1.2. Hello, and welcome to the TUM School of Management and our MOOC3. in quality engineering and management.4. My name is Martin Grunow. I'm professor5. in production and supply chain management here at the TUM School of6. Management at Technische Universität München.7. Yes, hello and welcome. My name is Holly Ott8. I teach in Martin's group, but I'm also a professor of Industrial Engineering9. at the Hochschule der Bayrischen Wirtschaft, also in Munich.10. We have developed this course for students here at the TUM School of11. Management12. as part of our operations program. The aim13. is to introduce our students to14. the basic concepts of quality, and to also15. repeat some of their basic statistics necessary16. for modern operations and quality management programs.17. Quality management is cross-functional work18. and a quality manager must not only have a sound understanding of the product19. and the processes involved, and of the costs,20. but a quality manager must also use leadership and managerial skills to21. build22. and motivate teams. She needs to interface23. with the top management, with technical experts,24. and with process experts, and last but not least,25. also with the customer. For this course,26. we will follow the well-known DMAIC process flow.27. That is define, measure,28. analyze, improve,29. and control. This cyclic process30. is the basis of a lot of quality31. management systems such as Six Sigma.32. And the course modules are organized--the statistics33. are organized--to support each part of the DMAIC flow.34. We have created interactive mini cases for you to apply35. your statistics knowledge in quality engineering settings.36. In the "define" phase of the process improvement project,37. the project leader is responsible for gaining an38. overview of the39. process and an understanding of the customer requirements40. for the product. And of course "customer" often refers to the end customer,41. the one purchasing the product. The "customer" can also refer to an internal42. customer,43. the next stage in the production flow. In the "define" process, the project leader is44. also responsible45. for setting up the team, for defining a timeline,46. and the project budget, i.e. the costs

47. of the project. In the next phase of the48. DMAIC process, the "measure" phase, the49. specific goal of the50. project must be defined. This involves creating51. a detailed process map, choosing the key parameters to measure52. and collecting and analyzing the data. We want to establish a baseline for the53. process performance54. with respect to the goal of the process improvement project.55. In this course we're using session two to review the concepts of56. random variables and probability distributions,57. and in session three we will review the normal distribution58. and we will look at the central limit theorem,59. which is the central part of sampling theory.60. Session four is an introduction to measurement theory61. and sampling plans. We will also discuss the difference between62. descriptive and inductive statistics. In the "analyze" phase,63. the project team identifies the factors that have a key64. influence on the processes and comes up with a hypothesis65. on how the processes can be improved.66. In session five, we will look at two methods of inferential statistics:67. confidence intervals and hypothesis testing.68. In session six, we will learn how to69. calculate the capabilities70. of a process and look at the concepts71. of regression and correlation. In the "improve" phase,72. the project team identifies a solution, and then demonstrates73. that this solution actually yields74. the desired improvement effect. And in session seven,75. we will learn how to design a two by two experiment76. and learn how to check for the significance of the effects.77. This will then allow us to evaluate the impact of a process change78. on our product or process quality. In the final phase of the DMAIC process,79. that is the "control" phase, we ensure80. that the obtained gains are maintained for a long horizon.81. We use standardized documentation.82. We use employee training and we use83. ongoing process monitoring. In session eight, we will introduce the concept of84. control charts,85. the key component for statistical process control.86. We will learn how to construct control charts87. and to calculate the correct 3- Sigma limits88. for the sample average and the sample range.89. And we conclude the course with various applications of this methodology.90. We're looking forward to collaborating with you throughout this class.91.

DMAIC:

