1 TOTAL QUALITY MANAGEMENT Prof. (Dr.) Satish Ailawadi.

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TOTAL QUALITY MANAGEMENT

Prof. (Dr.) Satish Ailawadi

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FUNDAMENTAL CONCEPTS OF TQM

• Total quality management is both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization.

• Encompasses mobilizing the entire organization to satisfy the demands of the customers.

• TQM is focused on routine involvement and participation of everyone in the organization in the systematic improvement of quality.

• It involves each individual and group within all parts of the organization.

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• TQM provides a way of life to constantly improve performance at every level and at in every activity, by creating a positive environment for continuous improvement based on

- Team work- Trust and Respect- Examining the processes in a systematic

manner- Application of quantitative methods and

analytic techniques

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Deming’s Chain Reaction

Improve quality

Decrease costs due to less rework, fewer mistakes, fewer delays and snags, and better use of time and materials

Improve productivity

Capture the market with better quality and lower prices

Stay in business Provide steady jobs and more jobs.

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A shift from traditional approaches to quality

QUALITY CONTROL-Quality standards -Statistical quality techniques-Process performance -Treating quality problems

QUALITY ASSURANCE-Quality systems (ISO 9000) -Quality planning - Quality policy- Quality costing - Problem solving

INSPECTION-Error detection- Rectification

TOTAL QUALITY MANAGEMENT -Involvement of all employees, customers and suppliers - Empowered employees- Teamwork - Quality strategy based upon a common mission and vision-Process oriented

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• TQM can be perceived as being concerned with the following

- Meeting the needs and expectations of customers.

- Covering all parts of the organization- Examining all costs which are related to quality- Doing things right the first time i.e. quality

designing rather than inspecting.- Developing the systems and procedures which

support quality and improvements- Developing a continuous process of

improvement

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• TQM concerns incremental and ongoing improvement of yourself, your work, and your organization.

• The Kaizen philosophy is imbedded in the TQM concept and encompasses the continuous and gradual improvement of all employees in the organization.

• Leads to improvement in employees’ personal output on a daily basis

Kaizen Philosophy

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Important Kaizen Rules• Work with and according to guidelines• Problems are opportunities for

improvements• Retrieve information where it happens• Consider the facts• Work according to the plan• Avoid waste• Order and neatness• Keep appointments

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Deming Wheel- focal point in Kaizen Approach

• In the Kaizen approach “Deming Wheel” is central, consisting of a cycle of activities necessary for effective quality improvement.

• The cycle consists of Plan, Do, Check, and Act.1. Plan- Define the problem, analyze the causes and draft an

action plan for solving the problem.- Determine the quality objectives, and critical success

factors.- Define performance indicators, collect and analyze the

process data, generate the possible solutions.- Select the most feasible solution and work it out.

2. Do

- Implement the plan on a limited scale or conduct an experiment to test the proposed improvement.

- Train all involved employees in the use of quality improvement methods and techniques.

- Describe the process which is considered for improvement and form project teams to lead the process.

3. Check- Evaluate the trial project with performance indicators.- Verify whether the improvement has been successful.- What have we learnt?

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4. Act- Implement proven improvements.- The improvements are documented in standard

procedures so all employees involved are well informed on how to handle in future.

- Usually the cycle gets repeated under different circumstance and conditions to test how consistent the results are.

ACT PLAN

CHECK DO

Quality Principles

A. Customer focus and customer involvement

- Employees regularly visit their customers.

- Customers are known and understood

- Customers’ needs are integrated in the activities.

- More is being done than the customer expects

- Satisfied customers are priority number one.

- Changing customer needs are systematically collected and lead to improvement.

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B. Involvement of all employees• Voluntary total involvement of everyone.• Teamwork that leverage the knowledge and

provides synergy based on open communication, respect and trust.

• Skills are developed on the basis of “Learning by doing”.

• Decisions on the basis of consensus.• The present situation is open for discussion.• Investing in knowledge.• Empowered employees• Entrepreneurial approach and leadership skills at

all business levels.

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C. Consistency of purpose

- An inspiring mission and vision is developed and communicated to all organizational levels.

- SMART- goals are formulated and preserved.(Specific, Measurable, Achievable, Realistic, and Time specific).

- Managers are consistent in their behaviour regarding these goals.

- Guidance is given to quality improvement process.

- There is commitment at top management.

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D. Act according to facts

- Work according to facts and not based on rumours or feelings.

- The causes and consequences of problems are analyzed according to “measuring is knowing”.

- Goal oriented data is gathered and interpreted accordingly.

- Measurements are based on figures; verify everything with data.

- Quality costs are analyzed.

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E. Process oriented- Internal customers are also satisfied.- The process is more important than the results; address

the means of work accomplishment and not the outcomes.

- The effectiveness of process is measured.- The output is standardized.- The processes are documented in schemes and standard

working procedures.- Suppliers are regarded as partners and long term

relationships are established.- The TQM culture is expanded to suppliers.- Reduction of process variations occurs continuously.

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F. Focus on continuous improvement.

- Employees improve themselves and their work and help others improve themselves and their organization.

- Problems are regarded as a means for improvement and a chance to improve processes.

- Emphasis on problem prevention instead of correction.

- Improvements are based on cross-functional, structured, and holistic approach, and are continuously documented.

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- Multidisciplinary improvement teams are established.

- There is a working climate in which continuous improvement is a way of life.

- Improvement of whole and not just the parts.

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Deming’s and Crosby's 14 points for quality improvement

S.No. Demimg Crosby

1. Create constancy of purpose towards improvement of product and service .

Establish management commitment

2. Adopt the new philosophy Form interdepartmental quality improvement teams.

3, Cease dependence on inspection Establish quality measurement.

4. End awarding business on the basis of price tag

Evaluate the cost of quality.

5. Improve constantly the system of production and service.

Establish quality awareness.

6. Institute training on the job. Instigate corrective action.

7. Institute leadership. Ad hoc committee for the zero defects programme.

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S.No. Deming Crosby

8. Drive out fear, so that everyone may work effectively for the company.

Supervise employee training.

9. Break down barriers between departments.

Hold a zero defects day to let all employees realize that there has been a change.

10. Eliminate slogans and exhortations.

Encourage individuals to establish improvement goals for themselves and their groups.

11. Eliminate quotas or work standards.

Error cause removal.

12. Give people pride in their job. Recognize and appreciate those who participate.

13. Institute education and a self-improvement programme.

Establish quality councils to communicate on a regular basis.

14. Put everyone to work to accomplish it.

Do it over again to emphasize that the quality improvement programme never ends.

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• Total quality management is a common method to improve the whole organization stepwise, structured and systematically according to hard work, discipline, intensive training, and consistent implementation of techniques and resources.

• The quality principles form the foundation of TQM and are expressed in the four pillars of the TQM-house, namely

1.Problem solving Discipline2.Interpersonal skills3.Teamwork4.Quality improvement process.

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Employee involvement, Structured, Stepwise, Discipline, Consistency.

Problemsolvingdiscipline

InterpersonalSkills.

Teamwork Qualityimprovement process

Total Quality Management

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• The success of TQM improves proportionately in conjunction with the percentage of employees within the organization who master this quality attitude, mentality, and skills,

• TQM covers all parts of the organization.

• For an organization to be truly effective, every single part of it, each department, each activity, each person and each level must work properly together, because every person and every activity affects and in turn is affected by others.

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What is Quality?• Degree to which a set of inherent characteristics

fulfills requirements.

• Many of us tend to equate quality with lluxury and expense.

• If asked to rank, for quality

- A Rolls Royce

- A Formula One racing car or

- A compact family saloon

• Most people would choose the Rolls Royce as possessing the highest quality of the three.

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• To use the definition of quality given earlier and to arrive at a ranking decision we need to examine another definition of quality “Grade”.

• Grade is defined as “category or rank given to given to different quality requirements for objects having the same functional use”.

• For example, classes of airline ticket or categories of hotels.

• When planning the quality requirement for an object, the grade for quality requirement must be known.

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• The examples of Rolls Royce, Formula One racing car and a compact family car have very different functional uses and it becomes necessary to compare each one of them with vehicles having the same functional use.

• This promotes an alternative definition of Quality as “Fitness for Purpose”.

• The problems this raises are ‘Who is to judge the fitness for purpose”?

- Should it be the customer?- Should it be the manufacturer or provider of

service?- Should it be an independent auditor?• Fitness for Purpose provides an element of

subjectivity.

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Working effectively to achieve quality• A common agreement is required on what quality

means.• It does not mean that all products need to be “gold

plated’.• It does not mean when buying a family saloon car that

all luxuries of a Rolls Royce need to be built into achieve quality.

• The basic quality objective is to provide products and services that meets the needs of the customers.

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• Individuals, based on their experience with the products, form an opinion about quality.

• From varying ideas and suggestions for defining quality one idea becomes clear in all cases-the need for customer satisfaction.

• The multitude of suggestions make it appear that quality is a moving target and is difficult to achieve.

• In fact, it is not so.

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Quality is “Conformance to

Specifications” • Conformity is ‘Fulfillment of a requirement”

• The Rolls Royce that meets all its specified requirements is a quality product.

• The family saloon that meets all its specified requirements is equally a quality product.

• Dr. Deming defines quality as the need to “provide customers with what they need, when they need it and at a higher perceived value and lower cost than anyone else.

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Prevention rather than detection to achieve quality

• Traditional methods include inspection, tests, audits to detect errors and eliminating them by scrapping or reworking products to conform to specification.

• This system of appraisal is commonly categorized as “Quality Control”.

• Inspection is the king.• During late 1950s and early 1960s the principle

of achieving quality by inspecting-out reject products was challenged.

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• It was realized that quality is inherent within the product and cannot be introduced once the product is made.

• The philosophy of “prevention rather than detection” provides the opportunity for eliminating the potential for error.

• It involves identifying opportunities for error and taking actions to eliminate those opportunities before a problem arises.

• It results in the contemporary quality expression of “Quality Assurance- Right First Time”

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Prerequisites of TQM and Possible Actions

1. Know your customers, both external and internal:- Who they are, their current needs, and their future

requirements. - Respond to their changing needs.- Do not forget the users.1.1 Possible Actions- Customer surveys- Functional analysis - Quality cost analysis- Quality function deployment

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2. Know your competitors2.1 Possible Actions- Customer surveys- Competitor analysis- Bench marking3. Know the cost of non-conformance (CONC)3.1 Possible Actions- Quality cost analysis- Functional analysis4. Measure performance against key customer driven parameters4.1 Possible Actions- Customer surveys- Competitor analysis- Bench marking

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5. Make sure that each employee understands and commits themselves to the quality objectives of the business.

5.1 Possible Actions

- Functional analysis

- Education and training

- Communication

6. Management commitment to the continual improvement of quality within the business.

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6.1 Possible Actions- Quality cost analysis- Functional analysis- Education and training- Communication.

7. Define the purpose of each department and activity in terms of satisfying external and internal customer requirements.


- Functional analysis

8. Enable the employees to fulfill their commitment to quality by influencing the programme of continuous improvement.


- Education and training

- Communication

- Corrective action task force, corrective actions group.

- Error cause removal schemes.

- Quality circles

- Problem solving 36

- Statistical process control

- Recognition of performance

- Suggestion programmes

- Self inspection programmes.

9. Wherever possible replace the inspection and correction techniques of quality control with effective preventive actions.


- Quality cost analysis

- Functional analysis37

- Quality Management Systems

- Error Cause removal schemes

- Quality Circles

- Problem solving

- Suggestion programmes.

10.Never accept a non-conforming output in the form of a product for external or internal customer.


- Quality Cost Analysis38

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- Functional Analysis

- Education and Training

- Communication.

11. Plan effectively before undertaking any actions.


- Quality Improvement Team

→ Apparently, there is no end to improvement.

• The recognition of the necessity to continuously revise the quality thinking is essential to the ultimate success of business venture.

5 S of Housekeeping• Housekeeping is given a lot of importance in the

total quality management system.

• It reduces the wastage of time and improves the efficiency and effectiveness of work.

• Improper housekeeping may lead to accidents, dull working environment and other work related problems.

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1. Seiri- Orderliness

• The orderliness of manufacturing aids, proper arrangement of raw materials near the machines and keeping the files and drawings in order to make working fast, effective and efficient without wastage of the effort or time and material.

2. Seiso- Clarity

• The clarity of work process, flow process charts, arrangement of raw materials, finished goods and intermediary services make the work place more efficient and effective. 41

3. Seiton-Tidiness

• Tidiness ensures adequate space for machines and movement of manpower is made easy.

• Tidiness avoids mixing of different materials and it makes product identification easy.

• The chances of rejection and rework gets minimized.

4. Seiketsu

• The cleanliness of the shop floor and the office are mandatory for good working environment, good product quality and elimination of accidents. 42

This also helps an organization to put up a decent appearance of the organization before the visitors.

5. Shitsuke-Discipline

• Recommends discipline in all the four housekeeping practices together to enhance the effectiveness of housekeeping.

• It ultimately leads to the self discipline of the organization.

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Total Quality Management Pioneers

1.Walter Shewart• Founder of P-D-C-A Cycle• Originator of statistical process control at AT&T

Bell Labs in 1930.2. W.Edward Deming• Led quality revolution in Japan during the post-

world war II period.• Quality is a key competitive advantage.• Deming quality award by Japan is the most

prestigious quality award.

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• Deming’s fourteen points for excellence.• Deming’s seven diseases.3. Joseph M.Juran• Led quality revolution in Japan during the post-

world War II period.• He defined quality as fitness for use by

customer.• Juran’s triology of quality, quality control, and

quality improvement.• Started Juran’s Institute in USA.• Introduced cost of poor quality.

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4. Philip B. Crosby • Started Crosby quality college.• Created the concept of ‘zero defect’.• Defined quality as conformance to requirement.• Crosby’s 14 steps of quality improvement.5. A.V. Feigenbaum• Originator of QM concept• His theory of three steps to quality• Quality leadership, modern quality technology

and organizational commitment.

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6. Taiichi Ohno• Formulated the flexible manufacturing systems

(FMS)• Father of the just-in-time and kanban

manufacturing.• Father of TPS or Toyota Production System.7. Sheigo Shingo• Originator of ‘Single minute exchange of dies”• Introducing the concept of modular

manufacturing.

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8. Kaoru Ishikawa• Originator of fish bone or the cause and effect

diagramme.• Originator of Company Wide Quality Control

(CWQC).• Responsible for initial deployment of quality

circles.• Remove the root cause and not the systems.9. Masaaki Imai• Popularized the Kaizen concept of continuous

improvement.10. E.Goldrat• Theory of constraints

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Deming’s 14 points to reach World Class Performance Standards

1. Achieve constancy of purpose• Top management must define the organization’s

vision, mission and objective with the constancy of purpose .

• The goal integration between the organization and individuals working there is extremely important for individuals to give their best for the achievement of the organizational objectives.

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2. Learn a new philosophy• Challenge the status-quo.• Today’s management is learning, unlearning and

relearning that is relevant to the organization.• The speed and frequency with which the

organization and its employees learn new philosophy decide its growth rate and market leadership.

3. Do not depend on mass inspection (Use statistical sampling technique).

• Emphasizes heavy deployment of statistical techniques in the area of inspection.

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• Deming was of the opinion that the behaviour of the whole group is going to be more or less the same as that of the sample lot taken for the inspection.

• Therefore, why unnecessarily waste precious resources of manpower and time for 100% inspection.

4. Reduce the number of vendors for better control and consistency

• Vendors need to be treated as part of the organization.• There needs to be direct involvement of the

organizations in the statistical process control of the vendors.

• This will lead to improve vendors’ process capability and there will be no need to do 100% inspection.

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• If the vendors are changed frequently for cheaper price, quality of supplies would never stabilize.

• Hence, number of vendors per component should be either one or two to have a better control and consistency in the supplies.

5. Recognize two sources of faults: (a)management and production systems (b) production workers.• There are two types of errors or faults.• One is due to random causes and other is due to

assignable causes.• The random causes are due to faulty process

design or inadequate machine capability.

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• The management alone can solve such problems.

• The assignable errors are due to workers and occur due to faulty workmanship.

• This can be eliminated by providing training to the workers and motivating them properly.

6. Improve on the job training• Deming always described on-the-job training as

the best method of training where the absorption of knowledge imparted during training is the maximum.

• Identify the training needs and the skill level required for each operator and employees.

• Conduct training for best results.

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7. Improve supervision• Improve the supervision at the process level so that not only errors or

mistakes are minimized, but also on-the-job training to the operators is strengthened.

• This will lead to continuous improvement, better productivity and enhanced quality of products, process and services.

8. Drive out fear• Organization should be proactive and there should be employee

involvement at all levels.• Fear should not be the driving force to achieve the end results.

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9. Improve communication• The majority of the labour problems are due to lack

of communication between the workers and the management.

• Communication should be immaculate in terms of training, learning of new technology, setting of new objectives etc.

10. Eliminate slogans and exhortations.• This is quite similar to driving out fear and hence gets

emphasized.• Ensure employees are not exploited.11. Consider work standards carefully and eliminate

quotas• Examine each standard from functional point of view.

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• Do not overdesign or keep tolerances too rigid .

• If it is not required from customer’s point of view and not adding any value, why unnecessary incur additional expenditure.

12. Teach statistical methods

• Implement statistical process control system in manufacturing leading to establishment of process capability

• This would lead to zero defects in products and services.

• Results into enhancement of productivity.

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13. Encourage education and a self-improvement programme.

• A product innovation and development helps in increasing the market share.

• Innovations in process enhances productivity and quality and reduces the cost of production.

• Organizations should have systems like suggestion scheme, quality improvement teams to encourage new skills and their implementation.

14. Ensure total employee involvement.

• Put everyone to work to accomplish it.

• Involvement should be voluntary.

• This would enable organization to achieve its objectives in minimum amount of time and cost.

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Deming’s Seven Deadly Diseases1. Lack of consistency of purpose to plan product and

services that have a sufficient market to keep the company in business and provide jobs.

2. Emphasis on short-term profits; short term thinking that is driven by a fear of unfriendly takeover attempts and pressure from bankers and shareholders to produce dividends.

3. Performance appraisals, merit rating, and annual appraisal without providing resources to accomplish objectives.

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4. Job hoping by managers.

5. Using only visible data and information in decision making with little or no consideration given to what is not known or cannot be known.

6. Excessive medical costs.

7. Excessive cost of liability driven up by lawyers that work on contingency fees.

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What are Quality Costs?• A particularly powerful technique in improving

quality. • Quality costs are incurred in two ways(a)The costs incurred in the design,

implementation, operation and maintenance of quality management systems, and

(b)The costs incurred through failure of product manufacture or services.

• Quality management systems may range from simple inspection to systems which include consideration of all the management actions affecting the quality of the product or service.

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• Production system failures can result in:(1)Production delays(2)Scrap(3)Rectification work(4)Late deliveries(5)Defective products going undetected, and even(6)Obsolete stocks• The outcome of these failures leads in turn to:(1)Warranty and product liability charges.(2)Complaint administration and investigation(3)Late delivery penalty clause payments(4)Product recall(5)Loss of goodwill

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• Quality costs can also arise from varieties of activities which may not be connected with the quality of product or service; such as

- Sales and marketing- Design and development- Purchasing- Production (including planning & control)- Handling and storage- Delivery, installation and servicing.

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• The control of these activities may lie within or outside an organization.

• The outside influences will come from suppliers, sub-contractors, stockists, agents, dealers or consumers.

• The quality costs can be summarized as;(1)Cost of appraisal(2)Cost of prevention(3)Cost of failure • Studies have indicated quality costs range from

5% to 25% of company’s turnover depending upon the nature of industry, products or services and the level of quality management employed.

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• Studies have also indicated that 95% of the costs stem from appraisal and failure.

• Neither of these costs add value to the product or service and therefore failure costs should be avoidable.

• If the causes of failure can be eliminated it will lead to a reduction in the need for appraisal with the consequent cost reduction.

• Studies have indicated that implementation of effective quality management systems can reduce quality costs to one third of their previous levels.

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Categories of Quality Costs Quality Related Costs

Conformance Costs Non-conformance Costs

Appraisal Costs

Prevention Costs

Internal failureCosts

External failureCosts

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• Appraisal Costs- The cost of assessing the quality achieved.- These costs include the costs of inspection and

testing carried out during and on completion of manufacture.

• Prevention Costs- The cost of any action taken to investigate,

prevent or reduce defects and failures.- These costs include the cost of planning,

setting-up and maintaining the quality management system.

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• Failure Costs-Internal

- The costs arising within the organization of the failure to achieve the quality specified.

- These costs include the cost of scrap, rework and re-inspection and also the consequential losses that result such as interruption in schedules, idle capacity.

• Failure Costs- External

- The costs arising outside the organization because of failure to achieve the quality specified.

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- These include the costs of claims against warranty, replacement, consequential losses, loss of goodwill and penalty clause payouts for late delivery.

→When a quality costing is carried out, it is necessary to consider appraisal, prevention and failure costs in terms of

- Salaries and wage- Consumable materials- Capital equipment depreciation- Various other costs directly related to department

within the organization.→ The loss of goodwill resulting from poor quality is

difficult to analyze and could be very easily be the most expensive of all the quality costs.

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Crosby's Theory on Quality Management-6 Cs

• While Juran propagated that ‘higher quality costs less’, Philip Crosby tried to popularize the concept that ‘quality is free’.

• Crosby is famous for his 6 Cs.

(1)Comprehension

- Ability to understand and absorb the quality related activities, its sustenance and improvements.

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(2) Commitments- Top management, employees, suppliers and the

customers to get committed to work together towards quality management systems.

(3) Competence- For improving the effectiveness and efficiency of the

quality management system and then sustaining the improvement on a long-term basis.

(4) Corrections- Fool proofing the quality management systems by

rectifying the mistakes and deviations and putting the quality management system back on the track for world-class performance.

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(5) Communications- In order to ensure support to the quality

management system from employees, suppliers and customers alike, communication in the organization should be clear without ambiguity.

(6) Continuance- The organization’s good performance and its

continuous improvement is the essence of a world-class organization and its successful operation.

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Four Absolute Requirements for attainment of quality-Crosby

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QS 9000/TS 16949

• REQMNT SPCIFIC TO AUTO MFG AND SUPPLIERS

• SUPPLIERS QLTY ASSURANCE MANUAL• QS 9000 STDS A SUPERSET OF ISO 9000 AND

APPLIES TO ALL SUPPLIERS OF PRODN MATRL, SERVICE PARTS, OR SERVICES

• CONTENTS OF QS 9000 INCLUDE: -ISO 9000 BASED REQMNTS -SECTOR SPECIFIC REQMNTS -CUSTOMER SPECIFIC REQMNTS

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SECTOR SPECIFIC REQMNTS

• PRODN PART APPROVAL PROCESS -PPAP IS GRANTED FOR A PART NUMBER ,ENGG CHANGE LEVEL MFG LOCN,MATRL SUBCONTRACTING AND PRODN PROCESS ENVT. CHANGE IN ANY OF THESE REQUIRES CUSTOMER NOTIFICATION

• CONTINUOUS IMPROVEMENT THRU TECHNIQUES: -CAPABILITY INDEX -THEORY OF CONSTRAINTS -PPM ANALYSIS -COST OF QLTY ANALYSIS -VALUE ANALYSIS -FAULT TREE ANALYSIS OR FISHBONE DIAGRAM -MISTAKE PROOFING

• MANUFACTURING CAPABILITIES -FACILITY PLANNING AND EFFECTIVENESS -MAINTENANCE AND REPAIR FACILITY

• PART TRACKING MECHANISM

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CUSTOMER SPECIFIC REQMNT

• DEAL WITH SPECIFIC REQMNTS OF CUSTOMER eg MARUTI , TATA MOTORS

• DEFINE SPECIFIC REQMNTS AND ACCEPTANCE LEVELS FOR SAFETY, EMISSION AND NOISE

• SUBMISSION OF DESIGN FMEA FOR EACH CRITICAL PART BY SUPPLIERS

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OVERVIEW OF ISO 14000

• ALSO CALLED ENVIRONMENTAL MGT SYSTEMS(EMS)

• EMS IS A SET OF MGT PROCEDURES THAT ALLOWS AN ORGANIZATION TO IDENTIFY,EVALUATE AND REDUCE THE ENVT IMPACT OF ITS ACTIVITIES

• WELL IMPLEMENTED EMS HELPS ORGANIZATION ADDRESS ITS REGULATORY DEMANDS IN A SYSTEMATIC MANNER WHICH REQUIRES RISK OF NON COMPLIANCE

• EMS HELPS ADDRESS ISSUES SUCH AS NOISE,POLLUTION,EFFLUENT,WATER AND ENERGY CONSERVATION

• EMS PROMOTES STRONGER OPERATIONAL CONTROLS

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ELEMENTS OF ISO 14000 SYSTEM

• ENVIRONMENT POLICY -ROADMAP FOR IMPROVING BUSINESS ENVIRONMENT PERFORMANCE -POLICY SHOULD INCLUDE COMMITMENT FOR POLLUTION PREVENTION AND ADHERENCE TO REGULATIONS , STANDARDS CODE OF PRACTICE ETC

• PLANNING -PLANNING TO INCLUDE COMPLIANCE TO LEGAL REQUIREMENTS

• IMPLEMENTATION -OPERATIONAL PROCEDURES TO IDENTIFY SPECIFIC REQUIRED CONTROLS

• CONTROL -PROCESSES TO MONITOR AND CONTROL ENVIRONMENTAL REGULATIONS

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BENEFITS OF ISO 14000

• IMPROVED ENVT PERFORMANCE

• IDENTIFICATION OF POLLUTION PREVENTION OPPORTUNITIES

• IMPROVED COMPLIANCE

• COST SAVINGS

• REDUCED EHS RISK

• IMPROVED PUBLIC RELATIONS

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OSHAS 18001

• PART OF OCCUPATIONAL HEALTH AND SAFETY MGT SYSTEM

• STRUCTURED PROCESS TO MINIMIZE POTENTIALS OF WORK RELATED INJURIES AND FATALITIES

• OBJECTIVITY IS TO INCREASE PRODUCTIVITY THROUGH MINIMIZATION OF ACCIDENT RELATED COSTS AND TIME

• A SAFETY AND HEALTH MGT POLICY SHOULD CONTAIN GUIDELINES FOR COMPLIANCE,PREVENTION AND CONTINUAL IMPROVEMENT

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MAJOR ELEMENTS OF OSHAS GUIDELINES

• IDENTIFICATION OF HAZARDS ASSOCIATED WITH A SITE,OPERATION AND PRECAUTIONS TO BE TAKEN PRIOR TO WORK COMMENCEMENT AND TERMINATION OF WORK

• MGT COMMITMENT AND EMPLOYEE INVOLVEMENT• HAZARD PREVENTION AND CONTROL• RISK ANALYSIS OF WKPLACES AND PRECAUTIONS TO BE OBSERVED

PRIOR TO START AND TERMINATION OF WORK• RISK ANALYSIS OF MATERIAL AND DECLARATION OF SAFE STORAGE

PLACES• PROCEDURE FOR PERMITS ,CERTIFICATES AND PERSONAL PROTECTION• PERIODIC AUDIT OF SAFETY AND HEALTH PROCEDURES• SAFETY AND HEALTH TRG AND PROCEDURE DEFINITION

IMPLEMENTATION AND CONTROL• DEFINITION OF EMERGENCY PROCEDURE AND CRISIS MGT PLANS AND

AUDIT OF PREPAREDNESS • SHOULD CONTAIN GUIDELINES FOR COMPLIANCE PREVENTION AND

CONTINUOUS IMPROVEMENT

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OVERVIEW OF SA 8000

• SOCIAL ACCOUNTABILITY REQUIREMENT• GLOBAL STANDARD ON CORPORATE SOCIAL ACCOUNTABILITY• AIMS TO GUARANTEE BASIC RIGHTS OF WORKERS INVOLVED

ESPECIALLY IN INDUSTRIAL UNITS• SETS BASIC STANDARDS FOR:

