138 CHAPTER 5 TOTAL QUALITY MANAGEMENT oy DEFINING Quay > Conformance to specieatons How wel product or service ‘ents the targets an {olrane deter bys designs > Rane for use ‘defini o gua that vals how we te prods prt or ts feted se > Value for peice pl Quality defined Inter of produto evr seuless feethe price pai > Supportsevies ult defined in tems of ‘he support provided ater theproducterseeace purchased The definition of quality depends on the role of the people defining it. Most consumers have a dificult time defining quality, but they know st when they ee For example, although you probably have an opinion as to which manufacturer of athletic shoes provides the highest quality, it would probably be difficult for you to define your quality standard in precise cers. Also, your friends may have different ‘opinions regarding which athletic shoes are of highest quality. The difficulty in defining quality exists regardless of product, and this is tue for both manufactur Ing and service organizations. Think about how difficule it may be to define quality or products such as arlne services. child day-care facilities. college classes. oF even OM textbooks, Further complicating the isue is that the meaning of quality has changed overtime. Today, there i no single universal definition of quality. Some people view quality 25 ~performance to standards” Others view i 5 “meetin the customer's needs” of sats- {ying the customer" Let's look at some ofthe more common definitions of qual, © Conformance to specifications measures how well the product or service meets the targets and tolerances determined by its designers, For example, the dimensions of a machine part may be specified by its design engineers as 3 = (05 inches. This would mean thatthe target dimension is 3 inches but the di- ‘mensions can vary between 2.95 and 3.05 inches. Similarly, the wait for hotel, room service may be specified as 20 minutes, but there may be an acceptable {delay ofan additional 10 minutes. Also, consider the amount of light delivered by a 60 watt light bulb. IF che bulb delivers 50 watts it des not conform to specifications. As these examples illustrate, conformance to specification is di- rectly measurable, though it may not be directly related to the consumer's idea of quality © Fleness for use focuses on how well the product performs is intended function ‘or use. For example, a Mercedes Benz and a Jeep Cherokee both meet a fitness or use definition If one considers transportation as the intended function However, i te definition becomes more specific and assumes thatthe intended use is for transportation on mountain rads and carrying fishing ger, the Jeep Cherokee has a greater fitness for use. You can also see that finess for use Is a user-based definition in tha iis intended (0 meet the needs of a specific user group, Value for price paid isa definition of quay that consumers often use for prod: ct oF service usefulness. This isthe only definition that combines economics with consumer criteria; it assumes that the definition of quality i price sensitive, For example, suppose that you wish to sign up for a personal finance seminar land discover thatthe same clas is being taught at wo different colleges at sig- nificantly diferent ction sates. If you take the les expensive seminar, you will feel that you have received greater value for the price. © Support services provided ate often how the quality of a product or service is kiged. Quality does not apply only to the product or service itself. also ap- plies to the people, processes, and organizational environment asociated with it For example, the quality ofa university is judged not only by the quality of stl and course offerings, but also by the effileney and accuracy of processing pa- perwork. ® Psychological criteria isa subjective definition that focuses on the judgmental evaluation of what constitutes product or service quality, Different factors contribute to the evaluation, such as the atmosphere of the environment or the perceived prestige ofthe product. For example, a hospital patient may receive av erage healthcare, bu avery friendly staff may leave the impression of high qual- Jn, Similarly, we commonly associate certain products with excallence because of ‘hee reputation; Rolex watches and Mercedes-Benz automobiles are examples, Differences Between Manufacturing ‘and Service Organizations Defining quality in manufacturing organizations Is often dlferent from that of ser- vices. Manufacturing organizations produce a tangible product that can be seen, ‘ouched, and directly measured. Examples include ers, CD players, clothes, comput es, and food items. Therefore, quality definitions in manufacturing usualy focus on tangible product features, ‘The most common quality definition in manufacturing Is conformance, which is ‘he degree to which a product characteristic meets preset standards. Other common ‘efinitions of quality sn manufacturing include performanee—such as acceleration of a vehicle; reliability—that the product will function as expected without fallure: ‘eatures—the exes that are included beyond the basic characteristics: durability — expected operational hfe of the product; and serviceabiliy—ow readily @ product can be repaired, The relative importance of these definitions 's based on the preter ‘ences of each individual customer. I is easy to see how diferent customers can have diferent definitions in mind when they speak of high produ quality. In contrast to manufacturing, service organizations prodice @ product that isin tangible. Usually, che complete preduct eannot be seen or touched. Rather, Its expe ‘rienced. Examples include delivery of health cae, experience of staying ata vacation ‘resort, and learning ata university. Te intangible nature ofthe product makes defin- Ing quality difficult. Also, since a service is experienced, perceptions can be highly subjective In addition to tanglble factors, quality of services is often defined by per ceptual factors. These Include responsivenes to customer needs, courtesy and frien ness of stall, prompines in esolving complaints, and atmasphere. Other definitions af duality in services include came —the amount of time a customer has to wait for the Service; and conslteney——the degree to which the service i the same each time. For these reasons, defining quality in services can be especially challenging. Dimensions (of quality for manufacturing versus service organizations are showa in Table 5-1 uving Organizations Serves Organizations Conformance to specifications Tangibe acters Performance Consistency Relobility Responsiveness to customor needs Features Courtesy/renalinass Durability Timeliness/promprness Serviceabilty ‘Nmosphere DEFINING QUALITY + 138 » Pools ere Awa defn alt tat Fenton jena ‘alters of iat, ‘ert produt or service ‘selene, AGLE 6-1 Dimensions of Quay for “Manufacturing Vers Serve Organi140 LINKS TO PRACTICE General Electric Company woe gecom Motorola, ine. swwww.motorola com Mp COST, OF QUALITY > Prevention oat Costs neared inthe proce ot peveotng poe qulity from excerng » Apprabal costs (Coat teased nthe process of uncovering dete > Internat fauce costs Cont eld with tscovering poor product ‘quay befor the product CHAPTER 5 TOTAL QUALITY MANAGEMENT Today's customers demand and expect high quality. Companies that do not make quality ape rity risk long-run survival World-class organizations such as General Blectric and Mo- torola atribute their sucess to having one of the best quality management programs in dhe ‘world, These companies were Some of the first to Implement 4 quality program called, Six Sigma, where the level of defects s reduced to approximately 3.4 parts per milion, To achieve this, everyone in the company is trained in quality. For example, individuals highly trained in quality improvement principles and techniques receive a designation called "Black Belt” The full-time job of Black Belts isto identify and solve quality problems. In fact, Motorola was one of the fist companies to win the prestigious Malcolm Baldrige National Quality Award in 1988, due 10 is high focus on qual. Both GE and Motorola have ha primary goal to achleve total customer satisfaction, To this end, the efforts ofthese organizations have include eliminating almost al de- Fees from products, processes, and transactions. Both companies consider quality (0 bbe the critical factor that has resulted in significant increases in sales and market share, 5 well as cst savings In the range of millions of dolar. ‘The reason quality has gained such prominence is that organizations have gained an understanding ofthe high cost of poor quality: Quality affects all aspects of the orga nization and has dramatic cos implications. The most obvious consequence occirs ‘when poor quality creates dissatisfied customers and eventually leads t loss of busi ness. However, quality has many other costs, which can be divided into two cate sgories. The firs eategory consists of costs necessary for achieving high quality which are called quality contol costs. These ae of two types: prevention costs and appraisal tosts. The second category consists of the cost consequences of poor quality, which a called qual fare costs These include exteenal flue costs and internal flue cass ‘These costs of quality are shown in Figure 5-1. The first two cost are incurred inthe hhope of preventing the second two. Prevention costs are all costs incured in the pros of preventing poor quality from ‘occurring, They ince quality planning costs, sch asthe costs of developing and imple- ‘menting a quality plan. Also inched are the costs of product and process desig, from collecting customer information to designing processes that achieve conformance to spec- ‘fications, Employee training in quality measurement Is Included as port of tis cos, as wells the costs of maintaining records of information and data elated to quay. ‘Appraisal costs are incurred in the process of uncovering defects. They include the «ost of quality inspections, product testing, and performing audits to make sure that ‘quality standards are being met, Also inckided in this category are the costs of worker Lime spent measuring quallty and the cost of equipment used for quality appralsa Taernal failure costs ae associated with discovering poor product quality before the product reaches the customer site: One type of internal failure cos is rework which Is the cos of correcting the defective item. Sometimes the Item Isso defective thet It cannot be corrected and must be thrown away. This s called scrap, and its costs inelude oes of eon and Inplorartra = ay an os na. ‘end inspecting oan all the material, bor, and machine cost spent in producing the defective product. Other types of internal flue costs inelude the cost of machine downtime due to fall ures in the proces andl the costs of discounting defective tems fr salvage value. [External fallure casts are associated with quality problems that occur atthe cus tomer site. These costs canbe particularly damaging because customer faith and oy- aly can be difficult to regain, They include everything from customer complaints, product setuens, and repairs, to warranty claims, recalls, and even litigation costs re sulting ftom product lability sues. A final component ofthis cost is lost sles and lost customers. For example, manufacturers of lunch meats and hot dogs whose prod- ucts have been recalled due to bacterial contamination have had to struggle to regain consumer confidence, Other examples include auto manufacturers whose products have been recalled due to major malfunctions such as problematic braking systems and lrlines that have experienced a crash with many fatalities. External faire can sometimes put a company out of busines almost overnight ‘Companies that consider quality important invest heavily in prevention and ap: praisal costs in order to prevent internal and external failure costs. The earlier defects fare found, the less costy they are to correct, For example, detecting anc correcting de- fects during product design and product production is considerably less expensive than when the defects are found at the customer ste. Ths shown in Figure 5-2, FIGURE 5-1 Casto quality Cost OF QUALITY © 141 > External aire costs (Costs ssoited with ality ‘problems tha occur a tbe FIGURE 5:2 Com odes142+ CHAPTER § TOTAL QUALITY MANAGEMENT External failure costs tend to be particularly high for service orgunizations. The reason is tac with a service the customer spends much time in the service delivery system, and there are fewer opportunities to correct detest than there are in manwi- facturing. Examples of external failure in services include an airline that has over Dooked flights long delays inairtine service, and lst luggage. > THE EVOLUTION OF TOTAL QUALITY MANAGEMENT. (TOM). & Marketing, Finance, ‘ecounting The concept of quality has existed for many years, though its meaning has changed and ened rer time Inthe easly twentieth rent. qpalty management meant in Specting produets to ensure that they met specifications. Inthe 1940s, during World War I, quality became more statistical in nature Statistical sampling techniques were used t0 evaluate quality, and quality control charts were used to monitor the produc- tion process. In the 1960s, with the help of so-called “quality gurus” the concept took. ‘on a broader meaning. Quality began to be viewed as something that encompassed the entire organization, not only the production proces. Since all functions were responsible for product quality and all shared the costs of poor qualty. quality was seen asa concept that affected the entire organization, The meaning of quality for businesses changed dramatically in the late 19705. Be- fore then quality was sil viewed as something chat needed to be inspected and corrected, However, in the 1970s and 1980s many US. industries lost marketshare to foreign competition. In the auto industry, manufacturers such a5 Toyota and Fonda ‘became major players. In the consumer goods market, companies such as Toshiba and Sony led the way. These foreign competitors were producing lower-priced products with considerably higher qual ‘To survive companies had to make major changes in their quality programs. Many hired consultants and instituted quality training programs for their employees. Anew ‘concept of quality was emerging, One result is that quality began to have a strategic ‘meaning. Today, successful companies understand that quality provides & competitive advantage. They put the customer frst and define quality as meeting or exceeding ‘eustomer expectations Since the 1970s, competition bused on quality has grown in importance and has {generated wemendous interest, concern, and enthusiasm. Companies in every line of business are fecusing on improving quality In order to be more competitive. In many industries quality excellence has become a standard for doing business. Companies that do not meet this standard simply will not survive. As you wil see later in the chapter, the importance of quality is demonstrated by national quality awards and quality certifications that are coveted by businesses. ‘The term used for today’s new conexpt of qualty is total qualty management or TOM, Figuce 5-3 presents a timeline of the old and new concepts of quality. You can see that the old concept is reactive, designed to correct quality problems after they occu, ‘The new concept i proactive, designed to build quality into the product and process de- sign, Nex, we lok a the individuals who have shaped our understanding of quality. Quality Gurus ‘Tolly understand the TQM movement, we need 10 look at the philosophies of no- table individuals who have shaped the evolutlon of TQM, Their philosophies and teachings have contributed to our knowledge and understanding of quality today ‘Their individual contributions are surnmariaed in Table 5-2. 