ITED 434 Quality Organization


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  • DISCUSSION: 1. How did Phillip Crosby get involved in quality? 2. What are the 3 areas of quality that he discussed? 3. What was the zero defects movement? 4. What does management need to do to make quality successful?
  • ITED 434 Quality Organization

    1. 1. PTTE 434 - Lecture 1 Quality Assurance, Organization & Management Jim Wixson, CVS, CMfgE [email_address] (208) 520-2296 (mobile) (425) 385-8028 (Everett Apartment) (425) 294-6947 (Boeing Office)
    2. 2. Lecture 1 - Objectives <ul><li>Learn the five definitions of quality </li></ul><ul><li>Learn about some of the various quality “movements. </li></ul><ul><li>Understand the concept of “Cost of Poor Quality.” </li></ul><ul><li>Understand the concept of “Continuous Improvement.” </li></ul><ul><li>Talk about some of the continuous improvement leaders and tools. </li></ul><ul><li>Learn about the importance of defining the problem well before trying to solve it. </li></ul>
    3. 3. Garvin’s Five Definitions of Quality <ul><li>Transcendent Definition (Relative Quality): Quality is universally recognizable; it is related to a comparison of features and characteristics of products. </li></ul><ul><li>Product-Based: Quality is a precise and measurable variable. Differences in quality reflect differences in quantity of some product attribute. </li></ul><ul><li>User-Based Definition: Quality is “fitness for intended use.” </li></ul>
    4. 4. Garvin’s Five Definitions of Quality (Cont’d) <ul><li>Manufacturing-Based Definition: Quality is “conformance to specifications.” </li></ul><ul><li>Value-Based Definition: Quality is defined in terms of costs and prices. A quality product is one that provides performance at an acceptable price or conformance at an acceptable costs. </li></ul>
    5. 5. Quality Revolution or Quality Confusion? Quality Circles Total Quality Management Statistical Process Control Six Sigma Quality Control Zero Defects Defect Prevention Quality Function Deployment Continuous Quality Improvement Quality Assurance Quality Planning
    6. 6. Juran’s Approach <ul><li>Balanced approach using managerial, statistical, and technological concepts of quality </li></ul><ul><li>Operational Framework: Quality Planning, Control, and Improvement </li></ul>
    7. 7. W. Edwards Deming <ul><li>Broad Systems view of quality </li></ul><ul><li>14 points focused on four parts: </li></ul><ul><ul><li>systems approach </li></ul></ul><ul><ul><li>statistical variation </li></ul></ul><ul><ul><li>nature and scope of knowledge </li></ul></ul><ul><ul><li>psychology and understanding of human behavior </li></ul></ul>
    8. 8. A. V. Feigenbaum <ul><li>Emphasized “ Total Quality Control ” throughout all functions of the organization. </li></ul><ul><li>Total Quality Control means both planning and control . </li></ul><ul><li>Provide technical and managerial procedures to ensure customer satisfaction and an economical cost of quality. </li></ul>
    9. 9. Philip Crosby <ul><li>Defined quality as: Conformance to requirements. </li></ul><ul><li>The only performance standard is ZERO DEFECTS . </li></ul><ul><li>All levels of employees can be motivated, but, they need the right tools. </li></ul>
    10. 10. Crosby’s Four Absolutes of Quality Management <ul><li>Quality is defined as conformance to requirements , not as 'goodness' nor 'elegance'. </li></ul><ul><li>The system for causing quality is prevention , not appraisal . </li></ul><ul><li>The performance standard must be Zero Defects , not 'that's close enough' . </li></ul><ul><li>The measurement of quality is the Price of Non-conformance , not indices . </li></ul>
    11. 11. Kaoru Ishikawa <ul><li>Showed the Japanese how to integrate the many tools of quality, especially the simpler tools. </li></ul><ul><li>Basic 7 Tools: Histograms, Pareto Charts, Cause and Effect Diagrams, Run Charts, Scatter Diagrams, Flow Charts, Control Charts </li></ul>
    12. 12. Six Sigma?
