Tqm Six Sgma

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More and more companies have implemented quality management in their operations. According to

isixsigma.com, many international organizations have implemented total quality management (TQM) such

as Toyota Motor, Motorola, Ford Motor, and Philip semiconductor. TQM which is a strategy aimed at

embedding awareness of quality in all organizational process (wikipedia) began in the 1950s and it has

become widely known in 1980s. Also, Six Sigma was originated from Motorola in 1986. Its purpose is to

identify and remove the causes of defects and errors in manufacturing and business processes. It uses a set

of quality management methods, including statistical methods, and creates a special infrastructure of people

within the organization (wikipedia). Another system, Just in Time (JIT) is used to manage inventory

effectively and increase the return on investment. Just in Time is first applied by Ford Company in 1923, and

then it was implemented by Toyota Motor. Applications of these strategies

and techniques have provided many benefits for a company. Beasley states that some of the benefits of JITare: cost savings, higher productivity, reduce scrap and rework. Wilson also mentions that TQM helpsreduction in variation, and supplier integration. In discussing Six Sigma, Waxer lists some of the benefits ofSix Sigma as cost avoidance, additional revenue, and increase in productivity. Thus, the practices of TQM,JIT, and Six Sigma have impacts to each other.

tqm

At its core, Total Quality Management (TQM) is a management approach to long-term successthrough customer satisfaction.

In a TQM effort, all members of an organization participate in improving processes, products,services and the culture in which they work.

The methods for implementing this approach come from the teachings of such quality leaders as

Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa and Joseph M.Juran.

A core concept in implementing TQM is Demings 14 points, a set of management practices to help

companies increase their quality and productivity:

1. Create constancy of purpose for improving products and services.

2. Adopt the new philosophy.3. Cease dependence on inspection to achieve quality.4. End the practice of awarding business on price alone; instead, minimize total cost by

working with a single supplier.

5. Improve constantly and forever every process for planning, production and service.6. Institute training on the job.7. Adopt and institute leadership.

8. Drive out fear.9. Break down barriers between staff areas.10. Eliminate slogans, exhortations and targets for the workforce.

11. Eliminate numerical quotas for the workforce and numerical goals for management.12. Remove barriers that rob people of pride of workmanship, and eliminate the annual rating

or merit system.13. Institute a vigorous program of education and self-improvement for everyone.

14. Put everybody in the company to work accomplishing the transformation.


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The term Total Quality Management has lost favor in the United States in recent years: Qualitymanagement is commonly substituted. Total Quality Management, however, is still used

extensively in Europe.

Total Quality Management (TQM) is an approach that seeks to improve quality andperformance which will meet or exceed customer expectations. This can be achieved by

integrating all quality-related functions and processes throughout the company. TQM looks atthe overall quality measures used by a company including managing quality design anddevelopment, quality control and maintenance, quality improvement, and quality assurance.TQM takes into account all quality measures taken at all levels and involving all companyemployees.

Origins Of TQM

Total quality management has evolved from the quality assurance methods that were firstdeveloped around the time of the First World War. The war effort led to large scalemanufacturing efforts that often produced poor quality. To help correct this, quality inspectorswere introduced on the production line to ensure that the level of failures due to quality wasminimized.

After the First World War, quality inspection became more commonplace in manufacturingenvironments and this led to the introduction of Statistical Quality Control (SQC), a theorydeveloped by Dr. W. Edwards Deming. This quality method provided a statistical method ofquality based on sampling. Where it was not possible to inspect every item, a sample wastested for quality. The theory of SQC was based on the notion that a variation in theproduction process leads to variation in the end product. If the variation in the process couldbe removed this would lead to a higher level of quality in the end product.

After World War Two, the industrial manufacturers in Japan produced poor quality items. In aresponse to this, the Japanese Union of Scientists and Engineers invited Dr. Deming to trainengineers in quality processes. By the 1950s quality control was an integral part of Japanesemanufacturing and was adopted by all levels of workers within an organization.

By the 1970s the notion of total quality was being discussed. This was seen as company-widequality control that involves all employees from top management to the workers, in qualitycontrol. In the next decade more non-Japanese companies were introducing qualitymanagement procedures that based on the results seen in Japan. The new wave of qualitycontrol became known as Total Quality Management, which was used to describe the manyquality-focused strategies and techniques that became the center of focus for the qualitymovement.

Principles of TQM

TQM can be defined as the management of initiatives and procedures that are aimed at

achieving the delivery of quality products and services. A number of key principles can beidentified in defining TQM, including:

Executive Management Top management should act as the main driver for TQM and

create an environment that ensures its success.

Training Employees should receive regular training on the methods and concepts ofquality.

Customer Focus Improvements in quality should improve customer satisfaction.

Decision Making Quality decisions should be made based on measurements.


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Methodology and Tools Use of appropriate methodology and tools ensures that non-

conformances are identified, measured and responded to consistently.

Continuous Improvement Companies should continuously work towards improvingmanufacturing and quality procedures.