1150 + CHAPTER 5 TOTAL QUALITY MANAGEMENT LINKS TO PRACTICE The Watt Disney Company swowedisney.com, > Causeand-etect, ‘agra ‘Reet ha sents Poni aus fpr ‘ual peoblens > Rowehare ‘schematic the sequence ofsep volved ian ‘operation or paces. ‘The importance of exceptional ‘quality fs demonetrated by The Walt Disney Company in oper ating its theme parks. The focus ‘of the parks Is eustomer sat faction, This is accomplished through meticulous attention to every detail, with particular Focus on the role of employees In service delivery. Employees fare viewed a6 the most Impor- tant organizational resource and great care is taken in employee hiring and training, All employees ae called "cas, members” regardless of whether they are janitors or performers, Employees are ex- tensively trained in customer service, communication, and quality awareness. Contin- ual monitoring of quality 's considered Important, and employers meet regularly teams to evaluat their effectiveness. All employees ae shown how the quality of their Individual obs contributes tothe sucess ofthe park, Hag, Use of Quality Tools ‘You can see that TQM places a great deal of responsibility on all workers. employees are to identily and correct quality problems, uhey need proper training. They need (0 ‘understand how to asses quality by using a variety of quality control tools, how to terpret findings, nd how to correct problems. In this section we look at seven differ. ent quality tools. These are often called the seven tools of quality control and are shown in Figure 5-7. They are easy to understand, yet extremely useful in identifying ‘and analyzing quality problems. Sometimes workers use only one toa at atime, but often a combination of tools s most helpful Cause-and-Effect Diagrams Cause-and-effect dlagrams are charts that identity potential causes for particular quality problems. They are often called fshbone dia frams because they look like the bones ofa fish. A general cause-and-effect diagram i Shown in Figure 5-8, The “head” of the fish isthe quality problem, such a damaged rippers on a garment or broken valves on a tire, The diagram is drawn so that the “spine” of the fish connects the “head” to the possible cause of the problem. These causes could be related to the machines, workers, measurement, suppliers, materials, ‘and many other aspects of the production process, Each of these possible causes can then have smaller “bones” that addres specific issues that relate to each cause, Forex ample, a problem with machines could be due to a need for adjustment, ald equip ‘ment o tooling problems. Similarly. a problem with workers could be related to lack of training, paor supervision, or fatigue au eft gaa rb ing fn ommend by ly control teams. Specific causes of problems can be explored through brainstorm ‘The development ofa cause-and-effect dlagrara requires the ean 10 think though all the possible causes of poor quality Flowcharts & flowchart Isa schematic diagram ofthe sequence of steps involved in an operation or process. t provides a visual tool that is easy (0 use and understand, By seeing the step involved in an operation or proces, everyone develops a clear pic tare of how the operation works and where problems could arise1. causeand tect Diagram ‘Suppliers Woners Machines _ Prolene Envtcrment Process Matra 2.Flowenart S.checktt Deter Tne NootDeecs Tol Boken appar v7 3 Rppedmateial — Yyzevid 7 Nissrgtatens 77 3 Faded ear w 2 Ficune 6.7 The seven tol of quay cont ‘THE PHILOSOPHY OF TOM + 181 4.contt act 7. Aistogram Frequeey FE Fi, Checklists A checklist is list of common defects and the numberof observed oc- > Checkst currences ofthese defects, Iti simple yet effective fact-finding tol that allows the A lst eommoa deft and worker to collet specific information regarding the defects observed, The checklist ti tmber of observed in Figure 5-7 shows four defects and the numberof times they have been observed ceurencer of tee defects. Tes clear that the biggest problem is ripped material, This means that the plant needs to focus on this specific problem—for example, by going to the source of supply or seeing whether the material rips during a pariculor production process, [checklist can also be used to foeus on ather dimensions, such as location or time, For example, if a defect Is being observed frequently, a checklist can be developed ‘hat measures the numberof occurrences per shift, per machine, or per operator In {his fashion we can isolate the location of the particular defect and then focus on correcting the problem, 152 + CHAPTER § TOTAL QUALITY MANAGEMENT FIGURE S-8 A general couse aneeet (fio) dagam > contol hart Chart ut to eveune trhether proces ‘peatng within set ‘pects > Seater diagrams ‘Graphs that stow how to sariblesare rete to ech poor ually managerent Control Charts Control charts are a very important quality control tool. We will study the use of control charts at great length in the next chapter. These charts, are used to evaluate whether a process is operating within expectations relative (0 some measured value such $ weight, width, or volume. For example, we could ‘messure the weight ofa sack of flour, the width ofa tire, or the volume of a bottle of soft drink. When the production process is operating within expectations, we say hat 4tis"in control” “Ta evaluate whether or nota process i in control, we regularly measure the var able of interest and plot it on a control chart. The chart has a line dawn the center ‘representing the average value ofthe variable we are measuring, Above and below the ‘enter line are two lines, called the upper control limit (UCL) and the lower contro limit (LCL). As long as the observed values fall within the upper and lower control limits, the process isin control and there is no problem with quality. When a mea- sured observation falls outside ofthese iit, there isa problem Scattor Diagrams Scatter diagrams are graphs that show how two variables are felated to one another. They are particularly useful in detecting the amount of corre lation, or the degree of linear relationship, between two variables. For example, in creased produetion speed and number of defects could be correlated postively; as production speed increases, so does the number of defets. Two variables could also be correlated negatively, so that an increase in one ofthe variables i associated with a decrease in the other. For example, increased worker training might be associated with a decrease i the numberof defects observed ‘The greater the degree of correlation, the more linear are the observations in the scatter diagram, On the other hand, the more scattered the observations in the di fram, the less correlation exists between che variables. OF course, other types of tlonships can also be observed on a seater diagram, such as an inverted U. This may be the case when one is observing the relationship between two variables such as oven,THE PHILOSOPHY OF TaM + temperature and number of defects, since temperatures below and above the ideal ‘could lead to defers Pareto Analysis Pareto analysis is technique usec to identity quality problems based on their degree of importance. The logic behind Pareto analysis i that only a Few quality problems are important, whereas many others ate not critial. The tech rlque was named after Viedo Pareto, a nineteenth-century Taian economist who {determined that only a small percentage of people controlled ost ofthe wealth, This ‘concept has often been called the B0~20 rule and has been extended to many areas In ‘quality management the logic behind Pareto’ principle is that most quality problems fakea result of only afew causes. The tick sto dently these causes. ‘One way to use Pareto analysis isto develop a chart that ranks the causes of poor ‘quality in decreasing order based on the percentage of defects each has caused. For ex- ample, a tally can be made of the numberof defects that result from diferent cause, such as operator error, defective parts, or itaccurate machine calibrations Percentages of defects can be computed from the cally and placed in a chart lke those shown in Figure 5-7. We generally tend to find that afew causes account for most of the defects, Histograms A histogram is a chart that shows che frequency distribution of ob: served values ofa variable, We can see from the plot what type of distribution a par- Uicular variable displays, such as whether ithas anormal distribution and whether the distribution is symmetrical Inthe food service industry the use of quality control tools & important in identiying quality problems. Grocery store chains, such as Kroger andl Mer, ‘must record and monitor the quality of {Incoming produce, such as tomatoes and Jeuce. Quality tools can be used to evaluate ‘the acceptability of product ‘quality and to monitor produet quality from individual suppliers. They can also bbe used to evaluate causes of quality problems, such as long transit time or poor re {eigeration, Similarly restaurants use quality control too to evaluate and monitor the ‘quality of delivered goods, such as meats, produce, or haked goods Product Design Quality Function Deployment critical aspect of building quality into a product, isto ensure tat the product design meets customer expectations. This ypiealy i not ‘seas It seems. Customers often speak In everytay language. For example, a prod- tet ean be described as “attractive “strong” or “safe” However, these terms can have ‘very dliferent meaning to efferent customers. What one person considers 10 be steong, another may not. To produce a product thal customers want, we need to translate customers’ everyday language into specific technical requirements. However, this can often be dificult, A useful tol for translating the voice ofthe customer into specific technical requirements quality function deployment (QED). Quality fune- tion deployment is also useful in enhancing communication between liffeentfune- tions, such s marketing, operations, nd engineering, 153 154 + CHAPTER 5 > Pareto analysis ‘Reehnigue wed ident ‘quay probes based on tha degre of importance. & TOTAL QUALITY MANAGEMENT QFD enables us to view the relationships among the variables involved i the design ofa product, such as technical versus customer requirements. Ths can help us analyze the big picture—for example, by running tess to see how changes in certain, techneal requirements of the product affect customer requirements. An example is an automobile manufacturer evaluating how changes in materials affect customer safety requirements. This type of analysis can be very beneficial in developing a product de- sign that meets customer needs, yet does not create unnecessary technical require ments for production. QED begins by identifying Important customer requirements, which typically ‘come from the marketing department. These requirements are numerically scored based on their importance, and scores are translated into spceiBe product charac teristics. Evaluations are then made of how the product compares with its sain ‘competitors relative to the identified characterises. Finally, spectic goals are set to Marketing Scdres the Wdentfied problems. The resullng matrix loks like a picture of a house ands often called the house of quali Next we wil consider the example of manu facturing a backpack to show how we would use QED. We wil start with a elaon- ship matrix tat tes customer requirements to product characters, shown In Figure $9. > Histogram Kena that shons he Customer Requirements Remember that our goal make a product chat Irony dean ot the customer wants Therefore, the frst thing We Deed to do is survey our ered oe of avast customers to find out spectcaly what they would be ooking fo in a product — in this cae a backpack for students, To find out precisely what features stdes LINKS To PRACTICE. The Kroger Company _ wednagecon Fioune 5-9 p] Potters \ Reatoneip Meijer Stores Limited alaonsnip ae } - t ten Posie He Sa ogig, o- wml com ehh GE GE vm SF) EBS 8 Fx tsoie d EE FS Qoeanne 3 i cameras | VE EA 8 8 crymtmnin 8 4 us Durable alyvv Ov Oi25%® Larose n|® @® * 7g POR as oxy aly x ste lely Low Cot w{* x * uation pate L Sepiymen (QD) preferences ofthe customer Ino spe enaTHE PHILOSOPHY OF TaM + 155 ‘would like in a backpack, the marketing department might send representatives {alk to students on campus, conduct telephone interviews, and maybe conduct focus groups, Lat’ say that students have identified fve desirable features: the backpack should be durable, lighnseight and roomy, look nice, and not eost very ‘much. These are shown in Figure 5-10, The importance customers attach to each ‘of these requirements s also determined and showin in the figure. This part ofthe figure looks lke the chimney of the “house” You can see that durability and roomminess are given the grestest importance. Competitive Evaluation On the far righ of our relationship matrix isan eval- uation of how our product compares to those of competitor. In this example there are (wo competitors, A and B. The evaluation scale i from one to ive— the higher the rating the better. The important ching here sto identify which customer requirements we should pursue and how we fre relative to our co petcos. For example, you ean see that our produc excels in ehrability relative to competitors, yet It does not look as nice. This means that in designing our prodic, we could gain a competitive advantage by focusing our design efforts ‘on a more appealing product. * Product Characteristics Specific product characteristics are on top of the rela tionship matrix, These are technical measures. In our example test inclade the ‘number of zippers anc compartments, the weight of the backpack, strength of the backpack, grade of the dye color, and the cost of materials ‘The Relationship Matrix The strength of the relationship between customer requirements and product characteristics is shown in the relationship matrix. For example, you can see thatthe number of zippers and compartments fs nega Lely related co the weight ofthe backpack. A negative relationship means that as we increase the desirability of ne varlable we decrease the desirability of the ‘ther. At the same time, roomines s positively related to the numberof zippers and compartments, as is appearance. A positive relationship means that an in ‘reas In desitablty of one variable I elated to an increase in the desirability of nother. This type of information is very important in coordinating the product design ‘The Trade-off Matrix. You can see how the relationship matrix is beginning 0 look ke a house. The complete house of quality is shown in Figure 5-10. The next step in our building proces sto put the “roof” on the house. This is done through a trade-off matrix, which shows how each product characterise is e- lated tothe others and thus allows us o see what trades we need to make, For example, the number of zippers is negatively related to the weight of the back- pack, Setting Targets The last step i constructing the house of quality i to evaluate ‘competitors’ products relative to the specific product characteristics and to set targets for our own product. The bottom row ofthe house isthe output of qual- ity function deployment. These are speclic, measurable product characteristics that have been formulated from general customer requirements The house of quality has been found to be very useful. You can see how it translates everyday terms lke “lightweight, *roominess” and “nice looking, into specific product characteristics that can be used in manufacturing the product. Note also how the house of quality can help in the communication between ‘marketing, operations, and design engineering 166 + CHAPTER § TOTAL QUALITY MANAGEMENT Fiouite 6-10 House of quality Retanitiny “Th probably hata roduc srt opr wi ator intended ie v v av @ | eas fetatonenin i i i Dever reive Bos Bog 7 rue PRieed ow i] ia oe | —_—— wae le Oe 2th? LUgntwagnt al® @® * fo Ps oom aly x Tades Looks ee |v Or cists Low oot mix x xix @ 1284s rom, 0 ‘competitive Al? at Sg sree els gf og so ourTaRcers 4 me ON oe = Conpettor® Reliability An important dimension of product design is thatthe product functions 1s expected. This is called reliability. Reliability is the probability that a product. ser ‘ice, oF part wil perform as intended fora specified period of time under normal con- dliions. We ae all familar with product sllabllty in the form of product warranties, We also know that no product is guaranteed with 100 percent certainty to function properly, However, companies know that a high reliability 4s an important part of customer oriented quality and try to build this into thelr product design. Reliability isa probability alkelIhood, or a chance. For example, a product with 2 90 percent reliability has a 90 percent chance of functioning as intended, Another way te look ati that the probability thatthe product wil fal is 1 ~ 90 = 10, or 10, percent. This also means that lout of 10 products will not function as expected. "The eliallity of a product isa direct function ofthe reliability of ts component parts. If all the parts in @ product must work forthe product to function, then the36 TOTAL QUALITY MANAGEMENT Mission statements are prepared to make the employees, understand in clear terms, ‘how’ to achieve the vision. They may also indicate ‘why’ all those have to be done. Some organizations have one statement as the mission and few others have few statements as mission. It may be written in any form but it should be clear to the employees. Mission statements should clearly indicate the methodologies to be followed for fulfilling the vision. It can be said to be a road map for achieving the vision. The mission statements acts as a guiding force, encouraging individuals to work towards reaching the vision. 2.5 OBJECTIVES Once the common vision and mission statements for the organization are made, then it is for the different departments to contextualize these statements in their working. Here the model shown in Fig. 2.10 is recommended. Every department should have well defined objectives. This will be based on why the department exists and what are its broad expected outcome. The objective of the design department of an organization may be defined as follows: + To design the product optimally using state of the art technology. + To design the product upto the delightment of customers, found and checked using the state of art management tools. + To incorporate innovativeness and flexibility in design. Again the point stressed is that these objectives should reflect the vision of the organization and should go well with the mission of the organization. If an organization has the following vision: ‘Be No.1 innovative company in India’ and the design department of that organization has the following objectives: “To design products according to the primary vision of the founder.’ ‘Then, it can be concluded that these are all mere statements. Such vision and objectives cannot improve the organization; on the other hand it may destroy the organization. 2.6 GOALS To fulfil the objectives, it is necessary that the expected objectives are split into specifics. The criteria may be functionality, action, etc. PRINCIPLES OF QUALITY MANAGEMENT 37° In planning based on the objectives, it is required to set goals. Goal setting may have the following acronym SMART. SMART goals are: S — Specific goals M — Measurable goals A — Achievable goals R — Realistic goals T — Time-bound goals Goals should be set to achieve something specific. It should not be vague. It should be explicit and written in clear words. It is always better to set measurable goals. At any point of time one should be able to say what percentage of that particular goal has been completed. Otherwise having a control will be difficult. Every time a goal is set, the most important factor behind the success of the goal is the motivation of the achiever. The person should have the confidence that the goal can be accomplished. It should be achievable’ to an extent or should have been achieved in an earlier instance. The goal should be realistic in the sense that it should not be just for academic interest. The goal should have down to earth application. Time frame has to be fixed for the completion of the goal. This will be helpful for scheduling the processes to achieve the goal. 2.7. TARGETS Goals are meaningful, clearcut subsets of objectives. Goals are for a team of people involved and may be long term in nature, But these should be made into few short term and person specific targets. Targets make individuals more comfortable with what he has to do within the time frame he has to accomplish the same. As every individual will have a target, it should be written with care and should reflect the vision and his job description, his potentials, ete. 2.8 ACTION PLANS Detailed action plans have to be laid down next. This will assist individuals in achieving the target. Also whenever there is a deviation to plan, it can be quickly tracked and restored. Action plans help in systematic study and presentation of the process to achieve the targets.lotal Quality Management (TQM) is no longer thought as a concept. It is a philosophy. The evolution of TQM is traced in this chapter. Literature was reviewed on various definitions of TQM. The principles for TQM implementation are presented along with the stages. The TQM models are researched into and two models, namely the Transition model and Integrated model were developed for successful implemen- tation of TQM. 3.1 EVOLUTION OF TQM ‘The evolution of TQM is traced to understand the concept. Evolution of TQM, as it has emerged in industries, is shown in Fig. 3.1. It started with inspection (INS), followed by Quality Control (QC), Quality Assurance (QA) and then Total Quality Management (TQM). FIG. 3.1 TQM Evolution. The main focus of each of these stages are: Inspection + Identifying non-conformities. + Salvaging. + End of pipe approach. + End justifies means. Quality control + Process performance data. * Quality planning. * Statistical tools. * Control instrumentation. 