Satya kurmi BETQ Page 14.67. E3: Business Excellences through QualityMODULE 1 IntroductionEnterprise excellence, eight critical functions1. Strategic planningStrategic plan documents the direction for the organization successfully achieving thevision and mission requires members of the leadership team to develop and deploy theirenterprise values, vision, mission, goals, and objectives in the enterprise strategic plan.2. Market and customer research and communicationMarket research and communication are critical to develop the strategies for strategicplanning. This is the function that identifies which opportunities within the customergroups and market segments to pursue. Fact-based decisions about what technology topursue and what products and services to offer are made at this stage.3. Research and technology developmentTherefore, sustainable growth requires development of mature technologies transferredeffectively and efficiently to the mix of products and services produced by the enterprise.4. Product, service, and process designAfter the enterprise strategies are established, it is necessary to define the offerings forthe customer and design the total customer experience. This is accomplished bydetermining the customer requirements and expectation, defining what our differentiatingcharacteristics will be, and designing the customer performance model5. Product and service commercializationThis function includes selection of materials, design of production processes, make orbuy decisions, and variability reduction activities.6. Post launch production
Satya kurmi BETQ Page 2This includes all in-house activities that add value to the materials to produce theproducts and services offered to the customers. Post launch production includes allactivities to produce the product the products and services after initial development7. Product and service supportAfter the product or service is delivered to a customer, there are continued opportunitiesto serve the customer: troubleshooting, repair, replacement, data collection, andcommunication activities. These support activities are critical to customer satisfactionand provide an opportunity to collect further information about customer wants anddesires.8. Measurement, analysis, and knowledge managementIt establishes the key enterprise performance metrics and provides for regular periodicperformance reviews. This function is the foundation for fact-based decision makingwithin the enterpriseEnterprise excellence model• Enterprise excellence is a holistic approach for establishing an agile and flexibleenterprise to thrive in the competitive world.• The enterprise excellence methodology focuses on optimizing the critical success factorsof quality, cost, schedule and risk to achieve the organization goals.• The goal is to cost effectively satisfy the customers’ requirements and expectations toincrease market share and to raise value to the stakeholders.• An enterprise is focused on staying healthy and increasing its value to its customers.• The VOCS is accomplished through implementation of Design for Lean Six Sigma(DFLSS), which establishes the infrastructure, processes and procedures for performingresearch, technology development and transfer and developing the products, services and
Satya kurmi BETQ Page 3processes necessary for cost effectively satisfying customer requirements andexpectations..Three deployment strategies to achieve enterprise excellence,• Deployment by Pilot Study Low risk and low investment approach Selecting a single function within the organization and implementing EnterpriseExcellence Once the desired goals are achieved, selecting other functions for implementation Deployment by pilot study will not yield a large return on investment or effect acultural change The functions involved in pilot study may be viewed with skepticism by the rest ofthe organization and may limit the success
Satya kurmi BETQ Page 4• Project-by-Project Deployment Typical strategy used in organizations that implement Six Sigma or Lean. In this strategy, improvement projects are identified and cross functional, multidiscipline teams are developed to address specific problems or opportunities. This strategy may result in optimizing one area of the enterprise at the cost of sub-optimizing other area of the enterprise. The cultural change resulting from this method of deployment is slow anduncoordinated• Enterprise-Wide Deployment This strategy requires executive and top management commitment. It begins with implementing a change in the culture of the enterprise through theimplementation of new processes and techniques. Enterprise wide deployment strategy is led by the executive leadership team anddeployed throughout the entire organization in a structured and planned manner. It requires major commitment of resources, yet has a very low risk of failure and isthe quickest way to achieve the organizational transformation to EnterpriseExcellence. Here also cross functional and multi discipline teams are created to work together toimprove the effectiveness and efficiency of enterprise processes.Quality revolution in the world, quality services, concept of total quality, how total quality leadsto stakeholders satisfaction.
Satya kurmi BETQ Page 5MODULE 2 Excellence Models & AwardsEFQM Model,During 1988 fourteen leading Western European companies took the initiative of forming theEuropean Foundation for Quality Management (EFQM). By July 1993 there were more than 280members from most Western European countries and most business sectors. Recognition ofachievement is a feature of the policy of the EFQM. In line with this policy, 1992 marked theinaugural presentation of a major new European business award -- The European Quality Award.This award is presented to the most successful exponent of Total Quality Management inWestern Europe.Located in Brussels, Belgium, the European Foundation for Quality Management today has over700 members and is a not-for-profit organization supporting the management of Europeancompanies in accelerating the process of making organizational excellence a decisive influenceon achieving global competitive advantage.The criteria of the model are based on Enablers (50%) and Results (50%). The enablers (how)focus on approach and deployment for leadership, policy & strategy, people, partnerships &resources, and processes. Results (what) focuses on the customer, people, society, and keyperformance results.At the heart of the EFQM ―Organizational Excellence Model‖ is RADAR, which consists of fourelements, Results, Approach, Deployment, Assessment, and Review.Determine the Results it is aiming for as part of its policy and strategy making process. Theseresults cover the performance of the organization, both financially and operationally, and theperceptions of its stake-holders.Plan and develop an integrated set of sound Approaches to deliver the required results, both nowand in the future. Deploy the approaches in a systematic way to ensure full implementationAssess and Review the approaches followed based on monitoring and analysis of the resultsachieved, and on ongoing learning activities.
