Critical Factors The Drive Success


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Critical Factors The Drive Success

  1. 1. Baldrige National Quality Program 2010Critical Factors the Drive Success Dave Stoltz President, Louisiana Quality Foundation
  2. 2. Baldrige National Quality Program 2010The Path to Excellence and Some Path Building Tools
  3. 3. Baldrige National Quality Program 2010 DM Petroleum Operations CompanyCustomer & Quality-Focused Performance
  4. 4. Baldrige National Quality Program 2010 The Baldrige Framework “The Baldrige Award enjoys very broad, positive recognition among leaders in each of the Baldrige Award-eligible sectors. . . . More than 70 percent of leaders surveyed among Fortune 1000 companies said they are likely to use the Criteria for Performance Excellence.” Booz Allen HamiltonResults from using theCriteria:• Better employee relations• Higher productivity• Greater customer loyalty• Increased market share• Improved profitability
  5. 5. Baldrige National Quality Program 2010Six Sigma Six Sigma concentrates on variation reduction by using statistical methods to lower process defect rates to less than 3.4 defects per million opportunities. Six Sigma Methodologies: • DMAIC - define, measure, analyze, improve, and control • DMADV - define, measure, analyze, design, and verify
  6. 6. Baldrige National Quality Program 2010 Lean is focused on the elimination of all nonvalue-adding activities and waste from an organization’s processes. Map and understandWaste includes value stream• Scrap• Rework Goals:• Inspection Customer- • Increase productivity• Inventory defined value • Eliminate waste Make value • Maximize resource stream flow• Queuing time utilization• Transporting materials or products Continuous• Redundant motion process• Anything for which a improvement final customer would not want to pay
  7. 7. Baldrige National Quality Program 2010ISO 9001: 2008A standards-based approach to managing an organization’s processesto consistently deliver products that meet customer requirements. Theapproach is based on registering a quality management system thatcomplies with the standard. • Take action to • Set objectives and improve processes to deliver products that meet customer requirements Quality ACT PLANManagement System CHECK DO • Monitor / measure • Implement processes and processes products against objectives and requirements
  8. 8. Baldrige National Quality Program 2010 The Baldrige Criteria The Criteria for Performance Excellence emphasize • Continuous performance improvement • Innovation • Integration • Results • SustainabilityThe Criteria for PerformanceExcellence focus on commonrequirements and are • Nonprescriptive • Holistic • Inclusive • Adaptable • Integrative
  9. 9. Baldrige National Quality Program 2010The Baldrige Criteria, Six Sigma, and Lean are complementary, notmutually exclusive. Many organizations use Baldrige to develop anoverall performance map to identify areas that need improvement,and then they may use one or more of these tools to designoperations or improve processes within the organization. .
  10. 10. Baldrige National Quality Program 2010Six Sigma and LeanHow they relate to the seven Baldrige CriteriaCategories
  11. 11. Baldrige National Quality Program 2010 The Leadership CategoryBaldrige, Six Sigma, and Lean all benefit fromleaders who• Align financial and human resources• Communicate cultural norms• Encourage and provide resources• Solidify a culture of organizational excellenceOnly Baldrige addresses the overall leadershipsystem.
  12. 12. Baldrige National Quality Program 2010Strategic Planning Category• Six Sigma and Lean can be methodologies for coordinating resource use toward organizational objectives identified using the Baldrige Criteria.• Six Sigma provides tools for measuring progress.
  13. 13. Baldrige National Quality Program 2010 Customer Focus Category Quantification of Customer- customer needs is the key. defined value Satisfaction DeterminationLean environments aim Map and understand Percent Satisfaction with Product, Service Attributesfor all process steps to value stream 100 On Time Delivery • Performance  80 1 00 measures, and be something for 60 99 analyses % OnmTime 40 98 R R ITY ICE rs ers BA BA Make value me AL RV sto sto QU SE Cu Cu All All Non-egg Supplier 97which the customer is stream flow 2001 2002 2003 2004 2005 BAR 2002 • Use feedback  Claims BAR 2003 96 and analyses  95 01 02 03 04 05 06 YTD Continuouswilling to pay. 3 P ounds P roduc e d to improve  C om pla ints per M ill SFF OTD BAR OTD process 2 improvement 1 0 . vg A D T Y 0 1 0 2 0 3 04 0 5 0 6 Y TD In Baldrige and Six Sigma, the voice of the customer is used to identify areas of needed improvement.
  14. 14. Baldrige National Quality Program 2010 Measurement, Analysis, and Knowledge Management CategorySix Sigma is data- Lean measures, analyzes,driven: and reduces• specific metrics • wait time• data collection • inventory• data analysis • batches• control data • process time • reworkBaldrige measuresand improves ISO 9001 monitors andprocesses, business measures processresults, and overall performance.organizationalperformance.
  15. 15. Baldrige National Quality Program 2010Workforce Focus Category 100 Employee Engagement 95 90 85.6 85 79.9 80 75 70.2 70 65 59.6 60 56.7 55 50 2005 2006 2007 2008 2009Six Sigma, Lean, and ISO 9001 methodologies require• Leadership development• Training• Compensation alignment• Culture shift
  16. 16. Baldrige National Quality Program 2010 Process Management Category Six Sigma, Lean, or ISO 9001 methodologies are used to • Generate standard operating procedures • Set specification and control limits • Identify explicit corrective actions • Optimize processes 2 .2 2 .1 5 2 .1 Cpk=1.25 Cpk= 4.42 2 . 05 2 1 .9 5 1 .9 1 .8 5 02 03 5 n n r 0 Ja Ja Ma Process Avg Spec Target UCL LCL Upper Spec Limit Lower Spec LimitBaldrige processes are interrelated andinterdependent steps along the path to customerengagement and organizational sustainability.
  17. 17. Baldrige National Quality Program 2010 Results CategorySix Sigma, Lean, and ISO 9001 are data-driven and results-oriented. Theiruse leads to tracking systems (control charts, scorecards, rolledthroughput yield charts, etc.) and results monitoring in functional businessareas where the methodologies are applied. Baldrige addresses all results—process, leadership, product, customer, financial, and workforce.
  18. 18. Baldrige National Quality Program 2010 SummaryThe Baldrige Criteria focus on business results and organizational improvementand innovation systems. Six Sigma and Lean methodologies drive waste andinefficiencies out of processes that users of the Baldrige Criteria identify forimprovement. Six Sigma, Lean, and ISO 9001 focus on organizationalimprovement and innovation processes.
  19. 19. Baldrige National Quality Program 2010Questions