The Quality Transformation Journey · Going from product focused to process focused quality TQM •...

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The Quality Transformation Journey

November 5th , 2013



Trends in Quality Management and Methodology

Rotem Greener, Director, Tefen IL

33

Modern quality organizations face challenging requirements

• Quality as part of the

business strategy

• Reduced revenues, share &

margins

• Tightened Regulations

• Demand for reduced Lead

Time

• Increased data

management complexity

x

• Quality at top management

level – no longer a support

function

• Reduce cost of quality

• Zero tolerance for mistakes

• Integrated approach for QA

and QC operations

• Improve QC efficiency

• Effective real time analysis

Trends

Implications

Going from product focused to process focused quality

TQM

• Quality as a

purpose

• Focus on product

quality

1950’s-

1970’s

1980’s

Lean – Quality at the source

• Recognized the

crucial effect of the

process on quality

• Empowers

employees to

achieve “Zero

Defects”

1990’s

-2000

Six Sigma

• Focus on the

variance of the

process

• Strong emphasis

on statistical

thinking and fact

based approach 2010-

Quality Engineering

• “Right First Time”

approach in focus

• Design robust and

forecasted

processes in

various industries

Demand for reducing cost of quality is increasing

55

Quality Management Objectives (LNS benchmark of 500 discrete manufacturing companies 2012)

A clear definition and methodology for measurement & analysis of

quality costs is required in the organization

66

The quality organization is evolving to ensure value

Quality as part of the

Value Stream

Quality as part of the

Value Stream • QC embedded in the value stream organization

Lean QualityLean Quality

• Avoid over-compliance

• QC & QA processes improvement that reduce lead time and increase

efficiency – e.g. batch records, sampling and testing

• Certify non-professional operators to perform QC work on the line

Quality support to

R&D

Quality support to

R&D

• Quality organization involved in defining market requirements

• DFX implementation

Implementing Statistical Thinking

Implementing Statistical Thinking

• Customers suffer mainly from the variance of the process

• The idea – Putting the variance up front as part of the daily analysis

across the organization and not just in the quality department

Statistical Thinking

� The average is just an average

� Make sure you eliminate irregularities

� Always use standard deviation to challenge

your conclusions

� For Lead time analysis it is better to use

median and variance (long tail effect)

� Use SPC to control the process, not

just the product

77

Train your staff to think and act statistics



Quality360 Methodology

So what needs to be done?

Effective processes with minimum waste and

minimum variance along the entire value chain of

the product / service

Certification & Standardization

Compliance with regulatory requirements,

certification and standardization of the

product/ service

• Optimal performance level of all product / service abilities

• Compliance with product / service quality targets

Performance & Failures

The ability to identify customer needs and

provide product / service beyond

expectations

Exceeding Customer Expectations

Effective Processes

In order to implement the standards and exceed them over time we have to build an optimal operating model

1010

Creating a quality culture

and continuous improvement

Creating a quality culture

and continuous improvement

Understanding and predicting

customer needs

Understanding and predicting

customer needs

Quality management

and support of core-processes

Quality management

and support of core-processes

Organizational culture and capabilities

building

Organizational culture and capabilities

building

Development and

implementation of quality

methodologies

Development and

implementation of quality

methodologies

Management InfrastructureManagement Infrastructure

The purpose of the operational model is to create a continuous improvement process that will support meeting quality targets

Understanding and predicting customer needs - delivering a product / service with properties that are beyond the customer expectations

1111

Basic

Performance

Excitement

Performing activities correctly will not increase the satisfaction but their absence will cause dissatisfaction

CategoryDefinition

Performing activities correctly will cause high satisfaction and their absence will cause dissatisfaction (satisfaction is proportional to performance level)

Performing activities will cause high satisfaction and perception of the product /service as of high quality (“WOW effect”)

Kano Model

Satisfaction

FulfilledNot fulfilled

Indifference Area

Dissatisfaction

The quality organization needs to develop skills for understanding market and customer behavior

Quality management and support core processes

1212

Organizational culture and capabilities building in the organization - how we build capabilities?