Satya kurmi BETQ Page 6Some of the winners are Rank Xerox of Britain, TNT distribution and Mortgage Express.Deming Awards,Instituted by Union of Japanese Scientists and Engineers (JUSE) Japan to commemorate Dr.W.E Deming’s contribution for the continued development of quality control, this prestigiousprize is based on the status of TQM implementation and results achieved.The Deming Award is presented to a company that has achieved significant performanceimprovements in the business results and customer satisfaction through application of TotalQuality Management. It was established in 1951 by the Union of Japanese Scientists andEngineers, Japan. This award is also conferred upon individuals who have contributed to TQMefforts. This prize was initially established only for the Japanese industries. In the recent yearsmore and more industries outside Japan were showing interest and hence this was extended tooverseas companies also effective from 1984.Eligibility for the Prize• The Deming Application Prize is given to an applicant company that effectively practicesTQM suitable to its management principles, type of industry and business scope. Thefollowing points are used as criteria to determine whether or not the applicant shall beawarded the prize.• Reflecting its management principles, type of industry, business scope and businessenvironment, whether the applicant company has established customer oriented businessactivities and strategies under its clear management leadership.• Whether TQM has been implemented properly to achieve business objectives andstrategies as mentioned above.• As an outcome of TQM implementation whether outstanding results have been achievedfor business objectives and strategies as stated in item No.1 above.• After the Deming Application Prize was thrown open to Non-Japanese Companies, thefollowing organizations in India have received the prestigious prize.
Satya kurmi BETQ Page 7• 1998 - Sundaram Clayton Limited, Chennai• 2001 - Sundaram Brake Linings Limited, Chennai• 2002 - TVS Motor Company Limited, Hosur• 2003 - Mahindra & Mahindra Farm Equipment2004 - SRF Limited, Chennai.Lucas – TVS Limited, ChennaiIndo Gulf Fertilizers Limited (UP)Deming Gold Medal.JUSE believes in the philosophy of continuous improvement and hence encourages the Demingaward winners to further show improved results in their TQM efforts. The organization that haswon the Deming Quality Award can apply for the Deming Gold Medal. The only Indianorganization that has won the Deming Gold Medal is Sundaram Clayton Limited, Chennai.MBNQA,Malcolm Baldrige was Secretary of Commerce in U.S.A from 1981 until his death in July 1987.Baldrige was a proponent of quality management as a key to U.S prosperity and long-termstrength. He took a personal interest in the quality improvement act that was eventually namedafter him and helped draft one of the early versions. In recognition of his contributions, Congressnamed the award in his honor On August 20, 1987, President Reagan signed the MalcolmBaldrige National Quality Improvement Act, establishing an annual National Quality Award.The purpose of the award is to promote Quality awareness, recognize Quality achievements ofU.S. companies, and publicize successful Quality strategies.The award program is managed by the National Institute of Standards and Technology, UnitedStates Department of Commerce. It’s administered by the Malcolm Baldrige National QualityAward Consortium, a joint effort of the American Society for Quality Control and the AmericanProductivity and Quality Center. All funding for the program is from private contributions.
Satya kurmi BETQ Page 8The real purpose of the Baldrige is to educate. It should not be seen as an alternative to ISO 9000which does not address many categories covered by Baldrige. They should be regarded ascomplimentary. Self-assessment is at the heart of the Baldrige and EFQM awards, and the easewith which this can be done is perhaps their greatest attraction.The Malcolm Baldrige National Quality Award recognizes American companies that excel inQuality achievement and Quality management. The award promotes:• Awareness of Quality as an increasing important element in competitiveness.• Understanding of the requirements for Quality excellence.• Sharing of information on successful Quality strategies and on the benefits derived fromimplementation of these strategies.Eligibility categories• Manufacturing Organizations• Service Organizations• Small Business Organizations• Health Care Organizations• Educational Institutions.• NPO / NGODifference between Deming awards & MBNQA,Sl No Criteria MBNQA Deming1 Country Only U.S organizations Anywhere in the World
Satya kurmi BETQ Page 92 For whom Only organizations Individuals and organizations3 Categories Clearly defined six categories Not clearly defined4 Improvement Can re-apply after five years Can apply for Deming gold medal5 Knowledge sharing Stresses on sharing the informationwith other organizationsNo such thing in the award6 Focus Strong customer and human resourcefocusedAll round focus but more on qualityRBNQA,Indian Merchant’s Chamber Ramakrishna Bajaj National Quality AwardAs the name suggests, the award has been initiated by Indian Merchant’s Chamber in thememory of the Business Visionary Late Shri Ramakrishna Bajaj. The award was set up in theyear 1996.The Motto of late Mr. Ramakrishna Bajaj was ―Trust in Quality and Business Ethics.‖ During hislifetime, he not only led the Bajaj House of Business to higher pinnacles of glory and prosperitybut also spearheaded the Quality Movement in the country in several ways. Past President andprominent Member of the Chamber for several decades, he was an industrial leader, firm believerand preacher of the significant importance that quality of management performance plays in oureconomic and social development.The scarce resources in the world are knowledge, entrepreneurship and human capital. Themanagement thinking modeled on the earlier philosophy would not be enough to retain andnurture the scarce human capital, in order to gain competitive advantage in the marketplace. Adifferent paradigm is required and this is what a good business excellence model such asRBNQA advocates.
