Definition: Total Quality...

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Definition: Total Quality Management

� Total Quality Management (TQ, QM or TQM) and Six Sigma (6σ) are sweeping “culture change” efforts to position a company for greater customer satisfaction, profitability and competitiveness.

� TQM may be defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer.

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Quality Descriptions

Design Quality (Features)

vs.

Conformance Quality

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Conformance Quality

• Meeting Our Customer’s Requirements

• Doing (the Right) Things Right the First Time;

Freedom from Failure (Defects)

• Consistency (Reduction in Variation)

• Continuous Improvement

• Quality in Everything We Do

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Quality Management History

�Frederick Winslow Taylor wrote Principles of Scientific Management in 1911

�Walter A. Shewhart used statistics in quality control and inspection, and showed

that productivity improves when variation is reduced (1924); wrote Economic

Control of Manufactured Product in 1931

�W. Edwards Deming and Joseph M. Juran, students of Shewhart, went to Japan in

1950; began transformation from “shoddy” to “world class” goods

�In 1960, Dr. K. Ishikawa formalized “quality circles” - the use of small groups to

eliminate variation and improve processes

� In the late ‘70’s and early 80’s:

- Deming returned from Japan to write Out of the Crisis,

and began his famous 4-day seminars in the United States

- Phil Crosby wrote Quality is Free

- NBC ran “If Japan can do it, why can’t we?”

- Motorola began 6 Sigma

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“On the assembly line at the Ford Motor Company in 1923, most of

the workers producing Model T’s were immigrants and could not

speak English. Many were also illiterate. Workers learned their

trade by modeling the actions of other workers. They were unable

to plan, problem-solve, and make decisions. As a result, the Taylor

scientific school of management flourished, and MBAs and

industrial engineers were invented to do this work. Today, however,

the workforce is educated. Workers know what is needed to

improve their jobs, and companies that do not tap into this

significant source of knowledge will truly be at a competitive

disadvantage.”

Joseph M. Juran (1991)

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“Knowledge-worker productivity is the biggest of the

21st-century management challenges. In the developed

countries, it is their first survival requirement. In no

other way can the developed countries hope to maintain

themselves, let alone to maintain their leadership and their standards of living.”

Peter F. Drucker (1999)

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Quality Management History Deming’s 14 Points

1. Create constancy of purpose for improvement

2. Adopt a new philosophy

3. Cease dependence on mass inspection

4. Do not award business on price alone

5. Work continually on the system of production and service

6. Institute Modern methods of training

7. Institute modern methods of supervision of workers

8. Drive out fear

9. Break down barriers between departments

10. Eliminate slogans, exhortations, and targets for the work force

11. Eliminate numerical quotas

12. Remove barriers preventing pride of workmanship

13. Institute a vigorous program of education and retraining

14. Take action to accomplish the transformation

A Quality Management System Is…

� A belief in the employee’s ability to solve problems

� A belief that people doing the work are best able to improve it

� A belief that everyone is responsible for quality

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Deming’s Concept of “Profound Knowledge”

� Understanding (and appreciation) of Systems

- optimizing sub-systems sub-optimizes the total system

- the majority of defects come from systems, the responsibility of

management (e.g., machines not in good order, defective material)

� Knowledge of Statistics (variation, capability, uncertainty in data, etc.)

- to identify where problems are, and point managers and workers

toward solutions

� Knowledge of Psychology (Motivation)

- people are afraid of failing and not being recognized, so they fear

how data will be used against them

� Theory of Knowledge

- understanding that management in any form is a prediction, and is

based on assumptions

Elements for Success

� Management Support/Involvement

� Mission Statement

� Proper Planning

� Customer and Bottom Line Focus

� Measurement

� Empowerment/Shared Leadership

� Teamwork/Effective Meetings

� Continuous Process Improvement

� Dedicated Resources/Training

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Benchmarking

1. Identify those processes needing improvement.

2. Identify a firm that is the world leader in performing the process (Library & WWW).

3. Contact the managers of that company and make a personal visit to interview managers and workers.

4. Analyze data

Baldrige Award Criteria Framework

Organizational Profile: Environment, Relationships, and Challenges

1

Leadership

2

Strategic

Planning

3

Customer and

Market Focus

5 Human Resource Development

& Management 7

Business

Results

6

Process

Management

Information, Analysis, and Knowledge Management


Malcolm Baldrige National Quality Award (2004)