1313

Provide tools and

knowledge through

training and coaching

Create a unified

language of quality

Use change management

tools with collaboration

of the management

1414

Methodologies and tools

USLLSL

USLLSL

USLLSL

failure!

EliminateDefective

items!

Lower Variance

target

xbar (m)

s

LSL

s s s s s s

USL

σσσσ

Continuous improvementSix Sigma

Variability

reduction

Qu

ali

ty m

eth

od

& t

oo

lsManagement

performance

Root Cause :analysis

5 why’sfishbone

CAPA

Risk management

Summary

The quality organization should no longer act or be considered as a

support function, but as part of the value stream

The process and the product are gradually designed to maximize

robustness and self testing

The quality organization should be involved in analyzing and

understanding of customer needs



Lean Transformations in Quality -Case Study

QC Labs operations in a leading pharmaceutical company

Pete Caldwell, Partner , Tefen UK

17

Improvements in Quality impact the whole value-stream

Not a support function…

But an integral part

of the value-stream’s

performance

An integral

part of the

value-stream

Q

Q Q Q

• Improving cost, quality & performance

• Avoiding local optimisation

• Implementing continuous improvement

Continuous improvement drives value stream improvements; not local optimisation

18

Improvements in Quality impact the whole value-stream

Not a support function… Q

Q Q Q

The ultimate

QP QP QP QP QP

19

Improved service

Reduced cost

Superior leaders

Lean Quality: not just cost ............

Highvalue-

added content

Highvalue-

added content

� High proportion of QC

activities adding value

� Minimized waste (OOS,

retests, admin,

documentation)

In pursuitof perfectionIn pursuitof perfection

� Leaders drive success from their teams

� Relentless pursuit of waste and cost

� CI an integral part of daily operations

At the pull of the

customer

At the pull of the

customer

� Campaigning only within lead-time targets

� Customer does not wait for Quality because of big batches

Speedy product flow

Speedy product flow

� QO in synch with value streams –no queuing

� Speedy deviation and problem handling

Aligned to the customer

Aligned to the customer

� Org structure, planning processes and layouts aligned to the value-streams

� Organisational

change

� Systems change

� Process change

� People change

� Organisation redesign

� Network redesign

� Systems strategy

� Low hanging fruit

� Processes redesign

� Roles redesign

� Improved interfaces &

communication

� Behavioural change

Vision & strategy

Short-term

TransformationImplementation

Transformation journey

� Contribute to the overall strategy

� Understand current performance and ‘blockers’

� Develop a clear vision and commitment

� Address all areas of scope (strategic and operational)

� Build an action plan; gain commitment

� Build a governance process

2-3 years

Programme management & organisational development

Long-term

� Challenge operating methods and practices

� Facilitate involvement of staff at all levels

� Implement KPIs & reporting tools

� Support pilot / feasibility projects

� Provide lean six sigma training and coaching

Project-driven Way-of-life

Vision & strategy TransformationImplementation

Start with a vision! (and a strategy)

2-3 years

CURRENT

� Costs

� Delivery, lead-time

� Quality

� Productivity

� Headcount

PERFORMANCE

� Strategic approach

� Technology, systems

� Facilities, layout

� Org structure

� Operation processes

PRACTICES

VISION

� Costs

� Delivery, lead-time

� Quality

� Productivity

� Headcount

PERFORMANCE

� Strategic approach

� Technology, systems

� Facilities, layout

� Org structure

� Operation processes

PRACTICES

Impact analysis

STRATEGY

� Between

current and

achievable

performance

BENEFIT

� Action plan, with

investment and

resources required

to achieve vision

COST

Business

case

STRATEGIC PRIORITIES

Tefenbenchmarks

Tefenbenchmarks1 2 4

3

Root cause analysis

BENEFIT

COMPETITIVE

Price

Quality

Service

Uniqueness

CONSTRAINTS

Facilities

People

Supply

Demand

Cash

TRADE-OFFS

Long-term vs short-term

Utilisation vs flexibility

Cost vs risk

Establish strategic priorities, drivers, trade-offs and principles

� Structured interviews to gain understanding of priorities, drivers, constraints and overall philosophy with its principles and trade-offs

� High-level targets for cost, quality and delivery metrics

� Prioritise QA and QC processes for redesign

� Process/function matrix to prioritise the key business processes according to their impact on quality and drivers, such as workload per department, cost, lead-time, customer value etc.