452__TOTAL QUALITY MANAGEMENT Quality assurance + Quality manuals. + System certification. + Quality costs. + Documentation. Total quality management + Customer focus. + Employer involvement. + Continuous improvement. + Performance measurement. In the olden days, inspection was said to be the tool used for checking quality. Every industry had an inspection department. Inspection is essentially an end of pipe approach. At the final stage of the process, be it manufacturing or service, it is inspected to check. If the inspection reveals positive trend, the process is approved. Else it is rejected. The underlying principle in this process of inspection is that “end justifies means”. In this quality era no one will accept this philosophy. At present everyone is convinced about the fact that “end does not justify means”. It is also to be noticed that in inspection, there is tremendous wastage. In manufacturing units, it results in the wastage of material and other resources. As the process of inspection, had many lacunae, quality control (QC) methodology was used. Here, the process was given importance. In this, the performance data were collected and statistical techniques were used to keep the process under control. Instrumentation was also used to maintain quality of the processes. This gave confidence to people in the organization about the quality of the work they did. The underlying principle is: if the means is right then the end should also be right. This made people inside to assess and know the quality of the process and the product. However, people outside remained in the dark, At this juncture, let us recall the way children went to school when they were in the first standard in early 1960s. Early morning they used to go to school with a clean slate and a chalk. From 9.00 am' to 4.00 pm they will be learning in the school and after 4.00 pm return home. Usually when they returned, the slate will again be clean unless they happened to score 100% marks in a test conducted in the last period. Back home, their mother would wonder what had happened in the school. Whether anything was learnt or not, remained a mystery to the parents. When this is compared to the present day school goers, there is a marked difference. At the kindergarten level itself, students are made to use notebooks and pencils unlike slate and chalk. This gave the assurance to the parents about the type of work and learning TOTAL QUALITY MANAGEMENT PHILOSOPHY 53 that went on in the school. This type of assurance is necessary for stakeholders who are outside the premises. The shareholders, the customers and the general public should be made aware of the type of quality work that is going on in an organization. This is essential to win their confidence. This prompted the preparation of quality manuals, in which every single process carried out in an industry is registered along w' . few additional details. Details such as who should do it, how it should be done, what are the probable errors that may come in, how it should be handled, if the responsibility is not carried out properly what has to be done, who will be monitoring and what are all the resource requirements for the completion of the process are included in the quality manual. This became a strong base for doing the processes correctly. Quality assurance is the next in the hierarchy. Documentation was given utmost importance. The philosophy of “say what you do and do what you say” was adopted in every industry. Certification procedures were formulated and international bodies such as ISO (International Standards Organization), came out with ISO 9000 series certification. Accredited bodies inspected day to day affairs of the industries and certified them as ISO 9001:2000 companies. Third party audit was made mandatory which prevented many loopholes. Such certifications assured the stakeholder of the quality of the company. Quality cost is another factor, which has been overlooked for years. ‘The conventional costing does not include many hidden costs such as appraisal costs and prevention costs. There is a myth prevailing among people that quality will cost more, i., if a company has to go in for producing quality goods then it has to spend more, resulting in reduction in profit margin. It is necessary that this misconception has to be removed before any quality initiatives are undertaken. It is well known that now companies are demanding their suppliers to supply better quality goods at lower prices. When quality initiatives are undertaken, it is sure to reduce the costs involved. Hence a detailed calculation of quality costs has to be made mandatory. Thus, quality assurance system incorporating calculation of quality costs assuring higher dividend, preparation of quality manual assuring a perfect system and a certifi- cation assuring the involvement of a third party audit has been introduced. An analysis of the three developments in quality area, thus far explained, will reveal that there has been concentration on system perfection. All the three, namely inspection; quality control and quality assurance focused on improving the system so as to make it error proof. A system with 100% efficiency is believed to be producing quality goods. Later it was realized that even a perfect system, if not manned by quality conscious individuals may result in producing goods of low quality. The involvement and the importance of human component in54 TOTAL QUALITY MANAGEMENT quality systems is then realized. It was concluded that to ensure quality both system component and the human component of an organization have to be given importance and made perfect. Total quality management is the last in the hierarchy of quality systems which incorporated both human and system component. However how much weightage to be given to each of these components is still under debate. It mostly depends on the type of organization and the nature of people working in that organization. TQM focused on customers and considered customers as king. While * defining the term “quality” it has been noticed that everything was focused on customers. TQM is essentially a management philosophy where every individual in an organization is motivated to work towards a common vision, in an ideal environment, continuously improving their performance, resulting in better business opportunities, The key factors here are teamwork, continuous improvement and performance measurement. The system is perfected, by going in for ISO certifications, the quality culture is inculcated in the organization and team effort is encouraged among the workers. TQM has been accepted world wide as the best methodology for ensuring “quality”. 3.2 DEFINING TQM TQM has to be defined properly, for implementation to be effective. Survey of literature reveals that TQM has many definitions. Some are: A total approach to put quality in every aspect of management. Bill Creech TQM is an evolving system of practices, tools and training methods for managing companies to provide customer satisfaction in a rapidly changing world. Alan Graham, David Walden TQM is basically a business philosophy founded on customer satisfaction. TQM involves two strands, namely, careful design of the product or service and ensuring that the organization's, systems can consistently produce the design. Helga Drummond The foundation on which a successful TQM effort rests includes customer focus, total participation and continual improvement. Ashok Rao TQM is an approach to business which looks critically at the products and services a company produces in relation to the processes it takes to create them and the people who do the work to make certain that outputs fully satisfy agreed customer requirements. John Bank ‘TOTAL QUALITY MANAGEMENT PHILOSOPHY 55) TQM means satisfying customers first time every time. It means enabling your employees to solve problems and eliminate waste. Kit Sadgrove TQM is a cooperative form of doing business that relies on the talents and capabilities of both labour and management to continually improve quality and productivity using teams. Joseph R. Jablonski The TQM policy has two components: defect free productiservice supplied on time to customers and advancing the state-of-the-art, which is a development process—to meet the rising expectations of customers requirements. S.M. Sundara Raju TQM is the integration of all functions and processes within an organization in order to achieve continuous improvement of the quality of goods and services. Vincent K. Omachonu and Joel E. Ross TQM is defined as Being driven to satisfy the customers. That means low cost, high quality and speed drive all processes. TQM is defined as Both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization. The key to an effective TQM program is to listen to the voice of the customer. Dictionary of advanced manufacturing technology TQM is defined as A total organization working as a team to meet or exceed customer needs and expectations by using a systematic approach to continuous improvement. TQM is an attitude of mind and a journey—not a destination. It means building quality into everything in every area—design, production, purchasing, vendor relations, inspection, service after sales, market research, development, financial control, personnel rewards, training and education. Aggarwal, Sumer Total quality is defined as Fitness for use or purpose. Joseph Juran Total quality is defined as Conformance to requirements. Philip Crosby10 TOTAL QUALITY MANAGEMENT. one can find fault with it. But in the second case, there is an additional component attached to it, namely the personal touch. This definitely had its role in creating an ‘impact’. ‘The first can be said to be an efficient way of serving coffee and the second an effective way of serving coffee. Efficiency is all about how the ‘producer’ has felt and effectiveness is all about how the ‘user’ has felt about it. Hence ‘quality’ has to include both efficiency and effectiveness. 1.5 DRIVERS OF QUALITY Every change is made effective by certain drivers of quality. If Quality Management principles are to be followed in industries, one or more of the following drivers are essential: Competition in the market Market situation is the key issue for any industry. In the erstwhile protected market, manufacturers have been producing components as they wanted and were able to sell theirs in the market. Many monopolists were dictating terms. The customers had no choice but to buy whatever was given to them. But now open market is the order of the day. There is no restriction for foreign companies to come in. This has increased the number of players and thus competition has emerged. Every player has to face the stiff competition and win. Survival of the fittest is the accepted norm. To be in the market one has to have a cutting edge. This situation is forcing every industry to go in for quality management principles. It can be said that competition is a very forceful driver. Knowledge explosion The knowledge explosion taking place in 21% century drives change towards quality initiatives in two ways: + It helps in making people understand their ignorance, lack of knowledge in doing the right things, the right way. Once they realize their present position, they naturally wish to improve. Thus, knowledge explosion becomes a driver for quality initiatives. + It (knowledge explosion) helps in knowing the latest developments, tools available for improvement, etc. Having equipped with such modern tools, it is obvious that anyone will be tempted to use it and improve. Hence knowledge explosion also turns out to be a good driver of quality. INTRODUCTION 17 Threat for survival As long as the existence is not questioned, one tends to be lethargic in taking initiatives. But when the survival is questionable no one will hesitate to take initiatives. The present market situation in India is posing a threat to many industries. Hence many are opting for quality certification, etc. Threat for survival is the best driver for Quality Initiatives. Demand from stakeholders Customers have a greater say in present day industries. All the stakeholders of the industry become external customers. Hence if they demand for a change and want the quality management principles to be implemented in the company then the company is obligated to do the same. Hence this will also be an effective driver. Promise of greater profit If a few industries have started using quality management principles and are progressing well then it will motivate many more to join the stream. Well established case studies with definite increase in profit because of quality management implementation will be an excellent driver. At present not many case histories are available which promote this point. It is also a bit difficult to explain or separate out the profit coming in exclusively because of quality management implementation. Desire to do better This is an internal motivation/self motivation which some people have. There will be an inner desire to do better always and excel in their work. This will drive people to go-in for quality initiatives, ‘The chapter has addressed on the changing views of quality and how quality can be introduced in organizations. Quality is imperative in today’s world, where there is tremendous competition to excel and perform at one’s best. Goals keep changing as achievements are made. EXERCISES CASE STUDY A TV company branded ‘SS’ established in 80’s was selling its brand based on ‘price’ differentiation. With several MNC entering the market, SS started facing stiff competition. The owner Mr. Nattan felt if he42 TOTAL QUALITY MANAGEMENT 4. Provide training. Carry out projects to solve problems. Report progress. Give recognition. Communicate results. Keep score. Seenas the regular systems and processes of the company. 2.9.4 Claus Moller’s Theory Claus Moller has developed the concept of personal quality as the central element of TQM. He talks about the 12 Golden rules to aid quality improvement. Set. personal quality goals. Establish own personal quality account. . Check how satisfied others are with your efforts. Regard the next link as a valued customer. Avoid errors. Perform tasks more effectively. Utilize resources well. . Be committed. Learn to finish what you start. Control your stress. 11, Be ethical. 12. Demand quality. SEMI MR wwe Everybody differ in their approaches to quality improvement. But their similarities may be more important. 2.9.5 Common Message from Gurus 1, There are no shortcuts to quality—prescribed procedures to be followed. 2. No quick fixes—it takes time to establish quality. 3. Improvement requires full commitment and support from top. 4, Extensive training needed. 5. Participation of all employees is a must. 2.10 TEN PRINCIPLES OF QUALITY MANAGEMENT Vision based * Vision will give a sense of direction. + Vision will motivate human resource. PRINCIPLES OF QUALITY MANAGEMENT 43 Maintain momentum by making annual improvement part of + Vision will help the organization to stay focused. * Without vision an organization will fail. *« Absence of vision will lead to confusion. Customer focussed + Open economy has driven away monopoly. It is buyer’s market which is in existence now. + Without customers no business can exist. + Internal customer orientation will improve productivity. + One dissatisfied customer can create havoc by unprecedented actions. * Retention of customer is the key issue in business. Prevention oriented + Prevention is better than cure is a well acknowledged phrase. + Prevention orientation will take one nearer to ‘Zero Defects’ status. . + Foolproof preventive techniques such as ‘Poka Yoka’ are available. + Corrective approach calls for costly monitoring mechanism. + Correction does not stop recurrence. Scientifically approached * Scientific methods are based on fundamental or derived laws of mathematics and science and hence the foundation is strong. + Scientific methods are well proved over the years and hence chances of going wrong is remote. + Use of scientific methods gives a sense of pride and improves the self esteem of workers. * Unscientific methods make one to depend on the previous experience, which may not be appropriate. + Logical reasoning which may not always be appropriate is avoided in scientific methods. Process given more importance than end results + End does not justify means + Proper means will ensure quality result. + Zero defect is possible only if the process are perfect. + Process orientation will make workers more responsible. + Result orientation will end up with huge loss as all the defects are to be rejected. Data based analysis Data based approach will always give the best insight to the problem and solution. + Information based or knowledge based approach may mislead at times. + Data collection is a strenuous process; however the returns will be higher.44 TOTAL QUALITY MANAGEMENT. + In many situations the raw data themselves will provide solution to problems or atleast provide useful clues. + Data collected and documented for one specific purpose, can well be used for some other purpose, thus providing a databank for multiple applications. Continuous improvement strategies + No one at any point of time can say that ‘Perfection’ has been achieved. Even six sigma companies talk about 3 ppm defects. Hence, there is always scope for improvement in everything. Quality improvement is a never ending process. The world has become so competitive that dynamism should reflect in every facet of business, even in product development. Creativity