Business excellences through quality

Satya kurmi BETQ Page 1
4.67. E3: Business Excellences through Quality
MODULE 1 Introduction
Enterprise excellence, eight critical functions
1. Strategic planning
Strategic plan documents the direction for the organization successfully achieving the
vision and mission requires members of the leadership team to develop and deploy their
enterprise values, vision, mission, goals, and objectives in the enterprise strategic plan.
2. Market and customer research and communication
Market research and communication are critical to develop the strategies for strategic
planning. This is the function that identifies which opportunities within the customer
groups and market segments to pursue. Fact-based decisions about what technology to
pursue and what products and services to offer are made at this stage.
3. Research and technology development
Therefore, sustainable growth requires development of mature technologies transferred
effectively and efficiently to the mix of products and services produced by the enterprise.
4. Product, service, and process design
After the enterprise strategies are established, it is necessary to define the offerings for
the customer and design the total customer experience. This is accomplished by
determining the customer requirements and expectation, defining what our differentiating
characteristics will be, and designing the customer performance model
5. Product and service commercialization
This function includes selection of materials, design of production processes, make or
buy decisions, and variability reduction activities.
6. Post launch production

This includes all in-house activities that add value to the materials to produce the
products and services offered to the customers. Post launch production includes all
activities to produce the product the products and services after initial development
7. Product and service support
After the product or service is delivered to a customer, there are continued opportunities
to serve the customer: troubleshooting, repair, replacement, data collection, and
communication activities. These support activities are critical to customer satisfaction
and provide an opportunity to collect further information about customer wants and
desires.
8. Measurement, analysis, and knowledge management
It establishes the key enterprise performance metrics and provides for regular periodic
performance reviews. This function is the foundation for fact-based decision making
within the enterprise
Enterprise excellence model
• Enterprise excellence is a holistic approach for establishing an agile and flexible
enterprise to thrive in the competitive world.
• The enterprise excellence methodology focuses on optimizing the critical success factors
of quality, cost, schedule and risk to achieve the organization goals.
• The goal is to cost effectively satisfy the customers’ requirements and expectations to
increase 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 performing
research, technology development and transfer and developing the products, services and

processes necessary for cost effectively satisfying customer requirements and
expectations.
.
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 Enterprise
Excellence
 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 a
cultural change
 The functions involved in pilot study may be viewed with skepticism by the rest of
the organization and may limit the success

• 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, multi
discipline 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 and
uncoordinated
• Enterprise-Wide Deployment
 This strategy requires executive and top management commitment.
 It begins with implementing a change in the culture of the enterprise through the
implementation of new processes and techniques.
 Enterprise wide deployment strategy is led by the executive leadership team and
deployed 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 is
the quickest way to achieve the organizational transformation to Enterprise
Excellence.
 Here also cross functional and multi discipline teams are created to work together to
improve the effectiveness and efficiency of enterprise processes.
Quality revolution in the world, quality services, concept of total quality, how total quality leads
to stakeholders satisfaction.

MODULE 2 Excellence Models & Awards
EFQM Model,
During 1988 fourteen leading Western European companies took the initiative of forming the
European Foundation for Quality Management (EFQM). By July 1993 there were more than 280
members from most Western European countries and most business sectors. Recognition of
achievement is a feature of the policy of the EFQM. In line with this policy, 1992 marked the
inaugural 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 in
Western Europe.
Located in Brussels, Belgium, the European Foundation for Quality Management today has over
700 members and is a not-for-profit organization supporting the management of European
companies in accelerating the process of making organizational excellence a decisive influence
on 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 key
performance results.
At the heart of the EFQM ―Organizational Excellence Model‖ is RADAR, which consists of four
elements, Results, Approach, Deployment, Assessment, and Review.
Determine the Results it is aiming for as part of its policy and strategy making process. These
results cover the performance of the organization, both financially and operationally, and the
perceptions of its stake-holders.
Plan and develop an integrated set of sound Approaches to deliver the required results, both now
and in the future. Deploy the approaches in a systematic way to ensure full implementation
Assess and Review the approaches followed based on monitoring and analysis of the results
achieved, and on ongoing learning activities.