Satya kurmi BETQ Page 10The new paradigm forces one to think beyond the stranglehold of Strategy, Structure andSystems and forces one to look at the other three forces of Purpose, Process and People. Astrategy, however good, needs to move beyond it and focus on the super ordinate goal or purposeof the organization. Similarly Structure needs to look beyond the Process. And finally, systemapproach has to graduate to people focus.RGNQA.Rajiv Gandhi National Quality Award was instituted by the Bureau of Indian Standards in 1991,with a view to encouraging Indian manufacturing and service organizations to strive forexcellence and giving special recognition to those who are considered to be the leaders of qualitymovement in India.This award is intended to generate interest and involvement of Indian Industry in qualityprograms, drive our products and services to higher levels of quality and equip our Industry tomeet the challenges of domestic and International markets.Rajiv Gandhi National Quality Award would help Indian Industry to improve quality by:a) Encouraging Indian Industry to make significant improvements in quality for maximizingconsumer satisfaction and for successfully facing competition in the global market as well;b) Recognizing the achievements of those organizations which have improved the quality of theirproducts and services and thereby set an example for others;c) Establishing guidelines and criteria that can be used by industry in evaluating their ownquality improvement efforts; andd) Providing specific guidance to other organizations that wish to learn how to achieveexcellence in quality, by making available detailed information on the `Quality ManagementApproach adopted by award winning organizations to change their culture and achieveeminence.• There are five awards consisting of one for large scale manufacturing organizations, onefor small scale manufacturing organizations, one for large scale service sector
Satya kurmi BETQ Page 11organizations, one for small scale service sector organizations and one for BEST OFALL.• In addition, there are eight commendation certificates each for large scale and small scalemanufacturing organizations as per industrial sectors given below:a) Bio-technology;b) Chemical industry;c) Electrical and electronic industry;d) Food and drug industry;e) Gems, jewelers and allied industry;f) Metallurgical industry;g) Textile industry; andh) Engineering industry and others• Further, there are six commendation certificates each for large scale and small scaleservice organizations in the following sectors:a) Educationb) Finance,c) Health Care,d) Information Technology,e) Utilities, andf) Others.• An organization is eligible to compete for the award, if it satisfies all the followingconditions:
Satya kurmi BETQ Page 12a) Applicant organization is located in India,b) Applicant organization has been in existence for at least three years as on last date of theapplication.c) Applicant organization is situated at one place or a unit of an organization housed at onelocation,d) Applicant organization has never been convicted by any court for deficiency in product orservice and/or found guilty of financial irregularities by any regulatory authority or court. Anundertaking to this effect will have to be submitted.e) Applicant organization is not manufacturing products, like tobacco and liquor etc which areinjurious to health.MODULE 3 Quality SystemsEMS/ISO 14001,ISO 14001 is the internationally recognized standard for the environmental management ofbusinesses. It prescribes controls for those activities that have an effect on the environment.
Satya kurmi BETQ Page 13These include the use of natural resources, handling and treatment of waste, and energyconsumption.The benefits of implementing ISO 14001Implementing an Environmental Management System is a systematic way to discover andcontrol the effects your company has on the environment. Cost savings can be made throughimproved efficiency and productivity, helping to reduce bills and reduce environmental impact.These are achieved by detecting ways to minimize waste and dispose of it more effectively andby learning how to use energy more efficiently. It verifies compliance with current legislationand makes insurance cover more accessible.OHSAS/ISO 18001,Many organizations are implementing an Occupational Health and Safety Management System(OHSMS) as part of their risk management strategy to address changing legislation and protecttheir workforce.An OHSMS promotes a safe and healthy working environment by providing a framework thatallows an organization to consistently identify and control its health and safety risks, reduce thepotential for accidents, aid legislative compliance and improve overall performance.OHSAS 18001 is the internationally recognized assessment specification for occupationalhealth and safety management systems. It was developed by a selection of leading trade bodies,international standards and certification bodies to address a gap where no third-party certifiableinternational standard exists.OHSAS 18001 has been designed to be compatible with ISO 9001 and ISO 14001, to help anorganization meet its health and safety obligations in an efficient manner.The following key areas are addressed by OHSAS 18001:• Planning for hazard identification, risk assessment and risk control• OHSAS management program
Satya kurmi BETQ Page 14• Structure and responsibility• Training, awareness and competence• Consultation and communication• Operational control• Emergency preparedness and response• Performance measuring, monitoring and improvement• OHSAS 18001 can be adopted by any organization wishing to implement a formalprocedure to reduce the risks associated with health and safety in the workingenvironment for employees, customers and the general public.ISO 22000, Food safety management systems - Requirements for any organization in the food chain. ISO 22000 is also used in the Food Safety Systems Certification (FSSC) SchemeFS22000. FS22000 is a Global Food Safety Initiative (GFSI) approved scheme. The global food industry is under pressure from a great number of private standards forfood safety which suppliers in the food industry are required to consider and becomecertified by in order to be able to sell their products. Increasing costs of certificationcombined with inflexible requirements in private standards entail increasing costs withoutcontributing to increased food safety. As an alternative to this development, a wellfounded and respected standard as ISO 22000 is needed.ISO 27001,The ISO 27001 standard was published in October 2005, essentially replacing the old BS7799-2standard. It is the specification for an ISMS, an Information Security Management System.BS7799 itself was a long standing standard, first published in the nineties as a code of practice.As this matured, a second part emerged to cover management systems. It is this against whichcertification is granted. Today in excess of a thousand certificates are in place, across the world.