and innovation are the order of the day in business circles. Established tools such as ‘benchmarking’ are available for continuous improvement. + Improved products will have a cutting edge in the market. Cost conscious attempt ROI (Return on Investment) is the performance index for any business enterprise. The visible quality costs are like the tip of the iceberg. There are plenty of hidden costs that go unnoticed. Quality is free; meaning poor quality costs can be offset by good quality profit: margin. Affordability is the key factor for customers and profit margin is the key factor for manufacturers. Prevention which could be done with Re. 1/- is missed, the failure/ defects due to that will cost the company Rs. 100/-. The cost ratios are so high. Documentation for traceability + Stakeholders are assured of the quality through documentation. ‘Traceability is effective and easy with documented information. + Documentation will amount to standardization. + To err is human; Documentation helps in curbing human errors. Role clarity is ascertained which reduces workplace confusion. Reward/Recognition assured + Recognition is one thing that every human being long for. + Motivation is the key factor for sustaining quality initiatives. + Rewards may be helpful in motivating non-performers to join quality initiators. + Disinterest in the job being done is the main culprit for low productivity and poor quality. + Human component plays a major role as compared to system component in quality initiatives. PRINCIPLES OF QUALITY MANAGEMENT 45. During this era, it was realized that there is a need for a paradigm shift in many functions of management. Thus far, people were happy with corrective systems, good end result, good profit, etc. System was given more importance and human beings were considered to be independent entities having limited connection with the system. These factors were found to be negative contributors in the management of the organization. Hence the new philosophy “quality management” started gaining momentum. It was intended to make the organization more effective. It can be applied in industries and service organizations such as banks, educational institutions, etc. Quality Management has become the watchword of every organization. Educational institutions are witnessing this change, by introducing the subject of Quality Management in their curriculum. - { EXERCISES CASE STUDY Brix & Co is a proprietorship firm located in Narpur. It is a TV Spare parts manufacturing company. It is in existence for more than 55 years. There are recent plans in the company to export its products abroad. Twenty young professionals who are highly talented were also recruited recently. ‘The proprietor, Mr. Shah Verma is a strict disciplinarian who is 70 years old. He is known for his autocratic style of management. Mr. Shah attended seminar organized for executives on quality management. Attracted by the principles taught in the seminar, he wanted to make his company a quality company. The same day he sat alone till 2 am and formulated a vision statement for his company. ‘The next day morning at 8 am he called for an urgent meeting of all the 60 employees he had and announce proudly his intentions of making the company a quality company. He also announced the vision statement for the company. By 10 am about 100 placards with the vision statement were made ready and fixed in all important locations. All the employees were suprised to see the placard everywhere and wondered what it is all about. Mr. Shah enforced that the vision of the company has to be adhered to by everyone. He was confident that company will soon become a quality company. One month later, Mr. Jain approached his brother Mr. Shah to help him in starting a joint venture company. Mr. Jain was new to business. Mr. Shah being very much attached to his family, readily agreed to his brother's proposal to start a new company. For the next six months, Mr. Shah ‘spent more than 80% of his time in the establishment of the new company.The O1 al Quality Gurus Wha a quality guru? ‘A guru, by definition, is @ good person, a wise person ancl a teacher, A quality guru should be all of these, plus have a concept and approach to quality vuithin business that has made @ major and lasting impact. The {gurus mentioned in his section have done, and continue to do, that in some cases, even after thelr death, The gurus There have been tree groups of gurus since the 1940's Early 1950's Amorieans who took the moseages of quality to Japan ' Late 1950's Japanese who developed new concepts in response to the Americans ' 1970's-1980's Western gurus who followed the Japanese industrial success Its beyond the scape of tis site to go into great detall on each of the gurus, thelr philosophies, taschings nd tools; Rewever, a brief overview oftheir contribution to the quslity Journey 's given, supported by several references. The Americans who went to Japan: \W Edwards Deming placed great importance and responsibilty on management, at both the individual and ‘company level, believing management to be responsible for 94% of quality problems. His Fourteen point plan is a complete philosophy of management. that can be appl to small or large organisations in the public, private or service sectors Create constancy of purpase towards Improvement of product and service ‘Adopt the new philosophy. We can no longer ive with commonly accepted levels of delay, mistakes land defective workmanship Cease dependence on mass inspection, Instead, require statistical evidence that quality is bul in End the practice of awarding business on the basis of price Find problems. Its martagement’s jab to work continually on the system Institute madem methods of waining on tha job Institute modern methods of supervision of production workers, The responsibilty of foremen must be changed from numbers to quality Drive out fear, so that everyone may work effectively for the company Break down barriers between departments Eliminate numerical goss, posters and slogans forthe workforce asking for new levels of productivity without providing methods Fliminate work standards that prescribe numerical quotas Remove barcers that stand between the hourly worker and thei right to pide of workmanship Institute a vigorous programme of education and retraining Create a structure in top management that wil push on the above points every day He believed that adaption of, and action an, the fourteen points was a signal that management intended to stay in business, Deming also encouraged a systematic approach to problem solving and promated the ‘widely known Plan, Do, Check, Act (POCA) cycle. The POCA cycie Is also known as the Deming cycle though it was developed by @ colleague of Deming, Dr Snewhart. é : Plan what is needed Doit Cheek that it works Aet to correct any problems or é improve performance itis a universal improvement methodology, the idea being to constantly improve, and thereby reduce the iiference between the requirements of tne customers and the performance of the process, Te cycle is about learning and ongoing improvement, learning what works and what does notin & systematic way; and the cycle repeats; after ane cycle is complete, another is started Dr Joseph M Juran developed the quality triogy ~ quality planning. quality control and qualty Improvement, Gaod quality management requires quality actions to be planned out, improved and controlled. The process achieves control at ane level of quality performance, then plans are made to Improve the performance on a project by project basis, using tools and techniques such as Pareto analysis. This activity eventually achieves breakthraugh to an improved level, which is again controled, to prevent any detetioration, Holding the gains Crea aad CE acd Breakthrough Pareto Analysis Cais er urd project-by-project,Juran believed quality is associated with customer satisfaction and dissatisfaction with the product, and emphasised the necessity for ongoing qualty Improvement through a succession of smal improvement projects carted out througout the organisation. His ten steps to quality Improvement are Build awareness of the need and opportunity for improvement Set goals for improvement ‘Organise to reach the goals Provide tralning Carty out projects to solve problems Report progress Give recognition Communicate resuts Keep score of improvernents achieved Malncain nomanturn He concentrated nat just on the end customer, but on other external ana internal customers. Each person along the chain, from product designer to Final user, is @ supplier and a ‘customer n addition, the person wl bbe a process, carying out some ‘tansformation or activity ‘Armand V Feigenbaum was the originator of “total qualty control”, often referred to as total quay He defined it as “An effective system for integrating quality development, quality maintenance and quality improvement efforts of the various groups within an organisation, so as to enable production and ‘Service at the most economical levels that allow full eustomer satisfaction”. He saw it as @ business method and proposed three steps to quality Quality leacership Modein quality technology Organisational commitment ‘The Japanese: Dr Kaoru Ishikawa made many contributions to qual, the most noteworthy being his total quality viewpoint, company wide quality control, his emphasis on the human side of quality, the Ishikawa diagram and the assembly and use of the "seven basic tools of quality’ Pareto analysis hich are the big problems? Cause and effect diagrams what causes the problems? Stratification how isthe daca mado up? Check sheets how often it occurs or 1s done? + Histograms ‘what do overall variations look tke? Scatter charts what are the relationships between factors? Process contro charts which variations to contsol and how? He believed these seven tools should be known widaly, if nat by everyane, in an organisation and used to ‘One of the most widaly known af these isthe Ishikawa (ar fishbone or cause and effect} diagram. causes causes PROBLEM or EFFECT Like other tools it assists groups in quality improvements. The diagram systematically represents and analyses the real causes behind a problem or effect. It organises the major and minor contributing causes leading o one effect (or problem), defines the problem, identifies possible and probable causes by narrowing down the possible ones, It alsa helps groups ta be systematic In the generation of ideas and to check that it has stated the direction of causation correctly. The diagrammatic format helps when presenting cesuts to others, Dr Genichi Taguchi believed its preferable to design product that is robust or insensive to variation inthe ‘manufacturing process, rather tnan attempt to control Robust product design all the many variations during actual manufacture.To put Parameter design "this idaa lato practice, he took the already established knowledge on experimental design and male it more Statistical process control Usable and prectical for quality professionals. His message was concerned with the routine optimisation roti inspection (of product and process prior to manufacture rather than {quality trough inspection, Quality and reliably are Ouskey exes pioceuime pushed back to the design stage where they really “and stage of evonitlon belong, and he broke down offtine quality into three stages: system design Parameter design Tolerance design “Taguchi methodology” is fundamentally @ prototyping method that enables the designer to identity the ‘optimal settings to produce a robust product that can survive manufacturing me after time, plece after piece, and provide what the customer wants. Today, Companies see a close link between Taguchi methods, which can be viewed along continuum, and quality function deployment (QFD). Shigeo Shingo is strongly associated with Justin-Time manufacturing, ana was the inventor of the single ‘minute exchange of dle (SMED) system, in which set up times are reduced from hours to minutes. and the PPoka-Yoe (mistake proofing) system. In Poka Yoke, defects are examined, the production system stopped and immediate feedback given so that the root causes of the problem may be identified and prevented from occurring again, The addition of a checklist recagnises that humans can forget or make mistakes!He distinguished between “errors”. which are inevitable, and “defects”, which result when an error reaches @ customer, and the aim of Poka-Yoke is to stop exrors becoming defects. Defects arise because {ertors re made and there isa cause and effect relationship between the two. Zero quality contro is the deal production system and this requires both Poka-Yoke and source inspactions, In the latter, errors are looked at before they become defects, and the system is either stopped for correction or the error condition automatically adjusted to prevent it from becoming a defect Western Gurus: Philip B Crosby is known for the concepts of "Quality is Free” and “Zero Defects”, and his quality improvement process is based on his four absolutes of quality Quality is conformance to requirements ‘Tne system or quatty is prevention The performance standard is zero defect The measurement of quality isthe price of non conformance His fourteen steps to quality improvement are Management is committed toa formalised qualty poly Form a management level quality improvement team (QIT) with responsiblity for quality Improvement process planning and administration Determine where curent and potential quality problems he Evaluate the cost of quality and explain is use as a management tool o measure waste Raise quality awareness and personal concern for quality amnongst all employees Take corrective actions, using established formal systems to remave the root causes of problems Establish a zero defects committee and programma Train all employees in quality improvement Hold a Zero Defects Day to broadcast the change and 2s @ management recommitment anc employee commitment Encourage individuals and groups to set improvement goals Encourage employees to communicate to management any obstacles they face in attaining their improvement goals Give formal recognition to all participants Establish quality councils for quality management information sharing Do ital over again - form a new quality improvement team ‘Tom Peters identified leadership as being cental the quality improvement process, discarding the word ‘Management” for “Leadership”. The new role Is of @ facitator, and the basis is "Managing by waking about” (MBWA), enabling the leader to keep in touch wit customers, innovation and people, the three main areas in the pursuit of excellence. He believes that, as the effective leader walks, atleast 3 major activities Customers Innovation feet (Bway are happening: Listening suggests caring People Teaching values are transmitted Faciitating ble to give on-the-spot help Quality control is the responsibility of all workers and all divistons. Do not confuse means with the objectives Put quality first and set your sights long term profits ‘Marker isthe entrance and exist of quality Top management must not show anger when facts are presented by subordinates 10, 95% problem can solve with problem solving tool, 11. Data without dispersion information (variability) are false data Shigeo Shing According to SS, statistical methods deteet errors too late in the manufacturing, process, what is needed is to identity errors as they happen and to correct or deal ‘with them right away. Shingo proposed his own version of zero ~ defects'. This is called ‘POKA YOKA’ in Japanese which means “FOOL PROOFING”. The idea is to handle errors as they occur. Poka Yoka emphases dealing with second logical issues with a relevant technical feedback and control system, Shingo’s ideas have nothing to say about human beings in terms of them as social cultural or political beings. Genechi Taguchi Japanese quality Guru, Genichi Taguchi, Ph.D, believes that: ‘© To improve quality, one must look up stream at the design stage because that is where quality begins. © Quality must be designed in, it cannot be inspected later. ‘Taguchi oriented ‘quality engineering’ which is an approach that involves combining ‘engineers and statistical methods to reduce costs and improve quality by optimising product design and manufacturing processes. ‘Taguchi methods helps produet designers estimate the true cost of quality and then ‘cost effectively improve quality He developed his loss funetion concept that combines cost, target and variation into ‘one metric. According to him quality in terms of the social loss, loss to producers and consumers from the time a product is conceived. The smaller the value of social loss, the more desirable isthe product.LOSS canbe occurred By the CUSTOMERS (cg. Short product lie, inereased maintenance and repair costs By the COMPANY. (cg. Increased sorap, rework and warranty cost damaged to company reputation the loss of Or by SOCIETY in general (eg. Pollution safety) ‘Taguchi quality loss function is a statement that: “Any deviation from the target value of quality characteristic result in extra costs to some segment of the society’ Quality loss function is expressed as: L L— Total oss CA cost of constant X—Aetual average value of quality characteristics and T Target value of quality characteristics (K-12 where ~ ‘Taguchi's Seven Points: (off line quality control Conventionally, quality control activities centre on final inspection sampling or on control charts and process control, This is known as * on line quality control * Taguchi pushed the process upstream to focus on product and process design. This is known as « offline quality control” ‘Taguchi's 7 points are as follows: 1. Product quality is measured by the total loss to Society created by the product 2. Continuous quality improvement and cost reduction care necessary to survive in world competition. 3. Quality improvement requires continual and repeated reduction of variation. 4. Quality loss is frequently proportional to the square of the deviation of the performance from the nominal value, 5. Product and process design can have an important impact on a product quality and cost 6. Performance variation can be reduced by suitable adj parameters and /or the process parameters. 