Improving productivity with the help of the management systemImproving productivity with the help of...

Feb 2011 (c) Nigel H Croft 2011 1

Improving productivity with the

help of the management system

Nigel H Croft

Chairman, ISO/TC176/SC2 – Quality Systems

Member, ISO/TC176 Chairman’s Strategic Advisory Group

Member, ISO/CASCO Chairman’s Policy Committee

Member, IAF/ILAC/ISO Joint Working Group

Member, ISO/CASCO WG21 (for ISO/IEC 17021)

Presentation outline

The basis for management systems

Process approach

PDCA

Productivity

Creating the right environment

Reducing variation

Eliminating waste

Solving problems and driving improvement

Using the management system for productivity

improvement

The role of a certification body auditor


The basis for

management systems


Feb 2011 4

“set of

interrelated or

interacting elements

to

establish policy and

objectives

and to

achieve those

objectives”

Hardware

(equipment)

Software

(methods)

Humanware

(people)

Interact within processes

Management System.......

In other words……..

RESULTS FOCUSED (c) Nigel H Croft 2011

ISO 9001

“Specifies quality management system

requirements for organization to:

demonstrate its ability to consistently provide

product that meets customer and applicable

regulatory requirements

enhance customer satisfaction………”

NOTE: “Services” are a specific kind of product, and

are also covered by ISO 9001

Feb 2011 5 (c) Nigel H Croft 2011

Feb 2011 6

The focus of ISO 9001

Focuses on “process control” and “results”

A “documented system” – NOT a “system of

documents”

2 core concepts…………

Identify the processes needed

Manage the processes using “P-D-C-A”

These same 2 basic concepts are key to

most productivity-focused initiatives

(c) Nigel H Croft 2011

DEFINE WHAT TO DO AND HOW TO DO IT

(Methods, procedures etc)

May or may not be documented

PRODUCT

(“Result of a

process”)

MONITORING AND

MEASUREMENT OPPORTUNITIES (Before, during and after the process)

Output Input PROCESS (“Set of interrelated

or interacting activities”)

EFFECTIVENESS

OF PROCESS =

Ability to achieve

desired results

(Focus of ISO 9001)

EFFICIENCY OF

PROCESS =

Results achieved vs

resources used

(Focus of ISO 9004)

(Includes

Resources)

Process from the “quality”

perspective


Plan •What to do?

•(“Objective”)

•How to do it?

•(“Procedure”)

Do •Do what was

planned

Check • Did things happen

according to plan?

Act •How to improve

next time?


Plan (Strategic level):

What do we want to achieve? Vision

Mission

Objectives

How can we achieve it? Strategic planning

Tactics

Resources

Dr Deming – “It‟s pointless to establish an objective without defining a method to achieve it”


Do:

Get everyone involved, committed, and

motivated (“Leadership”!)

Carry out “the plan”

Deploy throughout the organization

Break down the objectives to the appropriate

functions and levels


Check:

Is this what we expected? (Any anomalies?)

Are the results OK?

Can they be improved?

Any waste (non-value adding activities)?

Look for trends


Act Correct what went wrong (Correction)

Plan to do it right next time (Corrective action)

Learn to make things “error-proof” (Preventive action)

Think – how can we do this…….. More consistently?

Faster?

Cheaper?

Better?

Safer?

More environmentally friendly?

(Improvement)


“Productivity”

“Relative measure of the efficiency of a

person, machine, factory, system, etc., in

converting inputs into useful outputs”


ISO 9004

“Guidelines” for achieving sustained (long-

term) success using the Quality Management

System

Focus on efficiency

Financial resources and results

Use of natural resources

Competence and motivation

Allows for self-assessments (maturity model)


Other related standards

ISO 14001 – Environmental

ISO 27000 – Information Security

OHSAS 18001 – Health & Safety

ISO 26000 – Social Responsibility

ISO 31000 – Risk management

All can be incorporated to the extent needed

into an Integrated Management System and

used to drive productivity improvements


16

The “Plan-Do-Check-Act”

approach to Quality

“Set of interrelated

activities”

INPUTS CUSTOMER

(Internal or external)