-CHILD LABOUR BELOW AGE OF 15 -FORCED LABOUR -HEALTH AND SAFETY -DISCRIMINATION -FREEDOM OF COLLECTIVE BARGAINING -DISCIPLINARY PRACTICES INCLUDING TORTURE AND CORPORAL PUNISHMENT

-REGULATED WORKING HOURS NOT EXCEEDING 12 HRS/DAY AND ENFORCED BREAK AFTER EVERY 10 SUCCESSIVE WORK DAYS -COMPENSATION TO MEET MINIMUM WAGES ACT -SYSTEMS TO CONTROL COMPLIANCES TO STANDARDS

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BENEFITS OF SA 8000

• PUTTING COMPANY VALUES INTO ACTION

• ENHANCING COMPANY BRAND IMAGE

• IMPROVING EMPLOYEE RECRUITMENT , PERFORMANCE AND RETENTION

• BETTER CORPORATE PERFORMANCE

• ENHANCED EMPLOYEE LOYALTY AND COMMITMENT

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PEOPLE CAPABILITY MATURITY MODEL

• P-CMM MODEL FRAMEWORK FROM CARNEGIE MELLON S/W ENGG INST HELPS ORGS IN DEVELOPING WORKFORCE MATURITY AND ADDRESSING THEIR CRITICAL PEOPLE ISSUES

• BASED ON BEST PRACTICES IN HR,ORG DEV AND KM• P-CMM GUIDES IN IMPROVING PROCESSES FOR MANAGING

AND DEVELOPING WORKFORCE• ENABLES CONTINUOUS WORKFORCE DEVELOPMENT, SETS

PRIORITIES FOR IMPROVEMENT ACTIONS INTEGRATES WORKFORCE DEVELOPMENT WITH PROCESS IMPROVEMENT AND ESTABLISHES CULTURE OF EXCELLENCE

• PROVIDES ROADMAP FOR IMPLEMENTING WORKFORCE PRACTICES THAT CONTINUOUSLY IMPROVE ORG WORKFORCE CAPABILITY

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PEOPLE CAPABILITY MATURITY MODEL

• P-CMM ESTABLISHES AN INTEGRATED SYSTEM OF WORKFORCE PRACTICES THAT MATURE WITH INCREASING ALIGNMENT WITH BUSINESS OBJECTIVES PERFORMANCE AND CHANGING NEEDS

• P-CMM BASED ON 10 PRINCIPLES

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10 PRINCIPLES OF P-CMM

• 1.WKFORCE CAPABILITY DIRECTLY RELATED TO BUSINESS PERFORMANCE

• 2 CAPABILITY IS A COMPETITIVE ISSUE AND A SOURCE OF STRATEGIC ADVANTAGE

• 3 CAPABILITY MUST BE DEFINED IN RELATION TO STRATEGIC BUSINESS OBJECTIVES

• 4 KNOWLEDGE INTENSE WORK SHIFTS FOCUS FROM JOB ELEMENTS TO COMPETENCES

• 5 CAPABILITY CAN BE MEASURED AND IMPROVED AT MULTIPLE LEVELS INCLUDING INDIVIDUALS,WKGRPS,COMPETENCIES AND ORG

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10 PRINCIPLES OF P-CMM

• 6 INVESTMENT IN CAPABILITY IMPROVEMENT OF WKFORCE COMPETENCES THAT ARE CRITICAL TO CORE COMPETENCES AS A BUSINESS

• 7 OPERATIONAL MGT RESPONSIBLE FOR CAPABILITY OF WKFORCE

• 8 IMPROVEMENT OF WORKFORCE CAPABILITY CAN BE PURSUED AS A PROCESS OF PROVEN PRACTICES AND PROCEDURES

• 9 ORG RESPONSIBLE FOR PROVIDING IMPROVEMENT OPPORTUNITIES WHILE PEOPLE ARE RESPONSIBLE FOR TAKING ADVANTAGE OF THEM

• 10 AS TECHNOLOGIES EVOLVE RAPIDLY ORG MUST CONTINUALLY EVOLVE WKFORCE PRACTICES AND DEVELOP NEW COMPETENCES

88

MATURITY LEVELS OF P-CMM

• FIVE MATURITY LEVELS THAT ESTABLISH FOUNDATIONS FOR CONTINUALLY IMPROVING INDIVIDUAL COMPETENCIES DEVELOPING EFFECTIVE TEAMS MOTIVATING IMPROVED PERFORMANCE AND SHAPING WKFORCE TO ACCOMPLISH ITS FUTURE BUSINESS PLANS

• EACH MATURITY LEVEL IS A WELL DEFINED STAGE WHICH DISPLAYS NEW CAPABILITIES FOR DEVELOPING WKFORCE

89

FIVE STAGES OF MATURITY OF P-CMM

• 1 INITIAL LEVEL-TYPICAL CHARACTERISTICS INCONSISTENCY IN PERFORMING PRACTICES, DISPLACEMENT OF RESPONSIBILITY,EMOTIONALLY DETACHED WORKFORCE

• 2 MANAGED LEVEL-TYPICAL CHARACTERISTICS WORK OVERLOAD,ENVT DISTRACTORS,UNCLEAR PERFORMANCE OBJECTIVES,LACK OF KNOWLEDGE,POOR COMMN,LOW MORALE

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FIVE STAGES OF MATURITY OF P-CMM

• 3 DEFINED LEVEL-BASIC WKFORCE PRACTICES PERFORMED. INCONSISTENCY IN METHOD OF APPLICATION AND NO SYNERGY. OPPORTUNITIES MISSED TO STANDARDIZE PRACTICES BECAUSE KNOWLEDGE REQD TO CONDUCT BUSINESS ACTIVITIES HAS NOT BEEN IDENTIFIED AND IMPARTED

• 4 PREDICTABLE LEVEL-ORG MANAGES AND EXPLOITS CAPABILITY CREATED BY WKFORCE COMPETENCES.ORG IS ABLE TO MANAGE CAPABILITY AND PERFORMANCE QUANTITATIVELY AND PREDICT CAPABILITY FOR PERFORMNG WORK. IT CAN QUANTIFY CAPABILITY OF WKFORCE AND OF COMPETENCE BASED PROCESSES THEY USE IN ASSIGNMENTS

• 5 OPTIMIZING LEVEL-ENTIRE ORG FOCUSED ON CONTINUOUS IMPROVEMENT. IMPROVEMENTS ARE MADE TO CAPABILITY OF INDIVIDUALS AND WKGROUPS ,TO THE PERFORMANCE OF COMPETENCY BASED PROCESSES AND TO WKFORCE ACTIVITIES TREATS CHANGE MGT AS A BUSINESS PROCESS TO BE PERFORMED ON A REGULAR BASIS

91

EVOLUTION OF QUALITY MGT

• CONCEPT OF QUALITY HAS GROWN SINCE THE EARLY DEFINITION OF QUALITY AS “PRODUCING OUTPUT IN CONFORMANCE TO CUSTOMER REQUIREMENT”

• EVOLUTION HAS PASSED THROUGH 4 GENERATIONS

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QUALITY BUILDING BLOCK FIRST GENERATION-

INSPECTION• PRIMARY CONCERN IS DETECTION OF ERROR AND

CORRECTIVE ACTIONS THROUGH INSPECTIONS

• EMPHASIS IS ON CONFORMITY WITH CUSTOMER REQMNT.

• RESPONSIBILITY IS INSPECTION DEPARTMENT WHICH INSPECTS AND DOES ACCEPTANCE SAMPLING

• KEY OBJECTIVE OF EXERCISE IS TO IDENTIFY AND RECTIFY NON CONFORMITIES.

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QUALITY BUILDING BLOCK SECOND GENERATION-QC

• PRIMARY CONCERN IS QUALITY CONTROL

• EMPHASIS ON UNIFORMITY WITH REDUCED INSPECTION USING STATISTICAL TOOLS AND TECHNIQUES

• RESPONSIBILITY IS MANUFACTURING AND ENGINEERING DEPARTMENT

• DEVELOP QUALITY MANUAL AND PROCESS PERFORMANCE MEASUREMENT SYSTEMS

• QUALITY PLANNING IN PLACE

• SELF INSPECTION DONE BY OPERATORS

• MOTTO IS DO IT RIGHT FIRST TIME

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QUALITY BUILDING BLOCK THIRD GENERATION-QA

• PRIMARY CONCERN IS QUALITY ASSURANCE

• EMPHASIS ON PRODUCTION LINE AND QUALITY FROM THE FIRST STAGE

• QUALITY SYSTEMS DEVELOPMENT

• IMPLEMENTATION OF QFD, COST OF QUALITY, FMECA, VALUE ANALYSIS

• MOTTO IS DO THE RIGHT THING ALWAYS

• ELIMINATE NON VALUE ACTIVITIES AND FUNCTIONALITIES

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QUALITY BUILDING BLOCK FOURTH GENERATION-SQM

• EMPHASIS ON MARKET AND CONSUMER NEEDS

• QUALITY IS A STRATEGIC PLANNING EXERCISE

• INVOLVE CUSTOMERS, SUPPLIERS AND EMPLOYEES

• PROCESS PERFORMANCE MEASUREMENT AND MANAGEMENT

• OBJECTIVES ARE TO IMPROVE RESPONSIVENESS, REDUCE CYCLE TIME, IMPROVE QUALITY

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INSPECTION

• INSPECTION IS CONFORMITY EVALUATION BY OBSERVATION AND JUDGEMENT ACCOMPANIED BY MEASUREMENT AND TESTING

• UNDER AN INSPECTION BASED SYSTEM ONE OR MORE CHARACTERISTICS OF A PRODUCT PROCESS OR ACTIVITY ARE EXAMINED, MEASURED, TESTED OR ASSESSED AND COMPARED WITH SPECIFIED REQMNT TO ASSESS CONFORMITY WITH SPECS OR PERF. STDS

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INSPECTION

• IN SERVICE, SYSTEM IS APPLIED AT KEY POINTS CALLED APPRAILSAL POINTS

• INSPECTION CARRIED OUT THROUGH SELF INSPECTION OR AT END OF ACTIVITY

• AFTER EVENT SCREENING PROCESS WITH NO PREVENTION CONTENT OTHER THAN IDENTIFYING NON CONFORMING ENTITIES

• EMPHASIS IS ON REACTIVE QUICK FIX CORRECTIVE ACTIONS AND THINKING IS DEPARTMENT BASED

• DOES NOT INVOLVE SUPPLIERS OR CUSTOMERS

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DIFFERENT WAYS OF PERFORMING INSPECTION

• INSPECTION PROCESS - INTERNAL INSPECTION: INSPECTION CONDUCTED AS PART OF

THE OPERATION OR WORK PROCESS (E.G. AN ASSEMBLER NOTING HOW WELL PARTS FIT TOGETHER)

- EXTERNAL INSPECTION: INSPECTION CONDUCTED SEPARATE FROM THE OPERATION (E.G. AN INSPECTOR MEASURING PARTS FOR TOLERANCE FIT)

• INSPECTION MEASUREMENT - SENSORY INSPECTION: INSPECTION BY HUMAN SENSES,

INCLUDING TOUCH, VISION, HEARING, TASTE, SMELL, OR PERCEPTION (E.G. LOOKING FOR SCRATCHES ON LENSES, GENERAL PERCEPTION OF THE QUALITY OF ROOM SERVICE IN A HOTEL)

- PHYSICAL INSPECTION: INSPECTION WITH INSTRUMENTS OR DEVICES (E.G. CALIPERS, LASERS, SCALES, THERMOMETERS)

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• POPULATION INSPECTED - 100% INSPECTION: INSPECTION OF EVERY ITEM OR UNIT IN THE

POPULATION (WHERE POPULATION REFERS TO A PARTICULAR LOT OR BATCH OF ITEMS OR ITEMS PRODUCED BY A PARTICULAR PROCESS). THIS IS ALSO CALLED SCREENING.

- SAMPLE INSPECTION: INSPECTION OF A FRACTION OR SUBSET OF THE POPULATION; THE RESULT IS USED TO MAKE AN INFERENCE ABOUT THE ENTIRE POPULATION.

• INSPECTION JUDGEMENT - SUBJECTIVE INSPECTION: INSPECTION AND CONCLUSIONS MADE

BY THE PERSON WHO ALSO DID THE WORK; ALSO CALLED SELF-INSPECTION.

- OBJECTIVE INSPECTION: INSPECTION PERFORMED BY SOMEONE OTHER THAN THE PERSON WHO DIE THE WORK. IT INCLUDES AUTOMATED INSPECTION (MECHANICAL DEVICES) AND SUCCESSIVE INSPECTION (INSPECTION BY DOWNSTREAM WORKERS)

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• QUALITY CHARACTERISTICS INSPECTED

- VARIABLES INSPECTION: INSPECTION OF A FEATURE THAT IS REPRESENTED AND MEASURED WITH A CONTINUOUS NUMBERING SYSTEM OR SCALE (E.G. PHYSICAL DIMENSIONS, AND FEATURES SUCH AS WEIGHT, PRESSURE, AND TEMPERATURE)

- ATTRIBUTES INSPECTION: INSPECTION OF A FEATURE THAT FALLS INTO A SIMPLE CLASSIFICATION SCHEME (E.G. CONFORMING OR NONCONFORMING, DEFECTIVE OR NONDEFECTIVE, POOR/AVERAGE/GOOD, HIGH OR LOW)

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ASPECTS OF INSPECTION

• INSPECTION ITSELF ADDS NO VALUE AND IS WASTEFUL

• HOWEVER INSPECTION CAN NEVER BE TOTALLY ELIMINATED (EVEN DEFECT FREE PROCESSES REQUIRE INSPECTION TO ENSURE THEY STAY THAT WAY

• MINIMISE INSPECTION THROUGH ATTENTION TO QUALITY OF DESIGN AND QUALITY OF INPUTS

• FREQUENCY OF INSPECTION AND PLACES IN THE PROCESS THAT NEED INSPECTION CAN BE REDUCED WHILE QUALITY OF OUTPUT IS INCREASED

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ASPECTS OF INSPECTION

• INSPECTION CAN BE CARRIED OUT AS A PART OF AN OPERATION OR WORK PROCESS

• INSPECTION CAN BE DONE PHYSICALLY OR BY DEVICES

• QUANTITATIVELY INSPECTION CAN BE 100% OR SAMPLING

• INSPECTION IS ALSO DONE BY AN OPERATOR IN THE ASSEMBLY LINE (SUBJECTIVE) OR BY A QUALITY CHECKER AT THE END OF THE LINE (OBJECTIVE)

103

CHARACTERISTICS OF INSPECTION

• PRIMARY CONCERN IS DETECTION• EMPHASIS IS PRODUCT UNIFORMITY• METHOD IS GAUGING AND

MEASUREMENT• ROLE OF QLTY INSPECTOR IS INSPECTION

AND ACCEPTANCE SAMPLING• RESPONSIBILITY IS INSPECTION

DEPARTMENT

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QUALITY CONTROL

• DETAILED PRODUCT SPECIFICATIONS ESTABLISHED AND PROCEDURES AND CONTROL SYSTEMS IN PLACE ALONGWITH STAGEWISE PRODUCT TESTING AND REPORTING ACTIVITIES, LOGGING OF PROCESS PERF. DATA AND FEEDBACK OF PROCESS INFORMATION

• WITH QUALITY CONTROL THERE WILL BE A DEVIATION FROM EARLIER INSPECTION METHODS BY WAY OF SELF INSPECTION BY OPERATORS (PREVENTING DEFECTS FROM PASSING DOWN THE LINE), USE OF INFORMATION AND TOOLS TO PREVENT OFF SPECIFICATION PRODUCTS FROM BEING DELIVERED TO CUSTOMERS

105

QUALITY CONTROL

• QUALITY CONTROL MEASURES LEAD TO GREATER PROCESS CONTROL AND LOWER INCIDENCE OF NON CONFORMANCE

• ORGS WHOSE APPROACH TO QLTY IS BASED ON INSP & QLTY CONTROL OPERATE IN DETECTION TYPE MODE (FINDING & FIXING PROBLEMS)

• IN DETECTION ENVT EMPHASIS IS ON PROCEDURES - IT IS ABOUT GETTING RID OF THE PROJECTS AFTER THEY HAVE

OCCURRED - CONSIDERABLE EFFORT IS SPENT ON AFTER THE EVENT INSPECTING,

TROUBLESHOOTING, CHECKING, TESTING AND PROVIDING REACTIVE QUICK FIXES

- DETECTION WILL NOT IMPROVE QLTY BUT ONLY HIGHLIGHTWHEN IT IS NOT PRESENT

- PROBLEMS ARE CONTAINED BUT NOT ELIMINATED AND ARE LIKELY TO REPEAT

• ORGS OPERATING IN DETECTION MANNER ARE PREOCCUPIED WITH SURVIVAL

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QUALITY CONTROL MATRIX

• AREA OF RESPONSIBILITY PERSON -DETERMINE CUST NEEDS MKTNG

-QLTY LEVELS FOR BUSINESS TOP MGT - PRODUCT DESIGN SPECS ENGG -MFG PROCESS DESIGN MFG -PRODUCE QLTY GOODS MFG -DETERMINE PROCESS CAPABILITY QC -QUALIFY SUPPLIERS ON QLTY MATRLS -QLTY SYSTEMS PLANNING TOP MGT + QC -PLAN INSPECTION QC -FEEDBACK QLTY INFO QC -ADDRESSING QLTY COMP[LAINTS QC -CALCULATE QLTY COSTS FINANCE -ANALYZE QLTY COSTS QC -MEASURING QLTY QC

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PROCESSES FOR QLTY CONTROL

• IDENTIFY CUSTOMERS AND THEIR NEEDS

• DEVELOP PRODUCT FEATURES

• ESTABLISH QUALITY GOALS

• DEVELOP PROCESS FEATURES

• ESTABLISH PROCESS CONTROLS

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QUALITY CONTROL FOR TQM

• CHOOSE UNITS TO MEASURE

• SET GOALS

• MEASURE ACTUAL PERFORMANCE

• INTERPRETE THE DIFFERENCE

• TAKE ACTION ON THE DIFFERENCE

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CHARACTERISTICS OF QUALITY CONTROL(SQC)

• PRIMARY CONCERN IS CONTROL

• PRODUCT UNIFORMITY WITH REDUCED INSPECTION

• WIDE USAGE OF SQC TOOLS

• RESPONSIBILITY IS MFG AND ENGG

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QUALITY ASSURANCE

• QUALITY ASSURANCE IS A PREVENTIVE BASED SYSTEM WHICH IMPROVED PRODUCT/ SERVICE BY ELIMINATING THE ROOT CAUSE OF PROBLEM

• LASTING AND CONTINUOUS IMPROVEMENT IN QUALITY CAN BE ACHIEVED BY DIRECTING ORG EFFORTS TOWARDS PLANNING AND PREVENTING PROBLEMS FROM OCCURING AT SOURCE

• QA FOCUSES ON PROVIDING CONFIDENCE THAT QLTY REQMNTS WILL BE FULFILED (ISO 9000:2000)

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QUALITY ASSURANCE

• ADDL FEATURES REQD WHEN PROGRESSING FROM QC TO QA ARE – QMS TO INCREASE CONFORMITY, SEVEN QLTY CONTROL TOOLS, SPC, FAILURE MODE EFFECT ANALYSIS AND QLTY COSTS

• ACCENT IS ON PREVENTION OF NON CONFORMANCE

• EMPHASIS IS ON DESIGN IMPROVEMENT, PROCESS CONTROL IMPROVEMENT, ETC.

• QA IS A PREVENTION BASED SYSTEM WHICH INCREASES PRODUCTIVITY BY EMPHASISING ON DESIGN ASPECTS OF PRODUCT / SERVICE

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QUALITY ASSURANCE

• BY INTEGRATING QLTY INTO PLANNING & DESIGN STAGE IT STOPS NON CONFORMITY FROM OCCURING

• PROACTIVE APPROACH WHICH LOOKS AT PROCESS CONFORMITIES RESULTING IN PRODUCT CONFORMITIES

• SIX SIGMA ADVOCATES A METHODOLOGY CALLED PDCA

• QLTY CREATED AT DESIGN STAGE • CHANGING FROM DETECTION TO PREVENTION

REQUIRES NEW OPERATING PHILOSOPHY SUCH AS CROSS FUNCTIONAL TEAMS AND ROOT CAUSE ANALYSIS

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PLANNING FOR QLTY ASSURANCE

• ACTIVITY OF DEVELOPING PRODUCTS AND PROCESSES REQD TO MEET CUSTOMER NEEDS

• INVOLVES FOLLOWING STEPS: -ESTABLISH QLTY GOALS AND IDENTIFY CUSTOMERS WHO WILL BE IMPACTED BY EFFORTS TO MEET GOALS

• DETERMINE CUSTOMER NEEDS

• DEVELOP PRODUCT FEATURES THAT RESPOND TO CUSTOMER NEEDS

• DEVELOP PROCESSES TO PRODUCE PRODUCT FEATURES

• ESTABLISH PROCESS CONTROLS AND TRANSFER RESULTING PLANS TO OPERATING FORCES

114

CHARACTERISTICS OF QUALITY ASSURANCE

• PRIMARY CONCERN IS COORDINATION• EMPHASIS IS ON ENTIRE PRODN CHAIN• METHODS ARE PROGRAMS AND SYSTEMS• QLTY MSRMNT PLANNING DONE BY QLTY

PROFESSIONALS• ALL DEPTS HAVE RESPONSIBILITY

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COMPANYWIDE QUALITY CONTROL(SQM)

• QLTY INITIATIVE LAUNCHED COMPANYWIDE IS ALSO CALLED COMPANYWIDE QLTY CONTROL

• AVENUE THRU WHICH KAIZEN PURSUED• BUILDING BLOCKS OF CWQC ARE INFRASTRUCTURE AGILITY,

PEOPLE COMPETENCE AND PROCESS CAPABILITY• CWQC IS A MEANS TO PROVIDE GOOD AND LOW COST PRODUCTS

PASSING ON THE BENEFITS TO THE STAKEHOLDERS• CWQC REFERS TO :

-QLTY OF HUMAN BEHAVIOUR -QLTY OF WORK DONE -QLTY OF MGT -QLTY OF WORK ENVT -QLTY OF PRODUCT AND SERVICE -QLTY OF TRG -QC ACTIVITIES - CWQC SELF APPRAISAL AUDITS SUCH AS MBNQA -APPLICATION OF STATISTICAL METHODS

116

CHARACTERISTICS OF CWQC

• QUALITY NOT PROFIT FIRST

• CONSUMER ORIENTED NOT PRODUCER ORIENTED QC

• NEXT PROCESS IS THE CUSTOMER

• WORK WITH FACTS AND DATA AND APPL OF SQC TOOLS

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SALIENT FEATURES OF CWQC

• TQC WITH ALL EMPLOYEE PARTICIPATION

• EMPHASIS ON EDUCATION AND TRG• QLTY CTRL CIRCLE ACTIVITIES• CWQC AUDITS• USAGE OF INTERNATIONAL QLTY

FRAMEWORKS TO ASSESS READINESS OF PROCESSES TO MEET CUSTOMER REQUIREMENTS

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BENEFITS OF CWQC

• PROVIDE PRODUCTS,SERVICES THAT MEET CUST REQMNT

• HIGHER PROFITABILITY THRU IMPROVED WORK PROCEDURES FEWER DEFECTS,LESSER COSTS

• HELP EMPL ACHIEVE CORPORATE GOALS• SAVINGS IN ENERGY AND OTHER RESOURCES• HIGHER EFFECTIVENESS OF RESOURCES• IMPROVEMENT IN PROCESS THRUPUT• ENHANCED CUSTOMER HAPPINESS

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CHARACTERISTICS OF SQM

• PRIMARY CONCERN IS STRATEGIC VIEW• EMPHASIS ON MKTS AND CUSTOMER

NEEDS• METHODS ARE STRATEGIC PLANG GOAL

SETTING• QLTY PROFESSIONALS DO GOAL SETTIG

TRG AND CONSULTATION• ALL EMPLOYEES HAVE RESPONSIBILITY

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LEVELS OF TQM ADOPTION

• SIX LEVELS OF TQM ADOPTION -UNCOMMITED -DRIFTER -TOOL PUSHER -IMPROVER -AWARD WINNER -WORLD CLASS

• LEVELS SIGNIFY CHARACTERISTICS AND BEHAVIOUR WHICH ORG DISPLAYS IN RELATION TO TQM

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LEVEL 1-UNCOMMITTED

• NO FORMAL PROCESS OF QLTY IMPROVEMENT AND PROBABLY USE SOME SQC METHODS UNDER CUSTOMER PRESSURE

• QLTY IMPROVEMENT IS SEEN AS AN EXTERNALLY IMPOSED CONTRACTUAL REQMNT AND AN ADDITIONAL COST

• FOCUS ON MAS PRODUCT PRODUCTION NOT PROCESS

• CORRECTIVE AND PREVENTIVE ACTION TAKEN ONLY IN RESPONSE TO COMPLAINTS

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LEVEL 1-UNCOMMITTED CHARACTERISTICS

• EMPHASIS ON RETURN ON SALES AND ASSETS AT THE EXPENSE OF OTHER MEASURED FINANCIAL AND NON FINANCIAL METRICS

• MEETING OUTPUT AND SALES TARGET WHATEVER THE COST• LACK OF QA REGULATING SYSTEM RESULTING IN QLTY ASPECTS

BEING DISCARDED AND HIGH INCIDENCE OF INTERNAL AND EXTERNAL FAILURE

• EMPLOYEES SEE QLTY AS SOMEBODY ELSES JOB AND DON’T FEEL RESPONSIBLE FOR QLTY OF THEIR OUTPUT

• INEFFECTIVE AND INACCURATE CORRECTIVE ACTION CONTROL PROCEDURES

• PIECEWORK INCENTIVE REWARDS QTY AND NOT QLTY• SAME PROBLEMS RECUR WITH NO FORMAL PROCEDURES FOR

PERMANENT FIXES• PROCESS ACTIVITY INTRICACIES NOT UNDERSTOOD• PASS THE BUCK METHODOLY FOR BLAME

123

LEVEL 2-DRIFTERS

• ENGAGED IN PROCESS OF CONTINUOUS IMPROVEMENT FOR SOME TIME

• MAY BE CONTEMPLATING ONE OF THE QLTY FRAMEWORKS

124

LEVEL 2-DRIFTERS CHARACTERISTICS

• CONTINUOUS IMPROVEMENT NOT INTEGRATED WITH BUSINESS AND DEPARTMENTAL OBJECTIVES

• TQM NOT PENETRATED TO SHOP FLOOR AND OFFICE LEVELS

• MGT SUSCEPTIBLE TO LATEST MGT FADS• QLTY DEPT HAS LOW STATUS IN ORG• INADEQUATE REPORTING OF DEFECTS , FEEDBACK AND

LACK OF CLARITY ON WHAT REAL NON CONFORMANCE AND DEFECTS ARE

• GAPS IN PEOPLE UNDERSTANDING OF TQM• DRIFT FROM ONE INITIATIVE TO ANOTHER WITHOUT

CONSOLIDATING

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LEVEL 3-TOOL PUSHERS

• HAS MORE OPERATING EXPERIENCE OF QLTY ENVT

• GENERALLY HAS IMPLEMENTED QMS AND EMPLOYS TOOLS AND TECHNIQUES SUCH AS SQC AND 7 QC TOOLS

• SEVERAL ORGS AT THIS LEVEL USE EXCELLENCE MODELS

126

LEVEL 3-TOOL PUSHERS CHARACTERISTICS

• IMPLEMENTATION OF SPC,FMEA,DOE AND BENCHMARKING

• CONTINUOUS IMPROVEMENT EFFORT CONCENTRATED IN MFG OPERATIONS WITH OTHER DEPTS LES INVOLVED IN IMPROVEMENT EFFORTS

• DETAILED QLTY PROCEDURES ARE IN PLACE AND FOCUS IS ON CONTROL. EMPHASIS IS ON SOLVING CURRENT PROBLEMS

• SHORT TERM RESULTS REGARDING PRODUCT OUTPUT AND QLTY RESULTING IN REACTIVE SOLUTIONS AND NEGLECT OF LONG TERM ROOT CAUSE IMPROVEMENT

