CQE Preparation | The Quality Management System

CQE EXAM
PREPARATION COURSE
Part 1
Management and Leadership
By :
Eng : Hosam Abd El-Galeil

Chapter 1 A. Quality Philosophies and Foundations
Chapter 2 B. The Quality Management System
Chapter 3 C. ASQ Code of Ethics for Professional Conduct
Chapter 4 D. Leadership Principles and Techniques
Chapter 5 E. Facilitation Principles and Techniques
Chapter 6 F. Communication Skills
Chapter 7 G. Customer Relations
Chapter 8 H. Supplier Management
Chapter 9 I. Overcoming Barriers to Quality Improvement
Content

Objective :
Chapter 2
B. The Quality Management System
Apply (Application Level)
Know when and how to use ideas, procedures, methods, formulas,
principles, theories, etc.
3

The quality management system (QMS)
Strategic planning
The strategic plan is a vision with broad goals and objectives for the
organization to achieve.
Deployment of the strategy
The information system
For monitoring, analyzing, and improving the deployment
The difference between strategic planning and deployment of
the strategy can be understood this way:
• Strategic planning means deciding what to do.
• Deployment means using the best methods to carry out the strategic plan
4

Management should employ a series of sequentially ordered effectiveness tests
to discern the effectiveness of strategic quality plans
Management’s responsibility for the QMS
6

Strategic planning for quality will address each aspect of the SWOT analysis
7

Explore strategic quality initiatives that go beyond mere
incremental improvement.
Drive the philosophy of continuous improvement throughout the
organization
Create a culture of innovation.
 Look beyond the factory floor for breakthroughs in all systems,
such as research and development (R&D), product development,
marketing, human resources, and purchasing.
Strive for quality initiatives that add value for the customer and
establish a sustainable competitive advantage.
8

9

2. Deployment Techniques
Objective :
Apply (Application Level)
Know when and how to use ideas, procedures, methods, formulas,
principles, theories, etc.
10

It must be planned
Requires ways to identify the specific initiatives to be taken on.
 Supported, and monitored just as any other process
Support and monitoring require methods for tracking and communicating
progress.
Quality improvement does not just happen !!!
11

Policy Deployment
A quality policy should summarize the organization’s view on the
meaning and importance of quality as it relates to competitiveness,
customers, suppliers, employees, and continual improvement.
To ensure consistency and understanding throughout the organization,
policies need to be integrated with the strategic plan, then deployed
through appropriate initiatives and performance checks.
A documented and deployed quality policy provides:
 A written guide to managerial action, lending stability to the organization
 Consideration of quality problems and their ramifications
 A basis for auditing practices against policy
12

Goals and Objectives
“ Simply establishing goals is not enough”
1) Organization strategy:
Continually build and retain a loyal customer base.
2) Organizational goal:
Deliver all products to all customers 100 percent on time.
3) Organizational objective:
Given current capacity, improve delivery dates of all future customer
orders from 35 percent to 75 percent on-time delivery by February
2010 and to 100 percent by August 2010.
4) Functional objectives:
The quality department will assign a quality engineer to convene a
cross-functional process improvement team by November 1, 2009.
5) Action plans:
Detailed plans state how, when, and by whom the objective will be
achieved.
14

Benchmarking
Benchmarking is a process by which organizations evaluate their performance in
comparison to their competition or to best practices found internally or in
outside organizations.
Internal benchmarking
is used to compare performance between plants or divisions.
External (Competitive) benchmarking
is used to assess performance relative to direct competitors
within an industry.
Collaborative benchmarking
requires cooperation between two or more organizations.
Each organization freely shares information about their best
practices in exchange for information about other best
practices from a partner.
A well-executed benchmarking project will help both in deploying strategic plans
and suggesting modifications to future strategic plans.
16

A typical benchmarking project will include:
Benchmarking common pitfalls include :
lack of commitment
 Insufficient planning
Comparing processes that are not sufficiently similar to generate useful insights
Measuring processes that have little potential for significant gains.
 Planning
 Data collection
 Analysis
 Implementation
17

