MANAGING BUSINESS Deming’s, Juran’s and Crosby’s Philosophies
Learning Outcome <ul><li>At the end of this chapter, you should be able to: </li></ul><ul><li>Differentiate the Three main philosophies of Quality </li></ul><ul><li>Understand and use the approaches developed by each quality philosophy </li></ul>
Quality Philosophies Writer Definition of Quality Orientation Developed Deming Fitness for purpose Customer Deming’s Philosophy Fourteen Points of Quality Deming PDCA Cycle System of Profound Knowledge Juran Fitness for use Customer Quality Trilogy The Five Quality Characteristics Internal Customer The Four Phases of Problem Solving Quality Council The Quality Spiral Crosby Conformance to requirements Supplier Five Absolutes of Quality Fourteen-Point Plan for Quality
Deming’s Philosophy <ul><li>1. Concept of “ pride and joy ” at work. </li></ul><ul><li>2. Continuous improvement based on reduction in variation . </li></ul><ul><li>3. Higher quality leads to higher productivity which leads to more output . </li></ul><ul><li>4. Improvements in quality leads to lower costs leads to lower prices, which leads to sustaining long term competitive advantage. </li></ul><ul><li>5. Top management must assume the overriding responsibility for quality improvement. </li></ul>
Deming’s 14 Points <ul><li>1. "Create consistency of purpose towards improvement". Management is charged with the requirement to plan for today and tomorrow and to provide co-ordinated and organised effort to reach the quality goals set for tomorrow. </li></ul><ul><li>2. "Adopt the new philosophy". The implication is that management should actually adopt his philosophy, rather than merely expect the workforce to do so. </li></ul><ul><li>3. "Cease dependence on inspection". If variation is reduced, there is no need to inspect manufactured items for defects, because there won't be any. </li></ul><ul><li>4. "Move towards a single supplier for any one item." Multiple suppliers mean variation between feed stocks </li></ul>
Deming’s 14 Points <ul><li>5. "Improve constantly and forever". Constantly strive to improve business process. </li></ul><ul><li>6. "Institute training on the job". If people are inadequately trained, they will not all work the same way, and this will introduce variation. </li></ul><ul><li>7. "Institute leadership". The generation of effective leadership, especially self-leadership, is a primary requirement in the quality culture. Deming makes a distinction between leadership and mere supervision. The latter is quota- and target-based. </li></ul><ul><li>8. "Drive out fear". The blaming culture needs to give way to a problem-solving culture. This means that suggestions for improvement must be seen in a positive light. </li></ul>
Deming’s 14 Points for Transformation <ul><li>9. "Break down barriers between departments". Another idea central to TQM is the concept of the 'internal customer', that each department serves not the management, but the other departments that use its outputs. </li></ul><ul><li>10. "Eliminate slogans and targets". Another central TQM idea is that it's not people who make most mistakes - it's the process they are working within. Harassing the workforce without improving the processes they use is counter-productive. </li></ul><ul><li>11. "Eliminate management by objectives". Allowing individuals to set ambitious production targets as encouraging the delivery of poor-quality goods. </li></ul>
Deming’s 14 Points for Transformation <ul><li>12. "Remove barriers to pride of workmanship". Managers pushing numbers of output, rather than the quality produced is major barrier to pride development. </li></ul><ul><li>13. "Institute education and self-improvement". Continuous improvements in quality will lead the workforce to develop new skills and new ways of carrying out their job. </li></ul><ul><li>14. "The transformation is everyone's job". </li></ul>
The Deming Cycle (PDCA Cycle) PDCA (" Plan-Do-Check-Act ") is an iterative four-step problem-solving process typically used in business process improvement. It is also known as the Deming Cycle , Deming Wheel , or Plan-Do-Study-Act .
The PDCA Cycle PLAN Establish the objectives and processes necessary to deliver results in accordance with the expected output. DO Implement the new processes. Often on a small scale if possible CHECK Measure the new processes and compare the results against the expected results to ascertain any differences ACTION Analyse the differences to determine their cause. Each will be part of either one or more of the P-D-C-A steps. Determine where to apply changes that will include improvement.
