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TQM foundations and

problem solving strategies

STAT12049 (MATH11168)

Week 3

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Objectives

• describe the contributions that Deming, Juran, Ishikawa, Crosby and Conway have made to TQM

• discuss the differences between traditional total quality control in the West and in Japan

• explain the PDCA cycle• construct a cause-and-effect diagram

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• Deming was the first American quality expert to teach in Japan

• he first arrived in 1947 to assist General MacArthur’s government of occupation prepare for a census

• at that time he was employed as head mathematician and advisor in sampling at the US Bureau of Census

W. Edwards Deming (1900-1993)

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• his academic credentials included a masters degree from the University of Colorado and a PhD in Mathematical Physics (1928) from Yale University

• he produced approximately 200 publications

• he retired from his position at New York University in 1975 to become Emeritus Professor

• at 91 he was still writing and publishing articles and books, holding seminars etc

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• at the Census Bureau he had taught sampling methods and statistical control techniques resulting in huge increases in productivity for the 1940 census

• this success led to his invitation to teach quality courses for US industrialists, engineers and inspectors

• his methods were credited with better quality products, a higher volume of production and reduction in scrap and rework (all adding to America’s war effort)

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• he was disappointed by the management of American companies who did not take to his ideas

• in Japan he continued his successful teaching of quality and productivity ideas and insisted that Japanese management be involved

• he worked with many well known companies such as: Sony, Nissan, Mitsubishi and Toyota

• he believed that quality and productivity always increased as variability decreased – his main message was to reduce variation

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• the Deming Award has been, since 1965, the most fiercely fought for and coveted award in Japan

• it is given annually to chosen Japanese companies, worker groups and individuals who have distinguished themselves in the area of total quality

• Deming has been called the ‘father of the third wave of the industrial revolution’ by some because of his contributions to quality

• others believe his role is been overstated and that his major contribution was simply to convey mathematical concepts more clearly to the people involved

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Deming’s approach is based on understanding two types of variation:

• Controlled (common cause) variation – due to unassignable, chance, random or common causes. These causes are due to the process itself, its design and installation

• Uncontrolled (special cause) variation – due to assignable or special causes. For example, change of operation, procedures or raw materials and breakages are all outside influences on a process which interrupts its normal pattern of operation

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• uncontrolled variation leads to high costs and unknown quality – it also makes it impossible to evaluate any attempts to improve a system

• controlled variation leads to better ability to schedule activities closer together since it is more predictable and it is easier to eliminate waste and delay

• so firstly we must eliminate special causes and then we are able to look at quality improvement

• these concepts will be revisited frequently in this course

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• Deming states that 94% of all quality problems are due to management

• management need to include employees in decision-making processes and empower workers to help solve problems

• many of the concepts discussed appear in Deming’s book “Out of Crisis” which is a modern classic in total quality

• Deming is particularly famous for his 14 points

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1. Be constant and purposeful in improving products and services. Allocate resources to provide for long-term needs rather than short-term profitability. Aim to be competitive, to stay in business and to provide jobs.

2. Adopt the new philosophy. We are in a new economic age begun in Japan. Commonly accepted delays, mistakes and defective workmanship can no longer be tolerated; a transformation of Western management approach is needed to stop the downward spiral of decline in industry.

3. Stop depending on mass inspection as a way to achieve quality; build quality into the product in the first place. Demand statistical evidence of quality being built into manufacturing and purchasing functions.

Deming’s 14 points

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4. End the practice of awarding business on the basis of price alone. Instead require other meaningful measures of quality beyond price. Work to minimize total cost not just initial cost. Move towards a single supplier for any one item on a long-term relationship of loyalty and trust. Make sure purchasing managers realize they have a new job to do.

5. Find problems. It is management’s job to improve the system continually, make better every process for planning, production and service to improve quality, increase productivity and decrease costs.

6. Institute modern methods of on-the-job training. Include management in the training to make better use of all employees. New skills are required to keep up with changes in material, methods, product design, machinery, techniques and service.

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7. Set up new ways of supervising production workers. Front-line supervisors should help people produce quality products, forgetting about the numbers game. Improvement of quality will automatically improve productivity. Management should initiate action in response to reports of inherited defects, maintenance needs, bad tools, confused operational definitions and other things that lead to poor quality.