Satya kurmi BETQ Page 15ISO 27001 enhanced the content of BS7799-2 and harmonized it with other standards. A schemehas been introduced by various certification bodies for conversion from BS7799 certification toISO27001 certification.The objective of the standard itself is to "provide a model for establishing, implementing,operating, monitoring, reviewing, maintaining, and improving an Information SecurityManagement System". Regarding its adoption, this should be a strategic decision. Further, "Thedesign and implementation of an organizations ISMS is influenced by their needs andobjectives, security requirements, the process employed and the size and structure of theorganization".The standard defines its process approach as "The application of a system of processes withinan organization, together with the identification and interactions of these processes, and theirmanagement". It employs the PDCA, Plan-Do-Check-Act model to structure the processes, andreflects the principles set out in the OECG guidelines (see oecd.org).SEI CMM,These standards are exclusively used by the software industries. The project sponsored by USDepartment of Defense was established in 1984 by the Software Engineering Institute (SEI),Carnegie Mellon University.The researches have indicated that for every 100 IT projects started, 94 percent are restarted andthe project cost overruns are in the order of 178 percent. The time overrun is about 230 percent.About 31.1 percent of projects are canceled before they are completed. Only 9 percent of theprojects are on schedule and within the budgetThe CMM influences an organization’s culture by instilling discipline and continuous processimprovement into the workplace. It is a framework that enables an organization to build the rightproducts right. Continuous improvement is based upon long-term objectives accomplishedthrough the implementation of short-term evolutionary steps.A model is a structured collection of elements that describes the characteristics of effectiveprocess.
Satya kurmi BETQ Page 16The Capability Maturity Model (CMM) for software provides software organizations withguidance on:Gaining control of their processes for developing softwareEvolving towards a culture of software engineering and management excellenceCapability Vs PerformanceProcess capability – The range of expected results that can be achieved by following a process,initially established at the organization level.Process performance – A measure of the actual results achieved from following a process.Implementation of the various systems1. Industry survey and Benchmarking The organization may carry out a study of theorganizations in the particular industry in terms of their adopting or not adopting any particularinternational quality system. The Benchmarking could be done based on the organizationsimplementing and obtaining benefits of any quality system. They can also think of being the firstin their field to adopt any QMS and in course of time may become the Benchmark for otherorganizations2. Top management commitment The top management should clearly reflect their commitmentin the Quality Policy Statement and Quality Policy Objectives to be declared right in thebeginning of the implementation of QMS.3. Appoint the management representative The top management appoints as MR a person whohas a good knowledge of the quality system to be implemented and also a good knowledge of theorganization in terms of the product / service, the processes, the people and the market place.4. Awareness meeting The Top management then conducts a meeting of almost all thepersonnel in the organization for creating the awareness of the quality system.5. Appointment of an implementation team The MR can motivate and lead the whole exerciseonly if the personnel in all the areas assume the ownership for implementation. The MR inconsultation with the top management and the functional heads pick one or more persons from
Satya kurmi BETQ Page 17each area for implementing the QMS in their respective areas. These persons can be called theelement owners for their respective areas.6. Time schedule The MR then calls a meeting of all the element owners and based on the workcontent in each area decide on activity-wise dates. The proposal on the time frame will then besubmitted to top management. The schedule may then be revised7. Training The training programs is organized by the MR for all the employees in variousstages8. Select a consulting agency The MR and top management decide whether it is required toappoint an external consulting agency to help in the preparation of documents. If they feel theneed for the same, they call two or more such agencies and after discussions and negotiations,they finally decide on the agency.9. Review the present system The MR and the element owners along with the representativefrom the consulting agency review the present system in operation in the various areas and try tomatch them with the requirements of the standard.10. Write the documents This step is perhaps the most important and time consuming in thewhole exercise. While writing the documents, the requirements of the standard have to be kept inmind.11. Training on documentation The MR and the process owner selected as part of theimplementation team will then conduct training programs for all the staffs in their respectiveareas. All the staff will be given support for understanding and implementing the documentationin practice.12. Install the new system After the documentation is complete and all the personnel are trainedin the same, the implementation phase starts and the new system will be put into practice.13. Internal audit Internal audit is the most effective parameter for monitoring the health of theQMS in the organization. Internal audits are carried out by qualified internal auditors. Aninternal auditor cannot audit his own area of operation.
Satya kurmi BETQ Page 1814. Review of internal audit findings by MR After the internal audit is completed in all theareas, the MR reviews the internal audits reports and non-conformance reports for all the areas.15. Management review The MR then calls for a management review meeting in consultationwith the top management. This meeting is attended by the head of the organization, the MR, theheads of various functional areas in the organizations and other persons as desired by the head ofthe organization and / or the MR.16. Contact the external agency for audit The level of implementation gauged by internalaudits and management review meetings will determine the confidence level of top management,MR and other personnel on their readiness to face the external audit.The MR contacts the external agency for fixing up mutually convenient dates for the externalaudit. It is also decided whether to go in for a single stage audit or a two stage audit. The twostage audit consists of a pre-assessment audit and certification or registration audit.17. Pre-assessment If the organization is not totally confident about the level of implementationin all the areas and would like to have a check before the registration audit, they opt for pre-assessment audit. This audit is more friendly and informal.18. Registration This audit is conducted by the external agency as per the schedule mutuallyagreed earlier.• The audit is done in two parts viz: the adequacy audit and the compliance audit. In theadequacy audit, they check the documentation of the organization with respect to theoriginal standardMODULE 4 Excellence through Six SigmaWhat is six sigma? Six Sigma is a concept developed by Motorola and now adopted by many organizations.Motorola defined Six Sigma as a measure of goodness – a capability of a process toproduce perfect work. The Six Sigma concept is about the aim of making all processes inthe chain highly capable that is achieving a capability index of at least two.