    13. 13. Show Film <ul><li>Carving a Career in Quality , Phillip Cosby and Assoc., 25 min. </li></ul>
    14. 14. It can’t be done! <ul><li>“Management wants us to add on these quality activities to our regular duties without giving us the additional time [to accomplish them] -- it can’t be done!” </li></ul><ul><li>Discussion - How can it be done? </li></ul><ul><li>Has your employer implemented any quality improvement programs? </li></ul><ul><li>How was it done? </li></ul>
    15. 15. Quality? - Convincing Management <ul><li>Loss of production </li></ul><ul><li>Loss of customers </li></ul><ul><li>Loss of business </li></ul><ul><li>Loss of jobs </li></ul><ul><li>Class - Can you list some more reasons? </li></ul>
    16. 16. Hidden costs of poor quality Sea of Competition Reprocessing Rejects Sorting Inspection Customer returns Warranty expenses Downgrading of product Lost sales Process downtime Extra inventory Lost discounts Damaged goods Premium freight costs Customer allowances Overtime to correct errors Loss of good will Paperwork errors Delays Obsolete inventory Incorrect orders shipped Extra process capacity Competitor Competitor Competitor
    17. 17. Quality? - Convincing Management <ul><li>Quality is no longer just a technical issue, it is a business issue. </li></ul><ul><li>In order for a quality program to succeed, top management must be involved and committed to its success. </li></ul><ul><li>A company’s success is directly related to management’s commitment to quality. </li></ul>
    18. 18. Opportunity Cost of Attrition Dollars (000s) Number of Households Quarters 120,000 124,000 122,500 125,000 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 50,000 0 100,000 150,000 300,000 200,000 250,000 1Q $26,000 2Q $28,000 3Q $27,000 4Q $28,500 Annual Avg. profit lost (000s) Households defecting
    19. 19. Optimum Cost of Quality Quality of Conformance % Cost per Good Unit of Product 100 0 (Perfection) (No quality) Total quality costs per good unit of product Failure costs Costs of appraisal plus prevention Optimum cost
    20. 20. Two Components of Quality
    21. 21. Quality Progress Market research Customer service Marketing, administrative support Inspection Test Production Process Control Operations planning Specification Product development and design Market research Wholesaling Retailing Use Feedback Purchasing Suppliers
    22. 22. Little Q and Big Q
    23. 23. Continuous Improvement 1. Agree on and document my requirements with my supplier. 2. Return defective inputs to my supplier promptly and tactfully. 3. Feedback input quality data to my supplier. 1. Understand my customer requirements, and agree on and document my deliverables. 2. Reduce defects and variations in my output. 3. Measure my output quality from my customer’s perspective. 1. Learn to apply the tools of quality - teach others. 2. Continuously improve my process - reduce defects, cycle time, and know benchmarks. 3. Document and display my process, defect levels, and CI projects. I Am Responsible for Quality As a Good Process Owner or User I will: As a Good Supplier I will: As a Good Customer I will: Requirements and feedback My input My supplier My customer Requirements and feedback My output
    24. 24. Competitive Standing
    25. 25. Attribute Comparison - Radar Graph
    26. 26. Performance - Satisfaction Map Maintain Status quo Leverage competitive strength Assign little or no priority on action. Add resources to achieve improvement Importance Performance (% satisfied) 20 0 60 40 80 100 17.5 35 52.5 70 Product Sales Repairs Billing
    27. 27. Convincing upper management <ul><li>Return on assets (ROA) = Profit margin x Asset turnover </li></ul><ul><li>Assume COPQ* = 10% of sales revenue </li></ul><ul><li>Profit margin = 7% </li></ul><ul><li>Asset turnover = 3.0 </li></ul><ul><li>=> ROA = 7% x 3.0 =21% </li></ul><ul><li>Assume COPQ reduced to 6% of sales revenue </li></ul><ul><li>=> Profit margin = 7% + (10% - 6%) = 11% </li></ul><ul><li>Asset turnover = 3.0 </li></ul><ul><li>=> ROA = 11% x 3.0 = 33% </li></ul><ul><li>A 4% reduction in COPQ results in a 12% increase in ROA!! </li></ul>*Cost of Poor Quality
    28. 28. Convincing upper management <ul><li>Estimate the size of quality related losses. </li></ul><ul><li>Identify ways of improving quality. </li></ul><ul><li>Estimate the savings and other benefits. </li></ul><ul><li>Calculate return on investment (ROI) </li></ul><ul><li>Use a successful case history to justify a broader program. </li></ul><ul><li>If all else fails, take pictures of waste and/or hazards (EIMCO example). </li></ul>
    29. 29. Are Quality Approaches Influenced By Culture? Quality Approaches are Influence by Culture The US approach has historically been command-and-control oriented. The Japanese approach is based on an ethic of consistency and emphasis on reduction of waste. The Europeans have adopted broad standards that can be adapted to the diverse nation states of the EC.
