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  1. 1. Definition: Total Quality Management <ul><li>Total Quality Management (TQ, QM or TQM) and Six Sigma (6  ) are sweeping “culture change” efforts to position a company for greater customer satisfaction, profitability and competitiveness. </li></ul><ul><li>TQM may be defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer. </li></ul>SHAILENDRA DAF
  2. 2. Quality Descriptions <ul><ul><li>Design Quality (Features) </li></ul></ul><ul><ul><li>vs. </li></ul></ul><ul><ul><li>Conformance Quality </li></ul></ul>SHAILENDRA DAF
  3. 3. Conformance Quality <ul><li>Meeting Our Customer’s Requirements </li></ul><ul><li>Doing (the Right) Things Right the First Time; </li></ul><ul><li>Freedom from Failure (Defects) </li></ul><ul><li>Consistency (Reduction in Variation) </li></ul><ul><li>Continuous Improvement </li></ul><ul><li>Quality in Everything We Do </li></ul>SHAILENDRA DAF
  4. 4. Quality Management History <ul><li>Frederick Winslow Taylor wrote Principles of Scientific Management in 1911 </li></ul><ul><li>Walter A. Shewhart used statistics in quality control and inspection, and showed that productivity improves when variation is reduced (1924); wrote Economic Control of Manufactured Product in 1931 </li></ul><ul><li>W. Edwards Deming and Joseph M. Juran, students of Shewhart, went to Japan in 1950; began transformation from “shoddy” to “world class” goods </li></ul><ul><li>In 1960, Dr. K. Ishikawa formalized “quality circles” - the use of small groups to eliminate variation and improve processes </li></ul><ul><li>In the late ‘70’s and early 80’s: </li></ul><ul><li> - Deming returned from Japan to write Out of the Crisis , </li></ul><ul><li> and began his famous 4-day seminars in the United States </li></ul><ul><li> - Phil Crosby wrote Quality is Free </li></ul><ul><li> - NBC ran “If Japan can do it, why can’t we?” </li></ul><ul><li> - Motorola began 6 Sigma </li></ul>SHAILENDRA DAF
  5. 5. Quality Management History “ On the assembly line at the Ford Motor Company in 1923, most of the workers producing Model T’s were immigrants and could not speak English. Many were also illiterate. Workers learned their trade by modeling the actions of other workers. They were unable to plan, problem-solve, and make decisions. As a result, the Taylor scientific school of management flourished, and MBAs and industrial engineers were invented to do this work. Today, however, the workforce is educated. Workers know what is needed to improve their jobs, and companies that do not tap into this significant source of knowledge will truly be at a competitive disadvantage.” Joseph M. Juran (1991) SHAILENDRA DAF
  6. 6. Quality Management History “ Knowledge-worker productivity is the biggest of the 21st-century management challenges. In the developed countries, it is their first survival requirement . In no other way can the developed countries hope to maintain themselves, let alone to maintain their leadership and their standards of living.” Peter F. Drucker (1999) SHAILENDRA DAF
  7. 7. Quality Management History <ul><li>Deming’s 14 Points </li></ul><ul><li>1. Create constancy of purpose for improvement </li></ul><ul><li>2. Adopt a new philosophy </li></ul><ul><li>3. Cease dependence on mass inspection </li></ul><ul><li>4. Do not award business on price alone </li></ul><ul><li>5. Work continually on the system of production and service </li></ul><ul><li>6. Institute Modern methods of training </li></ul><ul><li>7. Institute modern methods of supervision of workers </li></ul><ul><li>8. Drive out fear </li></ul><ul><li>9. Break down barriers between departments </li></ul><ul><li>10. Eliminate slogans, exhortations, and targets for the work force </li></ul><ul><li>11. Eliminate numerical quotas </li></ul><ul><li>12. Remove barriers preventing pride of workmanship </li></ul><ul><li>13. Institute a vigorous program of education and retraining </li></ul><ul><li>14. Take action to accomplish the transformation </li></ul>SHAILENDRA DAF