Satya kurmi BETQ Page 19 Six Sigma refers to the number of standard deviation from the average setting of aprocess to the tolerance limit. In statistical terms, this translates to 3.4 defects per millionopportunities for error. For such levels of quality, both Design and Manufacturing have toplay a major role.Contributions of Motorola & GE,Six Sigma Success Story• In 1995 GE mandated each employee to work towards achieving 6 sigma• The average process at GE was 3 sigma in 1995• In 1997 the average reached 3.5 sigma• GE’s goal was to reach 6 sigma by 2001in critical processes• From 1998 onwards GE realized benefits worth 2billion USD.• GE was the first company to Implement Six Sigma in services and also in off shoring. ―themost important initiative GE has ever undertaken‖. Jack Welch Chief Executive Officer GeneralElectric.GE “Service Company” - examplesApproving a credit card application, installing a turbine, Lending money, servicing an aircraftengine, answering a service call for an appliance, underwriting an insurance policy Developingsoftware for a new CAT product.Six Sigma: Motorola Success StoryFollowing was the statement made by Robert W Galvin, Chairman of the Executive Committee,Motorola. This statement was made after first decade of Six Sigma Experience. ―At Motorola weuse statistical methods daily throughout all of our disciplines to synthesize an abundance of datato derive concrete actions…. How has the use of statistical methods within Motorola Six Sigmainitiative, across disciplines, contributed to our growth? Over the past decade we have reducedin-process defects by over 300 fold, which has resulted in cumulative manufacturing cost savings
Satya kurmi BETQ Page 20of over 11 billion dollars‖Benefits of six sigma Cost reduction Productivity improvement Increased market share Customer retention Reduced defectives Reduction in cycle time Cultural changeSix themes of six sigma1. Genuine Focus on the customer In six sigma, customer focus becomes the top priority Themeasures of six sigma performance begin with the customer. Six sigma improvements aredefined by their impact on customer satisfaction and value.2. Data and fact driven management Six sigma takes the concept of ―management by fact" to anew more powerful level. Six sigma managers will know what data or information they reallyneed and how to use them for maximum benefit3. Process focus, Management, and improvement In six sigma , process are where the actionis, whether designing the products and services , measuring performance , improving efficiencyand customer satisfaction or even running the business six sigma positions the process as the keyvehicle of success4. Proactive management Most simply, being "proactive‖ signifies acting in advance of eventsthe opposite of being "reactive". Six sigma has tools and practices that replace reactive habitswith a dynamic, responsive proactive style of management.5.Boundary-less collaboration It means break down barriers and improve teamwork, up, down,and across organizational lines. Six sigma expands opportunities for collaboration as peoplelearn how their roles fit into the "big picture" and can recognize and measure interdependence ofactivities in all parts of process.
Satya kurmi BETQ Page 216. Drive for Perfection; tolerance for Failure No company will get anywhere close to sixsigma without launching new ideas and approaches, which always involves some risk. Anycompany that makes six sigma its goal will have to constantly push to be ever-more-perfect(since the customers definition of "perfect" will always be changing) while being willing toaccept and manage occasional setback.DMAIIC methodology,D Define the problem or opportunities for improvement Gather facts regarding the exactquestions to be answered. Clearly identify the problem. Utilize numerical definitions to theextent possible. Focus on processes that create the problem and not on the outcome.M Measure process performance Establish our baseline performance and collect meaningfuldata relevant to the problem. Benchmark on the capability of a given process Focus on CTQfactors (critical to quality)A Analyze the process to determine the root causes of poor performance. All about finding thereal root cause to solving our problem. Analyze current processes, results and determine what ispossible compared to what the competition is doing.I Innovate. Be creative to find new ways to do things better, cheaper, or faster.I improve the process by attacking root causes. Evaluate possible solutions based on theirimpact on performance. Implement changes on the basis of best alternatives chosen during theexercise.C Control the improved process and hold the gains. Quantify the change in performance andmake sure the improvement is sustained. Lock in successes. Implement measures to keepvariables within the new operating limitsSix sigma Vs TQM,Six Sigma is a relatively new concept as compared to Total Quality Management (TQM).However, when it was conceptualized, it was not intended to be a replacement for TQM. BothSix Sigma and TQM have many similarities and are compatible in varied business environments,including manufacturing and service industries. While TQM has helped many companies inimproving the quality of manufactured goods or services rendered, Six Sigma has the potentialof delivering even sharper results.