    30. 30. National and International Quality Awards <ul><li>Malcolm Baldrige National Quality Award </li></ul><ul><li>Deming Prize </li></ul><ul><li>European Quality Award </li></ul><ul><li>Shingo Prize </li></ul>The US approach has historically been command-and-control oriented.
    31. 31. The Malcolm Baldrige National Quality Award <ul><li>Malcolm Baldrige National Quality Award </li></ul><ul><ul><li>The award is open to small (less than 500 employees) and large firms (more than 500 employees) in the manufacturing and service sectors. </li></ul></ul><ul><ul><li>There can be only two winners per category each year. That limits the number of yearly awards to six. </li></ul></ul>
    32. 32. The Malcolm Baldrige National Quality Award <ul><li>The President of the United States traditionally presents the Awards at a special ceremony in Washington, DC. Awards are made annually to recognize U.S. organizations for performance excellence. The Award eligibility categories are: </li></ul><ul><ul><li>manufacturing businesses </li></ul></ul><ul><ul><li>service businesses </li></ul></ul><ul><ul><li>small businesses </li></ul></ul><ul><ul><li>education organizations </li></ul></ul><ul><ul><li>health care organizations </li></ul></ul><ul><li>Recipients are expected to share information about their successful performance strategies with other U.S. organizations. </li></ul>
    33. 33. The Malcolm Baldrige National Quality Award <ul><li>The Award is named for Malcolm Baldrige, who served as Secretary of Commerce from 1981 until his tragic death in a rodeo accident in 1987. His managerial excellence contributed to long-term improvement in efficiency and effectiveness of government. </li></ul>
    34. 34. The Malcolm Baldrige National Quality Award <ul><li>The Malcolm Baldrige National Quality Award was created by Public Law 100-107, signed into law on August 20, 1987. </li></ul><ul><li>The Award Program, responsive to the purposes of Public Law 100-107, led to the creation of a new public-private partnership. </li></ul><ul><li>Principal support for the program comes from the Foundation for the Malcolm Baldrige National Quality Award, established in 1988. </li></ul>
    35. 35. The Malcolm Baldrige National Quality Award <ul><li>Key Characteristics of the MBNQA Criteria </li></ul><ul><ul><li>The criteria focus on business results. Companies must show outstanding results in a variety of areas to win. </li></ul></ul><ul><ul><li>The Baldrige criteria are nonprescriptive and adaptive. Although the focus on the Baldrige award is on results, the means for obtaining these results are not prescribed. </li></ul></ul>
    36. 36. The Malcolm Baldrige National Quality Award <ul><li>Key Characteristics of the MBNQA (cont.) </li></ul><ul><ul><li>The criteria support company-wide alignment of goals and processes. </li></ul></ul><ul><ul><li>The criteria permit goal-based diagnosis. </li></ul></ul><ul><ul><li>The criteria and scoring guidelines provide assessment dimensions. </li></ul></ul>
