A PRESENTATION ON FOR THE SUBJECT:-Production and Operation Management
• In today’s world due to insufficient quality or indifference to quality lead to disputes, which imposes serious drain on the financial resources of a company and limits profit potential.• To be competitive in today’s market, it is essential for construction companies to provide more consistent quality and value to their owners /customers.• It is high time to develop better and more direct relationships with our owners/ customers, to initiate more teamwork at the jobsite, and to producebetter quality work.• TQM owes its origin to two Americans- W.Edwards Deming and J.M. Juran- who launched it first in Japan which was on the process of rebuilding its economy devastated by World War- 2
ABOUT• WHAT IS TQM?TQM is an integrated organizational approach in delighting customers(both external and internal) by meeting their expectations on acontinuous basis through everyone involved with the organizationalworking on continuous improvement in all products/processes alongwith proper problem solving methodology.“TO DELIVER HIGHEST VALUE AT LOWEST COST” is themain objective of TQM
Significance of the term TQM Significance of the term TQM• Total - The responsibility for achieving Quality rests with everyone a business no matter what their function. It recognises the necessity to develop processes across the business, that together lead to the reliable delivery of exact, agreed customer requirements. This will achieve the most competitive cost position and a higher return on investment.• Quality - The prime task of any business is to understand the needs of the customer, then deliver the product or service at the agreed time, place and price, on every occasion. This will retain current customers, assist in acquiring new ones and lead to a subsequent increase in market share.• Management - Top management lead the drive to achieve quality for customers, by communicating the business vision and values to all employees; ensuring the right business processes are in place; introducing and maintaining a continuous improvement culture.
Scope of TQM Scope of TQMTQM is the foundation for activities, which includes: • Commitment by senior management and all employees • Meeting customer requirements • Reducing development cycle times • Just In Time/ Flow Manufacturing • Improvement teams • Reducing product and service costs • Systems to facilitate improvement • Employee involvement and empowerment • Recognition and celebration • Challenging quantified goals and benchmarking • Focus on processes / improvement plans This shows that TQM must be practiced in all activities, by all personnel, in Manufacturing, Marketing, Engineering, R&D, Sales, Purchasing, HR, etc.
Deming’s fourteen principles for TQM Deming’s fourteen principles for TQM1) Create constancy of purpose towards improving products and services, allocate resources to provide for long term need rather than short term profitability.2) Adopt the new philosophy for economic stability.3) Cease dependence on inspection to achieve quality.4) End the practice of awarding business on the basis of price tag alone.5) Improve constantly and forever every process.6) Institute modern training (for every employee!).7) Institute modern methods of supervision on helping people do a better 03/04/13 job. 6•
Deming’s fourteen principles for TQM(Contd..) Deming’s fourteen principles for TQM(Contd..)8) Encourage employees to speak up to drive out fear throughout the organisation.9) Break down barriers between departments by encouraging through teamwork and combining the efforts of people.10) Eliminate slogans, exhortations, and targets for the work force.11) Eliminate work standards that prescribe numerical quotas.12) Remove barriers to pride in workmanship.13) Institute a vigorous program of education and self- improvement for everyone.14) Place everybody in the company to work to accomplish the transformation and create a structure in top management that will push every day on the above points. 03/04/13 7
Benefits of TQM Benefits of TQMThe benefits of TQM can be classified into the following two categories:1. Customer satisfaction oriented benefits.2.Economic improvements oriented benefits.1. Customer satisfaction oriented benefits: The benefits under thiscategory are listed below:(a) Improvement in product quality.(b) Improvement in product design.(c) Improvement in production flow.(d) Improvement in employee morale and quality consciousness.(e) Improvement of product service.(f) Improvement in market place acceptance.2. Economic improvements oriented benefits: The benefits under thiscategory are as follows:(a) Reductions in operating costs.(b) Reductions in operating losses.(c) Reductions in field service costs. 03/04/13 8
Rashtriya Ispat Nigam Limited (Vizag Steel Plant) • One of the leading public sector enterprises under the Ministry of Steel, Government of India • Located in the state of Andhra Pradesh.
Why TQM at RINL?• TQM was implemented in the company to achieve the objectives of: – Preparing the companys products and internal processes to global standards – Enhancing quality, productivity, and total performance of the organization – Enriching the quality of work life of its employees
What is Six Sigma exactly means: What is Six Sigma exactly means:o Six sigma is a way of thinking and the results of the approach can yield a spectrum of improvement choices based on the balance of values and risk.o Six sigma is an internationally recognized management process focused on producing high quality products or services to meet the customer’s need and satisfaction
CONTD. CONTD.o Six Sigma is not a set of statistical tools, neither it is a bureaucratic, stage – gate approach to managing the projects but it is represents a philosophy to reduce variation continuously and create a win situation for all the partners in and around the business or services.o Six Sigma pioneer Motorola started the program in 1987 •Motorola describe Six Sigma as a standard methodology "for driving and achieving transformational change within an organization.
Objectives of Six Sigma: Objectives of Six Sigma:1. To reduce variation.2. To solving the problems in scientific manner.3. Six Sigma places an emphasis on the DMAIC approach (define, measure, analyze, improve, and control) to problem solving.4. To develop the bottom line responsibilities towards continuous improvement.5. Organizations using Six Sigma often utilize teams that are assigned well-defined projects with a direct impact on the bottom line.