Some 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 prestigious
prize is based on the status of TQM implementation and results achieved.
The Deming Award is presented to a company that has achieved significant performance
improvements in the business results and customer satisfaction through application of Total
Quality Management. It was established in 1951 by the Union of Japanese Scientists and
Engineers, Japan. This award is also conferred upon individuals who have contributed to TQM
efforts. This prize was initially established only for the Japanese industries. In the recent years
more and more industries outside Japan were showing interest and hence this was extended to
overseas companies also effective from 1984.
Eligibility for the Prize
• The Deming Application Prize is given to an applicant company that effectively practices
TQM suitable to its management principles, type of industry and business scope. The
following points are used as criteria to determine whether or not the applicant shall be
awarded the prize.
• Reflecting its management principles, type of industry, business scope and business
environment, whether the applicant company has established customer oriented business
activities and strategies under its clear management leadership.
• Whether TQM has been implemented properly to achieve business objectives and
strategies as mentioned above.
• As an outcome of TQM implementation whether outstanding results have been achieved
for business objectives and strategies as stated in item No.1 above.
• After the Deming Application Prize was thrown open to Non-Japanese Companies, the
following organizations in India have received the prestigious prize.

• 1998 - Sundaram Clayton Limited, Chennai
• 2001 - Sundaram Brake Linings Limited, Chennai
• 2002 - TVS Motor Company Limited, Hosur
• 2003 - Mahindra & Mahindra Farm Equipment
2004 - SRF Limited, Chennai.
Lucas – TVS Limited, Chennai
Indo Gulf Fertilizers Limited (UP)
Deming Gold Medal.
JUSE believes in the philosophy of continuous improvement and hence encourages the Deming
award winners to further show improved results in their TQM efforts. The organization that has
won the Deming Quality Award can apply for the Deming Gold Medal. The only Indian
organization 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-term
strength. He took a personal interest in the quality improvement act that was eventually named
after him and helped draft one of the early versions. In recognition of his contributions, Congress
named the award in his honor On August 20, 1987, President Reagan signed the Malcolm
Baldrige National Quality Improvement Act, establishing an annual National Quality Award.
The purpose of the award is to promote Quality awareness, recognize Quality achievements of
U.S. companies, and publicize successful Quality strategies.
The award program is managed by the National Institute of Standards and Technology, United
States Department of Commerce. It’s administered by the Malcolm Baldrige National Quality
Award Consortium, a joint effort of the American Society for Quality Control and the American
Productivity and Quality Center. All funding for the program is from private contributions.

The real purpose of the Baldrige is to educate. It should not be seen as an alternative to ISO 9000
which does not address many categories covered by Baldrige. They should be regarded as
complimentary. Self-assessment is at the heart of the Baldrige and EFQM awards, and the ease
with which this can be done is perhaps their greatest attraction.
The Malcolm Baldrige National Quality Award recognizes American companies that excel in
Quality 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 from
implementation of these strategies.
Eligibility categories
• Manufacturing Organizations
• Service Organizations
• Small Business Organizations
• Health Care Organizations
• Educational Institutions.
• NPO / NGO
Difference between Deming awards & MBNQA,
Sl No Criteria MBNQA Deming
1 Country Only U.S organizations Anywhere in the World

2 For whom Only organizations Individuals and organizations
3 Categories Clearly defined six categories Not clearly defined
4 Improvement Can re-apply after five years Can apply for Deming gold medal
5 Knowledge sharing Stresses on sharing the information
with other organizations
No such thing in the award
6 Focus Strong customer and human resource
focused
All round focus but more on quality
RBNQA,
Indian Merchant’s Chamber Ramakrishna Bajaj National Quality Award
As the name suggests, the award has been initiated by Indian Merchant’s Chamber in the
memory of the Business Visionary Late Shri Ramakrishna Bajaj. The award was set up in the
year 1996.
The Motto of late Mr. Ramakrishna Bajaj was ―Trust in Quality and Business Ethics.‖ During his
lifetime, he not only led the Bajaj House of Business to higher pinnacles of glory and prosperity
but also spearheaded the Quality Movement in the country in several ways. Past President and
prominent Member of the Chamber for several decades, he was an industrial leader, firm believer
and preacher of the significant importance that quality of management performance plays in our
economic and social development.
The scarce resources in the world are knowledge, entrepreneurship and human capital. The
management thinking modeled on the earlier philosophy would not be enough to retain and
nurture the scarce human capital, in order to gain competitive advantage in the marketplace. A
different paradigm is required and this is what a good business excellence model such as
RBNQA advocates.