    37. 37. MBNQA Criteria <ul><li>The Criteria are designed to help organizations use an integrated approach to organizational performance management that results in : </li></ul><ul><ul><li>delivery of ever-improving value to customers, </li></ul></ul><ul><ul><li>contributing to marketplace success </li></ul></ul><ul><ul><li>improvement of overall organizational effectiveness and capabilities </li></ul></ul><ul><ul><li>organizational and personal learning </li></ul></ul>
    38. 38. MBNQA Criteria <ul><li>The Criteria are the basis for organizational self-assessments,for making Awards, and for giving feedback to applicants. In addition, the Criteria have three important roles in strengthening U.S. competitiveness: </li></ul><ul><ul><li>to help improve organizational performance practices, capabilities, and results </li></ul></ul><ul><ul><li>to facilitate communication and sharing of best practices information among U.S. organizations of all types </li></ul></ul><ul><ul><li>to serve as a working tool for understanding and managing performance and for guiding organizational planning and opportunities for learning </li></ul></ul>
    39. 39. The Malcolm Baldrige National Quality Award Baldrige Award Framework 4 Information and analysis 3 Customer and market focus 6 Process management 1 Leadership 7 Business results 2 Strategic planning 5 HR develop. & management Customer and Market Focused Strategy and Action Plans
    40. 40. In the second phase, Board of Examiners to conduct a rigorous evaluation of an organization's performance management system and the results of its processes. The first phase of the Award cycle is to establish that the applicant meets the eligibility requirements. Applicants submit an Eligibility Certification Package certifying that the organization is eligible to apply for the Award. The third phase of the Award cycle involves the review of the application package. Applications are reviewed and evaluated by members of the Board of Examiners, all of whom adhere to strict rules regarding conflict of interest. The review is conducted in three stages: Stage 1 - Independent Review Stage 2 - Consensus Review Stage 3 - Site Visit Review
    41. 41. The Malcolm Baldrige National Quality Award <ul><li>Being a Baldrige Examiner </li></ul><ul><ul><li>Appointment to the board of Trustees for the MBNQA Board of Examiners is a very prestigious designation. </li></ul></ul><ul><ul><li>Examiners are unpaid volunteers, and must be willing to give up approximately 10% of their year to serve as an examiner. </li></ul></ul>
    42. 42. The Malcolm Baldrige National Quality Award <ul><li>For more information on the Malcolm Baldridge National Quality Award, visit: </li></ul><ul><li>http:// / </li></ul>
    43. 43. Quality Improvement: The Japanese Way <ul><li>Deming Prize </li></ul><ul><ul><li>The Deming Prize for quality was established in 1951 by the Japanese Union of Scientists and Engineers (JUSE). </li></ul></ul><ul><ul><li>The Deming Prize is much more focused on processes than is the Baldrige. </li></ul></ul>The Japanese approach is based on an ethic of consistency and emphasis on reduction of waste.
