What Does Today’s Business Environment Look Like? Global marketplace foreign competition foreign customers Global quality standards that are continually being upgraded Volatile economy good prospects for the “winner’s” Rapid turnover of technologies and products Employees are highly skilled

Global marketplace

foreign competition

foreign customers

Global quality standards

that are continually being upgraded

Volatile economy

good prospects for the “winner’s”

Rapid turnover of technologies and products

Employees are highly skilled

Quality - What’s the Big Deal? The Eternal Battle : Q uantity vs. Q uality Quantity goes directly to the bottom line: more product out ==> more $$$ But what are the costs associated with Quality?

The Eternal Battle : Q uantity vs. Q uality

Quantity goes directly to the bottom line:

more product out ==> more $$$

But what are the costs associated with Quality?

What is Quality? Fitness for Use Conformance to Specifications Producing the Very Best Products Excellence in Products and Services Total Customer Satisfaction Exceeding Customer Expectations Quality improvement starts with reducing Product VARIABILITY.

Fitness for Use

Conformance to Specifications

Producing the Very Best Products

Excellence in Products and Services

Total Customer Satisfaction

Exceeding Customer Expectations

Quality improvement starts with reducing Product VARIABILITY.

Quality - What’s the Big Deal? Direct Costs of Poor Quality: Lost Revenue: scrap, rework, repair Lost Productivity: materials, machines, and personnel Inspection Costs: inspectors, testing machines External Costs: warranty claims, price adjustments, late charges Indirect Costs of Poor Quality - Upset Customers: It is 5-7X harder to attract a new customer than to retain a current one Dissatisfied customers tell 8-20 people about their dissatisfaction. Satisfied customers only tell 3-5 people.

Direct Costs of Poor Quality:

Lost Revenue: scrap, rework, repair

Lost Productivity: materials, machines, and personnel

Inspection Costs: inspectors, testing machines

External Costs: warranty claims, price adjustments, late charges

Indirect Costs of Poor Quality - Upset Customers:

It is 5-7X harder to attract a new customer than to retain a current one

Dissatisfied customers tell 8-20 people about their dissatisfaction.

Satisfied customers only tell 3-5 people.

Statistical Process Control How do we reduce Product Variability? We use Statistical Process Control ! (SPC) Statistical Process Control : The application of statistical techniques to the control and improvement of processes.

How do we reduce Product Variability?

We use Statistical Process Control ! (SPC)

Statistical Process Control : The application of statistical techniques to the control and improvement of processes.

What are the sources of variation in a process? Machine variation Raw Material variation Different methods used Measurement variation Operator variation Environmental factors

Machine variation

Raw Material variation

Different methods used

Measurement variation

Operator variation

Environmental factors

Causes of Variation Random, chance, constant, common, unknown causes the “rhythm” of the process Assignable, special causes something has changed

Random, chance, constant, common, unknown causes

the “rhythm” of the process

Assignable, special causes

something has changed

Random, chance variation: “ 4M’s and OE” Machine Material Method Measurement Operator Environment

“ 4M’s and OE”

Machine

Material

Method

Measurement

Operator

Environment

Assignable Causes of Variation: The Backbone of SPC Examples of things that may be assignable causes of variation: machine troubles (damaged saw teeth, plugged blowpipe, etc.) faulty measuring device operator overcontrol worker fatigue drastic changes in raw material

Examples of things that may be assignable causes of variation:

machine troubles (damaged saw teeth, plugged blowpipe, etc.)

faulty measuring device

operator overcontrol

worker fatigue

drastic changes in raw material

Prevention vs. Detection Detection Model: $$$ lost to: making defective parts finding defective parts repairing or scrapping defective parts if/when detection fails, additional $$$ lost to: warranties cancelled orders

Detection Model:

$$$ lost to:

making defective parts

finding defective parts

repairing or scrapping defective parts

if/when detection fails, additional $$$ lost to:

warranties

cancelled orders

Detection Example Count the number of f’s in this paragraph: The study of SPC can be both fun and rewarding for everyone. When you find out that the fundamental ideas of statistics are fairly easy to learn, you will discover that your efforts result in a great deal of satisfaction. If you treat a production problem as a puzzle, the application of SPC provides clues for its solution, and when the puzzle is finally solved, the feeling of satisfaction is very fulfilling. Puzzles can be frustrating, but their final solution is fun.

Count the number of f’s in this paragraph:

The study of SPC can be both fun and rewarding for everyone. When you find out that the fundamental ideas of statistics are fairly easy to learn, you will discover that your efforts result in a great deal of satisfaction. If you treat a production problem as a puzzle, the application of SPC provides clues for its solution, and when the puzzle is finally solved, the feeling of satisfaction is very fulfilling. Puzzles can be frustrating, but their final solution is fun.

Prevention vs. Detection Prevention Model: minimal increased cost due to adding prevention measures in the process utilizes SPC to reduce product variability at the source no waste! ?? Which model does the semiconductor industry use??

Prevention Model:

minimal increased cost due to adding prevention measures in the process

utilizes SPC to reduce product variability at the source

no waste!

?? Which model does the

semiconductor industry use??

If SPC is the answer, What is the question? What is the distribution of process output? centering, range or “spread”, likelihood of an extreme value Is the process capable of meeting customer expectations? or, is the supplier’s product meeting specs.? What is causing the variability? When is it reasonable to “get tough” with employees?