Satya kurmi BETQ Page 22Total Quality Management is often associated with the development, deployment, andmaintenance of organizational systems that are required for various business processes. It isbased on a strategic approach that focuses on maintaining existing quality standards as well asmaking incremental quality improvements. It can also be described as a cultural initiative as thefocus is on establishing a culture of collaboration among various functional departments withinan organization for improving overall quality.Six Sigma roles – yellow belt to master black beltExecutive Leadership Includes CEO and other key top management team members. They areresponsible for setting up a vision for Six Sigma implementation.Champions Are responsible for the Six Sigma implementation across the organization in anintegrated manner. Champions also act as mentor to Black Belts.Master Black Belts Identified by champions, act as in-house expert coach for the organizationon Six Sigma. They devote 100% of their time to Six SigmaBlack Belts Operate under Master Black Belts to apply Six Sigma methodology to specificprojects. They primarily focus on Six Sigma project execution.Green Belts Are the employees who take up Six Sigma implementation along with their otherjob responsibilities. They operate under the guidance of Black Belts and support them inachieving the overall results.Yellow/White Belts It is common to find that Yellow or White Belt training targets supervisors,managers, directors and sometimes executives. Responsibilities of a Yellow/White Belt are verydifferent than a Green Belt or Black Belt but are often very similar and sometimes exactly likeChampions or Stakeholders.MODULE 5Define, Measure & AnalyzeUnderstanding process variation,Greater Process Variation = Greater Uncertainty = More WasteLesser Process Variation = Greater Certainty = Less Waste
Satya kurmi BETQ Page 23Process variation is the naturally occurring variation in the attributes of transistors (length,widths, oxide thickness) when integrated circuits are fabricated. It becomes particularlyimportant at smaller process nodes (<65 nm) as the variation becomes a larger percentage of thefull length or width of the device and as feature sizes approach the fundamental dimensions suchas the size of atoms and the wavelength of usable light for patterning lithography masks.Process variation causes measurable and predictable variance in the output performance of allcircuits but particularly analog circuits due to mismatch.If the variance causes the measured orsimulated performance of a particular output metric (bandwidth, gain, rise time, etc.) to fallbelow or rise above the specification for the particular circuit or device it reduces the overallyield for that set of devices.Process mapping,A map of a patient journey is a visual representation - a picture or model - of the relevantprocedures and administrative processes. The map shows how things are and what happens,rather than what should happen. This helps anyone involved see other peoples views and roles. Itcan also help you to diagnose problems and identify areas for improvement.There are different approaches to mapping patient journeys, procedures and administrativeprocesses in healthcare services. Which one you select will depend upon:What you need to knowResources and timescalesEngagement and interest of staffEach one gives you a slightly different perspective and there is no definitive right or wrong. Thekey is to reflect how things are - and not how they should be.Value stream mapping,(A Value Stream is the set of all actions (both value added and non value added) requiredbringing a specific product or service from raw material through to the customer.What it is—a way of making waste evident in a processWhy do it—to eliminate the waste
Satya kurmi BETQ Page 24How do it—use swim lane diagrams and, for now, show only lane changes, anddocument touch time, cycle time & people involved in each process step )Follow a ―product‖ or ―service‖ from beginning to end, and draw a visual representation of everyprocess in the material & information flowThen, draw (using icons) a ―future state‖ map of how value should flow.Value stream mapping- Helps you visualize more than the single process level Links the material and information flows Provides a common language Provides a blueprint for implementation More useful than quantitative tools Ties together lean concepts and techniquesValue stream analysisLean Six Sigma is a statistical concept that measures a process in terms of defects, with the goalof reducing variability, decreasing defects and increasing efficiency using rigorous quantitativemethods.Value Stream Mapping and Analysis (VSA) is one application of the Lean method designed toreduce waste and inefficiency for both the process owner and customer by ―mapping‖ a processflow and looking for areas that can be improved.Key Tenets of VSA• Reduce/eliminate time, waste, inefficiency• Include both ―owners‖ and ―customers‖
Satya kurmi BETQ Page 25• Twelve total steps between defining the boundaries and assumptions; the current state;and the idealized future state.Voice of the customer,The VOCS is accomplished through implementation of Design for Lean Six Sigma (DFLSS),which establishes the infrastructure, processes and procedures for performing research,technology development and transfer and developing the products, services and processesnecessary for cost effectively satisfying customer requirements and expectations.VOCS includes the policies and guidelines, infrastructure and processes that address therequirements and expectations of both internal and external customers.Internal customers for developing the processes to design, develop, produce and deliver theproducts and services to the external customers.External customers to ensure satisfying their requirements and expectationsFMEA, Failure mode and effect analysisThe FME(C) A is a design tool used to systematically analyze postulated component failures andidentify the resultant effects on system operations. The analysis is sometimes characterized asconsisting of two sub-analyses, the first being the failure modes and effects analysis (FMEA),and the second, the criticality analysis (CA). Successful development of an FMEA requiresthat the analyst include all significant failure modes for each contributing element or part in thesystem. FMEAs can be performed at the system, subsystem, assembly, subassembly or part level.The FMECA should be a living document during development of a hardware design. It should bescheduled and completed concurrently with the design. If completed in a timely manner, theFMECA can help guide design decisions. The usefulness of the FMECA as a design tool and inthe decision making process is dependent on the effectiveness and timeliness with which designproblems are identified. Timeliness is probably the most important consideration. In the extremecase, the FMECA would be of little value to the design decision process if the analysis isperformed after the hardware is built. While the FMECA identifies all part failure modes, itsprimary benefit is the early identification of all critical and catastrophic subsystem or systemfailure modes so they can be eliminated or minimized through design modification at the earliest
Satya kurmi BETQ Page 26point in the development effort; therefore, the FMECA should be performed at the system levelas soon as preliminary design information is available and extended to the lower levels as thedetail design progresses.Process capability analysis,Process capability is the ability of the process to meet the design specifications for a service orproduct.Nominal value is a target for design specifications.Tolerance is an allowance above or below the nominal value.
Satya kurmi BETQ Page 27Measurement systems evaluations
Satya kurmi BETQ Page 28Measurement is a process. The objective of the MSE is to learn as much as possible about themeasurement process in a short amount of time, identify improvements needed and then establishon-going control.The snapshot study can provide useful information about the current operation and the potentialwork required for a measurement process. Just as with any other process, we are concerned withthe level of the process and the variability in the process. Also, the measurement process mayshift, drift, etc. over time.In order to improve the measurement process, Y=f (x) must be understood. What x’s are drivingvariation in the measurement process? Process maps are used to understand the sources ofvariation in the measurement process.Just as control charting identifies and quantifies sources of variation affecting a process, so anMSE identifies and quantifies the sources of variation that affect a measurement system.Gage R & R,Repeatability and Reproducibility (R & R) StudiesEvaluate the precision of a measurement system.It is important that the gauge be properly calibratedBefore starting the Gauge R & R Study• Gage R&R is a study to measure the measurement error in measurement systems.• The 10% rule tells us thatif the percent of tolerance consumed by the R&R does not exceed 10%, the measurementsystem is excellent.