  8. 8. A Quality Management System Is… <ul><li>A belief in the employee’s ability to solve problems </li></ul><ul><li>A belief that people doing the work are best able to improve it </li></ul><ul><li>A belief that everyone is responsible for quality </li></ul>SHAILENDRA DAF
  9. 9. Quality Management History <ul><li>Deming’s Concept of “Profound Knowledge” </li></ul><ul><li>Understanding (and appreciation) of Systems </li></ul><ul><li>- optimizing sub-systems sub-optimizes the total system </li></ul><ul><li>- the majority of defects come from systems, the responsibility of </li></ul><ul><li>management (e.g., machines not in good order, defective material) </li></ul><ul><li>Knowledge of Statistics (variation, capability, uncertainty in data, etc.) </li></ul><ul><li>- to identify where problems are, and point managers and workers </li></ul><ul><li>toward solutions </li></ul><ul><li>Knowledge of Psychology (Motivation) </li></ul><ul><li>- people are afraid of failing and not being recognized, so they fear </li></ul><ul><li> how data will be used against them </li></ul><ul><li>Theory of Knowledge </li></ul><ul><li>- understanding that management in any form is a prediction, and is </li></ul><ul><li>based on assumptions </li></ul>SHAILENDRA DAF
  10. 10. Elements for Success <ul><li>Management Support/Involvement </li></ul><ul><li>Mission Statement </li></ul><ul><li>Proper Planning </li></ul><ul><li>Customer and Bottom Line Focus </li></ul><ul><li>Measurement </li></ul><ul><li>Empowerment/Shared Leadership </li></ul><ul><li>Teamwork/Effective Meetings </li></ul><ul><li>Continuous Process Improvement </li></ul><ul><li>Dedicated Resources/Training </li></ul>SHAILENDRA DAF
  11. 11. Benchmarking <ul><li>1. Identify those processes needing improvement. </li></ul><ul><li>2. Identify a firm that is the world leader in performing the process (Library & WWW). </li></ul><ul><li>3. Contact the managers of that company and make a personal visit to interview managers and workers. </li></ul><ul><li>4. Analyze data </li></ul>SHAILENDRA DAF
  12. 12. Baldrige Award Criteria Framework Information, Analysis, and Knowledge Management SHAILENDRA DAF Organizational Profile: Environment, Relationships, and Challenges 1 Leadership 2 Strategic Planning 3 Customer and Market Focus 5 Human Resource Development & Management 7 Business Results 6 Process Management
  13. 13. Malcolm Baldrige National Quality Award (2004) 1.0 Leadership (120 points) 2.0 Strategic Planning (85 points) 3.0 Customer and Market Focus (85 points) 4.0 Information and Analysis (90 points) 5.0 Human Resource Focus (85 Points) 6.0 Process Management (85 points) 7.0 Business Results (450 points) SHAILENDRA DAF
  14. 14. Categories for the Baldrige Award <ul><li>Manufacturing companies or subsidiaries that: </li></ul><ul><ul><li>produce and sell manufactured products or manufacturing processes or </li></ul></ul><ul><ul><li>produce agricultural, mining, or construction products. </li></ul></ul><ul><li>Service companies or subsidiaries that sell service </li></ul><ul><li>Small businesses </li></ul><ul><li>Education Institutions </li></ul><ul><li>Health Care Organizations </li></ul><ul><li>Non-Profit (new) </li></ul>SHAILENDRA DAF