7. The appropriate parameter settings that reduce variation can be identifying with the appropriate statistically designed experiments stment of the products 172+ CHAPTER 6 STATISTICAL QUALITY CONTROL & Marketing, Management, Engineering > Stastical quality control 00) ‘The gneral category of ‘alate ngatzatonl ‘nai Deseripivestastis Stes sed o deeb ‘aly arctic nd ‘elastin have all had the experience of purchasing a prod uct only to discover that it defective in some way for does not function the way it was designed to. This ‘ould be a new backpack with 8 broken zipper or an “out ‘of the box” malfunctioning computer printer: Many of us have struggled to assemble a product the manufacturer has indicated would need only “minos” assembly, only 10 find that apiece ofthe precuct is missing or defective. As consumers, we expect the products we purchase ta func tion as intended. However, producers of products know ‘that iis not always possible to inspect every product and ‘every aspect ofthe production process at all mes, The challenge Isc design ways to ‘maximize the ability to monitor the quality of products belng produced and eliminate defects, ‘One way to ensure 2 quality product i to build quality int the process. Consider Steinway & Sons, the premier maker of planios used in concert halls all over the world Steinway has been making pianos since the 1880s, Since that time the company’s, ‘manufacturing process has not changed significantly. It takes the company nine ‘months to a year to produce a plano by lashioning some 12,000-hand crafted parts, ‘acefully measuring and monitoring every pat ofthe process. While many of Sein- ‘way’ competitors have moved to mass production, where planos can be assembled in 20 days, Steinway has maintained a strategy of quality defined by skil and craftsman: ship, Steinway's production process is focused on meticulous process precision and extremely high product consistency. Ths has contributed (o making is name synony- mous with top quality UALITY CONTROL? In Chapter 5 we learned that total quality management (TQM) addresses organiza tional quality fom managerial and. philosophical viewpoints, TQM focuses on customer-driven quality standards, managerial leadership, continuous improvement, ‘quality bull Into product and process design, quality identified problems at the source, and qualily made everyone's responsibility. However, taking about solving ‘quality problems is not enough. We need specific tools that can help us make the right, ‘quality decisions, These tools come from the area of statistics and are used to help Identify quality problems in the production process as well as in the product ste. Statistical quality control isthe subject of this chapter ‘Statistical quality control (SQC) isthe term used to describe the se of statistical tools used by quality professionals. Statistical quality control can be divided into three broad categories: 1, Deseriptive statistics are used to describe quality characteristics and relation ships. Included are staistes such as the mean, standard deviation, the range, and a measure ofthe distribution of data,WHAT IS STATISTICAL QUALITY conTROL? + 173 2, Staustical process control (SPC) invlies inspecting & random simple ofthe ‘output fom a process a deciding whether the process is producing products ‘with characterises that fll within predetermined range. SPC answers the {qustion of whether the proces funeoning propel or Ho 4. Acceptance sampling isthe proces of randomly inspecting a sample of goods anu deciding whether to accept the entire lt based nthe results. Acceptance sampling determines whether a batch of goods should be aeepted or rejected ‘The tools in each of dese categories provide different types of information for use in analyzing quality. Descriptive stasis are used to describe certain quality characteris ter, such a the cntral tendancy and variability of observed dat, Although descriptions of certain characteristics are helpful they are noc enough to help us evaluate whether there is @ problem with quality. Acceptance sampling can help us do thls. Acceptance sampling helps us decide whether desirable quality has been achieved fora batch of products, and whether to accept or ret the lems produced. Although thi inform tion is hepful in making dhe quality acceptance decsion afer the product hasbeen pro- ‘duced, does not help us idenily and eatch a quality problem during the production pro Suatistia process contol SPC) Renta tol da aes Inspecting 2 andom sample ff he tpt rm 3 procs n eciding whe the rer preci produs Vetun a peedetenmined range > Common causesof > Acceptance stp ‘arian Theprecan st eander Fandom causes that cannot Inepectng sample of goods beac fn decing wheter “cept the ete ot sed on theres > Assignable causes of ‘Cases that can be enifed stein, LINKS 10 PRACTICE. Intel Corporation, vww.ntel com > bean average) ‘satiate tha ensures the ental tendency oa et of DESCRIPTIVE STATISTICS. — 174+ CHAPTER 6 STATISTICAL QUALITY CONTROL i SOURCES OF VARIATION: COMMON. AND.ASSIGNABLE CAUSES _ ~ If you look at botls ofa soft drink ina grocery store, you will notice that no two bottles are filled to exactly the same level. Some are fled slightly higher and some slightly lower, Siar, i you look a blueberry muffins ina bakery, you will novice tha some ae slighily Inger than others and some have more blueberries than others. ‘These types of differences are completely normal, No two products are exactly alike because of sight diferences in materials, workers, machines, tools, and other factors. causes of variation, Common eases of varia tion are based on random causes that we cannot identify. These types of variation are unavoidable ond are duc to alight difference in prosezcing, “An important task in quality control is to find out the range of natural random variation in a process For example, if the average botle of sot drink called Cocos Fizz contains 16 ounces of quid, we may determine chat the amount of natural vari ation is between 15.8 and 16.2 ounces. If this were the ease, we would monitor the Production process to make sure that the amount stays within this range. I produc ton goes out of this range —botles are found {0 contain on average 18.6 ounces — this would lead us to believe that there i a problem with the process because the var- ation is greater than the natural random varlatlon, “The second type of varation that can be observed involves variations where the causes can be precisely identified and eliminated. These are called assignable causes ‘of variation. Examples ofthis type of varaton are poor quality in raw materials, an femployee who needs more training, ora machine in need of repai. In each ofthese ‘examples the problem can be identified and corrected. Also, ifthe problem is allowed to persis, iwi continue to create a problem in the quality of the product. In the ex: ample of the soft drink botling operation, botes filed with 15.6 ounces of liquid ‘would signal a problem. The machine may need to be readjusted. This would be an assignable cause of variation. We can assign the variation toa particular cause (ma chine need to be readjusted) and we can correct the problem (readjust the machin). Descriptive staistis can be helpful in describing certaln characteristics of a product and a process. The most important descriptive statistics are measures of central tn ‘dency such a the mean, measures of variability such as the standard deviation and range, and measures of the distribution of data, We fist review these descriptive st titles and then see how we can measure their changes. The Mean In the soft drink bowling example, we stated that the average bottle is filled with 16 ounces of liquid, The arithmetic average, or the mean, is a statistic that measures the central tendency ofa set of data. Knowing the central point of a set of datas highly Important, Just think how importanc that number is when you receive test scores! To compute the mean we simply sum all the observations and divide by the total numberof observations. The equation for computing the mean isese the mean ‘observation f ‘number of observations The Range and Standard Deviation In the boting example we also stated thatthe amount of natural variation in the bottling proces is between 15.8 and 16.2 ounoes. Tis information provides us with the amount of variability of the data. I tells us how spread out the datas around the nea, There are wo measures that can be used to determine the amount of variation Jnr de dat The fe aneesuve fs de rage, whith fe erence Becwet Ue largest and smallest observations. In our example, the range for natural varlation is 04 Another measure of varlation isthe standard deviation, The equation for compat- {ng the standard deviation is where o = standard deviation of a sample the mean ‘observation 44 = 1... ‘1 the number of observations inthe sample Small values of the range and standard deviation mean that the observations are closely clustered around the mean. Large values of the range and standard deviation ‘mean that the observations are spread out around the mean Figure 6-1 Mustrates the differences beeen a smal and a large standard deviation for our bottling operation, You can see that the figare shows two distributions, both with a mean of 16 ounces However inthe first distribution the standard deviation {s lage and the data are spread out far around the mean. In the second distribution the standard deviation i RIPTIVE STATISHI¢S + 175 » Range “Tre difernce between he lage nd smaest ‘baer nt of dt > Standard desation ‘sca tht meres he mount of data persion ound the men, > Control chart A graph tha shows wheter ‘ample feta ale with the ‘common or aaa ange ot > Outot contol The station inwhich plot ‘zl ints. Vand the data are clustered close to the mean. FIGURE 6-1” Normatasrbutions wih van FIGURE'S:2’ —Diterencestereen symmetric and stand deviations sewed dations : | ‘awed stron | Sia stndad dv Large standart dowaton to stbgon FlGURE 6.3 i Quay convo chart for . (Cocoa Fie 87 ee es a7 wa ea 160 TED ean ez ‘op STATISTICAL PROCESS CONTROL METHODS 176 + CHAPTER 6 STATISTICAL QUALITY CONTROL Distribution of Data A thied descriptive statistic used co measure quality characteristics i the shape of the distribution of the observed data. When a distribution is symmetric, there are the same number of observations below and above the mean. This s what we commonly find shen only normal variation is present In the data, When a disproportionate umber of observations re elther above ar below the mean, we say that the data has a slowed distribution Figure 6-2 shows symmetric and skewed distributions fr the bot- ting operation Statistical prociss control methods extend the use of descriptive statistics to monitor the quality of the product and process. As we have learned So far, chere are common and assignable causes of variation inthe production of every product. Using statistical ‘process contral we want to determine the amount of variation that Is Common or nor~ mal Then we monitor the production process to make sure production stays within ‘this normal range. That is, we want to make sure the process isin a state of can. The most commonly used tool for monitoring the production proces is 4 control char. Different types of control chats are used to monitor diferent aspects of the produc ‘ton proces, In this section we will earn how to develop and use control charts. Developing Control Charts ‘A control chart (also called process chart or quality control chart) is a graph that shows whether a sample of data fals within the common or normal range of varia tion. A control chart has upper and lower contro limits that separate common from assgneble causes of variation, The comimon range of variation Is defined by the use of ‘control chart limits, We say that a process fs aut of control when a plot of data reveals ‘that one or more samples fll outside the control limit. Figure 6-3 shows a control chart forthe Cocoa Fizz hosting operation. The x axs represents samples (#1, 42, #3, tc) taken from the process overtime. The y axis rep- resents the quality characteristic thats being monitored (ounces of liquid). The cen ter line (CL) of the control chart isthe mean, or average, of the quality characteristic that is being measured, In Figure 6-3 the mean is 16 ounces, The upper contro limit (UCL) isthe maximum acceptable variation from the mean for a process that is in a state of contro, Similarly, the lower control limit (LCL) isthe minimum acceptable ‘variation from the mean fora process that is ina state of control. In our example, the sseerior aeSTATISTICAL PROCESS CONTROL METHODS = 177 ‘upper and lower control limits re 16.2 and 15.8 ounces, respectively. You can see that ‘sample of observations falls outside the contto limits we need 10 Took for assigna- ble caus. "The upper and lower control limits on a control char are usualy set at 23 stan- ‘dard deviations from the mean, If we assume thatthe data exhibit a norma distribu tion, these control limits wil capture 99.74 percent of the normal variation. Control limits can bese at "2 standard deviations from the mean, In that case control limits ‘would capture 95.44 percent of the values. Figure 6-1 shows the percentage of values that fall within a particular range of standard deviation Looking at Figure 6-4, we can conclude thc observations that fll outs these ange seyret igabte cases of vation Hewes, te sail pb ha vale {ht falls outs the limits i stil due to normal variation, This scaled Type Teor, with ‘the error being the chance of concluding that thee are assignable causes of variation ‘when only normal varlation exists, Another name for this alpha risk (a), where alpha refers tothe sum ofthe probabiles in both tall of the distribution that falls outside the confidence limits. The chance ofthis happening i given by che percentage or probability represented by te shaded areas of Figure 6-5. For limi of =3 standard deviations from thie mean, the probability of Type Teror is 26% (100% — 99.749), whereas for imi of 2 standard deviations ici 4.56% (100% ~ 95.44%) Types of Control Charts Control chart are one ofthe most commonly use tots in statistical process control ‘They can be used to measure any characterisc ofa product, such as the weight of cereal box, the number of chocolates in a box, or the volume of bottled wate. The diferent characteristics that can be measured by control charts can be divided Into {wo groups: variables and attributes. A control chart for variables is used to monitor characterises that can be measured and havea continuum of values, such as height ‘weight, or volume A soft drink bottling operation is an example ofa variable mea- sure, since te amount of liguid in the bottles is measured and can take on a number ‘of different values. Other examples are the weight ofa bag of sugar, the temperature ‘of a baking oven, or the diameter of paste tubing FIGURE 6-4 Percentage of vats capa by citron ranges of standard deviadon > Variable ‘product chracnstic that ‘abe messured and asa nina of ves (eg. eight wegh oe volun) > Atribute 2 product characterise that hava discrete valu ond can FIGURE6-S Chance of Type Levrr for 237 ‘Ggmostandard deviations) 178 = CHAPTER 6 STATISTICAL QUALITY cowTROL (CONTROL CHARTS.FOR VARIABLES. ‘contol chat wed to ‘monitor changes inthe mean Value of proess A control char for attributes, on the other hand, is used to monitor characteristics ‘hat have discrete values and can be counted. Often they canbe evaluated with asim ple yes or no decision. Examples include color, taste, or smell. The monitoring of ‘tributes usualy takes less tie than that of variables because a variable needs to be ‘measured (eg, the botle of soft drink contains 15.3 ounces of liquid). An atribute Fequire only a single decision, such as yes or no, good or bad, acceptable or unaetept able (eg. the apple is good or roten, the meat is ood or stale, the shoes havea defect for do not have a defect, te lightbulb works or It does not work) oF counting the number of defecs (eg, te number of broken cookles In the box, the number of dents in the car, the number of barnactes on the bottom of a boat). ‘Slatistial pines undies ane to unter many diferent types of vasiables and attributes. In the next two sections we look at how {0 develop conteol chars for vari ables and control charts for atrbutes, Control charts for variables monitor characteristics that can be measured and have a ‘continuous scale, sich as height, weight, volume, or width. When an item is inspected, the variable being monitored is measured and recorded, For example, I we were produ Ing canes, eight might be an important variable, We could take samples of candies and measure ther eights, Two ofthe mest commonly sed control chars for variables mon itor both the central tendency ofthe data (the mean) and the variably ofthe data (et ther the standard deviation or the range). Note that each chart monitors a different type Of Information. When observed values go outside the control limits, the process iss ‘sumed not tobe In contro. Production Is stopped, and employees attempt to identify the ‘cause of the problem and correct it, Next we look at how these charts are developed, Mean (x-Bar) Charts ‘A mean control chart is often refered to as an x-bar chart. It used 10 monitor ‘anges In the mean of a proces. To construct a mean chart we fist need to construct, the centerline ofthe chart. To do this we take multiple stmples and compute thei ‘means. Usually these samples are small, with about four or five observations. Bach sample has its own mean, ¥. The centerline ofthe chart i then computed a the mean (of all sample means, where 3s the number of samples: 7m ‘To construct the upper ancl lower control limits of the chart, we use the following formals Upper control limit (UCL) = + 20% Lower control limit (LCL) = % ~ 2, whore % = the average ofthe sample means 2 standard normal variable (2 for 95.44% confidence, 3 for 99.74% confidence) _ 19, = standard deviation ofthe distribution of sample means, computed as oVi 1 = population (process) standard deviation 'n= sample size (ewer of observations per sample) Example 6.1 shows the construction of a mean (x-bat) chart,‘CONTROL CHARTS FOR VARIABLES + 179 180 + CHAPTER STATISTICAL QUALITY CONTROL ‘The esting contol hart Areca eas aie ah tee i ene ne seb agtt au ueyliostyommattetiact cece Chart Observations Sample (botle volume in cunees) Average Range Nunbor Fa z z TESTU SES BST Oe 162 1600 1585 16D 1599 OT 160) 1501 1594 15831502 aT 1020 1585 1574 1581583 OG 1574 1886 1621 1610 1598 aT 1504 1601 1614 1603 1603 a0 1575 1621 160) 15m 15505 1542 1594 1602 1594 1583020 S164 1508 15H5 1598 15858 Ot 101564 1585 159 1580188300 1611 1600 1801 1sg2 —As90— oz We 1872 1585 