127

LEVEL 4-IMPROVERS

• ENGAGED IN PROCESS OF CONTINUOUS IMPROVEMENT FOR A LONG TIME

• RECOGNISE THE IMPORTANCE OF CUSTOMER FOCUSED CONTINUOUS IMPROVEMENT

128

LEVEL 4-IMPROVERS CHARACTERISTICS

• POLICY DEPLOYMENT AND PROBLEM SOLVING INFRASTRCTRE IN PLACE AS WELL AS A PROACTIVE QLTY SYSTEM

• HIGH DEGREE OF CLOSED LOOP ERROR PREVENTION THROUGH CONTROL OF PROCESSES

• PROCESS IMPROVEMENT ACTIVITIES EXIST

• BENCHMARKING STUDIES DONE• REAL PROGRESS MADE

129

LEVEL 5-AWARD WINNERS

• WINNERS OF MBNQA,EFQM,DEMING ETC

• HIGH DEGREE OF REALISED PROCESS CAPABILITY AND EFFECTIVENESS

130

LEVEL 5-AWARD WINNERS CHARACTERISTICS

• BUSINESS PROCESSES ARE EFFICIENT EFFECTIVE RELIABLE AND AGILE

• PROCESSES RESPONSIVE TO CUSTOMER NEEDS• EFECTIVE CROSS FUNCTIONAL PROCESSES• TQM VIEWED BY ALL EMPLOYEES AS A WAY OF

MANAGING BUSINESS TO SATISFY AND DELIGHT INTERNAL AND EXTERNAL CUSTOMERS

• PERCEPTIONS OF KEY STAKEHOLDERS ACTED UPON FOR IMPROVEMENT

131

LEVEL 6-WORLD CLASS

• TOTAL INTEGRATION OF CONTINUOUS IMPROVEMENT AND BUSINESS STRATEGY TO DELIGHT CUSTOMER

132

LEVEL 6-WORLD CLASS CHARACTERISTICS

• COMPANY VALUES UNDERSTOOD BY ALL EMPLOYEES CUSTOMERS SUPPLIERS

• RIGHT THINGS DONE RIGHT FIRST TIME EVERY TIME• WASTE IS NOT TOLERATED• KEY PROCESSES OF ORG ALIGNED WITH LONG TERM

GOALS AND VISION TO CREATE AN ENVIRONMENT CONDUCIVE TO IMPROVEMENT

• CAPABILITY TO PREDICT AND RESPOND TO CHANGING MKT CONDITIONS, CUSTOMER NEEDS AND REQMNTS

• COMPETE AND WIN AGAINST THE BEST WORLD WIDE• INDUSTRY LEADERS IN THEIR SPACE

133

DEMING PDCA

• PDCA IS PLAN DO CHECK ACT• PLAN

-IDENTIFY PROBLEM BY FACTS AND DATA -COLLECT DATA AND DETERMINE GOALS TO BE ACHIEVED -ANALYSE PROBLEM AND POSSIBLE CAUSES AND ISOLATE ROOT CAUSE

• DO -REMEDIAL STEPS FOR ERADICATION OF ROOT CAUSE OF PROBLEM

• CHECK -CHECK,MEASURE,ANALYSE AND MONITOR RESULTS

• ACT -STANDARDISE IMPROVEMENTS -CONTINUOUS REVIEW AND IMPROVEMENT

134

QUALITY IMPROVEMENT FOR TQM

• DIAGNOSE THE CAUSES OF POOR QLTY

• PROVIDE EFFECTIVE REMEDIES

• EFFECT CONTINUOUS IMPROVEMENT

135

QUALITY AUDIT AND REVIEW

• AUDIT IS THE MEANS BY WHICH MGT DECIDES WHETHER PEOPLE ARE CARRYING OUT DUTIES AS PER MGT PLAN

• REVIEW IS MEANS BY WHICH MGT DETERMINES WHETHER ORG IS EFFECTIVE IN MEETING CORPORATE GOALS(INCR MKT SHARE ETC)

136

QUALITY AUDITS

• SYSTEMATIC AND INDEPENDENT EXAMINATION TO DETERMINE WHETHER QUALITY ACTIVITIES COMPLY WITH PLANNED EXPECTATIONS AND ARE IMPLEMENTED EFFECTIVELY TO ACHIEVE OBJECTIVES

• QUALITY AUDITS APPLY TO PRODUCTS,PROCESSES AND SERVICES

• AUDITS CONDUCTED INTERNALLY AND EXTERNALLY• AUDITS ARE 1ST PARTY,2ND PARTY OR 3RD PARTY• 1ST PARTY AUDITS CONDUCTED INTERNALLY• 2ND PARTY AUDITS CONDUCTED BY CUSTOMER• 3RD PARTY AUDITS CONDUCTED BY OUTSIDE PARTIES

GENERALLY AUTHORIZED TO CERTIFY A CLIENT FOR COMPLIANCE

137

TYPES OF AUDITS

• COMPLIANCE AUDIT TO STANDARDS SUCH AS ISO 9000,ISO 14000,OSHAS 18000,SA 8000 ,SIGMA,CMM,P-CMM,

• COMPLIANCE AUDITS TO REGULATORY REQMNTS SUCH AS GAAP,BASEL 2 ETC

• ADEQUACY AUDIT IS AN EXERCISE WHICH DETERMINES THE EXTENT TO WHICH THE QLTY PROCEDURES ADEQUATELY MEET THE REQMNT OF COMPLIANCE STDS

• CONTROL AUDIT FOR ENSURING ACCURACY AND HONESTY OF FINANCIAL TRANSACTIONS WHICH UPDATE FINANCIAL FIGURES PUBLISHED IN THE BALANCE SHEET EG SOX 404,CLAUSE 49,SAS 300, AAS ETC

• PROCESS RISK AUDITS WHICH ANALYSE THE VARIOUS RISKS OF EVENTS NOT HAPPENING AND THEIR CONSEQUENCES,IMPACT AND REMEDIES

• FINANCIAL AUDITS EG INTERNAL AND EXTERNAL • COST AUDITS • SATISFACTION AUDITS EG IBM REVERSE APPRAISALS

138

MAIN FEATURES OF QLTY AUDIT

• ENTAILS SYSTEMATIC EVALUATION OF ACTIVITIES RELATED TO QLTY MGT

• PERSONS NOT ASSOCIATED WITH PROCESS CARRY OUT AUDIT

• PROCESS OF AUDIT DETERMINES WHETHER -DOCUMENTATION MEETS THE DEFINED QLTY OBJECTIVE OF THE ORGANIZATION -ACTIVITIES PERFORMED ARE IN CONFORMITY WITH THE DOCUMENTED SYSTEM -QLTY SYSTEM IS EFFECTIVE WITH RESPECT TO DOCUMENTATION AND ITS IMPLEMENTATION IN MEETING THE DEFINED QLTY OBJECTIVES -STATUTORY AND SAFETY REQMNT ARE BEING FULFILED

139

AUDIT OBJECTIVES

• DETERMINE CONFORMITY OR NON CONFORMITY OF QLTY SYSTEMS ELEMENTS WITH SPECIFIED REQMNT

• DETERMINE EFFECTIVENESS OF IMPLEMENTED QLTY SYSTEM IN MEETING SPECIFIED QLTY OBJECTIVE

• AFFORD OPPORTUNITY TO IMPROVE QLTY SYSTEM• EVALUATE A SUPPLIER TO ESTABLISH A CONTRACTUAL

RELATIONSHIP AND VERIFY THAT SUPPLIERS QLTY SYSTEM MEETS REQMNT

• DETERMINE ADEQUACY,SUITABILITY AND EFFECTIVENESS OF SYSTEM

• AID PROBLEM SOLVING• HELP IN ESTABLISHING CAPABILITY OF PROCESS• ENSURE MEETING STATUTORY REQMNT

140

TQM IMPLEMENTATION FRAMEWORK

• COMPANY GOALS AND STRATEGIES

• GOAL TRANSLATION INTO ACTIVITIES AND MEASURES

• PROCESS MAPPING

• PROCESS MEASUREMENT

• BENCHMARKING

• GAP ANALYSIS

• BUSINESS PROCESS AUDIT AND REENGINEERING

• MEASURING PROGRESS

• CONTINUOUS IMPROVEMENT AND FEEDBACK

*THESE ACTIVITIES CAN BE CLUBBED INTO 4 CATEGORIES

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TEN POINTS FOR FOUNDATION OF TQM FRAMEWORK

• LONG TERM COMMITMENT TO CONTINUAL IMPROVEMENT• ADOPT ZERO DEFECT PROGRAM TO CHANGE CULTURE TO RIGHT FIRST

TIME• TRAIN PEOPLE TO UNDERSTAND CUSTOMER-SUPPLIER RELATIONSHIPS• DO NOT BUY PRODUCTS AND SERVICES ON COST ALONE-LOOK AT THE

TOTAL COST• RECOGNIZE THAT IMPROVEMENT OF THE SYSTEMS NEEDS TO BE

MANAGED• ADOPT MODERN METHODS OF SUPERVISION AND TRAINING AND

ELIMINATE FEAR• ELIMINATE BARRIERS BETWEEN DEPTS BY MANAGING THE PROCESS• ELIMINATE ARBITRARY GOALS WITHOUT METHODS,STANDARDS BASED

ON NUMBERS,BARRIERS TO PRICE OF WORKMANSHIP,GET FACTS BY USING CORRECT TOOLS

• CONSTANTLY EDUCATE AND RETRAIN AND DEVELOP EXPERTS IN THE BUSINESS

• DEVELOP A SYSTEMATIC APPROACH TO MANAGE THE TQM IMPLEMENTATION

142

CATEGORIES OF ACTIVITIES IN FRAMEWORK

• ORGANISING -LONG TERM STRATEGY FOR TQM FORMULATED AND INTEGRATED INTO OTHER STRATEGIES WHICH INCLUDES A QLTY POLICY -CONTINUOUS IMPROVEMENT SCHEME DEVELOPED -STAGES OF IMPROVEMENT ACTIVITIES IDENTIFIED -VISION,MISSION STATEMENTS DEVELOPED -COMMON ORG DEFINITION OF QLTY -ESTABLISHMENT OF FORMAL PROCESSES FOR QLTY ASSESSMENT AND CONTROLS

143

CATEGORIES OF ACTIVITIES

• SYSTEMS AND TECHNIQUES -INVOLVES DEVELOPMENT OF QMS TO PROVIDE CONTROLS -IDENTIFY TOOLS FOR CONTINUOUS IMPROVEMENT -IMPL FORMAL QLTY SYSTEMS - KEY BUSINESS PROCESS ANALYSIS AND IMPROVEMENT BASED ON MEASUREMENT

144


• MEASUREMENT AND FEEDBACK -ENABLES VOICE OF CUSTOMER TO BE TRANSLATED INTO MEASURE OF PERFORMANCE WHICH ORG NEEDS TO CONTROL AND IMPROVE -DEALS WITH INTERNAL MEASURES OF PERFORMANCE -KEY INTERNAL AND EXTERNAL PERFORMANCE MSRS DEFINED TO ASSESS PROGRESS MADE AND TO ENSURE THAT CUSTOMERS ARE SATISFIED -DEFINE CUSTOMER EXPECTATIONS IN PERFORMANCE -BENCHMARK FOR IMPL , CTRL, IMPR -LINK REWARDS TO IMPR AND RESULTS -ASSESS PROGRESS TOWARDS WORLD CLASS PERFORMANCE eg MALCOLM BALDRIDGE NATIONAL QLTY AWARD -ENSURE THAT GAPS BETWEEN ACTUAL PERFORMANCE AND CUSTOMER EXPECTATION ARE IDENTIFIED,ANALYSED AND ADDRESSED -COMPLAINTS FROM CUSTOMERS ADDRESSED

145


• CULTURE CHANGE -ASSESS CURRENT ORG CULTURE -DEVELOP PLAN FOR CHANGE -CHANGE SHOULD BE PLANNED AND TAKE PLACE IN INCREMENTAL MANNER -FOCUS ON ROLE OF PEOPLE WITHIN ORG -RECOGNISE ONGOING CULTURAL CHANGES -CHANGE PLANS INCREMENTALLY -CONSIDER INTER RELATIONSHIP OF ALL ACTIVITIES IN ORG -IDENTIFY FACTORS WHICH INDICATE CULTURE CHANGE

146

HOUSE OF TQM

• ROOF-QLTY PLANNING -WORLD CLASS ORG VISION

• PILLARS-STATISTICAL PROCESS AND QLTY CONTROL -MGT CONTROL SYSTEMS

• FOUNDATION-CONTINUOUS IMPROVEMENT -ADDED VALUE MGT ACTIVITY –EMPLOYEE INVOLVEMNT

• FOUNDATION SYMBOLISES MOTIVATIONAL APPROACH AND QUEST FOR CONTINUOUS IMPROVEMENT

• ROOF IS INDICATIVE OF QLTY ASSURANCE AND CUSTOMER SATISFACTION

• PILLARS-SIGNIFY TECHNIQUES AND METHODS USED TO ACHIEVE OBJECTIVES

147

PRINCIPLES GOVERNING TQM SYSTEMS

• CUSTOMER FOCUSED APPROACH THAT ENSURES THAT ALL ACTIVITIES AND PROCESSES ARE FOCUSED TOWARDS ADDRESSING CUSTOMER NEEDS

• STRATEGIC PLANNING AND LEADERSHIP NEEDED WITH STRONG CUSTOMER ORIENTATION AND ABILITY TO SATISFY STAKEHOLDERS

• CROSS FUNCTIONAL HORIZONTAL PROCESSES WITH IDENTIFICATION OF INTERNAL AND EXTERNAL CUSTOMERS

• CONTINUOUS IMPROVEMENT OF ALL PROCESSES • TRAINING AND DEVELOPMENT OF PEOPLE• EMPOWERMENT OF PEOPLE

148

PERFORMANCE MEASURES FOR TQM

• ORG NEEDS QUANTIFIABLE MEASURES OF QLTY• MEASURES SHOULD BE AS SEEN BY CUSTOMER• PERFORMANCE MEASURES INCLUDE

-FIELD FAILURES –MTBF -CUSTOMER RETURNS –CUSTOMER COMPLAINTS -LOST BUSINESS -NON CONFORMANCE LEVELS –QLTY COSTS -EMPLOYEE SATISFACTION –ERRORS IN ORDERS –ERRORS IN QUOTE –ERRORS IN INVOICES –RATIO OF SUCCESSFUL QUOTES TO TOTAL QUOTES –AGEING OF DEBTS –COST OF CAPITAL IN OVERDUE ACR -%INCORRECT RECRUITS -TIME TO RECRUIT -STAFF COMPLAINTS –STAFF TURNOVER -RECRUITMENT COST -%NEGATIVE 360 DEGREE APPRAISALS -%GOODS REJECTED -%GOODS SHORTAGE –NO ENGG CHANGES –TIME TO RESPOND TO QUOTES –TURNAROUND TIME FOR REPAIRS -

149

KANOS MODEL OF CUSTOMER SATISFACTION

• CLASSIFIES PRODUCT ATTRIBUTES BASED ON HOW THEY ARE PERCEIVED BY CUSTOMERAND THEIR EFFECTS ON CUSTOMER SATISFACTION

• CLASSIFICATION USEFUL FOR GUIDING DESIGN DECISIONS

150

PROJECT ACTIVITIES IN KANO MODEL

• IDENTIFYING CUSTOMER NEEDS

• DETERMINING FUNCTIONAL REQUIREMENT

• CONCEPT DEVELOPMENT

• ANALYSING CXOMPETITIVE PRODUCTS

151

TOOLS USED IN KANO MODEL

• QUALITY FUNCTION DEPLOYMENT

• VALUE ANALYSIS

152

FEATURES OF KANO MODEL

• DIVIDES PRODUCT ATTRIBUTES INTO 3 CATEGORIES – THRESHOLD,PERFORMANCE AND EXCITEMENT

• A COMPETITIVE PRODUCT MEETS BASIC ATTRIBUTES,MAXIMISES PERFORMANCE ATTRIBUTES AND INCLUDES EXCITEMENT ATTRIBUTES

153

KANO MODEL DIAGRAM

154

THRESHOLD ATTRIBUTE

• EXPECTED ATFOR PRODUCT ATRIBUTES OR MUSTS OF A PRODUCT AND DO NOT PROVIDE AN OPPORTUNITY FOR PRODUCT DIFFERENTIATION

• INCREASING PERFORMANCE OF ATTRIBUTES PROVIDES DIMINISHING RETURNS IN TERMS OF CUSTOMER SATISFACTION

• POOR PERFORMANCE OF THESE ATTRIBUTES RESULTS IN EEXTREME CUSTOMER SATISFACTION eg BRAKES IN A CAR

• THRESHOLD ATTRIBUTES NOT CAPTURED IN QFD AND PRODUCTSNOT RATED ON BASIS OF THRESHOLD ATTRIBUTES

155

PERFORMANCE ATTRIBUTES

• ATTRIBUTES WHICH WILL ENHANCE CUSTOMER SATISFACTION

• ABSENCE WILL REDUCE CUSTOMER SATISFACTION

• PRICE CUSTOMER WILLING TO PAY IS CLOSELY TIED TO PERFORMANCE ATTRIBUTES eg PAY EXTRA FOR FUEL ECONOMY CARS

156

EXCITEMENT ATTRIBUTES

• UNSPOKEN AND UNEXPECTED BY CUSTOMER BUT RESULTS IN HIGH LEVELS OF CUSTOMER SATISFACTION

• ABSENCE DOES NOT LEAD TO DISSATISFACTION

• SATISFY LATENT WANTS• PROVIDING EXCITEMENT ATTRIBUTES

CAN RESULT IN COMPETITIVE ADVANTAGE

157

OTHER ATTRIBUTES

• ATTRIBUTES OF LITTLE OR NO CONSEQUENCE TO CUSTOMER AND DO NOT FACTOR IN CUSTOMER DECISION eg ENGINE NUMBER AND MFG DATE OF A CAR

158

ZERO DEFECT PROGRAM

• DOING THINGS RIGHT THE FIRST TIME EVERY TIME• PHILOSOPHY THAT BELIEVES IN DEFECT PREVENTION RATHER

THAN FINDING AND FIXING DEFECTS• UNDERSTAND BASIC SOURCE OF ERROR AND DEFECTS• DEFECTS DUE TO LACK OF KNOW-HOW OF JOB,LACK OF

FACILITIES OR LACK OF ATTENTION• PRODUCER NOT INSPECTOR TAKES RESPONSIBILITY FOR

ADHERING TO OUTPUT SPECS WITHOUT REWORK• BELIEVES THAT PREVENTION IS BETTER THAN DETECTION AND

CURE AND THAT CURING MEANS DOING NON VALUE ADD ACTIVITIES WHICH NEEDLESSLY ADD TO COSTS

• CHALLENGES CONCEPT OF AQL • HELPS IMPROVE CORPORATE IMAGE• DEFECT ELIMINATION THRU IDENTIFICATION OF WHAT IS

WRONG,WHY IT IS WRONG,HOW IT IS WRONG• SHOULD BECOME A PERSONAL HABIT

159

PREREQUISITES FOR ZD PROGRAM

• AVOIDING CONVERSION OF ERRORS INTO DEFECTS

• POSITIVE ATTITUDE OF EMPLOYEES• TRUST BETWEEN MGT AND STAFF• ORGANIZATIONAL QLTY POLICIES AND

STRATEGIES UNDERSTOOD BY ALL• ELIMINATION OF DEFECTS THRU

ANALYSIS RATHER THAN BLAME

160

CAUSES OF DEFECTS

• INAPPROPRIATE WORK PROCESSES OR OPERATIONS PROCEDURES OR INADEQUATE FACILITIES AND ENGG SUPPORT

• EXCESSIVE VARIATIONS IN OPERATIONS• INADEQUATE OPERATING SKILLS OR KNOW HOW• DEFECTIVE RAW MATERIAL• INADVERTENT ERRORS BY WORKERS• LACK OF DESIRE TO DO ERROR FREE WORK

161

RESOLUTION OF DEFECTS

• IMPROVING WORK PROCESSES AND PROCEDURES

• GOOD PM AND CONSTANT MONITORING OF EQPMNT

• STD OPERATING ROUTINES• CONTINUOUS TRG TO OPERATORS• ENFORCEMENT OF QLTY ASURANCE

STDS WITH SUPPLIERS AND MFG

162

COST OF QUALITY

• MOST IMPORTANT CONSIDERATION IN TQM• PROVIDES ABILITY TO ENHANCE CORPORATE PROFIT• COST OF QLTY IS CARDINAL FOR JUDGEMENT OF PROCESS

EFFECTIVENESS• QLTY COSTS ARE DIRECTLY PROPORTIONAL TO THE QLTY

CONFORMANCE OF THE PRODUCT• MEASUREMENT OF COSTS HELPS TO HIGHLIGHT

IMPORTANCE OF PRODUCT QLTY;FORMS BASIS OF DECISION MAKING;IDENTIFIES AREAS NEEDING IMPROVEMENT;MEASURES EFFECTS OF ACTIONS TAKEN;

• QLTY COSTS ARE CATEGORIZED INTO 4 MAJOR CATEGORIES-PREVENTION COSTS;APPRAISAL COSTS;FAILURE COSTS(INTERNAL AND EXTERNAL)

163

APPRAISAL COSTS

• INCURRED TO MEASURE EXTENT OF CONFORMANCE

• COSTS INCLUDE MEASURING,INSPECTING,TESTING,AND AUDITING PERFORMANCE TO DETERMINE CONFORMANCE TO ACCEPTABLE QLTY LEVELS,STDS OF PERFORMANCE AND SPECIFICATIONS, EVALUATING PURCHASED MATRL

• AVOIDABLE ACTIVITY

164

APPRAISAL COSTS• COSTS INCURRED TO MEASURE EXTENT OF CONFORMANCE AND INCLUDE

COSTS MENTIONED BELOW• -MEASURING,INSPECTING,TESTING AND AUDITING PERFORMANCE TO

DETERMINE CONFORMANCE WITH STDS• -QUALIFICATION TESTS FOR DESIGN REQUIREMENTS• -EVALUATING PURCHASED ITEMS AND INSPECTION COSTS OF INCOMING

MATERIAL• -COST OF STORAGE OF MATERIAL AWAITING INSPECTION• -EMPLOYEE AND EQUIPMENT PERFORMANCE• -IN PROCESS INSPECTION AND CONTROL• -FINAL TESTING AND INSPECTION• -PRODUCTION TRIALS• -MATERIAL CONSUMED DURING INSPECTION AND TESTING• -FIELD PERFORMANCE TESTING• -MAINTENANCE AND CALIBRATION OF EQUIPMENT• -AUDIT OF PREVENTIVE SYSTEM TO ENSURE EFFECTIVENESS

165

PREVENTION COSTS

• AIMED AT PREVENTING DEFECTS AND BUILDING ACCEPTABLE QLTY INTO PRODUCTS AND SERVICES

• INCLUDES TRAINING, DESIGNING PROCEDURES, VENDOR ASSURANCE EXERCISES,PROCESS CAPABILITY BUILDING ,TRAINING AND CONSUMER RESEARCH ORIENTED AT IMPROVING QLTY,PLANNING QUALITY ASSURANCE

• PREVENTION IS AVOIDABLE ACTIVITY AND SHOULD BE REPLACED BY TQM WHICH ADVOCATES COST OF BUILDING ACCEPTABLE QLTY

• PREVENTIVE COSTS INCLUDE DEVELOPMENT AND MAINTENANCE COSTS AS WELL AS QLTY PLANNING WHICH INCLUDESCOSTS INCURRED IN MFG PROCESS ,PROCESS RELIABILITY, PROCEDURE MANUALS,VENDOR DEVELOPMENT COSTS ,ADMIN COSTS,TRAINING COSTS, AND QLTY AUDIT COSTS

166

PREVENTION COSTS

• QLTY PLANNING COSTS SUCH AS MFG PROCESS COSTS EVALUATION OF QLTY PLANS INSP TEST PLANS RELIABILITY AND OTHER PLANS FOR IMPLEMENTING TQM SYSTEMS

• COST OF PREPARING PROCEDURE MANUALS• VENDOR DEVELOPMENT COSTS WHICH IS IDENTIFICATION

SELECTION DEVELOPMENT OF VENDORS AS WELL AS COSTS RELATED TO PLANNING WHICH INCLUDES COSTS OF TESTS REQD TO ACCEPT VENDORS PRODUCTS

• ADMIN COSTS INCURRED IN OVERRAL MGT• TQM TRG COSTS WHICH INCLUDE QLTY IMPROVEMENT

TRG COSTS• QLTY AUDIT COSTS REQD TO MEASURE EFFECTIVENESS

OF TQM PERFORMANCE

167

FAILURE COSTS

• TWO CATEGORIES: INTYERNAL FAILURE COSTS AND EXTERNAL FAILURE COSTS

• INTERNAL FAILURE COSTS ARE COSTS INCURRED BECAUSE OF DEFECTS IN PRODUCT BEFORE SHIPMENT TO CUSTOMER AND INCLUDES COSTS SUCH AS: -COST OF SCRAPPING PRODUCT -COST OF REWORK -COST OF LOSS OF PRODUCTIVE TIME –LOSS DUE TO DEFECTS SALE -LIABILITY INSURANCE –COST OF OPPORTUNITY LOSS

• EXTERNAL FAILURE COSTS REPRESENTS COSTS INCURRED AFTER DELIVERY TO CUSTOMER AND INCLUDES HEADS SUCH AS COST OF COMPLAINT HANDLING,COST OF REPLACEMENT,WARRANTY COST OF REPAIRS AND EXTENDED WARRANTY,COST OF ADDITIONAL CLAIMS TO BE PAID TO CUSTOMER TO COVER LITIGATION COSTS AND PENALTY COSTS,LOST CUSTOMERS,BAD DEBT,SALES RETURNS

168

Prevention Costs Number Reworked Total Rework Cost

Defective Units Cost of Not Reworking

Rework Cost/Unit

Failure Costs

Number Returned Cost of Processing Returns

Example of an Interrelationship Digraph

169

BREAKUP OF QLTY COSTS ATN ASHOK LEYLAND

• TOTAL QLTY COST IS 8.2% OF REV

• EXTERNAL COSTS IS 0.2%

• QLTY ASSURANCE IS 71.1%

• QLTY INSPECTION IS 12.8%

• QLTY CONTROL IS 15.9%

170

CASE STUDY OF COST OF NON CONFORMTIY

• INSTALLED CAPACITY OF PRODN /MTH = 1.1 MILLION MTRS• PLANNED PRODN FOR MTH AS PER PRODN PLAN = 0.86 MIL MTR• ACTUAL PRODN (OWING TO BRKDWN IN BOTTLENECK PROCESS)

IS 0.79 MIL MTR• AV SALES REALIZATION/MTR OF GOOD QLTY IS RS 100/MTR• OPPORTUNITY LOSS = 0.79 MIL MTRS/MTH = 0.84 MIL MTRS /YR• OPPORTUNITY LOSS/YR = 0.84 MIL MTR * 100RS/MTR =RS 8.4 CR• PLANNED 1ST QLTY FOR MTH WAS 95% ACTUAL OBTAINED 90%• QLTY LOSS = 5% FOR MTR. LOSS/2ND QLTY/ MTR = RS 40 • QLTY LOSS/YR = 5% * 0.79 * 40 * 12 = RS 1.896 CR• TOTAL COST OF NON CONFORMITY = 8.4 + 1.896 =10.296 CR/YR• ANNUAL TURNOVER = 135 CR• %LOSS OF NON CONFORMITY = 10.296/135 = 7.5% OF SALES