8. Drive out fear, so that everyone may work effectively for the company. Encourage top-down and bottom-up communications.

9. Break down barrier between departments. People in research, design, sales and production should work as a team to deal effectively with problems with products and services.

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10. Eliminate numerical goals, slogans, exhortations (like zero defects) and product targets for the workforce since most quality problems have to do with processes and systems which are created by managers and are beyond the power of employees. Such exhortations are simply a source of aggravation.

11. Eliminate work standards that prescribe numerical quotas for both the workforce and for managers. In their place put useful aids and supportive supervision. Use statistical methods for continuous improvement of quality and productivity.

12. Remove barriers that impede hourly-paid workers and managers from enjoying pride of workmanship. Abolish performance appraisal and management by objectives.

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13. Institute a vigorous programme of eduction and training. People should be improved with ongoing education and self-improvement. Competitive advantage is always rooted in knowledge.

14. Structure top management to empower them to achieve the above 13 points. Push every day to progress the 13 preceding points and take action to make the total transformation happen.

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Some comments on Deming’s 14 points:• eliminate numerical targets and performance

appraisals – the results produced by a worker are limited by the system

• numerical targets can be beyond what a system is capable of and hence management can push a system out of shape

• performance appraisals are unfair when a large amount of common cause variation is present

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Barriers to implementing Deming’s philosophy

• lack of constancy – management of a system should not flit from one idea to another (avoid the latest fads)

• preoccupation with short-term profit – management should be consistent in order to foster long-term growth

• managerial job mobility – decisions are made without an in-depth knowledge of the business

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• reliance on visible figures as a criteria for success – although accounts matter and employees and suppliers must be paid, end-of-quarter manipulation of figures can be a result of pressure to perform

• performance appraisals – Deming equates these with ‘management by fear’

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• Juran is a Balkan-born American who is now in his 90’s

• he operates the Juran Institute in New York• he earned his reputation in the 1950’s with his

book “Quality Control Handbook” which is still a standard reference in quality world-wide

• after the books’ publication, he went to Japan to build on Deming’s work there

• he based his message around ten steps

Joseph M. Juran

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Juran’s ten steps1. Create awareness of the need and opportunity for

quality improvement.

2. Set goals for continuous improvement.

3. Build an organization to achieve goals by establishing a quality council, identifying problems, selecting a project, appointing teams and choosing facilitators.

4. Give everyone training.

5. Carry out projects to solve problems.

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6. Report progress.

7. Show recognition.

8. Communicate results.

9. Keep a record of successes.

10. Incorporate annual improvements into the company’s regular systems and processes and thereby maintain momentum.

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• Juran’s main message was that quality is an integral part of management at all levels of a company

• his quality messages and techniques were translated into reading material for reading circles in Japan – these later developed into quality circles (problem solving quality improvement meetings for all levels of employees)

• Juran produced (and still does) training manuals and conducted quality training and seminars

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• Juran defines quality as “fitness for use or purpose” rather than conformance to specifications

• he believed a product could conform to all specifications but still be unfit for use

• he was responsible for taking quality beyond the technical aspects to the management arena

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• Juran’s essential message to managers is his trilogy: quality planning, quality control and quality improvement (see Figure 3.3 in Bank)

• Quality planning – the process for preparing to meet quality goals

• Quality control – the process for meeting quality goals during operation

• Quality improvement – the process for breaking through to unprecedented levels of performance

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• Juran estimated that 15% of quality problems (variation) in a company are due to special causes which means they may involve the workers

• he believed that 85% or more are due to management dealing with the system

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• Ishikawa was known as the ‘Father of Quality Circles’ for his role in launching Japan’s quality movement in the 1960’s

• he believed the American management style where “management manage and people do” would not work in Japan, but suggested American and Japanese business practices be blended with European craftsmanship

Prof. Kaoru Ishikawa (1915-89)

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• his quality circles were piloted at Nippon Telegraph and Cable Company in 1962

• by 1978 there were one million quality circles with 10 million employees mostly in manufacturing

• today there are two million quality circles involving 20 million members and extending into the service sectors in Japan