Gap Analysis (setup elements)

� Quality philosophy:

� Error-proofing?

� 100% testing?

� Risk management?

� Testing at source?

� Raw material pre-approved?

� Organizational structure:

� QC reports to manufacturing?

� QC structure aligned to product-streams of functional?

� Empowerment? Culture of improvement?

� Technology:

� Test methods?

� Information management?

� Layout:

� Proximity? Co-location?

� Functional layout? Or product-streams?

� Workplace organisation & 5S?

Gap Analysis (operational elements)

� Planning:

� Time-standards?

� Capacity models?

� Skills matrix?

� Processes for matching capacity with demand?

� Scheduling and doing the core testing operations:

� Daily scheduling?

� Time-standards?

� “Standard work”

� Simple processes

� Checking and managing:

� Getting data from the IS system

� Time-standards

� Leading, and balanced, metrics

� Continuously acting on learnings:

� Improvement processes

� Spare resource

� Culture and rewards

A lean quality vision

Aligning resources to customer needs

Capacity plans + flexibility = amount and skills of people needed

�Skills gaps identified and prioritised

according to resources modelled

�Allowing training and resourcing

strategies to be defined to meet

demand

Resource modelling based on standards Training strategy

Activity standards to

plan resources and meet demand

Skill gaps assessed for each resource

Align

QUALITY CONTROL ORGANIZATION

BIOCHEMISTRYGENERAL

CHEMISTRYTISSUE CULTURE MICRO-BIOLOGY

EARLY SHIFT

DAY SHIFTEARLY SHIFT

LATE SHIFT

DAY SHIFT

UPSTREAM DOWNSTREAM PACKING

NIGHT SHIFT

GENERAL

SAMPLE MGT

LATE SHIFT

LAB HELPERS

QC SUPPORT

CHECK & VALIDATE

Recognising the problems with functional organisations Align

As s performance was poor

� Poor on-time delivery of QC before lean quality programme:

� Typically 20% - 40%

� Causes delays in manufacturing

� Prevents effective planning

� Lead-times too long:

� Typically 1 month for ½-finished product

� Manufacturing must wait for results before continuing.

� Costing millions of Euros per year.

� Two functional labs testing samples for one customer

� Lead-time excessive in non-chrom:

14 days!

� Takes too long to start (though test-

time is shorter)

� Coordination between activities

hindered by the org. structure

QUALITY CONTROL ORGANIZATION

RAW MATERIALS IN-PROCESS RELEASE MICRO-BIOLOGY

EARLY SHIFT

LATE SHIFT

NIGHT SHIFT

DAY SHIFT

EARLY SHIFT

LATE SHIFT

DAY SHIFT

LAB HELPERLAB HELPER

UPSTREAM DOWNSTREAM

LAB HELPER

PACKING

QC SUPPORTQC SUPPORTQC SUPPORT

LAB HELPER

QC SUPPORT

CHECK & VAL CHECK & VAL CHECK & VAL CHECK & VAL

HIGH-VOL PRODUCT

DAY SHIFT

High Vol Product

QC SUPPORT

LAB HELPER

CHECK & VAL

The beginnings of a process-centric organisation Align

Analysts' added-value content extremely low

� Analysts adding value only 21% of the time

� Benchmark for standard labs is 45%

� Best-in-class is 72%

0%

5%

10%

15%

20%

25%

30%P

erc

en

t o

f ti

me

de

dic

ate

d t

o a

cti

vit

y

0%

5%

10%

15%

20%

25%

30%P

erc

en

t o

f ti

me

de

dic

ate

d t

o a

cti

vit

y

Waste

MICROBIOLOGY

IN PROCESS CONTROL

IN PROCESSCONTROL

RAWMATERIALS

SAMPLEMICRO

BIOLOGY HPLC IPC REAGENT STORESSTORES

Example: HPLC set-up

Paying analysts to walk 3 km per day

� Travel distance: 300 m per test

� Heavy travel between sample room & lab, reagent room & lab

� Heavy travel within lab itself

� Can be minimized by workplace organization and cellular layout

Waste

Process simplification reinforced by work cells

Waste

MICROBIOLOGY

IN PROCESS CONTROL

IN PROCESSCONTROL

RAWMATERIALS

SAMPLEMICRO

BIOLOGY HPLC IPC REAGENT STORESSTORES

Process simplification to increase analyst productivity by 10%

� Lean layout includes:

� Workplace organization, process simplification & method standardization

� Travel distance reduced to 55 m per test

Example: HPLC set-up

Waste

Analysts' added-value content extremely low

� Added value: 40%.

� Through process simplification, optimization and standardization

� A good start, but a long way to go!

Multi-Observational Study of Analysts

0%

5%

10%

15%

20%

25%

30%

Pe

rce

nt

of

tim

e d

ed

ica

ted

to

acti

vit

y

March 2012

Waste

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

8 - 9 9 - 10 10 - 11 11 - 12 12 - 1 pm 1 – 2 pm 2 – 3 pm 3 – 4 pm

Hours

Acti

vit

y

ABSENT

BREAK

IDLE

SAMPLING

REAGENT PREP

TRAINING

TEST SUPPORT

LIMS

PAPERWORK

TEST 4

TEST 3

TEST 2

TEST 1

4 – 5 pm

Analysts wasting time at the beginning and end of the day

� Green blocks (added value) account for 20% of time

� Two hours at start of day with very low added-value

Waste

� Value-stream mapping (internal) to dispel complexity

� Shows major bottlenecks and their impact on flow

� Required QC processing time: 0.1 days

� Actual lead-time: 5 days

� ‘X-FACTOR’ = 100 (benchmark: 4 - 10)

� Lean scheduling and bottleneck management increase speed

Silo-organisations & poor bottleneck management hinder flow

47 minutes

15

minutes

6

minutes

10

minutes

WIP

0 days

Validate

Karl FischerAppearanceCollect Sample

WIP

2 daysWIP

1 day

65 minutes

Bromine

WIP

0 days

30 minutes

Typing Results

WIP

2 days

WIP

0 days

WIP

2 days

Speed

� Many tests benefit from campaigning

� Typical batch size is 20 (optimum batch size is 5)

� Huge delays to lead-time through unnecessary (default)

campaigning

� The essence of “pull” is to do the work only when it’s needed

Silo-organisations & poor bottleneck management hinder flow

Pull

Achieve strategic objectives by laying a strong foundation

Improve

these

metrics...

...to achieve

thisperformance

Predictive lead-time

Right first time

ImproveKPIs

CHECK: predictive indicators prevent poor performance

Pre

dic

tiv

e le

ad

-tim

eR

igh

t F

irs

t T

ime

An

aly

st

Fle

xib

ilit

yO

n-tim

e D

eliv

ery

Ac

tua

l lea

d-tim

eP

rod

uc

tivity

(Co

st)

KPIs drive active management – not just a reporting structure

By focusing on leadingindicators

Performanceis improved

Improve

4040

Transformation : KPIs owned by the people and easy to use

� Simple, automatic KPI reports

� Help people see what actions to

take, quickly and easily

� Well-defined escalation procedures

Simple reports & reporting structures ensure speedy resolution of issues

Improve

RESULTS

Cycle time & productivity have improved; quality unaffected

Cycle time has decreased

by 10 days to 17 days

Productivity has doubled since

implementation of KPI structure

Pilot is now 7th best lab in Tefen benchmark; up from 17th

� Through implementation of strong KPI structures and appropriate actions, pilot has seen dramatic improvements in productivity

� CT has also decreased due to increased analyst activity

� Quality of performance has not been effected, and is consistently above 97%

� By driving these actions towards site goals and strategy, PDCA structure and KPIs ensures performance is improved, aligned with product stream and owned by analysts

Aligned vision and holistic programme gives good results!

The future in now…

Robust process

and embedded

testing

Q

Q Q Q

Value Stream

P&Q P&Q P&QP&QP&Q



Thank you!

The Quality Transformation Journey · Going from product focused to process focused quality TQM •...

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