1. Define – Intro

1.2. Which brings us to our first topic: define.3. Holly, what do you expect when you're buying a helmet?4. Well, the helmet, the bicycle helmet, should protect your head,5. so it should have a hard protective shell and straps, and it should fit well.6. Then you're defining quality as Dr. Juran does.7. He defines quality as "fitness for use."8. But I wouldn't like a helmet,9. like a yellow helmet like yours, with flowers.10. This is much more to my taste. I agree that11. a helmet should obviously protect your head, but what else are we really looking12. for when we are buying helmets?13. I think the helmet should have the color and14. the shape that I like. Exactly. Today's market is very competitive. So15. consumers can choose from a large variety of different products.16. For example, you want ahelmet to cycle17. to work, so you want a bright helmet. What about18. the competitive cyclists, right?19. What type of criteria would he apply? Well, I'm not a competitive cyclist,20. but what about weight21. and air resistance, low air resistance? So let's agree to broaden our22. definition23. to "fitness for use24. and meeting or exceeding customer expectations."25. But isn't that obvious? Well, not necessarily.26. The involvement of the customer is not obvious, especially not27. in complex environments. One of the most difficult parts of a quality28. improvement program29. is to define the problem and to bring all the stakeholders together30. to define the exact project that will be undertaken.31. This is why the "define" part of the DMAIC process is so important.32. Let's get back to our discussion. What else is important33. in relation to quality? Well, we've agreed34. that the helmet should protect our head, it should be suited for the use that we're35. going to use it for, either36. cycling to work or competitive racing, and it should meet the style37. requirements. So the color or the shape that I want.38. Exactly. We have left39. out one important aspect of quality, though,40. and that is we need to consider the value41. of the quality to the customer. As Godfrey says,

42. "The most fundamental truth is, that quality is relative:43. the customer simply focuses on value44. seen as quality over price."45. We can only succeed if we're able to46. offer more value than our competitors.47. And quality can have many different dimensions. For example,48. product performance, the reliability of the product,49. the durability of the product, service ability. Quality must be defined50. according to what the customer wants51. and this must be in terms of measurable characteristics,52. within the limits of their variability.53.

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2. Define – defining quality

1.2. Hello everyone. Welcome3. to session 1.1 of Quality Engineering and Management.4. In the last video,5. we listened to Martin Grunow talk about6. defining quality, and in this section what we'd like to do then,7. as our learning objectives, we'd like to reiterate8. how we define quality as relative to a set of requirements9. and in terms of customer expectations. And we will compare the concept of10. quality management11. today to the way it was considered in the past,12. and we'll list the major milestones in quality management13. over the last century. So first, to reiterate again what14. Professor Grunow said, to define quality.15. Dr. Juran said it16. could be defined as "fitness for use"-- customer specifications,17. meeting specifications. To expand on that, we can say18. "fitness for use and meeting or exceeding the customer expectations."19. And then we have a20. more recent definition by Professor Godfrey from North Carolina State21. University,22. and he says the most fundamental truth is that quality23. is relative. The customer focuses on value

24. and it sees this value as a ratio25. of quality to price, and26. only when we offer more value than our competitors27. do we truly succeed. So28. we also mentioned quality means different things to different people.29. Quality could be for you the fact that the product works, the performance of the30. product.31. It could be the reliability of the product,32. it could be the features that the product had or,33. maybe, the aesthetics of the product.34. It could be also a perceived quality--how do you35. perceive the quality as your product, or today we're talking a lot about36. sustainability aspects of the product. Quality must be37. defined for each product based on what the customer38. wants in the product through--39. and this is important for our for our course--40. it must be defined through measurable characteristics41. and their limits of variability. So42. quality is always relative to a set of requirements, to a set of specifications.43. These can be functional requirements, these could be44. subjective requirements, and quality means45. meeting or exceeding customer expectations46. depending on what the customer sees as quality.47. So we understand that now.48. What is non-quality? What do I mean by non-quality?49. Quote from Warren Buffett:50. "It takes 20 years to build a reputation and five minutes to ruin it.51. If you think about that, then you'll do things differently."52. And I think this tells us what53. we all know non-quality means. If you think54. of some of the product recalls that have happened recently,55. if you think of the fines that the big companies56. who've had big recalls have to pay or the damage to their reputation or to their sales.57. The past view of quality management58. was that this is very much end-of-line testing.59. The products would come out of the line and be tested, and either they would be scrapped60. or they would be reworked. Quality was viewed as costly and very very reactive,61. something that would add time and resources,62. consumption to your process, but today that has changed. And what we'd like to do now63. is to review64. the main milestones in quality management65. over the past 100 years or so.66. So here we see then from our textbook67. some of the major milestones, and we'd just like to highlight68. the most important ones. And of course we start with the 1920s with Dr. Shewhart69. from Bell Labs.