171

HIDDEN COST OF QLTY

• POTENTIAL LOST SALES DUE TO QLTY

• COST OF REDESIGN DUE TO QLTY REASONS

• COST OF CHANGING MFG PROCESS DUE TO INABILITY TO MEET QLTY REQMNT

• EXTRA MFG COSTS DUE TO DEFECTS

• UNREPORTED SCRAP

• EXCESS PROCESS COSTS OF ACCEPTABLE PRODUCTS

172

USE OF QLTY COST INFORMATION

• QLTY COST INFO CAN BE USED AS FOLLOWS: -IDENTIFY PROFIT OPPORTUNITIES -IMPROVE PURCHASING AND SUPPLIER RELATED COSTS -IDENTIFY WASTE IN ACTIVITIES -IDENTIFY QUALITY PROBLEMS

• FEATURES OF QLTY COSTS: -CORPORATE TARGET AND NOT INDIVISUAL -GENERALLY NOT MEASURED AT THE POINT OF CAUSE

173

MANAGING NON CONFORMITY

• DISTINCTION TO BE MADE BETWEEN NON CONFORMING AND DEFECTIVE

• NON CONFORMING IS WHEN INTENDED PURPOSE IS MET BUT SOME SPECIFICATIONS ARE NOT MET EG SECONDS

• DEFECTIVE IS WHEN INTENDED PURPOSE IS NOT MET AND PRODUCT IS UNFIT TO BE USED FOR INTENDED PURPOSES AND SCRAP IS THE ULTIMATE OF DEFECTIVE GOODS

174

DEALING WITH NON CONFORMITY

• DISCOVERY:- STAGE AT WHICH NON CONFORMITY IS DISCOVERED AND INVESTIGATION DONE TO DECIDE WHAT NEEDS TO BE DONE WITH EXISTING UNITS AND HOW TO PREVENT RECURRENCE

• IDENTIFICATION:-LABELLING OF NON CONFORMING MATRL

• SEGREGATION:-SEPARATION OF NONC CONFORMING MATRL

• ANALYSIS:-EXTENT OF DEVIATION FROM SPECS /REASONS

• APPROVAL:-ACCEPTANCE OF QLTY MATRL AND RETURN OF REJECTED GOODS TO SUPPLIERS OR CONDEMNATION OF UNFIT GOODS

• ACTION:-RETURN NOTE TO SUPPLIER OR SCRAP NOTE OR CORRECTIVE REWORK WORKORDER

• TRACKING:-TRACKING DEFECTIVE MATRL TO SUPPLIERS

175

QLTY COSTING• QUALITY COSTS ARE INCURRED DURING THE ENTIRE PRODUCT

LIFECYCLE eg DESIGNING,IMPLEMENTING,OPERATING,MAINTAINING,• COSTS INCURRED IN MAKING CONTINUOUS IMPROVEMENT TO

PRODUCT/PROCESS AND SUSTAINING QLTY• COSTS INCURRED IN PRODUCT/SERVICE FAILURE• QLTY COSTS CAN RANGE FROM 5% TO 25% OF SALES• ALMOST 90% TO 95% OF THESE COSTS COME FROM APPRAISAL AND

FAILURES• REDUCING FAILURE COSTS BY ELIMINATING CAUSES OF FAILURE CAN

LEAD TO REDUCTION OF APPRAISAL COSTS• USAGE OF ACTIVITY BASED COSTING THRU COST DRIVERS MAKES IT

EASIER TO GATHER QLTY RELATED COSTS• ABC BREAKS DOWN COSTS INTO ELEMENTS CALLED COST DRIVERS eg m/c

set up• FOR EACH COST DRIVER AN OVERHEAD RATE IS DETERMINED• COST DRIVERS RESULT IN MORE ACCURATE COSTING AND ENABLES

QLTY COST ASSOCIATED WITH AN ACTIVITY TO BE IDENTIFIED

176

QUALITY COST PROGRAMS

• FOR EACH FAILURE OR NON CONFORMANCE THERE IS A COST AND A CAUSE

• CAUSE SHOULD BE DRILLED DOWN TO THE ROOT CAUSE AND CAUSES STUDIED AND PREVENTED

• STRATEGIES FOR ANALYSING QLTY COSTS INCLUDE: -USING ZERO DEFECT PROGRAM TO ELIMINATE FAILURE COSTS -USE CAUSE EFFECT ANALYSIS TO STUDY PATTERN OF FAILURES

-ELIMINATION OF FAILURES THRU EFFECTIVE CORRECTIVE ACTION

• FOR SUCCESSFUL DEPLOYMENT OF TQM ORG NEEDS TO ADOPT QLTY COST PROGRAMS TO BE MORE PRODUCTIVE AND PROFITABLE

177

NEED FOR QLTY COST PROGRAM

• IDENTIFY AND DEFINE QLTY COST ITEMS

• DESIGN FORMATS FOR COLLECTING COST DATA

• LINK QLTY COST DATA WITH ACCOUNTING SYSTEM

• ANALYSE AND IDENTIFY COST AREAS REQUIRING IMPROVEMENT

• DEVELOP CORRECTIVE ACTION PROGRAMS

• IMPLEMENT CHANGES

• REVIEW AND RECTIFY

178

QUALITY CIRCLE

• PARTICIPATORY MGT PROCESS IN WHICH A SMALL GROUP OF PEOPLE AT GRASS ROOT LEVEL ARE INVOLVED

• QC IS A QLTY,PRODUCTIVITY,SAFETY IMPROVEMENT TECHNIQUE • QC IS A HRD AND A PROBLEM SOLVING TECHNIQUE AND IS

BASED ON THE FACT THAT SUGGESTIONS AFFECTING WORKPLACE SHOULD BEST COME FROM PEOPLE WHO WORK THERE

• QC IS A GROUP OF PEOPLE FROM DIFFERENT WORK AREAS WHO MEET ON A REGULAR BASIS FOR RESOLVING PROBLEMS RELATED TO QLTY , PRODUCTIVITY, COST REDUCTION,SAFETY,CUSTOMER SERVICE

• QC IDENTIFIES PROBLEMS OR OPPORTUNITIES FOR FURTHER IMPROVEMENT THRU ANALYSIS OF DATA RELATED TO WORK

• PEOPLE EXPERIENCE AUTONOMY AT PLACE OF WORK AND CONTROL DECISIONS THAT AFFECT THEM

179

CHARACTERISTICS OF QC

• SMALL GROUPS FORMED IN WORKPLACE WITH MEMBERSHIP BEING VOLUNTARY

• MEMBERS TRAINED IN PROVBLEM SOLVING TECHNIQUES

• ENABLES MEMBERS TO USE HIDDEN TALENTS,SKILLS

• ENHANCES JOB SATISFACTION THRU CHALLENGES FACED BY WORKERS

• QC EFFORTS RECOGNISED BY MGT

• MINIMISES BOREDOM IN WORKPLACE

180

OBJECTIVES OF QC

• IMPROVE QLTY AND PRODUCTIVITY THUS CONTRIBUTING TO IMPROVING AND DEVELOPING ERNTERPRISE

• REDUCE COSTS OF PRODUCTS BY WASTE REDUCTION,SAFETY,EFFECTIVE UTILIZATION OF RESOURCES,MINIMIZING DEFECTS AND ELIMINATING NON VALUE ADDED ACTIVITIES IDENTIFY AND SOLVE WORK RELATED PROBLEMS

• MAXIMIZE CREATIVE INTELLIGENCE OF PEOPLE

• DEVELOP INDIVISUALS AND ASSISTANCE IN SELF ACTUALIZATION

• INCREASE EMPLOYEE COMMITMENT AND LOYALTY

• SHARING OF IDEAS AND EXPERTISE

181

QC OPERATION CYCLE

• BASIC PURPOSE OF QC IS TO IDENTIFY AND SOLVE WORK RELATED PROBLEMS

• EACH PROBLEM PASSES THRU STAGES SUCH AS: -IDENTIFICASTION –SELECTION –ANALYSIS -IDENTIFICATION OF SOLUTION WITH ALTERNATIVES -EVALUATION OF RISKS AND PROBABILITY -SELECTION OF SOLUTION -PREPARE ACTION PLANS WITH DESIRED OUTCOMES AND RETURNS

-PREPARE BUDGETS FOR RESOURCES DURING IMPL -ALLOCATE RESOURCES TO PROJECT -IMPLEMENTATION,REVIEW AND FOLLOW UP

182

S-S PROBLEM SOLVING METHOD

• S-S PROBLEM SOLVING METHOD DECREASES UNCERTAINTY BY OFFERING A PROCEDURE OF DEFINING THE REAL CAUSES OF PROBLEMS

• PROBLEM IDENTIFICATION RESTS UPON UNDERSTANDING THE UNWANTED EFFECTS

• S-S METHOD HAS A FOUR STEP PROCESS: -PROCESS FLOW ANALYSIS -PROBLEM DEFINITION -IDENTIFICATION OF REAL CAUSE - IMPLEMENTATION OF CORRECTIVE/PREVENTIVE ACTION

183

STRUCTURE OF QC

• STEERING COMMITTEE WHICH INCLUDES TOP MGT(CEO,VP,GM,HOD)

• COORDINATORS(I/F BETWEEN TOP MGT AND LINE OPERATORS)

• FACILITATORS(SHIFT MGR)• CIRCLE LEADERS(SR.FOREMAN)• CIRCLE MEMBERS(LINE LEVEL WORKERS)• INVITEES AND NON MEMBERS

184

PROBLEM SOLVING TECHNIQUES IN QC

• TEAM WORK(BRAINSTORMING)

• DATA COLLECTION METHODS

• PARETO ANALYSIS

• FISHBONE DIAGRAM

185

QC AND EMPLOYEE EMPOWERMENT

• EMPLOYEES UNDERSTAND WHAT IS REQD OF THEM

• TOOLS REQD FOR EXECUTION OF A JOB ARE AVAILABLE TO EMPLOYEES

• PEOPLE KNOW THE GOALS AND CRITICAL SUCCESS FACTORS

186

QC IN ASHOK LEYLAND

• SELECTION OF PROBLEM WITH MATERIAL LOSS IN WKSHOP• QC FORMED TO SOLVE PROBLEM AND MINIMIZE MATRL

WASTAGE AND CONSUMPTION• FIGURES RELATED TO LOSSES BEFORE/AFTER QC IMPL • BEFORE IMPL AFTER IMPL• EXP CONS YRLY 105KG 105KG • ACTUAL CONS YRLY 210KG 165KG• LOSS KG 105KG 60KG• LOSS RS 1.785LACS RS 1.02 LAC RS

187

QC IN ASHOK LEYLAND

• USING QC CAUSES RELATED TO MAN,M/C,MATRL,METHOD DETECTED• CAUSES RELATED TO MAN :- -

LACK OF KNOWLEDGE OF MATRL –IMPROPER WK INSTR -EXCESS OPER –LACK OF KNOWLEDGE OF OPS/TOOLS

• CAUSES RELATED TO MACHINES -SUB OPTIMUM CONDITIONS –FRICTIONAL WEAR OF PARTS -MISALIGNMENT OF PARTS

• CAUSES DUE TO METHODS -IMPROPER MATRL HANDLING/STORAGE -LACK OF PROPER STD OPER INSTR

• CAUSES RELATED TO MATERIALS -IMPROPER SPECS TO SUPPLIERS –INADEQUATE INSP METHODS

• REASONWISE % ATTRIBUTABLE FOR LOSS -MAN 35.7% -M/C 28.6% -METHODA 21.4% -MATERIAL 14.3%

188

OBSERVATIONS POST QC IN ASHOK LEYLAND

• IMPROVED INTER PERSONAL RELATIONSHIP AND TEAMWORK

• ENHANCEMENT OF KNOWLEDGE BASE IN WORKERS

• MINIMIZED MATERIAL WASTAGE RESULTING IN MONETARY GAINS

189

QC IN TOYOTA

• WIDE USAGE OF QC• MEETING ONCE A WEEK FOR 1 HR • PEOPLE ENCOURAGED TO GIVE SUGGESTIONS• PRINCIPLE OF KAIZEN FOLLOWED• PROBLEMS ADDRESSED INCLUDE SAFETY,COST

REDN,QLTY,PRODUCTIVITY,EQPT PERFORMANCE• CERTAIN AREAS ARE OFF LIMIT EG WAGES,COMPANY

OPERATING PRINCIPLES,HR POLICIES,SUPPLIER SELECTION,SALES AND MKTNG POLICIES AND PERSONALITIES

• HOWEVER PRIVATE SUGGESTIONS IN ABOVE AREAS COULD BE OFFERRED AS KAIZEN

• CREATION OF ANGER VENTING ROOM

190

TQM IMPLEMENTATION

• FIVE PHASE IMPLEMENTATION -PHASE 0 PREPARATION -PHASE 1 PLANNING -PHASE 2 ASSESSMENT -PHASE 3 IMPLEMENTATION -PHASE 4 DIVERSIFICATION

191

PHASE 0 - PREPARATION

• DECISION TO IMPLEMENT TQM• COMMITMENT OF TOP MGT AND

RESOURCES TO TQM PROJECT• STRATEGIC PLANNING WITH VISION

STATEMENT, CORPORATE GOALS,CORPORATE QLTY POLICY AND CORPORATE COMMUNICATION

• KEY EXECUTIVE TRAINING

192

PHASE 1 - PLANNING

• LAYS FOUNDATION FOR PROCESS OF CHANGE WITHIN ORGANISATION

• DETAILED IMPLEMENTATION PLAN DEVELOPED• RESOURCE REQUIREMENT DRAWN• EXPECTED RESULTS AND OBSTACLE TO SUCCESS

IDENTIFIED• PRIORITISE PROCESSES• SELECT PROCESSES FOR IMPROVEMENT• DEVELOP IMPLEMENTATION PLANS AND

BUDGET

193

PHASE 2 - ASSESSMENT

• INVOLVES EXCHANGE OF INFO REQD TO SUPPORT PREPARATION, PLANNING,IMPL,DIVERSIFICATION PHASES

• EVALUATION OF SWOT FACTOR AT ALL LEVELS IN ORG

• INPUT FROM CUSTOMER VERY IMPORTANT

194

DEVELOP CORPORATE GOALS

• IMPLEMENT TQM• CREATE TECHNICAL EXCELLENCE AND

IMPROVE QUALITY• INCREASE PRODUCTIVITY OF FORCE• IMPROVE FINANCIAL MANAGEMENT• REDUCE COST OF MATERIAL• MAINTAIN CAPITAL PLANT • REDUCE OVERHEADS

195

STEPS IN PLANNING

• FORM TEAM• IDENTIFY EXPECTATION OF RESULTS• IDENTIFY OBSTACLES• FORMULATE CORPORATE OBJ• DECIDE CORPORATE PERFORMANCE

MEASUREMENTS• PRIORITISE AND SELECT PROCESSES FOR

IMPROVEMENT• DEVELOP IMPL SCHEDULE AND BUDGET

196

APPROACH TO PRIORITISE PROCESSES

• ADOPTION OF IDEAS FROM EMPLOYEES,CUSTOMERS AND SUPPLIERS

• IDENTIFICATION OF CHRONIC PROBLEMS

197

DETAILS OF PHASE 2

• SELF ASSESSMENT

• CUSTOMER SURVEY

• TQM TRAINING AT ALL LEVELS

198

PHASE 3 - IMPLEMENTATION

• SELECT AND TRAIN PEOPLE WHO WOULD IMPLEMENT TQM

• SELECT PROCESSES FOR IMPL-GENERALLY CORE PROCESSES

• TQM IMPLEMENTATION IN PROCESSES USING INITIATIVES SUCH AS BPI,ISO 9000 etc

• DATA COLLECTION ANAYSIS AND RECOMMENDATIONS

• CONTINUOUS IMPROVEMENT

199

PHASE 4 - DIVERSIFICATION

• SELECT STRATEGIC SUPPLIERS

• SUPPLIER TRAINING AND CERTIFICATION(SAS 70)

• SUPPLIER STANDARDISATION

200

STAGES OF STRATEGIC SUPPLIER DEVELOPMENT

• STEP1-CONFRONTATIONAL ATTITUDE

• STEP2-ARMS LENGTH RELATIONSHIP WHERE CAUTION GOVERNS RELATIONSHIP

• COMING TOGETHER WITH CONGRUENCE IN MUTUAL GOALS

• FULL BLOWN PARTNERSHIP

201

TQM IN MARKETING

• TQMMAR INVOLVES CONTINUOUS IMPROVEMENT IN THE MARKETING FUNCTION

• COMPANY OPERATIONS MUST BE COORDINATED AND MATCHED WITH NEEDS OF CUSTOMERS

• EVERYBODY WHO WORKS FOR THE COMPANY MUST PARTICIPATE IN A TOTAL MARKETING ENVIRONMENT

202

TQM MARKETING PROCESS• CLARIFY THE VISION IN RELATION TO MKT OPPORTUNITIES eg WHAT

SORT OF BUSINESS WE WISH TO BE IN• SET TANGIBLE GOALS TO EXPRESS WHAT THE COMPANY WANTS TO

ACHIEVE eg LOW COST PRODUCER CHALLENGE• DEVELOP AWARENESS AND KNOW OF WHERE COMPANY IS NOW,HOW

SITUATION HAS EVOLVED AND WHAT TRENDS ARE OPEN IN THE FUTURE eg COMPARITIVE PERCEPTION BETWEEN CUSTOMERS AND SALESMEN

• MAINTAIN BUSINESS ACTIVITIES TO ENSURE THAT STRATEGIES AND TACTICS ARE MUTUALLY REENFORCING eg APPLY DEMING PDCA CYCLE IN STRATEGIC PLANNING AND DEPLOYMENT

• SET DYNAMIC STANDARDS TO CREATE CLEAR AND CONSISTENT OPERATING MILESTONES WHICH ARE RELEVANT TO CHANGING DYNAMICS OF MKTPLACE

• PLANNED IMPLEMENTATION DESIGNED TO ENSURE STRATEGIES AND POLICIES ARE PUT INTO PLACE THROUGH MARKETING PLANNING SYSTEMS

203

TQM MARKETING AREAS

• MARKETING DATA

• MARKETING RESOURCES

• MARKETING PRODUCT/SERVICE

• MARKETING PRICE

• MARKETING PLACE

• MARKETING PROMOTION

• MARKETING SALES

204

MARKETING DATA

• PURCHASING CRITERIA

• DISTIBUTION/SELLING METHODS

• RELATIVE PERCEPTIONS

205

MARKETING RESOURCES

• EFFECTIVE UTILISATION OF CURRENT AND FIXED ASSETS

• ACCURACY OF PRODUCT COSTING SYSTEMS

• INTEGRATION BETWEEN MKTNG AND SALES

206

MARKETING PRODUCT/SERVICES

• CUSTOMER NEEDS AND WANTS

• PERFORMANCE EXPECTATIONS

• PERCEIVED BENEFITS OVER COMPETITION

• LEVEL OF QLTY REQUIRED

207

MARKETING PRICE

• CONSISTENT AND LOGICAL PRICING

• PROCESS FOR CHANGE

• COST/PROFIT RELATIONSHIP

• VALUE PERCEPTION

208

MARKETING PLACE

• HOW DO CUSTOMERS ACCESS YOU

• WHAT LEVELS OF SERVICE ARE CUSTOMERS DEMANDING

• HOW IS PERFORMANCE MONITORED AND CONTROLLED

• WHAT DISTRIBUTION METHODS ARE REQUIRED

209

MARKETING PROMOTION

• WHAT IS THE PRODUCT IMAGE

• IS ADVERTISING COST EFFECTIVE

• IS TIMING FOR PROMOTION RIGHT

• WHAT IS THE TARGET AUDIENCE DURING PROMOTION

210

MARKETING SALES

• LEVEL OF ITEGRATION OF SALES WITH MKTNG ACTIVITIES

• SALESMEANS FAMILIARITY OF CUSTOMER NEEDS AND WANTS AND CAPABILITY TO ADDRESS THEM

• CUSTOMER CARE PROVIDED• COST EFFECTIVENESS OF SALES

CALLS

211

CASE STUDY OF LUCAS INDUSTRY USING TQMMAR

• BENEFITS ARISING OUT OF IMPLEMENTING TQMMAR: -SALES UP BY 36% -PROFIT UP BY 20% -ROA UP BY 5%

212

TQM IN PURCHASING

• ORGANIZATIONWIDE PARTICIPATION IN THE IMPROVEMENT OF THE LOGISTIC PROCESS TO MEET THE NEEDS OF THE CUSTOMER

• IN MFG COMPANIES AROUND 50% OF PRODUCT COST COMES FROM MATERIAL COST

• IN SUPPLY CHAIN AREA PURCHASE QLTY IS CONSIDERED PARAMOUNT TO THE PROFITABILITY OF THE BUSINESS AND HENCE ACCENT ON PURCHASE QLTY

• PURCHASING NEEDS TO BE HENCE CONSIDERED AS A STRATEGIC FUNCTION

213

TQM IN PURCHASING

• PURCHASING EFFECTIVENESS

• PURCHASING EFFICIENCY

214

PURCHASING EFFECTIVENESS

• PURCHASING PRICE/COST DIMENSION

• PURCHASING QUALITY DIMENSION

• PURCHASING LOGISTICS DIMENSION

215

PRICE/COST DIMENSION

• MATERIAL COSTS/PRICES

• COMPARISON

• COORDINATION

• TRANSPORTATION

216

QUALITY DIMENSION

• SPECIFICATIONS

• REJECTS

• PURCHASING ENGINEERING

• REWORK

• PRODUCTION STOPS

217

LOGISTICS DIMENSION

• LEAD TIMES

• ORDER QUANTITY

• INVENTORIES

• VENDOR PERFORMANCE

• DELIVERY PERFORMANCES

218

PURCHASING EFFICIENCY

• PURCHASING ORGANIZATION DIMENSION -WORKLOAD ORDERS/QUOTATIONS -PROCEDURES -INFORMATION SYSTEM -MANAGEMENT -EXPERTISE

219

CASE STUDY OF TQMPUR AT ASHOK LEYLAND

• RATINGS BY USERS BASED ON IMPORTANCE: -QUALITY 17.51% -PRICE 9.42% -RELIABILITY 22.34% -DELIVERY 24.52% -SERVICE 26.21%

220

CASE STUDY OF TQM IMPLEMENTATION AT

ASHOK LEYLAND• ASHOK LEYLAND HAS CHOSEN A TQM MODEL WHICH IS BASED ON THE

FOLLOWING PILLARS - TOTAL QUALITY CONTROL - JUST IN TIME - TOTAL PRODUCTIVE MAINTENANCE• MODEL DESCRIBED IN THEIR PURSUIT OF WORLD CLASS MFG PURSUIT• STEPS - CHANGE MGT & WORKER INVOLVEMENT / OWNERSHIP - BENCHMARKING OF TQM GOALS - CREATION OF SKILLS / MULTI SKILLS FOR TQM - CREATION OF PROCESSES FOR MONITORING OF IMPROVEMENT AND

QUALITY CONTROL - IMPLEMENTATION OF INITIATIVES SUCH AS 5S, AUTONOMOUS

MAINTENANCE, DESIGN FOR QUALITY, KAIZEN etc AIMED AT MAXIMISING THROUGHPUT OF PROCESSES AS PER CUSTOMER REQMNT.

221

CASE STUDY OF TQM IMPLEMENTATION AT

ASHOK LEYLAND• ACHIEVEMENT

- INCREASE IN OEE BY 6% SINCE JUNE 2005

- DECREASE IN INVENTORY BY 12% BUT NO STOCKOUTS. APPROX. RS. 3.0 LAKHS / VEHICLE

- 6200 KAIZENS IMPLEMENTED SINCE JAN 1, 2005.

- ZERO DEFECTS ACHIEVED IN 3 SHOP FLOORS

- SUCCESSFUL IMPLEMENTATION OF AUTONOMOUS MAINTENANCE AND POKA YOKE RESULTING IN ENHANCED SALE OF 8%.

- 75% ELIMINATION OF WASTE

222

TQM IMPLEMENTATION AT VIKRAM CEMENT (NEEMUCH)

• MFG. CAPACITY 0.75 MT / ANNUM• KND DRY PROCESS• 93% CAPACITY UTILISATION• CERTIFICATIONS - ISO 9000:2000 BY DNV IN 2001 - RAJIV GANDHI NATIONAL QUALITY AWARD IN 1997 - ISO 14001 EMS BY DNV IN 1997 - OSHAS 18001 BY DNV IN 2001 - SA 8000 BY DNV IN 2003 - TPM AWARD FROM JIPM IN 1995 & 2001 - FIRST CEMENT PLANT IN THE WORLD TO ACHIEVE LEVEL 5 OF

INTERNATIONAL QUALITY RATING SYSTEM (TQM LEVEL OF ADOPTION) FROM DNV

- IMC RAMAKRISHNA BAJAJ NATIONAL QUALITY AWARD IN 1998

223

TQM INITIATIVES IN VIKRAM CEMENT

• INITIATIVES PRACTISED INCLUDE: - BUSINESS PROCESS IMPROVEMENT (CONTINUOUS IMPROVEMENT) - KAIZEN IN WORKPLACE - LIFE CYCLE COST MGT - JUST IN TIME - ZERO DEFECT - SPARE PARTS MGT - PROCESS CAPABILITY IMPROVEMENT THROUGH MEASUREMENT, ROOT CAUSE ANALYSIS,

ETC. - FAILURE MODE EFFECT ANALYSIS - PLAN DO CHECK ACT - VALUE ANALYSIS - STATISTICAL PROCESS CONTROL - QUALITY FUNCTION DEPLOYMENT - TOTAL PRODUCTIVITY MAINTENANCE - CORPORATE SOCIAL RESPONSIBILITY• PERFORMANCE MEASUREMENT SYSTEMS INCLUDE - BALANCED SCORECARD - EUROPEAN FOUNDATION FOR QUALITY MGT

224

TQM IN GODREJ INDUSTRY• CUSTOMER SATISFACTION THRU QUALITY FUNCTION DEPLOYMENT • PDCA CYCLE• MANAGEMENT BY FACT-5W + 1H APPROACH=WHAT,WHY,WHO,WHEN,WHERE + HOW• TOTAL EMLOYEE INVOLVEMENT• TOTAL WASTE ELIMINATION• TOTAL QUALITY CONTROL• CII-EXIM BUSINESS EXCELLENCE MODEL• SUPPLIER DEPARTMENTAL PURPOSE ANALYSIS• KEY BUSINESS PROCESS IMPROVEMENT• SMALL GROUP ACTIVITY• QUALITY CIRCLES• KAIZEN• 5S HOUSE KEEPING + TPM• SIX SIGMA• ENVIRONMENTAL HEALTH SAFETY COMMITTEES• ISO 9000• CONTINUOUS COMPETENCY DEVELOPMENT

225

BENEFITS FOR GODREJ INDUSTRY

• INCREASED CUSTOMER FOCUS• CONTINUOUS IMPROVEMENT MINDSET• BETTER PRODUCT QUALITY• BETTER SYSTEMS AND PROCEDURES• BETTER CROSS FUNCTIONAL TEAMWORK• INCREASED PLANT RELIABILITY• WASTE ELIMINATION IN OFFICES AND

FACTORIES

226

TQM SYSTEMS ALIGNMENT

• STRATEGIC PLANNING• BUDGETING• REWARDS AND RECOGNITION• APPRAISAL AND PROMOTION• HEALTH AND SAFETY• MARKETING AND COMMUNICTNS• KEY ORG PROCESSES• CUSTOMER NEEDS• EMPLOYEE NEEDS FOR GROWTH AND DEVELOP• QLTY INCLUDED IN PEOPLES JOB KRA• TIE REWARD SYSTEM WITH CUSTOMER SATISFCATION

227

CORPORATE READINESS WITH ALIGNMENTS

• HOW EFFECTRIVELY DOES YOUR ORGANISATION HAVE ALIGNMENT WITH THE FOLLOWING:

• SYSTEMS

• CUSTOMER

• SUPPLIER

• PUBLIC RESPONSIBILITY

228

TQM CUSTOMER ALIGNMENT

• IDENTIFY KEY CUSTOMERS• DEVELOP CUSTOMER ALIGNMENT STRATEGY AND PLAN• ESTABLISH VAKLID CUSTOMER REQMNT AND

EXPECTATION• DEVELOP AND MONITOR CUST SATISFACTION• CREATE PARTNER RELATIONS WITH KEY CUSTOMERS• LINK CUST REQMNT TO NEW PROD DEV• EMPOWER PEOPLE IN ORG TO ACHIEVE CUST DELIGHT• GATHER CONTINUOUS FEEDBACK FROM CUST• ANTICIPATE FUTURE CUSTOMER NEEDS• BENCHMARK TO HELP ACHIEVE CONTINUOUS IMPR AND

MEASURE QLTY OF COMPETITION

229

TQM SUPPLIER ALIGNMENT

• IDENTIFY KEY SUPPLIERS• DEVELOP SUPPLIER ALIGNMENT STRATEGY AND

PLAN• ESTABLISH AND USE SUPPLIER SATISFACTION

MEASURES• VENDOR CERTIFICATION• PARTNER RELATIONSHIP WITH KEY SUPPLIERS• SUPPLIER AWARDS• TQM TRAINING TO SUPPLIERS• CONTINUOUS FEEDBACK FROM SUPPLIERS• IMPROVE RELATIONSHIP WITH SUPPLIERS

230

PUBLIC RESPONSIBILITY

• PROMOTE QLTY AWARENESS OUTSIDE ORGANISATION

• ESTABLISH LINKS BETWEEN ENVIRONMENT,QLTY,SAFETY, HEALTH AND ETHICS

• SUPPORT COMMUNITY SERVICES ACTIVITIES

231

TQM IN SERVICE SECTOR

• SERVICE SECTOR IS ALL ABOUT INTERACTING WITH CUSTOMERS HENCE CONCEPT OF SERVICE QUALITY

• TQM IS A MEASUREMENT OF QUALITY PERFORMANCE

• TO APPLY TQM TO SERVICE SECTOR REQUIRES ANALYSIS OF CHARACTERISTICS OF SERVICE OPERATIONS

• SERVICE IS AN ACT OR PERFORMANCE THAT ONE PARTY OFFERS TO ANOTHER, AND IS INTANGIBLE AND DOES NOT RESULT INTRANSFER OF OWNERSHIP OF A TANGIBLE ASSET

• SERVICE IS PROVIDED TO A CUSTOMER – INTERNAL AND EXTERNAL

232

TQM IN SERVICE SECTOR

• SERVICE WORK EXISTS BECAUSE OF: - DOMAIN EXPERTISE – SUB CONTRACTED SERVICES WHICH ELIMINATE

NON CORE ACTIVITIES• SERVICE ORG SELLS DIRECTLY TO USER• SERVICES ARE PROVIDED AS PER CUSTOMER REQMNT• SERVICES ARE NOT STOREABLE• IN MANY CASES REQUIREMENT OF SERVICE SCOPE ARE NOT CLEARLY

DEFINED• SCOPE OF MAKING ERRORS IN TERMS OF QUALITY, VARIETY IS MORE• QUALITY IN SERVICES IS LESS TANGIBLE AND MORE DIFFICULT TO

QUANTITY• SERVICE EXPECTATION BY CUSTOMER ARE DYNAMIC• SERVICE SECTOR EMPHASISES ON HUMAN FACTOR

233

DIMENSIONS OF SERVICE QUALITY

• CUSTOMER PERCEIVED SERVICE QUALITY IS VIEWED AS A RESULT OF TECHNICAL (OUTPUT) QLTY AND FUNCTIONAL (PROCESS) QLTY.

