Session Managing Quality. Session Outline Continuous Improvement Employee Empowerment Six Sigma...

Session

Managing Quality

Session Outline

Continuous Improvement Employee Empowerment Six Sigma Taguchi Concepts Just-in-Time (JIT) Benchmarking

This Session

Weekly Activity: Leadership Style In 1939, Professor Kurt Lewin undertook a study which

identified three (3) major leadership styles: Authorative (autocratic) Participative (democratic) Delegative (Laissez-Faire)

Answer the 18 questions at: http://psychology.about.com/library/quiz/bl-

leadershipquiz.htm See what your predominant leadership style is.

Topic Example Video

The following video explains what is quality.

Take note of the key points. http://www.youtube.com/watch?

v=QJNVrY_Z2NM

“The degree of excellence of a thing” (Webster’s Dictionary)

“The totality of features and characteristics that satisfy needs” (ASQ)

Fitness for useQuality of design

What Is Quality?

Definitions of Quality

American Society of Quality: Product characteristics & features that affect customer satisfaction

User-Based: What consumer says it is Manufacturing-Based: Degree to which a

product conforms to design specification Product-Based: Level of measurable

product characteristic

A Japanese character that symbolizes a broader dimension than quality, a deeper process than education, and a more perfect method than persistence

Takumi

Fitness forConsumer Use

Fitness forConsumer Use

Producer’s PerspectiveProducer’s Perspective Consumer’s PerspectiveConsumer’s Perspective

Quality of ConformanceQuality of Conformance

• Conformance to criteria

• Cost

Quality of DesignQuality of Design

• Quality characteristics• Price

MarketingMarketingProductionProduction

The Meaning of QualityThe Meaning of Quality

The Meaning of Quality

Quality of Conformance

Ensuring product or service produced according to design

Depends onDesign of production processPerformance of machineryMaterialsTraining

The Operations Manager must recognize:

1.1. The tangible component of The tangible component of services is importantservices is important

2.2. The service process is The service process is importantimportant

3.3. The service is judged against The service is judged against the customer’s expectationsthe customer’s expectations

4.4. Exceptions will occurExceptions will occur

Service Quality

Operation Reliability & durability Conformance Serviceability Appearance Perceived quality

Quality

Goods Dimensions of Quality

UPS Service Specifications

Under-standing

TangiblesReliability

CommunicationCredibility

Security

Responsiveness

Competence

Courtesy

Access

Service Quality Attributes

Service Quality Determinants Reliability – consistency and dependability Responsiveness – willingness/readiness of

employees to provide service; timeliness Competence – possession of skills and

knowledge required to perform service Access – approachability and ease of contact Courtesy – politeness, respect,

consideration, friendliness of contact personnel

Service Quality Determinants Communication – keeping customers informed

in languages they understand Credibility – trustworthiness, believability,

honesty Security – freedom from danger, risk or doubt Understanding/knowing the customer – making

the effort to understands the customer’s needs Tangibles – the physical evidence of the service

International Standards

Information regarding International and Australian standards for quality management and quality system elements guidelines can be obtained from state and territory offices of Standards Australia .

A good starting point would be the state office: Standards Association of Australia.

Website: www.standards.com.au

Productivity Improvements

Sales Gains Improved response Higher Prices Improved reputation

Reduced Costs Increased productivity Lower rework and scrap

costs Lower warranty costs

Increased Profits

Improved Quality

Costs & market share

Company’s reputation

Product liability

International implications

Costs of Quality Prevention costs - reducing the potential for

defects through planning, design, process, training, information

Appraisal costs - evaluating products, inspection and testing, test equipment, operator suitability

Internal failure - of producing defective parts or service, scrap/wastage, rework, process failure, process down-time, price reduction

External costs - occur after delivery, customer complaints, product returns, warranty, product liability, lost sales

External Failure

Internal Failure

Prevention

Appraisal

Total Cost

Quality Improvement

Total CostTotal Cost

Costs of Quality

Quality Philosophers

Walter ShewhartW. Edwards Deming Joseph JuranPhilip CrosbyArmand Feigenbaum

Topic Example Video

The following video discusses Total Quality Management.


v=U_GnYwReTzc

TQM

Encompasses entire organization, from supplier to customer

Stresses a commitment by management to have a continuing,

company-wide, drive toward excellence in all aspects of

products and services that are important to the customer.