    44. 44. What is the Deming Prize? <ul><li>The Deming Application Prize Given to companies or divisions of companies that have achieved distinctive performance improvement through the application of TQM in a designated year. </li></ul><ul><li>The Deming Prize for Individuals Given to individuals who have made outstanding contributions to the study of TQM or statistical methods used for TQM, or individuals who have made outstanding contributions in the dissemination of TQM. </li></ul><ul><li>The Quality Control Award for Operations Business Units Given to operations business units of a company that have achieved distinctive performance improvement through the application of quality control/management in the pursuit of TQM in a designated year. </li></ul>
    45. 45. The Deming Prize <ul><li>For more information on the Deming Prize visit: </li></ul>http:// /
    46. 46. Other Japanese Contributions to Quality Thought <ul><li>Lean Manufacturing (Toyota Production System) </li></ul><ul><ul><li>Lean is a method of systematically eliminating waste in a production system. </li></ul></ul><ul><ul><li>Lean dramatically reduces cycle time. </li></ul></ul><ul><ul><li>Lean focuses on the company’s “value stream” to identify wasted movement, wasted time, wasted inventory, and wasted space. </li></ul></ul><ul><ul><li>Lean has been adopted by many US manufacturers and other firms and has aided them in achieving dramatic improvements in operations </li></ul></ul>
    47. 47. Other Japanese Contributions to Quality Thought - 5 S’s <ul><li>Other Japanese Contributions to Quality (cont.) </li></ul><ul><ul><li>The Five S’s. The five Ss are a sequential process that companies follow to literally “clean up their acts.” The Ss are: </li></ul></ul><ul><ul><ul><li>Seri ( Sort ): organizing by getting rid of the unnecessary. </li></ul></ul></ul><ul><ul><ul><li>Seiton ( set in order ): neatness that is achieved by straightening offices and work areas. </li></ul></ul></ul><ul><ul><ul><li>Siso ( Shine ): cleaning plant and equipment to eliminate dirtiness that can hide or obscure problems. </li></ul></ul></ul><ul><ul><ul><li>Seiketsu ( Standardize ): standardizing locations for tools and other materials. </li></ul></ul></ul><ul><ul><ul><li>Shetsuke ( Sustain ): discipline in maintaining the prior four Ss. </li></ul></ul></ul>
    48. 48. Other Japanese Contributions to Quality Thought <ul><li>Other Japanese Contributions to Quality (cont.) </li></ul><ul><ul><li>Quality Circles </li></ul></ul><ul><ul><ul><li>Are natural work teams made up of workers that are empowered to improve processes they use. </li></ul></ul></ul><ul><ul><li>Total Productive Maintenance (TPM) </li></ul></ul><ul><ul><ul><li>The idea behind this concept is that the worst condition a machine should ever by is on the day you purchase it. </li></ul></ul></ul>
    49. 49. Shingo Prize for Excellence in Manufacturing <ul><li>Named for Japanese industrial engineer Shigeo Shingo who distinguished himself as one of the world’s leading experts in improving manufacturing processes. </li></ul><ul><li>The Prize was established in 1988 to promote awareness of Lean manufacturing concepts </li></ul><ul><li>Recognizes companies in the United States, Canada, and Mexico that achieve world-class manufacturing status. </li></ul>
    50. 50. Shingo Prize for Excellence in Manufacturing <ul><li>The Shingo Prize recognizes organizations and research that is consistent with its mission and model with two types of prizes: </li></ul><ul><ul><ul><li>Business Prize —promotes use of world-class manufacturing strategies and practices to achieve world-class results. </li></ul></ul></ul><ul><ul><ul><li>Research Prize —promotes research and writing regarding new knowledge and understanding of manufacturing processes. </li></ul></ul></ul><ul><li>Business Week referred to the Shingo Prize as the “Nobel prize of manufacturing,” because it establishes the standard for world-class excellence. </li></ul>
    51. 51. Shingo Prize for Excellence in Manufacturing <ul><li>For more information on the Shigo Prize visit: </li></ul>http://
    52. 52. Quality Improvement: The European Way <ul><li>ISO 9000 </li></ul><ul><ul><li>Is the European standard for quality that has been expanded worldwide. </li></ul></ul><ul><li>The ISO 9000 family is primarily concerned with &quot;quality management&quot;. This means what the organization does to fulfil: </li></ul><ul><ul><li>the customer's quality requirements, and applicable regulatory requirements, while aiming to enhance customer satisfaction, and achieve continual improvement of its performance </li></ul></ul>The Europeans have adopted broad standards that can be adapted to the diverse nation states of the EC.
