MDP 308 Quality Management - Cairo University MDP 308 Quality Management Lecture #14 Total Quality...

MDP 308

Quality Management

Lecture #14

Total Quality Management, Six Sigma and quality awards and certificates

Today’s lecture

Total quality management (TQM)

Six-Sigma

DMAIC

Malcolm Baldrige National Quality Award (MBNQA)

ISO 9000

History of quality management In the 1960s, Japanese products were known for their poor quality and they

couldn’t be sold in the western market.

Japanese manufactures invited some “quality gurus” such as Deming and Juran to teach them how to implement statistical methods to improve their quality.

The work of quality gurus ended up with philosophies and guidelines which the Japanese followed and developed. They succeeded to improve their quality.

Next 20 years, top managers in USA focused on marketing, production quantity and financial performance, Japanese managers improved quality at an unprecedented rate.

Market started preferring Japanese products and American companies suffered immensely. Ford Motor Company had operating losses of $3.3 billion between 1980 and 1982. Xerox market share dropped from 93% in 1971 to 40% in 1981.

America woke up to the quality revolution in early 1980s. Ford Motor Company consulted Deming to help transform its operations.

(By then, 80-year-old Deming was virtually unknown in USA. Whereas Japanese government had instituted The Deming Prize for Quality in 1950.)

Managers started to realize that “quality of management” is more important than “management of quality.” Birth of the term Total Quality Management (TQM).

TQM – Integration of quality principles into organization’s management systems.

Quality Philosophies and

Management Strategies

W. Edwards Deming

Taught engineering, physics in the 1920s, finished PhD in 1928

Met Walter Shewhart at Western Electric

During WWII, he worked with US defense contractors, deploying statistical methods

Sent to Japan after WWII to work on the census

Deming Deming was asked by the Japanese Union of Scientists

and Engineers (JUSE) to lecture on statistical quality control to management

Japanese adopted many aspects of Deming’s management philosophy

Deming stressed “continual never-ending improvement”

Deming lectured widely in North America during the 1980s; he died 24 December 1993

Deming’s 14 Points (just good to mention)

1. Create constancy of purpose toward improvement

2. Adopt a new philosophy, recognize that we are in a time of change, a new economic age

3. Cease reliance on mass inspection to improve quality

4. End the practice of awarding business on the basis of price alone

5. Improve constantly and forever the system of production and service

6. Institute training

7. Improve leadership, recognize that the aim of supervision is help people and equipment to do a better job

8. Drive out fear

9. Break down barriers between departments

14 Points continued

10. Eliminate slogans and targets for the workforce such as zero defects

11. Eliminate work standards

12. Remove barriers that rob workers of the right to pride in the quality of their work

13. Institute a vigorous program of education and self-improvement

14. Put everyone to work to accomplish the transformation

Note that the 14 points are about change

Joseph M. Juran

Born in Romania (1904), immigrated to the US

Worked at Western Electric, influenced by Walter Shewhart

Emphasizes a more strategic and planning oriented approach to quality than does Deming

Juran Institute is still an active organization promoting the Juran philosophy and quality improvement practices

The Juran Trilogy

1. Planning

2. Control

3. Improvement

These three processes are interrelated

Project-by-project improvement

Kaoru Ishikawa

Son of the founder of JUSE, promoted widespread use of

basic tools

Armand Feigenbaum

Author of Total Quality Control, promoted overall

organizational involvement in quality

Three-step approach emphasized quality leadership, quality

technology, and organizational commitment

TQM

Total - made up of the whole

Quality - degree of excellence a product or service

provides

Management - act, art or manner of planning, controlling,

directing,….

Therefore, TQM is the art of managing the whole to

achieve excellence.

What does TQM mean?

Total Quality Management means that the organization's

culture is defined by and supports the constant

attainment of customer satisfaction through an integrated

system of tools, techniques, and training. This involves the

continuous improvement of organizational processes,

resulting in high quality products and services.