Intense Customer FocusIntense Customer Focus

MeasurementMeasurement

QualityQuality

Continual ImprovementContinual Improvement

EmpowermentEmpowerment

Total quality management

Total Quality Management

1. Customer defined quality2. Top management leadership3. Quality as a strategic issue4. All employees responsible for quality5. Continuous improvement6. Shared problem solving7. Statistical quality control8. Training & education for all employees

Organizational Practices

Quality Principles

Employee Fulfillment

Attitudes (e.g., Commitment)

How to Do

What to Do

EffectiveBusiness

EffectiveBusiness

CustomerSatisfaction

CustomerSatisfaction

Achieving TQM

TQM Activity Flowmodel


Quality Principles

Employee Fulfillment

Customer Satisfaction


Leadership Mission statement Effective operating procedure Staff support TrainingYields: What is important and what

is to be accomplished

Quality Principles

Customer focus Continuous improvement Employee empowerment Benchmarking Just-in-time Tools of TQMYields: How to do what is important and to

be accomplished

Employment Fulfillment

Empowerment Organizational commitmentYields: Employees’ attitudes that

they can accomplish what is important and to be accomplished

Customer Satisfaction

Winning orders Repeat customersYields: An effective organization with

a competitive advantage

14. Make top managers responsible13. Train employees in new skills12. Train employees in statistics11. Require quality work10. Avoid strictly numerical goals9. Encourage cooperation8. Drive out fear7. Raise line supervisor quality6. Train workers5. Identify problems4. Fewest suppliers3. Statistical control2. Continuous quality1. Plan for future

Deming:Productivity Improvements

Concepts of TQM

Continuous improvement Employee empowerment Benchmarking Just-in-time (JIT) Taguchi concepts Knowledge of TQM tools

Topic Example Video

The following video outlines the Just-in-Time (JIT) concept as practiced by MacDonalds.


v=FpwwcpubUIw

‘‘Pull’ system of production scheduling Pull’ system of production scheduling including supply managementincluding supply management Production only when signaledProduction only when signaled

Allows reduced inventory levelsAllows reduced inventory levels Inventory costs money and hides process Inventory costs money and hides process

and material problemsand material problems

Encourages improved process and Encourages improved process and product qualityproduct quality

Just-in-Time (JIT)

Reducing inventory revealsproblems so they can be solved

ScrapUnreliable Vendors

Capacity Imbalances

Just-in-Time (JIT)

Engineering and experimental Engineering and experimental design methods to improve design methods to improve product and process designproduct and process design Identify key component and process Identify key component and process

variables affecting product variationvariables affecting product variation

Taguchi ConceptsTaguchi Concepts Quality robustnessQuality robustness Quality loss functionQuality loss function Target-oriented qualityTarget-oriented quality

Taguchi Concepts

1. Customer focus2. Work systems and processes3. Continuous improvement4. People working together5. Systematic analytical tools and

techniques

The Five Platforms of TQM

Customer Focus External customers - identify who they are

and exactly what they want from the organisation.

Internal customers - need to work together to satisfy external customers by integrating all internal operations into an interdependent ‘whole’. This adds value, achieves continuous improvement and better results.

Trading partnerships - forging co-operative relationships with customers and suppliers to so everyone ‘wins’.

Work Systems and Processes

Improving systems by simplifying and streamlining them to avoid unnecessary activities and duplication of effort and enable people to ‘get it right the first time”.

Four main focus areas: Suppliers (inputs) Process (ie. bottlenecks) Transfer (prior to delivery/handover) Customer service (post-purchase follow-up)

Represents continual Represents continual improvement of all processes improvement of all processes

Involves all operations and work Involves all operations and work centers including suppliers and centers including suppliers and customerscustomersPeople, Equipment, Materials, People, Equipment, Materials,

ProceduresProcedures

Continuous Improvement

Continuous Improvement

Japanese word for continuous incremental improvement is ‘Kaizen’.

The Kaizen approach is “to keep examining everything that is done so see how it can be done better”.

Incremental improvements are cost effective and add up to improved productivity and performance in the long run.

People Working Together

“When spider webs unite, they can tie up a lion” - Ethiopian Proverb.

To achieve ongoing improvements to processes, products, services and the organisation as a whole, people must work together.

This requires an attitude that places, quality, teamwork and continuous improvement at the very core of an organisation’s culture.

Cultures therefore need to be based on shared values and vision, commitment to goals, an empowered, creative workforce, willing to learn, change, develop and grow who operate in a team environment with supportive management.

