What is pareto analysis? Give an example of how it can be used.

List and describe the major quality tools

– Cause and effect– Check Sheet– Histograms– Pareto Analysis– Run Charts/Control Charts– Scatter diagrams

List and explain 5 reasons why continual improvement is important

– It is fundamental to success in a global marketplace

– Maintaining the status quo is like standing still in a race

– Customers need change– Innovation today is routine tomorrow– A bargain today is high priced tomorrow

List and explain the two types of variation

Explain the importance of the normal distribution in process control

List and explain the key elements of total quality

– Customer focus– Obsession with Quality– Scientific Approach– Long-term commitment– Teamwork– Education and training– Freedom through control– Unity of purpose– Employee Involvement

Explain why the implementation of total quality requires cultural change

– Change can not occur in a hostile environment

– Moving to Total Quality takes time – It can be difficult to overcome the past

List and explain 6 essential continual improvement activities

– Maintain communication– Correct obvious problems– Look upstream– Quality improvement is not putting out fires– Document problems and progress– Monitor change

Two Views of Quality• Defective parts per hundred• Detection of problems• Finished product inspection• Passive employees who (blindly) follow orders• Short term profits• Productivity & quality in conflict

• Meeting customer specifications• Establishing acceptable levels of

nonconformance

• Quality is inspected in

• Defects are to be expected• Quality is a separate function or department• Employees blamed for poor quality• Supplier relationships are short lived & cost

driven

• Defective parts per million• Prevention of problems• Continual improvement• Employees empowered to think and

recommend improvements• Long term profits• Productivity gains are made as a result of

Quality improvements• Exceeding customer expectations• Establishing benchmarks for customer

satisfaction & continually improving

• Quality is achieved by product & process design & effective control techniques

• Defects are to be prevented• Quality should be fully intergrated – it’s

everybody’s responsibility• 85% of quality problems are

management’s fault• Supplier relationships are long term and

quality driven

Traditional

Total Quality

Page 11

W. Edward Deming Fourteen Points

1."Create constancy of purpose towards improvement". Replace short-term reaction with long-term planning.

2."Adopt the new philosophy". The implication is that management should actually adopt his philosophy, rather than merely

expect the workforce to do so.

3."Cease dependence on inspection". If variation is reduced, there is no need to inspect manufactured items for defects, because there

won't be any.

4."Move towards a single supplier for any one item." Multiple suppliers mean variation between feedstocks.

5."Improve constantly and forever". Constantly strive to reduce variation.

6."Institute training on the job". If people are inadequately trained, they will not all work the same way, and this will introduce variation.

7."Institute leadership". Deming makes a distinction between leadership and mere supervision. The latter is quota- and

target-based.

Page 20

W. Edward Deming Fourteen Points 8."Drive out fear".

Deming sees management by fear as counter- productive in the long term, because it prevents workers from acting in the organization's

best interests.

9."Break down barriers between departments". Another idea central to TQM is the concept of the 'internal customer', that each department serves not the management, but the other departments that use its outputs.

10."Eliminate slogans". Another central TQM idea is that it's not people who make most mistakes - it's the process they are working within. Harassing the workforce without improving the processes they use is counter-productive.

11."Eliminate management by objectives". Deming saw production targets as encouraging the delivery of poor-quality goods.

12."Remove barriers to pride of workmanship". Many of the other problems outlined reduce worker satisfaction.

13."Institute education and self-improvement".

14."The transformation is everyone's job".

Page 20

Common errors made when starting quality initiatives

• Senior management delegation & poor leadership– Can not delegate leadership to the Quality department or an outside

consultant.• Team mania

– Teams will need to be established, but the approach needs to be learned. Teams will only be effective when a cultural change takes place

• The deployment process– It can not be a directive from “the top”. Plan must be made for

integration of the TQ principals into the organization and for the necessary cultural change

• A narrow, dogmatic approach– Organizations need to tailor TQ to their individual needs. They can not

simply take the Demming approach or the Juran approach, they need to take from all the models and get the best fit for their organization

• Confusion about the differences among education, awareness, inspiration, and skill building

– Training and skill building are two different things. Training can be done over a short period of time; skill building takes not only time but a cultural change to foster that growth.