Company Culture The culture of the company should aim at developing employees

ability to work together to improve quality.

Employee Involvement Employees should be encouraged to be pro-active inidentifying and addressing quality related problems.

The Cost Of TQM

Many companies believe that the costs of the introduction of TQM are far greater than thebenefits it will produce. However research across a number of industries has costs involved indoing nothing, i.e. the direct and indirect costs of quality problems, are far greater than thecosts of implementing TQM.

The American quality expert, Phil Crosby, wrote that many companies chose to pay for thepoor quality in what he referred to as the Price of Nonconformance. The costs are identified

in the Prevention, Appraisal, Failure (PAF) Model.

Prevention costs are associated with the design, implementation and maintenance of the TQMsystem. They are planned and incurred before actual operation, and can include:

Product Requirements The setting specifications for incoming materials, processes,

finished products/services.

Quality Planning Creation of plans for quality, reliability, operational, production and

inspections.

Quality Assurance The creation and maintenance of the quality system.

Training The development, preparation and maintenance of processes.

Appraisal costs are associated with the vendors and customers evaluation of purchasedmaterials and services to ensure they are within specification. They can include:

Verification Inspection of incoming material against agreed upon specifications.

Quality Audits Check that the quality system is functioning correctly.

Vendor Evaluation Assessment and approval of vendors.

Failure costs can be split into those resulting from internal and external failure. Internal failurecosts occur when results fail to reach quality standards and are detected before they are

shipped to the customer. These can include:

Waste Unnecessary work or holding stocks as a result of errors, poor organization orcommunication.

Scrap Defective product or material that cannot be repaired, used or sold.

Rework Correction of defective material or errors.

Failure Analysis This is required to establish the causes of internal product failure.

External failure costs occur when the products or services fail to reach quality standards, butare not detected until after the customer receives the item. These can include:


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Repairs Servicing of returned products or at the customer site.

Warranty Claims Items are replaced or services re-performed under warranty.

Complaints All work and costs associated with dealing with customers complaints.

Returns Transportation, investigation and handling of returned items

Six Sigma what does it mean?

Six Sigma at many organizations simply means a measure of quality that strivesfor near perfection. Six Sigma is a disciplined, data-driven approach andmethodology for eliminating defects (driving toward six standard deviationsbetween the mean and the nearest specification limit) in any process -- frommanufacturing to transactional and from product to service.

The statistical representation of Six Sigma describes quantitatively how aprocess is performing. To achieve Six Sigma, a process must not produce morethan 3.4 defects per million opportunities. A Six Sigma defect is defined asanything outside of customer specifications. A Six Sigma opportunity is then the

total quantity of chances for a defect. Process sigma can easily be calculatedusing a Six Sigma calculator.

The fundamental objective of the Six Sigma methodology is the implementationof a measurement-based strategy that focuses on process improvement andvariation reduction through the application ofSix Sigma improvement projects.This is accomplished through the use of two Six Sigma sub-methodologies:DMAIC and DMADV. The Six Sigma DMAIC process (define, measure, analyze,improve, control) is an improvement system for existing processes falling belowspecification and looking for incremental improvement. The Six Sigma DMADVprocess (define, measure, analyze, design, verify) is an improvement system

used to develop new processes or products at Six Sigma quality levels. It canalso be employed if a current process requires more than just incrementalimprovement. Both Six Sigma processes are executed by Six Sigma Green Beltsand Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts.

According to the Six Sigma Academy, Black Belts save companies approximately$230,000 per project and can complete four to 6 projects per year. GeneralElectric, one of the most successful companies implementing Six Sigma, hasestimated benefits on the order of $10 billion during the first five years ofimplementation. GE first began Six Sigma in 1995 after Motorola and AlliedSignal blazed the Six Sigma trail. Since then, thousands of companies aroundthe world have discovered the far reaching benefits of Six Sigma.

Many frameworks exist for implementing the Six Sigma methodology. Six SigmaConsultants all over the world have developed proprietary methodologies forimplementing Six Sigma quality, based on the similar change managementphilosophies and applications of tools.
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Adams Associates using six sigma plus specializes in synergistic combination ofstrategic planning, leadership and total quality management (tqm) so clients

achieve more goals more often. Six sigma plus is a planned use of strategy,total quality management (tqm) and leadership development. It is the plus in

six sigma plus that cause people to align for goal accomplishment. This is a

major difference between six sigma plus and a statistical approach or ateaching of total quality management (tqm) tools. The plus is often the catalyst

that allows all other concepts to be a success.

Issues are selected for special attention as six sigma plus projects. Projects with

significant importance are assigned to Black Belts as six sigma projects. Thus

each six sigma plus project is assigned a leader trained in six sigma and total

quality management (tqm) tools. These Six Sigma Plus Black Belts' duties

include teaching other members of the six sigma plus project team appropriatetotal quality management (tqm) philosophy, interfacing with management,

coaching, leadership skills, teaching total quality management (tqm) tools andchanging systems to sustain six sigma plus projects improvements.

