Chapter 3 Philosophies & Framework Uploaded Ppt

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1

Chapter 3Chapter 3

Philosophies

and

Frameworks


Leaders in the Quality Revolution

W. Edwards DemingJoseph M. JuranPhilip B. CrosbyArmand V. FeigenbaumKaoru IshikawaGenichi Taguchi


Who’s Who?

ab

c

Deming ____

Juran ____

Crosby ____


Deming Chain Reaction

Improve quality

Costs decrease

Productivity improves

Increase market share with better quality and lower prices

Stay in business

Provide jobs and more jobs


Key Idea

The Deming philosophy focuses on continual improvements in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of top management.


Deming’s System of Profound Knowledge

Appreciation for a systemUnderstanding variationTheory of knowledgePsychology


Systems

Most organizational processes are cross-functional

Parts of a system must work togetherEvery system must have a purposeManagement must optimize the

system as a whole


Key Idea

The aim of any system should be for all stakeholders—stockholders, employees, customers, community, and the environment—to benefit over the long term.


Variation

Many sources of uncontrollable variation exist in any process

Excessive variation results in product failures, unhappy customers, and unnecessary costs

Statistical methods can be used to identify and quantify variation to help understand it and lead to improvements


Theory of Knowledge

Knowledge is not possible without theory

Experience alone does not establish a theory, it only describes

Theory shows cause-and-effect relationships that can be used for prediction


Psychology

People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful

Fear is demotivating Managers should develop pride and joy

in work


Deming’s 14 Points (Abridged) (1 of 2)

1. Create and publish a company mission statement and commit to it.2. Learn the new philosophy.3. Understand the purpose of inspection.4. End business practices driven by price alone.5. Constantly improve system of production and service.6. Institute training.7. Teach and institute leadership.8. Drive out fear and create trust.


Deming’s 14 Points (2 of 2)

9. Optimize team and individual efforts.10. Eliminate exhortations for work force.11. Eliminate numerical quotas and M.B.O. Focus on improvement.12. Remove barriers that rob people of pride of workmanship.13. Encourage education and self-improvement.14. Take action to accomplish the transformation.

www.deming.org


Juran’s Quality Trilogy

Quality planningQuality controlQuality improvement

www.juran.com


Key Idea

Juran proposed a simple definition of quality: “fitness for use.” This definition of quality suggests that it should be viewed from both external and internal perspectives; that is, quality is related to “(1) product performance that results in customer satisfaction; (2) freedom from product deficiencies, which avoids customer dissatisfaction.”


Phillip B. Crosby

Quality is free . . . “Quality is free. It’s not a gift, but it is free. What costs money are the unquality things -- all the actions that involve not doing jobs right the first time.”


Philip B. Crosby

Absolutes of Quality Management: Quality means conformance to requirements Problems are functional in nature There is no optimum level of defects Cost of quality is the only useful

measurement Zero defects is the only performance

standard

www.philipcrosby.com


A.V. FeigenbaumThree Steps to Quality

Quality Leadership, with a strong focus on planning

Modern Quality Technology, involving the entire work force

Organizational Commitment, supported by continuous training and motivation


Kaoru Ishikawa Instrumental in developing Japanese

quality strategy Influenced participative approaches

involving all workersAdvocated the use of simple visual tools

and statistical techniques


Genichi Taguchi

Pioneered a new perspective on quality based on the economic value of being on target and reducing variation and dispelling the traditional view of conformance to specifications:

No Loss LossLoss

Tolerance

0.500 0.5200.480


Malcolm Baldrige National Quality Award

Help improve quality in U.S. companies

Recognize achievements of excellent firms and provide examples to others

Establish criteria for evaluating quality efforts

Provide guidance for other American companies

Malcolm Baldrige, former U.S. Secretary of Commerce


Criteria for Performance Excellence

Leadership Strategic Planning Customer and Market Focus Measurement, Analysis, and

Knowledge Management Human Resource Focus Process Management Business Results

Baldrige Award trophy


The Baldrige Framework –A Systems Perspective

4Measurement, Analysis, and Knowledge Management

5Human

Resource Focus

3Customer &

Market Focus

2Strategic Planning

1Leadership

6Process

Management

Organizational Profile:

Environment, Relationships, and Challenges

7BusinessResults


Key Idea

The Baldrige criteria define both an integrated infrastructure and a set of fundamental practices for a high-performance management system.


