deming’s System of Profound Knowledge
Appreciation for a systemUnderstanding variationTheory of knowledgePsychology
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 7
Systems
Most organizational processes are cross-functional
Parts of a system must work togetherEvery system must have a purposeManagement must optimize the
system as a whole
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 8
Key Idea
The aim of any system should be for all stakeholders—stockholders, employees, customers, community, and the environment—to benefit over the long term.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 9
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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 10
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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 11
Psychology
People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful
Fear is demotivating Managers should develop pride and joy
in work
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 12
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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 13
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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 14
Juran’s Quality Trilogy
Quality planningQuality controlQuality improvement
www.juran.com
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 15
Key Idea
Juran proposed a simple definition of quality: “fitness for use.” This definition of quality suggests that it should be viewed from both external and internal perspectives; that is, quality is related to “(1) product performance that results in customer satisfaction; (2) freedom from product deficiencies, which avoids customer dissatisfaction.”
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 16
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.”
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 17
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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 18
A.V. FeigenbaumThree 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 19
Kaoru Ishikawa Instrumental in developing Japanese
quality strategy Influenced participative approaches
involving all workersAdvocated the use of simple visual tools
and statistical techniques
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 20
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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 21
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 American companies
Malcolm Baldrige, former U.S. Secretary of Commerce
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 22
Criteria for Performance Excellence
Leadership Strategic Planning Customer and Market Focus Measurement, Analysis, and
Knowledge Management Human Resource Focus Process Management Business Results
Baldrige Award trophy
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 23
The Baldrige Framework –A Systems Perspective
4Measurement, Analysis, and Knowledge Management
5Human
Resource Focus
3Customer &
Market Focus
2Strategic Planning
1Leadership
6Process
Management
Organizational Profile:
Environment, Relationships, and Challenges
7BusinessResults
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 24
Key Idea
The Baldrige criteria define both an integrated infrastructure and a set of fundamental practices for a high-performance management system.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 25
Criteria Evolution (1 of 2)
From quality assurance and strategic quality planning to a focus on process management and overall strategic planning
From a focus on current customers to a focus on current and future customers and markets
From human resource utilization to human resource development and management
From supplier quality to supplier partnerships
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 26
Criteria Evolution (2 of 2)
From individual quality improvement activities to cycles of evaluation and improvement in all key areas
From data analysis of quality efforts to an aggregate, integrated organizational level review of key company data
From results that focus on limited financial performance to a focus on a composite of business results, including customer satisfaction and financial, product, service, and strategic performance
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 27
Key Idea
Approaches that organizations use to address the Baldrige criteria requirements need not be formal or complex, and can easily be implemented by small businesses.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 28
Receive Applications
Judges Select for Consensus Review?
Judges Select forSite Visit Review?
Stage 1Independent Review
Stage 2Consensus Review
Stage 3Site Visit Review
Stage 4Judges 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 29
Self Assessment
A primary goal of the Baldrige 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 recipient
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 30
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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 31
Other Quality AwardsEuropean Quality AwardCanadian Awards for Business
ExcellenceAustralian Business Excellence AwardChinese National Quality Award (New)
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 32
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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 33
Key Idea
ISO 9000 defines quality system standards, based on the premise that certain generic characteristics of management practices can be standardized, and that a well-designed, well-implemented, and carefully managed quality system provides confidence that the out-puts will meet customer expectations and requirements.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 34
Objectives of ISO Standards 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 system requirements are being fulfilled
Provide confidence to customers and other stakeholders that quality requirements are being achieved
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 35
Structure of ISO 9000 Standards
21 elements organized into four major sections: Management Responsibility Resource Management Product Realization Measurement, Analysis, and Improvement
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 36
ISO 9000:2000 Quality Management Principles
1. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 37
Key Idea
ISO 9000 provides a set of good basic practices for initiating a quality system, and is an excellent starting point for companies with no formal quality assurance program.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 38
Six SigmaBased on a statistical measure that
equates to 3.4 or fewer errors or defects per million opportunities
Pioneered by Motorola in the mid-1980s and popularized by the success of General Electric
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 39
Key Idea
Six Sigma can be described as a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and a clear financial return for the organization.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 40
Key Concepts of Six Sigma (1 of 2)
Think in terms of key business processes, customer requirements, and overall strategic objectives.
Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtaining resources.
Emphasize such quantifiable measures as defects per million opportunities (dpmo) that can be applied to all parts of an organization
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 41
Key Concepts of Six Sigma (2 of 2)
Ensure that appropriate metrics are identified early and focus on business results, thereby providing incentives and accountability.
Provide extensive training followed by project team deployment
Create highly qualified process improvement experts (“green belts,” “black belts,” and “master black belts”) who can apply improvement tools and lead teams.
Set stretch objectives for improvement.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 42
Key Idea
Although different, Baldrige and Six Sigma are highly compatible and can each have a place in the management system of a successful organization.