70. And Dr. Shewhart developed the fundamentals of the statistical methods71. that are used today72. for statistical process control and control charts.73. And Drs. Dodge and Roming worked on statistical sampling plans, also a74. key for quality management, and75. we also had then the contributions of designed experiments.76. So Sir Ronald Fisher,77. he was working on agricultural yields,78. and of course we have Dr. Taguchi, who was looking at79. process and product D.O.E.s for engineers.80. Now, in World War II the US military started using81. statistical methods in order to produce goods82. and ammunition, and after the war83. there was many developments in the84. science of reliability. But it wasn't until85. after the war that the more exciting quality management86. concepts were developed, then, for consumers,87. for consumer production. And of course we start with88. Edward Deming who went to Japan,89. bringing Dr. Shewhart's ideas of statistical process control90. to the Japanese automobile industry, and here we have the birth91. of, with the Japanese, the worth of Toyota Production System,92. also known as lean manufacturing. And this meant93. that the Japanese automobile industry suddenly presented a huge94. competition to the American95. automobile industry. And it was understood96. the power of these quality methods, and97. in the 1980s, Motorola made a huge step98. with their Six Sigma process,99. a data-driven, systematic,100. problem-solving approach following also the DMAIC flow.101. In 1987, we saw the standardization102. of quality standards103. as part of the International Organization for Standardization.104. This was the ISO 9000 standards at the time.105. And today we see the acceptance of quality106. as a critical strategic parameter107. in business planning. And the customers--we are also interested in quality.108. Particularly as we're looking at a more global109. market and production, we're interested in quality,110. and even more so now we're starting to look at sustainability.111. So just to give you an example of Six Sigma.112. So here is a picture of113. the Mini. Now this is not a real example for the Mini but suppose you have an114. automobile115. with 10,000 parts

116. and processes. So117. if you have in those 10,000 parts and processes a failure rate of 6,210118. parts-per-million. So for every million119. part every million parts you have one failure120. and you have 10,000 parts or processes. Then you can expect to have none121. of your automobiles fault-free. If you122. have a Six Sigma quality, if you have controlled your process to123. 3.4 defects per million124. then you will have roughly 97 percent of125. your product defect-free. So126. this is showing us then127. that if you have complex processes, if you have complex products,128. if you use statistics in quality,129. you can push your production from being130. from having 0 good parts131. to having nearly defect-free parts. Now132. we wanted to talk again a little bit also about today's view of quality133. management, and this is from134. a presentation by Dr. Manfred Seiker here in Munich.135. He's worked many years in quality management, and I like the way136. he presents this. He looks at quality management137. as a set of enablers and a set of results.138. And across the bottom you see people, processes,139. products, and then people again. And140. at two different levels, you see subjective and objective. So141. what this means--let's start in the top corner. In order to have142. quality management in your organization, you need to have the leadership,143. the employees, the value and the culture,144. dedicated to quality. These subjective145. ideas that then can be used to enforce146. the objectives, strategy, management,147. and targets for a quality organization, quality in the organization.148. Now then, in order to149. realize these targets, you have to manage change.150. You have to manage change to change your processes, both your151. internal and your external processes, and processes to do with your suppliers,152. to develop quality processes.153. Those are all the enablers. Then we move to the results.154. Having quality processes, having the quality mindsets,155. brings, then, quality products. And again, quality products156. depends on what the customer expectations are.157. You are meeting or exceeding customer expectations.158. And then finally, who does this affect?159. What are the results? You have your customers,160. you have the society that is receiving your products,161. but also as Dr. Seiker points out,

162. we have the stakeholders in the company, a very critical163. part of our entire quality164. management. These are the people interested in the success of the company.165. Now what does it take to realize this?166. Of course, we are looking at statistics in this course. We're going to be looking at167. the processes and products, we're going to be evaluating168. their performance and looking at ways to improve that, but169. what else does this involve? And here,170. in this next slide, Dr. Seiker has added171. all the different people that are involved.172. And you can see here finance, you can see here management.173. You have the quality engineers doing the statistics.174. You have the marketing. You have the product developers.175. You have the communication. You have customers. Everybody in the company176. is involved in the quality management. It is just not--177. it's no longer just the inspection team at the end of the line178. doing a sorting of the final products. It is a mindset,179. it is a philosophy, which then drives the company180. towards a goal of total quality management.181. So in lecture 1.2182. we're going to talk, then, about understanding183. customer expectations as part of the "define" flow.184. Thank you very much!185.