1.0 Leadership (120 points)

2.0 Strategic Planning (85 points)

3.0 Customer and Market Focus (85 points)

4.0 Information and Analysis (90 points)

5.0 Human Resource Focus (85 Points)

6.0 Process Management (85 points)

7.0 Business Results (450 points)


Categories for the Baldrige Award

� Manufacturing companies or subsidiaries that: � produce and sell manufactured products or manufacturing processes or

� produce agricultural, mining, or construction products.

� Service companies or subsidiaries that sell service

� Small businesses � Education Institutions � Health Care Organizations � Non-Profit (new)


Characteristics of a Baldrige Award Winner

� The companies formulated a vision of quality and how they would achieve it.

� Senior management was actively involved.

� Companies carefully planned and organized their quality effort to insure effective

initiation.

� They vigorously controlled the overall process.

� Studies have shown MBA Winners’ success.


ISO 9000

� Series of standards agreed upon by the International Organization for Standardization(ISO)

� Adopted in 1987

� More than 100 countries

� A prerequisite for global competition?

� ISO 9000 directs you to:

� document what you do and then do as you documented.


ISO 9000 Series

� 9001

� Model for Quality Assurance in Design, Production Installation, and Servicing.

� 9002

� Model for Quality Assurance in Production and Installation

� 9003

� Model for Quality Assurance in Final Inspection Test


Three Forms of Certification

1. First party: A firm audits itself against ISO 9000 standards.

2. Second party: A customer audits its supplier.

3. Third party: A "qualified" national or international standards or certifying agency serves as auditor.


ISO 9000 versus the Baldrige Award

� Which should we pursue first?

� What are the differences between the two?

� Do you have to be ISO 9000 certified before going for the Baldrige Award?


ISO 9000 versus the Baldrige Award

Baldrige

ISO 9000

QS 9000

Evans and Lindsay The Management and Control of Quality, Southwestern Books, p536.


Costs of Quality: Categories

� Appraisal costs

� Prevention costs

� Internal failure costs

� External failure costs


The 1-10-100 Rule

1

10

100

•••• Defects caught at their source cost the organization $1.

•••• Defects caught outside of the source department but within the

organization cost $10.

•••• Defects that reach the external customer cost $100!


Cost of Poor Quality Category Examples

Failure – Costs – Internal Prevention Costs Re-shipping Quality Administration Unnecessary Travel Time Quality Planning Re-picking/Picking Quality Systems Design Unpacking/Storing Returns Calibration and Maintenance Re-order Time Production/Inspection Equipment Crediting Time Vendor Assessment Quality Training

Failure Costs – External Appraisal Costs Loss of Sales Incoming Test and Inspection Complaints In-Process Inspection Returns Final Inspection Warranty Claims Sampling Procedures

Quality Audits


COPQ Projections

$

Appraisal Costs

External Failure Costs

Internal Failure Costs

Prevention Costs

$ Saved

Total Cost Using a COPQ

System

Total Cost Without Using

A COPQ System

Months


Process Flow Chart No,

Continue;

Buffer:Material

Received from

Supplier

Inspect

Material for

Defects Defects

found?

Return to

Supplier for

Credit

Yes

Can be used to find

quality problems.

Can be used to find

quality problems.


Input-Output Analysis

Suppliers Inputs Sub-

Processes Outputs Customers

S C O P I

Measures

From Flowchart


Example SIPOC - Specifying Equipment Selection and Installation Procedures at Coca-Cola USA

Suppliers

Customers

Coca-Cola Fountain

Outputs

Equipment Selection Guide

Equipment Sales Manuals

Technology Cost/ Benefit Matrix

Installation Guidelines

Installation Time Standards

Installation Rating System

Installation Design Guidelines

Inputs

Technical Information

Technical Questions

Customer Input

Process

Developing Installation Cost Reduction Programs

Developing Equipment Selection Policies and Procedures

Designing Installation Policies and Procedures

Customers

Burger King

McDonald’s

Prestige

Coca-Cola Fountain

Equipment Suppliers

Measures

Number of Entities Using Guidelines

Installation Audit Ratings

Survey of Users Effectively Using Selection Guidelines


Pareto Analysis

80% of the

problems

may be

attributed to

20% of the

causes. Assy.