The new paradigm forces one to think beyond the stranglehold of Strategy, Structure and
Systems and forces one to look at the other three forces of Purpose, Process and People. A
strategy, however good, needs to move beyond it and focus on the super ordinate goal or purpose
of the organization. Similarly Structure needs to look beyond the Process. And finally, system
approach 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 for
excellence and giving special recognition to those who are considered to be the leaders of quality
movement in India.
This award is intended to generate interest and involvement of Indian Industry in quality
programs, drive our products and services to higher levels of quality and equip our Industry to
meet 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 maximizing
consumer 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 their
products and services and thereby set an example for others;
c) Establishing guidelines and criteria that can be used by industry in evaluating their own
quality improvement efforts; and
d) Providing specific guidance to other organizations that wish to learn how to achieve
excellence in quality, by making available detailed information on the `Quality Management
Approach' adopted by award winning organizations to change their culture and achieve
eminence.
• There are five awards consisting of one for large scale manufacturing organizations, one
for small scale manufacturing organizations, one for large scale service sector

organizations, one for small scale service sector organizations and one for BEST OF
ALL.
• In addition, there are eight commendation certificates each for large scale and small scale
manufacturing 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; and
h) Engineering industry and others
• Further, there are six commendation certificates each for large scale and small scale
service organizations in the following sectors:
a) Education
b) Finance,
c) Health Care,
d) Information Technology,
e) Utilities, and
f) Others.
• An organization is eligible to compete for the award, if it satisfies all the following
conditions:

a) Applicant organization is located in India,
b) Applicant organization has been in existence for at least three years as on last date of the
application.
c) Applicant organization is situated at one place or a unit of an organization housed at one
location,
d) Applicant organization has never been convicted by any court for deficiency in product or
service and/or found guilty of financial irregularities by any regulatory authority or court. An
undertaking to this effect will have to be submitted.
e) Applicant organization is not manufacturing products, like tobacco and liquor etc which are
injurious to health.
MODULE 3 Quality Systems
EMS/ISO 14001,
ISO 14001 is the internationally recognized standard for the environmental management of
businesses. It prescribes controls for those activities that have an effect on the environment.

These include the use of natural resources, handling and treatment of waste, and energy
consumption.
The benefits of implementing ISO 14001
Implementing an Environmental Management System is a systematic way to discover and
control the effects your company has on the environment. Cost savings can be made through
improved 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 and
by learning how to use energy more efficiently. It verifies compliance with current legislation
and 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 protect
their workforce.
An OHSMS promotes a safe and healthy working environment by providing a framework that
allows an organization to consistently identify and control its health and safety risks, reduce the
potential for accidents, aid legislative compliance and improve overall performance.
OHSAS 18001 is the internationally recognized assessment specification for occupational
health 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 certifiable
international standard exists.
OHSAS 18001 has been designed to be compatible with ISO 9001 and ISO 14001, to help an
organization 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

• 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 formal
procedure to reduce the risks associated with health and safety in the working
environment 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) Scheme
FS22000. FS22000 is a Global Food Safety Initiative (GFSI) approved scheme.
 The global food industry is under pressure from a great number of private standards for
food safety which suppliers in the food industry are required to consider and become
certified by in order to be able to sell their products. Increasing costs of certification
combined with inflexible requirements in private standards entail increasing costs without
contributing to increased food safety. As an alternative to this development, a well
founded and respected standard as ISO 22000 is needed.
ISO 27001,
The ISO 27001 standard was published in October 2005, essentially replacing the old BS7799-2
standard. 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 which
certification is granted. Today in excess of a thousand certificates are in place, across the world.