Satya kurmi BETQ Page 29R&R = 15% means that 15% of the variation inproduct measurements is due to the measurement System.Analysis of variance,• If more than one operator used in study then measurement (gauge) error has twocomponents of variance:222gaugeproducttotal• Repeatability:- Variance due to measuring instrument• Reproducibility:- Variance due to different operators.Design of experimentsExperiments to estimate the components& are called: gauge repeatability andreproducibility studies (gauge R&R studies).
Satya kurmi BETQ Page 30n - Number of parts r – number of operatorsFor example:2 operators, r=2 j=1…r10 items, n=10 i=1…nMODULE 6 Innovate, Improve & ControlIncremental innovation to radical innovation to breakthrough innovation, valueinnovation,Cost control, Profitability of any organization can be maximized through widening the gap between thecost and the revenue There will be some constraints in increasing the revenue in the capitalist as well ascontrolled economies So, profits can be maximized mainly through cost control Manufacturing cost is controlled by wastage reduction, value analysis, inventory controland efficient utilization of all resourcesSteps in Cost Control
Satya kurmi BETQ Page 311. To set up the target: – the expense target should be set in advance for a specific period. Theseare known as budgets. Proper budgeting should be done for all important expense centers2. To measure the actual: information on actual performance should be collected on a regularbasis3. To compare the actual with the target: ascertain the discrepancy between targets and actual.V= T – A, Variance, Target & Actual4. To analyze the variance: go into detail and find the reasons for the variance5. To locate the responsibilities for unfavorable variance: the areas / persons responsible for thevariance should be identified.6. To take corrective action – a proper corrective and preventive action plans should be in placeValue engineering,Value Engineering aims at a systematic identification and elimination of unnecessary costsresulting in the increased use of alternatives, less expensive material, cheaper designs, less costlymethods of manufacturing etc to provide the same performance, quality and efficiency and adecreased level of overall unit costs and consequently greater profits.The steps involved in value engineering are:• Identifying the customer needs and based on the same determining what a particularcomponent must do to satisfy the customer requirements.• A detailed analysis with complete breakup on the price of every component of the finishproduct purchased from a supplier or manufactured in-house.• From the price breakup, those features that do not add value towards customerrequirements are considered for elimination.
Satya kurmi BETQ Page 32• Looking into the raw material specifications and the processes, alternative materials andprocesses are considered which will contribute towards cost reduction but not affectingthe customer requirements or quality of the final product.• As a finished product, the functional utility is measured and its intrinsic worth in terms ofthe functions is compared with the costs. Then it is investigated as to how the value canbe improved either by obtaining better performance or by reducing costs or both or byobtaining some additional advantage such as conservation of materials.The seven Mudas,The waste of overproduction JIC (just in case) instead of JIT, extra safe scheduling, inaccuratescheduling, trying to utilize available resources all constitute to over production. It can bereduced by line balancing and improving setting times.The waste of waiting The idle time of people / process / materials for instructions / information /materials / operations sequence constitute the waste of waiting. It can be reduced by betterscheduling using Bar Charts and other tools.The waste of Transporting The movement of three Ms -- People / Equipments / Materials –more often or more distance than necessary constitutes to the waste of transporting and can bereduced by better plant layouts.The waste of inappropriate processing Adding features not value added in the eyes of thecustomer and using expensive equipments where simpler and less costly equipments can do thesame job constitute to the waste of inappropriate processing and can be reduced by analyzingcustomer returns and customer feedback and initiate corrective actions based on the same.The waste of unnecessary inventory This happens mainly to cover up quality problems,manpower availability variations, supplier problems and other similar reasons. It can be reducedby implementing JIT, Kanban etcThe waste of unnecessary motions The excessive movements of various parts of the body bythe workmen constitute the waste of unnecessary motions. The same can be reduced by betterergonomics, better layouts and provision of working platforms.
Satya kurmi BETQ Page 33The waste of defects The rejections/rework in processing both at the manufacturer end as wellas the supplier end constitute to the waste of defects. It can be reduced by visual management,Poka Yoke, provision of check lists etc.Continuous measurable improvements―Kaizen‖ is a Japanese term used to convey ―gradual, orderly and continuous improvement‖.Introduced to the colloquial business world in the 1980s, Kaizen has become a well-known andwidely practiced management philosophy. Popularized by Toyota Motors, the philosophyencourages an organization to work cooperatively on an ongoing basis to make improvementswithout excessive expenditures or special projects. Sounds simple, but what does it mean foryour organizationMODULE 7 World Class PracticesVisual controls,Visual control is a business management technique employed in many places where informationis communicated by using visual signals instead of texts or other written instructions. The designis deliberate in allowing quick recognition of the information being communicated, in order toincrease efficiency and clarity. These signals can be of many forms, from different colouredclothing for different teams, to focusing measures upon the size of the problem and not the sizeof the activity, to kanban and heijunka boxes and many other diverse examples.JIT,Also known as ZIPS (zero inventory production system), MAN (materials as needed), NOT(nick of time), ZIN (zero inventories)JIT means that virtually no inventories are held at any stage of production. Exact number of unitsbrought to each successive stages of production at the right time.