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• his ‘fishbone diagram’, the Ishikawa diagram or cause and effect diagram, was invented in 1943 as a management problem solving tool

• his book “What is Total Quality Control?” introduced seven basic tools he believed were indispensable for quality control: pareto analysis, fishbone diagrams, stratification, tally charts, histograms, scatter diagrams and control charts

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• Crosby was a less academic populariser of TQM• he obtained his quality education by coming up

the ranks from inspector to tester to assistant foreman to junior engineer to section chief to manager to director and finally to corporate vice-president

• this progression has given him an overall understanding of business practices

Philip B. Crosby

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• today he is chairman of his own quality college and consultancy firm call Philip Crosby Associates (PCA) Inc., which he started in 1979

• he differs from Deming and Juran because he believes that a zero defects goal is practical, reasonable and achievable

• Crosby targets his training at management not at quality control people

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Crosby’s four essentials of quality management (he calls these ‘the absolutes’) are:

1. Quality is defined as conformance to requirements, not as goodness.

2. Quality is achieved by prevention not appraisal.

3. The quality performance standard is zero defects (a concept he invented in the 1960’s when he worked for the Martin company on missile projects) and is best known for no acceptable quality levels.

4. Quality is measured by the price of non-conformance, not by indexes.

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• Crosby also developed 14 steps to a quality improvement programme

(see Bank, pp. 99-102)

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John S. Oakland

• Oakland is Britain’s foremost leader in the philosophy of total quality management

• he comes from a nuts and bolts, no nonsense operations management perspective

• his early career was in research and production management and he has a PhD in chemistry

• his book “Total Quality Management” is the seminal British book on TQM

• the new edition “Cases in Total Quality Management” was co-authored by Leslie J. Porter

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• he also wrote “Statistical Process Control”• his main contribution has been to further

integrate TQM into company strategy• he defines TQM as ‘a comprehensive approach to

improving competitiveness, effectiveness and flexibility through planning, organising and understanding each activity and involving each individual at each level”

• Oakland’s implementation plan for TQM involves 14 steps (see Figure 3.5 of Bank)

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Oakland’s model can be summarised in five points:

1. First one must identify customer-supplier relationships.

2. Then set up a system to manage processes.

3. Change the company culture from what it was to a TQM culture.

4. Improve communications company-wide.

5. Demonstrate commitment to quality.

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Differences between Japanese and Western approaches to Quality

• Western management is often hierarchical and focused on control

• Japanese management see their role as supportive of those closer to the customer – the customer is often incorporated into the decision making process

• a move is being made away from the Japanese style quality circles which usually contain workers from the same divisions to cross-functional teams from various divisions that address goals that are common to the whole organisation such as quality, costs and scheduling

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• some people suggest that empowerment is a cornerstone for effective Quality Management

• giving decision making authority to workers gives them a sense of ownership and responsibility and is likely to lead to a reduction of mistakes

• it allows for creativeness and innovation• it increases worker morale which can lead to

reduced turnover time, absenteeism and illness

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• the Japanese place less emphasis on specialist professionals – TQM involves the entire workforce

• in the West specialists are often attached to divisions

• Japanese unions are enterprise wide whereas Western unions are usually based on trades

• Westerners tend to formulate management plans and expect the workers to simply follow these plans without making any contribution

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• Japanese companies are more likely to hire technical school graduates – there is less elitism and shopfloor experience is held in greater esteem

• Japanese companies place less emphasis on merit pay – they take into account satisfaction from a job well done, happiness from cooperating with others, joy from personal growth as well as monetary rewards

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• owner managers are rare in Japan – owners and shareholders do not pressure companies for short term gains at the expense of the medium and longer term as often happens in the West

• Western companies make definitions regarding quality that indicate they are interested in high quality rather than Ishikawa’s view of achieving quality appropriate to the customer at a reasonable price

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• Westerner’s tend to seek dramatic improvements whereas the Japanese approach is to seek small incremental changes

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The PDCA Cycle

Plan

DoCheck

Act Determine goals

Determine methods

Educate

Implement

Check the effects

Take appropriate

action

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Plan: the first step must be to identify the aspect of the process in most urgent need of improvement. This might also mean choosing to examine an aspect of the process which will produce the greatest benefit for the least amount of effort. Once the problem is identified and the process fully understood, a plan can be formulated in order to bring about an improvement to the process.