DESIRED

OUTPUTS

“PRODUCT”

• Effect on Product conformance

• Environmental Aspects / Impacts

• Health and Safety Risks

• Social implications

UNDESIRED OUTPUTS

(“WASTE”)

MONITOR/MEASURE

How to carry out the process? – (documented or not)

Feb 2011 (c) Nigel H Croft 2011

Feb 2011 17

Cause and Effect PROCESS

“INTENDED

PRODUCT”

“UNINTENDED

PRODUCT” (WASTE)

INEFFICIENCY (c) Nigel H Croft 2011

How to use the

management system to

improve productivity


Creating the right

envronment


5S – Preparing the work

environment

“Pre-requisite” for

sound quality management

productivity improvement

Seiri – “Sort, Systematize or simplify”

Seiton – “Straighten, standardize”

Seiso – “Shine”

Seiketsu – “Sanitize”

Shitsuke – “Sustain”


5S 21

Alphabetical Order A, B, C, D, ….. Z

Numerical Order 1, 2, 3, 4, ……

Dictionary definition:

To put things in order (or organize them)

according to a specific rule or principle.

Industrial definition:

To distinguish between necessary things and unnecessary things, and getting rid of what you do not need.

Seiri = Organization

2 Feb 2011 (c) Nigel H Croft 2011

5S 22

Dictionary definition:

Establishing a neat layout so that you can

always get just as much of what you need

when you need it.

Industrial definition:

It is a way of eliminating

search.

Seiton = Neatness


Laboratory in Cement Factory


5S 24

Definition:

Eliminating trash, filth, and

foreign matters for a cleaner

workplace. Cleaning as a form of

inspection.

Seiso = Cleaning


5S 25

Definition:

Keeping things organized, neat,

and clean, even in personal and

environmental aspects.

Seiketsu = Standardization

SEIRI SEITON

SEISO


5S 26

Definition:

Doing the right things as a matter of

course.

Shitsuke = Self-discipline


Reducing variation

and eliminating waste


“All we are doing is looking at the time line; from the moment the

customer gives us an order to the point when we collect cash.

And we are reducing that time line by removing the non-value-

added wastes.”

Taiichi Ohno

The Essence of Lean………..

Order Cash

Order Cash


“Lean Six-Sigma” Philosophy

All work is a process

All processes have variability which leads to waste

Eliminate harmful sources of variation

Make fewer and fewer mistakes – strive for perfection

Keep customers and their needs at the forefront


Over-Production

Waiting

Inventory Motion Transportation

Defects /

Rejects/

Re-work

Over-Processing

Waiting for…

•Faxes

•System to come up

•Customer feedback

•Customer response

•A handed-off file to come back

•Searching for files / handling paperwork

•Gathering information

•Extra key strokes

•Handoffs

•Repeated manual entry of data

•Use of inappropriate software

•Use of outdated forms •Data entry errors

•Pricing error

•Missing information

•Billing errors

•Open projects

•E-mails unread

•Unused records in database

•Retrieving or storing files

•Going to get signatures

•Going to copy machine or printer

•More information than customer needs

•Creating reports no one reads

•Making extra copies

Recognize and Eliminate Waste

Waste is anything we do that doesn’t create value for the customer!


(Slide courtesy of Dr T N Smith)

Waste

Any activity that consumes resources without

creating value for the customer is waste.

Three categories of waste (“3Mu”)

MURI – (Overburden)

MURA – (Uneven-ness)

MUDA – (Non value adding activities)


“3M’s”

Feb 2011 32

33

Seven Components of Waste

Muda is classified into seven

components: Overproduction

Correction (defects)

Inventory

Motion

Overprocessing

Conveyance

Waiting

Additional forms of muda include: Under use of talent

Lack of safety

Being Lean means eliminating waste. Feb 2011 (c) Nigel H Croft 2011

Measure of Process Capability (Sigma Level)

-6s -5s -4s -3s -2s -1s 0 1s 2s 3s 4s 5s 6s

Lower

Specification

Upper

Specification

-3s -2s -1s 0 1s 2s 3s

Lower

Specification

Upper

Specification

What is Six Sigma?

• All processes will

have variation.

