ch 9. six sigma quality hk

8/3/2019 Ch 9. Six Sigma Quality HK

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Outline:Total Quality Management (TQM) Defined

Quality Specifications and Costs

Six Sigma Quality and Tools

External Benchmarking

ISO 9000

Service Quality Measurement

Chapter 9. Six-Sigma Quality


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TQM Defined

Total quality managementTotal quality management is defined as managing theentire organization so that it excels on all dimensionsof products and services that are important to thecustomer

Two fundamental operational goals:

1. Careful design of product or service

2. Ensure consistent production of product or service


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Philosophical Leadersof the Quality Movement

Philip Crosby W. Edwards Deming

Joseph M. Juran

Each has slightly different definitions of what quality is and howto achieve it (see Exhibit 8.1), but they all had the same generalmessage:

To achieve outstanding quality requires:

quality leadership from senior management,

a customer focus,

total involvement of the workforce, and

continuous improvement based upon rigorous analysis ofprocesses.


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Quality Specifications

Design qualityDesign quality -- Inherent value of the product in the marketplace Conformance qualityConformance quality - Degree to which the product or service

design specifications are met Products can have high design quality but low conformance

quality, and vice versa

Quality at the source Related to conformance quality Means the person who does the work takes responsibility for

making sure output meets specifications

Both design quality and conformance quality should provideproducts that meet customer objectives

This is often termed fitness for use Entails identifying the dimensions of product (or service) that the

customer wants i.e., the voice of the customer

Developing a quality control program


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Dimensionsof Quality

Performance Primary product or service characteristic

Features Added touches, bells and whistles, secondary characteristics

Reliability Consistency of performance over time, probability of failing

Durability Useful life

Serviceability Ease of repair

Response Characteristics of the human-to-human interface (speed,

courtesy, competence) Aesthetics

Sensory characteristics (sound, feel, look, and so on)

Perceived quality (reputation) Past performance and other intangibles (perceived quality)


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Dimensionsof Quality Examples


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Costsof Quality (COQ)

External Failure

Costs

Appraisal Costs

Prevention Costs

Internal Failure

Costs

Costs of

Quality

Costs of inspection, testing, andother tasks to ensure that theproduct or process is acceptable

sum of all costs to prevent defects

Costs for defects incurred withinthe system: scrap, rework, repair

Costs for defects that passthrough the system


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Costsof Quality

No matter what the quality is, it will costcost $$...... So, the assumptions of cost of quality

Failures are caused

Prevention is cheaper

P

erformance can be measured

Discuss the "internal" and "external failure costs" fora high end coffee house (e.g., Starbucks)


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Six-Sigma Quality

Six-sigma is a philosophy whichreflects the goal of eliminatingdefects in the products.

Seeks to reduce variation in theprocesses that lead to productdefects

The name, six sigma refers tothe variation that exists withinplus or minus six standarddeviations of the process outputs

Statistically speaking a process insix-sigma control limits willonly produce 2 defects per billionunits.


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Six Sigma Quality: DMAIC Cycle

Define, Measure, Analyze, Improve, and Control DMAICDMAIC Developed by General Electric as a means of focusing effort on

quality using a methodological approach

Firms striving to achieve six-sigma generally adopt DMAICcycle.

DMAIC are the typical steps employed in continuousimprovement (a.k.a. Kaizen) concept which seeks to continuallyimprove all aspects of production (parts, machines, labor,processes, etc)

Overall focus of the methodology is to understand and achieve

what the customer wants A 6-sigma program seeks to reduce the variation in the processes

that lead to these defects


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Six Sigma Quality: DMAIC CycleCases/examples from classmates

1. Define (D)

2. Measure (M)

3. Analyze (A)

4. Improve (I)

5. Control (C)

Customers and their priorities

Process and its performance

Causes of defects

Remove causes of defects

Maintain quality


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Example to illustrate the process

We are the maker of this cereal. Consumer Reports hasjust published an article that shows that wefrequently have less than 15 ounces of cereal in a box.

What should we do?

Step 1: Define

What is the critical-to-quality characteristic?

The CTQ (critical-to-quality) characteristic in this caseis the weight of the cereal in the box.