ISO 27001 enhanced the content of BS7799-2 and harmonized it with other standards. A scheme
has been introduced by various certification bodies for conversion from BS7799 certification to
ISO27001 certification.
The objective of the standard itself is to "provide a model for establishing, implementing,
operating, monitoring, reviewing, maintaining, and improving an Information Security
Management System". Regarding its adoption, this should be a strategic decision. Further, "The
design and implementation of an organization's ISMS is influenced by their needs and
objectives, security requirements, the process employed and the size and structure of the
organization".
The standard defines its 'process approach' as "The application of a system of processes within
an organization, together with the identification and interactions of these processes, and their
management". It employs the PDCA, Plan-Do-Check-Act model to structure the processes, and
reflects 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 US
Department 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 and
the 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 the
projects are on schedule and within the budget
The CMM influences an organization’s culture by instilling discipline and continuous process
improvement into the workplace. It is a framework that enables an organization to build the right
products right. Continuous improvement is based upon long-term objectives accomplished
through the implementation of short-term evolutionary steps.
A model is a structured collection of elements that describes the characteristics of effective
process.

The Capability Maturity Model (CMM) for software provides software organizations with
guidance on:
Gaining control of their processes for developing software
Evolving towards a culture of software engineering and management excellence
Capability Vs Performance
Process 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 systems
1. Industry survey and Benchmarking The organization may carry out a study of the
organizations in the particular industry in terms of their adopting or not adopting any particular
international quality system. The Benchmarking could be done based on the organizations
implementing and obtaining benefits of any quality system. They can also think of being the first
in their field to adopt any QMS and in course of time may become the Benchmark for other
organizations
2. Top management commitment The top management should clearly reflect their commitment
in the Quality Policy Statement and Quality Policy Objectives to be declared right in the
beginning of the implementation of QMS.
3. Appoint the management representative The top management appoints as MR a person who
has a good knowledge of the quality system to be implemented and also a good knowledge of the
organization 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 the
personnel 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 exercise
only if the personnel in all the areas assume the ownership for implementation. The MR in
consultation with the top management and the functional heads pick one or more persons from

each area for implementing the QMS in their respective areas. These persons can be called the
element owners for their respective areas.
6. Time schedule The MR then calls a meeting of all the element owners and based on the work
content in each area decide on activity-wise dates. The proposal on the time frame will then be
submitted to top management. The schedule may then be revised
7. Training The training programs is organized by the MR for all the employees in various
stages
8. Select a consulting agency The MR and top management decide whether it is required to
appoint an external consulting agency to help in the preparation of documents. If they feel the
need 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 representative
from the consulting agency review the present system in operation in the various areas and try to
match them with the requirements of the standard.
10. Write the documents This step is perhaps the most important and time consuming in the
whole exercise. While writing the documents, the requirements of the standard have to be kept in
mind.
11. Training on documentation The MR and the process owner selected as part of the
implementation team will then conduct training programs for all the staffs in their respective
areas. All the staff will be given support for understanding and implementing the documentation
in practice.
12. Install the new system After the documentation is complete and all the personnel are trained
in 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 the
QMS in the organization. Internal audits are carried out by qualified internal auditors. An
internal auditor cannot audit his own area of operation.

14. Review of internal audit findings by MR After the internal audit is completed in all the
areas, 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 consultation
with the top management. This meeting is attended by the head of the organization, the MR, the
heads of various functional areas in the organizations and other persons as desired by the head of
the organization and / or the MR.
16. Contact the external agency for audit The level of implementation gauged by internal
audits 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 external
audit. It is also decided whether to go in for a single stage audit or a two stage audit. The two
stage 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 implementation
in 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 mutually
agreed earlier.
• The audit is done in two parts viz: the adequacy audit and the compliance audit. In the
adequacy audit, they check the documentation of the organization with respect to the
original standard
MODULE 4 Excellence through Six Sigma
What 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 to
produce perfect work. The Six Sigma concept is about the aim of making all processes in
the chain highly capable that is achieving a capability index of at least two.