• TECHNICAL REFERS TO TRADITIONAL QC IN MFG• FUNCTIONAL IS WAY SERVICE IS DELIVERED THRU PROCESS IN

WHICH CUSTOMER IS A PARTICIPANT• CUSTOMER EVALUATES QLTY DURING OR AFTER SERVICE• TEN DETERMINANTS OF SERVICE QUALITY - TANGIBLES SERVICE SHOULD BE A TANGIBLE FACILITY OR

ADVICE RENDERED TO CUSTOMER - RELIABILITY CONSISTENCY OF PERFORMANCE AND ABILITY TO

HONOUR PROMISED - RESPONSIVENESS READINESS AND TIMELINESS TO PROVIDE

SERVICE - COMPETENCE POSSESSION OF REQD SKILLS AND KNOWLEDGE TO

PERFORM SERVICE

234

DIMENSIONS OF SERVICE QUALITY

- RELIABILITY CONSISTENCY OF PERFORMANCE AND ABILITY TO HONOUR PROMISED

- RESPONSIVENESS READINESS AND TIMELINESS TO PROVICE SERVICE

- COMPETENCE POSSESSION OF REQD SKILLS AND KNOWLEDGE TO PERFORM SERVICE

- COURTESY POLITENESS, RESPECT OF CONTACT PEOPLE - CREDIBILITY TRUST WORTHINESS AND HONESTY - SECURITY FREEDOM FROM DANGER & RISK - ACCESS APPROACHABILITY - COMMUNICATION KEEPING CUSTOMERS INFORMED IN LANGUAGE

THEY UNDERSTAND LISTENING TO CUSTOMERS - UNDERSTANDING CUSTOMER MAKING REPORTS TO UNDERSTAND NEEDS AND WANTS

235

GUIDING PRINCIPLES FOR SERVICE QUALITY

• QUALITY IN ALL ACTIVITIES• CONTINUOUS IMPROVEMENT IN QUALITY AND

EFFECTIVENESS OF ACTIVITIES• TEAM WORK AND EMPLOYEE INVOLVEMENT BACKED BY

COMMITMENT, INVOLVEMENT AND SUPPORT OF MGT IS REQD TO SUCCEED

• MAKE WORK SYSTEMS CONDUCIVE THROUGH EMPOWERMENT AND Z THEORY

• ENCOURAGE EMPLOYEES TO GIVE SUGGESTIONS• CREATE AN EXTENDED ENTERPRISE OF SUPPLIERS,

EMPLOYEES, CUSTOMERS• CREATE AN AURA OF MUTUAL TRUST & RESPECT• LEARN FROM MISTAKES

236

QUALITY DIMENSIONS IN SERVICE

• TIME

- TIME REQD TO EXECUTE A SERVICE

- TIME INCLUDES ARRANGEMENT TIME, WAITING TIME, SERVICE TIME, DELAY TIME, ACCEPTANCE TIME

ARRANGEMENT TIME INCLUDES UNDERSTANDING OF SERVICE REQMNT & LEVEL, STAFFING, ETC.

• COST

- COST OF SERVICE TO SATISFACTION OF CUSTOMER DECIDES QLTY OF SERVICE

• ERROR

- AMOUNT OF ERROR AND COST IMPACT DECIDES THE QLTY OF SERVICE.

IMPL OF SIX SIGMA FOR SERVICE

237

SERVICE PERFORMANCE GAP

• COMPANY PERCEPTION OF SERVICE OUTCOME SHOULD MATCH CUSTOMER EXPECTATION

• IF IT FAILS TO DO SO THERE IS A SERVICE GAP• OVERALL GAP BETWEEN EXPECTATION AND PERCEIVED

PERFORMANCE IS DETERMINED BY IMPORTANT GAPS WHICH INCLUDE INFO, DESIGN, COMMN

1. GAP BETWEEN CUSTOMER EXPECTATION AND MGT PERCEPTION OF EXPECTATION.

2. GAP BETWEEN MGT PERCEPTION OF CUSTOMER EXPECTATION AND COMPANY QLTY SPECIFICATIONS

3. GAP BETWEEN SERVIE QLTY SPECS AND ACTUAL SERVICE DELY 4. GAP BETWEEN ACTUAL SERVICE DELY AND EXTERNAL

COMMUNICATION ABOUT SERVICE 5. GAP BETWEEN CUSTOMER EXPECTATION AND PERCEIVED

SERVICE

238


• CRITERIA USED BY CUSTOMERS IN JUDGING SERVICE - TANGIBLE PHYSICAL EVIDENCE POTENTIAL / DELVD - RELIABILITY HONOURING PROMISES. GETTING IT RIGHT - FEATURES ADDL PERFORMANCE OF SUPPLEMENTARY SERVICES - RESPONSIVENESS READINESS TO PROVIDE SERVICE ESPECIALLY

AGILITY (OUTSIDE SPECS) - COMMUNICATION KEEPING CUST INFORMED IN LANGUAGE

THEY UNDERSTAND - CREDIBILITY HONESTY TRUST - TIMELINESS PROVIDE CORRECT SERVICES IN TIME - SECURITY PHYSICAL & FINANCIAL - FLEXIBILITY ABILITY TO PROVIDE NON STD SERVICES - COMPETENCE POSSESSION OF CORE COMPETENCE - EFFECTIVENESS ACHIEVES DESIRED RESULT

239


- COURTESY POLITENESS, RESPECT

- UNDERSTANDING KNOWING THE CUST NEEDS & WANTS

- ACCESS ERASE OF APPROACH & CONTACT

- PERCEPTION REPUTATION OF QLTY LEVEL

- FUNCTION PERFORM PRIMARY FUNCTION

- CONFORMANCE SATISFACTION OF PRESET REQMNT

240

SERVQUAL MODEL

GAP 1: CUSTOMER EXPECTATION – MGT PERCEPTION GAP• CONSUMER EXPECTATION – MGT PERCEPTION OF CUST

EXPECTATIONS• FINANCIAL / TELECOM ORGS OFTEN TREAT ISSUES OF

PRIVACY AND CONFIDENTIALITY AS UNIMPORTANT BUT CONSUMERS CONSIDER THESE ISSUES VERY IMPORTANT

• MGT HAS INACCURATE PERCEPTION OF WHAT CUSTOMER ACTUALLY EXPECTS

• IF MGT DOES NOT RECEIVE FEEDBACK ABOUT POOR QLTY SERVICE IT WILL BELIEVE IT IS MEETING CUSTOMER EXPECTATIONS

• GAP EXISTS BECAUSE THERE IS LACK OF CUSTOMER FOCUS

241

SERVQUAL MODEL

GAP 2: SERVICE QUALITY SPECIFICATION GAP

• MGT PERCEPTION OF CUST EXPECTATIONS – SERVICE QLTY SPECS

• SPECS DESIGNED BASED ON WHAT DESIGNER THINKS CUSTOMER WANTS

• REPRESENTS INABILITY OF MGT TO TRANSLATE CUST EXPECTATIONS TO SERVICE QLTY SPECS

GAP 3 : SERVICE DELIVERY GAP

• SERVICE QLTY SPECS – SERVICE QLTY ACTUALLY DELVD

• OCCURS BECAUSE OF LACK OF SUPPORT FOR FRONTLINE STAFF, PROCESS PROBLEMS

242

SERVQUAL MODEL

GAP 4: EXTERNAL COMMUNICATION GAP• SERVICE DELY INTENTIONS – WHAT IS COMMUNICATED

ABOUT SERVICE TO CUSTOMERS• GAP RESULTS FROM INADEQUATE COMMN FROM SERVICE

PROVIDERGAP 5 : EXPECTED SERVICE – PERCEIVED SERVICE GAP• ACTUAL PERFORMANCE – CUST PERCEPTION OF SERVICE• PERCEIVED QLTY OF SERVICE DEPENDS ON SIZE OF GAP5

WHICH IN TURN DEPENDS ON GAPS ASSOCIATED WITH MKTNG, DESIGN & DELY OF SERVICE

• SUBJECTIVE JUDGEMENT OF SERVICE QLTY WILL BE AFFECTED BY MANY FACTORS WHICH COULD CHANGE THE PERCEPTION OF SERVICE DELVD

243

APPROACH FOR IMPLEMENTING TQM IN

SERVICES• DEVELOP SERVICE QUALITY STRATEGY - NEED TO ANALYSE - NEEDS & EXPECTATION OF CUSTOMER - FUNCTION OBJECTIVES - SERVICE PROCESS AND OPERATIONS - MEASUREMENT AND CONTROL PARAMETERS - FEEDBACK SYSTEM AND EVALUATION - QUALITY IMPROVEMENT STRATEGY SHOULD INVOLVE - MISSION STATEMENT DEMONSTRATING COMPANY’S VISION AND

VALUES WHICH INCLUDE ORIENTATION TOWARDS NEEDS OF THE CUSTOMER

- SENIOR MGT COMMITMNT TO SUPPORT CUSTOMER SUPPORT INITIATIVES

- CUSTOMER SATISFACTION FEEDBACK PROGRAM TO MEASURE CUSTOMER PERCEPTION OF SERVICE DELIVERY

- SET OF SERVICE PERFORMANCE STDS

244


SERVICE SECTOR• ANALYSE SERVICE PROCESSES AND DEFIND QLTY MSRS

- PROCESS THROUGH WHICH SERVICE FUNCTIONS OPERATE MUST BE WELL IDENTIFIED. THIS INVOLVES

- DEVELOPING PROCESS ACTIVITIES THRU FLOW CHARTS

- DEFINE PROCESS AND IDENTIFY CUST. REQMNT

- UNDERSTANDING HOW PROCESS OPERATES AT DIFFERENT LEVELS

- IDENTIFYING INPUTS TO PROCESS AND DOCUMENTING QLTY REQMNT TO INPUTS

- DEFINING OUTPUT OF SERVICE FUNCTION AND HOW OUTPUT QLTY IS MEASURED

245


SERVICE SECTOR• ESTABLISH PROCESS CONTROL SYSTEM - FOR CONTINUOUS MONITORING OF SERVICE PROCESS IT IS ESSENTIAL TO

ESTABLISH PROCESS CONTROLS - DETERMINE KEY PERFORMANCE AREAS TO DETERMINE CONTROL

SYSTEMS - FOCUS ON UNDERSTANDING WHAT NEEDS TO BE MSRED AND

CONTROLLED TO MEET CUSTOMER EXPECTATION• INVESTIGATE PROCESS TO IDENTIFY IMPROVEMENT OPPORTUNITIES - FOCUS ON IDENTIFYING INTERVAL PROCESS PROBLEMS AFFECTING

CUSTOMER SATISFACTION AND COSTS - EXPLORING PROCESS IMPROVEMENT OPPORTUNITIES - COLLECT & REVIEW DATA ON PROCESS OPERATIONS - DEVELOP CAUSE & EFFECT DIAGRAMS TO IDENTIFY CAUSES OF WASTE OR

POOR QUALITY. - DETERMINE CHRONIC PROBLEMS AREAS• IMPROVE PROCESS QUALITY

246

13SPC

• INSERT PPTS

247

7 NEW QC TOOLS

• INSERT PPTS HERE

248

SHEWHART CYCLE FOR CONTINUOUS IMPROVEMENT

• FOUR PARTS TO IMPROVE PROCESSES-PLAN,DO,CHECK,ACT• P REPRESENTS EARLY PLANNING

-USING TQM TOOLS IDEMNTIFY OPPORTUNITIES FOR PROCESS IMPROVEMENT -DEFINE PROBLEM,IDENTIFY CUSTOMERS -DEVELOP SOLUTIONS TO IMPROVE PROCESS -PREPARE SCHEDULE AND RESOURCE ESTIMATES FOR IMPLEMENTING QLTY PROCESS

• D IS DO FOR IMPLEMENT THE PROCESS IMPROVEMENT• C IS CHECK

-AFTER IMPLEMENTING NEW PROCESS IDENTIFY AND CHECK ACTUALLY WHAT HAPPENED AGAINST EXPECTED RESULTS

• A IS ACT -INCORPORATE SUCCESSFUL PROCESS IMPROVEMENTS AS WORK STANDARDS

249

REASONS FOR IMPLEMENTING TQM

• PRODUCTS/SERVICES DON’T MEET CUSTOMER REQUIREMENT

• CUSTOMER EXPECTATIONS ARE CONSTANTLY INCREASING AND ARE DIFFICULT TO MEET CURRENTLY

• HIGH QUALITY DEFECTS AND COSTS• ATMOSPHERE OF INDIFFERENCE IN ORG WITH

PEOPLE FEELING THAT QLTY IS JOB OF INSPECTION

• PRODUCT DELIVERY TIME IS HIGH AND DOES NOT MEET THE CUSTOMER EXPECTATION

250

RESULTANT BENEFITS OF TQM

• GREATER CUSTOMER LOYALTY AND RETENTION• LOWER EMPLOYEE ATTRITION• GREATER QUALITY OUTPUTS• FOCUS ON MARKET NEEDS AS WELL AS INDIVISUAL CUST NEEDS • IMPROVED MARKET SHARE • FACILITATES QLTY PERFORMANCE IN ALL PROCESSES THRU REMOVAL OF NON

VALUE ADD ACTIVITIES• GREATER PRODUCTIVITY AND LOWER QLTY COSTS• HIGHER PROFITABILITY THRU DECREASED COST OF QUALITY• REDUCED WARRANTY COSTS• BETTER BUSINESS RESULTS• POSITIVE WORK CULTURE IN ORGANISATION• HIGHER EMPLOYEE MORALE• COMMAND OF SOCIAL RESPECT• GAIN IN TANGIBLE BENEFITS SUCH AS PRODUCTIVITY IMPROVEMENT ,REDUCED

QLTY COSTS,INCREASED PROFITABILITY AND IN INTANGIBLE ASSETS SUCH AS EFFECTIVE TEAM WORK,IMPROVEMENT IN RELATIONS,CUSTOMER SATISFACTION AND ENHANCED PROBLEM SOLVING CAPACITY

251

ROADBLOCKS IN TQM IMPLEMENTATION

• NO FORMAL STRATEGY OR METHOD• LACK OF EFFECTIVE COMMUNICATN• INADEQUATE TRG AND FOCUS ON QLTY• LACK OF TOP MGT COMMITMENT AND INCOMPATIBLE STRUCTURES AND

ISOLATED INDIVIDUALS• LACK OF COMPETENCE OF LEADERS• INADEQUATE DATA SYSTEMS AND ANALYSIS THRU UNAVAILABILITY OF

PROPER TOOLS• NO CUSTOMER FOCUS• LACK OF PROPER SYSTEMS AUDIT• LACK OF CROSS FUNCTIONAL EFFORTS• EMPHASIS ON QUICK FIXES• INABILITY TO CHANGE CULTURE• IMPROPER PLANNING• INEFFECTIVE MEASUREMENT TECHNIQUES• LACK OF EMPOWERMENT• FAILURE TO CONTINUALLY IMPROVE

252

LEADING PRACTICES FOR TQM

253

TOYOTA PRODUCTION SYSTEM

• REVOLUTIONARY APPROACH ADOPTED AFTER 1973 OIL CRISIS• PRIMARY PURPOSE OF TPS IS TO ACHIEVE COST REDUCTION, ELIMINATE

WASTE, AND SATISFY CUST NEEDS AT LOWEST COST• TO ACHIEVE COST REDUCTION SYSTEM MUST ACHIEVE GOALS SUCH AS

QLTY CONTROL AND QLTY ASSURANCE• KEY INITIATIVES IN TPS

-POKAYOKE –COMPANYWIDE QLTY CONTROL-JUST IN TIME -TOTAL PRODUCTIVE MAINTENANCE –KAIZEN -TOTAL WASTE REDUCTION –ZERO DEFECTS –VALUE ENG AND ANALYSIS –FAILURE MODE EFFECT ANALYSIS -ROOT CAUSE ANALYSIS OF FAILURE –QUALITY FUNCTION DEPLOYMENT –QUALITYPOLICY DEPLOYMENT –SIX SIGMA -TOYOTA 7 WASTES

• FLEXIBLE MFG SYSTEM IS AN INTEGRAL PART OF TPS AND INVOLVES MFG OF VARIED PRODUCTS WITH MINIMUM CHANGEOVER AND SETUP

• WORKER SUGGESTIONS IMPLEMENTED INTO PROCESSES

254

TOYOTA PRODUCTION SYSTEM

• IMPLEMENTS SUBSYSTEMS -CONTROL PRODN IN RIGHT QTY AT RIGHT TIME -PROCESS WITHDRAWS PARTS FROM PREVIOUS PROCESS ONLY WHEN REQD(PULL PROCESS) -PRODN SMOOTHING WHERE SINGLE LINE PRODUCES MULTI VARIETIES IN RESPONSE TO VARYING CUSTOMER DEMANDS -REDUCTION OF SET UP TIME3 WHICH REDUCES OVERALL PRODN LEAD TIME ACROSS ENTIRE PROCESS -STANDARDISATION OF OPERATIONS WHICH MINIMISE RESOURCES BY BALANCING OPERATIONS ON THE LINE -IMPROVEMENT ACTIVITIES AIMED AT IMPROVING PRODUCTIVITY -COMPANYWIDE QLTY CONTROL WHICH PROMOTES IMPROVEMENT IN ALL DEPTS

255

POKAYOKE• TECHNIQUE USED TO PREVENT ERRORS BEING CONVERTED TO DEFECTS• QA APPROACH NON STATISTICALLY DRIVEN• BASED ON ASSUMPTION THAT MISTAKES WILL OCCUR UNTIL

PREVENTIVE MEASURES ARE TAKEN• AFTER EVERY OPER PRODUCT ANALYSED FOR COMPLETENESS OF SPECS

AND ADHERENCE TO QLTY AND IF EXCESS VARIATION PROCESS STOPPED • SOURCE OF MISTAKE TO BE KNOWN ANALYSED AND CORRECTED• EMPHASIS ON SOURCE ANALYSIS WHICH CHECKS FOR FACTORS WHICH

CAUSE MISTAKES AND SOLUTIONS FOUND AND APPLIED TO PREVENT REOCCURENCE

• FORMIDABLE TOOL FOR ACHIEVING ZERO DEFECT• ENCOURAGES WORKERS TO BECOME SENSITIVE TO QLTY ISSUES AND

AVOIDS PASSING RESPONSIBILITY TO QLTY DEPT• ENCOURAGES A BUILT IN QLTY CHECK SYSTEM• DRASTICALLY REDUCES REWORK AND REJECTS AND OVERALL LEAD

TIME

256

REASONS FOR ERRORS

• HUMAN ERRORS OR ATTITUDE

• MACHINE MALFUNCTION OR POOR INPUT MATRL

• UNCLEAR OPERATING INSTRUCTION OR PROCEDURES

257

STEPS IN POKA YOKE

• DETECTING DEFECT• PREVENTING OCCURRENCE OF DEFECT• PURPOSE IS TO STOP PROCESS WHEN CONDITIONS EXIST

THAT CAUSE PROBLEMS AND PREVENT NON CONFORMING WIP FROM GOING DOWNSTREAM

• TWO TYPES OF POKAYOKE• REGULATORY-DEVICES WHICH GIVE FOREWARNING AND

SHUT DOWN PROCESS BEFORE ACCIDENT WHEN ABNORMALITY DETECTED EG PHOTOCOPIER

• SETTING POKAYOKE-DEVICES THAT CHECK THAT SETTINGS ARE OK BEFORE MAIN RUN

258

TECHNIQUES USED IN POKAYOKE

• 5S

• CAUSE EFFECT DIAGRAMS

• ROOT CAUSE ANALYSIS

259

ADVANTAGES OF POKAYOKE

• REMOVES DEFECTS FROM SOURCE• FASTER DEFECT DETECTION• IMPROVES ENVT SAFETY• ENSURES IMMEDIATE FEEDBACK• IMPROVES EQPT EFFECTIVENESS

AND RELIABILITY• PROMOTES WORK CULTURE FOR

PERFECTION

260

METHOD STUDY

• SYSTEMATIC RECORDING AND CRITICAL EXAMINATION OF WAYS OF DOING WORK

• OBJECTIVE OF METHOD STUDY IS TO IMPROVE ACTIVITY

• ACTIVITY IMPROVED THRU PROCESS IMPROVEMENT OR REDESIGN

• NEED TO DRAW PROCESS AND ACTIVITY CHARTS WITH DELAYS ETC TO IMPROVE EFFECTIVENESS AND EFFICIENCY OF PROCESS

261

ANDON

262

JUST IN TIME

• PRODUCTION PHILOSOPHY WHOSE OBJECTIVE IS TO PRODUCE QLTY GOODS

• USER PULL PHILOSOPHY• SYSTEM OF ACHIEVING ZERO DEVIATION FROM SCHEDULE• INTELLIGENT WAY TO MANAGE INVENTORIES IN PURCHASING

PRODUCTION AND DISTRIBUTION PIPELINES• TIES PRODUCTION TO ACTUAL DEMANDAND MAINTAINS FLOW• EXPOSES ROOT CAUSE PROBLEMS BOTTLENECKS AND ALL TYPES

OF WASTES• ATTACKS WASTES SUCH AS EXCESSIVE SETUP TIME QLTY

REJECTS M/C DOWNTIME TRANSPORTATION INSPECTION OVER PRODUCTION SCRAP

• IMPROVES FLEXIBILITY AND RESPONSIBILITY AND RESPONSIVENESS OF FIRM

• HELPS REDUCE COSTS

263

JUST IN TIME

• JIT IMPLEMENTED TO INCREASE EFFICIENCY

• JIT SUPPLIER PROGRAM REQUIRES SUPPLIER TO SHIP SMALL LOTS ON A PULL BASIS THAQT ARRIVE EXACTLY AT THE POINT IN THE PROCESS WHEN AND WHERE THE PARTS ARE REQD

• PARTS ARE NOT INSPECTED BUT DELIVERED STRAIGHT TO WORK CENTRE

264

PRINCIPLES OF JIT

• CONTINUOUS IMPROVEMENT• SIMPLIFIED APPROACHES FOR PROCESSES• CYCLE TIME REDUCTION• PULL BASED MECHANISM• ELIMINATION OF 7 WASTES• PARTNERSHIP WITH EMPLOYEES SUPPLIERS

CUSTOMERS• BUILT IN QLTY WITH REDUCTION OF

VARIABILITY• LEAN PRODUCTION• PROCESS MEASUREMENTS AND IMPROVEMENT

265

WHAT JIT ELIMINATES/MINIMIZES

• WASTES DUE TO TOYOTA 7 AND OTHER WASTES

• WASTES IN INSPECTION• WASTE IN M/C SET UP TIME• REDUCES QUEUES BY USING A PULL

BASED SYSTEM• STRESSES NEED FOR OPERATIONAL

SIMPLICITY WHICH INCLUDES MATRL FLOW AND CONTROL

266

JIT APPROACH TO MATERIAL FLOW

• APPROACH TO MATRL FLOW AIMS TO ELIMINATE COMPLES ROUTES BY ADOPTING UNIDIRECTIONAL FLOWLINES

• MAJORITY OF BATCH SYSTEMS ARE ORGANIZED IN A TYPICAL PROCESS LAYOUT

• MOST ITEMS MFG IN BATCH MODE GO THROUGH VARIOUS SHOPS

• EACH PROCESS INVOLVES WAIT TIME AS WELL AS TRANSPORT TIME

• CONSEQUENCES ARE HIGH WIP AND LONG MFG LEAD TIMES

• JIT IS A PULL BASED MFG SYSTEM WHICH RESULTS IN REDUCED WIP LEVELS ,REDUCED INVENTORY LEVELS,REDUCED MFG LEAD TIMES

267

GUIDING PRINCIPLES FOR JIT

• VALUE ADD AND WASTE ELIMINATION• SIMPLIFICATION• CLEANLINESS AND ORGANIZATION• VISIBILITY• CYCLE TIMING• AGILITY• VARIATION REDUCTION• CONTINUOUS IMPROVEMENT• MEASUREMENT

268

TQM AND JIT

• MFG IMPLEMENT JIT TO INCREASE EFFICIENCY• JIT FORCES QLTY MGT• JIT SUPPLIERS PROGRAM REQUIRES A SUPPLIER TO SHIP SMALL

LOTS ON A PULL BASIS THAT ARRIVE EXACTLY AT THE POINT OF IN THE PROCESS WHEN AND WHERE THE PARTS ARE NEEDED

• PARTS ARE NOT INSPECTED BUT DELIVERED STRAIGHT TO WORK CENTRE

• JIT ENABLES ELIMINATION OF WASTE WHICH COULD BE BY WAY OF OVER PRODN , INVENTORY, SCRAP, REWORK etc

• JIT ALSO STRIVES TO ELIMINATE WASTES IN MATRL HANDLING,INSPECTION , WAITING, M/C SET UP TIMES

• JIT REDUCES QUEUES BY USING A PULL SYSTEM• JIT STRESSES NEED FOR OPERATIONAL SIMPLICITY WHICH

INCLUDE MATRL FLOW AND CONTROL.