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Do: In this stage, the plan is implemented and trials are conducted using the solution proposed in the planning phase. It may also be necessary to educate those involved in the process and to train them in any new methods being implemented.

Check: Here data is collected and analysed to determine the degree to which the improvement was successful.

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Act: If the new approach is deemed to be successful, then the necessary action is taken to permanently implement it within the system.

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It should be noted that this cycle is designed to bring continuous improvement to a process, and thus the user will need to make many revolutions of the cycle. The ultimate goal of such a procedure is to reduce the number of problems in the system to zero. This however, is a goal that is never likely to be attained. The process will instead continually make steps towards the goal of a perfect or ideal process.

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Ishikawa diagrams

Brainstorming • a structured problem-solving technique

designed to generate ideas and produce group consensus of their relative importance

• a group will achieve more ideas than the sum of individual ideas – participants are able to build on the ideas of others

• Week 4 examines brainstorming in more detail and those ideas will be used when constructing Ishikawa diagrams in Assignment 2

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• Ishikawa diagrams (cause and effect diagrams) aim to clearly summarise the possible causes of an effect (either desirable or undesirable)

• the effect could be a defect in a product, a better product etc

• we are aware of the nature of the effect but want to determine what caused it, often in order to improve the situation

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• we must always clearly define the effect or problem ensuring that it is a single effect, not a group of related effects

• we should generate as many ideas as possible about the possible cause of an event (using a brainstorming session)

• after an idea is added, find other ideas by asking “what caused this?” but don’t evaluate ideas yet

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Top-down generation of causes – start with the effect and work towards the cause by asking why (often referred to as why-why analysis). Problem – only causes identified in first step are explored further

Bottom-up generation of causes – ideas are generated without any restrictions and by whatever means available (brainstorming or nominal group technique are used – we examine these next week)

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Process phases generation of causes – effects are often associated with processes, so this method examines each phase of a process one at a time.

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• once a list of possible causes has been reached, the diagram can be constructed. It is not unusual to expect approximately 100 ideas from the brainstorming session – more ideas may be thought of and added as the diagram is constructed

• first the effect should be written in a box on the right-hand side of the page

• next, the possible causes should be grouped into categories, for example “work method”, “workers”, “equipment” and “measurement” are common headings for an industrial process

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• possible causes may be put under more than one heading if necessary

• now within each heading, identify different levels of causality

• the headings are usually called the first level causes, factors that contribute directly to these are second level causes, then third level causes etc

• the (simplified) fishbone diagram on the following page illustrates this layering of causes

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Poor exam performance

Classes Study material

Teaching Organisation

Bad time of day

Clash with another class

Not well prepared

Does not know subject material

Poorly written

Arrived late

Poor explanations

Too expensive

No planning

Busy social life

Not interesting

Absent regularly

Too many late nights

Not available outside class

Watching TV

Simplified Cause and Effect Diagram Example

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• Note that the example on the previous slide is simplified – a fishbone diagram produced for an assignment should contain much more detail

• in this diagram, the first level causes are “Classes”, “Study Material”, “Teaching” and “Organisation”

• an example of a second level cause is “Too many late nights” and a third level cause is “Watching TV”

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There are a number of different formats for the cause and effect diagram, but the example on the previous slide is best for our purposes. Figure 3.2 of Ledolter shows a diagram that is a combination of a flowchart and a cause and effect diagram.

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• once a cause and effect diagram has been produced, we should now use it to determine the most likely cause(s) of the effect

• sometimes this may mean choosing one factor as most significant and leaving others for examination later in another revolution of the PDCA cycle

• we search for the most likely cause by eliminating all possible causes except for one

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• there is a tendency to jump to conclusions about what is the most likely cause of the effect – avoid this temptation and make sure the decision is a considered and well justified one

• a good way of choosing between a number of possible causes is to create a Pareto chart: get group agreement on which are the most likely causes and then ask each group member to rank these causes from least to most likely. Construct a Pareto chart of the average of these ranks.

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Have a go at Exercise 3.2 from Ledolter, but use the PDCA cycle instead of the IDEA procedure.

Also do Activity 3-2 from the Study Guide.