 Six Sigma refers to the number of standard deviation from the average setting of a
process to the tolerance limit. In statistical terms, this translates to 3.4 defects per million
opportunities for error. For such levels of quality, both Design and Manufacturing have to
play 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. ―the
most important initiative GE has ever undertaken‖. Jack Welch Chief Executive Officer General
Electric.
GE “Service Company” - examples
Approving a credit card application, installing a turbine, Lending money, servicing an aircraft
engine, answering a service call for an appliance, underwriting an insurance policy Developing
software for a new CAT product.
Six Sigma: Motorola Success Story
Following 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 we
use statistical methods daily throughout all of our disciplines to synthesize an abundance of data
to derive concrete actions…. How has the use of statistical methods within Motorola Six Sigma
initiative, across disciplines, contributed to our growth? Over the past decade we have reduced
in-process defects by over 300 fold, which has resulted in cumulative manufacturing cost savings

of over 11 billion dollars‖
Benefits of six sigma
 Cost reduction
 Productivity improvement
 Increased market share
 Customer retention
 Reduced defectives
 Reduction in cycle time
 Cultural change
Six themes of six sigma
1. Genuine Focus on the customer In six sigma, customer focus becomes the top priority The
measures of six sigma performance begin with the customer. Six sigma improvements are
defined by their impact on customer satisfaction and value.
2. Data and fact driven management Six sigma takes the concept of ―management by fact" to a
new more powerful level. Six sigma managers will know what data or information they really
need and how to use them for maximum benefit
3. Process focus, Management, and improvement In six sigma , process are where the action
is, whether designing the products and services , measuring performance , improving efficiency
and customer satisfaction or even running the business six sigma positions the process as the key
vehicle of success
4. Proactive management Most simply, being "proactive‖ signifies acting in advance of events
the opposite of being "reactive". Six sigma has tools and practices that replace reactive habits
with 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 people
learn how their roles fit into the "big picture" and can recognize and measure interdependence of
activities in all parts of process.

6. Drive for Perfection; tolerance for Failure No company will get anywhere close to six
sigma without launching new ideas and approaches, which always involves some risk. Any
company that makes six sigma its goal will have to constantly push to be ever-more-perfect
(since the customer's definition of "perfect" will always be changing) while being willing to
accept and manage occasional setback.
DMAIIC methodology,
D Define the problem or opportunities for improvement Gather facts regarding the exact
questions to be answered. Clearly identify the problem. Utilize numerical definitions to the
extent possible. Focus on processes that create the problem and not on the outcome.
M Measure process performance Establish our baseline performance and collect meaningful
data relevant to the problem. Benchmark on the capability of a given process Focus on CTQ
factors (critical to quality)
A Analyze the process to determine the root causes of poor performance. All about finding the
real root cause to solving our problem. Analyze current processes, results and determine what is
possible 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 their
impact on performance. Implement changes on the basis of best alternatives chosen during the
exercise.
C Control the improved process and hold the gains. Quantify the change in performance and
make sure the improvement is sustained. Lock in successes. Implement measures to keep
variables within the new operating limits
Six 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. Both
Six Sigma and TQM have many similarities and are compatible in varied business environments,
including manufacturing and service industries. While TQM has helped many companies in
improving the quality of manufactured goods or services rendered, Six Sigma has the potential
of delivering even sharper results.

Total Quality Management is often associated with the development, deployment, and
maintenance of organizational systems that are required for various business processes. It is
based on a strategic approach that focuses on maintaining existing quality standards as well as
making incremental quality improvements. It can also be described as a cultural initiative as the
focus is on establishing a culture of collaboration among various functional departments within
an organization for improving overall quality.
Six Sigma roles – yellow belt to master black belt
Executive Leadership Includes CEO and other key top management team members. They are
responsible for setting up a vision for Six Sigma implementation.
Champions Are responsible for the Six Sigma implementation across the organization in an
integrated manner. Champions also act as mentor to Black Belts.
Master Black Belts Identified by champions, act as in-house expert coach for the organization
on Six Sigma. They devote 100% of their time to Six Sigma
Black Belts Operate under Master Black Belts to apply Six Sigma methodology to specific
projects. They primarily focus on Six Sigma project execution.
Green Belts Are the employees who take up Six Sigma implementation along with their other
job responsibilities. They operate under the guidance of Black Belts and support them in
achieving 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 very
different than a Green Belt or Black Belt but are often very similar and sometimes exactly like
Champions or Stakeholders.
MODULE 5
Define, Measure & Analyze
Understanding process variation,
Greater Process Variation = Greater Uncertainty = More Waste
Lesser Process Variation = Greater Certainty = Less Waste