269

TQM AND JIT

• APPROACH TO MATRL FLOW AIMS TO ELIMINATE COMPLEX ROUTE PATHS BY ADOPTING UNIDIRECTIONAL FLOWLINES

• MAJORITY OF BATCH SYSTEMS ARE ORGANIZED IN A TYPICAL PROCESS LAYOUT

• MOST ITEMS MFG IN A BATCH MODE GO THRU VARIOUS OPERATIONS SHOPS AND EACH PROCESS INVOLVES WAIT TIME AS WELL AS TRANSPORT TIME

• CONSEQUENCES ARE HIGH WIP AND LONG MFG LEAD TIME

• JIT IS A PULL BASED MFG SYSTEM WHICH RESULTS IN REDUCED WIP LEVELS REDUCED INERNTORIES REDUCED MFG LEAD TIMES ,IDENTIFYING BOTTLENECK AREAS AND IDENTIFYING PROBLEM AREAS

270

PROCESS FLOW AND JIT• JIT REDUCES DELAYS BETWEEN PROCESS STAGES AND ENABLES AUDIT TRAILS OF

EVIDENCE • GOAL OF JIT IS TO MOVE MATRL, MONEY,KNOWLEDGE,PEOPLE, IN THE PIPELINE AS

FAST AS POSSIBLE• PIPELINE IS SELDOM UNIFORM OR WITHOUT OBSTACLES THAT VARY IN SIZE• OUTPUT OF PIPELINE LIMITED BY NARROWEST PARTS OF PIPE WHICH CORRESPOND

TO STAGES OF PROCESS THAT TAKE MORE TIME OR WHERE STOPPAGES/SLOWDOWNS OCCUR

• OBSTRUCTION DIFFICULT TO ELIMINATE AS THERE ARE SEVERAL TASKS IN PROCESS AND EACH PROBLEM MAY ARISE FROM DIFFERENT TASK AND ALSO IT MAY BE DIFFICULT TO BUILD A CAUSE-EFFECT RELATIONSHIP AS NEW OBSTRUCTIONS MAY APPEAR

• FLOW IN PIPELINE IS DYNAMIC AND SOURCES OF OBSTRUCTION KEEP CHANGING AND QLTY OF OUTPUT VARIES eg RAW MATRL QLTY,M/C PERFORMANCE,CUSTOMER ORDERS ALL VARY REQUIRING CHANGE IN FLOW RATE

• JIT ENABLES CONTINUOUS ADAPTATION OF PIPELINE FLOW TO DESIRED FLOW RATES AND MATCH CUSTOMER DEMANDS WITH ACCEPTABLE QLTY LEVELS

271

EFFECTS OF JIT

• USE OF POKA YOKE• WORKERS RESPONSIBILITY FOR QLTY• STANDARDISATION • TEAM WORK• BLANKET ORDERS FREQUENT DELIVERIES• SMALL LOT SIZE OF MFG / PURCHASE AND ZERO INVENTORY• MULTISKILLED WORKFORCE• EMPOWERED AND INVOLVED WORKFORCE• FEW VENDORS WHO ARE GEOGRAPHICALLY CLOSE• NO INSPECTION OF SUPPLY FROM VENDOR• LESSER LEAD TIME• MINIMISED WIP• BALANCE IN WORK STATION CAPACITY

272

BENEFITS OF JIT

• SHORTENED LEAD TIME

• REDUCED TIME SPENT ON NON PROCESS WORK

• REDUCED INVENTORY

• BETTER BALANCE BETWEEN VARIOUS PROCESSES

• PROBLEM CLARIFICATION

273

BENEFITS OF JIT AT ASHOK LEYLAND

• WIP REDUCTION BY 50%• MFG LEAD TIME REDUCTION BY 50-

75%• VENDOR RESPONSE TIME

REDUCTION BY 30%• DELIVERY LEAD TIME REDUCTION

BY 60%• SCRAP COST REDUCTION BY 40%

274

JIT2

• ELIMINATES NON VALUE ACTIVITIES THAT EXIST IN SUPPLY CHAIN OUTSIDE COMPANY

• MODIFICATION MADE IN PURCHASE PROCESS BY ELIMINATING BUYER IN PURCHASE DEPT AND SALESMAN IN SALES DEPT

• VENDOR HAS ACCESS TO CUSTOMER DATABASE AND CUSTOMER NEEDS TRANSLATED TO VENDOR ORDERS

275

PRINCIPLES OF JIT2

• LONG TERM ALLIANCE OF CUSTOMER – SUPPLIER AND COMMITMENT TO QLTY COST DELY

• SUPPLIER REP PHYSICALLY PRESENT INSIDE MFG FACILITY AND IS EMPOWERED BY CUST TO MANAGE ACTIVITIES ASSOCIATED WITH THEIR SUPPLY PROGRAM DAILY OPERATIONS ORDER ETC

276

BENEFITS OF JIT2

• ELIMINATES PURCHASING ADMIN COSTS

• REDUCES COST OF MATRL

• UTILISES SUPPLIER EXPERTISE IN PRODUCT/PROCESS DESIGN ISSUES

• REDUCES SALES PROMOTION AND ADMIN EXPENSES

277

WASTE MANAGEMENT

• WASTE EXISTS EVERYWHERE FROM INDUSTRY TO HUMAN ACTIVITIES

• IN ANY PROCESS WASTE ACCOUNTS FOR A VERY LARGE AMOUNT OF NON VALUE ADD ACTIVITY

• MGT NEEDS TO CONTROL ACTIVITIES BETTER THRU TIGHTER CONTROL

• WASTE MGT IMPROVES COSTS AND PRODUCTIVITY AND REDUCES CYCLE TIMES

278

TOTAL WASTE REDUCTION

• STRUCTURED APPROACH TO DEAL WITH WASTES AND DELAYS WITH VIEW TO ELIMINATION

• APPROACH SEPARATES WASTE(NON VALUE ADD ACTIVITIES) FROM VALUE ADDITION AND SCRUTINISES ESSENTIAL NON VALUE ADD ACTIVITIES FOR MINIMISATION OF WASTEFUL ACTIVITIES

• PREREQUISITE FOR TQM

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• WASTE MAY EXIST IN PROCEDURES POLICIES SYSTEMS AND IS DIFFICULT TO IDENTIFY HIDDEN WASTES

• AUTOMATION IS NOT THE SOLUTION TO WASTE • NEED OF THE HOUR IS TO IDENTIFY REAL

WASTES THAT AFFECT BOTTOM LINES• WASTE MGT SHOULD BE A CONTINUOUS DRIVE

ON THE GUIDELINES OF TQM• PERIODIC REVIEW OF

POLICIES,PROCEDURES,PROCESSES TO ENSURE PROCESS IMPROVEMENT AND WASTE REDUCTION

280


• DRASTICALLY IMPROVES QLTY, PRODUCTIVITY,FLEXIBILITY AND SAFETY

• REDUCES CYCLE TIME AND IMPROVES RESPONSIVENESS

• MAXIMIZES UTILIZATION OF ASSETS AND PROCESSES

• MINIMISES [PROCESS LOSSES AND COST OF NON CONFORMITY

• REDUCES PROCESS AND PRODUCT COST AND IMPROVES CONTRIBUTIONS

• IMPROVES LIQUIDITY BY FREEING MONEY TIED UP IN INVENTORIES AND OTHER WASTES

281

TOYOTA 7 WASTES

• PRODUCTION DEFECTS

• TRANSPORTATION

• INVENTORY

• OVER PRODUCTION

• WAITING

• PROCESSING

• MOTIONS AND EFFORT

282

OTHER WASTES

• WASTED CAPACITY• WASTED ENERGY• WASTE FROM LOST OPPORTUNITY• WASTE FROM UNREQD EXPENSES• WASTE FROM UNUTILISED TALENT• WASTE FROM LOSSES DUE TO

EFFICIENCY,STARTUP,IDLING, BATCH CHANGEOVER• WASTE DUE TO COMMN LOSSES OR INEFFECTIVENESS OF

COMMN• WASTED PLANNING EFFORTS• WASTED INVESTMENTS• WASTED OVERSTAFFING• WASTE IN DISPOSAL

283

PROCESS WASTE

• INSERT PPT ON PROCESS WASTE

284

ELIMINATION OF 3M

• 3M STAND FOR MUDA MURA AND MURI• MUDA MEANS WASTES OF ALL KINDS

SUCH AS REWORK,TRANSPORTATION,DELAYS

• MURA MEANS INCONSISTENCES SUCH AS NON CONFORMANCE TO QLTY AND STD OPERATING PROCEDURES

• MURI MEANS NON RATIONALITY OR DISCREPANCY ie UNSCIENTIFIC WAY OF DOING THINGS

285

ELIMINATION OF 3M

• 3M EXERCISE DONE TO -ELIMINATE WHOLE ACTIVITY -REDUCE STEPS IN ACTIVITY -CHANGE AND SIMPLIFY ACTIVITY -REDUCE THE TIME COST AND FATIGUE INVOLVED IN ACTIVITY

286

LEVELS OF WASTE

• FOUR LEVELS OF WASTE: -LEVEL 1 refers to business related wastes. It includes wastes due to cross functional issues, poor communication and coordination between vendors, customers and even poor investment decisions -LEVEL 2 refers to plant level wastes. It includes faulty production planning and control, poor layout resulting in un required movement and WIP It includes poor m/c capability resulting in rework, scrap and rejection. It also includes poor maintenance policies

287

LEVELS OF WASTE

• FOUR LEVELS OF WASTE (CONTD): -LEVEL 3 refers to process or method related work and includes issues like excess time spent or setup activities adjustment and alignment. It covers poor workplace design and unsafe methods -LEVEL 4 refers to wastes within processes. Includes issues such as improper postures at workplace and lack of standard operating procedures

288

LEVEL 1 BUSINESS LEVEL WASTE

• Faulty performance measure• Poor business policies and short sightedness at top

level• Poor communication and coordination between

vendors and customers• Too much emphasis on utilization of resources• Excess production• Poor product and process design

289

LEVEL 2-PLANT LEVEL WASTES

• Play safe tendency

• Poor production planning and control

• Poor layout resulting in back tracking and excessive traveling

• WIP inventory

• Batch size constraints

290

LEVEL 3-PROCESS AND METHOD WASTES

• Poor sequencing of machines and operations

• Long changeover times

• Poor work place design

• Tendency of temporary storage

• Incapable and poorly maintained equipment

• Unsafe methods

291

LEVEL 4-MACHINE/OPERATOR LEVEL WASTES

• Poor housekeeping

• Excess bending and fatigue

• Lack of operator training

• Operator has to frequently fetch material for production

292

BPR BENCHMARKING

293

TQM CHANGE MGT

294

WHAT IS SMED

• MEHOD DEVELOPED BY SHINGO• AIM OF APPLYING SMED METHODOLOGY IS TO

SYSTEMATICALLY REDUCE TIME LOST IN PRODN FOR MACHINE SETUPS FROM HOURS TO MINUTES

• APPLIES TO ALL PRODN ACTIVITIES AND IS AN IMPORTANT INITIATIVE IN THE LEAN MFG AREA

• VERY RELEVANT IN THE DAYS OF INCREASED REQUESTS FOR CUSTOMISED PRODUCTS AT SHORT NOTICE

• SMED LEADS TO REDUCED LESDTIMES

295

BATCH CHANGEOVER ACTIVITIES

• IN CLASSICAL CHANGEOVER BETWEEN TWO BATCHES THE FOLLOWING ACTIVITIES TAKE PLACE: -FINISH ACTUAL BATCH -DISMOUNT OLD TOOLS -STOP MACHINE -CHANGE TOOLS -ADJUST MACHINE TO NEW REQMNT -START MACHINE -TRIALS -PROCESS NEW BATCH

• CHANGEOVER SEQUENCE GENERALLY DONE WITHOUT STD METHOD OR PROCEDURES AND DURATION DEPENDS ON INDIVISUAL SKILLS

• CHANGEOVERS CAUSE PRODUCTIVITY LOSS AND CREATES TEMPTATIONS FOR LARGER EBQ

296

APPROACH OF SMED

• SETUP TIME REDUCTION IS OF CRUCIAL IMPORTANCE FOR PROFITABILITY

• APPROACH OF SMED IS TO REDUCE OUTPUT AND QLTY LOSSES DUE TO CHANGEOVER

• SMED APPROACH IS RECOMMENDED BY JIPM TO REDUCE SETUP LOSSES

297

TOTAL PRODUCTIVITY MAINTENANCE

298

KAIZEN

• PROCESS OF SYSTEMATIC,SMALL GRADUAL AND CONTINUOUS IMPROVEMENT THAT USES TECHNIQUES SUCH AS TPM,JIT,PDCA

• SEEKING BETTER METHODS IN ACCORDANCE WITH REQUIREMENT OF ACTUAL SITUATION

• KEY ELEMENTS OF KAIZEN INCLUDE ADAPTABILITY OF PROCESSES AND PEOPLE AND OPTIMISING EXISTING CAPACITIES

• PEOPLE BASED APPROACH WHICH CENTRES AROUND PROCESS ORIENTED THINKING

• AIM IS TO ALIGN COMPANY FOR CONTINUOUS IMPROVEMENT• PRACTICES ELIMINATION OF 3M WHICH ARE MUDA-WASTE

MURA-NONCONFORMITY TO QLTY,MURI-DISCREPANCY OF METHOD OF DOING THINGS

• ALIGNING COMPANY FOR CONTINUOUS IMPROVEMENT• GENERATES PROCESS ORIENTED THINKING• TRIES TO SIMLIFY,COMBINE,ADD,REARRANGE,ELIMINATE

ACTIVITIES(SCARE)

299

KAIZEN

• DEVELOPS EMPLOYEES TO OWN THEIR PROCESSES AND GENERATE PROCESS ORIENTED THINKING

• EFFECTIVELY TRAINS PARTICIPANTS TO IDENTIFY ROOT CAUSE AND PERMANENTLY RECTIFY PROBLEMS

300

TYPES OF KAIZEN

• GROUP ORIENTED

• INDIVISUAL ORIENTED

301

GROUP ORIENTED KAIZEN

• KAIZEN IN GROUP WORK IS REPRESENTED BY SMALL GROUP ACTIVITIES LIKE QUALITY CIRCLES

• CALLS FOR PDCA APPROACH NAND DEMANDS THAT PEOPLE IDENTIFY PROBLEM AREAS IDENTIFY AND ANALYSE CAUSES IMPLEMENT COUNTER MEASURES TO RESOLVEPROBLEMS AT THE ROOT CAUSE AND ESTABLISH NEW PROCEDURES

302

SMALL GROUP ACTIVITIES

• SMALL GROUP ACTIVITIES ARE INFORMAL VOLUNTARY SMALL GROUPS WITHIN DEPT TO CARRY OUT SPECIFIC TASKS eg SAFETY, ZERO DEFECT,PRODUCTIVITY

• ADVANTAGES OF SMALL GROUP ACTIVITIES ARE: -STRENGTHENING OF TEAM WORK - BETTER COORDINATION OF ROLES - BETTER COMMUNICATION BETWEEN PLANNERS AND EXECUTORS -IMPROVED MORALE -DEVELOPMENT OF MULTI SKILLS AND IMPROVEMENT OF CURRENT SKILLS -IMPROVED LABOUR MGT RELATIONS -

303

INDIVISUAL ORIENTED KAIZEN

• SUGGESTION SYSTEM IS A VEHICLE FOR CARRYING OUT INDIVISUAL ORIENTED KAIZEN

• CONSIDERED A MORALE BOOSTER AND MGT TRIES TO SEARCH FOR KAIZENS WHICH GIVE ECONOMIC PAYBACKS

• CONVERT WORKFORCE TO THINKING PEOPLE WHO ADD VALUE TO WORK

304

HIERARCHY OF KAIZEN INVOLVEMENT

• TOP MANAGEMENT

• MIDDLE MGT AND STAFF

• SUPERVISOR

• WORKERS

305

TOP MANAGEMENT

• INTRODUCE KAIZEN AS CORPORATE STRATEGY

• PROVIDE SUPPORT AND DIRECTION FOR KAIZEN BY ALLOCATING RESOURCES

• ESTABLISH POLICY FOR KAIZEN AND CROSS FUNCTIONAL GOALS

• REALISE KAIZEN GOALS THROUGH POLICY DEPLOYMENT AND AUDITS

• BUILD SYSTEMS,PROCEDURES AND STRUCTURES CONDUCICE FOR KAIZEN

306

MIDDLE MANAGEMENT

• IMPLEMENT KAIZEN GOALS AS DIRECTED BY TOP MGT THROUGH POLICY DEPLOYMENT

• USE KAIZEN IN FUNCTIONAL CAPABILITIES• ESTABLISH MAINTAIN UPGRADE STANDARDS• MAKE EMPLOYEES KAIZEN CONSCIOUS

THROUGH TRAINING PROGRAMS• HELP EMPLOYEES DEVELOP SKILLS AND TOOLS

FOR PROBLEM SOLVING

307

SUPERVISORS

• USE KAIZEN IN FUNCTIONAL AREAS• FORMULATE PLANS FOR KAIZENS AND

PROVIDE GUIDANCE TO WORKERS• IMPROVE COMMUNICATION WITH

WORKERS AND SUSTAIN MORALE• SUPPORT SMALL GROUP ACTIVITIES AND

INDIVISUAL SUGGESTION SYSTEM• INTRODUCE DISCIPLINE IN THE

WORKSHOP AND PROVIDE KAIZEN SUGGESTIONS

308

WORKERS

• ENGAGE IN KAIZEN THROUGH THE SUGGESTION SYSTEM AND SMALL GROUP ACTIVITIES

• PRACTICE DISCIPLINE• ENGAGE IN CONTINUOUS SELF

DEVELOPMENT TO BECOME BETTER PROBLEM SOLVERS

• ENHANCE SKILLS AND JOB PERFORMANCE EXPERTISE WITH CROSS EDUCATION

309

KAIZEN STRATEGY

• MAINTAIN AND IMPROVE WORKING STANDARDS THROUGH GRADUAL IMPROVEMENT

• DELEGATE RESPONSIBILITY OF MAINTAINING STANDARDS TO WORKERS WITH MGT IMPROVING STDS

• PRODUCE A SYSTEMS APPROACH THAT CAN BE APPLIED TO REALIZING THIS GOAL

310

PREREQUISITES FOR KAIZEN

• HIGHLY RESPONSIVE WORKFORCE• DEEP UNDERSTANDING OF BUSINESS

PROCESS WORKFLOW RULES, OBJECTIVES, DEPENDENCIES

• PROJECTION OF KAIZEN AS CORPORATE PHILOSOPHY AND VISIBLE IN STRATEGIES

• ALL EMPLOYEES SHOULD UNDERSTAND AND BE INVOLVED IN THE DRIVE

• SENSE OF PROCESS OWNERSHIP AND COMMITMENT

311

ADVANTAGES OF KAIZEN

• ENSURES INCREMENTAL BUT CONTINUOUS IMPROVEMENT IN QLTY,PRODUCTIVITY,SAFETY,CLEANLINESS AND CAPACITY UTILIZATION

• REMOVES DEFECTS USING ROOT CAUSE ANALYSIS

• REDUCES WASTE REWORK REJECTION AND LOSS OF ENERGY

• OFFERS FLEXIBILITY AND REDUCES PROCESS CYCLE TIMES

• LOWERS PROCESS COSTS AND LESSENS WASTE

312

ADVANTAGES OF KAIZEN

• PROVIDES SCOPE FOR INNOVATION• INSTILS SENSE OF OWNERSHIP• ENSURES INCREMENTAL CONT IMPR• REMOVES PROCESS OBSTACLES• REMOVES DEFECTS THRU RCA• IMPROVES TEAM BUILDING• REDUCESWASTES,REWORK, REJECTION

AND LOSS OF ENERGY • REDUCES PROCESS CYCLE TIME

313

KAIZEN IMPL IN ASHOK LEYLAND

• MATRL AND INFO FLOW REVIEWED• TIME STUDY OF PROCESS ELEMENTS• CYCLE TIME OF ACTIVITIES MEASURED• PROCESS PROBLEMS IDENTIFIED

ANALYSED • GOALS SET FOR CHANGE• KAIZEN IDEAS DEVELOPED PLANS FOR

IMPL DONE AND IMPL • IMPACT OF KAIZEN MEASURED• REPORT ON ACHIEVEMENT

314

KAIZEN TRAINING AT ASHOK LEYLAND

• TRG CONSISTS OF REVIEW OF TPS PHILOSOPHY OBJECTIVE AND EXAMPLES OF PAST KAIZEN EFFORTS

• EXTENDS TO ACTUAL APPLICATION IN WKPLACE AND F/U TO ENSURE ACHIEVEMENT OF PLANNED IMPROVEMENT

• KAIZEN MATRL AND INFO FLOW IS REVIEWED

• TIME STUDY OF PROCESS ELEMENTS

315

KAIZEN TRAINING AT ASHOK LEYLAND

• CYCLE TIME OF M/C MEASURED• PROCESS PROBLEMS IDENTIFIED AND

ANALYSED• KAIZEN GOALS SET FOR CHANGE• KAIZEN IDEAS DEVELOPED AND

IMPLEMENTED• IMPACT OF KAIZENS ON PROCESSES

VERIFIED• REPORT ON ACHIEVEMENT PREPARED

316

DESIGN QUALITY

• IDENTIFYING NEEDS INCLUDING NEED TO CHANGE

• DEVELOPING OFFERING THAT SATISFY NEEDS

• CHECKING CONFORMANCE TO THE NEED

• ENSURING THAT NEED IS SATISFIED

317

LINKS BETWEEN GOOD DESIGN AND MANAGING

BUSINESS• LEADERSHIP AND MANAGEMENT STYLE• CUSTOMERS STRATEGY AND PLANNING• PEOPLE MGT AND SATISFACTION• RESOURCE MGT• PROCESS MGT• IMPACT ON SOCIETY AND BUSINESWS

PERFORMANCE

318

DESIGN ATTRIBUTES IN SERVICES

• LABOUR INTENSITY-RATIO OF LABOUR COSTS INCURRED TO THE VALUE OF ASSETS AND EQUIPMENT (PEOPLE V/S EQPT COST)

• CONTACT-PROPORTION OF TOTAL TIME REQD TO PROVIDE SERVICE FOR WHICH CUSTOMER IS PRESENT

• INTERACTION-EXTENT TO WHICH CONSUMER ACTIVELY INTERVENES IN THE SERVICE PROCESS TO CHANGE THE CONTENT OF THE SERVICE. THIS INCLUDES CUSTOMER INFO FROM WHICH NEEDS CAN BE ASSESSED AND FEEDBACK FROM WHICH SATISFACTION LEVELS CAN BE INFERRED

• CUSTOMIZATION-INCLUDES CHOICE AND ADAPTATION

319

CHARACTERISTICS OF SERVICE DELIVERY SYSTEMS

• PERISHABLE-SERVICES CANNOT BE STORED

• SIMULTANEOUS-CONSUMER MUST BE PRESENT FOR MANY SERVICES TO BE RENDERED eg MEDICAL OPERATION

• HETEROGENOUS-EXPLICIT AND IMPLICIT SERVICE ELEMENTS RELYING ON PERSONAL PREFERENCES AND PERCEPTIONS.SAME SERVICE MAY GENERATE VARIED DEGREES OF SERVICE OUTPUTS AND QLTY

320

DESIGN FOR MANUFACTURE

• DESIGN FOR MFG DESCRIBES DESIGNING A PRODUCT SO THAT IT CAN BE PRODUCED EASILY AND ECONOMICALLY

• DFM VIEWS PRODUCT DESIGN AS FIRST STEP IN PRODUCT MFG• DFM IDENTIFIES PRODUCT-DESIGN CHARACTERISTICS THAT ARE

EASY TO MFG, FOCUSES ON DESIGN OF COMPONENT PARTS THAT ARE EASY TO FABRICATE AND ASSEMBLE

• DFM INTEGRATES DESIGN WITH PLANNING• DFM ENSURES THAT MFG CONCERNS ARE INTEGRATED INTO

DESIGN• DFM IMPROVES QLTY OF PRODUCT-DESIGN AND REDUCES COST

OF DESIGN AND MFG• DESIGN SHOULD MEET CUSTOMER NEEDS• STANDARDISATION ALLOWS INTERCHANGEABILITY OF PARTS

RESULTING IN REDUCTION IN INVENTORY ITEM NUMBERS

321

DFM GUIDELINES

• MINIMSE NUMBER OF PARTS• DEVELOP A MODULAR DESIGN• DESIGN PARTS FOR SEVERAL M/C

TYPES• MAKE ASSEMBLY EASY AND

FOOLPROOF• DESIGN FOR MINIMAL HANDLING• MINIMISE SUB ASSEMBLIES

322

DFM GUIDELINES

• USE STD PARTS

• SIMPLIFY OPERATIONS

• DESIGN FOR EASY REPLACEMENT OF PARTS

• USE WELL UNDERSTOOD PROCESSES

• ANALYSE FAILURES

323

DESIGN FOR ASSEMBLY

• SET OF PROCEDURES FOR REDUCING NUMBER OF PARTS IN AN ASSEMBLY AND DETERMINING AN ASSEMBLY SEQUENCE

• PROVIDES A CATALOG OF GENERIC PART SHAPES ALONG WITH ESTIMATES OF ASSEMBLY TIMES

324

DESIGN FOR ENVIRONMENT

• EVERY YEAR MILLIONS OF PC ETC ARE DISCARDED

• GOVT HAS ENFORCED A RETHINK ON DISPOSAL OF ELECTRONIC WASTE

• DFE INVOLVES DESIGNING PRODUCTS FROM RECYCLED MATRL USING MATRL WHICH CAN BE RECYCLED OR DESIGNING A PRODUCT WHICH IS EASIER TO REPAIR THAN DISCARD

325

IMPACT ON SOCIETY AND BUSINESS PERFORMANCE

• CONSIDER HOW PRODUCT DESIGN CAN IMPACT -ENVIRONMENT -RECYCLING AND DISPOSAL OF MATERIAL -PACKAGING AND WASTAGE OF RESOURCES -ECONOMY(EMPLOYMENT) -BUSINESS RESULTS FINANCIAL AND NON FINANCIAL

326

DEFINITION OF VALUE

• VALUE IS A WORD USED WITHOUT UNDERSTANDING THE MEANING

• DIFFERENT DEPTS OF SAME COMPANY HAVE VARIED MEANING

• DESIGNER RELATES VALUE WITH RELIABILITY

• MFG RELATES WITH COST OF MFG• PURCHASE RELATES WITH COST OF RM• SALES RELATES TO THE PRICE CUSTOMER

IS WILLING TO PAY

327

DEFINITION OF VALUE

• VALUE IS THE RELATIONSHIP BETWEEN COST AND QLTY • VALUE = QUALITY/COST• VALUE IS PLACED FOR VARIOUS ATTRIBUTES MORE POPULARLY

KNOWN AS FUNCTIONS OF A PRODUCT• TWO TYPES OF FUNCTIONS -

PRIMARY –SECONDARY• PRIMARY FUNCTIONS ARE THOSE ATTRIBUTES FOR WHICH A

PRODUCT IS PURCHASED AND MEANT TO BE USED eg THE PRIMARY FUNCTION OF A CAR IS TO SAFELY TRANSPORT PEOPLE BETWEEN TWO POINTS WITH FUEL ECONOMY