Senior Leadership is responsible for the strategic plan, and selecting potential

six sigma plus project areas. Once a six sigma plus project is understoodusing total quality management (tqm) tools, total quality management (tqm)

techniques generate alternatives. Improvements are then implemented. Six

sigma plus projects maintain improvements using control tools of total qualitymanagement (tqm). This is the define, measure, analyze, improve and control

sequence (DMAIC) ofsix sigma.

Six sigma training is recommended for themanagement and championsas

well as for any six sigma black belt or green belt.

WHAT IS THE DIFFERENCE BETWEEN TQM AND SIXSIGMA?

This article will discuss the differences between TQM and Six Sigma.

Knowing the difference between TQM and Six Sigma can be incredibly

helpful for managers or business owners who are looking for a quality

control and management approach that is right for their organization.

It's important to remember that while TQM, or Total Quality
http://www.adamssixsigma.com/six_sigma_approach.htmhttp://www.adamssixsigma.com/six_sigma_training/management_and_champions.htmhttp://www.adamssixsigma.com/six_sigma_training/management_and_champions.htmhttp://www.adamssixsigma.com/six_sigma_training/management_and_champions.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_black_belt_training.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_green_belt_training_GBPM.htmhttp://www.businessknowledgesource.com/manufacturing/what_is_the_difference_between_tqm_and_six_sigma_022427.html#%23http://www.businessknowledgesource.com/manufacturing/what_is_the_difference_between_tqm_and_six_sigma_022427.html#%23http://www.adamssixsigma.com/six_sigma_approach.htmhttp://www.adamssixsigma.com/six_sigma_training/management_and_champions.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_black_belt_training.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_green_belt_training_GBPM.htmhttp://www.businessknowledgesource.com/manufacturing/what_is_the_difference_between_tqm_and_six_sigma_022427.html#%23http://www.businessknowledgesource.com/manufacturing/what_is_the_difference_between_tqm_and_six_sigma_022427.html#%23


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Management, was around for quite a while before Six Sigma came

along, Six Sigma and TQM do not have to be mutually exclusive in

terms of business use. They are actually quite compatible in a number

of different business situations and industries. It's best to think of the

relationship between TQM and Six Sigma as TQM being able to help

you improve the quality of your processes, your products, and your

services, Six Sigma has the ability to help you make those

improvements even sharper and more focused.

Alright, let's start with TQM, Total Quality Management.

TQM is a quality control approach that is usually thought of along with

the development, implementation, and continual control of different

organizational systems that are used with a number of different

processes. TQM is based on a particular organizational approach, an

approach that zones in on how to keep already existing quality

standards at a high while simultaneously improving quality.

Essentially, TQM is meant to focus on the culture of a business. What

TQM strives to do is to get different departments in your business-

whether manufacturing, service, or something else-to work together

so that you can all help improve the quality of processes and products.

Six Sigma is also an approach that seeks to correct and improve the

quality of your processes. So how is Six Sigma different from TQM?

Well, let's look at how it's obviously different. TQM strives for general

improvements based on a collaborative cultural approach to the

problem. Six Sigma also requires the efforts of numerous

departments. However, Six Sigma is a statistical and data driven

approach that measures and analyzes data in an effort to discover how

variations and defects can be reduced to the level where when you are

running a process, there are less than 3.4 defects per million cycles or

million products. Six Sigma is used along with Statistical Process

Control, and together the two of them use statistics in order to

monitor and maintain your processes. Six Sigma is a lot of TQM taken
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to another level.

So now that we've gone over what the general differences are between

TQM and Six Sigma, let's talk about the most fundamental difference

between the two approaches. The fundamental difference between Six

Sigma and TQM is the way that each one approaches quality control.

First, let's look at TQM. TQM defines quality as the level to which a

process or a product meets standards produced inside the company.

Six Sigma shifts the definition of quality to a relational one,

emphasizing that quality is based on the fewest number of defects,

which must be removed as much as possible. However, Six Sigma's

quality is also defined in large part by the customer, who determines

the value of the process or the product. Six Sigma takes a moreholistic approach to quality improvement, working to improve the

entire business instead of focusing on individual processes and

operations within segregated departments. Another difference between

TQM and Six Sigma is that if you want to implement Six Sigma's

approach, you need professionals who are certified in Six Sigma

techniques. TQM does not require this type of complete, full-time

dedication to the quality management system chosen by your

company. Once again, while there are many fundamental and

superficial differences between Six Sigma and TQM, the two can work

in tandem and support each other in all situations.

Differences and Similarities Between Six Sigma and

TQM, total quality management.

A question we frequently get asked is the difference between Six Sigma and TQM,

total quality management.First off the tools are basically the same,depending upon the level of TQM, total quality management,sophistication. For a definition of Six Sigma see:

http://www.adamssixsigma.com/Glossary_of_terms/what_is_six_sigma.htm

If Six Sigma is used only at the project level to eliminate defects, it is an incremental

improvement approach with some structure and discipline. This can be very
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valuable but misses much of the true value of Six Sigma and the major differences

between TQM, total quality management and Six Sigma.