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3. Define – Understandin customer expectations

1.2. Hello everyone. Welcome3. to session 1.1 of Quality Engineering and Management.4. In the last video,5. we listened to Martin Grunow talk about6. defining quality, and in this section what we'd like to do then,7. as our learning objectives, we'd like to reiterate8. how we define quality as relative to a set of requirements9. and in terms of customer expectations. And we will compare the concept of10. quality management11. today to the way it was considered in the past,12. and we'll list the major milestones in quality management13. over the last century. So first, to reiterate again what

14. Professor Grunow said, to define quality.15. Dr. Juran said it16. could be defined as "fitness for use"-- customer specifications,17. meeting specifications. To expand on that, we can say18. "fitness for use and meeting or exceeding the customer expectations."19. And then we have a20. more recent definition by Professor Godfrey from North Carolina State21. University,22. and he says the most fundamental truth is that quality23. is relative. The customer focuses on value24. and it sees this value as a ratio25. of quality to price, and26. only when we offer more value than our competitors27. do we truly succeed. So28. we also mentioned quality means different things to different people.29. Quality could be for you the fact that the product works, the performance of the30. product.31. It could be the reliability of the product,32. it could be the features that the product had or,33. maybe, the aesthetics of the product.34. It could be also a perceived quality--how do you35. perceive the quality as your product, or today we're talking a lot about36. sustainability aspects of the product. Quality must be37. defined for each product based on what the customer38. wants in the product through--39. and this is important for our for our course--40. it must be defined through measurable characteristics41. and their limits of variability. So42. quality is always relative to a set of requirements, to a set of specifications.43. These can be functional requirements, these could be44. subjective requirements, and quality means45. meeting or exceeding customer expectations46. depending on what the customer sees as quality.47. So we understand that now.48. What is non-quality? What do I mean by non-quality?49. Quote from Warren Buffett:50. "It takes 20 years to build a reputation and five minutes to ruin it.51. If you think about that, then you'll do things differently."52. And I think this tells us what53. we all know non-quality means. If you think54. of some of the product recalls that have happened recently,55. if you think of the fines that the big companies56. who've had big recalls have to pay or the damage to their reputation or to their sales.57. The past view of quality management58. was that this is very much end-of-line testing.59. The products would come out of the line and be tested, and either they would be scrapped

60. or they would be reworked. Quality was viewed as costly and very very reactive,61. something that would add time and resources,62. consumption to your process, but today that has changed. And what we'd like to do now63. is to review64. the main milestones in quality management65. over the past 100 years or so.66. So here we see then from our textbook67. some of the major milestones, and we'd just like to highlight68. the most important ones. And of course we start with the 1920s with Dr. Shewhart69. from Bell Labs.70. And Dr. Shewhart developed the fundamentals of the statistical methods71. that are used today72. for statistical process control and control charts.73. And Drs. Dodge and Roming worked on statistical sampling plans, also a74. key for quality management, and75. we also had then the contributions of designed experiments.76. So Sir Ronald Fisher,77. he was working on agricultural yields,78. and of course we have Dr. Taguchi, who was looking at79. process and product D.O.E.s for engineers.80. Now, in World War II the US military started using81. statistical methods in order to produce goods82. and ammunition, and after the war83. there was many developments in the84. science of reliability. But it wasn't until85. after the war that the more exciting quality management86. concepts were developed, then, for consumers,87. for consumer production. And of course we start with88. Edward Deming who went to Japan,89. bringing Dr. Shewhart's ideas of statistical process control90. to the Japanese automobile industry, and here we have the birth91. of, with the Japanese, the worth of Toyota Production System,92. also known as lean manufacturing. And this meant93. that the Japanese automobile industry suddenly presented a huge94. competition to the American95. automobile industry. And it was understood96. the power of these quality methods, and97. in the 1980s, Motorola made a huge step98. with their Six Sigma process,99. a data-driven, systematic,100. problem-solving approach following also the DMAIC flow.101. In 1987, we saw the standardization102. of quality standards103. as part of the International Organization for Standardization.104. This was the ISO 9000 standards at the time.105. And today we see the acceptance of quality