• Reduce variation

relative to customer

requirements to

improve quality.


Six Sigma – The Measure

Sigma Level Defects per Million

Opportunities

3s 66,807

4s 6,210

5s 233

6s 3.4

7s 0.02


σ σ 1 6

The essence of Six Sigma

Define Measure Analyze Improve Control


Process Capability Index - Cp

ND

ET C p =

Cp evaluates the

POTENTIAL capability of

the process, in relation

with the tolerance

Process

Capability

Index (Cp) is:

=

Natural distribution

(ND)

Poor

Cp < 1

Marginal

Cp = 1

Good

Cp > 1

Better

Cp >> 1

LSL USL Nominal

Engineering

tolerance (ET)

ND

ND

ND

USL-LSL

UCL-LCL


Cp is not enough………… Which of these two processes is performing

better?

Cp is called the potential capability of the process

because it tells us how well the process could

perform if it was centered on the specification

target...

LSL USL Nominal

Process

Center

LSL USL Nominal

Process

Center 1 2


Poor Cpk < 1

LSL Nominal

Engineering Tolerance (ET)

Natural Distribution (ND)

USL

Marginal Cpk = 1

Best Cpk = Cp

Good Cpk > 1

Poor Cpk < 0

Cpk values greater than 1.33 are considered GOOD

Cpk values greater than 1.33 and equal to Cp are considered BEST

The Meaning of Cpk

Cpk assesses both the process’ accuracy and precision


Statistical Control is Not the

End

Six Sigma is a measure of process capability

Zero Defect is the goal for Product

Performance


Errors vs. Defects

Defects result from errors/mistakes.

Errors/Mistakes are the cause of defects

With the goal of Zero Defects, the key is to

find ways of catching simple mistakes before

they produce defects


Solving problems and

driving improvement


“QC Story”

Define the problem (targets, schedules etc)

Observe (time, places, symptoms etc)

Analyse (Cause/effect diagrams, Control charts,

Pareto analysis, scatter diagrams, histograms etc)

Define actions

Study results and learn

Act/Standardize

Plan for the future (need for further improvement)


Gemba

Refers to the place where value is created;

Can be any "site" such as the factory floor, a

construction site, sales floor or where the

service provider interacts directly with the

customer

Important that problems are visible, and the

best productivity improvement ideas will

come from “going to the gemba”. (Like Tom

Peters‟ “Management by Walking Around”) Feb 2011 (c) Nigel H Croft 2011 44

See the Waste at Gemba

See the flow of materials & information

See what is actually happening

Identify and countermeasure problems

Develop eyes for „seeing waste‟

Identify opportunities for Kaizen

Development of problem-solving skills


Kaizen

Refers to philosophy or practices that focus

upon continual (small-step) improvement of

processes

Kaizen is a daily process, the purpose of

which goes beyond simple productivity

improvement.

Promotes a systematic approach to

improvement to eliminating waste in all

business processes. Feb 2011 (c) Nigel H Croft 2011 46

“The forgetful organization”

Time

Improve Improve Improve

FORGET FORGET FORGET

“SAWTOOTH” EFFECT


Jidoka

"the decision to stop and fix problems as they

occur rather than pushing them down the line

to be resolved later"


“The learning organization”

Time

“LADDER” EFFECT

Improve

Standardize

Maintain (routine)


Kaizen Document

Reality

Plan

Countermeasures

Identify

Waste

Reality

Check Make Changes Verify Change

Measure

Results

Make this

the Standard

Celebrate

Do It

Again

Start Here


Kaikaku

Making fundamental and radical changes to

improve the system

When “Kaizen” is not enough

“Is there a better way to do this??”

“Re-engineering”


Using the management

system for productivity

improvement


ISO 9001 Clause 4.1

The organization shall…………

a) determine the processes needed for the QMS

b) determine their sequence and interaction

c) determine criteria and methods needed to ensure

effective operation and control

d) ensure availability of resources and information to

support operation and monitoring

e) monitor, measure where applicable, and

analyse these processes, and

f) implement actions necessary to achieve planned

results and continual improvement Feb 2011 (c) Nigel H Croft 2011 53

Performance Measures

Peter Drucker - “If you can't measure it, you

can't manage it!”