1612 16151598 a eee - = 131885 1576 1574 1598 158302 M4873 158 1896 1610 AS91037 1§ 1620 1601 1040 1588 teas oa pane Shor: acon Fi = 16 1612 160 1583 1501 159908 ome) | Cr 17 1601 1555 15ah 1568 1585033 1 1578 ioe wat 1612 tao. 1 1584 1582 1605 1612 1598 a mo 1582 160 1642 1503 60200 21 1611 1602 1600 1588 1900075 2 1598 1582 1589 1589 159006 1605 1873 1873 150385 2% 1801 1601 1S80 15a sds 251608 1578 1582 1598 150800 al ee MeTS Sn + Solution “Te cere ine ofthe control dats thw average ofthe spl The coil inks ace veh =f an 188s (t= 8 Theor fal 2S ron pe Sele] eee tebe t= ann sts a(t) is[CONTROL CHARTS FOR VARIABLES » 181 182 TABLE 641 Feet or de ina contol lms oF Fad Recs Re peaey E [Somputtons for Bar Cha Hoss fpunsea +t Sure: Fae apo he jandard Eroc othe Moan ASTM Man an Quy Zev fr conte char tae aera Ch Contarino =| pe =oooeren TL Tet Con Lit ae, Uk: Upper Cont C= Another way 1 construct the conteol limits Is to use the sample range as an ‘estimate of the variability ofthe process. Remember thatthe cange Is simply the df= ference between the largest and stallest values in the sample, The spread ofthe range ‘an tellus about the Variability of the data, In this case conteol limits would be ‘constructed as follows Upper contro imic (UCL) = ¥ + AR Lower conirol limit (LCL) = ¥~ A,B where 3 = average ofthe sample means R= average range ofthe samples ‘Ay © factor obtained from Table 6-1 [Notice that A; isa factor that includes three standard deviations of ranges and is de pendent on the sample size being considered. ‘Aquat cool iepector at Cac Fizz sug the dts fom Example 6. un develop conta Ts the average range (forthe went five sarpls 28 ounas computed as 98) and th ‘average ran (of he observations i 1595 ounces. develop hresgma control Hts forthe owing operation, ani Constructing a Mean (x-Bar) Chart from the Sample Range > Range (R) chart Peanut chart at monitors ‘changes inthe person 0° “arity f pres + Solution = 1595 canes R= 29 ‘The value of Ar obtained fom Table 6.1. Por 4, Ay = 7. Ths lade tothe following ‘The cena of he contol dart = CL = 1595 ounce uct. 1895 + (7028) = 1616 Leh = 3 A R= 1905 ~ (79)(20) = 1574 T+, CHAPTER 6 STATISTICAL QUALITY CONTROL Factor for ¥-0hart Sample Size n A 2 1.8 ° 327 3 102 ° 251 4 073 ° 228 5 058 ° an 6 04a ° 2.00 1 042 008 192 a 037 on 186 8 034 0.18 12 10 ost 02 178 u 029 026 1 2 027 028 in 8 0.25 oa 169 “ 028 033 161 6 0.22 0.35 105, 6 021 0.36 164 u 0.20 0.38 162 8 0.19 039 161 9 0.19 040 150 20 0.18 om 159 a 0.17 043 158 2 017 043 157 2 0.18. oad 156 2 0.16 045 155 2B 0.5 0.48 154 Range (R) Charts Range (R) charts areanother (pe of control chart for variables. Whereas x-bor charts measuee shit in the central tendeney of the proces, range charts monitor the dispersion or varlbillyof the process. The method for developing and using Rrcharts isthe same as that for xcbar chars. The center line ofthe control chart isthe average range, and the upper and lower control limits are computed a5 fol tows cL ucL= DR LcL=D,R where values for D, and D, are obtained from Table 6-1CONTROL CHARTS FOR VARIABLES * 183, ‘The quay contol inspector Coca Fze would Ihe to devo a rage (chat oer o mon ‘to volume asprsion in the boting poass Use the data fom ample to develop cone Tits forthe sap age. + Solution From te dain Example 6 you cn seta overage sample rang qt ee Roomy and Frow The 6-1 for = 4 220 028) = 082 (02) =0 Using Mean and Range Charts Together You can see that mean and range charts are used to monitor different variables ‘The mean or x-bar chart measures the central tendency of the process, whereas the range chart measures the dispersion or variance of the process. Since both varl- ables are important, it makes sense to monitor @ process using both mean and Emre Constructing a Range (R) Chart tp CONTROL CHARTS FOR ATTRIBUTES. 184 + CHAPTER 6 STATISTICAL QUALITY CONTROL FIGURE 6-6 | Pros sits eapured by Fans | | ad Rebar igo 6a 162 WEE 159 WO Tei 2 | cE esr | (a) Snitin moan detecie by ehart but nt Rahat | feo 0 161 w2 168 189 Teo Tei woz ean Mest (©) Shitin lsparsiondtectas by Rchat but not by Beha range charts Its possible o have a shift in the mean of the product but not a change in the dispersion. For example, at the Cocoa Fizz bottling plant the ma- thine setting can shift so thatthe average bore filled concalns not 16.0 ounces, but 15,9 ounces of liquid. The dispersion could be the same, and this shift would be detected by an x-bar chart but not by a range chart. Ths is shown in part (a) of Figure 6-6, On the other hand, there could be a shift in the dispersion ofthe prod- ‘uct without a change in the mean. Cocoa Fizz may stil be producing bottles with an average fil of 16.0 ounces. However, the dispersion of the product may have in ‘creased, as shown in part (b) of Figure 6-6. This condition would be detected by a range chart but not by an x-bar chart, Because a shift in elther the mean or the ange means thatthe process is out of contol, It i important to use both charts to ‘monitor the process. Control charts for attributes are used to measure quality characteristics that are counted rather than measured, Attributes are discrete in nature and entail simple yyes-or'no decisions. For example, this could be the number of nonfunctioning lightbulbs, the proportion of broken eggs in a carton, the number of rotten ap- ples, the number of scratches on a tle or the number of complaints issued. TwoCONTROL CHARTS FOR ATTRIBUTES » 185: of the most common types of control charts for attributes are p-charts and e-chares, P-charts are used to measure the proportion of items in a sample that are defective. Examples are the proportion of broken cookies ina batch and the pro~ portion of ears produced with & misaligned fender. P-charts are appropriate when ‘both the number of defectives measured and the sizeof the otal sample can be counted. A proportion can then be computed and used as the statist of mea CC-charts count the actual numberof defects For example, we can count the num ber of complaint fom customers ina month, the number of bacteria ona petri dish, for the number of barnacies an the bottom of s boat. However, we cannot compte the proportion of complaints from customers, the proportion of bacteria on a pet dish, br the proportion of barnacles on the bottom of & bot ‘Protiem Saving Tip The primary ifeence beeen wing a p-chart nd a-ha ia follows [A preart ase ten both the Ltt sample se ad the tamberof ccs canbe compute ‘Acct used when we ca compute ofthe ne of defects bot cont compute tbe propor hon thee eect, P-Charts, charts are used to measure the proportion tha defective in a sample, The com pulation ofthe center line as well a the upper and lower contro limi is simile 10 the computation forthe other kinds of control chars. The center line Is computed as te average proportion defective in the population, . This is obtained by taking a ‘numberof samples of observations at random and computing the average value ofp eros all samples ‘To construct the upper and lower control limits fora p-chart, we use the Following Formas: where 2 = standard normal variable B= the sample proportion defective 4, = Uhestandard deviation ofthe average proportion defective AAs with the other charts, 21s selected to be elther 2 or 3 standard deviations, depend ing on the amount of data we wish to capture in our control Limits. Usually, however, they are set at 3 ‘The sample standard deviation is computed as follows where is the sample size, > Phar ‘Reontol tt ta onions (he propia dects in mpl 186 + CHAPTER 6 STATISTICAL QUALITY CONTROL Constructing a p-Chart ‘A production manages aa te manufacturing plant has inspec he suber of defective tes fweniyrfen spe wid ty obervtions each Fallaying are the number of defective es found in cach sng Number of Ramber of Sample sfectie Observations Frsction Namie 5 Sampled Defective T o 5 a a 08 4 20 0 5 a0 05 6 0 5 7 a0 6 8 0 10 9 aa 05 io 0 0 0 0 iy 2 20 10 a 0 10 u 0 5 5 0 05 6 Py 10 " a a ie Pt 5 0 0 05 20 0 05 Toa 70 Constr tices contact (2 3) wh hs dormaton + Solution Th ete io he car total number ofdtetve toes 40 Ck P~ at nunberofoeervations 300 ~ Bu Toca, 7 ae UCL = + x(a) = 10+ (060) LeL = p= slo) = 10 - 3¢057) = [nth example the lover con ini ge, which smut occurs because Ih om ‘onan approximation ofthe blaemial dibuton. When this curs, the LCL rounded up fo ‘obese wu cao ave 3 negative colCONTROL CHARTS FOR ATTRIBUTES » ‘The resulting contol charts a5 oows: (Constructing ap-Ghar ina er Sot estan rae 2 e BUSS Tarp CP ae Bos] 9 100 (cs sconce C2705) [Sane p= | 0087 Zale een canes] i CL cenertne Tet Laver Cont int =| 0.00. [UCL Ueper Cont Lint 187 1 uy c-carts —_ > Caan ‘eoneol hart wed to des per un Computing a e-Chart CHAPTER 6 STATISTICAL QUALITY CONTROL CC-charts are used to monitor the number of defects per unit, Examples are the umber of returned meals to @ restaurant. the number of trucks that exceed their weight limit in a month, che number of discolorations on a square foot of carpet, and the riumber of bacteria in a milliliter of water. Nowe thatthe types of units of, ‘measurement we are considering ae a period of ime, a surface area, oF a volume of liquid The average number of defects, 7 isthe centerline of the contol chart. The upper ‘and lower control limits are computed as follows uct LcL= ‘The mun of weekly cstmer complaints ae monitored a lage Rotel ing esha Co pins have been reorder he pst ent wens. Deel re sia conta Unis sg he allowing das: ‘ota Ts 078d TW ee E2S1392 15 ‘The average number a conpain's pee weeks = 22. Therelor,2 = 22 UCL =2+ f= 22+ 22 = 60s tcl =2- f= 22-22-2250 Asin the previous example, the LCL negate an should be rede up 40x, Following the ‘oro cta for this exeC-cHARTS + 189 “Ths can abo be compat sng» sprecshot show el x = [Computing @ C-Chart Tambor of a Toe oe Computations fra char Ermer ‘bar =| tt - iat reo oa exe [signee Taser on 8] ‘Gani tnw =] a8 TEL Lower Coolant =] — aaa Gi: Upper Cente t=] 65 Before You Go On Wie have discussed several types of statistical quality contro! (SQC) techniques, One category af SQC techniques consists of descriptive statistics (ools such asthe mean. range, and standard devition. These tools are used to describe quality characteristics and relationships. Another category af SQC techniques consists of statistical process control (SPC) methods that are use! co monitor changes inthe praduetion process, To understand SPC. ‘methods you must understand the diferences between common and assignable eauses of variation, Common Six Sigma Introduetion: Six sigma is a long journey. However, itis one of the rewarding journeys that an individual or company may elect to take. Six Sigma is many things, but foremost it is a data driven leadership approach using specific tools and methodologies that lead to fact based decision ~ making. The focus is on performance throughout the organization. The resulting culture of leaders is one that does not tolerate waste or inefficiency. It is very creative in its approach to doing business, and it offers solutions that exceed the customer's requirements and expectations. ‘The concept of a culture of leaders may seem strange at first glance. Yet one of the things that Six Sigma does is empower individuals throughout the organi: n to develop individual leadership skills and capabilities. This is accomplished through projects that teach them to gather data, analyze them, and as a part of a team, determine the best course of action for the company to follow to enhance performance. Six Sigma pioneer Motorola started the program in 1987. It took five full year to see significant results of six sigma. Motorola attributes 15 billion dollars in savings over the past 11 years to Six Sigma. In 1997, General electric (GE) invested 380 million US dollars in Six Sigma mostly for trainings, and in the same year GE received 700 million US dollars in documented benefits from creased productivity The basic of Six sigma quality initiative, very briefly, means going from approximately 35,000 defects per million operations, which is average for ‘most companies, including GE, to fewer than four defects per million in every element in every processes that this company engages in every day. Six sigma has been adopted as a quality philosophy by companies such as Texas Instruments, Allied signal, Eastman Kodak, and in India by ICICI, Godrej Appliances etc. Godrej Appliances is one of the few companies in India where the six sigma initiative was started as early as 1995, courtesy GE (JV partner). Another Six Sigma project at Godrej Appliances was related to remittance of payment made anywhere in the country to their Mumbai headquarters. Barlier, it used to take 4—S days at least, but six sigma resulted in a reduction in this duration to bring it down to 3.46 days. The reduction was only marginal, but it resulted in savings around Rs. 1 Crore, What is Six Sigma exactly means:+ Six sigma is a way of thinking and the results of the approach can yield a spectrum of improvement choices based on the balance of values and risk. ‘+ Six sigma is an internationally recognized management process focused on producing high quality products or services to meet the customer's need and satisfaction. + Six Sigma is not a set of statistical tools, neither it is a bureaucratic, stage ~ {gate approach to managing the projects but it is represents a philosophy to reduce variation continuously and create a win win situation for all the pariners in and around the business or services, + Motorola describe Six Sigma as a standard methodology "for driving and achieving transformational change within an organization. It is a business improvement process that focuses an organization on customer requirements, process alignment, analytical rigor, and timely execution.” Objectives of Six Sigma: + To reduce variation + To solving the problems in scientific manner Six Sigma places an emphasis on the DMAIC approach (define, measure, analyze, improve, and control) to problem solving, + To develop the bottom line responsibilities towards continuous improvement. Organizations using Six Sigma often utilize teams that are assigned well- defined projects with a direct impact on the bottom line. + To create importance on Business level strategy Upper management typically supports Six Sigma as a key of business strategy. THREE KEY CHARACTERISTICS OF SIX SIGMA 1, Leadership Commitment Achieving Six Sigma is not easy — it requires serious commitment in the form of time, effort, and resources. For a company to be successful, such commitment must come first from the top executive leadership of the organization and must be practiced by everyone. 2. Managing Decisions with Data 11 is not enough to run a business based on one's experience or "tribal knowledge." Decisions must be based on data versus the typical "I think", "I feel", or "In my pinion" practices that often exist today. With the maturation of the ‘information economy, data is available (0 virtually everyone in the organization, along with the tools for analyzing that data. Properly using data to Measure, Analyze, Improve, and Control performance forms the foundation of the Six Sigma methodology. 3. Training and Cultural Change Improved performance does not and will not happen automatically. High-caliber training is required. Disciplined implementation must follow, and people at all levels hhave to change the way they go about doing their jobs. In short, new ways of thinking, communicating, and operating must pervade the entire organization. You also need a methodology, DMAIC and DFSS provide a structured problem solving roadmap and tools towards obtaining the results you expect. Sigma Tools kits and its overview: Six Sigma So DMAIC Process Six Sigma Training Poka - Yoka Hierarchy ‘The Seven Magnificent Quality Tools Histogram Ishikawa’s fish bone diagramPROCESS CAPABILITY + 195 FIGURE 6-9 roots warily nt cents! acs peloton width for EvampleT ta. ust I specttcaton wen >i Process apabiiy of machines oo oe ‘sail lent of He Process Vriaity ——] statistical procs conto Six Sigma Quality The term Six Sigma® was coined by the Motorola Corporation tn the 1980s to» Stsgmaquallty describe the high level of quality the company was striving to achieve. Sigma (o) Ahighievelof quality stands fr the numberof standard deviations ofthe process, Recall that =3 sigma (o) sed wih ‘ears that 2600 ppm are defective. The level of defects associated with Six Sigma is SPDToNmatly 34 defective approximately 34 ppm. Figure 6-10 shows a proces distribution with quality levels of"? "24 sigma (¢) and 26 sigma (a) You ean se the difference inthe numberof defects produced FIGURE 6-10 PM defective for 23 vrs ar quality (acts) 196 - CHAPTER 6 STATISTICAL QUALITY CONTROL Py LINKS To PRACTICE cd To achieve the goal of Six Sigma, Motorola > Jus instituted a quail oes in evry aspect Motorola, Ine. of 1s organization. Before « product de Signed, marketing ens Ut product char acteristics are exacly what customs Want Operations ensres that ext proviet char acters cn be acleved Uvough prot design, the manufctring process, nd the ‘mater use The Six Sigma concep sn integral part of other functions 8 well, es ted in the finance and accountng depart ‘ents f reduce costing errs ad the te required o close the books at Ui endo the ‘month, Numerous oer companies, sich as Genel Electric and Teas Instruments, have followed Motrois ladership and have al insted the Sx Sigma concept I fc, the Six Sigma quality standard hs become a ‘There are two aspects to implementing the Six Sigma concept. The Bist isthe use ‘of technical tools to dentify and eliminate causes of quality problems. These technical tools include the stustical quality contol tools discussed in this chapter. They also fnchade the problem-solving tools discussed in Chapter 5, such as cause-and-effect di agrams, flow charts, and Pareto analysis. [n Six Sigma programs the use of these tech nical tools is integrated throughout the entire organizational system, ‘The second aspect of Six Sigma implementation i people involvement, In Six ‘Sigma all employees have the taining fo use technical tools and are responsible for rooting out quality problems, Employees are given marta arts ies that reflec thelr stalls inthe Six Sigma proces. Black belts and master black bles are individuals who have extensive training in the use of technical tools and are responsible for caryin ‘out the implementation of Six Sigma, They are experienced individuals who oversee the measuring, analyzing, process controling, and improving. They achieve