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Irwin/McGraw-Hill 1

Definition:Total Quality Management

Total Quality Management (TQ, QM or TQM) and Six Sigma (6) 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.

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Quality Descriptions

Design Quality (Features)

vs.

Conformance Quality

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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

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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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“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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“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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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 departments10. Eliminate slogans, exhortations, and targets for the work force11. Eliminate numerical quotas12. Remove barriers preventing pride of workmanship13. Institute a vigorous program of education and retraining14. 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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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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Benchmarking1. 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

1Leadership

2StrategicPlanning

3Customer andMarket Focus

5Human Resource Development & Management 7

Business Results

6 ProcessManagement

Information, Analysis, and Knowledge Management


Malcolm Baldrige NationalQuality 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)


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)


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.


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.


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


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.


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?


ISO 9000 versusthe Baldrige Award

Baldrige

ISO 9000

QS 9000

Evans and Lindsay The Management and Control of Quality, Southwestern Books, p536.


Costs of Quality: Categories Appraisal costs

Prevention costs

Internal failure costs

External failure costs


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!


Cost of Poor Quality Category Examples

Failure – Costs – Internal Prevention CostsRe-shipping Quality AdministrationUnnecessary Travel Time Quality PlanningRe-picking/Picking Quality Systems DesignUnpacking/Storing Returns Calibration and MaintenanceRe-order Time Production/Inspection EquipmentCrediting Time Vendor Assessment

Quality TrainingFailure Costs – External Appraisal CostsLoss of Sales Incoming Test and InspectionComplaints In-Process InspectionReturns Final InspectionWarranty Claims Sampling Procedures

Quality Audits


COPQ Projections

$

Appraisal Costs

External Failure Costs

Internal Failure Costs

Prevention Costs

$ Saved

Total CostUsing a COPQ

System

Total CostWithout Using

A COPQSystem

Months


Process Flow ChartNo, 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.


Input-Output Analysis

Suppliers Inputs Sub-Processes Outputs Customers

S COPIMeasures

From Flowchart


Example SIPOC - Specifying Equipment Selection and Installation Procedures at Coca-Cola USA

SuppliersCustomersCoca-Cola Fountain

OutputsEquipment Selection GuideEquipment Sales ManualsTechnology Cost/ Benefit MatrixInstallation GuidelinesInstallation Time StandardsInstallation Rating SystemInstallation Design Guidelines

InputsTechnical InformationTechnical QuestionsCustomer Input

ProcessDeveloping Installation Cost Reduction ProgramsDeveloping Equipment Selection Policies and ProceduresDesigning Installation Policies and Procedures

CustomersBurger KingMcDonald’sPrestigeCoca-Cola FountainEquipment Suppliers

MeasuresNumber of Entities Using GuidelinesInstallation Audit RatingsSurvey of Users Effectively Using Selection Guidelines


Pareto Analysis

80% of the problems may be attributed to 20% of thecauses.

Assy.Instruct.

Freq

uenc

y

Design Purch.Training

Other


Run Chart

0.440.460.48

0.50.520.540.560.58

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

Time (Hours)

Dia

met

er


HistogramFr

eque

ncy

Data Ranges


Scatter Diagram

02468

1012

0 10 20 30

Hours of Training

Def

ects


Checksheet (data collection)

Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount

Monday


Cause & Effect Diagram

Effect

ManMachine

MaterialMethod

Environment


Fishbone Analysis:Existing Hiring Process Problems


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


Customer SurveyWors

tBest

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


Example Customer Survey Results - Quantas Airways

Survey of Frequent Flier Needs – Order of Priority:

1. No lost baggage 12. Assistance with connections2. No damaged baggage 13. Being kept informed of delays3. Clean toilets 14. Transport to cities4. Comfortable seats 15. Accurate arrival info 5. Prompt baggage delivery 16. Well-organized boarding6. Ample leg room 17. Quick/friendly airport check-in7. Good quality meals 18. Self-service baggage trolleys8. Prompt reservation service 19. On-time arrival9. Friendly/efficient cabin crew 20. Provision of pillows/rugs10. Clean and tidy cabin 21. Assistance with customs11. Comfortable cabin temp 22. On-time departures


Continuous Improvement Process

Orlando RemanufacturingAnd

Distribution Center


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


Phase 1: Internal Kickbacks

To BeRemanufa

c-tured Equipment

Tear Down

And WashRemanu-facture

Reassembly

FinalClean-up

QA

Unit NotOK


Five Most Common Reasons For Returns From QA

Missing/Wrong Part

Dirt/ Rust DefectivePart

Leaks PoorInsulation

January-May (61 units)


Reasons for Returns from QA- Weighted Average

Leaks Dirt/ Rust StainlessSteel

Missing/Wrong Part

DefectivePart

PoorInsulation

Weighted Avg. = % Occurring X Defect Cost (0-10, Based on Time to Repair)


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 $$?


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


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


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


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.



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.



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.



Measure

Control

Define

Analyze

ImproveImprove: Generate both obvious and creative solutions to fix and prevent problems. Finding creative solutions by correcting root causes requires innovation, technology and discipline.



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.


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.


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.

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