Quality Management Philosophy Concepts 2014 Part 1 St.ver.

QUALITY MANAGEMENT

January 2014 1 Quality Management

QUALITY MANAGEMENT

• Introduction

• Philosophy & Concepts • Tools and Techniques used in Total Quality

management • International Quality Standards and Awards


Literature

• Quality Management for Organizational

Excellence – by David L.Goetsch and Stanley B.Davis

• Juran´s Quality Handbook

– by Joseph M. Juran and Joseph A De Feo


QM – Philosophy & Concepts

• The Total Quality Approach • Quality and Global Competitiveness • Strategic Management • Ethics • Partnering • Quality Culture • Customer Satisfaction • Employee Empowerment • Leadership and Change • Teambuilding and Teamwork • Effective Communication • Training



• The Total Quality Approach • Quality and Global Competitiveness • Strategic Management • Ethics • Partnering • Quality Culture • Customer Satisfaction • Employee Empowerment • Leadership and Change • Teambuilding and Teamwork • Effective Communication • Training January 2014 5 Quality Management

What is Quality?


Definition of Quality

• Joseph M.Juran:"Fitness for use." • Philip B. Crosby: "Conformance to requirements. • Peter Drucker: "Quality in a product or service is not what

the supplier puts in. It is what the customer gets out and is willing to pay for”

• ISO 9000: "Degree to which a set of inherent characteristics fulfills requirements

• Six Sigma: "Number of defects per million opportunities.“ • American Society for Quality:

– a. The characteristics of a product or service that bear on its ability to satisfy stated or implied needs;

– b. A product or service free of deficiencies.

January 2014 Quality Management 7

http://en.wikipedia.org/wiki/Philip_B._Crosby

Quality

• Quality has been defined in a number of ways. When viewed from a consumer’s perspective, it means meeting or exceeding customer expectations.

…..providing him with superior value


Dimensions of Quality

Dimension Product example

Mobile phone

Performance Signal, Battery charge

Features Internet, camera,......

Conformance Workmanship

Reliability Mean-time-to-failure

Durability Useful life

Serviceability Ease of repair

Response Courtesy of dealer

Aesthetics Surface finish

Reputation Customer report ranking


http://www.t-mobile.com/shop/Phones/cell-phone-detail.aspx?cell-phone=Samsung-Gravity-TXT-Charcoal-Yellow-Refurbished

Two Views of Quality

• How well the features of a product or service meet the customer need and therefore provide them with satisfaction => higher quality costs (usually) more

• Freedom from failures => higher quality costs (usually) less


Total Quality

• Total quality is an approach to doing business that attempts to maximize an organization’s competitiveness through the continual improvement of the quality of its products, services, people, processes, and environments.


Managing for Quality (Juran)

• A set of universal methods that any organization, whether a business, an agency, a university or a hospital can use to attain superior results by designing, continuously improving and ensuring that all products, services and processes meet customer and stakeholder needs.


Juran´s trilogy

• Designing and planning for Quality

• Compliance, controlling and assuring quality

• Improving quality


Juran´s trilogy

• Creating processes to design goods and services to meet needs of the stakeholders (internal and external). Understand needs of customers

• Creating processes to control quality. Ensure compliance to design criteria

• Creating a systematic approach to improve continuously. Failures must be discovered and remedied.

=> Create functions and skills to do the things above


Financial trilogy

• Financial planning – Annual financial and operational budgets (revenues, costs and

profits) – Financial goals for the organization and its divisions

• Financial control – Evaluation of actual financial performance and taking action on

the differences – Cost control, expense control, risk management, inventory

control, etc.

• Financial improvement – Improvement of financial results – Cost reduction projects, new facilities, new product

development, M &A, joint ventures, etc


Quality planning

• Establish the project and design goals

• Identify the customers

• Discover the customer needs

• Develop the product or service features

• Develop the process features

• Develop the controls and transfer to operations

=> Customer – customer needs- product features – process features- process control features


Quality planning tools

• Benchmarking • Brainstorming • Competitive analysis • Control charts • FMEA • Flow diagram • Process capability • Scatter diagram • Etc.