Stakeholder Identification and Analysis
Stakeholders include the following:
• Stockholders, the owners of the company.
• The executive group, including the board of directors and the top tier of managers.
• Employees other than top management.
• Suppliers and customers.
• The community at large.
The stakeholders need to be clearly identified and their differing needs must be met.
18

Performance Measurement Tools
Performance Measures should be :
 linked to strategic objectives.
 rigorous, objective, quantifiable, and standardized.
 achievable, realistic, and time-based.
 assigned to appropriate personnel
 Focus on the vital few.
 Automate data collection and calculations if possible.
 Select measures that are resistant to perverse behavior.
19

20
Robert Kaplan and David Norton introduced the balanced scorecard in 1992. Refer
to the list of stakeholders above.
Kaplan and Norton argued that most strategic plans were unbalanced because one
stakeholder group, the stockholders, was overemphasized.
They proposed a “balanced” scorecard with four perspectives:
1. Financial fundamentals
2. Business processes
3. Customer
4. Learning and growth
Balanced Scorecard

Balanced Scorecard
21
The balanced scorecard provides a framework to translate the strategic plan
into specific tasks that can be managed by frontline employees.
Financial measures include traditional indicators such as cash flow, sales, and
return on investment.
Business processes include manufacturing measures such as yield and rework.
It can also include support activities such as order processing.
Customer measures may include trends in customer satisfaction or average wait
times on telephone hot lines.
The learning and growth perspective recognizes the human element in an
organization and looks at softer measures such as participation in employee
suggestion programs and training.
In a typical scorecard, the objective is listed along with associated measures,
targets for performance, and initiatives that will drive the organization to achieve
the objective.

Dashboard
22
A dashboard provides a visual, at-a-glance display of key business indicators.
 Dashboards provide a compact view of the current organizational state.
Dashboards may include trend charts, bar charts, and green/yellow/red lights to
indicate performance relative to target.
Some dashboards include “drill down” features so that managers can dig into
lower-level data.
Digital dashboards must be customized for various activities throughout the org .
High-level dashboards are appropriate for executives, but frontline employees need to
access low-level data appropriate for their sphere of influence.
The elements in a dashboard should be linked to the strategic objectives.
Sales are targeted to grow at 3.75 percent per year.
To avoid revealing confidential information , the dashboard shows only deviation to
target.

23
In Figure, although sales in the recent past have fallen short of the goal, the
trend is favorable.
Dashboard

24
•Inventory turns (annual sales divided by current inventory) have met or exceeded the
target in two of the past three quarters.
•The milestone review for new product development shows two tasks behind schedule.
•The YEAR TO- DATE (YTD) performance to target chart includes several elements that
were selected in the balanced scorecard process.
•Calculating the ratio between actual performance and the target allows us to combine
various metrics on a single chart with a common scale.
•In this example, management should be concerned that employee suggestions are not
being closed promptly and customer calls are still not being processed fast enough
through the call center.
•Remember that what you measure will determine to a great extent the activities
of your organization.
•Therefore, carefully select the metrics for your dashboards, scorecards, and other
performance measurement tools.
•More information on performance measures such as process capability indices
is presented in Chapter 38.
Dashboard

25
•Work planning requires a clear understanding of the overall goal and the
objectives , also referred to as outcomes to be achieved (the “what”).
•The planning process must also take into account how the initiative relates to other
projects (for example, sharing of resources), and therefore often requires input from or
participation by multiple stakeholders.
•A Gantt chart may be added to show the timing of each step in the schedule.
Periodic work review meetings are held to provide:
• A prescheduled meeting between the project leader and the manager to
discuss progress of the project.
• A summary of performance (presuming day-to-day feedback was given),
evaluation of progress, determination of actions to correct/improve
performance, and renegotiation of such activities as may be necessary
• A meeting where both parties come prepared with documentation relative to
the work objectives
• An effective time for the manager to reinforce work done well .
Planning and Scheduling (plan your work, work your plan)