The real value of Six Sigma starts to show when it is integrated with the

organization's Strategic Plan helping to implement that plan with a focus on the

paying customers. In order to achieve the true benefits of Six Sigma, projects willcross organizational boundaries and be focused on business processes this is

relatives unusual for most TQM, total quality management efforts. Sustained

strategic results can be achieved when this is done. When applied to a business

process the benefits obtained move the organization toward World Class

Performance in that business process.

Following are some key areas with a typical TQM, total quality management

approach followed by the Six Sigma approach.

Core Business:

TQM, total quality management

Frequently not part of the Business Strategy.

Quality Council did not include Senior Managers.

No bottom line accountability

Re-stripe the parking lot projects.

Six Sigma

A strategy from the top of the Business Unit

Champions and Senior Management are the Quality Council

Projects frequently have a profitability hurdle

Projects are carefully selected with managers accountable.

Some helpful links:

http://www.adamssixsigma.com/strategic_planning.htm

http://www.adamssixsigma.com/Newsletters/strategy_vision_values.htm

http://www.adamssixsigma.com/Newsletters/products_services_distribution.htm
http://www.adamssixsigma.com/strategic_planning.htmhttp://www.adamssixsigma.com/strategic_planning.htmhttp://www.adamssixsigma.com/Newsletters/strategy_vision_values.htmhttp://www.adamssixsigma.com/Newsletters/products_services_distribution.htmhttp://www.adamssixsigma.com/strategic_planning.htmhttp://www.adamssixsigma.com/Newsletters/strategy_vision_values.htmhttp://www.adamssixsigma.com/Newsletters/products_services_distribution.htm


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Goals:


Improve everything

Usually not targeted to a process or business

Frequently without focus

No projected performance levels.

Six Sigma

3.4 defect per million opportunities

Targeted areas

Projects have a defined scope by management.

Some helpful links:

http://www.adamssixsigma.com/six_sigma_training/leadership_skills_development.htm

http://www.adamssixsigma.com/Newsletters/employee_motivation.htm

http://www.adamssixsigma.com/Newsletters/supply_chain_management.htm

Leadership:


Frequently vocal strong supporters

Most places with active leadership succeeded at some level

Most management treated it as a fad
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When supporters left so did TQM, total quality management.

Six Sigma

Where successful the top management demands implementation

Management takes an active role in all phases of Six Sigma

If management treats like TQM, Six Sigma will have the same success/failure.

Some helpful links:

http://www.adamssixsigma.com/Newsletters/leadership_skills.htm

http://www.adamssixsigma.com/six_sigma_training/executive_coaching.htm

http://www.adamssixsigma.com/six_sigma_training/management_training.htm

Application:


Learn the tools

Don't worry about the bottom line

Use as many tools as possible

Many re-stripe the parking lot projects.

Six Sigma

Black Belts are well trained

Projects are expected to meet objectives

Use only the tools necessary for the projects
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Significant improvement expected.

Some helpful links:

http://www.adamssixsigma.com/six_sigma_training/management_and_champions.htm

http://www.adamssixsigma.com/six_sigma_training/six_sigma_black_belt_training.htm

http://www.adamssixsigma.com/six_sigma_training/six_sigma_green_belt_training.htm

Change:


Within departments

Incremental

Seldom based on customer critical criteria

No time urgency.

Six Sigma

Best results when focused on customer

Business process focus

Crosses departmental functions

Significant improvement for each project

Time frame part of scope.

Some helpful links:

http://www.adamssixsigma.com/six_sigma_training/six_sigma_methodology.htm

http://www.adamssixsigma.com/Newsletters/customers_results.htm

http://www.adamssixsigma.com/Newsletters/competition.htm
http://www.adamssixsigma.com/six_sigma_training/management_and_champions.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_black_belt_training.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_green_belt_training.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_methodology.htmhttp://www.adamssixsigma.com/Newsletters/customers_results.htmhttp://www.adamssixsigma.com/Newsletters/competition.htmhttp://www.adamssixsigma.com/six_sigma_training/management_and_champions.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_black_belt_training.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_green_belt_training.htmhttp://www.adamssixsigma.com/six_sigma_training/six_sigma_methodology.htmhttp://www.adamssixsigma.com/Newsletters/customers_results.htmhttp://www.adamssixsigma.com/Newsletters/competition.htm


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Organization:


Separate organization

Not accountable to the business unit

Collection of "experts"

A career

Not a respected or strong area of the corporation

Parking place for ended careers.

Six Sigma

Champion reports within the Business

Black Belts are in the Business Unit

Black Belts are expected to return to line function

Quality Council of Senior Leaders and Champions.