  15. 15. Characteristics of a Baldrige Award Winner <ul><li>The companies formulated a vision of quality and how they would achieve it. </li></ul><ul><li>Senior management was actively involved. </li></ul><ul><li>Companies carefully planned and organized their quality effort to insure effective initiation. </li></ul><ul><li>They vigorously controlled the overall process. </li></ul><ul><li>Studies have shown MBA Winners’ success. </li></ul>SHAILENDRA DAF
  16. 16. ISO 9000 <ul><li>Series of standards agreed upon by the International Organization for Standardization(ISO) </li></ul><ul><li>Adopted in 1987 </li></ul><ul><li>More than 100 countries </li></ul><ul><li>A prerequisite for global competition? </li></ul><ul><li>ISO 9000 directs you to: </li></ul><ul><ul><li>document what you do and then do as you documented. </li></ul></ul>SHAILENDRA DAF
  17. 17. ISO 9000 Series <ul><li>9001 </li></ul><ul><ul><li>Model for Quality Assurance in Design, Production Installation, and Servicing. </li></ul></ul><ul><li>9002 </li></ul><ul><ul><li>Model for Quality Assurance in Production and Installation </li></ul></ul><ul><li>9003 </li></ul><ul><ul><li>Model for Quality Assurance in Final Inspection Test </li></ul></ul>SHAILENDRA DAF
  18. 18. Three Forms of Certification <ul><li>1. First party: A firm audits itself against ISO 9000 standards. </li></ul><ul><li>2. Second party: A customer audits its supplier. </li></ul><ul><li>3. Third party: A &quot;qualified&quot; national or international standards or certifying agency serves as auditor. </li></ul>SHAILENDRA DAF
  19. 19. ISO 9000 versus the Baldrige Award <ul><li>Which should we pursue first? </li></ul><ul><li>What are the differences between the two? </li></ul><ul><li>Do you have to be ISO 9000 certified before going for the Baldrige Award? </li></ul>SHAILENDRA DAF
  20. 20. ISO 9000 versus the Baldrige Award SHAILENDRA DAF Baldrige ISO 9000 QS 9000
  21. 21. Costs of Quality : Categories <ul><li>Appraisal costs </li></ul><ul><li>Prevention costs </li></ul><ul><li>Internal failure costs </li></ul><ul><li>External failure costs </li></ul>SHAILENDRA DAF
  22. 22. The 1-10-100 Rule <ul><li>  </li></ul>1 10 100  Defects caught at their source cost the organization $1.    Defects caught outside of the source department but within the organization cost $10.    Defects that reach the external customer cost $100! SHAILENDRA DAF
  23. 23. Cost of Poor Quality Category Examples <ul><li>Failure – Costs – Internal Prevention Costs </li></ul><ul><li>Re-shipping Quality Administration </li></ul><ul><li>Unnecessary Travel Time Quality Planning </li></ul><ul><li>Re-picking/Picking Quality Systems Design </li></ul><ul><li>Unpacking/Storing Returns Calibration and Maintenance </li></ul><ul><li>Re-order Time Production/Inspection Equipment </li></ul><ul><li>Crediting Time Vendor Assessment </li></ul><ul><li>Quality Training </li></ul><ul><li>Failure Costs – External Appraisal Costs </li></ul><ul><li>Loss of Sales Incoming Test and Inspection </li></ul><ul><li>Complaints In-Process Inspection </li></ul><ul><li>Returns Final Inspection </li></ul><ul><li>Warranty Claims Sampling Procedures </li></ul><ul><li>Quality Audits </li></ul>SHAILENDRA DAF
  24. 24. COPQ Projections $ Appraisal Costs External Failure Costs Internal Failure Costs Prevention Costs $ Saved Total Cost Using a COPQ System Total Cost Without Using A COPQ System Months SHAILENDRA DAF
  25. 25. Process Flow Chart No, Continue… Buffer:Material Received from Supplier Inspect Material for Defects Defects found? Return to Supplier for Credit Yes Can be used to find quality problems. SHAILENDRA DAF