Quality Control

• Assure Repeatable and Compliant Processes


Quality Control Tools

• SPC (Statistical Process Control)

• Problem Solving methods

• Poka Yoke


Quality Improvement

• Create breakthroughs in Performance


Quality Improvement Tools

• Six Sigma

– RDMAIC process

• Recognize

• Define

• Measure

• Analyze

• Improve

• Control


Juran´s trilogy


• Key characteristics of the total quality approach are as follows: – strategically based, – customer focus, – long-term commitment, – teamwork, – employee involvement and empowerment, – continual process improvement, – education and training,

The Total Quality Approach to Quality Management


• The rationale for total quality can be found in the

need to compete in the global marketplace. • Countries that are competing successfully in the

global marketplace are seeing their quality of living improve. Those that cannot are seeing theirs decline.

The Total Quality Approach to Quality Management


• W. Edward Deming is best known for his Fourteen Points, the Deming Cycle

• Joseph M. Juran is best known for the Pareto Principle, and the Juran Trilogy.

• Armand V. Feigenbaum is best known for his Total Quality Control.

• Philip B. Crosby is best known for his Quality is Free and the Zero Defects program

The Total Quality Pioneers



• The Total Quality Approach

• Quality and Global Competitiveness • Strategic Management • Ethics • Partnering • Quality Culture • Customer Satisfaction • Employee Empowerment • Leadership and Change • Teambuilding and Teamwork • Effective Communication • Training January 2014 26 Quality Management

• Several factors can inhibit competitiveness, including those related to business and government, family, and education.

• In a global marketplace quality is the key to competitiveness.

• Total Quality approach minimizes the Cost of Quality, making products or services more competitive

Quality and Global Competitiveness


Costs of Quality

• Prevention

• Appraisal and inspection

• Internal failure

• External failure

• COPQ = Costs of Poor Quality

COPQ


Prevention Costs

• Quality Planning activities

– FMEA analysis

– Control Plans

• Quality training

• Product design Verification


Appraisal and Inspection Costs

• Testing product

• Reviewing documents

• Inspecting equipment and supplies

• End of line inspection

• Product audits

• Etc.


Internal Failure Costs

• Rework on product

• Scrap of non conforming product

• Correcting database errors

• Stocking extra parts to replace defective components

• Etc,


External Failure Costs

• Warranty claims

• Product (safety) recalls

• Investigating complaints


Direct Cost of Poor Quality (4 – 8% of Sales)

Indirect Cost of Poor Quality (15 – 25% of Sales)

Scrap Rework Warranty Customer Return

Loss of Customer Loyalty

Engineering change

Excessive inventory

Late delivery

Excessive overtime

Excessive employee turnover

Expediting costs


Cost of Quality

Freedom from failures

Failure

Appraisal & Prevention

Total

Co

sts

100%

Juran´s Cost of Quality


Cost of Quality

Excess Quality

Customer Value of Quality

Co

st o

f Q

ual

ity

Junk Zone Profit

Zone

Quality Costs

Freedom from Failures 100%


Quality Cost as % of Sales


Cost distribution as a % of total cost of Quality

Prevention

Appraisal

Internal Failure

External Failure

3,5 %

26 %

2,5 %

68 %


COPQ - Product Safety Recalls - USA

• Number of Recalls by Product Category

• Home Products 1541

• Child Products (not including toys) 1267

• Toys 889

• Sports and Recreation Products 846

• Outdoor Products 509

• Specialty Products 43



• Number of Product Recalls By Hazard Percent • Fire and Fire-Related Burns 1562 • Choking 837 • Laceration 503 • Fall Hazard 489 • Electrocution / Electric Shock 392 • Vehicle Accident 361 • Lead 343 • Strangulation 276 • Burn (Non-Fire Related) 231 • Entrapment 181



Strollers Recalled by Britax Due to Partial Fingertip Amputation Hazard The hinge on the folding mechanism on B-Agile single and double strollers and BOB Motion strollers can injure consumers when consumers fold the strollers. January 30, 2014

Fred & Friends Recalls Infant Pacifiers Due to Choking Hazard The Chill Baby Artiste, Volume and Panic pacifiers fail to meet federal safety standards. January 30, 2014

West Marine Recalls Folding Bicycles; Frames Can Break Causing Riders to Fall West Marine Jetty Express 2 and Port Runner 2 bicycle frames can break. Bikes are used in and around docks and marinas. January 30, 2014