As a rule of thumb, work reviews should be scheduled at least once a month
for objectives spanning more than a three-month period.
Planning and Scheduling
It is never appropriate to wait until just before the planned achievement date
to review progress on work objectives.
26
Format For An Implementation Schedule
An Action Plan Format

Project Justification and Prioritization Tools :
27
Project Management
Quality engineers often become involved in project activity , either as a project team
member or as a project leader.
A number of proven techniques and tools are available to assist in cost-effective
project management. The first is proper project selection.
Projects must be prioritized to select those having the most merit.
Projects should be evaluated for their fit to overall business needs, financial
payoff, and potential risks.
Exceptions will be made for legal mandates and customer demands.
Only projects that are optional should be prioritized.
 Major projects involve risk of loss.
Risk assessment involves identifying potential problems that could occur, their
impact, and what, if any, actions should be taken to offset them, such as taking
countermeasures, purchasing risk insurance, or developing contingency plans.
For complex projects, it may be prudent to apply a formal risk assessment tool
such as a failure mode and effects analysis (FMEA) or simulation.
If the benefits of a project are uncertain and multiple outcomes are possible, then a
decision tree can help to estimate the expected value of gain or loss.

28
For complex projects, it may be prudent to apply a formal risk assessment tool
such as a failure mode and effects analysis (FMEA) or simulation.
Failure Mode And Effects Analysis (FMEA)

29
The financial payout for each outcome is shown at the end of the branch.
A few simple rules apply to the creation of a decision tree:
• At each branch point, the probabilities must sum to 1.0.
• The expected value for each branch is calculated by multiplying all the
probabilities along the branch by the financial payout.
• Add the expected payout for all the outcomes within a decision branch.
• Choose the decision with the highest payout.
Project Justification and Prioritization Tools
A decision tree
A decision tree lists the potential outcomes and assigns a probability to each branch.

Decision tree example continued
31

A decision tree example continued
32

Additional Project Justification Tools
Payback period
The number of years it will take to recover the investment from net cash
flows.
Net present value (NPV)
Taking into account the time value of money, NPV involves finding the
present value of each cash flow (yearly) discounted at the cost of
capital percentage used by the organization, summing the discounted
cash flows, and determining if the project is a candidate for approval
based on how positive the NPV is.
Internal rate of return (IRR)
A discount rate that causes the NPV to equal zero.
If the IRR is greater than the minimum required by the organization for
typical capital investments, the project is a candidate for acceptance.
33

37
Internal rate of return (IRR)
The IRR is a good way of judging different investments .
In a way it is saying "this investment would earn 14%
(assuming it all goes according to plan!)

40
Project Planning and Estimation
Success of a project is significantly impacted by effectiveness of project planning.
A typical project-planning sequence for a larger project is outlined in following Table

41
A typical project-planning sequence for a larger project

42

43

Work Breakdown Structure (WBS) Example :
44

Gantt, or milestone, chart Example :
45
Gantt, or milestone, chart for an ISO 9001 implementation showing the major
implementation phases and their relative timing.

Critical Path Method (CPM) chart
46
Critical Path Method (CPM) chart showing every activity in the project and how its
start depends on the completion of other activities. The sequence that takes the
longest total time constitutes the critical path and determines the minimum time
to completion of the project.

Resource requirements matrices (RRM)
RRMs may be compiled for facilities, equipment, materials, contract/consulting
services, personnel, and so on.
47
Resource requirements matrices (RRM) are essentially spreadsheets laying out
the requirements over time against the activities in the project.

Monitoring and Measuring Project Activity and Results
In medium to large projects, milestones (critical checkpoints) are established
in the planning stage and the project monitored against these milestones.
Thorough periodic project reviews are conducted, including assessment of
schedules against the critical path, expenditures against budgets, resource
utilization against plans, implementation results achieved, a possible
reevaluation of risks, and any major issues impacting project continuance.
Based on these reviews, the project may be continued as planned, modified,
put on hold, or canceled.
A similar review is conducted to evaluate the results when the project is
completed.
48
Critical project performance measures include timeliness, budget variance, and
resource usage.
Project measurements must then be determined and a system for tracking,
monitoring, and reporting progress is established.