106. as a critical strategic parameter107. in business planning. And the customers--we are also interested in quality.108. Particularly as we're looking at a more global109. market and production, we're interested in quality,110. and even more so now we're starting to look at sustainability.111. So just to give you an example of Six Sigma.112. So here is a picture of113. the Mini. Now this is not a real example for the Mini but suppose you have an114. automobile115. with 10,000 parts116. and processes. So117. if you have in those 10,000 parts and processes a failure rate of 6,210118. parts-per-million. So for every million119. part every million parts you have one failure120. and you have 10,000 parts or processes. Then you can expect to have none121. of your automobiles fault-free. If you122. have a Six Sigma quality, if you have controlled your process to123. 3.4 defects per million124. then you will have roughly 97 percent of125. your product defect-free. So126. this is showing us then127. that if you have complex processes, if you have complex products,128. if you use statistics in quality,129. you can push your production from being130. from having 0 good parts131. to having nearly defect-free parts. Now132. we wanted to talk again a little bit also about today's view of quality133. management, and this is from134. a presentation by Dr. Manfred Seiker here in Munich.135. He's worked many years in quality management, and I like the way136. he presents this. He looks at quality management137. as a set of enablers and a set of results.138. And across the bottom you see people, processes,139. products, and then people again. And140. at two different levels, you see subjective and objective. So141. what this means--let's start in the top corner. In order to have142. quality management in your organization, you need to have the leadership,143. the employees, the value and the culture,144. dedicated to quality. These subjective145. ideas that then can be used to enforce146. the objectives, strategy, management,147. and targets for a quality organization, quality in the organization.148. Now then, in order to149. realize these targets, you have to manage change.150. You have to manage change to change your processes, both your151. internal and your external processes, and processes to do with your suppliers,

152. to develop quality processes.153. Those are all the enablers. Then we move to the results.154. Having quality processes, having the quality mindsets,155. brings, then, quality products. And again, quality products156. depends on what the customer expectations are.157. You are meeting or exceeding customer expectations.158. And then finally, who does this affect?159. What are the results? You have your customers,160. you have the society that is receiving your products,161. but also as Dr. Seiker points out,162. we have the stakeholders in the company, a very critical163. part of our entire quality164. management. These are the people interested in the success of the company.165. Now what does it take to realize this?166. Of course, we are looking at statistics in this course. We're going to be looking at167. the processes and products, we're going to be evaluating168. their performance and looking at ways to improve that, but169. what else does this involve? And here,170. in this next slide, Dr. Seiker has added171. all the different people that are involved.172. And you can see here finance, you can see here management.173. You have the quality engineers doing the statistics.174. You have the marketing. You have the product developers.175. You have the communication. You have customers. Everybody in the company176. is involved in the quality management. It is just not--177. it's no longer just the inspection team at the end of the line178. doing a sorting of the final products. It is a mindset,179. it is a philosophy, which then drives the company180. towards a goal of total quality management.181. So in lecture 1.2182. we're going to talk, then, about understanding183. customer expectations as part of the "define" flow.184. Thank you very much!185.

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Define – Understanding customer expetations

1.2. Hello everyone, and welcome to session 1.2 of3. Quality Engineering and Management. So, in the last section we talked about4. defining quality, and now we want to look at