Gree Expands Dehumidifier Recall to Include GE Brand Dehumidifiers Due to Serious Fire and Burn Hazards The dehumidifiers can overheat, smoke and catch fire. Fires reported. January 29, 2014

IKEA Expands Recall of Junior Beds that Pose Laceration Hazard The metal rod connecting the guard rail to the bed can break in use. January 28, 2014

Bodum USA Recalls Coffee Presses Sold Exclusively at Starbucks Due to Laceration and Burn Hazards The glass carafe can fall out of the metal frame and plastic base of the coffee press and break or shatter. January 28, 2014

Reebok-CCM Recalls Senior Hockey Elbow Pads Due to Risk of Elbow Injury Foam padding inside the elbow pads can crack, fracture or split. January 28, 2014

System Sensor Recalls Reflected Beam Smoke Detectors Due To Failure to Alert Consumers in a Fire (Recall Alert) When used with certain power supplies, the smoke detectors, used mostly in commercial buildings, can fail to send a signal to the fire alarm control panel that sounds the alarm

http://www.cpsc.gov/en/Recalls/2014/Strollers-Recalled-by-Britax/

http://www.cpsc.gov/en/Recalls/2014/Fred-and-Friends-Recalls-Infant-Pacifiers/

http://www.cpsc.gov/en/Recalls/2014/West-Marine-Recalls-Folding-Bicycles/

http://www.cpsc.gov/en/Recalls/2014/Gree-Expands-Dehumidifier-Recall-to-Include-GE-Brand-Dehumidifiers/

http://www.cpsc.gov/en/Recalls/2014/IKEA-Expands-Recall-of-Junior-Beds-that-Pose-Laceration-Hazard/

http://www.cpsc.gov/en/Recalls/2014/Bodum-USA-Recalls-Coffee-Presses-Sold-Exclusively-at-Starbucks/

http://www.cpsc.gov/en/Recalls/2014/Reebok-CCM-Recalls-Senior-Hockey-Elbow-Pads/

http://www.cpsc.gov/en/Recalls/Recall-Alerts/2014/System-Sensor-Recalls-Reflected-Beam-Smoke-Detectors/

/en/Recalls/2014/Strollers-Recalled-by-Britax/





/en/Recalls/2014/Fred-and-Friends-Recalls-Infant-Pacifiers/

/en/Recalls/2014/Fred-and-Friends-Recalls-Infant-Pacifiers/

/en/Recalls/2014/West-Marine-Recalls-Folding-Bicycles/



/en/Recalls/2014/Gree-Expands-Dehumidifier-Recall-to-Include-GE-Brand-Dehumidifiers/





/en/Recalls/2014/IKEA-Expands-Recall-of-Junior-Beds-that-Pose-Laceration-Hazard/

/en/Recalls/2014/IKEA-Expands-Recall-of-Junior-Beds-that-Pose-Laceration-Hazard/

/en/Recalls/2014/Bodum-USA-Recalls-Coffee-Presses-Sold-Exclusively-at-Starbucks/





/en/Recalls/2014/Reebok-CCM-Recalls-Senior-Hockey-Elbow-Pads/





/en/Recalls/Recall-Alerts/2014/System-Sensor-Recalls-Reflected-Beam-Smoke-Detectors/




• Number of Product Recalls by Country of Origin • China 2,124 • United States 685 • Taiwan 299 • Mexico 106 • Hong Kong 91 • Canada 74 • Japan 70 • Thailand 64 • India 61 • Korea 57


COPQ – car recalls USA

Automakers recalled about 15.5 million vehicles in 2011 compared with 20 million in 2010, according to figures released by the National Highway Traffic Safety Administration. The figure was the fourth lowest in the last decade.


COPQ – car recalls USA

January 30, 2013

• Toyota Motor on Wednesday announced recalls involving

more than 1 million vehicles in the U.S • Combined, it's one of the largest recalls so far this year

– Most are Corollas, some are Lexus IS sedans – One recall involves airbags and the other focuses on wipers

• Last month, Toyota agreed to pay more than $1 billion in the U.S. to settle lawsuits where vehicle owners said the value of their cars and SUVs plummeted after the company recalled millions of vehicles because of sudden-acceleration issues


Investment in Quality Cost


Quality and Global Competitiveness

• The most important key in maximizing competitiveness is the human resource.