Instruct.

Fre

qu

en

cy

Design Purch. Training

Other


Run Chart

0.44

0.46

0.48

0.5

0.52

0.54

0.56

0.58

1 2 3 4 5 6 7 8 9 10 11 12

Time (Hours)

Dia

mete

r


Histogram

Fre

qu

en

cy

Data Ranges


Scatter Diagram

0

2

4

6

8

10

12

0 10 20 30

Hours of Training

Defe

cts


Checksheet (data collection)

Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount

Monday


Cause & Effect Diagram

Effect

Man Machine

Material Method

Environment


Fishbone Analysis: Existing Hiring Process Problems


Control Charts

970

980

990

1000

1010

1020

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

LCL

UCL


Customer Survey

Worst Best

Are We On Time? 5 4 3 2 1

Are We Courteous? 5 4 3 2 1

Does The Product Work?

5 4 3 2 1

Is It Cost Effective? 5 4 3 2 1

Overall Rating?

General Comments:

5 4 3 2 1


Example Customer Survey Results - Quantas Airways

Survey of Frequent Flier Needs – Order of Priority:

1. No lost baggage 12. Assistance with connections

2. No damaged baggage 13. Being kept informed of delays

3. Clean toilets 14. Transport to cities

4. Comfortable seats 15. Accurate arrival info

5. Prompt baggage delivery 16. Well-organized boarding

6. Ample leg room 17. Quick/friendly airport check-in

7. Good quality meals 18. Self-service baggage trolleys

8. Prompt reservation service 19. On-time arrival

9. Friendly/efficient cabin crew 20. Provision of pillows/rugs

10. Clean and tidy cabin 21. Assistance with customs

11. Comfortable cabin temp 22. On-time departures


Continuous Improvement Process

Orlando Remanufacturing And

Distribution Center


Remanufacturing Procedures

Clean

– Ice Chest – Parts

– Tower Assembly

Remanufacturing

– Load Test Ice Bin by

Drain – Evaluate Cold Plate

Remove

– Cup Rest – Splash Plate

– Drain Pan – Valves

– Mounting Blocks

Flush Out

– Install Clamps at Each

Tubing End – Install Tubing to

Mounting Block Fittings – Put’ O ’rings on Fittings

Inspect Soda Manifold

Requisition Needed Parts

Prepare Rear Tower Panel

on Woodgrain Units for Sabre Vinyl

– Repair Dents – Sand

– Clean Surface

Reassembly

Polish Stainless Steel

Surfaces That Will Be Visible

Leak Test Drain Pan

Test Junction Box

– Continuity – Correct Secondary

Voltage

Apply Sabre Vinyl

Install New Beverage Tubing

and Rubatex

Install Drain Pan, Drain

Fittings and Hose

Install Cup Rest

Install Valve Mounting Plate

Install and Connect Valve

Wiring Assembly

Install Valve Mounting

Blocks

Install Valves

Install Sabre Valve Covers,

Nozzles and Decals

Install Lid

Install Tube Protector on

Inlets

Install Splash Plate

Send to QA

Hold for Write-off if Bin

Leaks or Circuits are Unusable

Remove

– Product Hoses, Tower and Disassemble

– Flush Cooling Circuits

– Inspect Fittings

Sanitize Cooling Circuits

Drill and Tap New Mounting

Holes for Broken Hardware

– Impact and Evaluate

Fittings – Inspect Legs

Clean Electrical Junction Box

– Check for Frayed Wires – Tape Connections

Install Tower Structure Onto

Drain Pan Riser

Install Drain Pan Riser Onto

Ice Chest Assembly

Disassembly and

Cleaning


Phase 1: Internal Kickbacks

To Be Remanufac-

tured Equipment

Tear Down And Wash

Remanu- facture

Reassembly Final

Clean-up

QA

Unit Not OK


Five Most Common Reasons For Returns From QA

Missing/

Wrong Part

Dirt/Rust Defective

Part

Leaks Poor

Insulation

January-May (61 units)


Reasons for Returns from QA - Weighted Average

Leaks Dirt/Rust Stainless

Steel

Missing/

Wrong Part

Defective

Part

Poor

Insulation

Weighted Avg. = % Occurring X Defect Cost (0-10, Based on Time to Repair)


Why Dirt?