Criteria Evolution (1 of 2)

From quality assurance and strategic quality planning to a focus on process management and overall strategic planning

From a focus on current customers to a focus on current and future customers and markets

From human resource utilization to human resource development and management

From supplier quality to supplier partnerships


Criteria Evolution (2 of 2)

From individual quality improvement activities to cycles of evaluation and improvement in all key areas

From data analysis of quality efforts to an aggregate, integrated organizational level review of key company data

From results that focus on limited financial performance to a focus on a composite of business results, including customer satisfaction and financial, product, service, and strategic performance


Key Idea

Approaches that organizations use to address the Baldrige criteria requirements need not be formal or complex, and can easily be implemented by small businesses.


Receive Applications

Judges Select for Consensus Review?

Judges Select forSite Visit Review?

Stage 1Independent Review

Stage 2Consensus Review

Stage 3Site Visit Review

Stage 4Judges Recommend Award

Recipients to NIST Director/DOC

Feedback report to applicant



No

No

Baldrige Award Evaluation Process


Self Assessment

A primary goal of the Baldrige program is to encourage many organizations to improve on their own by equipping them with a standard template for measuring their performance and their progress toward performance excellence.

Boeing Airlift & Tanker Programs – 1998 recipient


Deming Prize

Instituted 1951 by Union of Japanese Scientists and Engineers (JUSE)

Several categories including prizes for individuals, factories, small companies, and Deming application prize

American company winners include Florida Power & Light and AT&T Power Systems Division


Other Quality AwardsEuropean Quality AwardCanadian Awards for Business

ExcellenceAustralian Business Excellence AwardChinese National Quality Award (New)


ISO 9000:2000

Quality system standards adopted by International Organization for Standardization in 1987; revised in 1994 and 2000

Technical specifications and criteria to be used as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes, and services are fit for their purpose.


Key Idea

ISO 9000 defines quality system standards, based on the premise that certain generic characteristics of management practices can be standardized, and that a well-designed, well-implemented, and carefully managed quality system provides confidence that the out-puts will meet customer expectations and requirements.


Objectives of ISO Standards Achieve, maintain, and continuously improve

product quality Improve quality of operations to continually

meet customers’ and stakeholders’ needs Provide confidence to internal management

and other employees that quality system requirements are being fulfilled

Provide confidence to customers and other stakeholders that quality requirements are being achieved


Structure of ISO 9000 Standards

21 elements organized into four major sections: Management Responsibility Resource Management Product Realization Measurement, Analysis, and Improvement


ISO 9000:2000 Quality Management Principles

1. Customer Focus

2. Leadership

3. Involvement of People

4. Process Approach

5. System Approach to Management

6. Continual Improvement

7. Factual Approach to Decision Making

8. Mutually Beneficial Supplier Relationships


Key Idea

ISO 9000 provides a set of good basic practices for initiating a quality system, and is an excellent starting point for companies with no formal quality assurance program.


Six SigmaBased on a statistical measure that

equates to 3.4 or fewer errors or defects per million opportunities

Pioneered by Motorola in the mid-1980s and popularized by the success of General Electric


Key Idea

Six Sigma can be described as a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and a clear financial return for the organization.


Key Concepts of Six Sigma (1 of 2)

Think in terms of key business processes, customer requirements, and overall strategic objectives.

Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtaining resources.

Emphasize such quantifiable measures as defects per million opportunities (dpmo) that can be applied to all parts of an organization


Key Concepts of Six Sigma (2 of 2)

Ensure that appropriate metrics are identified early and focus on business results, thereby providing incentives and accountability.

Provide extensive training followed by project team deployment

Create highly qualified process improvement experts (“green belts,” “black belts,” and “master black belts”) who can apply improvement tools and lead teams.

Set stretch objectives for improvement.


Key Idea

Although different, Baldrige and Six Sigma are highly compatible and can each have a place in the management system of a successful organization.

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