What’s the goal of TQM?What’s the goal of TQM?

“Do the right things right the first

time, every time.”

Another way to put itAnother way to put it

At it’s simplest, TQM is all managers leading and

facilitating all contributors in everyone’s two main

objectives:

(1) total client satisfaction through quality products

and services; and

(2) continuous improvements to processes, systems,

people, suppliers, partners, products, and services.

Productivity and TQM

Traditional view:

Quality cannot be improved without significant losses in

productivity.

TQM view:

Improved quality leads to improved productivity.

An illustration

A manufacturing process produces 100 parts per day.

Currently, 75% of process output conforms to specs.

About 60% of the fallout (25%) can be reworked into an

acceptable product.

Direct manufacturing cost = $20 and reworking costs$4

per part.

Therefore, the manufacturing cost per good part is

evaluated as:

𝐶𝑜𝑠𝑡/𝑔𝑜𝑜𝑑 𝑝𝑎𝑟𝑡 =$20 100 +$4(15)

90= $22.89

An illustration (cont.)

An engineering study reveals that excessive process

variability is the reason for extremely high fallout.

A new quality improvement program can reduce the

fallout from 25% to 5%.

Out of the 5% fallouts, 60% can be reworked and 40%

scrapped.

After implementing the quality improvement program, the

cost per good part is evaluated as:

𝐶𝑜𝑠𝑡/𝑔𝑜𝑜𝑑 𝑝𝑎𝑟𝑡 =$20 100 +$4(3)

98= $20.53

Basic Tenets of TQM

1. The customer makes the ultimate determination of quality.

2. Top management must provide leadership and support for all quality initiatives.

3. Preventing variability is the key to producing high quality.

4. Quality goals are a moving target, thereby requiring a commitment toward continuous improvement.

5. Improving quality requires the establishment of effective metrics. We must speak with data and facts not just opinions.

The three aspects of TQM

Counting

Customers

Culture

Counting

Customers

Culture

Tools, techniques, and training in

their use for analyzing,

understanding, and solving quality

problems

Quality for the customer as a

driving force and central concern.

Shared values and beliefs,

expressed by leaders, that define

and support quality.

TQM: A “Buzzword” Losing Popularity

For many companies, the term TQM is associated with corporate programs (mid 1980s ~ early 1990s) aimed at implementing employee teams and statistical process control.

Unfortunately, many companies were dissatisfied with the perceived results of these programs, concluding TQM does not work.

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.

Copyright (c) 2013 John Wiley & Sons, Inc.

Why TQM failed?

Emphasis on widespread training, quality awareness

Training often turned over to HR function

Not enough emphasis on quality control and improvement tools, poor follow-through, no project-by-project implementation strategy

TQM was largely unsuccessful

• Quality traditionally means fitness for use, which has two

general aspects

- Quality of design

- Quality of conformance

• The modern concept of quality is “quality is inversely

proportional to variability”

• Quality Improvement: Reduction of variability in processes

and products (elimination of waste)

23

Six Sigma

Business improvement approach that seeks to find and

eliminate causes of defects and errors in processes by focusing

on outputs that are critical to customers.

Created first by Motorola in the 1980s, then popularized by

AlliedSignal and General Electric (GE) in the 1990s.

The late Bill Smith, a reliability engineer is credited with

conceiving the idea of Six Sigma.

GE (specifically CEO Jack Welch) extensively promoted it.

The term Six Sigma is based on a statistical measure that

equates 3.4 or fewer errors or defects per million opportunities.

Six SigmaCore philosophy based on key concepts:

Think in terms of key business processes and customer requirements with focus on strategic objectives.

Focus on corporate sponsors responsible for championing projects.

Emphasize quantifiable measures such as defects per million opportunities (dpmo).

Ensure appropriate metrics is identified to maintain accountability.

Provide extensive training.

Create highly qualified process improvement experts -“belts”.