  26. 26. Input-Output Analysis Suppliers Inputs Sub- Processes Outputs Customers S C O P I Measures From Flowchart SHAILENDRA DAF
  27. 27. Example SIPOC - Specifying Equipment Selection and Installation Procedures at Coca-Cola USA Suppliers Customers Coca-Cola Fountain Outputs Equipment Selection Guide Equipment Sales Manuals Technology Cost/ Benefit Matrix Installation Guidelines Installation Time Standards Installation Rating System Installation Design Guidelines Inputs Technical Information Technical Questions Customer Input Process Developing Installation Cost Reduction Programs Developing Equipment Selection Policies and Procedures Designing Installation Policies and Procedures Customers Burger King McDonald’s Prestige Coca-Cola Fountain Equipment Suppliers Measures Number of Entities Using Guidelines Installation Audit Ratings Survey of Users Effectively Using Selection Guidelines SHAILENDRA DAF
  28. 28. Pareto Analysis 80% of the problems may be attributed to 20% of the causes. Assy. Instruct. Frequency Design Purch. Training Other SHAILENDRA DAF
  29. 29. Run Chart 0.44 0.46 0.48 0.5 0.52 0.54 0.56 0.58 1 2 3 4 5 6 7 8 9 10 11 12 Time (Hours) Diameter SHAILENDRA DAF
  30. 30. Histogram Frequency Data Ranges SHAILENDRA DAF
  31. 31. Scatter Diagram 0 2 4 6 8 10 12 0 10 20 30 Hours of Training Defects SHAILENDRA DAF
  32. 32. Checksheet (data collection) <ul><li>Billing Errors </li></ul><ul><ul><li>Wrong Account </li></ul></ul><ul><ul><li>Wrong Amount </li></ul></ul><ul><li>A/R Errors </li></ul><ul><ul><li>Wrong Account </li></ul></ul><ul><ul><li>Wrong Amount </li></ul></ul>Monday SHAILENDRA DAF
  33. 33. Cause & Effect Diagram SHAILENDRA DAF Effect Man Machine Material Method Environment
  34. 34. Fishbone Analysis: Existing Hiring Process Problems SHAILENDRA DAF
  35. 35. Control Charts 970 980 990 1000 1010 1020 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 SHAILENDRA DAF LCL UCL
  36. 36. Customer Survey SHAILENDRA DAF Worst Best Are We On Time? 5 4 3 2 1 Are We Courteous? 5 4 3 2 1 Does The Product Work? 5 4 3 2 1 Is It Cost Effective? 5 4 3 2 1 Overall Rating? General Comments: 5 4 3 2 1
  37. 37. Example Customer Survey Results - Quantas Airways <ul><li>Survey of Frequent Flier Needs – Order of Priority: </li></ul><ul><li>No lost baggage 12. Assistance with connections </li></ul><ul><li>No damaged baggage 13. Being kept informed of delays </li></ul><ul><li>Clean toilets 14. Transport to cities </li></ul><ul><li>Comfortable seats 15. Accurate arrival info </li></ul><ul><li>Prompt baggage delivery 16. Well-organized boarding </li></ul><ul><li>Ample leg room 17. Quick/friendly airport check-in </li></ul><ul><li>Good quality meals 18. Self-service baggage trolleys </li></ul><ul><li>Prompt reservation service 19. On-time arrival </li></ul><ul><li>Friendly/efficient cabin crew 20. Provision of pillows/rugs </li></ul><ul><li>Clean and tidy cabin 21. Assistance with customs </li></ul><ul><li>Comfortable cabin temp 22. On-time departures </li></ul>SHAILENDRA DAF
  38. 38. Continuous Improvement Process Orlando Remanufacturing And Distribution Center SHAILENDRA DAF