Page 27

The Relationship between Quality and Competitiveness

• The relationship between quality and competitiveness can be summarized as follows: In a modern global marketplace, quality is the key to competitiveness.

How does Quality help an organization to become competitive?

Page 44

The cost of Quality

• “traditional” attitude is that there is a cost to quality• Quality is a “support” function; does not contribute

directly to manufacturing and so is often one of the first functions to go in hard times

When TQ is integrated as a normal part of business, it contributes directly to manufacturing and is actually an important tool to avoid hard times

Competitiveness and the U.S. Economy

• Ability to compete globally has direct impact on quality of life

• Ability to compete depends upon the ability to do a better job of producing goods

• To do a better job producing goods nations and organizations need to focus on policies, systems and resources in a coordinated way to continually improve

Pg 47

Competitiveness and the U.S. Economy

• Many industrialized nations have taken steps to link education, economics and labor market policy to promote competitiveness

• The U.S. is still debating the need for a national industrial policy and a national education policy

• 1980s – U.S. improved productivity by putting more people to work – other nations improved productivity by making the worker more efficient

• 2000 to 2010 – the number of U.S. workers is on the decline to maintain productivity U.S. workers must become more efficient

Pg 48

Factors Inhibiting Competitiveness Business and government

• Emphasis on short-term profits fed by fear of unfriendly takeover attempts and pressure from lenders or shareholders (2)

• Excessive medical costs (6)• Excessive costs of liability inflated by lawyers

working on contingency fees (7)

Pg 49

Factors Inhibiting Competitiveness

Family• The family unit is the nation’s most important human

resource development agency• Single parents who must work full time jobs have

little or no time to help their children excel in school• Parents who must work more than one job have little

or no lime to help their children excel in school• Children with parents who do no value education are

unlikely to value it themselvesPg 51

Management by Accounting, Antithesis of Total Quality

• Creates an analytically detached approach to decision making

– Printouts vs firsthand knowledge and insight

• Focus on short-term cost reduction

– At the cost of long term improvements in people and processes

• Narrowly focused manages viewing every problem from a finance and accounting perspective

Managing the organizations financial results instead of the people and processes that produce those results

Pg 67

Ethics

• Ethics is the study of morality.

• Ethics is the study of human behavior within a moral context.

• Morality are the values that that are subscribed to and fostered by society

• Ethical behavior is behavior within the limits prescribed by widely accepted moral valuesPg

116

Ethics

• As applied in the workplace, morality is translated into standards of conduct.

• If a certain behavior is illegal, it is also unethical.

• However, conduct may be legal but unethical.

• Ethical behavior can be influenced by an individual’s ego strength, Machiavellianism, and focus of control.

Guild lines for Determining Ethical Behavior

• Morning-After Test– How will you feel tomorrow about what you did today

• Front Page Test– How would you feel if this was written up in the

newspaper?• Mirror Test

– Can you look in the mirror• Role reversal Test

– How would you feel about being on the receiving end of this behavior?

• Commonsense Test– How does this fit into everyday commonsense?

Tests of Ethical Behavior

Pg 117

Guild lines for Determining Ethical Behavior

• Purpose– People think they are ethical people who let their conscience guild

them. And always want to feel good about themselves.• Pride

– People feel they have the “right stuff” to make unpopular decisions• Patience

– People believe “right” will prevail in the long run…..and they are willing wait

• Persistence– Stay the (ethical) course and see it through to it’s positive

conclusion• Perspective

– People take time to reflect and are guided by their internal ethical standards

5 P’s of Ethical Behavior

Pg 117

Trust and Total Quality

• Trust is a critical element of ethics, which, in turn, makes ethics critical in total quality.

• Many of the fundamental elements of total quality depend on trust and ethical behavior,

• including communication, • interpersonal relations, • conflict management, • problem solving, • teamwork, • employee involvement and empowerment, • and customer focus.

Pg 119

Trust and Total Quality

• Trust can be built by

–being loyal to those not present,

–keeping promises,

–and sincerely apologizing when necessary.

Pg 119

Values and Total Quality

• Values are the deeply held beliefs that form the core of who we are.

