Chapter 3: Quality Improvement and Cost Reduction

Course Instructor:

Ibrahim Abdulla

Major Topics

Sporadic and Chronic Problems

Project-by-Project Approach

Example of a project

Wide Quality Improvement Initiative

Experiences with Project-by-Project Approach

Introduction to Six-Sigma Improvement

Define Phase

Measure Phase

Analyze Phase

Improve Phase

Control Phase

Six Sigma Summary and Project Example

Maintaining a focus on Continuous improvement

1- Sporadic and Chronic ProblemsCosts Associated with wastes (cost, quality and time related) are due to Sporadic and Chronic Problems

Sporadic Problem: is a sudden change from Statuesque

Chronic Problems: is a long standing adverse situation

The differences between Sporadic and Chronic Problems Approach to solving is different Sporadic are dramatic and require immediate attention The reason for chronic waste is the lack of structured

approach to identify and reduce waste

Structured approach to improvement does not apply only to quality but also to productivity, cycle time, and safety

2- Project-by-Project Approach

Most effective approach to improvement

Main Steps Proving the need Identifying the project Organizing the project team

Quality improvement project tasks: Verifying the project need an mission Diagnosing the cause Providing remedy Dealing with resistance to change Instituting control to hold the gains

It is also called Juran’s breakthrough sequence

Six-Sigam is an alternative approach

Verifying the project need an mission (Define Step in Six-Sigma)

Reduce the number of defective solder connections

3- Example of a project

Diagnosing the cause (Measure and Analyze Step in Six-Sigma)

Providing remedy (Improve Step in Six-Sigma) Either the temperature of the soldering need to be raised or the

speed of the wave soldering machine need to be reduced Dealing with resistance to change (Improve Step in Six-Sigma)

One engineer had pre-defined position, did not change his mind until the experiment proved him wrong

Instituting control to hold the gains (Improve Step in Six-Sigma) To insure the improvement was maintained the process was

monitored

4 - Wide Quality Improvement Initiative

Steps of Major quality improvement initiatives Estimate the size of chronic waste or other quality related

issues Estimate the saving and other benefits

Set a goal to cut down costs to half in five years Do not imply costs would be reduced to zero Verify unquantifiable benefits

Calculate the return on investment resulting from improvement

Use a successful case history in the organization to justify a broader program

5- Experiences with Project-by-Project Approach

Large cost reductions and improved quality to customers have been achieved. 1$ = 5 to 10$

Investment require for improvement has been modest and not capital intensive

Most Projects can be completed in Six months

The Key chronic problems cut through departments and thus require cross-functional project team

In companies consisting of autonomous units, a project that is successful in one unit can be applied to the other units without need for duplicating diagnostic work

The improvement approach should include suppliers

Improvement must include goals in annual business plan that are aligned with other business goals and strategies, etc.

6 - Introduction to Six-Sigma Improvement

7 - Organization Culture and Quality

8 - Assessment of Current Quality Activities

9- National Quality Awards

National Institute of Standards and Technology (NIST)

Areas: Industry Services Small Business Education Health Care

Each country has its own System and regulatory body

10 - ISO 9000 Quality System Standards

Developed by International Organization for Standards

Minimum Criteria for quality Systems

Required to meet domestic and International competition

Some industries have their own quality systems (Example QS9000 for Automotive Industry). These systems includes ISO 9000 and additional industry related standards

ISO Do not emphasis on results, but rather on Existence of quality systems

Baldrige Criteria Focus on Customer Satisfaction.

Baldrige and ISO 9000 complement each other

Questions/Queries