ISO 9001 requires processes to be monitored

and, where applicable, measured

Monitor = maintain regular close observation;

observe and check over a period of time;

Measure = ascertain the size, amount, or degree

of something by comparison with a standard unit

or with an object of known size Feb 2011 (c) Nigel H Croft 2011 54

Albert Einstein

“Not everything that matters can be measured

and

not everything that can be measured matters”


The role of the

certification body

auditor

How to “add value” without

providing consultancy


Feb 2011 57

Maturity of “Quality culture”

Confo

rmity t

o IS

O 9

001

Low High

Lo

w

Hig

h

Zone 1 Zone 2

Zone 3 Zone 4

ISO/IAF Audit Practice Group

Guidance “Adding Value”


Feb 2011 58

Zone 1:

Low degree of conformity / Low quality

culture

Be clear on what is required and why

Identify and explain clearly any and all NC‟s

Avoid advice on “how to” meet requirements

(consulting!)

Productivity improvements should be a

natural consequence of understanding

processes and implementing the system


Confo

rmity

to I

SO

9001:2

000

Low Low High High

Lo

w

Lo

w

Hig

h

Hig

h

Zone 1 Zone 2

Zone 3 Zone 4


Confo

rmity

to I

SO

9001:2

000

Low Low High High Low Low High High

Lo

w

Lo

w

Hig

h

Hig

h

Lo

w

Lo

w

Hig

h

Hig

h

Zone 1 Zone 2

Zone 3 Zone 4


Feb 2011 59

Zone 2:

Low degree of conformity / Mature quality

culture

Relate QMS to organization‟s current initiatives

(eg Six-sigma, TQM, etc)

Understand organization‟s business needs

Don‟t be intimidated!

Beware not to let productivity concerns

prejudice the QMS!


Confo

rmity

to I

SO

9001:2

000

Low Low High High

Lo

w

Lo

w

Hig

h

Hig

h

Zone 1 Zone 2

Zone 3 Zone 4


Confo

rmity

to I

SO

9001:2

000


Lo

w

Lo

w

Hig

h

Hig

h

Lo

w

Lo

w

Hig

h

Hig

h

Zone 1 Zone 2

Zone 3 Zone 4


Feb 2011 60

Zone 3:

High degree of conformity / low quality culture

Act as a catalyst for the organization to build on

its QMS, and integrate into daily work routine

Stimulate and encourage (but don‟t require)

organization to look beyond conformity to ISO

9001

ISO 9004

Opportunities for improved efficiency (reduced waste)

Identify improvement opportunities


Confo

rmity

to I

SO

9001:2

000

Low Low High High

Lo

w

Lo

w

Hig

h

Hig

h

Zone 1 Zone 2

Zone 3 Zone 4


Confo

rmity

to I

SO

9001:2

000


Lo

w

Lo

w

Hig

h

Hig

h

Lo

w

Lo

w

Hig

h

Hig

h

Zone 1 Zone 2

Zone 3 Zone 4


Feb 2011 61

Zone 4:

High degree of conformity / mature quality culture

Work closely with top management

Relate QMS audit to strategic objectives and

performance / productivity improvements

Be critical and probing

Use ISO 9001 to discipline and maintain performance

improvements

Encourage incorporation of „lean‟ ideas and

methodologies


Confo

rmity

to I

SO

9001:2

000

Low Low High High

Lo

w

Lo

w

Hig

h

Hig

h

Zone 1 Zone 2

Zone 3 Zone 4


Confo

rmity

to I

SO

9001:2

000


Lo

w

Lo

w

Hig

h

Hig

h

Lo

w

Lo

w

Hig

h

Hig

h

Zone 1 Zone 2

Zone 3 Zone 4


(c) Nigel H Croft 2011 62

Conclusions

ISO 9001 and other management systems provide a sound, disciplined base from which to drive productivity improvements

Process approach

PDCA

Third party certification body auditors have an important role to play by encouraging (not requiring!) clients to improve productivity by intelligent use of the management system

Feb 2011


THANK YOU

[email protected]

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