• Values guide our behavior as individuals and as organizations

• An organization will not produce quality product or provide a quality service unless the organization values quality

• Individuals and organizations apply their knowledge and skills most willingly to efforts in which they believe

Pg 120

Integrity and Total Quality

• Integrity requires honesty, but it is more than just honest.

• Integrity is a combination of honesty and dependability.

• People with integrity can be counted on to do the right thing, do it correctly, and do it on time.

Manager’s Role in Ethics

• Managers play a key role in ethics in an organization. • They are responsible for

• setting an example of ethical behavior, • helping employees make ethical choices, • and helping employees follow through and

behave ethically after making an ethical choice. • In carrying out these responsibilities, managers can

use the best-ratio approach, black-and-white approach, and full-potential approach.

Pg 123

Partnering or Strategic Alliances

• Partnering means working together for mutual benefit.

• The purpose of partnering is to enhance competitiveness.

• It involves pooling resources, sharing costs, and cooperating in ways that mutually benefit all parties involved in the partnership.

• Partnerships may be formed internally (among employees) and externally with suppliers, customers, and potential competitors.

• The maximum benefits of partnering are realized when all parties in the chain of partners cooperate.

Partnering with Suppliers

• The goal is to form a mutually beneficial relationship which promotes continuous improvement of quality, productivity and competitiveness.

• Stages of development• Uncertainty & tentativeness• Short-term pressure• Need for new opportunity• Adoption of new paradigm• Awareness of potential• Adoption of new values• Mature partnering

Traditional supplier relationships have been adversarial

Pg 156

Partnering with Customers

• The rationale for forming customer partnerships is customer satisfaction and increased competitiveness.

• The best way to ensure customer satisfaction is to involve customers as partners in the product development process.

• Doing so is, in turn, the best way to ensure competitiveness.

Customer-defined quality is a fundamental aspect of total quality.

Partnering with Potential Competitors

• Competitors may ban together to improve domestic manufacturing to improve their competitive position over foreign imports.

• Competitors may produce products for one another when facilities and equipment are not available

• Competitors may share information on safety, regulatory controls, education, training, etc

• This is especially prevalent with small and mid-sized enterprises (SMEs)

Increased competitiveness

Pg 160

Manager’s Role in Ethics

Best Ratio Approach• Based on the belief that all people are basically

good• In the right conditions they will behave ethically

AND under certain conditions they will behave unethically

• Managers need to create conditions that promote ethical behavior.

• Maintain the best possible ratio of good choices over bad choices

• When faced with hard decisions, to the most good for the most people

Manager’s Role in Ethics

Black and White Approach• Right is right and wrong is wrong regardless of

the conditions• Managers need to make ethical decisions and

carry them out• Managers should make fair and impartial choices

regardless of the out come and do the right thing without concern for short term consequences.

Pg 124

Manager’s Role in Ethics

Full Potential Approach• Decisions are made based upon how they will

effect the ability of those involved to reach their full potential

• People are responsible for realizing their full potential within the parameters of morality

• Ethical choices are those which achieve the goal without infringing on the rights of others

Models for Making Ethical Decisions

Categorical Imperative Model• Right is right, wrong is wrong, there are no gray areas• By who’s definition of right & wrong?

Full-disclosure Model• Could the company explain its action to the stakeholders?• Values of the stakeholders are applied to decide what is ethical.

Doctrine of the Mean Model• In any situation, a moderate middle ground is an ethical option• Moderation is ethical?

Golden Rule Model• “do unto others as you would have them do unto you”• Values of the stakeholders are applied to decide what is ethical.

Market-ethic Model• Any legal action that promotes profitability is ethical• In the long run the market will reject unethical behavior because it

is unprofitable

Pg 130

Models for Making Ethical Decisions

ContinuedOrganizational Ethic Model• What ever serves the organization’s interest is ethical• A set of guiding principals must be in place to ensure ethical

behaviorEqual Freedom Model

• Organizations have the right to behave as they wish so long as they do not impinge on the rights of the stakeholders

• Need to look at long range impact of behaviorsProportionality Ethic Model

• The world is so complex that decisions are never clearly right or wrong

• Make sure the good outweighs the badProfession Ethic Model

• Profession Peer Review• Professional Code of Ethics

Pg 130

Customer Defined Quality

• Only Customers can tell you what they want and how they want it.