Some helpful links:

http://www.adamssixsigma.com/strategic_planning.htm

http://www.adamssixsigma.com/Newsletters/design_redesign.htm

http://www.adamssixsigma.com/six_sigma_training/cycle_time.htm

http://www.adamssixsigma.com/six_sigma_training/project_management.htm

Focus:

http://www.adamssixsigma.com/strategic_planning.htmhttp://www.adamssixsigma.com/strategic_planning.htmhttp://www.adamssixsigma.com/Newsletters/design_redesign.htmhttp://www.adamssixsigma.com/six_sigma_training/cycle_time.htmhttp://www.adamssixsigma.com/six_sigma_training/project_management.htmhttp://www.adamssixsigma.com/strategic_planning.htmhttp://www.adamssixsigma.com/Newsletters/design_redesign.htmhttp://www.adamssixsigma.com/six_sigma_training/cycle_time.htmhttp://www.adamssixsigma.com/six_sigma_training/project_management.htm


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Manufacturing

Products

Little on service

Little on logistics

Little on marketing.

Six Sigma

All business processes

Non-manufacturing are often the largest opportunities.

Some helpful links:

http://www.adamssixsigma.com/Newsletters/products_services_distribution.htm

http://www.adamssixsigma.com/Newsletters/measure_value.htm

http://www.adamssixsigma.com/Newsletters/data_analysis.htm

http://www.adamssixsigma.com/Newsletters/supply_chain_management.htm

Total Quality Through Six

SigmaSome argue that many of the tools Six Sigma uses are not new. However, while Six

Sigma uses conventional methods, its application is anything but conventional. Instead itstresses the importance of searching for a new way of thinking and doing. In fact, Six

Sigma defines a clear road map to achieve Total Quality:

1. Leadership Commitment: Top management not only initiates Six Sigmadeployment, it also plays an active role in the whole deployment cycle. Six Sigma

starts by providing senior leadership with training in the principles and tools it

needs to direct the development of a management infrastructure to support Six
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Sigma. This involves reducing the levels of organizational hierarchy and

removing procedural barriers to experimentation and change.

2. Customer Focus: Systems are developed for establishing close communicationswith external customers (direct customers, end-users, suppliers, regulatory

bodies, etc), and with internal customers (employees). From upstream suppliers to

ultimate end-users, Six Sigma eliminates the opportunities for defects.3. Strategic Deployment: Six Sigma targets a small number of high-financial

leveraged items. It focuses the companys resources: right support, right people,

right project, and right tools, on identifying and improving performance metricsthat relate to bottom-line success.

4. Integrated Infrastructure: The Leadership Team defines and reviews project

progress. The Champion acts as a political leader and removes the barriers for the

project team. The Master Black Belt acts as a technical coach and provides in-depth knowledge of quality tools. The Black Belt controls the project while the

Green Belt supports the Black Belt - together they form the Six Sigma Project

Teams. In addition, the incentive and recognition systems motivate the project

teams to achieve the business goals.5. Disciplined Framework: Six Sigma projects are Implemented using the

Measure, Analyze, Improve and Control disciplined road map. This MAICdiscipline sets up a clear protocol to facilitate internal communication. In

addition, from a business perspective, Six Sigma is also a framework for

continuous business improvement.

6. Education and Training: Six Sigma believes that true commitment is driven bytrue understanding. As a fact-based methodology, it intensively utilizes quality

and statistical tools to transform a practical problem to a practical solution. Thus,

a top-to-bottom training is conducted in Six Sigma philosophy and systemimprovement techniques for all levels.

In conclusion, Six Sigmas approach and deployment makes it distinguishable from other

quality initiatives. The Six Sigma approach involves the use of statistical tools within a

structured methodology for gaining the knowledge needed to achieve better, faster, andless expensive products and services than the competition. The repeated, disciplined

application of the master strategy on project after project, where the projects are selected

based on key business objectives, is what drives dollars to the bottom line, resulting inimpressive profits. Moreover, fueled by the bottom line improvement, top management

will continuously be committed to this approach, the work culture will be constantly

nurtured, customers will definitely be satisfied, and Total Quality will ultimately beachieved.


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Six Sigma VS. Total QualityManagement (TQM)

In some aspects of quality improvement, TQM and Six Sigma share the same philosophy

of how to assist organizations to accomplish Total Quality. They both emphasize theimportance of top-management support and leadership. Both approaches make it clear

that continuous quality improvement is critical to long-term business success. However,

why has the popularity of TQM waned while Six Sigma's popularity continues to grow inthe past decade?

T. Pyzdek (Why Six Sigma is Not TQM, 2001) stated that the primary difference is

management. Unlike TQM, Six Sigma was not developed by technicians who only

dabbled in management and therefore produced only broad guidelines for management to

follow. The Six Sigma way of implementation was created by some of America's mostgifted CEOs - people like Motorola's Bob Galvin, Allied Signal's Larry Bossidy, and

GE's Jack Welch. These people had a single goal in mind: making their businesses assuccessful as possible. Once they were convinced that tools and techniques of Six Sigma

could help them do this, they developed a framework to make it happen.