Satya kurmi BETQ Page 34No warehouse for the parts which are fed to the assembly line directly from the truck.All ancillary industries need to operate in the vicinity of OEM to avoid problems oftransportation.Production of only what is needed and when it is needed in the subsequent stages of production.Suppliers directly supplying on the assembly line of the manufacturer their components / sub-assemblies just a few minutes before they are required on the assembly line.This enhances efficiency of operations and quick responses to changes are possible.Tremendous saving on storage space is one big advantageInventory levels reduced considerably and hence better utilization of the working capital.No generation of non-moving inventory due to obsolescence.Reduction in defectives by not carrying too much inventory.Tendency to use non-standard material in case of the other material not available can also beavoided by following JIT.JIT is the opposite of JIC – Just in case --- trying to store the materials saying the same isrequired just in case of problems.Advantages of JIT to the manufacturerCreative supplier networking, Eliminates the need to count individual parts, Simplified receivingsystems, Eliminates receiving inspection, Eliminates unpacking, Reduction in material spoilage,Reduction in inventory levelsKanban,KAN means card and BAN means visual signal. Hence Kanban is all about visual cards carryinginformation that every operation produces only that quantity that will be used in the next stage.Since the drawing of the component and only numbers are specified in the card, the workmencan easily understand the same.
Satya kurmi BETQ Page 35JIT and KANBAN are implemented simultaneously in organizations It consists of a set of cards,with one being allocated for each part being manufactured that travel between preceding andsubsequent processes Kanban is a pull system as opposed to the push system Kanban system wasdeveloped in the eighties by Mr.Taiichi Ohno, a Vice President at Toyota Motor Corporation,Japan.Advantages of Kanban SystemReduced costs in high volume production lines, Reduced production lead time, Reduction inWIP, Create work sites that can respond to changes quickly, Avoids overproduction, Delegatesresponsibility to front line employees,Provides quick and precise information.ABC analysis,Pareto principle extended to inventory management.10% by number – 70% by value20% by number – 20% by value70% by number – 10% by valueThe inventory value is calculated by multiplying the annual volume of usage by the rupee valueof each item.Activity based costing,Activity based costing is an approach for allocating overhead costs, An activity is an event thatincurs costs, A cost driver is any factor or activity that has a direct cause and effect relationshipwith the resources consumed.ABC Steps
Satya kurmi BETQ Page 36• Overhead cost drivers are determined.• Activity cost pools are created.– A activity cost pool is a pool of individual costs that all have the same cost driver.• All overhead costs are then allocated to one of the activity cost pools.• An overhead rate is then calculated for each cost pool using the following formula:– Costs in activity cost pool/base– The base is, of course, the cost driver• Overhead costs are then allocated to each product according to how much of each basethe product uses.Mixed model production,Mixed Model Production is the practice of assembling several distinct models of a product on thesame assembly line without changeovers and then sequencing those models in a way thatsmoothens the demand for upstream components.To avoid inventory accumulation different goods are made every day. It is based on the dailyanticipated demand. Mixed model production gives best results when shipment dates are linkedto production schedules, requiring the manufacture of small batches, using quick changeoverfrom one item to another.Poka Yoke,Poka-Yoke was developed by Shigeo Shingo from Toyota Motors as a tool to achieve ZeroDefects. The process of Zero Defects is also known as ―Mistake Proofing‖ or ―Fail-Safe‖ Bytaking over repetitive tasks or actions that depend on vigilance or memory, Poka-Yoke can freeworkers’ time and mind to pursue more value added activities. Poka-yoke is a Japanese termthat means "mistake-proofing". A poka-yoke is any mechanism in a lean manufacturing processthat helps an equipment operator avoid mistakes . Its purpose is to eliminate product defects by
Satya kurmi BETQ Page 37preventing, correcting, or drawing attention to human errors as they occur The concept wasformalized, and the term adopted, by Shigeo Shingo as part of the Toyota Production System. Itwas originally described as baka-yoke, but as this means "fool-proofing" (or "idiot-proofing") thename was changed to the milder poka-yoke.SMED,Single-Minute Exchange of Die (SMED) is one of the many lean production methods forreducing waste in a manufacturing process. It provides a rapid and efficient way of converting amanufacturing process from running the current product to running the next product. This rapidchangeover is key to reducing production lot sizes and thereby improving flow (Mura).The phrase "single minute" does not mean that all changeovers and startups should take only oneminute, but that they should take less than 10 minutes (in other words, "single-digit minute").Closely associated is a yet more difficult concept, One-Touch Exchange of Die, (OTED), whichsays changeovers can and should take less than 100 seconds. A Die is a tool used inmanufacturing. However SMEDs utility of is not limited to manufacturingJidoka,The Japanese term jidoka comprises three Chinese characters and is an untranslatable play onwords. The first character, "ji" refers to the worker herself. If he feels ―something is wrong‖ or ―Iam creating a defect‖, he must stop the line. "Do" refers to motion or work, and "ka" to the suffix―-action‖. Jidoka is a Japanese word which translates as autonomation; a form of automation inwhich machinery automatically inspects each item after producing it, ceasing production andnotifying humans if a defect is detected; Toyota expands the meaning of jidoka to include theresponsibility of all workers to function similarly, i.e. to check every item produced and to makeno more if a defect is detected, until the cause of the defect,has been identified and correctedHeizunka,The lean practice of averaging the volume of items produced and the schedule of production. Thegoal of heijunka is daily consistency permitting continuous flow.Single piece flow.
Satya kurmi BETQ Page 38a. Single piece flow is the ideal state where parts are manufactured one at a time, and flowthroughout the manufacturing and supply chain as single unit, transferred as customer’sorder.b. Manufacturing large batches of parts simultaneously, or accumulating parts in a bin forshipping or transferring 2 or more parts at the same time is opposite or contrasted to thedefinition of Single Piece Flow.c. Single Piece Flow (SPF) supports Just-in-Time, Toyota Production Systems, LeanManufacturing, Theory of Constraints (Drum, Buffer, Rope), and similar types ofphilosophies and systemsMODULE 8Case Studies of Successful Organizations.