• SECONDARY FUNCTIONS ARE THOSE ATTRIBUTES WHICH ARE NOT PRIMARY FUNCTIONS BUT WHICH PEOPLE WISH TO SEE AS ATTRIBUTES OR FUNCTIONSS IN A PRODUCT eg IN A CAR WE ALSO WISH TO HAVE A/C AND OTHER ACCESSORIES

328

DEFINITION OF VALUE ANALYSIS/ENGINEERING

• VA/VE DEFINED AS TECHNIQUE WHICH EXAMINES ALL FACETS OF FUNCTION AND COST OF A PRODUCT IN ORDER TO DETERMINE WHETHER CERTAIN PRODUCT COSTS CAN BE REDUCED OR ELIMINATED WHILE RETAINING ALL FEATURES AND QLTY

• SOCIETY OF AMERICAN VALUE ENGRS DEFINES VALUE ANALYSIS AS THE SYSTEMATIC APPLICATION OF RECOGNISED TECHNIQUES WHICH IDENTIFY FUNCTION OF PRODUCT/SERVICE,ESTABLISH A MONETARY VALUE FOR THE FUNCTION AND PROVIDE FUNCTION RELIABILITY AT LOWEST COST

• VALUE ANALYSIS IS A FUNCTIONALLY IORIENTED METHOD FOR IMPROVING PRODUCT VALUE BY RELATING ELEMENTS OF PRODUCT WORTH TO ELEMENTS OF COST

• OBJECTIVE OF VA IS TO IMPROVE VALUE BY REDUCING COSTS WITHOUT SACRIFING QLTY AND RELIABILITY

• VE IS A COST PREVENTIVEE TECHNIQUE WHICH ELIMINATES UNREQD COSTS FROM BEING BUILT INTO PRODUCT

329

VALUE ENGG/ANALYSIS

• ENGINEERING IS A PROCESS OF ASSESSMENT OF A PRODUCT DURING DESIGN PHASE

• ANALYSIS IS ASSESSMENT OF A PRODUCT DURING USAGE• OBJECTIVE IS TO ELIMINATE UNREQD FEATURES AND

FUNCTIONS IN PRODUCT DESIGN• MOST ACTIVITIES PERFORMED IN ANALYSIS PHASE• VA TEAM ASSIGNS A VALUE TO EACH FUNCTION AND

FINDS COSTS TO DELIVER FUNCTION AND RATIO OF VALUE TO COST IS CALCULATED

• RATIO IMPROVED BY REDUCING COST OF ITEM OR INCREASING WORTH

330

VALUE ENGG/ANALYSIS

• VALUE ANALYSIS IS A MGT TECHNIQUE FOR REDUCING MFG COSTS AND ///LY IMPROVING QLTY AND RELIABILITY OF PRODUCT

• VALUE ENGG IS USED TO COVER THE INITIAL DESIGN STAGE

• VALUE MEANS DIFFERENT THINGS TO DIFFERENT PEOPLE AT DIFFERENT TIME

• VALUE OF AN ITEM DETERMINED ON THE BASIS OF VARIOUS ASPECTS:

331

TYPES OF VALUE• COST VALUE IS SUM OF ALL COSTS INCURRED IN MFG OF PRODUCT eg MATRL

LABOUR TOOLING O/H• USE VALUE IS THE COST INCURRED TO MAKE PRODUCT FUNCTIONAL eg QLTY

COSTS INCURRED TO ENSURE A/C COOLS TO REQD TEMPERATURE• ESTEEM VALUE IS THE COST INCLUDED INTO PRODUCT TO ENHANCE CUSTOMER

APPEAL Eg IN SOME CASES THE MOTOR CAR ESTEEM VALUE > USE VALUE IN TERMS OF FUEL

CONSUMPTION LIKE IN THE CASE OF A MERCEDES BENZ WHICH GIVES ONLY 6 KM/LTR AGAINST THE AVERAGE 15-18KM/LTR IN OTHER BRANDED CARS

• EXCHANGE VALUE IS THE VALUE OF PROPERTIES WHICH ENABLES AN ITEM TO BE EXCHANGED FOR SOMETHING ELSE .EXCHANGE VALUE IS GENERALLY RESALE VALUE. Eg REAL ESTATE EXCHANGE VALUE IS INFLATED BY 20% EVERY YEAR

• PLACE VALUE IS VALUE OF PROPERTY/EQUIPMENT WHICH VARIES IN PRICE WRT LOCATION eg IN MUMBAI REAL ESTATE IS MORE EXPENSIVE IN WESTERN SUBURBS THAN IN EAST

• TIME VALUE IS PROPERTY OF PRODUCT/SERVICE RENDERED AT THE RIGHT TIME eg THE TIMING OF AN EMERGENCY OPERATION IS CRITICAL FOR SURVIVAL OF THE PATIENT

332

VALUE ENGG/ANALYSIS

• ECONOMIC WORTH = COST VALUE + EXCHANGE VALUE + USE VALUE + ESTEEM VALUE + PLACE VALUE + TIME VALUE

• REAL WORTH = ECONOMIC WORTH/COST VALUE • REAL WORTH = WORTH/LIFE CYCLE COST• FOCUS OF VE TO INCREASE REAL VALUE OF

PRODUCT PROCESS OR SERVICE• VE/VA GENERALLY RESULTS IN COST

REDUCTION

333

QUESTIONS IN VALUE ANALYSIS

• CAN WE DO WITHOUT IT• DOES IT DO MORE THAN REQD• DOES IT COST MORE THAN IT IS WORTH• CAN SOMETHING ELSE SUBSTITUTE IT• CAN TWO PARTS BE COMBINED OR CAN ONE

COMPONENT BE MADE INTO TWO • CAN IT BE MADE IN A LESS COSTLY METHOD

WITH LESS COSTLY MATRL• CAN IT BE MADE CHEAPER BETTER OR FASTER• WHAT NEW PROCESSES CAN WE USE

334

QUESTIONS IN VALUE ANALYSIS

• CAN AN ALTERNATIVE MATRL BE USED• CAN ANY DIMENSIONS BR REDUCED TO

USE LESS MATRL• CAN AMOUNT OF WASTE BE REDUCED• CAN PARTS BE STANDARDISED• CAN TWO PARTS BE COMBINED • IS BUYING CHEAPER THAN MAKING• WHAT IS THE COST OF ADHERING TO

SPECS• WHAT NEW PROCESSES CAN BE USED

335

WAYS TO INCREASE VALUE BY VE

• REDUCE FUNCTIONS WITH CUT CORNERS EXERCISE

• KEEP FUNCTIONS UNCHANGED BUT REDUCE COSTS

• INCREASE FUNCTIONS BUT RETAIN COSTS

• INCREASE FUNCTIONS MORE THAN COST INCREASE

336

USES OF VALUE ENGINEERING

• COST PREVENTION AND ELIMINATN TECHNIQUE TO REDUCE COST OF PRODUCT

• ENABLES BETTER UNDERSTANDING OF EMPL JOBS

• BALANCES COST AND PERFORMNCE• PREVENTS OVER DESIGN OF COMPONENTS• MOTIVATES EMPL TO GIVE CREATIVE IDEAS• INCREASES PROFITS AND DEFLATES COSTS• HELPS SATISFY CUSTOMERS WITH PRODUCTS

337

PRINCIPLES OF VALUE ANALYSIS

• DO NOT USE A PART THAT DOES NOT CONTRIBUTE TO THE VALUE OF THE PRODUCT

• DO NOT USE A PART WHOSE COST IS NOT PROPORTIONAL TO ITS USEFULNESS

• DO NOT PROVIDE ANY FEATURES TO THE COMPONENT OR FINISHED PRODUCT THAT ARE NOT ABSOLUTELY REQUIRED

• ACCEPT CHANGE IF PART OF REQD QLTY IS MADE BY A PROCESS COSTING LESS THEN USE THE ALTERNATIVE PROCESS

• USE STANDARDISED PARTS WHEREVER POSSIBLE• USE PROPER MFG METHODS TAKING INTO ACCOUNT THE QUANTITIES• COST OF COMPONENT USED SHOULD BE PROPORTIONAL TO ITS FUNCTION• USE THE MATERIAL BEST SUITED FOR THE PURPOSE• PURCHASE THE PART INSTEAD OF IN HOUSE MFG IF SUITABLE SUPPLIER

CAN PROVIDE THE PART OF GOOD QLTY AT REASONABLE PRICE

338

WHEN TO APPLY VA

• PRODUCTS ARE LOSING THEIR MKT SHARE AND THERE IS DECLINE IN SALES

• PRODUCTS ARE PRICED HIGHER THAN COMPETITION IN A PRICE SENSITIVE MKT OR PRODUCT COST IS > SALES PRICE OF COMPETITION

• NEW DESIGNS TO BE UNDERTAKEN• RISING MFG COSTS

339

REASONS FOR UNNECCESARY COSTS

• LACK OF RELEVANT INFO LEADS TO WRONG DECISIONS WHICH INCREASE COSTS

• WRONG BELIEFS FROM ACCEPTING OPINIONS

• LACK OF IDEAS

340

DIFFERENCE BETWEEN VE AND OTHER COST REDUCTION

TECHNIQUES• TRADITIONAL TECHNIQUES ARE POST PRODUCTION ORIENTED

AND CONCENTRATION IS ON THE PART OR ELEMENT IN CONTRAST TO VALUE ANALYSIS WHICH IS FUNCTION ORIENTED

• OTHER TECHNIQUES TRY TO REDUCE THE COST BY EXISTING METHOD WHEREAS VA NEVER CONSIDERS ANY PROCESS METHOD OR ELEMENT GRANTED AND IT ANALYSES BY FUNCTION RATHER THAN PART OR ELEMENT

• COST REDUCTION CAN REDUCE THE COSTS UPTO 10% WHEREAS VA CAN REDUCE COSTS UPTO 40-50% WITHOUT SACRIFICING QLTY AND PERFORMANCE

• VALUE ANALYSIS QUESTIONS THE VERY EXISTENCE OF PARTS OR PROCESS BY ANALYSIS OF ITS DESIGN SPECIFICATIONS, MATRLS AND PROCESS OF MFG

• COST REDUCTION IS COST ORIENTED AND CONCENTRATES ON FINDING THE CHEAPER COST WHEREAS VALUE ANALYSIS IS FUNCTION ORIENTED AND TRY TO PRODUCE THE PRODUCT AT LOWEST COST WITHOUT SACRIFICING QLTY AND PERFORMANCE

341

STRATEGIC STEPS IN VALUE ANALYSIS

• DETERMINE FUNCTION AND COST OF EACH ELEMENT IN FINISHED PROD

• CONSIDER ALTERNATIVES THAT FULFIL FUNCTIONS

• SELECT BEST ALTERNATIVE WHICH INCLUDES MATRL,STANDARDISATION OF DIMENSIONS

• STRATEGIC CHOICE OF MAKE EXPENSIVE PRODUCTS OR SUBCONTRACT

• MODIFY DESIGN TO REDUCE COSTS

342

VA PROCEDURE

• IDENTIFY ITEMS TO BE ANALYSED• DIFFERENTIATE WHETHER ITEM OR PROCESS• IDENTIFY INTERNAL AND EXTERNAL CUSTOMERS• IDENTIFY BASIC FUNCTIONS• IDENTIFY SECONDARY FUNCTIONS WHICH SUPPORT BASIC• TO PRIORITISE DETERMINE VALUE OR IMPERTANCE TO

CUSTOMER OF EACH FUNCTION• BREAK ITEM/PROCESS INTO CONSTITUENT COMPONENTS

BY USING FLOWCHART• ASSOCIATE COMPONENTS WITH FUNCTIONS• LOOK FOR COMPONENTS WHICH CAN BE MODIFIED OR

ELIMINATED

343

OPTIONS IN VA/VE

• MODIFY

• INTEGRATE

• SUBSTITUTE

• SIMPLIFY

344

WHEN TO USE VA/VE

• AIM IS TO EVALUATE REAL VALUE OF PRODUCT/PROCESS

• FOCUS IS ON SAVING COSTS

• AIM IS ON INCREASING VALUE OF PROCESS/PRODUCT

345

BENEFITS OF VALUE ENGINEERING

• COST REDUCTION/ELIMINATION TECHNIQUE

• BALANCES COSTS AND PERFORMANCE• PREVENTS OVER DESIGN OF PRODUCT

(CUSTOMER FUNCTION DEPLOYMENT)• INCREASES PROFITS AND REDUCES COSTS• INCREASES CUSTOMER SATISFACTION

346

EXAMPLES OF VALUE ANALYSIS

• MODIFY-MOTOR CAR ENGINES HAVE BEEN MODIFIED TO RUN ON CNG

• INTEGRATE-AIR CONDITIONER AND HEAQTER INTEGRATED INTO ONE UNIT

• SUBSTITUTE-INHOUSE WIRING HAS BEEN CHANGED FROM COPPER TO ALUMINIUM OR COKE BOTTLES CHANGED FROM GLASS TO PLASTIC

• SIMPLIFY-APPLICATION SOFTWARE SIMPLIFIED BY BEING MADE MODULAR.EARLIER ALL MODULES WERE BUNDLED OR COMPLICATED EQUIPMENT MADE MODULAR WHICH SIMPLIFIES MAINTENANCE

347

FAILURE MODE EFFECT ANALYSIS

• ENGG TECHNIQUE USED TO DEFINE IDENTIFY AND ELIMINATE KNOWN/POTENTIAL FAILURES PROBLEMS,ERRORS WHICH OCCUR

• ALL PROBABLE FAILURE MODES WITH THEIR CAUSES AND RESULTS LISTED WITH LIKELIHOOD OF FAILURE

• DONE BEFORE PRODUCT REACHES CUSTOMER• IN BUSINESS PROCESSES THE DIRECT/INDIRECT

FINANCIAL/NON FINANCIAL IMPACT COMPUTED• FMEA AIMS TO ASSESS WHETHER EFFECTS OF FAILURE

MODE ARE CRITICAL• CONSIDERATIONS LIKE SEVERITY OF

FAILURE,LIKELIHOOD OF FAILURE AND DETECTABILITY (FORESEEN THRU DEGRADATION,INSPECTION)

348

METHODOLOGY OF FMEA

• IDENTIFY PROCESS CHARACTERISTICS IN EACH OPERATION• DEFINITION OF WHAT IS FAILURE-TOTAL,PARTIAL WITH EFFECTS• FIND OUT ALL POSSIBLE FAILURE MODES AND ANALYSE EFFECTS• ESTIMATE SERIOUSNESS OF FAILURE MODES AND EFFECT TO

CUSTOMER BY RATING FAILURE IN TERMS OF RISK PRIORITY NUMBER

• FIND OUT ROOT CAUSE OF FAILURE• SUGGEST ACTIONS TO IMPROVE DETECTION AND ELIMINATE

FAILURE MODE OR REDUCE OCCURRENCE AND IMPACT• FAILURES ADDRESSED BASED ON RPN• OBJECTIVE OF FMEA TO ANTICIPATE FAILURES• INTER RELATIONSSHIP BETWEEN FAILURES DRAWN THRU FAULT

TREE ANALYSIS USING AND/OR GATES• FTA/FMEA DEVELOPED BY BELL LAB AND WIDELY USED BY US

DEFENCE UNDER THE INITIATIVE RCM 1

349

KEY DEDUCTIONS OF FMEA

• PROCESS RELIABILITY AND UPTIME• ROOT CAUSE FAILURE ANALYSIS• CAUSE EFFECT CHAIN OF FAILURES

WITH PATTERNS• PROCESS EFFECTIVENESS AND

EFFICIENCY• CUSTOMER COMPLAINTS AND

RETURN DATA ANALYSIS

350

CATEGORIES OF FMEA

• SYSTEM FMEA USED TO ANALYSE COMPONENTS/SUBSYSTEMS IN EARLY STAGE OF DESIGN CONCEPT DONE THRU COP AID SIMULA

• DESIGN FMEA USED TO ANALYSE PRODUCTS/PARTS BEFORE THEY ARE RELEASED TO MFG THRU CAE-CAD

• PROCESS FMEA APPLICABLE IN ANALYSIS OF FAILURE MODES CAUSED BY PROCESS DEFICIENCES

• SEVICE FMEA USED TO ANALYSE SERVICES BEFORE THEY REACH THE CUSTOMER THRU ENSURING OF QLTY AND RELIABILITY OF SERVICE

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OUTPUT OF FMEA

• POTENTIAL LIST OF FAILURE MODES• POTENTIAL LIST OF CRITICAL

CHARACTERISTICS AND EFFECTS• POTENTIAL LIST OF FAILURE MODES

PRIORITIES RANKED BY RPN• POTENTIAL LIST OF PARAMETERS TO BE

TESTED FOR A PROCESS• SHORT AND LONG TERM PROCESS

CAPABILITIES

352

PROCEDURAL STEPS IN FMEA ANALYSIS

• IDENTIFY ALL COMPONENTS AND ASSEMBLIES OF THE SYSTEM

• LIST ALL POSSIBLE FAILURE MODES OF A SYSTEM WITH PROBABILITIES AND CAUSE-EFFECT CHAIN DIAGRAM

• ESTIMATE EFFECTS EACH FAILURE MODE HAS ON PROCESS/PRODUCT

• LIST ALL POSSIBLE CAUSES OF EACH FAILURE MODE

• CALCULATE RPN=PROBABILITY*SERIOUSNESS*DIFFICULTY OF DETECTION

353

RISK PRIORITY NUMBER

• HELPS IN DEFINING CRITICALITY OF FAILURE• GOAL OF FMEA TO REDUCE RPN• RPN=SEV* OCCUR*DET• SEV 1=NO EFFECT SEV 10=HAZARD• OCCURRENCE PROBABILITY 1-9 WITH 1 BEING

REMOTE AND 9 CERTAIN FAILURE• DETECTION IS POSSIBILITY AND EASE OF

DETECTION WITH 1 BEING EASILY DETECTED AND 4 BEING DETECTED ONLY AFTER CAUSE EFFECT AND ROOT CAUSE ANALYSIS

354

SEVERITY CODES• 1 NO EFFECT• 2 VERY SLIGHT EFFECT ON PERFORMANCE. NON VITAL FAULTS

OBSERVED.CUST NOT ANNOYED• 3 SLIGHT EFFECT ON PERFORMANCE.CUST SLIGHTLY ANNOYED• 4 MINOR EFFECT ON PERFORMANCE.FAULT DOES NOT REQUIRE

IMMEDIATE ATTENDANCE.CUST OBSERVES MINOR EFFECT ON PERFORMANCE.NON VITAL FAULTS OBSERVED

• 5 MODERATE EFFECT ON PERFORMANCE.CUST DISSATISFIED.FAULT REQUIRES REPAIRS

• 6 SIGNIFICANT DEGRADATION OF PERFORMANCE BUT SYSTEM OPERATIONAL.CUST DISCOMFORT.NON VITAL PART INOPERABLE

• 7 MAJOR PERFORMANCE RETARDATION BUT SYSTEM OPERATIONAL. SUBSYSTEM INOPERABLE.CUST VERY DISSATISFIED

• 8 EXTREME SITUATION.SYSTEM INOPERABLE BUT SAFE CUST VERY DISSATISFIED

• 9 SERIOUS POTENTIAL HAZARD GRADUAL WHOLE FAILURE.SAFETY ENDANGERED

• 10 CATASTROPHIC HAZARDOUS EFFECTS SAFETY RELATED FAILURES.

355

OCCURRENCE PROBABILITY

• RATING CHANCE LIKELY• 1 10**-8 REMOTE• 2 10**-7 ISOLATED• 3 10**-6 OCCASIONAL• 4 10**-5 MODERATE LOW• 5 10**-4 MODERATE HIGH• 6 10**-3 RSNABLE PROBABLTY• 7 10**-2 HIGH PROBABLTY• 8 10**-1 IMMINENT• 9 100% FAILURE

356

DETECTION RATING

• 1 FAULT OBVIOUS• 2 FAULT DISCOVERED AFTER

INSPECTION• 3 FAULT DICOVERED AFTER

FAILURE ANALYSIS• 4 FAULT DISCOVERED AFTER

PERFORMING CAUSE EFFECT AND ROOT CAUSE ANALYSIS

357

FMEA CHART AT ASHOK LEYLAND

• PROCESS-PROJECTION WELDING• POTENTIAL FAILURE MODES:

-THREAD TIGHT –NUT DAMAGE -NUT MISSING

• POTENTIAL EFFECTS OF FAILURE -FITMENT PROBLEM

• SEVERITY 9• POTENTIAL CAUSES OF FAILURE:

-CURRENT FLUCTUATION -IMPROPER WELDING

• OCCURRENCE 8• DETECTION METHOD-PROCESS CHECKING• DETECTION 3• RPN 216

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FAULT TREE ANALYSIS• WELL ESTABLISHED TECHNIQUE FOR FINDING FAILURE RELATIONSHIP

AND IS FAULT ORIENTED WHERE IT LOOKS AT ALL POSSIBLE WAYS IN WHICH A PRODUCT COULD FAIL

• FOCUSES ON RELATIONSHIPS BETWEEN FUNCTIONAL EFFECTS AND PRODUCT COMPONENT AND IS DONE TOP DOWNWARDS AND BEGINS BY IDENTIFYING THE TOP UNDESIRABLE EVENTS IN THE SYSTEM

• BASIC STEPS INVOLVED IN PERFORMING FTA : -ESTABLISHING SYSTEM DEFINITION -CONSTRUCTING FAULT TREE - EVALUATING FAULT TREE QUALITATIVELY -COLLECTING DATA SUCH AS FAILURE RATES REPAIR RATES AND FAILURE PROBABILITY AND MTBF -RECOMMENDING CORRECTIVE MEASURES

• WHEREAS FMEA CONSIDERS FAILURE OR INDIVIDUAL COMPONENTS OF SYSTEM ONE AT A TIME AND NOTING FAILURE CONSEQUENCES FROM BOTTOM UP FTA IS REVERSE OF FMEA

• USES OR /AND GATES FOR DRILLING DOWN

359

ROOT CAUSE ANALYSIS OF FAILURE

• UNDERTAKEN TO SEARCH FOR ROOT OF PROBLEM• EFFECTIVE RCA IS ABOUT SEEKING SOLUTIONS THAT

CONTROL CAUSES OF PROBLEMS• LOOK FOR CAUSES FROM EFFECTS• EACH CAUSE OR SET OF CAUSES CAUSE THE NEXT

EFFECT(S)• SOLUTION IS ATTACHED TO THE CAUSE THAT PREVENTS

THE PROBLEM FROM REOCCURING • UNDERSTANDING CAUSE EFFECT RELATIONSHIP IS VITAL

IN EFFECTIVE MAINTENANCE PROGRAM• TECHNIQUE FOR FAULT ANALYSIS WHICH TRACES ROOT

CAUSE IS CALLED 5-WHY ANALYSIS

360

ROOT CAUSE ANALYSIS OF FAILURE

• SEARCH ROOT CAUSE OF PROBLEM

• EACH CAUSE PRODUCES 1 OR MORE NEXT EFFECTS

• SOLUTION IS ONE THAT PREVENTS CAUSE FROM REOCCURING

• QUESTION WHY 5 TIMES MAY LEAD TO ROOT CAUSE OF PROBLEM

361

STAGES IN ROOT CAUSE ANALYSIS

• UNDERSTANDING THE PROBLEM

• DATA COLLECTION AND REVIEW

• DATA ASSESSMENT ANALYSIS AND ROOT CAUSE DETERMINATION

• CORRECTIVE ACTION TAKEN

• CORRECTIVE ACTION REPORTING AND ANALYSIS

362

5 WHY ANALYSIS OF CONVEYOR BELT AT ASHOK

LEYLAND• PROBLEM-CONVEYOR BELT GOT CUT ALONG

WIDTH• WHY BELT CUT--FOREIGN MATRL STUCK• WHY FOREIGN MATRL STUCK—ENTRAPPED

AROUND ROUTE• WHY ENTRAPPED—MATRL NOT SCREENED• WHY MATRL NOT SCREENED—INADEQUATE

PROCESS CONTROL• ROOT CAUSE—WHY INADEQUATE PROCESS

CONTROL—• SCREENING FACILITY NOT AVAILABLE

363

QUALITY FUNCTION DEPLOYMENT

• METHODOLOGY WHERE ALL KNOWLEDGE ABOUT NEEDS AND WANTS OF CUST ARE INCORPORATED INTO ALL STAGES OF DESIGN,MFG,DELVY AND SERVICES

• QFD IS METHODOLOGY WHERE ALL REQMNT ARE UNDERSTOOD AND INCORPORATED FOR BENEFIT OF CUSTOMERS

• QFD EMPLOYS A STEP BY STEP APPROACH FROM CUSTOMER NEEDS AND EXPECTATIONS THRU 3 PLANNING PHASES OF: -PRODUCT PLANNING –PRODUCT DEVELOPMENT -PROCESS DELIVERY AND SERVICES

• QFD IS PROCEDURE WHICH HELPS TO BUILD QLTY INTO UPSTREAM PROCESSES AND INTO NEW PRODUCT DEV

• VOICE OF CUSTOMER IS CARDINAL TO QFD• IMPORTANT TO DETERMINE WHO ACTUALLY IS THE CUSTOMER INTERNAL OR

EXTERNAL• LEVELS OF CUSTOMER EXPECTATIONS: -

BASIC FUNCTIONAL EXPECTATION –PERFORMANCE EXPECTATIONS -SERVICE EXPECTATIONS -INVESTMENT PROTECTION EXPECTATIONS -MINIMUM COST OF OWNERSHIP

364

QUALITY FUNCTION DEPLOYMENT

• CUSTOMER REQUIREMENTS AND PERCEPTIONS• PRODUCT PLANNING(TRANSLATION OF REQMNT INTO FUNCTIONAL FEATURES AND

SPECIFICATIONS)• DESIGN REQUIREMENT TRANSLATED INTO DESIGN ATTRIBUTES AND ENGINEERING

MEASURES• PART DEPLOYMENT AND CHARACTERISTICS• PROCESS PLANNING- OPERATIONAL STEPS AND MEASURES• OPERATIONAL TASKS,MEASURES,CONDITIONS• CONTROLS• DEPLOYED THRU PRODUCT PLANNING, PART DEVELOPMENT,PROCESS

PLANNING,PRODUCTION PLANNING,SERVICE PLANNING • VARIOUS DEGREES OF PLANNING INVOLVED IN QFD INCLUDE: -

PRODUCT PLANNING -PART DEVELOPMENT -PROCESS PLANNING -PRODUCTION PLANNING -SERVICE PLANNING -

365

LEVELS OF CUSTOMER EXPECTATION

• BASIC FUNCTIONAL EXPECTATIONS

• PERFORMANCE EXPECTATIONS

• SERVICE EXPECTATIONS

• INVESTMENT PROTECTION EXPECTATIONS

• MINIMISED COST OF OWNERSHIP EXPECTATIONS

366

QFD PROCESS• REQUIRES THAT COMPANY ADOPT A CUSTOMER ORIENTED PHILOSOPHY• QFD HAS MULTIPLE MATRICES FOR TRANSLATRING CUSTOMER NEEDS INTO

PRODUCT REQMNT AND SYSTEM SPECS• PHASES EMPLOYED ARE:

-CONVERTING CUSTOMER REQMNT INTO TECHNICAL REQMNT -CONVERTING TECHNICAL REQMNT INTO CHARACTERISTICS OF KEY PARTS OF PRODUCT -CONVERTING CHARACTERISTICS OF KEY PARTS INTO THE PROCESS TO MFG OF THESE PARTS -CONVERTING CHARACTERISTICS OF THE MFG PROCESS INTO DETAILED PRODN PROCEDURES AND CONTROL METHODS

• 1 CUSTOMER REQUIREMENT –TECHNICAL ATTRIBUTES -CUSTOMER PERCEPTIONS -ENGINEERING MEASURES

• 2 DESIGN MATRIX -TECHNICAL ATTRIBUTES -PRODUCT FEATURES –MEASURES• 3 OPERATING MATRIX –PRODUCT FEATURS -PROCESS STEPS –MEASURES -PROCESS