• Must work with customers to determine their needs and collaborate with suppliers & operations to deliver them.

• Components of Customer defined quality Identifying Customer needs Customer focus Customer Satisfaction

Customer Satisfaction• In a total quality setting, customers define quality.

Therefore, customer satisfaction must be the highest priority.

• Customer satisfaction is achieved by producing high-quality products that meet or exceed expectations.

• It must be renewed with each purchase.

• Focus must be on the customer

• The key to establishing a customer focus is to put employees in touch with customers so that customer needs are known and understood.

Customer Satisfaction• To ensure customer satisfaction, it must be renewed

with every new purchase. • This cannot be accomplished if quality, even though

it is high, is static. • Satisfaction implies continual improvement. • Continual improvement is the only way to keep a

customer satisfied and loyal.

Keys to Customer Satisfaction

• Establishing a customer focus. put employees in touch with customers so

that customer needs are known and understood.

• Continual improvementProcess improvement throughout the

supply chain; from raw materials to deliveryMaking things better, even when they are

not broken

Customer Satisfaction

Customer Satisfaction is critical, but it is not the end of the race. It is a means to an end, not the end.

The goal is Customer Retention

Quality Culture: Changing Hearts, Minds and

Attitudes• A quality culture is an organizational value system that

results in an environment that is conducive to the establishment and continual improvement of quality. It consists of values, traditions, procedures, and expectations that promote quality.

• Implementing total quality necessitates cultural change in an organization, for the following reasons: Change cannot occur in a hostile environment. Moving to total quality takes time. It can be difficult to overcome the past.

Change cannot occur in a hostile environment

• The total quality approach to doing business may be radically different than what management and employees are used to.

• Managers who are used to sitting in their lonely towers at the top of the pecking order and issuing edicts from on high are likely to reject the concept of employee involvement and empowerment.

• Employees who are used to competing against their own fellow workers for promotion and wage increases may not be open to mutually supportive internal partnerships and teamwork.

• Situations such as this can create an environment that is hostile toward change, no matter how desirable that change is.

• Change can be difficult, even when people want to change. It can be impossible in a hostile environment.

Moving to total quality takes time.

• The nature of total quality is such that the organization may have to go down somewhat before it can turn things around and start to come up.

• In a conversion to total quality, positive results are rarely achieved in the short run.

• This characteristic gives non-believers and people who just don't want to change (and such people are often the majority at first) the opportunity to promote the "I told you it wouldn't work" syndrome.

It can be difficult to overcome the past.

• Employees who have worked in an organization for any period of time have probably seen a variety of management fads come and go.

• Promoting the latest management gimmick and then letting it die for lack of interest may be part of the existing organizational culture. If this is the case, it will be difficult to overcome the past.

• The past is not just an important part of an organization's culture; it can be the most difficult part to overcome

Organizational Change• The laws of organizational change are as follows:

Understand the history behind the current culture. Don’t tamper with systems—improve them. Be prepared to listen and observe. Involve everyone affected by change in making it.

People resist change for the following reasons

• FearChange brings with it the unwanted specter of the unknown, and people fear the unknown. Worst-case scenarios are assumed and compounded by rumors. In this way, fear tends to feed on itself, growing with time.

• Loss of ControlPeople value having a sense of control over their lives. There is security in control. Change can threaten this sense of security and cause people to feel as if they are losing control of their lives1 jobs, areas of responsibility1 and so on.

• UncertaintyUncertainty is difficult to deal with. For better or worse, people like to know where they stand. Will I be able to handle this? What will happen to me if I can't? These are the types of questions people have when confronted with change.

• More WorkChange sometimes means more work3 at least at first. This concern includes work in the form of learning. In order to make the change, people may have to learn more information or develop new skills. For an undefined period, they may have to work longer hours.

Change brings with it the unwanted specter of the unknown, and people fear the unknown. Worst-case scenarios are assumed and compounded by rumors. In this way, fear tends to feed on itself, growing with time.

People value having a sense of control over their lives. There is security in control. Change can threaten this sense of security and cause people to feel as if they are losing control of their lives1 jobs, areas of responsibility1 and so on.

