quality philosophies and standards: baldrige to six sigma

Quality Philosophies and StandardsQuality Philosophies and Standards

Britt WatwoodBritt WatwoodCenter for Teaching ExcellenceCenter for Teaching Excellence

VCUVCU

(Baldrige, Six Sigma and Lean Mgmt)(Baldrige, Six Sigma and Lean Mgmt)

What is meant by the term?What is meant by the term?

“Quality”

Quality’s Quality’s FoundatioFoundatio

nn

QualityQuality

Philosophy &Practice

Tools

Empowerment

Quality Quality EvolutioEvolutio

nn• 1930’s1930’s

– Shewart CycleShewart Cycle• 1950’s1950’s

– Deming in JapanDeming in Japan• 19801980

– Productivity / Quality CirclesProductivity / Quality Circles• 19851985

– Deming/Crosby/JuranDeming/Crosby/Juran• Late 1980’sLate 1980’s

– Total Quality MgmtTotal Quality Mgmt• 1990’s1990’s

– Baldrige CriteriaBaldrige Criteria• CurrentCurrent

– Six SigmaSix Sigma– Lean ManagementLean Management

Quality Quality OverviewOverview

QMSMarkets &Customers

VOCLean

6 σ

ProductOperation

StrategyFormulation

ProductSupport

QualityQuality

Malcolm Malcolm Baldrige Baldrige National National

Quality AwardQuality Award

www.quality.nist.gov

Malcolm Malcolm Baldrige NQABaldrige NQA

• Twenty years evolvingTwenty years evolving• A Framework and A ToolA Framework and A Tool• Self-AssessmentSelf-Assessment• Promotes Awareness of Promotes Awareness of

Continuous Improvement Continuous Improvement and Excellenceand Excellence

• Sharing of Best PracticesSharing of Best Practices• Presented by the Presented by the

President of the United President of the United StatesStates

Baldrige Baldrige is a is a

“Process”“Process”

• A systems perspective

• Built around core values

• Linkages within the framework

Core Core ValuesValues

•Visionary LeadershipVisionary Leadership•Customer Driven ExcellenceCustomer Driven Excellence•A Learning OrganizationA Learning Organization•Valued Employees and Valued Employees and

PartnersPartners•AgilityAgility•Focus on the FutureFocus on the Future

Core Core ValuesValues

•Managing for InnovationManaging for Innovation•Management By FactManagement By Fact•Social Responsibility Social Responsibility •Results and Value DrivenResults and Value Driven•Overall Systems PerspectiveOverall Systems Perspective

Visionary Visionary LeadershipLeadership

• Senior leadership has Senior leadership has visionvision

• Senior leadership Senior leadership communicates that visioncommunicates that vision

• Values and expectations Values and expectations align with visionalign with vision

• Leaders are role modelsLeaders are role models

Customer Customer Driven Driven

ExcellenceExcellence

• Quality and Performance are Quality and Performance are Judged by the CustomersJudged by the Customers

• Customer Satisfaction Customer Satisfaction tracked and used to improve tracked and used to improve processesprocesses

• Customer Satisfaction of Customer Satisfaction of Competitors Known and Competitors Known and Used to Improve Own Used to Improve Own OfferingsOfferings

Organizational Organizational LearningLearning

• Learning directed Learning directed at improved at improved products…and products…and improved peopleimproved people

• Embedded in all Embedded in all processesprocesses

• ContinuousContinuous• Results in Positive Results in Positive

ChangeChange

Valuing Valuing EmployeeEmployee

s &s &PartnersPartners

• Committed to Committed to satisfaction, satisfaction, development, and well-development, and well-being of employeesbeing of employees

• Recognition SystemsRecognition Systems• Risk-Taking EncouragedRisk-Taking Encouraged• Strategic Alliances with Strategic Alliances with

SuppliersSuppliers

AgilityAgility

• The ability to The ability to thrive in the thrive in the White-water White-water Rapids of ChangeRapids of Change

