Quality Philosophies and Standards Britt Watwood Center for Teaching Excellence VCU (Baldrige, Six Sigma and Lean Mgmt)

What is meant by the term? “ Quality”

“ Quality”

Quality’s Foundation Philosophy & Practice Tools Empowerment Quality

Quality Evolution 1930’s Shewart Cycle 1950’s Deming in Japan 1980 Productivity / Quality Circles 1985 Deming/Crosby/Juran Late 1980’s Total Quality Mgmt 1990’s Baldrige Criteria Current Six Sigma Lean Management

1930’s

Shewart Cycle

1950’s

Deming in Japan

1980

Productivity / Quality Circles

1985

Deming/Crosby/Juran

Late 1980’s

Total Quality Mgmt

1990’s

Baldrige Criteria

Current

Six Sigma

Lean Management

Quality Overview QMS Markets & Customers VOC Lean 6 σ Product Operation Strategy Formulation Product Support Quality

Malcolm Baldrige National Quality Award www.quality.nist.gov

Malcolm Baldrige NQA Twenty years evolving A Framework and A Tool Self-Assessment Promotes Awareness of Continuous Improvement and Excellence Sharing of Best Practices Presented by the President of the United States

Twenty years evolving

A Framework and A Tool

Self-Assessment

Promotes Awareness of Continuous Improvement and Excellence

Sharing of Best Practices

Presented by the President of the United States

Baldrige is a “Process” A systems perspective Built around core values Linkages within the framework

A systems perspective

Built around core values

Linkages within the framework

Core Values Visionary Leadership Customer Driven Excellence A Learning Organization Valued Employees and Partners Agility Focus on the Future

Visionary Leadership

Customer Driven Excellence

A Learning Organization

Valued Employees and Partners

Agility

Focus on the Future

Core Values Managing for Innovation Management By Fact Social Responsibility Results and Value Driven Overall Systems Perspective

Managing for Innovation

Management By Fact

Social Responsibility

Results and Value Driven

Overall Systems Perspective

Visionary Leadership Senior leadership has vision Senior leadership communicates that vision Values and expectations align with vision Leaders are role models

Senior leadership has vision

Senior leadership communicates that vision

Values and expectations align with vision

Leaders are role models

Customer Driven Excellence Quality and Performance are Judged by the Customers Customer Satisfaction tracked and used to improve processes Customer Satisfaction of Competitors Known and Used to Improve Own Offerings

Quality and Performance are Judged by the Customers

Customer Satisfaction tracked and used to improve processes

Customer Satisfaction of Competitors Known and Used to Improve Own Offerings

Organizational Learning Learning directed at improved products…and improved people Embedded in all processes Continuous Results in Positive Change

Learning directed at improved products…and improved people

Embedded in all processes

Continuous

Results in Positive Change

Valuing Employees & Partners Committed to satisfaction, development, and well-being of employees Recognition Systems Risk-Taking Encouraged Strategic Alliances with Suppliers

Committed to satisfaction, development, and well-being of employees

Recognition Systems

Risk-Taking Encouraged

Strategic Alliances with Suppliers

Agility The ability to thrive in the White-water Rapids of Change Cycle Time Responsiveness

The ability to thrive in the White-water Rapids of Change

Cycle Time

Responsiveness

Focus on the Future Long-Term Viewpoint Long-Term Commitment to Key Stakeholders Strategic Focus on Resources, Employee and Product Development

Long-Term Viewpoint

Long-Term Commitment to Key Stakeholders

Strategic Focus on Resources, Employee and Product Development

Managing For Innovation Innovation Part of the Culture More than Sustainability Meaningful Change to Products and Services

Innovation Part of the Culture

More than Sustainability

Meaningful Change to Products and Services

Management By Fact Measurement AND Analysis of Performance Key Processes Identified Outputs Known Yours and Competitors! Comparison with Benchmarks Use of Trend Data

Measurement AND Analysis of Performance

Key Processes Identified

Outputs Known

Yours and Competitors!

Comparison with Benchmarks

Use of Trend Data

Social Responsibility Safe Work Environment Legal Work Environment Good Corporate Citizen

Safe Work Environment

Legal Work Environment

Good Corporate Citizen

Results & Value Focus on Key Results Creating Value for Stakeholders Customers Employees Stockholders Suppliers / Partners The Community Both Leading and Lagging Indicators

Focus on Key Results

Creating Value for Stakeholders

Customers

Employees

Stockholders

Suppliers / Partners

The Community

Both Leading and Lagging Indicators

Systems Perspective Linkage and Alignment between the Baldrige Categories Leadership Strategic Planning Customer & Market Focus Measurement, Analysis, & KM Workforce Focus Process Management Business Results

Linkage and Alignment between the Baldrige Categories

Leadership

Strategic Planning

Customer & Market Focus

Measurement, Analysis, & KM

Workforce Focus

Process Management

Business Results

Baldrige Criteria 4 Measurement, Analysis & Knowledge Management 1 Leadership Organizational Profile Environment, Relationships, & Challenges 2 Strategic Planning 3 Customer & Market Focus 6 Process Mgmt 5 Workforce Focus 7 Business Results

ISO 9000 Commitment to Customer Requirements Documentation Requirements Resource Allocation Measurement and Analysis

Commitment to Customer Requirements

Documentation Requirements

Resource Allocation

Measurement and Analysis

Standard Deviation Sigma is a measure of variation 

Sigma Variation The sigma value is a metric that indicates how well a process is performing. The higher the sigma value, the better. The higher the sigma value, the more the process is defect-free .