Uncertainty is difficult to deal with. For better or worse, people like to know where they stand. Will I be able to handle this? What will happen to me if I can't? These are the types of questions people have when confronted with change.

Change sometimes means more work3 at least at first. This concern includes work in the form of learning. In order to make the change, people may have to learn more information or develop new skills. For an undefined period, they may have to work longer hours.

Leadership• Leadership is the ability to inspire people to make a

total, willing, and voluntary commitment to accomplishing or exceeding organizational goals.

• Good leaders overcome resistance to change, broker the needs of constituent groups inside and outside the organization, and establish an ethical framework.

• Good leaders are committed to both the job to be done and the people who must do it. They are good communicators and they are persuasive.

common myths about leadership • Leadership is a rare skill.

While it is true that few great leaders of world renown exist, many good, effective leaders do. Most effective leaders spend their careers in virtual anonymity, but they exist in surprisingly large numbers and there may be little or no correlation between their ability to lead and their relative positions in an organization. One of the keys to success in a total quality setting is to create an environment that brings out the leadership skills of all employees at all levels and focuses them on continually improving competitiveness.

• Leaders are born, not made.Leadership, attitudes, and behaviors can be learned, even by those who do not appear to have inborn leadership potential.

• Leaders are charismatic.Some leaders have charisma and some don't. Some of history's most renowned leaders have had little or no charisma. Correspondingly, some of history's greatest misleaders have been highly charismatic.

common myths about leadership• Leadership exists only at the top.

Total quality would not work if this myth were true. Total quality relies on the building of teams at all levels in an organization and teaching employees in these teams to be leaders. In reality, the opposite of this myth is often true. Top managers may be the least capable leaders in a company. Leadership is about producing results and causing continual improvement, not one's relative position within the organization.

• Leaders control, direct, prod, and manipulate.If practice is an indicator, this is the most widely believed myth. Leadership is about involving and empowering, not prodding and manipulating.

• Leaders don't need to be learners.Lifelong learning is a must for leaders. One cannot be a good leader without being a good learner. Leaders approach learning from the perspective of what matters most to their organization

Leadership Styles

• Common leadership styles include the following: – democratic, – participative, – goal-oriented, – and situational.

Maslow's Hierarchy of Needs

Effective Communication

• Communication is a process that involves a message, sender, receiver, and medium.

• The message is what is being transmitted (information, emotion, intent, or something else).

• The sender is the originator of the message• The receiver is the person to whom it goes. • The medium is the vehicle used to transfer the

message.

four levels of communication.

• One-On-One-Level Communication - One-one level communication involves one person communicating within a peer group.

• Team-Level Communication -The primary difference between one-on-one and team-level communication is that, with the latter, all team members are involved in the process at once. A team meeting called to solve a problem or to set goals would be an opportunity for team-level communication.

• Company-Level Communication - Company-level communication is communication among groups. A meeting involving various different departments within a company is an opportunity for company level communication.

• Community-Led Communication - Community-led communication occurs when groups inside of a company and groups outside the company. The most common examples of community- level communication are a company's sales force communicating with clients and the purchasing department communicating with vendors.

Inhibiting Effective Communication

• Various factors can inhibit communication. Prominent among these are: Differences in meaning A lack of trust Information overload Interference Premature judgments “Kill the Messenger” syndrome Condescending tone Inaccurate assumptions Listening problems.

Various factors can inhibit communication

• Differences in Meaning - People have different backgrounds, levels of education, and cultures.

• words, gestures, and facial expressions can have altogether different means to different people.

• This is why managers should invest time getting to know employees.

• Lack of Trust - If receivers do not trust senders, they may be overly sensitive and guarded.

• They might concentrate so hard on reading between the lines and looking for hidden agendas that they miss the message.

• Information Overload - Information overload is more of an inhibitor than it has ever been.

• Computers, modems, satellite communication, facsimile machines, electronic mail, and the many other technological devices developed to promote and enhance communications can actually cause breakdowns in communication.

Various factors can inhibit communication

• Interference - Interference is any external distraction that inhibits effective communication.

• Condescending Tone - A condescending tone when conveying information can inhibit effective communication.

• People do not like being talked down to and typically respond to tone of voice as much as or more than the content of a message.