What is the distribution of process output?

centering, range or “spread”, likelihood of an extreme value

Is the process capable of meeting customer expectations?

or, is the supplier’s product meeting specs.?

What is causing the variability?

When is it reasonable to “get tough” with employees?

Can we afford to minimize the variability? Over time, how can we be sure the process hasn’t changed? When should we “tinker” with the process and when should we leave it alone? If SPC is the answer, What is the question?

Can we afford to minimize the variability?

Over time, how can we be sure the process hasn’t changed?

When should we “tinker” with the process and when should we leave it alone?

SPC is a tool to supplement not replace the existing knowledge your people have of your process. Adoption of SPC principles often leads to increased profits increased productivity increased employee involvement in the process increased morale New technology requires change. Change  fear, resistance,...

SPC is a tool to supplement not replace the existing knowledge your people have of your process.

Adoption of SPC principles often leads to

increased profits

increased productivity

increased employee involvement in the process

increased morale

Quality Control Activities undertaken to regulate quality of a product Product Quality Control Activities to evaluate and regulate quality following production (“inspect and reject”) Process Quality Control Activities to ensure a quality product is produced during manufacturing Some definitions-

Quality Control

Activities undertaken to regulate quality of a product

Product Quality Control

Activities to evaluate and regulate quality following production (“inspect and reject”)

Process Quality Control

Activities to ensure a quality product is produced during manufacturing

Statistical Quality Control (SQC) The application of statistical techniques to the control of quality (SPC, Acceptance Sampling, etc.) Statistical Process Control (SPC) The application of statistical techniques to the control of processes (sometimes considered a subset of SQC) Total Quality Management (TQM) An all-encompassing approach to quality consistent with Deming’s “14 points” Some definitions- Definitions from Quality Systems Terminology , American Society for Quality Control, ANSI/ASQC A3-1987

Statistical Quality Control (SQC)

The application of statistical techniques to the control of quality (SPC, Acceptance Sampling, etc.)

Statistical Process Control (SPC)

The application of statistical techniques to the control of processes (sometimes considered a subset of SQC)

Total Quality Management (TQM)

An all-encompassing approach to quality consistent with Deming’s “14 points”

Who needs to understand and commit to SPC? Everyone in the plant management production engineering and design sales Giving one person all of the responsibility for SPC will not work

Everyone in the plant

management

production

engineering and design

sales

10 Steps of Implementing SPC 1. Analyze the process 2. Decrease obvious variability 3. Gauge capability study 4. Sampling plan 5. Implement CONTROL CHARTS 6. Put the operator in charge 7. Process capability study 8. Improve the process 9. Reduce sampling 10. Return to step 1

1. Analyze the process

2. Decrease obvious variability

3. Gauge capability study

4. Sampling plan

5. Implement CONTROL CHARTS

6. Put the operator in charge

7. Process capability study

8. Improve the process

9. Reduce sampling

10. Return to step 1

TQM- Deming’s 14 Points: Create constancy of purpose for improvement of product and service Adopt the new philosophy Cease dependence on mass inspection End the practice of awarding business on price tag alone Improve constantly and forever the system of production and service Institute training Institute leadership Drive out fear Break down barriers between staff areas Eliminate slogans, exhortations, and targets for the workforce Eliminate numerical quotas Remove barriers to pride of workmanship Institute a vigorous program of education and retraining Take action to accomplish the transformation

Create constancy of purpose for improvement of product and service

Adopt the new philosophy

Cease dependence on mass inspection

End the practice of awarding business on price tag alone

Improve constantly and forever the system of production and service

Institute training

Institute leadership

Drive out fear

Break down barriers between staff areas

Eliminate slogans, exhortations, and targets for the workforce

Eliminate numerical quotas

Remove barriers to pride of workmanship

Institute a vigorous program of education and retraining

Take action to accomplish the transformation

TQM- Deming’s 7 Deadly Diseases: Lack of constancy of purpose, failure to plan ahead Emphasis on short-term profits Evaluation of performance, merit rating, annual review Mobility of management Running a company with visible figures alone Excessive medical costs Excessive legal costs

Lack of constancy of purpose, failure to plan ahead

Emphasis on short-term profits

Evaluation of performance, merit rating, annual review

Mobility of management

Running a company with visible figures alone

Excessive medical costs

Excessive legal costs

TQM- Crosby’s 14 Steps: Management commitment The quality improvement team Measurement The cost of quality Quality awareness Corrective action Zero defects planning Employee education ZD day Goal setting Error-cause removal Recognition of good work in the quality process Quality councils Repetition

Management commitment

The quality improvement team

Measurement

The cost of quality

Quality awareness

Corrective action

Zero defects planning

Employee education

ZD day

Goal setting

Error-cause removal

Recognition of good work in the quality process

Quality councils

Repetition

Deming vs. Crosby Where do they agree? Management commitment Employee training Never ending process Remove barriers, create teams Where do they disagree? The use of numerical quotas Zero defects Slogans and posters

Where do they agree?

Management commitment

Employee training

Never ending process

Remove barriers, create teams

Where do they disagree?

The use of numerical quotas

Zero defects

Slogans and posters

Quality Initiatives Malcolm Baldridge National Quality Award recognizes world-class quality management establishes a set of standards ISO9000 globally accepted quality standard assures customers of a certain level of quality requires regular re-certification

Malcolm Baldridge National Quality Award

recognizes world-class quality management

establishes a set of standards

ISO9000

globally accepted quality standard

assures customers of a certain level of quality

requires regular re-certification