    53. 53. Quality Improvement: The European Way <ul><li>The ISO 14000 family is primarily concerned with &quot;environmental management&quot; . This means what the organization does to: </li></ul><ul><ul><li>minimize harmful effects on the environment caused by its activities, and to </li></ul></ul><ul><ul><li>achieve continual improvement of its environmental performance. </li></ul></ul>
    54. 54. ISO 9000 and 14000 <ul><li>ISO 9000 and ISO 14000 are known as generic management system standards . Generic means that the same standards can be applied to any organization, large or small, whatever its product - including whether its &quot;product&quot; is actually a service - in any sector of activity, and whether it is a business enterprise, a public administration, or a government department. </li></ul><ul><li>Management system refers to what the organization does to manage its processes, or activities in order that the products or services that it produces meet the objectives it has set itself, such as the following: </li></ul><ul><ul><ul><ul><li>satisfying the customer's quality requirements , </li></ul></ul></ul></ul><ul><ul><ul><ul><li>complying to regulations , or </li></ul></ul></ul></ul><ul><ul><ul><ul><li>meeting environmental objectives . </li></ul></ul></ul></ul>
    55. 55. ISO 9000 and 14000 <ul><li>For more information on the ISO 9000 and ISO 14000 visit: </li></ul>
    56. 56. European Quality Award <ul><li>European Foundation for Quality Management (EFQM) was founded in 1988 by the Presidents of 14 major European companies </li></ul><ul><li>First European Quality Award issued in 1992 </li></ul><ul><li>Endorsed by the EU Commission </li></ul><ul><li>Network has more than 700 members </li></ul><ul><li>Formed the European framework for quality improvement along the lines of the Malcolm Baldrige Model in the USA and the Deming Prize in Japan. </li></ul>The Europeans have adopted broad standards that can be adapted to the diverse nation states of the EC.
    57. 57. European Quality Award <ul><li>Europe's most prestigious Award for organizational Excellence </li></ul><ul><li>Award levels are: </li></ul><ul><ul><li>Award Winner </li></ul></ul><ul><ul><li>Prize Winners </li></ul></ul><ul><ul><li>Finalists </li></ul></ul><ul><ul><li>Recognized for Excellence </li></ul></ul>
    58. 58. European Quality Award <ul><li>Prize Winner categories consist of : </li></ul><ul><ul><ul><ul><li>Leadership and constancy of purpose </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Customer focus </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Corporate social responsibility </li></ul></ul></ul></ul><ul><ul><ul><ul><li>People development and involvement </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Results orientation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Management by processes and facts </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Continuous learning, innovation and improvement </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Partnership development </li></ul></ul></ul></ul>
    59. 59. European Quality Award <ul><li>For more information on the European Quality Award visit: </li></ul>http://
    60. 60. Contributions of Various Disciplines <ul><li>Finance : Measuring the cost of poor quality </li></ul><ul><li>Industrial Engineering : Design of integrated systems, measurement, problem solving, work analysis </li></ul><ul><li>Information Technology : Measurement, analysis, and reporting on quality </li></ul><ul><li>Marketing Research : Competitive standing on quality, understanding customer desires </li></ul><ul><li>Operations Management : Management of integrated systems </li></ul>
    61. 61. <ul><li>Operations research : Analyzing product design alternatives for optimization </li></ul><ul><li>Organizational Behavior : Understanding quality culture, making teams effective. </li></ul><ul><li>Organizational Effectiveness : Satisfying the needs of both internal and external customers. </li></ul>Contributions of Various Disciplines (Cont’d)
    62. 62. Contributions of Various Disciplines (Cont’d) <ul><li>Strategic Planning : Quality as a means of achieving a unique competitive advantage. </li></ul><ul><li>Systems Engineering : Translating customer needs into product features and process features </li></ul><ul><li>Value Engineering : Analysis of essential functions needed by customer to find the lowest cost way of providing these functions that meet quality, reliability, and performance requirements. </li></ul>