Assumptions, risks, and rationale for selecting the project
 Decisions made to initiate project and approvals
 Detailed plans for design and implementation
 Design and/or implementation changes
Major obstacles encountered and how they were resolved
Details of implementation (for example, measurements established)
Progress reports and resulting decisions
Final evaluation of project results
Results of post-project audits
If the team has not documented every aspect of the project, begin to document
as soon as you can in order to capture details such as the following while they
are still available:
Project Documentation
49
All documentation is valuable in planning and estimating new projects and in
avoiding previous mistakes. Likewise, the documented knowledge base is a tool
for training those new to project management.

3. QUALITY INFORMATION SYSTEM
Objective :
Remember (Knowledge Level)
Recall or recognize terms, definitions, facts, ideas, materials, patterns,
sequences, methods, principles, etc.
50

A quality information system
= quality system +information system
A well designed information system allows information generated at
one level or in one part of the organization to be used for many
different purposes.
51

A Quality Information System (QIS)
 Is a collection of data, rules, and equipment that creates information
about quality in a systematic way.
A QIS will collect, store, analyze, and manage quality-related data from
customers, suppliers, and internal processes.
It will generate information in the form of printed reports, screen
displays, and signals sent to mechanical devices.
Depending on the degree of automation, it may give answers to
questions posed by humans, or it may have built-in action rules.
Above all, if it is well done it will enhance profit and productivity.
52

53
Concept and Objectives
•The first requirement in studying quality information systems is to understand
what, exactly, a “system” is.
The word is used in many different contexts. For example, this book discusses
management systems, information systems, strategic planning systems, and
quality systems, just for starters.
From other sources you can learn about transportation systems,
manufacturing systems, educational systems, social systems, gambling
systems, and planetary systems (for example, the solar system).
The essence of a system is this: it ties a number of components together that
act in common with each other.
Systems that quality engineers are interested in are dynamic and goal oriented.
They have inputs, outputs, operating rules (procedures or transformational
processes), data storage, and boundaries.
They are designed by people to achieve specified goals.

54
Computerized information systems are explicitly designed, and usually by cross-
functional teams.
•A quality information system is both a quality system and an information system.
It is save to speak of “the” quality information system, because an effective
organization will have numerous quality systems, which may be manual,
computerized, or hybrid (with both manual and computer elements).
A well designed information system allows information generated at one level
or in one part of the organization to be used for many different purposes.
Concept and Objectives

55
Uses of Quality Information Systems
Information systems may be used to:
• Initiate action (for example, generating a shop order from a customer’s order)
• Control a process (for example, controlling the operation of a laser cutting
machine within given specification limits)
• Monitor a process (for example, real-time production machine interface
with control charting)
• Record critical data (for example, measurement tool calibration)
• Create and deploy operating procedures (for example, an ISO 9001–based
quality management system)
• Manage a knowledge base (for example, capturing, storing, and retrieving
needed knowledge)
• Schedule resource usage (for example, personnel assignments)
• Archive data (for example, customer order fulfillment)

56
•The importance of information systems becomes apparent when looking at their
impact on various aspects of quality management.
•Both process management and problem solving require accurate and timely
information.
The importance of information systems
Contrast the following two cases:
One information system might be hard-wired into manufacturing and
testing equipment, with monitors displaying real-time information complete
with alarms and action signals; it could have options for graphic display of
statistical and trend analysis for quick intervention.
Another system in the same plant could tie executives, project teams, and off-
site employees together through an intranet; organizational objectives and
milestones appropriate for each level and function could be displayed as both
text and graphics, along with actual performance and gaps.
These two QISs are quite different.