Process variation is the naturally occurring variation in the attributes of transistors (length,
widths, oxide thickness) when integrated circuits are fabricated. It becomes particularly
important at smaller process nodes (<65 nm) as the variation becomes a larger percentage of the
full length or width of the device and as feature sizes approach the fundamental dimensions such
as 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 all
circuits but particularly analog circuits due to mismatch.[1]
If the variance causes the measured or
simulated performance of a particular output metric (bandwidth, gain, rise time, etc.) to fall
below or rise above the specification for the particular circuit or device it reduces the overall
yield for that set of devices.
Process mapping,
A map of a patient journey is a visual representation - a picture or model - of the relevant
procedures and administrative processes. The map shows how things are and what happens,
rather than what should happen. This helps anyone involved see other people's views and roles. It
can also help you to diagnose problems and identify areas for improvement.
There are different approaches to mapping patient journeys, procedures and administrative
processes in healthcare services. Which one you select will depend upon:
What you need to know
Resources and timescales
Engagement and interest of staff
Each one gives you a slightly different perspective and there is no definitive right or wrong. The
key 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) required
bringing a specific product or service from raw material through to the customer.
What it is—a way of making waste evident in a process
Why do it—to eliminate the waste

How do it—use swim lane diagrams and, for now, show only lane changes, and
document 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 every
process in the material & information flow
Then, 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 techniques
Value stream analysis
Lean Six Sigma is a statistical concept that measures a process in terms of defects, with the goal
of reducing variability, decreasing defects and increasing efficiency using rigorous quantitative
methods.
Value Stream Mapping and Analysis (VSA) is one application of the Lean method designed to
reduce waste and inefficiency for both the process owner and customer by ―mapping‖ a process
flow and looking for areas that can be improved.
Key Tenets of VSA
• Reduce/eliminate time, waste, inefficiency
• Include both ―owners‖ and ―customers‖

• 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 processes
necessary for cost effectively satisfying customer requirements and expectations.
VOCS includes the policies and guidelines, infrastructure and processes that address the
requirements and expectations of both internal and external customers.
Internal customers for developing the processes to design, develop, produce and deliver the
products and services to the external customers.
External customers to ensure satisfying their requirements and expectations
FMEA, Failure mode and effect analysis
The FME(C) A is a design tool used to systematically analyze postulated component failures and
identify the resultant effects on system operations. The analysis is sometimes characterized as
consisting of two sub-analyses, the first being the failure modes and effects analysis (FMEA),
and the second, the criticality analysis (CA).[2] Successful development of an FMEA requires
that the analyst include all significant failure modes for each contributing element or part in the
system. 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 be
scheduled and completed concurrently with the design. If completed in a timely manner, the
FMECA can help guide design decisions. The usefulness of the FMECA as a design tool and in
the decision making process is dependent on the effectiveness and timeliness with which design
problems are identified. Timeliness is probably the most important consideration. In the extreme
case, the FMECA would be of little value to the design decision process if the analysis is
performed after the hardware is built. While the FMECA identifies all part failure modes, its
primary benefit is the early identification of all critical and catastrophic subsystem or system
failure modes so they can be eliminated or minimized through design modification at the earliest

point in the development effort; therefore, the FMECA should be performed at the system level
as soon as preliminary design information is available and extended to the lower levels as the
detail design progresses.
Process capability analysis,
Process capability is the ability of the process to meet the design specifications for a service or
product.
Nominal value is a target for design specifications.
Tolerance is an allowance above or below the nominal value.

Measurement systems evaluations

Measurement is a process. The objective of the MSE is to learn as much as possible about the
measurement process in a short amount of time, identify improvements needed and then establish
on-going control.
The snapshot study can provide useful information about the current operation and the potential
work required for a measurement process. Just as with any other process, we are concerned with
the level of the process and the variability in the process. Also, the measurement process may
shift, drift, etc. over time.
In order to improve the measurement process, Y=f (x) must be understood. What x’s are driving
variation in the measurement process? Process maps are used to understand the sources of
variation in the measurement process.
Just as control charting identifies and quantifies sources of variation affecting a process, so an
MSE identifies and quantifies the sources of variation that affect a measurement system.
Gage R & R,
Repeatability and Reproducibility (R & R) Studies
Evaluate the precision of a measurement system.
It is important that the gauge be properly calibrated
Before 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 that
if the percent of tolerance consumed by the R&R does not exceed 10%, the measurement
system is excellent.