this by acting 35 coaches, team leaders and failiators of the proces of continuous improve- ment, Green belts ae individuals who have suficlent training in technical ols to serve on teams or on small individual projets. ‘Suecessful Six Sigma implementation requires commitment fram top company, leaders. These individuals must promote the process, eliminate barriers o implemen. tation, and ensure that proper resources are available. A key individual isa champion ‘of Six Sigma, Tis isa person who comes from the Cop ranks ofthe organization and, Isresponsible for providing direction ancl overseeing all aspects of the proces. “RM ACCEPTANCE SAMPLING. Acceprance sampling, the third branch of statistical quality control, refers 10 the process of randomly inspecting a certain number of items from a lot or batch in or- ‘er to decide whether to accept oF reject the entire hatch. What makes acceptanceACCEPEANCE SAMPLING + 197 sampling dlferent from stasticl process control is that acceptance sampling is per formed either before or after the proces, rather than during the process. Acceptance sampling tefowe the process involves sampling materials received from a supper, such as randomly inspecting crates of uit that wil be used in a restaurant, boxes of lass dishes that willbe sold In a department store, or metal castings that willbe Used in a machine shop. Sampling afr the process involves sampling finished items that are to be shipped either to @ customer or toa distribution center Examples in clude randomly testing a certain nurnber of computers from a batch to make sure they meet operational requirements, and randomly inspecting snowboards to make sure that they are not defective, "You may be wondering why we would only inspect some items in the lt and not the entire lot. Acceptance sampling is used when inspecting every item is not physt cally possible or would be overly expensive, or when inspecting a large number of items would lead (0 ervors due {0 worker fatigue. This lst concern is especially in portant when a large numberof items are processed in a short period of time. An ‘ther example of when acceptance sampling would be used i in destructive testing, such as testing eggs for salmonella or vehicles for crash testing. Obviously, in these ‘eases it would not be helpful test every item! However, 100 pereent inspection does ‘make sense I the cost of inspecting an item Is es than the cst of passing on a dete: tive item, |As you will se inthis section, the goal of acceptance sampling isto determine the criteria for acceptance or rejection based on the size ofthe lot, the size of the sample, and the level of confidence we wish to attain, Acceptance sampling can be Used for both attribute and variable measures, though ie ls most commonly used for attributes. ln this section we will look atthe different types of sampling plans and at ways to evalsate how well sampling plans discriminate between good and bad lots Sampling Plans A sampling plan is plan fr acceptance sampling that precisely specifies the parame: ters of the sampling process and the acceptance/rejection criteria. The variables to be specie include the sizeof the lot (N) the sizeof the sample Inspected from the lot (6), the number of defects above which a loti rejected (@), and the numberof sam ples that will be taken, “There are diffrent types of sampling plans. Some call for single sampling ia ‘which a random sample is drawn from every lot. Each item in the sample is exam- ‘ned and is labeled as ether “good” or “bad.” Depending on the numberof defects or ‘bad items found, the entice lt i either accepted or rejected. For example. lot size ‘of 50 cokes Is evaluated for acceptance by randomly tnspeeting 10 cookles from the Jot. The cookies may be inspected to make sure they are not broken or burned. If 4 for more of the 10 cookies inspected are bad, the entire loti rejected. In this exam ple, the lot size V = 60, the sample size n= 10, and the maximum number of ‘efects at which a lo i accepted 18 ¢ = 4, These parameters define the acceptance sampling plan. ‘nother type of acceptance sampling is called double sampling. This provides an op- portunity to sample the lot a second time sf the result of the fst sample are nconclusve.In double sampling we frst samp a lot of goods according to preset crte- +a for definite acceptance or rejection, However, I the resulls fall in the mide range, Sampling soles randomly Inspecting tens rom ao. > Sampling plan A pl for aca sapling that prety Species te parameters of the sampling process and the accopaneepcion era Chapter —4: Different techniques for TQM: Benchmarking Dr. Shyamal Gomes Introduction: ‘When an organization / company want to maintain a level of quality that satisfy their customers atthe appropriate time and price then that organization must follow some quality management techniques for fulfil those principles and planning, The techniques are + Benchmarking # Kaizen + Quality Circle + Quality Function Deployment (QFD) ‘+ Business Process Reengineering «Total Productive Maintenance + Six Sigma, + Poka Yoka et. Techniques: universe of TQM eryaay Maintenance Reduce Variation Redesign The Whole process, Customer Voice of customer (QFD) Environment for Cont, Improvement (alzen) Actually the important principles of Total Quality are: 1. Focus or delighting the customer 2. Participation and team work 3. Continuous improvement and learning, 4. Zero defect ( maximum level) SUPPLYPlanning for quality must always start with the product attributes (or specications) Which are important to the customers. A method must then be devised to test and measure quality for each of product attributes. Next, the quality standards are set against which the actual quality is compared. Quality planning also involves seting of quality objectives, establishing quality strategies and formulating quality policies: Benchmark and Benchmarking: ‘A benchmark is a point of reference against which things are measured, In business, these points of reference or standards can measure by questions about the product or service eg how many, how much time, how much money, how reliable or how well made is it, by studying other organizations and compating the answers to these questions, we will be able to measure our performance against that of others. AS a result, an organization will be able to set new goals, and adapt the best practices to their organization. This exactly helps them to satisfy their customers with the best ‘quality, cost, product and service. Bench marking is an effective technique, which helps organizations to create quality targets in the Strategic Quality Management Process. Benchmarking is a systematic method by which an organization can continuously measure themselves against the best industry practices or world class or “Best in Cass’ and improve accordingly. Simply it is “the search of industry best practices that lead to superior performance” Benchmarking is systematic and continuous measurement improvement Process: A process of continuously measuring and comparing an organization's business processes against process leaders any where in the world to gain information which will help the organization to take action to improve performance, WHAT IS OUR WHAT ARE OTHER'S PERFORMANCE |<} PERFORMANCE LEVEL, LEVEL, HOW DO_WE. HOW DID THEY GET CREATIVE ADAPTATIO BREAK THROUGH PERFORMANCE Thus, the goal of benchmarking is to make the best in class target for the organization, based on the information from both internal and external sources. The secret to benchmarking technique is “borrow — adopt ~ refine” the best attributes for continuous growth and development. When Benchmarking? Where there are 8 negative answers like: 1. Is the company’s QMS properly developed, documented and implemented - 2, Are there systems to allocate appropriate resources and finding for the effective implementation of QMS- no. 3. Company's great strength areas are measured — no, 4. Company's great weakness areas are measured ~ no. 5. Company's great opportunities are measured ~ no. 6. Areas have threats for its survival - no. 7. Customer needs assessed and rectified ~ no. 8. _KSF application is central focus- no. Levels of Benchmarking in Competitive environment: + Internal benchmarking — within one’s org. + Competitive benchmarking ~ analysis the performance and practices of best ~ in — class companies, + Non ~ competitive benchmarking — is leaming something about a process a company wants to improve by benchmarking. + World class benchmarking- ambitious and looking towards recognized leader General areas of Benchmarking / where benchmarking: Operational Strategies: + Inventory management + Inventory control Marketing management + Customer service levels + Purchasing + Billing and collection + Purchasing practices Quality Improvement efforts / process * Management of quality councils ‘+ Overall equipment effectiveness etc H.R. Practices * Talent Acquisition / Search ‘© Training and Development ‘© Compensation management ete. Supply chain management + Warehousing and distribution + TransportationTypes of Benchmarking: ‘There are (7) seven types of Benchmarking: + Performance or operational benchmarking + Processor funetional benchmarking + Strategic benchmarking + Functional Benchmarking + Intemal Benchmarking + Extemal Benchmarking + Intemational Benchmarking A, Performance or operational benchmarking: + Itinvolves ~ pricing, technical quality, features and other quality + Performed by reverse engineering in which competitor's products are taken apart and analyzed + Tlis also known as competitive benchmarking B. Process or Functional benchmarking: + Centres on work processes such as billing, order entry or employee training. + It identifies the most effective practices in companies that perform similar functions, no matter in what Industry. €. Strategic Benchmarking + Examines how companies compute and seeks the winning strategies that have led to competitive advantage and market success. + Determine how well a company is prepared to compete in a segment and to help define a best-in-class competitor is to construct a key success factor (KSF). SUCCESS FACTOR MATRIX (KSF)_ Tey sucess | Compettve analysis ~ Computer indus ment Performance Rating Weight] OurCompany | Compeitor A | Competior | Compaior 8 c Suppliers R&D. Servise Cost Structure | D. Functional benchmarking: or generic benchmarking ~ is used when an organization look to benchmark with partners drawn from different business sectors or areas of activity to find ways of improving similar functions or work processes. This sort of benchmarking can lead to innovation and dramatic improvements. E, Internal Benchmarking: Involves seeking partners from within the same organization, The main advantages of IB are that access to sensitive data and information is easier, standard data is often readily available and usually less time and resources are needed F, External Benchmarking: Involves seeking outside organizations that are known to be best in class. External benchmarking provides opportunities of learning from those who are at the cutting edge, although it must be remembered that not every best practice solution can be transferred to others. In addition, EB may take up more time and resources to ensure the comparability of data and information, credibility of findings and development of sound recommendations. International Benchmarking: It is used where partners are sought from other countries because best practitioners are located elsewhere in the world. Globalization and advances in IT are increasing opportunities for international projects. However, this can be more time and resources to set up and implement and the results may need careful analysis due to national differences. Phases of Benchmarking: Benchmarking is usually treated as a structural process. The structure is best provided by developing a step by step model. Any type of, benchmarking process model should provide an adequate framework for the successful planning and execution of a benchmarking exercise. It should be flexible enough to encourage people to modify the process to suit their needs and project requirements. There are 5 stages of Benchmarking: + Planning: Identify the product, service or process to be benchmarked + Analysis: Determine the gap between the firm’s current performance and that of the firm’s benchmarked and identify the causes of significant gaps. + Integration: Establish goals and obtain the support of managers who must provide the resources for accomplishing the goals + Action: Develop action plans, and team assignment, implement the plans, monitor progress and recalibrate benchmark as improvements are made.+ Maturity: Leadership position attended, best practices fully integrated into process. XEROX ‘s twelve steps of benchmarking (1980): Phase 1: Planning 1. Identify what to benchmark; 2. Identify comparative companies; 3. Determine data collection method & collect data. Phase 2: Analysis 4. Determine current performance gap; 5. Project future performance levels. Phase 3: Integration 6. Communicate finding and gain acceptance; 7. Establish functional goals Phase 4: Action 8. Develop action plans; 9, Implement specific actions & monitor progress; 10. Recalibrate benchmarks. Phase 5: Maturity 11, Attain leadership position 12, Fully integrate practices into processes. ‘The Process and of Benchmarking: Therefore, the process of Benchmarking may involve asking 4 key questions What should we benchmark? ‘Whom should we benchmark? How do we perform the process? How do they perform the process? ‘These 4 questions formed the basis on which Boeing, Digital equipments company, ‘Motorola and Xerox jointly developed a benchmarking template. ISO and ISO 9000: ‘An Overview of International Organization for Standardization (ISO): ISO is a non governmental organization with a central secretariat in Geneva, Switzerland, and represents a network of national standard organizations of 150 countries. BIS is also a member of ISO. ISO is the world’s largest developer of standards of various types’ especially in quality and was born on 23rd February 1947. Since its inception, ISO published over 15,000 international standards. In 2003, ISO published 995 new and revised international standards. ISO itself does not perform certification to its ISO 9000 and ISO 1400 certificates, There are around 750 certification bodies active around the world those issues these certificates to the organizations after conducting audit of their quality/ environmental management systems. What is 180 90007 A revolution occurred in 1987 in the management of quality world wide when the International Organization for Standards ( Geneva, Switzerland) bought out a set of standards pertaining not to the quality of products but rather to the practice of quality assurance methods with in a company. Termed as ISO 9000 standards, these proved their value rather quickly and went Global @ ISO 9000 is a series of international quality standards which serve as a guidance to suppliers and purchasers about the minimum requirements of a quality system. © The first edition of ISO 9000 standards was completed in 1986 by ISO Technical committee and it was published in 1987. Ralli Wolf was the first company in India to get ISO 9001 certified in the year 1988 by BSI, UK. @ The basic principle behind ISO 9000 is stated in Section 1 - scope and Field of Application: @ “The requirements specified are aimed primarily at achieving customer satisfaction by preventing non conformity at all stages ‘from design through to servicing”1SO 9000 is not a mandatory system nor it is a government regulation. However, it is a very important customer regulation. It provides assurance to a wide variety of customers about an organization’s quality assurance methods and quality management practices. ‘The Objectives of ISO 9000: 1. Achieve, maintain, and seek to continuously improve product quality (including services) in relationship to requirements 2. Improve the quality of operations to continuously meet customers’ and stakeholders stated and implied needs 3. Provide confidence to internal management and other employees that quality requirements are being fulfilled and that improvement is taken place 4. Provide confidence to customers and other stakeholders that quality requirements are being achieved in the delivered product. 5. Provide confidence that quality system requirements are fulfilled ISO 9000 was originally issued as a series of six internationally agreed upon standards to guide and audit a company’s quality management practices. ‘Three types of certification are there in ISO 9000 depending upon the activities of the organization seeking the certification. These are ISO 9001, ISO 9002 and ISO 9003. ISO provides two documents as guidance to organizations for understanding various aspects of a good quality system: 1> ISO 9000: This documents explains pri applications, and guide to selection and use and 2> ISO 9004: ‘This document explains principle concepts and applications, guide to quality management, and quality system elements. ‘These standards are the minimum acceptable level of standards that a suppliers quality management practices should meet, in order to receive the “ ISO 9000 accreditation or certification”, ple concepts and [iso 8402 Terminology standard provide: léefinition of all terms, is comprehensive glossary. [ISO 9000: Quality ManagemenifHlelps company determine whic! ind quality assurance standards standard of ISO 9001, 9002 and 9003 uidelines for selection lies. [SO 9001: Quality systems jodel for quality assurance indesign, jevelopment, production _ installation, land servicing of products of services, jodel_ for quality assurance in| oduction and Installation [Model for quality assurance in final inspection and testin [ISO 9004: Quality measurement} fhe guidelines for applying the element nd quality system _elementsjof the quality management system. uidelines Structure of ISO Quality Standards ISO 9000: iSO 9002: Quality system iSO 9003: Quality system Definition of concepts _ ISO 8402 Selection and use of the standards Ist Non Contractual Situations Contractual ations | Gaal Nagenet Three 7180 9001 And Quality System ledets Elements for ISO 9002 TSO 9004 Quality Assurance | ISO 9003 Elements of ISO 9000: ISO 9000 standards focus on 20 key elements or requirements of a firm’s quality program. To get certification, the firm must pass a rigorous audit to assure compliance ‘with all these standards,The requirements are given below: SI__| Element / Requirements 150 9001 [1S0 9002 [150 9003 [1 [Management Responsibility x x2 2. | Quality System - x x2 3.