57
Good information systems are critical to cross-functional collaboration, since
distributed information access is required in order for groups and employees to
make quicker and better decisions.
For example :
•Some projects can be carried out largely through computerized discussions
and transmission of documents.
Often this enables highly skilled team members to participate regardless
of their physical location and can also reduce the amount of time
required for the project.
Good information systems
The modern quality engineer must be competent in the selection, application,
and use of hardware and software technology appropriate to the tasks and
responsibilities assigned.
Consideration should be given not only to the functionality of the system for the task,
but also issues such as required user skills, compatibility with other systems, and
information security.
The quality engineer must understand project management techniques
and must be a good team member.

58
PLC and SCADA Systems
The widespread use of microcomputers and programmable logic controllers (PLCs)
has transformed the factory floor.
There is a growing trend toward distributed measurement and control, where
PLCs have built-in programs and logic to control machines and processes.
Fewer and fewer technicians are turning dials or opening and closing valves to
control processes.
These tasks are now controlled by PLCs. But many PLCs do not have a human
interface such as a monitor or keyboard.
The programmable logic controllers (PLCs) :
•are widely distributed throughout the plant,
so manual data collection is time-consuming
and cumbersome.
•PLC language is not user-friendly. This
situation has given rise to large-scale
supervisory control and data acquisition
(SCADA) systems.

59
Supervisory Control And Data Acquisition (SCADA) Systems :
SCADA is a bundling of software
programs and hardware components
used for process control and the
gathering of data in real time from
various locations in order to control
equipment and conditions.
•The SCADA system interfaces with all of the PLCs through a network.
•The SCADA system periodically polls the PLC memory registers to collect data.
•The system includes a human interface, usually in a central location such as a
control room, to monitor the processes, generate alarms, and allow the
operator to intervene or override as necessary.
•The SCADA system typically includes real-time trend charts and graphic displays
of the current status of the equipment. The system also provides for data
storage in a database program, which provides rapid retrieval of data for
subsequent analysis and reporting.

What is the role of a quality engineer in the creation of
a large-scale SCADA system?
•The QUALITY ENGINEER should be involved
from the earliest planning stages to ensure that
user and system requirements are thoroughly
documented.
•The quality engineer should participate in
creating the user requirements ,after all, the
quality engineer is typically considered the local
expert in data analysis and reporting.
What reports are needed? How should the data
be displayed and summarized?
60
The information system should be viewed as no different
from a manufacturing system

61
Information System Strategy and Tactics
Although there are many ways to design information systems, it is a truism that
the larger they get the more fraught with risk of failure they become.
So the quality engineer can render a real service to the employer by studying
strategy and tactics of systems development.
The need for a strategy was emphasized by Pearlson and Saunders (2004) who
produced an information systems strategy matrix, as shown in Figure .
In this matrix, four different categories are displayed: hardware, software,
networking, and data. Other categorizations could be made. This is just a small
example of the kinds of analysis required , another tool to consider is the V-model.

The V Model
The V model starts on the left side at the top of the V (see Figure), with high level
user requirements, and cascades down through functional specifications and
detailed design requirements.
On the right side of the V, test protocols are developed, executed, and documented
to verify that the design specifications have been met.
62
The QE should be involved in this process to ensure quality and data
integrity during the execution of the project.

Ideas to improve the success of system development projects :
63
 Carefully define the scope of the QIS and what it is expected to accomplish.
From the very beginning emphasize operational benefits, not technical specifications.
It may be wise to develop a pilot project that can be used to show what really does
work and what does not.
Getting some benefits in a short period of time builds confidence, not only in the
system itself but in the competence of the system developers.
Be sure that the goal of the QIS supports the goal of the business.
(This point was discussed earlier in this chapter when we discussed strategic planning.)
Once the goal is set, use well-proven project management techniques.
Get advance agreement on who will do what and when.
Get buy-in to clearly understood milestones.