5. the important concepts of understanding customer expectations6. to define the problem, the heart7. of the "define" phase of our DMAIC flow.8. So for the learning objectives, we'd like you to be able to explain9. the relevance of the "define" phases in the DMAIC flow,10. and discuss the differences between a problem11. in the process outputs, and causes of the problem, which should be12. in the process itself or the process inputs.13. And then we will list the key14. parts of the "define" phase in a DMAIC project.15. So, first of all, what we're going to use16. is an example here from Dr. Reiner17. Hutwelker, who's one of our course contributors. He's a Six Sigma Black Belt,18. and here he has this scenario for cookie baking.19. So you have the inputs for your cookies.20. You have flour, you have sugar, you have eggs,21. you have salt. Those all go into the process.22. Process: you have your cook,23. the cook weighs the ingredients, mixes them together,24. forms the cookies, and puts them in the oven. And your output25. is a burnt cookie. What's your problem?26. Clearly here you have a problem; you have a burnt cookie.27. Now, this may seem very very obvious to you,28. but, as we show in this cartoon, defining the problem is not always so easy.29. This is from project cartoons, so you have30. how the customer explained what they31. wanted, how the project manager understood what they wanted,32. and then what the customer finally received. In a complex organization33. with a complex product, you may know the customer expectations,34. but you may not have understood them--or you may know the customer expectations35. and then they change, or you may know the customer expectations,36. but your process is not capable of producing37. to that level of quality. So38. it's important to be able to define39. the problem very, very clearly--40. clearly and accurately-- before you start any type of41. project.42. And this has been well-known in the literature.43. You can see for many, many years people have discussed,44. "What is a problem? How do you define a problem?"45. And we can say46. a problem is an undesirable state;47. it is not meeting the customer expectations,48. or it could be improved49. in order to exceed the customer expectations.50. It's a gap--a problem is a gap--

51. in the actual state, the as-is state,52. and the desired state, the to-be state.53. But now we need to, as part of our project--as part of "define"--54. to define the problem, and here again55. there's a lot of debate with scholars,56. how to define a problem correctly.57. How can you verbally state the problem,58. how can you write down clearly what is the problem.59. And the conclusion in general is that this depends on the circumstances.60. It depends on the situation, it depends on the perspectives of the people.61. But for our DMAIC project we need to clearly understand62. what is the problem so that we can follow63. our flow in order to effect64. a process improvement. So65. we're going back, then, just briefly to the cookie66. scenario. Again you have inputs,67. you have processes and then you have68. and output. And here we have an output that the cookie is burnt.69. And it's important to understand in this section70. that problems71. are always attributes of the72. output a process. Here the example73. is that the cookie is burnt. The problem is not that74. we cooked too long, we baked too long, or we didn't use enough75. eggs. The problem is that the cookie is burnt.76. So, to restate this, and again this is from77. Dr. Hutwelker, a problem is the deviation78. of a required attribute in the product in the79. output of a process. This attribute, then,80. can be assigned to either a problem with the quality81. of the product, a problem with the availability--maybe you don't have82. enough,83. or it's late--or a problem that the product consumes too many84. resources. And you have a range, then--85. a target range you would like your quality,86. your availability, and your resource consumption87. to fall within a desired range.88. And when you look at the output, you see if those89. are achieved or not. So90. in the "define" phase of the91. DMIAC process--and this can be extended into Six Sigma--92. you want to do at least the following steps:93. Customers, employees, and managers94. need to identify problems, or you can call them95. potentials, in processes and in products.96. These need to be evaluated,

97. the relevance of the output parameters need to be evaluated,98. and the impact of these output parameters99. need to be estimated on the fulfillment of the100. output quality. So how critical are these parameters for101. output quality? The information is to be summarized102. about the process, about the important outputs,103. and about the problems that are observed. And you need to104. indicate the relevance of this information on the customer expectations105. and on the business. And finally then to agree on an objective106. for the important critical-to-quality parameters,107. and on the scope of the entire project. And then, of course,108. as part of "define" in a real project, you would define the team,109. you define your deadlines, and that would all be then clarified110. before you move into the analysis,111. the improvement, and the control parts-- the measurement, analysis,

improvement,112. and control parts of your DMAIC113. flow.114. So, to do this in our course, we have developed a small115. project, the DMAIC project, and this is based on116. hiking boot production--loosely based on hiking boot production--117. and we use this, then, to help you118. go through each step of the DMAIC process.119. So, what we'd like you to do now--please complete the practice problem120. for defining quality and then start121. the DMAIC project in this section. We have the first part is the introduction122. and the second part is called123. defining customer expectations and basic process understanding.124. Next week,125. and then for the next seven weeks, we're going to be doing126. the statistics for quality. And in127. each section we're going to try to relate this, then, back128. to our DMAIC project129. with the hiking boots. And of course we have practice problems related to quality

in each,130. but from next week on we'll be looking in131. detail at the measure, analyze,132. improve, and control sections, and so it's very important to understand, then,133. that the "define" phase is your starting point.134. It's the define phase that then starts off135. everything else for the successful completion136. of your process improvement project. Thank you very much.137.

Define -