  39. 39. Remanufacturing Procedures <ul><li>Clean </li></ul><ul><ul><li>Ice Chest </li></ul></ul><ul><ul><li>Parts </li></ul></ul><ul><ul><li>Tower Assembly </li></ul></ul>Remanufacturing <ul><ul><li>Load Test Ice Bin by Drain </li></ul></ul><ul><ul><li>Evaluate Cold Plate </li></ul></ul><ul><li>Remove </li></ul><ul><ul><li>Cup Rest </li></ul></ul><ul><ul><li>Splash Plate </li></ul></ul><ul><ul><li>Drain Pan </li></ul></ul><ul><ul><li>Valves </li></ul></ul><ul><ul><li>Mounting Blocks </li></ul></ul>Flush Out <ul><ul><li>Install Clamps at Each Tubing End </li></ul></ul><ul><ul><li>Install Tubing to Mounting Block Fittings </li></ul></ul><ul><ul><li>Put’ O ’rings on Fittings </li></ul></ul>Inspect Soda Manifold Requisition Needed Parts <ul><li>Prepare Rear Tower Panel on Woodgrain Units for Sabre Vinyl </li></ul><ul><ul><li>Repair Dents </li></ul></ul><ul><ul><li>Sand </li></ul></ul><ul><ul><li>Clean Surface </li></ul></ul>Reassembly Polish Stainless Steel Surfaces That Will Be Visible Leak Test Drain Pan <ul><li>Test Junction Box </li></ul><ul><ul><li>Continuity </li></ul></ul><ul><ul><li>Correct Secondary Voltage </li></ul></ul>Apply Sabre Vinyl Install New Beverage Tubing and Rubatex Install Drain Pan, Drain Fittings and Hose Install Cup Rest Install Valve Mounting Plate Install and Connect Valve Wiring Assembly Install Valve Mounting Blocks Install Valves Install Sabre Valve Covers, Nozzles and Decals Install Lid Install Tube Protector on Inlets Install Splash Plate Send to QA Hold for Write-off if Bin Leaks or Circuits are Unusable <ul><li>Remove </li></ul><ul><ul><li>Product Hoses, Tower and Disassemble </li></ul></ul><ul><ul><li>Flush Cooling Circuits </li></ul></ul><ul><ul><li>Inspect Fittings </li></ul></ul>Sanitize Cooling Circuits Drill and Tap New Mounting Holes for Broken Hardware <ul><ul><li>Impact and Evaluate Fittings </li></ul></ul><ul><ul><li>Inspect Legs </li></ul></ul><ul><li>Clean Electrical Junction Box </li></ul><ul><ul><li>Check for Frayed Wires </li></ul></ul><ul><ul><li>Tape Connections </li></ul></ul>Install Tower Structure Onto Drain Pan Riser Install Drain Pan Riser Onto Ice Chest Assembly Disassembly and Cleaning SHAILENDRA DAF
  40. 40. Phase 1: Internal Kickbacks To Be Remanufac-tured Equipment Tear Down And Wash Remanu- facture Reassembly Final Clean-up QA Unit Not OK SHAILENDRA DAF
  41. 41. Five Most Common Reasons For Returns From QA January-May (61 units) SHAILENDRA DAF
  42. 42. Reasons for Returns from QA - Weighted Average Weighted Avg. = % Occurring X Defect Cost (0-10, Based on Time to Repair) SHAILENDRA DAF
  43. 43. Why Dirt? <ul><li>Materials </li></ul><ul><li>Cleaning Compounds watered down </li></ul><ul><li>Need Larger Wire Brushes </li></ul><ul><li>People </li></ul><ul><li>Need More Training </li></ul><ul><li>More Attention to Detail – Do it Right the First Time </li></ul><ul><li>Environment </li></ul><ul><li>Dust/Humidity </li></ul><ul><li>Poor Lighting </li></ul><ul><li>Space Limitations </li></ul><ul><li>Measurement </li></ul><ul><li>QA Manager Fixes Some Things Without Informing the Technicians </li></ul><ul><li>Methods </li></ul><ul><li>Need to Rinse Parts off after Sandblasting </li></ul><ul><li>Need Better Procedure for Determining What to Remanufacture Based on its Condition </li></ul><ul><li>Machines </li></ul><ul><li>Best tools for $$? </li></ul>SHAILENDRA DAF
  44. 44. Why Leaks? <ul><li>People </li></ul><ul><li>Use Wrong Clamps </li></ul><ul><li>Don’t Crimp Properly </li></ul><ul><li>Forget to Connect </li></ul><ul><li>Machines </li></ul><ul><li>Bad Dispenser Design </li></ul><ul><li>Need Rims That Make it Easier to Install Tubing </li></ul><ul><li>Environment </li></ul><ul><li>High Temperatures in Warehouse </li></ul><ul><li>Poor Lighting </li></ul><ul><li>Methods </li></ul><ul><li>Softening Tubing with Water that’s Too Hot </li></ul><ul><li>Need to Check Units for All Possible Ways They Could Leak </li></ul><ul><li>Materials </li></ul><ul><li>Bad Tubing </li></ul><ul><li>“ O” Rings Out of Spec </li></ul><ul><li>“ O” Rings Too Old (Dry) </li></ul><ul><li>Measurement </li></ul><ul><li>No Testing for Leaks Prior to QA </li></ul><ul><li>Need to ID by Mfr./Model Which Units Leak the Most </li></ul>SHAILENDRA DAF