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Step 2 - Measure

How would we measure to evaluate the extent of theproblem?

What are acceptable limits on this measure?Lets assume that the government says that we must

be within 5 percent of the weight advertised on the

box.Upper Tolerance Limit = 16 + .05(16) = 16.8 ouncesLower Tolerance Limit = 16 .05(16) = 15.2 ounces

We go out and randomly buy 1,000 boxes of cereal and

find that they weight an average of 15

.875

ounceswith a standard deviation of 0.529 ounces.

What percentage of boxes are outside the tolerancelimits?


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Upper Tolerance

= 16.8

Lower Tolerance

= 15.2

Process

Mean = 15.875

Std. Dev. = .529

What percentage of boxes are defective (i.e. less than 15.2 oz)?

Z = (x Mean)/Std. Dev. = (15.2 15.875)/.529 = -1.276

NORMSDIST(Z) = NORMSDIST(-1.276) = 0.100978

Approximately, 10 percent of the boxes have less than 15.2

Ounces of cereal in them!


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Step 3 - Analyze - How can we improve the capabilityofour cereal box filling process?

Decrease Variation Line vibration impacts scale

Random delays in nozzle open/close

Center the Process

Increase Specifications


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Step 4 Improve How good is good enough?Motorolas Six Sigma

Calibrate the equipment more frequently, upgradeprocess

6-sigma minimum from process center to nearest spec

1 23

1 02 3

12W

6W

1 23 1 02 3

12W


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Step 5 Control

Statistical Process Control (SPC)Use data from the actual process

Estimate distributions

Look at capability - is good quality possible

Statistically monitor the process over time


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Analytical Tools for Six Sigma and Continuous

Improvement: FlowchartFlowchart


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Improvement: RunchartRunchartCan be used to identify when

equipment or processes are

not behaving according to

specifications

0.44

0.460.48

0.5

0.52

0.54

0.560.58

1 2 3 4 5 6 7 8 9 10 11 12

Time (Hours)

Diameter

MEASURE


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Improvement: ChecksheetChecksheet

Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount

Monday

Can be used to keep track of defects or used to make surepeople collect data in a correct manner (MEASUREMEASURE)


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Improvement: Pareto AnalysisPareto Analysis

Assy.

Instruct.

Frequency

Design Purch. Training Other

80%

Can be used to find when 80% of the problems may beattributed to 20% of the causes (MEASUREMEASURE)


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Improvement: HistogramHistogram

NumberofLot

s

Data Ranges

Defects

in lot

0 1 2 3 4

Can be used to identify the frequency ofquality defect occurrence and displayquality performance (MEASURE)MEASURE)


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Analytical Tools for Six Sigma and ContinuousImprovement: Cause & Effect DiagramCause & Effect Diagram


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Analytical Tools for Six Sigma and Continuous Improvement:

Opportunity Flow Diagram

IMPROVE

Value added activities

(Vertical steps) vs.

Non-value added activities

(horizontal steps)


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Improv

ement: Contr

ol Chart

sContr

ol Chart

s

Can be used to monitorongoing productionprocess quality and quality

conformance to statedstandards of quality


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Other Six Sigma Tools

Failure Mode and Effect Analysis (FMEA) is a structuredapproach to identify, estimate, prioritize, and evaluate risk ofpossible failures at each stage in the process

Design of Experiments (DOE) a statistical test to determine

cause-and-effect relationships between process variables andoutput

a.k.a. multivariate analysis (testing)

i.e., testing multiple independent variables (Xs) with respect to adependent variable (Y)


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The Shingo System:Example

Exhibit 8.10

Poka-Yoke Example

(Placing labels on parts

coming down a conveyor)


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ISO 9000

Series of standards agreed upon by the InternationalOrganization 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 asyou documented."

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 orcertifying agency serves as auditor

Is it important for small or medium sized businesses to have ISO9000 certification?


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External Benchmarking Steps

1. Identify those processes needing improvement2. Identify a firm that is the world leader in performing

the process Obviously not a direct competitor

P

ossibly from another industry3. Contact the managers of that company and make a

personal visit to interview managers and workers

4. Analyze data Compare the processes

Compare the results (performance of the processes)

ch 9. six sigma quality hk

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