Set stretch objectives for improvement.

Focus of Six Sigma is on Process

Improvement with an Emphasis on

Achieving Significant Business Impact

• A process is an organized sequence of activities that

produces an output that adds value to the

organization

• All work is performed in (interconnected) processes

– Easy to see in some situations (manufacturing)

– Harder in others

• Any process can be improved

• An organized approach to improvement is necessary

• The process focus is essential to Six Sigma

Different Processes in Production Systems

Six Sigma Approach

A disciplined and analytical approach to process

Specialized roles for people:

Six Sigma Deployment Leader

Six Sigma Champion

Six Sigma Master Black Belt (MBB)

Six Sigma Black Belt (BB)

Six Sigma Green Belt (GB)

Six Sigma Yellow Belt (YB)

Top-down driven (Champions from each business)

BBs and MBBs have responsibility (project definition, leadership, training/mentoring, team facilitation)



Responsible for approving improvement projects

Facilitate project identification and

selection, select BBs and other team

members, remove barriers,

insures availability of resources.

May have several projects to work on.

Technical leader, work with champions

to select projects and provide technical

support to BBs.

Team leaders involved in actual project

completion activities.

Have less training in Six Sigma tools.

Usually part of a black-belt lead team.



Six Sigma and DMAIC approach

Six Sigma involves a five-step process: Define, Measure, Analyze, Improve, Control - (DMAIC).

The DMAIC approach is based on the Shewhart cycle



DMAIC

DMAIC is a structured problem-solving technique

consisting of the following steps:

Define

Measure

Analyze

Improve

Control

DMAIC is usually associated with six sigma, but it can

be used with any business or process improvement

effort



The DMAIC process



Six Sigma Projects

Essential part of DMAIC: Integral component of Six Sigma. Quality and business improvement via projects traces back to Juran.

Breakthrough opportunity: Focus on a project that will result in a major improvement.

Financial systems integration: Project impact should be evaluated in terms of financial benefits.

Value opportunity of a project must be clear: Project objectives must be aligned with corporate business objectives at all levels.

Project selection

Project management



2.2 The Define Step



A process map or value stream map (Chapter 5)

may also be prepared. These should be completed

by at least the end of the Measure step.



The Define Tollgate



2.3 The Measure Step

Purpose is to evaluate and determine the present process state

Identify key process input variables (KPIV) and key process output variables (KPOV)

Data – from historical records, from sampling, from observational studies

Histograms, box plots, Pareto charts, scatter diagrams, stem-and-leaf diagrams may all be useful

In some businesses, the measurement system must be developed

Measurement systems capability may be important



The Measure Tollgate



2.4 The Analyze Step

Determine cause-and-effect relationships

Sources of variability – common cause versus assignable

cause

Tools – control charts, hypothesis testing, confidence

intervals, regression models, failure modes and effects

analysis

Discrete event simulation



The Analyze Tollgate



2.5 The Improve Step

Process redesign to reduce bottlenecks

Mistake-proofing

Statistical tools – particularly designed experiments

Design of Experiments can be applied to either the

physical process or a computer model of the process

Pilot test the solution to confirm that it will solve the

problem



The Improve Tollgate



2.6 The Control Step

Complete all remaining work on project

Provide the process owner with a process control plan

Training documents (if appropriate) should be provided

Methods and metrics for future audits

Transition plan to the new process might include a

validation step



The Control Tollgate



What Makes it Work?

Successful implementations characterized by:

Committed leadership

Use of top talent

Supporting infrastructure

Formal project selection process

Formal project review process

Dedicated resources

Financial system integration

Project-by-project improvement strategy (borrowed from Juran)

Recognizing and Rewarding Quality

Promotion of High Quality Goods and Services

Malcolm Baldrige National Quality Award (MBNQA) (United

States)

ISO9000 certification

Deming Prize (Japan)

European Quality Award (European Union)

Malcolm Baldrige National Quality Award

(MBNQA)

Background

Established in 1987 to recognize total quality management in American

industry.