R&R = 15% means that 15% of the variation in
product measurements is due to the measurement System.
Analysis of variance,
• If more than one operator used in study then measurement (gauge) error has two
components of variance:
222
gaugeproducttotal
• Repeatability:
- Variance due to measuring instrument
• Reproducibility:
- Variance due to different operators.
Design of experiments
Experiments to estimate the components
& are called: gauge repeatability and
reproducibility studies (gauge R&R studies).

n - Number of parts r – number of operators
For example:
2 operators, r=2 j=1…r
10 items, n=10 i=1…n
MODULE 6 Innovate, Improve & Control
Incremental innovation to radical innovation to breakthrough innovation, value
innovation,
Cost control,
 Profitability of any organization can be maximized through widening the gap between the
cost and the revenue
 There will be some constraints in increasing the revenue in the capitalist as well as
controlled economies
 So, profits can be maximized mainly through cost control
 Manufacturing cost is controlled by wastage reduction, value analysis, inventory control
and efficient utilization of all resources
Steps in Cost Control

1. To set up the target: – the expense target should be set in advance for a specific period. These
are known as budgets. Proper budgeting should be done for all important expense centers
2. To measure the actual: information on actual performance should be collected on a regular
basis
3. To compare the actual with the target: ascertain the discrepancy between targets and actual.
V= T – A, Variance, Target & Actual
4. To analyze the variance: go into detail and find the reasons for the variance
5. To locate the responsibilities for unfavorable variance: the areas / persons responsible for the
variance should be identified.
6. To take corrective action – a proper corrective and preventive action plans should be in place
Value engineering,
Value Engineering aims at a systematic identification and elimination of unnecessary costs
resulting in the increased use of alternatives, less expensive material, cheaper designs, less costly
methods of manufacturing etc to provide the same performance, quality and efficiency and a
decreased 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 particular
component must do to satisfy the customer requirements.
• A detailed analysis with complete breakup on the price of every component of the finish
product purchased from a supplier or manufactured in-house.
• From the price breakup, those features that do not add value towards customer
requirements are considered for elimination.

• Looking into the raw material specifications and the processes, alternative materials and
processes are considered which will contribute towards cost reduction but not affecting
the customer requirements or quality of the final product.
• As a finished product, the functional utility is measured and its intrinsic worth in terms of
the functions is compared with the costs. Then it is investigated as to how the value can
be improved either by obtaining better performance or by reducing costs or both or by
obtaining 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, inaccurate
scheduling, trying to utilize available resources all constitute to over production. It can be
reduced 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 better
scheduling 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 be
reduced by better plant layouts.
The waste of inappropriate processing Adding features not value added in the eyes of the
customer and using expensive equipments where simpler and less costly equipments can do the
same job constitute to the waste of inappropriate processing and can be reduced by analyzing
customer 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 reduced
by implementing JIT, Kanban etc
The waste of unnecessary motions The excessive movements of various parts of the body by
the workmen constitute the waste of unnecessary motions. The same can be reduced by better
ergonomics, better layouts and provision of working platforms.

The waste of defects The rejections/rework in processing both at the manufacturer end as well
as 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 and
widely practiced management philosophy. Popularized by Toyota Motors, the philosophy
encourages an organization to work cooperatively on an ongoing basis to make improvements
without excessive expenditures or special projects. Sounds simple, but what does it mean for
your organization
MODULE 7 World Class Practices
Visual controls,
Visual control is a business management technique employed in many places where information
is communicated by using visual signals instead of texts or other written instructions. The design
is deliberate in allowing quick recognition of the information being communicated, in order to
increase efficiency and clarity. These signals can be of many forms, from different coloured
clothing for different teams, to focusing measures upon the size of the problem and not the size
of 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 units
brought to each successive stages of production at the right time.

No 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 of
transportation.
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 advantage
Inventory 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 be
avoided by following JIT.
JIT is the opposite of JIC – Just in case --- trying to store the materials saying the same is
required just in case of problems.
Advantages of JIT to the manufacturer
Creative supplier networking, Eliminates the need to count individual parts, Simplified receiving
systems, Eliminates receiving inspection, Eliminates unpacking, Reduction in material spoilage,
Reduction in inventory levels
Kanban,
KAN means card and BAN means visual signal. Hence Kanban is all about visual cards carrying
information 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 workmen
can easily understand the same.