    63. 63. Systems Dynamics <ul><li>Most process improvement efforts rely on breaking problems down into smaller, more manageable, components. </li></ul><ul><li>This “reductionist” approach sometimes fails to recognize that the problem is greater than the sum of its parts. </li></ul><ul><li>A “systems thinking” approach to identify interactions between activities and the unintended consequences that can arise from well-intended corrective actions. </li></ul>
    64. 64. How SD can facilitate the Improvement Efforts <ul><li>SD provides a visual model of the system under study. </li></ul><ul><li>Changes to the system can be made easily and quickly analyzed </li></ul><ul><li>Repeated iteration of a SD model can optimize the system under study </li></ul>
    65. 65. Approach for Quality Improvement Projects <ul><li>Get a champion </li></ul><ul><li>Prove the need </li></ul><ul><li>Identify Projects </li></ul><ul><li>Organize teams </li></ul><ul><li>Perform the study, or Kaisan </li></ul><ul><li>Document recommendations </li></ul><ul><li>Perform a pilot project </li></ul><ul><li>Document results </li></ul><ul><li>Expand to entire organization </li></ul>
    66. 66. Carrying out the project <ul><li>Verify project need and mission </li></ul><ul><li>Diagnose the causes </li></ul><ul><li>Provide a remedy and prove its effectiveness </li></ul><ul><li>Deal with resistance to change </li></ul><ul><li>Institute controls to hold the gains </li></ul>
    67. 67. Intro to Six Sigma <ul><li>Six Sigma Capability: Extremely small variation in the process mean compared to the range of the specification limits. </li></ul><ul><li>Even if process mean shifts by 1.5 sigma => no more than 3.4 parts per million fall out of the specification limit. </li></ul><ul><li>Key focus: Y=f(X 1 …X n ) </li></ul>
    68. 68. Breakthrough Improvement <ul><li>Verify the project need (Six  Define ) </li></ul><ul><li>Diagnose the Causes (Six  Measure and Analyze ) </li></ul><ul><li>Provide a remedy and prove its effectiveness (Six  Improve ) </li></ul><ul><li>Deal with resistance to Change (Six  Improve ) </li></ul><ul><li>Institute controls to hold the gains (Six  Control ) </li></ul>
    69. 69. Six Sigma Process - Click Here D efine the Problem M easure A nalyze I mprove C ontrol <ul><li>A) Identify what the customer wants. </li></ul><ul><li>B) Organize an improvement team. </li></ul><ul><li>C) Create a process flow chart - (SIPOC ) </li></ul><ul><li>A) Select “Critical to Quality Characteristic” metrics. </li></ul><ul><li>B) Define Performance Standards. </li></ul><ul><li>C) Validate the measurement System. </li></ul><ul><li>D) Establish baseline performance in terms of Sigma Capability - Defects per Million Opportunities. </li></ul><ul><li>A) Identify significant characteristics and establish process capability. </li></ul><ul><li>B) Define performance targets for significant characteristics. </li></ul><ul><li>C) Identify root cause of process variation. </li></ul><ul><li>A) Identify and evaluate potential solutions. </li></ul><ul><li>B) Implement short-term countermeasures. </li></ul><ul><li>C) Implement long term corrective actions. </li></ul><ul><li>D) Identify systemic indirect effects and unintended consequences of improvement ideas. </li></ul><ul><li>E) Establish operating tolerances for new process. </li></ul><ul><li>A) Verify corrective actions and validate new measurement systems. </li></ul><ul><li>B) Determine process capability. </li></ul><ul><li>C) Establish and implement control plan. </li></ul><ul><li>Move on to next highest priority process. </li></ul>End
    70. 70. Value Engineering <ul><li>Value Engineering (VE) is an intensive, interdisciplinary problem solving activity that focuses on improving the value of the functions that are required to accomplish the goal, or objective of any product, process, service, or organization. </li></ul><ul><li>VALUE METHODOLOGY “The systematic application of recognized techniques which identify the functions of the product or service, establish the worth of those functions, and provide the necessary functions to meet the required performance at the lowest overall cost.” </li></ul><ul><li>* John M. Bryant, VM Standard , Society of American Value Engineers, Oct. 1998 </li></ul>
