Critical Factors The Drive Success

Baldrige National Quality Program 2010

Critical Factors the Drive Success

Dave StoltzPresident, Louisiana Quality Foundation

Baldrige National Quality Program 2010Baldrige National Quality Program

The Path to Excellence andSome Path Building Tools

http://www.baldrige.nist.gov/Video/Getting_Results/index.html


Customer & Quality-Focused Performance

DM Petroleum Operations Company


“The Baldrige Award enjoys very broad, positive recognition among leaders in each of the Baldrige Award-eligible sectors. . . . More than 70 percent of leaders surveyed among Fortune 1000 companies said they are likely to use the Criteria for Performance Excellence.”

Booz Allen Hamilton

Results from using the Criteria:

• Better employee relations

• Higher productivity

• Greater customer loyalty

• Increased market share

• Improved profitability

The Baldrige Framework


Six Sigma concentrates on variationreduction by using statisticalmethods to lower process defectrates to less than 3.4 defects per million opportunities.

Six Sigma Methodologies:• DMAIC - define, measure, analyze, improve,

and control• DMADV - define, measure, analyze, design,

and verify

Six Sigma


Customer-defined value

Map and understand

value stream

Make value stream flow

Continuous process

improvement

Goals: • Increase productivity• Eliminate waste• Maximize resource utilization

Waste includes• Scrap • Rework • Inspection • Inventory• Queuing time • Transporting materials

or products • Redundant motion• Anything for which a

final customer would not want to pay

Lean is focused on the elimination of all nonvalue-adding activities and waste from an organization’s processes.


ISO 9001: 2008 A standards-based approach to managing an organization’s processes to consistently deliver products that meet customer requirements. The approach is based on registering a quality management system that complies with the standard.

• Implement processes

• Monitor / measure processes and products against objectives and requirements

• Set objectives and processes to deliver products that meet customer requirements

• Take action to improve

ACT PLAN

DOCHECK

QualityManagement

System


The Criteria for Performance Excellence emphasize• Continuous performance improvement • Innovation• Integration • Results• Sustainability

The Criteria for Performance Excellence focus on common requirements and are

• Nonprescriptive • Holistic• Inclusive• Adaptable• Integrative

The Baldrige Criteria

Baldrige National Quality Program 2010The Baldrige Criteria, Six Sigma, and Lean are complementary, not mutually exclusive. Many organizations use Baldrige to develop an overall performance map to identify areas that need improvement, and then they may use one or more of these tools to design operations or improve processes within the organization.

.


Six Sigma and LeanHow they relate to the seven Baldrige Criteria Categories


The Leadership Category

Baldrige, Six Sigma, and Lean all benefit from leaders who• Align financial and human resources• Communicate cultural norms • Encourage and provide resources• Solidify a culture of organizational excellence

Only Baldrige addresses the overall leadership system.


Strategic Planning Category• Six Sigma and Lean can be methodologies for

coordinating resource use toward organizational objectives identified using the Baldrige Criteria.

• Six Sigma provides tools for measuring progress.


Customer Focus Category

Lean environments aim for all process steps to be something for which the customer is willing to pay.

In Baldrige and Six Sigma, the voice of the customer is used to identify areas of needed improvement.

Customer-defined value

Quantification of customer needs is the key.

Satisfaction Determination

• Performance measures, and analyses

• Use feedback and analyses to improve

40

60

80

100

QUALITY

All Cust

omers BAR

SERVIC

E

All Cust

omers BAR

2001 2002 2003 2004 2005

Percent Satisfaction with Product, Service Attributes

BAR 2003BAR 2002

On Time Delivery

9 5

9 6

9 7

9 8

9 9

1 00

'01 '02 '03 '04 '05 '06 YTD

% O

n T

ime

SFF OTD BAR OTD

Non-egg Supplier Claims

0

1

2

3

Com

plai

nts

per M

illPo

unds

Pro

duce

d

YTD Avg.

'01 '02 '03 '04 '05 '06 Y TD

Map and understand value stream

Make value stream flow

Continuous process improvement


Measurement, Analysis, and Knowledge Management Category

Six Sigma is data-driven:• specific metrics • data collection• data analysis • control data

Baldrige measures and improves processes, business results, and overall organizational performance.

Lean measures, analyzes, and reduces• wait time• inventory • batches• process time• rework

ISO 9001 monitors and measures process performance.


Workforce Focus Category

Six Sigma, Lean, and ISO 9001 methodologies require • Leadership development • Training• Compensation alignment• Culture shift

Employee Engagement

85.6

70.2

79.9

59.656.7

50556065707580859095

100

2005 2006 2007 2008 2009


1 .8 5

1 .9

1 .9 5

2

2 .05

2 .1

2 .1 5

2 .2

Jan '02Jan '03

Mar '05

Process Avg Spec Target UCLLCL Upper Spec Limit Lower Spec Limit

Cpk=1.25 Cpk= 4.42

Process Management Category

Baldrige processes are interrelated and interdependent steps along the path to customer engagement and organizational sustainability.

Six Sigma, Lean, or ISO 9001 methodologies are used to• Generate standard operating procedures• Set specification and control limits• Identify explicit corrective actions• Optimize processes


Results CategorySix Sigma, Lean, and ISO 9001 are data-driven and results-oriented. Their use leads to tracking systems (control charts, scorecards, rolled throughput yield charts, etc.) and results monitoring in functional business areas where the methodologies are applied.

Baldrige addresses all results—process, leadership, product, customer, financial, and workforce.


The Baldrige Criteria focus on business results and organizational improvement and innovation systems. Six Sigma and Lean methodologies drive waste and inefficiencies out of processes that users of the Baldrige Criteria identify for improvement. Six Sigma, Lean, and ISO 9001 focus on organizational improvement and innovation processes.

Summary


Questions

Critical Factors The Drive Success

Documents

Transcript of Critical Factors The Drive Success