STEPS• 4CONTROL MATRIX -PROCESS STEPS –OPERATIONAL

TASKS,CONDITIONS,CONTROLS MEASURES

367

IMPLEMENTING THE QFD PROCESS-SEQUENCE OF

ACTIONS• OBTAIN CUSTOMER NEEDS AND PERCEPTIONS• TRANSLATE CUSTOMER NEEDS INTO PRODUCT/ SYSTEM REQMNT

& SPECS• MEASURES OF CUSTOMER NEEDS ARE TRANSLATED INTO DESIGN

ATTRIBUTES AND ENGINEERING MEASURES• DESIGN ATTRIBUTES ARE TRANSLATED INTO PRODUCT/SERVICE

FEATURES• REQUIRED FEATURES ARE BASED DIRECTLY ON MEASURES OF

CUSTOMER NEEDS• FEATURES ARE THEN USED TO DEFINE PROCESSES AND

OPERATING CONDITIONS THAT ARE REQUIRED TO DELIVER VALUE TO CUSTOMER

• CONTROLS ARE DEFINED FOR OPERATING CONDITIONS HOUSE OF QLTY – DESIGN MATRIX – OPERATING MATRIX – CONTROL MATRIX

368

BENEFITS OF QFD

• PROMOTES BETTER UNDERSTANDING OF CUSTOMER DEMANDS AND COMPLAINTS AND SIMPLIFIES REMEDIAL ACTION

• PROMOTES BETTER UNDERSTANDING OF DESIGN INTERACTIONS• INVOLVES MFG IN DESIGN PROCESS• IMPROVES DOCUMENTATION OF DESIGN AND DEVELOPMENT

PROCESS• REDUCES NUMBER OF ENGG CHANGES• BRINGS NEW DESIGNS TO MARKET FASTER• REDUCES OVERALL COSTS OF DESIGN AND MFG• FACILITATES IDENTIFICATION OF CAUSES OF CUSTOMER

COMPLAINTS AND MAKES IT EASIER TO TAKE PROMPT ACTION • INCREASES CUSTOMER SATISFACTION• USEFUL TOOL FOR IMPROVING PRODUCT QLTY• MINIMIZES REJECTS AND REWORK• MINIMIZES CUSTOMER CLAIMS SUBSTANTIALLY

369

SIX SIGMA

• BUSINESS STRATEGY FOR GOOD QUALITY

• LEVEL OF PERFORMANCE THAT REDUCES DEFECTS

• METRIC OF PROCESS CAPABILITY • COMMITMENT TO CUSTOMERS TO

ACHIEVE ACCEPTABLE LEVEL OF DEFECTS

370

SIX SIGMA

• STATISTICAL INDICATION OF VARIATION FROM STANDARD WHICH IS MEANT TO INCREASE CUST SATISFACTION AND A TOOL WHICH AIMS AT ELIMINATING DEFECTIVE OUTPUT

• SIXMA EXPRESSED AS DEFECTS OR NON CONFORMITIES PER MILLION OPPORTUNITIES. 6 SIGMA IS A LEVEL OF PERFORMANCE WITH 3.4 DPMO

• ENABLES COMPANIES TO DRASTICALLY IMPROVE BOTTOM LINES AND MEASURES PROCESS CAPABILITY FOR QLTY

• CONCEPT DEVELOPED BY MOTOROLA• SIGMA IMPL CONSISTS OF

-DEFINE OBJECTIVE OF PROJECT -MEASURE KEY PROCESS PARAMETERS -ANALYSE PARAMETERS - IMPROVE THRU BENCHMARKING AND CONTINUOUS IMPROVEMENT -CONTROL PROCESS EXECUTION

371

STRATEGIC IMPLICATION OF SIX SIGMA

• BUSINESS PHILOSOPHY

• COMPANY VISION

• METRIC TO MEASURE AND COMPARE PERFORMANCE/RESULTS

• SYMBOL OF EXCELLENCE

• GOAL

• METHODOLOGY

372

ESSENCE OF SIX SIGMA• STRATEGIC TOOL WHICH AIMS AT ELIMINATING DEFECTIVE OUTPUT BY

BRINGING DOWN THE COST OF QLTY TO ZERO• DRASTICALLY REDUCES INSPECTION COSTS,DEFECTIVE COSTS,REWORK

AND RECTIFICATION COSTS• DATA AND FACT DRIVEN MGT APPROACH WITH FOCUS ON CUST• RIGOROUS ANALYTICAL PROCESS ORIENTED METHODOLGY• LEVEL OF PERFORMANCE(3.4 DPMO) WHICH REFLECTS REDUCED DEFECTS• MECHANISM WHICH ALLOWS COMPANIES TO INPROVE BOTTOM LINE• CONCEPT LINKED WITH QLTY,PRODUCTIVITY AND COST• METRIC WHICH DESCRIBES HOW WELL PROCESSES MEET CAPABILITY

REQMNT• SET OF STATISTICAL TOOLS TO HELP DMAIC PHASES • SIGNIFICANTLY IMPROVES PROFITABILITY THYRU CAPABILITY

IMPROVEMENT OF PROCESSES• EMPOWERS COST MSRMNT AND CONTROL

373

GOALS OF SIX SIGMA

• DEFECT REDUCTION

• YIELD IMPROVEMENT

• IMPROVED CUSTOMER SERVICES

• HIGHER NET INCOME

374

SIX SIGMA SPECIFICATION TABLE

• 1 SIGMA 30.23% 697700DPPM

• 2 SIGMA 69.13% 308700DPPM

• 3 SIGMA 93.32% 66810DPPM

• 4 SIGMA 99.3790% 6210DPPM

• 5 SIGMA 99.97670% 233DPPM

• 6 SIGMA 99.999660% 3.4DPPM

375

APPROACH FOR SIX SIGMA

• SIX SIGMA HAS A UNIVERSALLY DEFINED APPROACH WHICH CALLED DMAIC OR DEFINE,MEASURE,ANALYSE,IMPRVE,CONTROL

376

DEFINE

• QUESTIONS -WHAT IS THE PROBLEM AND SCOPE -CRITICALITY AND IMPORTANCE TO CUSTOMER -WHAT IS THE BENCHMARK -DEPENDENT VARIABLES AFFECTNG PROJECT -VOICE OF CUSTOMER HOW CAPTURED

• KEY ISSUES -WHAT IS DEFINITION OF PROJECT INCLUDING OPERATIONAL DETAILS -WHAT ARE PROJECT MILESTONES -CRITICAL TO QUALITY PARAMETERS AND IDENTIFICATION OF CRITICAL SUCCESS FACTORS

• TOOLS USED -PROJECT MGT -PARETO ANALYSIS -QFD -PROCESS MAPPING

377

MEASURE

• QUESTIONS -LIST PERFORMANCE VARIABLES AND IMPACT -GAP BETWEEN BENCHMARK AND EXISTING STATUS -PERFORMANCE CAPABILITY OF PROCESSES

• KEY ISSUES -REQMNT OF CUSTOMER –VALIDATION OF MSRMNT SCHEMES

• TOOLS USED - PROCESS MAPPING –QFD –CAUSE-EFFECT -7QC TOOLS –PROCESS SIGMA AND CAPABILITY

378

ANALYSE

• QUESTIONS -WHAT ARE SUCCESS FACTORS -WHAT ARE PERFORMANCE GOALS -WHAT ARE SOURCES OF VARIATION -WHAT IS TARGET % FOR IMPROVEMENT

• KEY ISSUES -ABILITY OF COMPANY TO DO IT -SELECTION OF VARIABLE AND QUANTIFICATION

• TOOLS USED -PROCESS MAP ,GAP ANALYSIS,ANALYTICAL TOOLS

379

IMPROVE

• QUESTIONS -HOW IS VARIABLE PERFORMANCE DIAGNOSED -HOW OPERATING LIMITS AND PROCESS CAPABILITY ESTABLISHED

• KEY ISSUES -HOW PERFORMANCE IMPRVMNT VERIFIED -ACTION PLANS -SOLUTIONS TO ADDRESS ROOT CAUSE OF PROBLEM -ESTABLISH OPERATING TOLERANCES

• TOOLS USED -DESIGN OF EXPERIMENTS

380

CONTROL

• QUESTIONS -HOW PERFORMANCE METRICS MONITORED –HOW CONTINUOUS IMPROVEMENT MONITORED

• KEY ISSUES -CONTROL OF PROCESSES -IMPLEMENTATION AND AUDIT OF CONTROL SYSTEM

• TOOLS USED -SPC POKA YOKE -INTERNAL QLTY AUDITS –CAPABILITY AUDITS

381

TOTAL PRODUCTIVITY MAINTENANCE

382

STRATEGIC QLTY MGT

• PROCESS OF ESTABLISHING LONG RANGE QLTY GOALS AND DEFINING APPROACH TO MEETING THESE GOALS

• STRATEGIC QLTY MGT LED BY SENIOR MGT• ELEMENTS IN SQM INCLUDE MISSION, SWOT

ANALYSIS• IDENTIFY AND EVALUATE ALTERNATIVE

STRATEGIES,DEVELOP GOALS• PREPARE DETAILED SHORT TERM PLANS• TRANSLATE PLANS INTO BUDGETS ACTIONS AND

RESOURCE REQMNTS

383

STRATEGIC QLTY MGT

• FUNDAMENTAL OBJECTIVE OF TQM STRATEGY IS TO ACHIEVE CUSTOMER SATISFACTION THRU TOTAL QLTY

• ACHIEVED THRU CUSTOMER FOCUS,CONTINUOUS IMPROVEMENT AND PEOPLE INVOLVEMENT

• THRUSTS ADOPTED INCLUDE SIX SIGMA,REDUCED CYCLE TIMES,CUSTOMER SATISFACTION TEAMWORK AND EMPOWERMENT

• BENCHMARKED WITH BEST OF CLASS AND ASSESSMENT OF QLTY WORTHINESS DONE THRU FRAMEWORKS SUCH AS MALCOLM BALDRIDGE ETC

• PERFORMANCE METRICS INCLUDE MEETING CUSTOMER REQMNT,QLTY STDS-DPU,DPMO,CYCLE TIME ETC

384

• ORG VISION MISSION VALUE STATEMENTS• FUNCTIONAL VISION MISSION etc• LONG TERM AND SHORT TERM GOALS• CRITICAL SUCCESS FACTORS • COMPETENCE ASSESSMENT• STRATEGIES TO ACHIEVE GOALS• RISK ASSESSMENT OF STRATEGIES WITH IMPACTS AND

ALTERNATIVES• DEFINITION OF MEASURES STRATEGIC OUTCOMES AND TARGETS

FOR PROCESSES AND ACTIVITIES• SELF ASSESSMENT AND ANALYSIS OF PROCESSES GAP FINDING

ANALYSIS AND IMPROVEMENT• BENCHMARKING FOR PROCESS IMPROVEMENT• FEEDBACK AND IMPROVEMENT• CONTINUOUS PROCESS OF IMPROVEMENT

SQM FRAMEWORK

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STRATEGIC STATEMENTS

• IN ORDER TO SUCCEED COMPANIES MUST ENUNCIATE VISION MISSION AND QLTY POLICY STATEMENTS

• STATEMENTS PERIODICALLY REVIEWED AND UPDATED IF REQD

• PART OF STRATEGIC PLANNING PROCESS WHICH INCLUDES GOALS AND OBJECTIVES

• VISION STATEMENT IS A DECLARATION OF WHERE AN ORG WISHES TO BE IN THE FUTURE. GOOD COMPANIES HAVE A CORPORATE VISION AND DEPENDENT FUNCTIONAL VISIONS

• MISSION STATEMENT PROVIDES A CLEAR STATEMENT OF PURPOSE AND DEFINES THE FUNCTION OF THE ORG

• QLTY POLICY IS A GUIDE AS TO HOW TO PROVIDE PRODUCTS/SERVICES TO CUSTOMERS

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QUALITY POLICY AND MISSION STATEMENT

• ORG MUST HAVE QLTY POLICY AND MISSION STATEMENTS WHICH DETERMINE AND INFLUENCE HOW WORK IS DONE

• POLICIES AND MISSION STATEMENT ARE INDICATIVE OF ORG VALUE SYSTEMS

• POLICY IS RULES FOR PREDETERMINED COURSE OF ACTION TO GUIDE PERFORMANCE OF WORK TOWARD THE ORG OBJECTIVE. POLICIES ARE COURSE OF ACTION SELECTED BY BUSINESS UNITS TO GUIDE ORG THINKING AND DESIGNED TO INFLUENCE DECISIONS

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NEED FOR QUALITY POLICY AND MISSION STATEMENT

• ESSENTIAL FOR SUCCESSFUL FUNCTIONING OF QLTY IMPROVEMENT PROCESS

• STATEMENT OF INTENTIONS OF TOP MGT INDICATING WHAT ORG PROPOSES TO DO

• STATEMENT OF VALUES WHICH DOMINATE ORG ACTIONS AND TRANSLATES GOALS TO ACTIONS

• STANDARDS FOR EVALUATING PERFORMANCES• ENCOURAGE IMPROVEMENT AND INNOVATION• SUPPORT OF LONG TERM OBJECTIVES• ENABLING ORG TO CARRY OUT MAIN OBJECTIVE OF

CUSTOMER SATISFACTION• POLICY SHOULD DEAL WITH FUTURE DEVELOPMENT• STATEMENTS SHOULD BE PERIODICALLY REVIEWED TO

INCORPORATE CHANGING NEEDS

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QUALITY STATEMENTS

• COMPANIES WISHING TO BE PROFICIENT IN QLTY SHOULD CLEARLY DEFINE THEIR VISION,MISSION AND QLTY POLICY STATEMENTS

• PERIODICALLY REVIEWED AND UPDATED

• PART OF STRATEGIC PLANNING EXERCISE WHICH INCLUDES GOALS AND OBJECTIVES

• VISION STATEMENT DEPICTS THE LONG TERM ASPIRATIONS OF THE COMPANY

• MISSION STATES HOW THE VISION WILL BE ACCOMPLISHED

• QLTY POLICY IS A GUIDE TO PROVIDE QLTY PRODUCTS/SERVICES TO CUSTOMERS AND DETERMINES AND INFLUENCES HOW WORK IS DONE

• POLICIES ARE INDICATIVE OF SYSTEMS IN PLACE

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QUALITY POLICY

• QLTY IMPROVEMENT IS MGT RESPONSIBILITY

• ALL EMPLOYEES SHOULD PARTICIPATE IN QLTY IMPROVEMENT WHICH IS A CONTINUOUS PROCESS

• CARRY OUT QLTY BENCHMARKING SO AS TO IMPROVE

• IMPORTANT SUPPLIERS AND CUSTOMERS WILL BE CLOSELY INVOLVED IN QLTY POLICY

390

QUALITY POLICY

• COMPANY SHOULD ANNOUNCE QUALITY POLICY AND CONTENT SHOULD BE KNOWN TO ALL EMPLOYEES

• QUALITY POLICY REQUIRES TOP MGT TO : -IDENTIFY CUSTOMER NEEDS -ASSESS ORG CAPABILITY TO MEET THESE NEEDS ECONOMICALLY -ENSURE PURCHASED MATERIAL AND SERVICES RELIABLY MEET REQUIRED STANDARDS OF PERFORMANCE AND EFFICIENCY -CONCENTRATE ON PREVENTION RATHER THAN DETECTION -EDUCATE AND TRAIN FOR QUALITY IMPROVEMENT -MEASURE CUSTOMER SATISFACTION -REVIEW QLTY MGT SYSTEMS TO MAINTAIN PROGRESS

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• ORG MUST HAVE QLTY POLICY AND MISSION STATEMENTS WHICH DETERMINE AND INFLUENCE HOW WORK IS DONE

• POLICIES AND MISSION STATEMNTS ARE INDICATIVE OF ORG VALUE SYSTEMS

• POLICY IS RULES FOR PREDETERMINED COURSE OF ACTION TO GUIDE PERFORMANCE OF WORK TOWARD THE ORG OBJECTIVE

• POLICIES ARE PLANS OR COURSE OF ACTIONS SELECTED BY BUSINESS UNITS TO GUIDE ORG THINKING AND DESIGNED TO INFLUENCE DECISIONS

• STATEMENTS PERIODICALLY REVIEWED FOR CURRENCY

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• ESSENTIAL FOR SUCCESSFUL FUNCTIONING OF QLTY IMPROVMNT PROCESS

• STATEMENT OF INTENTIONS OF TOP MGT INDICATING WHAT ORG PROPOSES TO DO

• STANDARD FOR EVALUATING PERFORMANCE

• SUPPORT OF LONG TERM OBJECTIVES• POLICY SHOULD DEAL WITH FUTURE

DEVELOPMENTS

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REQUIREMENT OF QLTY POLICY

• ESSENTIAL FOR SUCCESSFUL FUNCTION OF QLTY IMPROVEMENT PROCESS

• STATEMENT OF INTENT OF OF TOP MGT

• STATEMENT OF VALUES WHICH DOMINATE ACTIONS

• STANDARD FOR EVALUATING PERFORMANCE

• SUPPORT FOR LONG TERM OBJECTIVES

• ESTABLISH ORG AS A QLTY CONSCIOUS COMPANY

• IDENTIFY CUSTOMER PERCEPTION OF NEEDS

• ENSURE SUBCONTRACTED MFG/SERVICES MEET REQD STDS OF PERFORMANCE AND QLTY

• CONCENTRATE ON PREVENTION RATHER THAN CURE

394

POLICY DEPLOYMENT HOSHIN KANRI

• STRUCTURED PLANNING PROCESS THAT USES FACT BASED AND PARTICIPATIVE METHODS TO DELIVER ACHIEVEMENT OF OBJECTIVES THRU CONTINUOUS IMPROVEMENT

• APPROACH TO CONTINUOUS IMPROVEMENT THRU TQM AND APPLICATION OF PDCA FOR STRATEGIC MGT

• POLICY REFERS TO COMPANY VISION LONG RANGE PLANS AND TARGETS• DEPLOYMENT REFERS TO THE WAY TOP MGT CONVEYS VISION AND PLANS TO

MGRS AND ENCOURAGE THEIR PARTICIPATION IN DEPLOYING VISION RELATED GOALS AND PLANS

• ALL EMPLOYEES AND PROCESSES WORK IN SAME DIRECTION TO ACHIEVE ORG OBJECTIVES

• MEANS OF ENGAGING EMPLOYEES IN THE BUSINESS PLANNING PROCESS FOCUSING ON CRITICAL OBJECTIVES TO ACHIEVE BUSINESS OBJECTIVES AND CONVERTING STRATEGIC INTENT TO OPERATING PLAN

• 3 COMMON PHASES -DEFINITION OF VISION,MISSION,GOALS AND OBJECTIVES OF COMPANY -DEPLOYMENT OF OBJECTIVES THROUGHOUT ORGANISATION -MGT OF ACHIEVEMENT OF OJBECTIVES

• POLICY DEPLOYMENT IS PDCA APPLIED TO PLANNING AND EXECUTION OF FEW CRITICAL STRATEGIC OBJECTIVES

• POLICY DEPLOYMENT HAS SIX KEY STEPS

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STEPS IN POLICY DEPLOYMENT

• 1 DEVELOP A LONG TERM VISION • 2 DETERMINE ANNUAL POLICIES TO

SUPPORT VISION• 3 DEPLOY POLICY IN COMPANY THRU

PARTICIPATION IN PLANNING• 4 IMPLEMENT THE POLICY• 5 AUDIT THE PROCESS AND PLANS

MONTHLY• 6 AUDIT THE POLICY ANNUALLY BY TOP

MGT

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PDCA CYCLE IN POLICY DEPLOYMENT

• PDCA CYCLE USED EXTENSIVELY

• PLAN POLICY DEVELOPMENT

• DO DEPLOY POLICY

• CHECK AUDITING DIAGNOSIS REPORTING

• ACT POSSIBLE CHANGE OF PLAN BASED ON THE DIAGNOSIS

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MAIN FEATURES EMERGING FROM DEFINITION OF POLICY

DEPLOYMENT• CLEAR ORG OBJECTIVES UNDERSTOOD

BY ALL EMPLOYEES• INVOLVEMENT OF EMPLOYEES IN

DEVELOPMENT OF ACTION PLANS• ALL EMPLOYEES AND PROCESSES

WORKING IN SAME DIRECTION TO ACHIEVE ORG OBJECTIVES

• REGULAR REVIEW MECHANISM USING PDCA CYCLE PROMOTING ORG OBJECTIVES

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KEY DRIVERS IN POLICY DEPLOYMENT

• CLEAR ORGANISATION GOALS UNDERSTOOD BY ALL EMPLOYEES

• INVOLVEMENT OF EMPLOYEE IN DEVELOPMENT OF ACTION PLANS

• ALL EMPLOYEES WORK IN SAME DIRECTION TO ACHIEVE ORG OBJECTIVES AND USE PDCA FOR CONTINUOUS IMPROVEMENT

399

PDCA CYCLE IN POLICY DEPLOYMENT

• PLAN-POLICY DEVELOPMENT

• DO-DEPLOY POLICY

• CHECK-AUDITING,DIAGNOSIS AND REPORTING

• ACT-POSSIBLE CHANGE OF PLAN BASED ON DIAGNOSIS

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STEPS IN POLICY DEPLOYMENT

• DEVELOP LONG TERM VISION FOR COMPANY

• DETERMINE ANNUAL POLICIES TO SUPPORT VISION

• DEPLOY POLICY ORGWIDE THRU PARTICIPATION IN PLANNING

• IMPLEMENT POLICY• AUDIT PROCESS AND PLANS MONTHLY• AUDIT PROCESS ANNUALLY BY TOP MGT

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CUSTOMER STRATEGY AND PLANNING

• CUSTOMER DESIGNED AS A PART OF POLICY AND STRATEGY DECISIONS

• DESIGNERS AND CUSTOMERS COMMUNICATE BIDIRECTIONALLY

• CUSTOMERS INCLUDED INTO DESIGN PROCESS• CUSTOMERS HELPED IN UNDERSTANDING THEIR NEEDS

AND WANTS• SYSTEMS IN PLACE TO ENSURE THAT THE CHANGING

REQUIREMENTS OF CUSTOMERS ARE ADDRESSED AND STRATEGIES AND POLICIES ARE REVISED ACCORDINGLY

• INNOVATIVE PERFORMANCE MEASURES INCORPORATED INTO POLICY AND STRATEGY REVIEWS

• DESIGN PROCESS RESPONDS QUICKLY TO CUSTOMERS

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ROLE OF DIFFERENT TOOLS OF TQM

• SETTING UP DIFFERENT ROLES AS PER TQM PRINCIPLES • ESTABLISHING PROCESS CAPABILITY USING SPC• DETERMINING COST OF QUALITY AND POKA YOKE• AGILITY• CONTINUOUS IMPROVEMENT OF PROCESS• DETERMINING COST OF IMPROVEMENT• REENGINEERING OF BUSINESS PROCESS TO MINIMISE

COSTS AND MAXIMISE EFFICIENCY• BENCHMARKING FOR WHAT MUST BE ACHIEVED AND

HOW• INTEGRATION OF BENCHMARKING TO RELATED BUSINESS

AREAS AND PROCESSES• REFINEMENT OF PROCESS BASED ON IMPROVEMENT

EFFORTS

403

TQM ASSESSMENT MODELS

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• FOR CONTINUOUS IMPROVEMENT TO BE SUSTAINED ACTIVITIES NEED TO BE MONITORED CONTINUALLY

• TQM ASSESSMENT PROVIDES FRAMEWORKS FOR GENERATED TYPE OF FEEDBACK ABOUT CONTINUOUS IMPROVEMENT

• CRITERIA COVER VARIOUS ACTIVITIES PRACTICES PROCESSES AND PROVIDES MECHANISM FOR QUANTIFYING ORG CURRENT STATE OF TQM DEVELOPMENT BY MEANS OF A POINTS SCORE

• TQM ASSESSMENT IS A COMPREHENSIVE SYSTEMATIC AND REGULAR REVIEW OF ACTIVITIES AND RESULTS

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• PROCESS ENABLES ORG TO ASCERTAIN STRENGTHS AND DISCOVER AREAS IN WHICH IMPROVEMENT IS CALLED FOR

• RESULTS ARE MONITORED FOR PROGRESS• THREE POPULAR INTERNATIONAL TQM

ASSESSMENT MODELS: -MALCOLM BALDRIGE NATIONAL QUALITY AWARD(MBNQA) -EUROPEAN FOUNDATION FOR QLTY MGT(EFQM) -DEMING AWARD

• THE FIRST TWO ARE POPULAR IN INDIA AND KNOWN AS IMC- RAMAKRISHNA BAJAJ(MBNQA) AND CII-EXIM RAJIV GANDHI AWARD(EFQM)

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• MODELS OFFER GUIDELINES IN ASSESSING STATE OF READINESS OF PROCESSES TOWARDS ACHIEVEMENT OF BUSINESS EXCELLENCE

• BENEFITS OF TQM ASSESSMENT INCLUDE -CONTINUOUS IMPROVEMENT -VISIBILITY IN DIRECTIONS -AWARENESS OF QLTY RELATED ISSUES -IMPROVEMENT OF BUSINESS RESULTS -INCREASED LEVEL OF MEETING CUSTOMER EXPECTATIONS

• TWO TYPES OF ASSESSMENTS -SELF -COLLABORATIVE

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MALCOLM BALDRIDGE MODEL

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MALCOLM BALDRIGE FRAMEWORK

• FOUR INDUSTRY CATEGORIES -MFG AND SERVICES -EDUCATION -HEALTHCARE -NON PROFIT

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OBJECTIVES OF MBNQA

• PLAN TO KEEP IMPROVING OPERATIONS CONTINUOUSLY• SYSTEM FOR MEASURING IMPROVEMENTS ACCURATELY• STRATEGIC PLAN BASED ON BENCHMARKS THAT

COMPARE COMPANY PERFORMANCE WITH WORLDS BEST • CLOSE PARTNERSHIP WITH SUPPLIERS AND CUSTOMERS

THAT FEEDS IMPROVEMENT BACK INTO OPERATIONS• DEEP UNDERSTANDING OF CUSTOMER SO THAT THEIR

REQMNT CAN BE TRANSLATED INTO PRODUCTS/SERVICES• LONG LASTING RELATIONSHIP WITH CUSTOMER GOING

BEYOND PRODUCT DELY • FOCUS ON PREVENTING MISTAKES RATHER THAN

CORRECTION

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INSERT MBCRITERIA PRESENTATION

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STEPS INVOLVED IN PROCESSING OF MBNQA

• SELF ASSESSMENT AND BPI• APPLICATION• FORMING OF TEAMS• EXAMINER INDIVISUAL SELF ASSESSMENT BASED ON APPLICATION-

STRENGTHS,AREAS OF IMPROVEMENT AND SITE VISIT ISSUES• CONSENSUS SCORING-IDENTIFICATION OF STRENGTHS,AREAS OF

IMPROVEMENT AND SITE VISIT ISSUE• SENDING OF SITE VISIT ISSUES BY TEAM LDR TO CUSTOMER• SITE VISIT• REVIEW OF SCORES AND REPORT• FEEDBACK REPORT SENT TO CUSTOMER• CUSTOMER SCORES SENT TO JUDGES PANEL• SHORTLISTING BY JUDGES• ROLE MODEL DETERMINATION• JUDGES FINAL REVIEW• ANNOUNCEMENT OF AWARDS• AWARDS CEREMONY

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APPLICATION CONTENTS FOR MBNQA

• EACH APPLICANT MUST SUBMIT AN APPLICATION REPORT IN MAX OF 60 PAGES CONSISTING OF -A BRIEF ORGANIZATIONAL PROFILE WHICH IS MAX OF 5 PAGES. -RESPONSES TO EACH AREAS TO ADDRESS IN THE CRITERIA WITH REFERENCE TO THE PROPER SUB POINT NUMBER WHICH IS MAX OF 60 PAGES

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EFQM Criteria

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ADDENDUM

1 TOTAL QUALITY MANAGEMENT Prof. (Dr.) Satish Ailawadi.

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