The differences between TQM and Six Sigma are summarized in Table 7.1.

Table 7.1: TQM vs. Six Sigma

TQM Six SigmaA functional specialty within the

organization.

An infrastructure of dedicated change

agents. Focuses on cross-functional value

delivery streams rather than functionaldivision of labour.

Focuses on quality. Focuses on strategic goals and applies them

to cost, schedule and other key business

metrics.

Motivated by quality idealism. Driven by tangible benefit far a majorstockholder group (customers, shareholders,

and employees).Loosely monitors progress toward

goals.

Ensures that the investment produces the

expected return.

People are engaged in routine duties(Planning, improvement, and

control).

Slack resources are created to change keybusiness processes and the organization

itself.


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Emphasizes problem solving. Emphasizes breakthrough rates of

improvement.

Focuses on standard performance,

e.g. ISO 9000.

Focuses on world class performance, e.g.,

3.4 PPM error rate.

Quality is a permanent, full-time job.Career path is in the quality

profession.

Six Sigma job is temporary. Six Sigma is astepping-stone; career path leads elsewhere.

Provides a vast set of tools and

techniques with no clear framework

for using them effectively.

Provides a selected subset of tools and

techniques and a clearly defined framework

for using them to achieve results (DMAIC).

Goals are developed by quality

department based on quality criteria

and the assumption that what is good

for quality is good for theorganization.

Goals flow down from customers and senior

leadership's strategic objectives. Goals and

metrics are reviewed at the enterprise level

to assure that local sub-optimization doesnot occur.

Developed by technical personnel. Developed by CEOs.

Focuses on long-term results.

Expected payoff is not well-defined.

Six Sigma looks for a mix of short-term and

long-term results, as dictated by business

demands.

THE JUST-IN-TIME (JIT) APPROACH(Sample of Full-Text)

SUMMARY

JIT presentations often employ the analogy of a stream when describing

proper inventory management. Well-managed systems achieve a flowof inventory from raw material to the customer like a smooth river,unimpeded by shoals of scrap or machine breakdown or otherproblems. This concept did not originate with the Japanese. HenryFord's River Rouge plant regularly converted iron ore into a Model T infour days. However, in recent years, especially the 1970s, Americanbusiness has not improved its manufacturing capability quickly enough


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to maintain a competitive position in cost or quality or marketresponsiveness or flexibility.

In 1983 APICS began a zero inventory crusade---strongly advocatingJIT. Firms such as CM, Ford, Chrysler, Bendix, Harley-Davidson, IBM,

Hewlett-Packard, AT&T, and others began the journey even earlier.There has been much progress on regaining competitiveness in recentyears. This progress has been achieved by emphasizing continuousimprovement, reduced inventories, expanded roles for hourly workers,fewer levels of management, longer term relationships with customersand suppliers, and an emphasis on providing value to the customer,Many American firms are once again at or near world class status. Weshould remember, however, that complacency is the principle barrier tomaintaining world class status. We must adopt the philosophy ofKaizen, continuous improvement. The Japanese underscore theurgency of maintaining competitiveness with a phrase taught to everyschoolchild, "Export or Die!" In yesterday's world, export or die was atruism for any island economy. In today's global village, export or die isa truism for all economies.

What is Just-In-Time? / Why is JIT Important?

To prosper---and often even to survive---manufacturing companies mustprovide value at least equal to that of competitors. Today,manufacturing competition includes plants located in many differentparts of the world. For example, some refrigerators sold at majordepartment stores in Canada are assembled in Wroclaw, Poland, usinga condenser manufactured in Sao Paulo, Brazil. Much of the world isone big market, with goods crossing many different types of boundaries.

Although international trade always has existed, it has exploded in thelast few decades. Improved communication and transportation havebeen contributing factors, but the primary cause has been dramaticallyimproved manufacturing productivity---with emphasis on both qualityand cost. Although Japan has been in the forefront of this advance,South Korea, Taiwan, Malaysia, Singapore, and Thailand have maderemarkable strides. Progress is also taking place in Mexico and Brazil,and most Western European countries have continued to improve theirindustrial capability. In addition, it is not unreasonable to expect thatEastern European countries will improve their competitive position asthey revise their economic policies.


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These developments and a benign neglect of manufacturing by topmanagement in many North American firms caused foreign tradebalance deficits and a lower productivity growth in the United Statesduring the 1960s and 1970s than in many other countries. Some U.S.companies lost market share and others lost markets. The MITcommission on industrial productivity reported a large and increasingbalance of trade deficit in automobiles, consumer electronics, machinetools, semiconductors, and textiles (Dertouzos et al. 1989). Continuationof such a pattern can have dire consequences for the quality of life inany country. Foreign debt, currency devaluation, and loss of marketsand profits eventually not only affect the ability of consumers topurchase material goods such as toasters and automobiles but also limita nations ability to support health care, the arts, education, andrecreation activities. In brief, the standard of living can decreasedramatically. For example, Argentina was a relatively prosperouscountry at the turn of the century, but today its economy is in shambles.Nearly all citizens suffer when such a change occurs.