64
Do not simply delegate the project to the information technology (IT) folks but keep
quality engineers and managers fully engaged in the development.
Concentrate on user expectations and how they are being realized.
Focus attention on the overall performance of the system rather than specific metrics.
Ongoing discussion and comparison between the users and the developers is an
important key to success.
 Publish regular progress reports and keep the language in user terms.
A common trap in large-scale information systems projects is to get bogged down in
technical metrics and jargon; the user may cross their fingers and hope for the best
without really understanding what is going on.
A corollary of this is to be sure that the end user has the technical competency to
understand what is being said.
Reports cannot be watered down simply to avoid confusing the uneducated.
Ideas to improve the success of system development projects :

65
Example of an Internally Developed QIS
A highly automated packaging plant in Texas started production in 2001.
•Equipment breakdowns plagued the facility for the first year of production.
•Downtime was so excessive that the plant was operating below the break-even point.
•Management decided to make a major investment in a new information system.
•Over the course of the next year, nearly every machine in the facility was linked
through a network to a database.
• Sensors were added to monitor key production processes.
•Automatic feedback systems were installed and gradually tuned to achieve stability in
the most complex processes.
•Customized reports were created to distill vast amounts of data into usable
information.
•The reports summarized and prioritized the current status so that management could
quickly allocate resources where they were most needed.

66
•One such report is shown in next Figure ,the report executes automatically at the
end of each production shift.
•It analyzes data from nearly 700 machines, identifies the top three concerns in
each functional area, and prints a one-page summary.
•The quality department and the maintenance department worked together to
develop the format.
•The general manager participated in establishing the equipment performance standards
needed to support the balanced scorecard objectives.
•If performance does not meet the objectives, then the report highlights the total with a
large, bold font.
•Management and maintenance employees can quickly identify concerns and focus their
process improvement efforts accordingly.
•The team designing this system took several months and gave a great deal of thought to
balancing the automatic collection and processing of data with the human interpretation
of information.

67
The report executes automatically at the end of each production shift

68
•It would have been easier to design a completely closed-loop control system but
this would have precluded human intervention and thoughtful study of what the
processes were saying.
•But at the same time, the data on which the daily and weekly reports were based
was massive and it was essential that it be condensed and summarized before being
presented to humans.
•The plant achieved a dramatic improvement in throughput in less than six months
after implementing this QIS.
•The report shown in Figure (and others like it) helped drive a transformation in
quality and productivity.
•By the end of the second year, the plant achieved best-in-class quality and their
profit margin was over 10 percent, exceeding the original performance target.

69
Example of a Web-Based QIS
•In 2002 this company decided to use information systems development to automate
their quality recording, analysis, and reporting.
•They also sought ISO 9000:2000 registration (see Chapter 12).
•Cequent did not want to develop their own software, so they contracted with IQS, a
quality information systems vendor in Cleveland, Ohio, to provide the software
on demand through the Internet.
•Cequent partnered with suppliers of automated test equipment (ATE) to feed process
parameters, process data, and test data directly into the IQS software, which
eliminated duplicate inspections.
• Inspectors began use roving laptop computers with wireless I/O and power supplied
by car batteries on small carts.
•The system integrated several different small stand-alone quality systems and
manufacturing resource planning (MRP) systems into one integrated factory wide
system.
•Most of the system development was done through interactive online messaging.
•Using the vendor’s experience with ISO 9000 processes, Cequent was able to
achieve registration within about nine months of their initial commitment to seek it.
Cequent Performance Products, a small manufacturing company in Tekonsha,
Michigan, supplies parts to the automotive industry

70
•The two examples above are but a small sample of the tremendous number and
variety of QISs now being implemented.
•There are so many new developments.
Bar codes, voice entry, optical character recognition, local area and wide area
networks, are among the host of new technologies available for cost-effective
automation of quality systems.
Knowledge management, audiovisual presentations, individual learning
programs, decision support systems, computerized conferencing, systems
modeling, automated online reference services ,the list goes on and on.
The foresighted quality engineer will study computerized information
systems techniques and possibilities with great zeal.
This is an area that will continue to revolutionize all aspects of life, both
organizational and personal.
Summary
At many facilities, a one percent gain in production yield is a realistic
assumption and will generate a much larger return than a few hours saved per
month generating manual reports.

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CQE Preparation | The Quality Management System

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