Three Key Characteristics of Three Key Characteristics of SIX SIGMA: SIX SIGMA: Leadership Commitment: • Achieving Six Sigma is not easy – it requires serious commitment in the form of time, effort, and resources. For a company to be successful, such commitment must come first from the top executive leadership of the organization and must be practiced by everyone.
** Managing Decisions with Data: It is not enough to run a business based on ones experience or "tribal knowledge." Decisions must be based on data versus the typical "I think", "I feel", or "In my opinion" practices that often exist today. With the maturation of the information economy, data is available to virtually everyone in the organization, along with the tools for analyzing that data. Properly using data to Measure, Analyze, Improve, and Control performance forms the foundation of the Six Sigma methodology.
*** Training and Cultural Change: • Improved performance does not and will not happen automatically. High-calibre training is required. Disciplined implementation must follow, and people at all levels have to change the way they go about doing their jobs. •In short, new ways of thinking, communicating, and operating must pervade the entire organization. You also need a methodology. DMAIC and DFSS provide a structured problem solving roadmap and tools towards obtaining the results you expect.
Six Sigma Methodology – DMAIC & IDOV Six Sigma Methodology – DMAIC & IDOVSix Sigma is a process oriented methodology Six Sigma is a process oriented methodologydesigned to improve business performance by designed to improve business performance byimproving specific areas of strategic business improving specific areas of strategic businessprocesses. There are 2 different methodologies processes. There are 2 different methodologiesavailable for carrying out improvements in available for carrying out improvements inprocesses or operations. processes or operations.Improvements can be of two types: improving Improvements can be of two types: improvingthe existing process or designing a new process the existing process or designing a new processaltogether. When we have an existing process altogether. When we have an existing processand we want to improve the process we deploy and we want to improve the process we deploythe DMAIC methodology. While designing a new the DMAIC methodology. While designing a newprocess or completely revamping the existing process or completely revamping the existingprocess the Design for Six Sigma or IDOV process the Design for Six Sigma or IDOVmethodology is deployed. methodology is deployed.
DMAIC Methodology DMAIC MethodologyDefine Define the problem. Define the customer(s) and the requirements. Define the current capability. Define the key processes that will have the greatest impact on customer.Measure Identify the statistical measures to monitor the key process. Set up the data collection plan. Measure the processAnalyse Determine the analysis tools and methods to be used. Summarize the data measured. Run the analysis and determine the root causes, effects, etc.Improve Improve and Implement. Focus on developing process/technology to improve the root cause. Test the method on sample process and validate the improvement.Control Standardize and document the process and implement the plan. Monitor the process and feedback the results back to the process for continuous improvement. 20
DFSS (IDOV) Methodology DFSS (IDOV) MethodologyIdentify Develop a team. Create team charter. Gather VOC. Perform competitive analysis. Develop CTQs and formally tie design to VOC.Design Identify functional requirements. Develop alternative concepts. Evaluate alternatives and select a best-fit concept. Deploy CTQs and predict sigma capability.Optimize Determine process capability. Develop detailed design elements. Predict performance. Optimize design.Verify Test and validate the design. Share feedback with manufacturing and sourcing to improve future manufacturing and designs.
Six Sigma Philosophy Six Sigma Philosophy Improve Improve customer satisfaction customer satisfaction by reducing and eliminating by reducing and eliminating defects defects Greater Profits Greater Profits03/04/13 22
Motorola’s application Motorola’s application of Six Sigma of Six SigmaSix Sigma became a poster child for driving down cost and improving organizationalbottom line when Motorola won the Malcolm Baldrige National Quality Award in1988, which was the ﬁrst year this award was presented. In 1987, Motorola wasoperating at a four sigma level. This means that Motorola was running at defect rateof about 6,200per million opportunities compared to its Japanese counter parts thatwere running at 3.4 defects per million opportunities. Motorola’s defect rates lead toincrease cost to sales and diminished proﬁts and contributed to losing marketshare. Motorola’s customers included many police, ﬁre, and emergency responseorganizations that relied on radios and communication equipments manufactured byMotorola.. Losing these customer’s to foreign competition would be public relationsand ﬁnancial disaster for Motorola.
Given Motorola’s dire situation, Chairman Bob Galvin Given Motorola’s dire situation, Chairman Bob Galvinmandated bold initiative for mandated bold initiative forthe company. This mandate could be summed up as: the company. This mandate could be summed up as:(1) improve product quality by ten times in two years; (1) improve product quality by ten times in two years;(2) improve product quality by 100 times in four years; and (2) improve product quality by 100 times in four years; and(3) reach Six Sigma quality level in ﬁve years. (3) reach Six Sigma quality level in ﬁve years.The immediate goal of Six Sigma is to reduce The immediate goal of Six Sigma is to reducedefects. Reducing defects leads to yield defects. Reducing defects leads to yieldimprovement. Higher yields improve customer improvement. Higher yields improve customersatisfaction. The ultimate goal is enhanced net satisfaction. The ultimate goal is enhanced netincome. income.Six Sigma applications brought process focus to the Six Sigma applications brought process focus to thecompany and resulted in tremendous cost and company and resulted in tremendous cost andprocess improvements. In 2002, Six Sigma process improvements. In 2002, Six Sigmaapplication earned Motorola another Malcolm application earned Motorola another MalcolmBaldrige National Quality Award in the Government Baldrige National Quality Award in the Governmentand Industrial Sector. and Industrial Sector.