Getting employees involved in Getting employees involved in product and process improvementsproduct and process improvements 85% of quality problems are due 85% of quality problems are due

to process and materialto process and material TechniquesTechniques

Build communication networks Build communication networks that include employeesthat include employees

Develop open, supportive supervisorsDevelop open, supportive supervisors Move responsibility to employeesMove responsibility to employees Build a high-morale organizationBuild a high-morale organization Create formal team structuresCreate formal team structures

Employee Empowerment

Systematic Tools & Techniques

Used to investigate and improve systems and procedures.

Provides objective and systematic ways to identify and resolve problems, streamline systems and process and build quality into those systems.

Topic Example Video

The following video explains the benefits of organisations using a six sigma approach.


v=aNMULFcLuIM

Normal Distribution

68%

95%

99.7%

Approximate percentage of area within given standard deviations (empirical rule).

Two meaningsTwo meanings Statistical definition of a process Statistical definition of a process

that is 99.9997% capable, 3.4 that is 99.9997% capable, 3.4 defects per million opportunities defects per million opportunities (DPMO)(DPMO)

A program designed to reduce A program designed to reduce defects, lower costs, and improve defects, lower costs, and improve customer satisfactioncustomer satisfaction

Six Sigma

Mean

Lower limits Upper limits

3.4 defects/million

±6

2,700 defects/million

±3

Figure 6.4

Six Sigma

Originally developed by Motorola, Originally developed by Motorola, adopted and enhanced by adopted and enhanced by Honeywell and GEHoneywell and GE

Highly structured approach to Highly structured approach to process improvementprocess improvement A strategyA strategy A discipline - DMAICA discipline - DMAIC 66

Six Sigma

1.1. Define critical outputs Define critical outputs and identify gaps for and identify gaps for improvementimprovement

2.2. Measure the work and Measure the work and collect process datacollect process data

3.3. Analyze the dataAnalyze the data

4.4. Improve the processImprove the process

5.5. Control the new process to Control the new process to make sure new make sure new performance is maintainedperformance is maintained

DMAIC ApproachDMAIC Approach

Six Sigma

Emphasize defects per million Emphasize defects per million opportunities as a standard metricopportunities as a standard metric

Provide extensive trainingProvide extensive training Focus on corporate sponsor support Focus on corporate sponsor support

(Champions)(Champions) Create qualified process improvement Create qualified process improvement

experts (Black Belts, Green Belts, etc.)experts (Black Belts, Green Belts, etc.) Set stretch objectivesSet stretch objectives

This cannot be accomplished without a major commitment from top level

management

Six Sigma

Topic Example Video

The following video explains the 7 quality control tools.


v=LdhC4ziAhgY

Tools of TQM Tools for generating ideas

Check sheet Scatter diagram Cause and effect diagram

Tools to organize data Pareto charts Process charts (Flow diagrams)

Tools for identifying problems Histograms Statistical process control chart

Seven Tools for TQM

TQMTQM

Flexible processEducation and training

Flexible processEducation and training

TECHNOLOGY

STRUCTURE

PEOPLE

CHANGE AGENT

Education and trainingSupportive Performance Evaluation and reward

DecentralisationReduced vertical differentiationReduced division of labourWider span of controlCross-functional teams

Active leadership from top management

Implementing TQM

Many problemsMany problems Worker fatigueWorker fatigue Measurement errorMeasurement error Process variabilityProcess variability

Cannot inspect quality into a Cannot inspect quality into a productproduct

Robust design, empowered Robust design, empowered employees, and sound employees, and sound processes are better solutionsprocesses are better solutions

Inspection

1.1. At the supplier’s plant while the supplier At the supplier’s plant while the supplier is producingis producing

2.2. At your facility upon receipt of goods At your facility upon receipt of goods from the supplierfrom the supplier

3.3. Before costly or irreversible processesBefore costly or irreversible processes4.4. During the step-by-step production During the step-by-step production

processprocess5.5. When production or service is completeWhen production or service is complete6.6. Before delivery to your customerBefore delivery to your customer7.7. At the point of customer contactAt the point of customer contact

Inspection

Also known as source controlAlso known as source control The next step in the process is The next step in the process is

your customeryour customer Ensure perfect product Ensure perfect product

to your customerto your customer

Poka-yoke is the concept of foolproof devices or techniques designed to pass

only acceptable product

Source Inspection

OrganizationOrganization What is What is InspectedInspected StandardStandard

Arnold Palmer Arnold Palmer HospitalHospital

BillingBilling

PharmacyPharmacy

LabLab

NursesNurses

AdmissionsAdmissions

Accurate, timely, and Accurate, timely, and correct formatcorrect format

Prescription accuracy, Prescription accuracy, inventory accuracyinventory accuracy