• Cycle TimeCycle Time• ResponsivenessResponsiveness

Focus Focus on the on the FutureFuture

• Long-Term ViewpointLong-Term Viewpoint• Long-Term Commitment Long-Term Commitment

to Key Stakeholdersto Key Stakeholders• Strategic Focus on Strategic Focus on

Resources, Employee and Resources, Employee and Product DevelopmentProduct Development

Managing Managing For For

InnovationInnovation

• Innovation Part of Innovation Part of the Culturethe Culture

• More than More than SustainabilitySustainability

• Meaningful Change Meaningful Change to Products and to Products and ServicesServices

Management Management

ByByFactFact• Measurement AND Measurement AND

Analysis of PerformanceAnalysis of Performance• Key Processes Key Processes

IdentifiedIdentified• Outputs KnownOutputs Known

– Yours and Competitors! Yours and Competitors!

• Comparison with Comparison with BenchmarksBenchmarks

• Use of Trend DataUse of Trend Data

SocialSocialResponsibilityResponsibility

• Safe Work Safe Work EnvironmentEnvironment

• Legal Work Legal Work EnvironmentEnvironment

• Good Corporate Good Corporate CitizenCitizen

Results Results & Value& Value

• Focus on Key ResultsFocus on Key Results• Creating Value for Creating Value for

StakeholdersStakeholders• CustomersCustomers• EmployeesEmployees• StockholdersStockholders• Suppliers / PartnersSuppliers / Partners• The CommunityThe Community

• Both Leading and Both Leading and Lagging IndicatorsLagging Indicators

Systems Systems PerspectivePerspective

• Linkage and Alignment Linkage and Alignment between the Baldrige between the Baldrige CategoriesCategories– LeadershipLeadership– Strategic PlanningStrategic Planning– Customer & Market FocusCustomer & Market Focus– Measurement, Analysis, & KMMeasurement, Analysis, & KM– Workforce FocusWorkforce Focus– Process ManagementProcess Management– Business ResultsBusiness Results

Baldrige Baldrige CriteriaCriteria

4 Measurement, Analysis & Knowledge Management

1Leadership

Organizational ProfileEnvironment, Relationships, &

Challenges

2StrategicPlanning

3Customer &

Market Focus

6ProcessMgmt

5Workforce

Focus7

BusinessResults

ISO 9000ISO 9000

• Commitment to Customer Commitment to Customer RequirementsRequirements

• Documentation Documentation RequirementsRequirements

• Resource AllocationResource Allocation• Measurement and Measurement and

AnalysisAnalysis

Standard Standard DeviationDeviation

Sigma is a measure ofvariation

Sigma Sigma VariationVariation

• The sigma value is a The sigma value is a metric that indicates metric that indicates how well a process is how well a process is performing.performing.

• The higher the sigma The higher the sigma value, the better.value, the better.

• The higher the sigma The higher the sigma value, the more the value, the more the process is process is defect-freedefect-free..

Example of Example of Sigma Sigma ValueValue

Yield DPMO Sigma

30.9%690,000 169.2%308,000 293.3% 66,800 399.94% 6,210 499.98% 320 599.9997% 3.4 6

Yield DPMO Sigma

30.9%690,000 169.2%308,000 293.3% 66,800 399.94% 6,210 499.98% 320 599.9997% 3.4 6

Most companies Most companies operate at around operate at around 4 sigma – the 4 sigma – the quality standard quality standard set by the US set by the US Government in Government in WW IIWW II

Example of Example of Sigma ValueSigma Value

What Does 99% Defect-Free Mean?What Does 99% Defect-Free Mean?

•200,000 wrong drug prescriptions each year

What Does 99% Defect-Free Mean?What Does 99% Defect-Free Mean?

•Two short or long landings at major airports each day

What Does 99% Defect-Free Mean?What Does 99% Defect-Free Mean?

•5,000 incorrect surgical procedures every week

What Does 99% Defect-Free Mean?What Does 99% Defect-Free Mean?