• The Competitive Edge is in the Quality of the People



• The Total Quality Approach • Quality and Global Competitiveness

• Strategic Management • Ethics • Partnering • Quality Culture • Customer Satisfaction • Employee Empowerment • Leadership and Change • Teambuilding and Teamwork • Effective Communication • Training January 2014 46 Quality Management

Strategic Management

• Strategic management is management that bases all actions, activities, and decisions on what is most likely to ensure successful performance in the marketplace.

• The two major components of strategic management are strategic planning and strategic execution.

• Part of strategic planning is thinking creatively to

eliminate “sacred cows” that work against competitiveness.


Strategic planning

• Who are we?

• Where are we going?

• How will we get there?

• What do we hope to accomplish?

• What are our core competencies?

• What are our strengths and weaknesses?

• What are our opportunities and threats?


Strategic Planning Process

Step 1 SWOT Analysis (environmental assessment)

Step 2 Develop the Vision

Step 3 Develop the Mission

Step 4 Develop the Guiding Principles

Step 5 Develop the Broad Strategic Objectives

Step 6 Develop the Specific Tactics (action plan)


SWOT analysis

• SWOT analysis is defined as a structured approach to evaluating the strategic position of a business by identifying its strengths, weaknesses, opportunities and threats

• SWOT analysis identifies the core competencies of the organization


Core competencies

• Core competencies are things an organization

does so well they can be viewed as providing a

competitive advantage.


SWOT analysis

• Opportunities

• Threats

– => apply to External Factors

• Strengths

• Weaknesses

– => apply to Internal Factors


SWOT example


SWOT analysis


Vision

• An organization’s vision is its guiding force, the dream of what it wants to become and its reason for being.


Vision Statement Apple

Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings


Vision Statement JC

JC will be recognized by its customers as global and diversified technology and industrial leader


Mission

• An organization’s mission describes who an

organization is, what it does, and where it is

going.


Mission Statement Apple

Apple Computer is committed to protecting the environment, health and safety of our employees, customers and the global communities where we operate.

We recognize that by integrating sound environmental, health and safety management practices into all aspects of our business, we can offer technologically innovative products and services while conserving and enhancing recourses for future generations.

Apple strives for continuous improvement in our environmental, health and safety management systems and in the environmental quality of our products, processes and services


//upload.wikimedia.org/wikipedia/commons/f/fa/Apple_logo_black.svg

Mission Statement JC

Exceeding Our Customers’ Increasing Expectations

Customers are the reason we are in business. They

are at the core of our reputation. Our focus must be to help them be successful.

Our Mission is founded on quality, innovation, productivity and responsiveness.


Guiding Principles

• An organization’s guiding principles establish

the framework within which it will pursue its

mission. Together, the guiding principles

summarize an organization’s value system,

the things it believes are most important.


JC Values (Guiding Principles)

Integrity We act with honesty, fairness, respect and safety, furthering a culture of unquestioned integrity. This strengthens relationships across businesses and functions.

Customer Satisfaction Our future depends on us serving as customer advocates and increasing our customers’ success. We are proactive, hard-driving and easy to work with. We offer expert knowledge and practical solutions. We deliver on our promises.

Employee Engagement As we grow, so will our people. We foster a culture that promotes excellent performance, teamwork, inclusion, leadership and growth. Our employee and leader diversity will mirror our global markets and population.


JC Values (Guiding Principles)

Innovation We believe there is always a better way. We encourage change and seek the opportunities it brings. We will commercialize innovations globally at an accelerating pace. Sustainability Through our products, services, operations and community involvement, we promote the efficient use of resources to benefit all people and our planet. The environment and sustainability are key elements of our business proposition


Broad strategic objectives

• An organization’s broad strategic objectives translate its mission into more specific terms that represent actual targets at which the organization aims. The objectives are more specific than the mission, but they are still broad.


JC (Automotive) Broad Strategic Objectives

• Global presence

• Diversified customer and product portfolio

• Vertical integration of components across all vehicle segments

• Established market leader in rapidly emerging Chinese market

• Investing in technology and advanced development

• Progressing long-term strategy of building customer value and profitable growth by transforming into a technology company


Action plan

• Well defined, finite projects and activities undertaken for the purpose of specific desired outcomes in support of the broad objectives.


