definition: total quality...
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Irwin/McGraw-Hill 1
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.
Irwin/McGraw-Hill 2
Quality Descriptions
Design Quality (Features)
vs.
Conformance Quality
Irwin/McGraw-Hill 3
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
Irwin/McGraw-Hill 4
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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Quality Management History
“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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Quality Management History
“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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Quality Management History
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
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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)
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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)
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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.
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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.
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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
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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.
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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?
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ISO 9000 versus the Baldrige Award
Baldrige
ISO 9000
QS 9000
Evans and Lindsay The Management and Control of Quality, Southwestern Books, p536.
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Costs of Quality: Categories
� Appraisal costs
� Prevention costs
� Internal failure costs
� External failure costs
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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!
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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
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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
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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.
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Input-Output Analysis
Suppliers Inputs Sub-
Processes Outputs Customers
S C O P I
Measures
From Flowchart
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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
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Pareto Analysis
80% of the
problems
may be
attributed to
20% of the
causes. Assy.
Instruct.
Fre
qu
en
cy
Design Purch. Training
Other
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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
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Histogram
Fre
qu
en
cy
Data Ranges
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Scatter Diagram
0
2
4
6
8
10
12
0 10 20 30
Hours of Training
Defe
cts
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Checksheet (data collection)
Billing Errors
Wrong Account
Wrong Amount
A/R Errors
Wrong Account
Wrong Amount
Monday
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Cause & Effect Diagram
Effect
Man Machine
Material Method
Environment
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Fishbone Analysis: Existing Hiring Process Problems
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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
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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
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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
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Continuous Improvement Process
Orlando Remanufacturing And
Distribution Center
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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
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Phase 1: Internal Kickbacks
To Be Remanufac-
tured Equipment
Tear Down And Wash
Remanu- facture
Reassembly Final
Clean-up
QA
Unit Not OK
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Five Most Common Reasons For Returns From QA
Missing/
Wrong Part
Dirt/Rust Defective
Part
Leaks Poor
Insulation
January-May (61 units)
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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)
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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 $$?
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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
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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
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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
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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.
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Six Sigma DMAIC 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.
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Six Sigma DMAIC Process
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.
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Six Sigma DMAIC 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.
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Six Sigma DMAIC Process
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.
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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.
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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.