The MIT commission observed:

A large continental economy like the United States will not be able tofunction primarily as a producer of services in the foreseeable future.One reason is that it would have to rely on exports of services to pay forits imports, and this does not seem realistic. In 1987 gross U.S. exportsof services, excluding income from overseas investments and overseassales of government services, were worth $57 billion, whereas the totalvalue of goods and services imported into the United States was about$55 billion. - - , The United States thus has no choice but to continuecompeting in the world market for manufactures. The ultimate scale ofAmerican manufacturing is not known, but it will not be trivial. Theimportant question is not whether the United States will have amanufacturing industry but whether it will compete as a low-wagemanufacturer or as a high-productivity manufacturer. (Dertouzos et al.1989, 39-40)

Clearly it is preferable to compete as a high-productivity manufacturer.

These considerations led many organizations in the United States,Canada, and other countries to examine successful manufacturingorganizations in North America and throughout the world to identify theoperating characteristics and practices of companies capable ofcompeting in the present worldwide market. The essential


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characteristics of a such a company are that it produces high qualityproducts at low cost and that it responds quickly to customer requestsfor delivery, changes in design, and changes in volume, When acompany has achieved these goals, it can compete with anybody,anywhere. It is important to understand that both high quality and lowcost are relative terms; continuous improvement is needed to maintainhigh relative quality and low relative cost. Referring to the degree ofchange needed to achieve world class status in Thriving on Chaos(1987), Tom Peters notes:

Radical changes in organizational structure and procedures are calledfor, Layers of management must be reduced in most big firms by 75percent. Product development time and order lead time must be slashedby 90 percent. Electronic/telecommunication linkups to customers andsuppliers must be developed posthaste. Just listening to customers anddealers needs to become the norm-and as yet it is not.

Different terms are used to identify the process of improvingmanufacturing productivity with emphasis on high quality and low cost:the Just-in-Time (JIT) approach, zero inventory, total qualitymanagement, world class manufacturing, and the search for excellence.We are using JIT because it seems to have been the first, and all of theessential concepts are inherent to it. The title of the process is notimportant; adopting the philosophy and pursuing its operating objectivesare. This section includes concepts, approaches, and practices that mayhave originated under the aegis of programs with each of the differentlabels and titles given to various productivity improvement programs...

THE PHILOSOPHY OF JIT

JIT is a philosophy embodying various concepts that result in a differentway of doing business for most organizations. The basic tenets of thisphilosophy include:

A. All waste, anything that does not add value to the product or service,should be eliminated Value is anything that increases the usefulness ofthe product or service to the customer or reduces the cost to thecustomer.

B. JIT is a never ending journey, but with rewarding steps andmilestones.


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C. Inventory is a waste. It covers up problems that should be solvedrather than concealed. Waste can gradually be eliminated by removingsmall amounts of inventory from the system, correcting the problemsthat ensue, and then removing more inventory.

D. The customers' definitions of quality, their criteria for evaluating theproduct, should drive product design and the manufacturing system.This implies a trend toward increasingly customized products.

E. Manufacturing flexibility, including quick response to deliveryrequests, design changes, and quantity changes, is essential tomaintain high quality and low cost with an increasingly differentiatedproduct line.

F. Mutual respect and support based on openness and trust should

exist among an organization, its employees, its suppliers, and itscustomers.

G. A team effort is required to achieve world class manufacturingcapability. Management, staff, and labor must participate. This impliesincreasing the flexibility, responsibility, and authority provided to thehourly worker.

H. The employee who performs a task often is the best source ofsuggested improvements in the operation. It is important to employ the

workers' brains, not merely their hands.

JIT is a very eclectic approach. It includes many old ideas and somenew ones and relies on basic concepts from many disciplines, includingstatistics, industrial engineering, production management, and thebehavioral sciences. But first and foremost, it is pragmatic and, thus,empirical. Discovering "what works" and why it works requires that plantoperations be studied thoroughly. This requires the collection andanalysis of relevant data concerning the plant's operation and itsperformance. This pragmatism causes the manufacturing process and

its environment to be viewed as a research laboratory, similar to auniversity hospital, in that the primary task may be to produce qualityoutput but another important goal is to learn how to do it better the nexttime.

Traditionally, inventory has been viewed as an asset, one that can beconverted to cash. The Just-in-Time view is that inventory does not add


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value but instead incurs costs, and thus is a waste. Holding inventory isanalogous to not receiving any interest for a deposit in a bank and,furthermore, paying to keep it there. Traditionally, holding inventory wasseen as being less costly than correcting the production and distributionefficiencies that inventory overcame. For example, large lot sizesspread the cost of expensive setups across many parts. JIT takes adifferent view.