Strategic Planning Process

Step 1 SWOT Analysis (environmental assessment)

Step 2 Develop the Vision

Step 3 Develop the Mission

Step 4 Develop the Guiding Principles

Step 5 Develop the Broad Strategic Objectives

Step 6 Develop the Specific Tactics (action plan)



• Strategies that organizations can adopt for gaining a

sustainable competitive advantage are – cost leadership,

– differentiation, and

– market-niche strategies.

• Total Quality can be the most effective cost

leadership or differentiation strategy – improve efficiency, cut costs

– continuous improvement of the product features



• Integration of Quality programs in strategic plan is important for their success

• This includes annual quality goals and subgoals


Strategic Execution

• Even the best strategic plan will serve no purpose unless it is effectively executed.

• Progress of achieving goals is measured by: – KPI´s (Key Process Indicators)

– Quantitative reports on performance

– Audits



• The Total Quality Approach • Quality and Global Competitiveness • Strategic Management

• Ethics • Partnering • Quality Culture • Customer Satisfaction • Employee Empowerment • Leadership and Change • Teambuilding and Teamwork • Effective Communication • Training January 2014 71 Quality Management

Ethics

• Ethics is about doing the right thing within a moral framework.

• The most common impediment to ethical conduct is human nature because people tend to behave according to perceived personal interest.


Ethics

• The Total Quality approach cannot be successfully implemented in an organization that fails to subscribe to high standards of ethical behavior


Ethics

• Many of the fundamental elements of total quality depend on trust and ethical behavior, including

– communication,

– interpersonal relations,

– conflict management,

– problem solving, teamwork,

– employee involvement and empowerment, and

– customer focus.


Ethics

• Sarbannes – Oxley (SOX) Federal law in the US.

• Top management must now individually certify the accuracy of financial information.

• Penalties for fraudulent financial activity are much more severe



• The Total Quality Approach • Quality and Global Competitiveness • Strategic Management • Ethics

• Partnering • Quality Culture • Customer Satisfaction • Employee Empowerment • Leadership and Change • Teambuilding and Teamwork • Effective Communication • Training January 2014 76 Quality Management

Partnering

• Partnering means working together for mutual benefit. It involves pooling resources, sharing costs, and cooperating in ways that mutually benefit all parties involved in the partnership.

• Partnerships may be formed

– internally (among departments) and

– externally with suppliers, customers


Partnering with suppliers

• 85% of the added value comes from suppliers (automotive industry)

• Traditional model (based on price only)

• Total Quality model – partnership from design to delivery


Partnering with Customers

• The rationale for forming customer partnerships is customer satisfaction.

• The best way to ensure customer satisfaction is to involve customers as partners in the product development process.

• Doing so is, in turn, the best way to ensure competitiveness.

• Customer-defined quality is a fundamental aspect of total quality.


Partnering with Suppliers & Customers

Suppliers Customer End Users

Suppliers Customer End Users

Invisible wall



• The Total Quality Approach • Quality and Global Competitiveness • Strategic Management • Ethics & Corporate Social Responsibility • Partnering and Strategic Alliances

• Quality Culture • Customer Satisfaction • Employee Empowerment • Leadership and Change • Teambuilding and Teamwork • Effective Communication • Training January 2014 81 Quality Management

Quality Culture

• One of the greatest obstacles in implementing Total Quality is the cultural behavior

Why? • Successful Total Quality implementation requires cultural change • People do not like to change! • Resisting change is natural human behavior

– Fear – Uncertainty – Loss of control – More work – ……

• Emotional transition January 2014 82 Quality Management

Total Quality culture

• Short vs long term objectives

• Managers as coaches vs bosses

• Finger pointing vs problem solving

• Supplier cooperation

• Continuous improvement



• Behaviour matches slogans

• Customer input is actively sought and used to continually improve quality

• Employees are both involved and empowered

• Work is done in teams

• Executive level managers are both committed and involved, responsibility for quality is NOT delegated

• Sufficient resources are made available where and when they are needed to ensure the continuous improvement of quality



• Education and training are provided to ensure that employees at all levels have the knowledge and skills needed to continuously improve quality

• Reward and promotion systems are based on contributions to the continual improvement of quality

• Fellow employees are treated as internal customers

• Suppliers are treated as partners


Quality Management Philosophy Concepts 2014 Part 1 St.ver.

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Transcript of Quality Management Philosophy Concepts 2014 Part 1 St.ver.