The sigma value is a metric that indicates how well a process is performing.

The higher the sigma value, the better.

The higher the sigma value, the more the process is defect-free .

Example of Sigma Value Yield DPMO Sigma 30.9% 690,000 1 69.2% 308,000 2 93.3% 66,800 3 99.94% 6,210 4 99.98% 320 5 99.9997% 3.4 6

Yield DPMO Sigma

30.9% 690,000 1

69.2% 308,000 2

93.3% 66,800 3

99.94% 6,210 4

99.98% 320 5

99.9997% 3.4 6

Yield DPMO Sigma 30.9% 690,000 1 69.2% 308,000 2 93.3% 66,800 3 99.94% 6,210 4 99.98% 320 5 99.9997% 3.4 6 Example of Sigma Value Most companies operate at around 4 sigma – the quality standard set by the US Government in WW II

Yield DPMO Sigma

30.9% 690,000 1

69.2% 308,000 2

93.3% 66,800 3

99.94% 6,210 4

99.98% 320 5

99.9997% 3.4 6

What Does 99% Defect-Free Mean?

200,000 wrong drug prescriptions each year What Does 99% Defect-Free Mean?

200,000 wrong drug prescriptions each year

Two short or long landings at major airports each day What Does 99% Defect-Free Mean?

Two short or long landings at major airports each day

5,000 incorrect surgical procedures every week What Does 99% Defect-Free Mean?

5,000 incorrect surgical procedures every week

20,000 lost articles of mail every hour What Does 99% Defect-Free Mean?

20,000 lost articles of mail every hour

Unsafe Drinking Water for 15 minutes each day What Does 99% Defect-Free Mean?

Unsafe Drinking Water for 15 minutes each day

No electricity for 7 hours each month What Does 99% Defect-Free Mean?

No electricity for 7 hours each month

50 dropped newborns at the hospital each day What Does 99% Defect-Free Mean?

50 dropped newborns at the hospital each day

Defects Effect Costs The Cost of Quality 4 Sigma: 99.4% 6,210 defects Industry Average Lose 15-20% of sales 5 Sigma: 99.98% 233 defects Lose 5-10% of sales 6 Sigma: 99.9997% 3.4 defects Lose Less than 1% of sales

The Cost of Quality

4 Sigma: 99.4%

6,210 defects

Industry Average

Lose 15-20% of sales

5 Sigma: 99.98%

233 defects

Lose 5-10% of sales

6 Sigma: 99.9997%

3.4 defects

Lose Less than 1% of sales

DMAIC Design Measure Analyze Improve Control

As a nation, we seem to be obsessed with LEAN…

Effectiveness vs Efficiency V O C 6 σ Selection 6 σ Control 6 σ Improvement Process Metrics Lean Metrics Lean Workload Lean Process Six Sigma = Effectiveness Lean Mgmt = Efficiency

The term “ lean ” is used because lean manufacturing uses “ less ”… Labor in the factory Manufacturing space Capital investment Materials Time between the customer order and the product shipment Definition

The term “ lean ” is used because lean manufacturing uses “ less ”…

Labor in the factory

Manufacturing space

Capital investment

Materials

Time between the customer order and the product shipment

Continuous flow Batch size Production Layout Processing Quality Based on forecast Based on function / department Large Batch & queue Lot sampling Based on orders Based on product flow Small Assured during processing Traditional Lean Lean Mgmt Comparison

Key Elements : Stability Quality Continuous Flow Kaizen Pull System Workload Balancing

Key Elements :

Stability

Quality

Continuous Flow

Kaizen

Pull System

Workload Balancing

Waste “ Anything that adds Cost to the product without adding Value”

“ Anything that adds Cost

to the product

without adding Value”

Non - Value Added: 95% Value Added: 5% Waste Overproduction Excess Inventory Product Defects Non-value added processing Wait time Underutilized labor Excess motion Unnecessary Transportation

Overproduction

Excess Inventory

Product Defects

Non-value added processing

Wait time

Underutilized labor

Excess motion

Unnecessary Transportation

7 Types of Muda Types of Waste CORRECTION WAITING PROCESSING MOTION INVENTORY CONVEYANCE OVERPRODUCTION Repair or Rework Any wasted motion to pick up parts or stack parts. Also wasted walking Wasted effort to transport materials, parts, or finished goods into or out of storage, or between processes. Producing more than is needed before it is needed Maintaining excess inventory of raw mat’ls, parts in process, or finished goods. Doing more work than is necessary Any non-work time waiting for tools, supplies, parts, etc..

Workplace Organization Maintain through empowerment, commitment, and discipline Sort Sustain Set In Order Shine Standardize Keep machines and work areas clean Use standard methods to keep Sort, Set In Order, and Shine to a condition Organize the work area 5 S Get rid of clutter

KAI To modify / Change ZEN To make good / better + = KAIZEN Gradual and orderly, continuous improvement.

Differences in Emphasis Six Sigma Process Improvement Reduced Defect Rate Lean Efficiency Improvement Reduce Waste Baldrige Criteria Performance Excellence across Entire System Results Oriented

Six Sigma

Process Improvement

Reduced Defect Rate

Lean

Efficiency Improvement

Reduce Waste

Baldrige Criteria

Performance Excellence across Entire System

Results Oriented

What Makes Sense For YOUR Company ???

What Makes

Sense For

YOUR

Company ???

Questions???