JIT views inventory as a symptom of inadequate management, amethod of hiding inefficiencies and problems, see Figure 1.Inefficiencies that cause inventory include: long and costly setups,scrap, lengthy and widely varying manufacturing lead times, longqueues at work centers, inadequate capacity, machine failure, lack ofworker and equipment flexibility, variations in employee output rate, longsupplier lead times, and erratic supplier quality. JIT emphasizes thatsolving each of these problems will reduce the need for inventory andimprove productivity. It strives to have the right material, at the righttime, at the right place, and in the exact amount. Thus, the name "Just-in-Time" is used by many to designate an organized and continuingprogram to improve operations productivity.

In Kaizen (1986), Masaaki Imai argues that the most important aspect ofJIT is a philosophy of continuous improvement. He explains thatalthough Westerners and Japanese both ascribe to improvement, hehas discovered that the two cultures have 'different concepts of whatthis term means. Westerners think of improvement as a step function---a change represents a marked increase in performance. That level ofperformance is held until the next performance leap is introduced. TheJapanese view continuous improvement as an upward sloping line-driven by numerous incremental improvements, Each improvement is initself imperceptible, but collectively the changes made in a few monthswilt represent a great deal of progress.

This difference in culture can be seen in the management of

suggestions, Western companies offer large rewards for suggestionsthat substantially reduce company costs. In a typical year a few hundredsuggestions may be received, a small percentage of which actually areimplemented. Toyota, by contrast, offers a small, fixed fee---less than$1---per suggestion. They receive hundreds of thousands ofsuggestions each year and implement more than 90 percent of them.Imai contends that the total improvement achieved by emphasizing
http://www.mcts.com/images/cgi/JIT-FIG1.gifhttp://www.mcts.com/images/cgi/JIT-FIG1.gif


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incremental improvement is greater than that achieved by emphasizingdramatic improvement. Certainly the performance of Toyota in recentyears represents a strong ease for Imai's point of view.

The Japanese do not neglect dramatic improvement, either. The books

of Shigeo Shingo (1985, 1986,1988) explore from an engineer'sperspective the process of analyzing operations for opportunities fordramatic improvement, One story illustrates his approach. A client ofShingo's, a manufacturer of engraved brass plates, was seeking a wayto efficiently remove the lubricating fluid used to cool the engraving pen,because cleaning the engraved plate represented the largest singleprocess cost. Shingo, on reflecting on the purpose of the fluid-coolingplus debris removal, suggested the use of a focused stream ofcompressed air rather than fluid. The company's management felt thatair would not properly protect the pen and would shorten the pen's life.On Shingo's insistence, the company tried it and found that the methodnot only eliminated the need to clean the plate after engraving but alsoactually extended the pen life by 30 percent. This story illustrates twoaspects of continuous improvement---careful analysis combined with awillingness to try new approaches, even when they seem unpromising...(there's much more!)

Six Sigma and TQM (Total Quality Management) are both methods formonitoring the quality of your products, processes, and services. TQM is aimedat overhauling the way that companies do things. Lean Six Sigma is aimed

towards obtaining the fastest change possible in a company. While both methodsaim at improving quality, there are important differences between them.

Lean Six Sigma

Lean Six Sigma arose out of a combination ofSix Sigma principles and Leanmanufacturing methodology. The principles behind Lean Six Sigma include:

Customer-satisfaction based initiatives for quality improvement Specific metrics that drive decision making Seeks to reduce variation that causes quality Separates non-value work from value work - considering non-value work

to be waste Focuses upon speed
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Total Quality Management (TQM)

Total Quality Management gave birth to methodologies like Six Sigma and LeanSix Sigma. The process centers on quality and takes a customer-focusedapproach. While Lean Six Sigma focuses upon speed, metrics, and reducing

variation, TQM focuses on the long haul of quality improvement.

Features include:

Having a consistent, constant, and stated purpose behind improvingquality

Reducing dependence upon inspections (Lean Six Sigma is very data-intensive)

Getting rid of fear and hierarchy in the company Ensuring everyone in the company has undergone training and that they

are working towards quality improvement

Ensuring that education is an on-going process

Which Method is Best for You?

If you work in a field that requires precision (i.e. healthcare, manufacturing,engineering, etc.) then Lean Six Sigma may have more benefits to you due to thedependency on data gathering and monitoring any variation that occurs. This canbe a very productive way to ensure the quality of your services and products.Through using DMAIC (Decide, Measure, Analyze, Improve, Control) eachchange inducted into a process is carefully monitored.

On the other hand, if your industry is more service-based or less precise, totalquality management may work best for you in your situation. This means that youimprove quality by having a purpose, erasing boundaries between divisions in thecompany, and ensure the training of every individual. Customer service might bean example where TQM is more appropriate than Lean Six Sigma.

Both methods are extremely effective at improving the quality of goods andservices - ifcarefully implemented and supervised by a project managementteam.

Read more: http://www.brighthub.com/office/project-management/articles/46733.aspx#ixzz1GNw30crG
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