System of Profound Knowledge <ul><li>Deming’s later near the end of his life, synthesized the underlying foundations of the 14 points in what he called “ A System of Profound Knowledge ”. </li></ul><ul><li>It consists of four interrelated parts: </li></ul><ul><li>Appreciation for a system </li></ul><ul><li>Understanding of variation </li></ul><ul><li>Theory of knowledge </li></ul><ul><li>Psychology </li></ul>
Deming’s System of Profound Knowledge Appreciation for system Understanding of variation Theory of knowledge Knowledge of Psychology
Systems <ul><li>Deming stressed that systems must be focused towards a purpose . </li></ul><ul><li>Stockholders can realise financial benefits, employees can receive opportunities for training and education that will enhance their job in work, customers can receive products and services that meet their needs and create satisfaction , the community can benefit from business leadership, and the environment can benefit from responsible management. </li></ul>
System <ul><li>Systems thinking applies to managing people also. </li></ul><ul><li>Many factors affect an individual employees’ performance: </li></ul><ul><li>The training received </li></ul><ul><li>The information and resources provided </li></ul><ul><li>The leadership of supervisors and managers </li></ul><ul><li>Disruption on the job </li></ul><ul><li>Management policies and practices </li></ul>
Variation <ul><li>Modern technology has improved our ability to produce many physical parts with very little variation; however the variation that stems from human behaviour and performance continues to hamper quality efforts. </li></ul><ul><li>Deming’s suggested that management first understand, and then work to reduce variation through improvements in technology, process design, and training. </li></ul><ul><li>Demings’ proposed that every employee in the firm to be familiar with statistical techniques and other problem solving tools. </li></ul><ul><li>Excessive variation results in products that fail or perform erratically and inconsistent service that does not meet customer’s expectation. </li></ul>
Knowledge <ul><li>Experience only describes – it cannot be tested or validated – and experience alone is no help in management. Theory (knowledge), on the other hand, helps one to understand cause and effect relationships that can be used for prediction ad rational management decisions. </li></ul><ul><li>Deming’s never gave managers any “solutions” for achieving quality. He wanted them to learn and discover (acquire knowledge) what works and what is appropriate for their individual organisation. </li></ul>
Psychology <ul><li>It helps us to understand people, interactions between people and circumstances. </li></ul><ul><li>People can be motivated intrinsically and extrinsically ; however the most powerful motivators are intrinsic (hygiene factors). </li></ul><ul><li>Deming’s does not believe pay is a motivator. </li></ul>
Joseph Juran’s Philosophy <ul><li>Unlike Deming, however, Juran did not propose a major cultural change in the organisation, but rather sought to improve quality by working within the system familiar to managers. </li></ul><ul><li>He argued that employees at different levels of an organisation speak in their own “language”. (Top managers speak in the language of dollars and workers speak in the language of things) </li></ul>
Joseph Juran’s Philosophy <ul><li>Juran’s prescriptions focus on 3 major quality processes called the Quality Trilogy: </li></ul>Quality planning- identifying customers both external and internal, determining their needs, translating customer needs into specifications, developing product features that respond to those needs Quality control- the process of meeting quality goals (based on meeting that needs of customers) at a minimum combined costs during operations. Quality improvement- the process of breaking through to unprecedented levels of performance.
Philip B. Crosby’s Philosophy <ul><li>Crosby’s 5 Absolutes of Quality Management : </li></ul><ul><li>Quality means conformance to requirements, not elegance. </li></ul><ul><li>There is no such thing as a quality problem. </li></ul><ul><li>There is no such thing as the economics of quality; doing the job right the first time is always cheaper. </li></ul><ul><li>The only performance measurement is the cost of quality, which is the expense of non-conformance. </li></ul><ul><li>5. The only performance standard is “Zero Defects” </li></ul>