Materials

� Cleaning Compounds watered down

� Need Larger Wire Brushes

People

� Need More Training

� More Attention to Detail – Do it Right the First Time

Environment

� Dust/Humidity

� Poor Lighting

� Space Limitations

Measurement

� QA Manager Fixes Some Things Without Informing the Technicians

Methods

� Need to Rinse Parts off after Sandblasting

� Need Better Procedure for Determining What to Remanufacture Based on its Condition

Machines

� Best tools for $$?


Why Leaks?

People

� Use Wrong Clamps

� Don’t Crimp Properly

� Forget to Connect

Machines

� Bad Dispenser Design

� Need Rims That Make it Easier to Install Tubing

Environment

� High Temperatures in Warehouse

� Poor Lighting

Methods

� Softening Tubing with Water that’s Too Hot

� Need to Check Units for All Possible Ways They Could Leak

Materials

� Bad Tubing

� “O” Rings Out of Spec

� “O” Rings Too Old (Dry)

Measurement

� No Testing for Leaks Prior to QA

� Need to ID by Mfr./Model Which Units Leak the Most


PDCA Cycle (Deming Wheel) 1. Plan a change

aimed at

improvement.

1. Plan

2. Execute the

change.

2. Do

3. Study the results;

did it work?

3. Check

4. Institutionalize

the change or

abandon or

do it again.

4. Act


What is Six Sigma?

•A sweeping culture change effort to position a company for

greater customer satisfaction, profitability and

competitiveness (developed by Motorola in the late 1970’s)

• A goal of near perfection in meeting customer

requirements

• A comprehensive and flexible system for achieving,

sustaining and maximizing business success; uniquely

driven by close understanding of customer needs,

disciplined use of facts, data, and statistical analysis, and

diligent attention to managing, improving and reinventing

business processes


Six Sigma DMAIC Process

Measure

Control

Define

Analyze

Improve

Define: Define who your customers are, and what their requirements are for your products and services – Their expectations. Define your team goals, project boundaries, what you will focus on and what you won’t. Define the process you are striving to improve by mapping the process.



Measure

Control

Define

Analyze

Improve

Measure: Eliminate guesswork and assumptions about what customers need and expect and how well processes are working. Collect data from many sources to determine speed in responding to customer requests, defect types and how frequently they occur, client feedback on how processes fit their needs, how clients rate us over time, etc. The data collection may suggest Charter revision.



Measure

Control

Define

Analyze

Improve

Analyze: Grounded in the context of the customer and competitive environment, analyze is used to organize data and look for process problems and opportunities. This step helps to identify gaps between current and goal performance, prioritize opportunities to improve, identify sources of variation and root causes of problems in the process.



Measure

Control

Define

Analyze

Improve Improve: Generate both obvious and creative solutions to fix and prevent problems. Finding creative solutions by correcting root causes requires innovation, technology and discipline.



Measure

Control

Define

Analyze

Improve

Control: Insure that the process improvements, once implemented, will “hold the gains” rather than revert to the same problems again. Various control tools such as statistical process control can be used. Other tools such as procedure documentation helps institutionalize the improvement.


Six Sigma DMADV Process

Measure

Validate

Define

Analyze

Design

Design: Develop detailed design for new process. Determine and evaluate enabling elements. Create control and testing plan for new design. Use tools such as simulation, benchmarking, DOE, Quality Function Deployment (QFD), FMECA analysis, and cost/benefit analysis.


Six Sigma DMADV Process

Measure

Validate

Define

Analyze

Design

Validate: Test detailed design with a pilot implementation. If successful, develop and execute a full-scale implementation. Tools in this step include: planning tools, flowcharts/other process management techniques, and work documentation.

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