    71. 71. Value Engineering/Value Analysis - Why is it important? <ul><li>Last 3 years, 2.7 million manufacturing jobs left the U.S. </li></ul><ul><li>The U.S. is loosing the battle to foreign competition. </li></ul><ul><li>Labor costs $12 to $30 per hour in U.S., less than $1 elsewhere. </li></ul><ul><li>Fewer and fewer people will be required to produce the world’s goods. </li></ul><ul><li>Lean and Six Sigma alone are not enough! </li></ul>
    72. 72. Competitive Advantage <ul><li>Quality is defined as “conformance to specification.” </li></ul><ul><li>Value is defined as: </li></ul><ul><li>You can’t have one without the other! </li></ul><ul><li>Competitive Advantage = Quality + Value </li></ul>Function Cost
    73. 73. Six Step Value Engineering Job Plan Information Phase Creativity Phase Evaluation Phase Planning Phase Reporting Phase Implementation Phase <ul><li>Clearly identify the problem(s) to be solved, and gather information on the background, functions and requirements of the product, process, or system. </li></ul><ul><li>Brainstorm ideas on how to improve the high cost, broken, or inadequately performed key functions. </li></ul><ul><li>Screen ideas for acceptance, score remaining ideas on a scale and group ideas into categories. Develop design scenarios, and selection criteria. Rate and rank ideas. </li></ul><ul><li>Plan how to sell ideas to management, identify key recommendations, plan management presentation. </li></ul><ul><li>Give oral presentation to management, or develop written report. </li></ul><ul><li>Get management approval for go-ahead, make management plan, make assignments, implement, follow-up. </li></ul>
    74. 74. Mapping VE to 6  VA/VE 6  Information Phase Creativity Phase Evaluation Phase Planning Phase Reporting Phase Implementation Phase D efine the Problem M easure A nalyze I mprove C ontrol
    75. 75. Vilfredo Pareto Vilfredo Pareto (1848-1923) was an Italian economist and a political sociologist. He devised the law of the trivial many and the critical few, known as the 80:20 rule. Pareto’s Law states that in many business activities 80% of the potential value can be achieved from just 20% of the effort. The remaining 80% of effort shows relatively little return.
    76. 76. Defining the Problem - Pareto Analysis
    77. 77. Quality Improvement Example Solder Defects
    78. 78. Solder Defects - Pareto Analysis
    79. 79. Ishikawa or Fishbone Diagram
    80. 80. Process Data 1 2 3 4 5 6 7 8 9 10 11 12 350 300 250 200 Temperature o F Seconds Region of cold solder joints Region of heat overload on P.C.B.A.
    81. 81. Conclusions <ul><li>Either raise solder temperature, or slow down the conveyor. </li></ul><ul><li>A previous test years ago had been conducted at a higher temperature, but, resulted in “reflow of tin under the solder mask.” </li></ul><ul><li>A trial was conducted at a higher temperature yielding satisfactory results and broke the resistance to change. </li></ul>
    82. 82. Don’t jump to solution! <ul><li>An apparel manufacturing company detected a problem with it’s “fuseable” lining. </li></ul><ul><li>Many customer returns </li></ul><ul><li>Lining falling off after a few washings </li></ul><ul><li>Solution: “We need a new brand of lining. Our current brand is defective!” </li></ul>
    83. 83. Don’t jump to solution! - DOE Fusible Lining Example A B Current ? Expected
    84. 84. Sporadic v.s. Chronic Problems <ul><li>Sporadic problems are dramatic and require immediate attention. </li></ul><ul><li>Chronic problems are not dramatic, they occur over a long period of time. </li></ul><ul><li>Chronic problems are difficult to solve. </li></ul><ul><li>Chronic problems are “accepted as inevitable.” </li></ul>
    85. 85. Sporadic v.s. Chronic Problems <ul><li>Sporadic problems are solved by fixing the control process. </li></ul><ul><li>Chronic problems are solved using process improvement techniques such as Value Engineering and/or Six Sigma. </li></ul><ul><li>Value Engineering may be applied to sporadic problems as well, e.g., Boeing 737/757 elevator feel computer problem. </li></ul>
    86. 86. Sporadic and chronic quality problems Loss due to defects Time Sporadic departure from historic level Historic level Improved level The difference between historic and improved levels is caused by a chronic disease that can be eliminated economically through process improvement techniques.