•20,000 lost articles of mail every hour

What Does 99% Defect-Free Mean?What Does 99% Defect-Free Mean?

•Unsafe Drinking Water for 15 minutes each day

What Does 99% Defect-Free Mean?What Does 99% Defect-Free Mean?

•No electricity for 7 hours each month

What Does 99% Defect-Free Mean?What Does 99% Defect-Free Mean?

•50 dropped newborns at the hospital each day

What Does 99% Defect-Free Mean?What Does 99% Defect-Free Mean?

Defects Defects Effect Effect CostsCosts• The Cost of Quality The Cost of Quality

– 4 Sigma: 99.4%4 Sigma: 99.4%• 6,210 defects6,210 defects• Industry AverageIndustry Average• Lose 15-20% of salesLose 15-20% of sales

– 5 Sigma: 99.98%5 Sigma: 99.98%• 233 defects233 defects• Lose 5-10% of salesLose 5-10% of sales

– 6 Sigma: 99.9997%6 Sigma: 99.9997%• 3.4 defects3.4 defects• Lose Less than 1% of salesLose Less than 1% of sales

DMADMAICIC

Design

Measure

Analyze

Improve

Control

As a nation,we seem to be obsessed

with LEAN…

Effectiveness vs EfficiencyEffectiveness vs Efficiency

V O C6 σ

Selection6 σ

Control6 σ

Improvement

ProcessMetrics

LeanMetrics

LeanWorkload

LeanProcess

Six Sigma = Effectiveness

Lean Mgmt = Efficiency

• The term “The term “leanlean” is used ” is used because lean manufacturing because lean manufacturing uses “uses “lessless”…”…

Labor in the factoryManufacturing spaceCapital investmentMaterialsTime between the customer order and the product shipment

DefinitionDefinition

Continuous flow

Batch size

Production

Layout

Processing

Quality

Based on forecast

Based on function / department

Large

Batch & queue

Lot sampling

Based on orders

Based on product flow

Small

Assured during processing

Traditional Lean

Lean Mgmt ComparisonLean Mgmt Comparison

Key ElementsKey Elements::

• StabilityStability

• QualityQuality

• Continuous FlowContinuous Flow

• KaizenKaizen

• Pull SystemPull System

• Workload BalancingWorkload Balancing

WasteWaste

“Anything that adds Cost

to the product without adding Value”

“Anything that adds Cost

to the product without adding Value”

Non - Value Added: 95%

Value Added: 5%

WasteWaste

• Overproduction• Excess Inventory• Product Defects• Non-value added

processing• Wait time• Underutilized

labor• Excess motion• Unnecessary

Transportation

7 Types 7 Types of Mudaof Muda

Typesof

Waste

CORRECTION

WAITING

PROCESSING

MOTION

INVENTORYCONVEYANCE

OVERPRODUCTION

Repair orRework Any wasted motion

to pick up parts or stack parts. Also wasted walking

Wasted effort to transportmaterials, parts, or finished goods into or out of storage, or between processes.

Producing morethan is needed before it is needed

Maintaining excessinventory of raw mat’ls,parts in process, orfinished goods.

Doing more work thanis necessary

Any non-work timewaiting for tools, supplies, parts, etc..

Workplace Workplace

OrganizationOrganization

Maintain through empowerment,

commitment, and discipline

Sort

Sustain Set In Order

ShineStandardize

Keep machines and workareas clean

Use standard methods to keep Sort, Set In Order,

and Shine to a condition

Organize the work area

5 S

Get rid of clutter

KAITo modify /

Change

ZENTo make good /

better+

= KAIZEN

Gradual and orderly, continuous improvement.

Differences in Differences in

EmphasisEmphasis•Six Sigma– Process Improvement– Reduced Defect Rate

•Lean– Efficiency Improvement– Reduce Waste

•Baldrige Criteria– Performance Excellence

across Entire System– Results Oriented

What MakesWhat Makes

Sense ForSense For

YOURYOUR

Company ???Company ???

Questions???Questions???