  45. 45. PDCA Cycle (Deming Wheel) SHAILENDRA DAF 1. Plan a change aimed at improvement. 1. Plan 2. Execute the change. 2. Do 3. Study the results; did it work? 3. Check 4. Institutionalize the change or abandon or do it again. 4. Act
  46. 46. What is Six Sigma? <ul><li>A sweeping culture change effort to position a company for greater customer satisfaction, profitability and competitiveness (developed by Motorola in the late 1970’s) </li></ul><ul><li>A goal of near perfection in meeting customer requirements </li></ul><ul><li>A comprehensive and flexible system for achieving, sustaining and maximizing business success; uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving and reinventing business processes </li></ul>SHAILENDRA DAF
  47. 47. Six Sigma DMAIC Process Measure Control Define Analyze Improve Define: Define who your customers are, and what their requirements are for your products and services – Their expectations. Define your team goals, project boundaries, what you will focus on and what you won’t. Define the process you are striving to improve by mapping the process. SHAILENDRA DAF
  48. 48. Six Sigma DMAIC Process Measure Control Define Analyze Improve Measure: Eliminate guesswork and assumptions about what customers need and expect and how well processes are working. Collect data from many sources to determine speed in responding to customer requests, defect types and how frequently they occur, client feedback on how processes fit their needs, how clients rate us over time, etc. The data collection may suggest Charter revision. SHAILENDRA DAF
  49. 49. Six Sigma DMAIC Process Measure Control Define Analyze Improve Analyze: Grounded in the context of the customer and competitive environment, analyze is used to organize data and look for process problems and opportunities. This step helps to identify gaps between current and goal performance, prioritize opportunities to improve, identify sources of variation and root causes of problems in the process. SHAILENDRA DAF
  50. 50. Six Sigma DMAIC Process Measure Control Define Analyze Improve Improve: Generate both obvious and creative solutions to fix and prevent problems. Finding creative solutions by correcting root causes requires innovation, technology and discipline. SHAILENDRA DAF
  51. 51. Six Sigma DMAIC Process Measure Control Define Analyze Improve Control: Insure that the process improvements, once implemented, will “hold the gains” rather than revert to the same problems again. Various control tools such as statistical process control can be used. Other tools such as procedure documentation helps institutionalize the improvement. SHAILENDRA DAF
  52. 52. Six Sigma DMADV Process Measure Validate Define Analyze Design Design: Develop detailed design for new process. Determine and evaluate enabling elements. Create control and testing plan for new design. Use tools such as simulation, benchmarking, DOE, Quality Function Deployment (QFD), FMECA analysis, and cost/benefit analysis. SHAILENDRA DAF
  53. 53. Six Sigma DMADV Process Measure Validate Define Analyze Design Validate: Test detailed design with a pilot implementation. If successful, develop and execute a full-scale implementation. Tools in this step include: planning tools, flowcharts/other process management techniques, and work documentation. SHAILENDRA DAF