• Poor Listening Skills - Poor listening skills can seriously inhibit effective communication.

• Premature Judgement - Premature judgments by either the sender or the receiver can inhibit effective communication.

Various factors can inhibit communication

• Inaccurate Assumptions - Our perceptions are influenced by our assumptions.

• Consequently, inaccurate assumptions tend to shut down communication before it has a change to get started.

• Kill-the-Messenger Syndrome - In the days when gladiators dueled in Rome's Coliseum, it was common practice to kill the bearer of bad news.

• Managers who kill the manager when an employee tells the hard truth will eventually hear only what employees think they want to hear.

• This dangerous situation quickly leads to uninformed ill-advised managers.

Pareto charts

• The Pareto principle suggests that most effects come from relatively few causes. In quantitative terms: 80% of the problems come from 20% of the causes (machines, raw materials, operators etc.); 80% of the wealth is owned by 20% of the people etc. Therefore effort aimed at the right 20% can solve 80% of the problems. Double (back to back) Pareto charts can be used to compare 'before and after' situations. General use, to decide where to apply initial effort for maximum effect.

cause-and-effect diagram

• The cause-and-effect diagram was developed by the late Dr. Kaoru Ishikawa, a noted Japanese quality expert; others have thus called it the Ishikawa diagram. Its purpose is to help identify and isolate the causes of problems. It is the only one of the seven basic quality tools that is not based on statistics.

Histograms

• Histograms have to do with variability. Two kinds of data are commonly associated with processes: attributes data and variables data. An attribute is something that the output product of the process either has or does not have. Variables data are data that result when something is measured. A histogram is a measurement scale across one axis and a frequency of like measurements on the other.

Check Sheets• The check sheet is a tool that facilitates collection of relevant data,

displaying it in a visual form easily understood by the brain. Check sheets make it easy to collect data for specific purposes and to present it in a way that automatically converts it into useful information.

• A Check Sheet is a data recording form that has been designed to readily interpret results from the form itself. It needs to be designed for the specific data it is to gather. Used for the collection of quantitative or qualitative repetitive data. Adaptable to different data gathering situations. Minimal interpretation of results required. Easy and quick to use. No control for various forms of bias - exclusion, interaction, perception, operational, non-response, estimation.

Scatter Diagrams• The scatter diagram is arguably the simplest of the seven basic

quality tools. It is used to determine the correlation between two variables. It can show a positive correlation, a negative correlation, or no correlation.

Run Charts and Scatter Plots

Time

Measure

Variable Y

Variable X

Run

Scatter

Control Charts• In the context of the seven total quality tools, run

charts and control charts are typically thought of as being one tool together. The control chart is a more sophisticated version of the run chart. The run chart records the output results of a process over time. For this reason, the run chart is sometimes called a trend chart. The weakness of the run chart is that it does not tell whether the variation is the result of special causes or common causes. This weakness gave rise to the control chart.

Rationale for Continual Improvement

• The rationale for continual improvement is that it is necessary in order to compete in the global marketplace.

• Just maintaining the status quo, even if the status quo is high quality, is like standing still in a race.

• Customer needs are not static. They change continually.

– A typical example is the personal computer.

The Scientific Approach

● Using the scientific approach means: Collecting meaningful data Identifying root causes of problems Developing appropriate solutions Planning and making changes.

The scientific approach makes decisions based on data, looking for root causes of problems, and seeking permanent solutions instead of relying on quick fixes.

To effectively manage, measure and improve something, it must

first be understood

Common Improvement Strategies

• Commonly used improvement strategies include the following: Describing the process Standardizing the process Eliminating errors in the process Streamlining the process Reducing sources of variation Bringing the process under statistical control Improving the design of the process.

Goldratt’s Theory of Constraints

• Goldratt’s theory of Constraints is another approach used to achieve continual improvement in the workplace. It involves the following steps: Identify Exploit Subordinate Eliminate restraints Overcome inertia

Optimizing and Controlling Processes through Statistical

Process Control (SPC)• A total of 99.73% of the output of a process that is in statistical

control will fall within the ±3σ limits of the process.

• Do not confuse process average and limits with specification average and limits.

• It is usually desirable to make the process average coincident with the specification average and to make the process spread narrower than the specification limits.