JIT 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 and
subsequent processes Kanban is a pull system as opposed to the push system Kanban system was
developed in the eighties by Mr.Taiichi Ohno, a Vice President at Toyota Motor Corporation,
Japan.
Advantages of Kanban System
Reduced costs in high volume production lines, Reduced production lead time, Reduction in
WIP, Create work sites that can respond to changes quickly, Avoids overproduction, Delegates
responsibility to front line employees,Provides quick and precise information.
ABC analysis,
Pareto principle extended to inventory management.
10% by number – 70% by value
The inventory value is calculated by multiplying the annual volume of usage by the rupee value
of each item.
Activity based costing,
Activity based costing is an approach for allocating overhead costs, An activity is an event that
incurs costs, A cost driver is any factor or activity that has a direct cause and effect relationship
with the resources consumed.
ABC Steps

• 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 base
the product uses.
Mixed model production,
Mixed Model Production is the practice of assembling several distinct models of a product on the
same assembly line without changeovers and then sequencing those models in a way that
smoothens the demand for upstream components.
To avoid inventory accumulation different goods are made every day. It is based on the daily
anticipated demand. Mixed model production gives best results when shipment dates are linked
to production schedules, requiring the manufacture of small batches, using quick changeover
from one item to another.
Poka Yoke,
Poka-Yoke was developed by Shigeo Shingo from Toyota Motors as a tool to achieve Zero
Defects. The process of Zero Defects is also known as ―Mistake Proofing‖ or ―Fail-Safe‖ By
taking over repetitive tasks or actions that depend on vigilance or memory, Poka-Yoke can free
workers’ time and mind to pursue more value added activities. Poka-yoke is a Japanese term
that means "mistake-proofing". A poka-yoke is any mechanism in a lean manufacturing process
that helps an equipment operator avoid mistakes . Its purpose is to eliminate product defects by

preventing, correcting, or drawing attention to human errors as they occur The concept was
formalized, and the term adopted, by Shigeo Shingo as part of the Toyota Production System. It
was originally described as baka-yoke, but as this means "fool-proofing" (or "idiot-proofing") the
name was changed to the milder poka-yoke.
SMED,
Single-Minute Exchange of Die (SMED) is one of the many lean production methods for
reducing waste in a manufacturing process. It provides a rapid and efficient way of converting a
manufacturing process from running the current product to running the next product. This rapid
changeover 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 one
minute, but that they should take less than 10 minutes (in other words, "single-digit minute").[1]
Closely associated is a yet more difficult concept, One-Touch Exchange of Die, (OTED), which
says changeovers can and should take less than 100 seconds. A Die is a tool used in
manufacturing. However SMED's utility of is not limited to manufacturing
Jidoka,
The Japanese term jidoka comprises three Chinese characters and is an untranslatable play on
words. The first character, "ji" refers to the worker herself. If he feels ―something is wrong‖ or ―I
am 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 in
which machinery automatically inspects each item after producing it, ceasing production and
notifying humans if a defect is detected; Toyota expands the meaning of jidoka to include the
responsibility of all workers to function similarly, i.e. to check every item produced and to make
no more if a defect is detected, until the cause of the defect,has been identified and corrected
Heizunka,
The lean practice of averaging the volume of items produced and the schedule of production. The
goal of heijunka is daily consistency permitting continuous flow.
Single piece flow.

a. Single piece flow is the ideal state where parts are manufactured one at a time, and flow
throughout the manufacturing and supply chain as single unit, transferred as customer’s
order.
b. Manufacturing large batches of parts simultaneously, or accumulating parts in a bin for
shipping or transferring 2 or more parts at the same time is opposite or contrasted to the
definition of Single Piece Flow.
c. Single Piece Flow (SPF) supports Just-in-Time, Toyota Production Systems, Lean
Manufacturing, Theory of Constraints (Drum, Buffer, Rope), and similar types of
philosophies and systems
MODULE 8
Case Studies of Successful Organizations.

Business excellences through quality

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