Audit for lab-test accuracyAudit for lab-test accuracy

Charts immediately Charts immediately updatedupdated

Data entered correctly and Data entered correctly and completelycompletely

Table 6.5Table 6.5

Service Industry Inspection

PDCA Cycle

4.Act:

Implement the plan

1.Plan:

Identify the improvement and make a plan

3.Check:

Is the plan working

2.Do:Test the plan

The Quality Circle Process

PresentationImplementation

Monitoring

SolutionProblem results

Problem Analysis

Cause and effectData collection and analysis

Problem IdentificationList alternatives

ConsensusBrainstorming

TrainingGroup processes

Data collectionProblem analysis

Organization8-10 members

Same areaSupervisor/moderator

Use internal

benchmarkin

g if you’re big

enough

Selecting best practices to use as a Selecting best practices to use as a standard for performancestandard for performance Determine what to Determine what to

benchmarkbenchmark Form a benchmark teamForm a benchmark team Identify benchmarking partnersIdentify benchmarking partners Collect and analyze benchmarking Collect and analyze benchmarking

informationinformation Take action to match or exceed the Take action to match or exceed the

benchmarkbenchmark

Benchmarking

Use of meta tagsUse of meta tags Yes:Yes: 70% 70%, No:, No: 30% 30%

Meaningful homepage titleMeaningful homepage title Yes:Yes: 97% 97%, No:, No: 3% 3%

Unique domain nameUnique domain name Yes:Yes: 91% 91%, No:, No: 9% 9%

Search engine registrationSearch engine registration Above Above 96%96%

Average loading speedAverage loading speed 28K: 19.31, 56K: 28K: 19.31, 56K: 10.88, T1: 2.5910.88, T1: 2.59

Average number of spelling errorsAverage number of spelling errors 0.160.16

Visibility of contact informationVisibility of contact information Yes:Yes: 74% 74%, No:, No: 26% 26%

Presence of search enginePresence of search engine Yes:Yes: 59% 59%, No:, No: 41% 41%

Translation to multiple languagesTranslation to multiple languages Yes:Yes: 11% 11%, No:, No: 89% 89%

Table 6.3Table 6.3

Website Benchmarking Factors

Customer focus Planning Process improvement Supplier relationships Involvement and commitment Communication Leadership

Best Practice Quality Checklist

Customer Focus

Do we define quality in terms of customer expectations and perceptions?

Do we clearly understand our customer’s expectations?

Do we strive to meet and exceed those expectations?

Do we have service-level agreement with our key customers that formalises expectations and reviews procedures?

Planning

Do we have a well tested strategic and quality plan that identifies our quality vision?

Do our employees know and support our quality plan?

Is our quality plan supported in day-to-day actions?

Do we set quantifiable targets for improvements?

Process Improvement

Have we documented and standardised our key business processes and evaluated them against customer expectations?

Do we continually improve these processes?

Supplier relationships

Do we select our suppliers based on best value for money and their commitment to continuous improvement?

Do we have well developed working relationships with our key suppliers?

Do we have partnership arrangements with key suppliers that set out our expectations, performance standards and procedures, and problem-solving processes?

Involvement and Commitment

Do our managers and employees know they are each responsible and accountable for quality?

Are they trained in TQM tools and techniques, including team building?

Do they have 'total quality attitudes' and behaviours?

Communication

Do we measure our results and communicate them to all employees?

Do we benchmark with other organisations?

Do people share information and contribute ideas?

Leadership

Is management fully committed to implementing total quality?

Do they take a strong and visible role in leading change?

Are they role models for total quality attitudes, actions and behaviours?

Recap Video

The following video recaps on the importance of quality for organisations.

Take note of the key points. http://www.youtube.com/watch?v=rtyQgm-

n7KU

Task 1: Undertake Simulation Games: Heizer & Render –

Managing Quality Ch. 6. http://wps.prenhall.com/bp_heizer_opsmgmt_10/147/37738/9661053.cw/index.html

Task 2: Undertake Chapter Self-study Quizz: Heizer & Render –

Managing Quality Ch. 6. http://wps.prenhall.com/bp_heizer_opsmgmt_10/147/37738/9661053.cw/index.html

Task 3: Undertake Case Study – Westover Electric Inc. http://wps.prenhall.com/bp_heizer_opsmgmt_10/147/37738/9661053.cw/index.html

Discuss the questions outlined in the case study.

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