Purpose

Stimulate U.S. companies to improve quality and productivity.

Establish guidelines and criteria to evaluate quality.

Recognize those firms that improve their quality.

Provide guidance in how to achieve quality.

Copyright © 2005 The McGraw-Hill Companies. All rights reserved.

The Integrated Framework of

the Baldrige Award Criteria

Source: 2004 Criteria for Performance Excellence, U.S. Dept. of Commerce, Baldrige National Quality Program, National Institute of Standards and Technology,

Gaithersburg, MD 20899. (www.quality.nist.gov)

2001 Award Criteria—Item Listing

Source: 2004 Criteria for Performance Excellence, U.S. Dept. of Commerce, Baldrige

National Quality Program, National Institute of Standards and Technology, Gaithersburg,

MD 20899. (www.quality.nist.gov)

Benefits of the Baldrige Quality Criteria

Baldrige guidelines can be used to:

Help define and design a total quality system.

Evaluate ongoing internal relationships among department,

divisions, and functional units within an organization.

Assess and assist outside suppliers of goods and services to

a company.

Assess customer satisfaction.

ISO 9000: 2000, 2008, 2015

Created by International Organization for Standardization(IOS) which was created in 1946 to standardize quality requirement within the European market.

IOS initially composed of representatives from 91 countries: probably most wide base for quality standards.

Adopted a series of written quality standards in 1987 (first revised in 1994, and more recently (and significantly) in 2000, 2008 and 2015).

Prefix “ISO” in the name refers to the scientific term “iso” for equal. Thus, certified organizations are assured to have quality equal to their peers.

ISO 9000: 2000 ISO 9000:2000 refers to the ISO 9000 update released in the

year 2000

Defines quality systems standards based on the premise that certain generic characteristics of management principles can be standardized.

And that a well-designed, well-implemented and well managed quality system provides confidence that outputs will meet customer expectations and requirements.

Standards are recognized by 100 countries including Japan and USA.

Intended to apply to all types of businesses (industrial or service).

ISO 9000: 2000

Created to meet five objectives:

1. Achieve, maintain, and seek to continuously improve product quality in relation to the requirements.

2. Improve the quality of operations to continually meet customers’ and stakeholders’ needs.

3. Provide confidence to internal management that quality requirements are being met.

4. Provide confidence to the customers that quality requirements are being met.

5. Provide confidence that quality system requirements are fulfilled.

ISO 9000: 2000 structure

Consists of three documents

1. ISO 9000 – Fundamentals and vocabulary.

2. ISO 9001 – Requirements.

Organized in four sections: Management Responsibility; Resource Management; Product Realization; and Measurement, Analysis and Improvement.

3. ISO 9004 – Guidelines for performance improvements.

ISO 9000: 2000 Quality Management

Principles

Principle 1: Customer Focus

Principle 2: Leadership

Principle 3: Involvement of people

Principle 4: Process approach

Principle 5: Systems approach for management

Principle 6: Continual improvement

Principle 7: Factual approach to decision making

Principle 8: Mutually beneficial supplier relationships.

ISO 9000:2015 principles

ISO 9000 registration Originally intended to be a two-party process where the

supplier is audited by its customers, the ISO 9000 process became a third-party accreditation process.

Independent laboratory or a certification agency conducts the audit.

Recertification is required every three years.

Individual sites – not entire company – must achieve registration individually.

All costs are to be borne by the applicant.

A registration audit may cost anywhere from $10,000 to $40,000.

(more information at http://www.iso.org)

Other ISO quality standards

The ISO 9000 series of standards celebrated its 30th

anniversary in 2017.

The popularity of the ISO 9000 series paved the way for

other management system standards, including:

ISO 14000: Environmental management systems

ISO 26000: Guidance on social responsibility

ISO 31000: Risk Management Principles and Guidelines

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