__| Contract review x = 4 [Design control x = 5.[ Document and data control x x x2 6 | Purchasing 1x x 7____| Control of supplied products x x = 8. [Product identification and |X x x2 traceability | Process control x x = 10,__| Inspection and testing x x xD II, [Control of inspection, measuring | X x x2 and test equipment Inspection and test status x x x2 Cont non — conforming |X x x2 products ‘Corrective and preventive action |X x 7 Handling, storage, — packaging, | X x x2 preservation and delivery 16.__| Control of quality records x x x2 17. [Intemal quality audits of the | X XI x2 quality system 18, | Training to employees that affect | X XI XD quali a 19.___| Servicing as required by customers [X___ 20. | Statistical Techniques x Note X— Fully requirements X1 less stringent requirement than ISO 9001 X2~ less stringent requirement than ISO 9002, Implementation and Registratio Since implementation of ISO 9000 is a tough task, support of the top management is essential. Employees must be well trained as they will be applying the procedures and taking care of the details. Managers and supervisors must be trained to enable them to understand the standards themselves and also to anticipate questions that might be asked to external auditors. Key steps of Implementat There are a number of steps that are necessary to implement a quality ‘management system. The first step in this regard is to acquire the full support of upper management and we can consider it as Top management commitment to achieve ISO certification Secondly, establish a stecring committee with representatives from production, quality assurance, purchasing, engineering (design) and other functions like HR etc. The steering committee can coordinate project tasks such as collecting existing procedures, reviewing them and revising them as necessary. The other key steps are: ‘+ Awareness programme on Quality Management system to all in the organization. * Establishing a * quality policy’ + Developing a ‘corrective action process’ to monitor and control non — conformance. ‘* Writing ‘ document control’ procedures ( generally work instructions are available as a starting point) * Completing ‘drafts of detailed procedures’ for each ISO element, reviewing them and approving them. * Completing the ‘quality manual’ this consolidates all procedures. © Appoint an implementation team * Training all employees (implementation team) on the quality policy and audit procedures of the company. * Select the element owner, for each of the system elements. Owners may be assigned more than one element. + Review the Present System and write the documents «Install the new system — policies, procedures and work instructions gradually / one by one/ one element to another. Conducting internal audits Management Review Pre assessments and Preparing for registration audit.Registration: The ISO 9000 standards originally were intended to be advisory in nature and to be used for two party contractual situations (between a customer and supplier) and for internal auditing. However, they quickly evolved into criteria for companies who wished to ‘certify’ their quality management or achieve ‘registration’ through a third party auditor, usually a registration agency known as registrar. Registration Process: The steps are: * Document review of the quality system documents or quality manual by the re ‘* Pre- assessment which identifies potential non-compliance in the quality system or in the documentation * Surveillance of periodic re audit to verify conformity with the practices and system registered Here it is very important to understand that the recertification is required every three years. Individual departments or divisions — not entire organization or companies ~ must achieve registration individually. All costs are borne by the applicants, so the process can be quite expensive. Basic Requirements for ISO-9000 Certification @ Documentation: Documentation of procedures for carrying out any activity in the operation © Performance: Use the documentation as a working tool by doing everything that is written (achieved against planned) © Verification: The accepted written procedures are respected by all parties concerned, illing: A written trace of all procedures should be retained, kept updated and be available to all persons concerned Advantages of ISO 9000 certification Marketing Muscle: A company that is certified is able to offer a superior product or services and this will give the company marketing muscle. @ Contractor selection: A partner has ISO certification can help for any situation whether it is European or American business ® Suppliers: Selecting a new supplier can be time consuming or costly. If a potential supplier is ISO 9000 certified, then the selection process for a buyer firm can be considerably reduced, Criticism of ISO 9000 certification @ Bureaucratic 2 Costly © No guarantee that a company who is certified provides a quality services or products 1SQ 9000 and TOM: ISO 9000 is not TQM , but it is a subcomponent of TQM and a good start on the sustainability of total quality management path. ISO 9000 is only the minimum required quality standard that a supplier must demonstrate to receive the ISO 9000 accreditation. TQM by contrast is much more comprehensive. TQM links quality to customer satisfaction by requiring action on four essentials A strong customer orientation ( internal and external in all activities in the organization) © Direct involvement of top management in the delivery of quality product / services. * Total company ~ wide participation in the delivery of quality and © The systematic analysis of quality problems focused on continuous improvement of quality performance and the prevention of quality problems. Implementation Process and requirements for ISO 9001:2000 The internationally recognized ISO 90012000 standard is generic. It is not a product standard, but applicable to any manufacturing or service industry. Created by the International Organization for Standardization (ISO), its objective is to set intemational requirements for Quality Management Systems. Upgraded version ISO 9001:2000 is the latest version of the standard, issued December 15, 2000. The new edition has combined 1994 editions of ISO 9001, ISO 9002, and ISO 9003. What is different?The new standard places more emphasis on continual improvement and customer satisfaction than the 1994 versions. It applies to the processes of an organization that influence quality. ‘The major clauses in the new standard are: Quality Management System Management Responsibility Resource Management Product Realisation Measurement, Analysis, and Improvement ‘Therefore, for third party certification, the company need to implement an effective Quality Management System complying with the requirements of the standard, The first and foremost objective is to get Certification: Certification, or registration, to a standard is the outcome of a successful assessment by an independent third party. After having decided on the management system the company wish to implement, there are certain steps to get company need to start. Here some important points that every company who are seeking certification must keep in their mind are as follows: 1. Make sure the process begin with the right attitude. 2. Have a complete understanding of the concept set forth in the standard, and use the standard as a guide template to everyone of the ‘management system 3. Know what application and implications of the standard will mean to that company. 4. Company must use the standard as a tool for improvement. 5. Have an understanding of the risks and processes that affect the organization's ability to realize its business strategy. Select the partner (certification body/registrar) carefully. What are the steps? To obtain the certificate the company / organization trying for certification, must follow the steps. There are 10 general steps that helps to get certification: Obtain a standard: Obtain and read a copy of the standard to familiarize the company with the requirements. Think and finally decide if this certification/registration of standard makes good sense for the company or organization. Review literature and software: There is a large amount of published information available that is designed to assist the organization /company in understanding and implementing a standard. Assemble a team and define your strates ‘The adoption of a management system needs to be the strategic decision of the whole organization. It is vital that your senior management is involved in the creation process. They decide the business strategy that an efficient management system should. In addition, the organization needs a dedicated team to develop and implement their management system, Determine training needs: ‘The team members responsible for implementing and maintaining the ‘management system(s) will need to know the full details of the applicable standard(s). There is a wide range of courses, workshops, and seminars available designed to meet these needs. Review consultant options: Independent consultants will be able to advise you of a workable, realistic, and cost effective strategy plan for implementation. Develop management systems manual: The management systems manual of the organization should describe the policies and operations of the company. Through the manual, they will provide an accurate description of the organization and the best practice adopted to consistently satisfy customer expectations. Develop procedures: Procedures describe the processes of your organization, and the best practice to achieve success in those processes. These procedures should answer the following questions about each process Implement the management system: Communication and training are key to a successful implementation. During the implementation phase, the organization will be working according to the procedures that were developed to document and demonstrate the effectiveness of the management system. Consider a pre-assessment: The company can choose to have a preliminary evaluation of the implementation of the management system by a certificationbody/registrar. The purpose of this is to identify areas of non- conformance and allow to correct these areas before company begin the accredited certification process. Receiving a non-conformance means that 4 particular area of the management systems is not compliant with the requirements of the standard. Select a certification body/registrar: The business relationship with the certification body/registrar will be in place for many years, as the certification has to be maintained. In this age of corporate scrutiny, it is imperative to choose a certification body/registrar with a reputation beyond reproach, Accreditation: Having a certified management system can be used as a competitive sales argument. It is also increasingly becoming a term of contract. But what is accredited certification and how does the certification process work? What is accreditation? Accreditation verifies the certification body/registrars competence. To fulfil the accreditation criteria, an accrediting authority assesses the certification body/registrar. This is to verify that the certification body/registrar complies with requirements, It is the authority’s way of auditing the auditors (certification bodies/registrars like DNV, a certified body of ISO), What is third party —aceredited certification? Accredited certification of management systems is used to demonstrate compliance to a standard. Third party certification bodies/registrars are auditing organizations that provide auditing services to companies that wish to obtain certification to specific standards. How do an organization /company become certified by Third party? ‘The management system is always subject to change. A successful management system is one that is improved on a continual basis, However, if not maintained it is possible that a management system will become obsolete. Therefore, accredited certification consists of two stages: the primary certification and maintenance of the certificate thereafter. Initial visi¢ Before the actual certification audit, the company can choose to have a preliminary visit to their organization. For an initial visit, the third party send a lead auditor to review the quality manual, check procedures, facilities and briefly check the implementation of entire management system. In essence, this is a preliminary audit intended to uncover areas organisation’s management system that might need special attention. During the initial visit the scope and audit program is agreed upon, as well. Documentation re w External lead auditor evaluates the management system manual. The documentation review report summarizes any findings from this process. The report indicates if the organization is ready to proceed with the certification audit. Certification audit During the certification audit, the accreditation team will conduct informal interviews, examinations and observations of the system in operation. It provides them with essential information required for the certification process and assesses the degree of compliance of the company’s management system with the requirements of the standard. When found compliant, they issue the certificate. At this stage the company have completed the initial certification and can move on to maintenance of their certification. Periodic audits Each issued certificate has a three-year life period. Upon certification, they will create a periodic audit schedule for regular audits over the three- year period. These audits confirm the companys on-going compliance with specified requirements of the standard. At least one periodic audit per year is required. Re-certification audit After the three years are up, the certification will be extended through a re-certification audit.TOTAL QUALITY MANAGEMENT ~ IT QUALITY AUDIT Dr. Shyamal Gomes Introduction: The term ‘audit’ was defined in the 16th Century as * the official examination of the accounts with verification by reference to witness and vouchers". Gradually, It came to be associated with ‘any systematic investigation or appraisal or procedures or operation for the purpose of determining conformity with prescribed procedures’. Today audit can be defined as “Checking - Inspection - Examination - Reporting”. According to ISO 8402: “An audit is a systematic and independent examination to determine whether quality activities and related results comply with planned arrangements and whether these arrangements are implemented effectively and suitable to achieve objectives” (ISO - 8402) What is Quality Audit? A quality audit entails a systematic evaluation of a representative sample of the activities and drawing inference on the quality system as a whole. Quality audit is always performed against a documented system. The process of the quality system determines whether! 1. The documentation meets the defined quality objective of the organization. 2, The activities performed are in conformity with the documented system. 3. The quality system is effective with respect to documentation and its implementation, in meeting the defined quality objectives, and 4, Statutory and safety requirements are being fulfilled. Now question come what is quality auditing? Quality auditing is the process of examining the effectiveness of management control programs, the purposes of which is to prevent problems. Quality audit, which forms an important part of a quality management system, is an independent review conducted to compare the given aspects of quality performance with a standard for that performance. It is one of the key management tools for achieving the objectives set out by the organization. It is an activity of gathering information for the improvement or corrective actions for standard. Audit should be carried out to: 1. Determine conformity or non-conformity of quality system elements Sea press Wms acetate, Nas 2. Determine the effectiveness of the implemented quality system in meeting the specified quality objective. 3. Afford an opportunity to improve the quality system Types of Quality Audit: ‘There are three types of quality audits, namely, fist party (internal), second party (external) and third party (extrinsic) audits. Let us understand each ofthese in details 1) First party quality audit (Internal audit): when an organization conducts an audit on its own quality system using its own staff / extemal consultants, the audit is known as first part quality audit or internal quality audit, Important points are: auditing staff must be trained for conducting this exercise and should not bias against the functional department being audited, 2) Second party quality audit (external quality audit): The second party quality audit is performed by the purchasing organization upon the supplier ‘organization. The idea here is to have an assessment of the supplicr’s processes in order to have confidence that the supplier would be able to supply ‘goods or services of an agreed quality level on a sustained basis. Important point is these audits can be performed by the trained personnel of the purchasing organization or an outside ageney hired by them. 3) Third party quality audit (extrinsic audit): this audit is performed by the certification bodies (ISO registered bodies) on the applicant organization seeking such certification. If these, auditors, after conducting the quality audit fon the organization with respect to a standard, find the organization t0 be worthy enough, the certification is granted to the organization. Third party audits normally results in the disruption of day-to-day activities of the organization being audited during the duration of the audit Apart from the registered certification bodies, the third part audit may also be conducted by some government departments dealing with environment and pollution, health and safety, atomic energy etc. Quality Audit Catego 1, System Audits are looking at a particular system which includes multiple processes and can spread across several employees and departments. The audit of your calibration system can be consider a system audit. Your interaction chart lists your systems. 2. Conformance Audits are audits to define system requirements. These are global in nature. For example a 3rd party audit of your ISO 9001 SYSTEM is a conformance audit. 3. Compliance Audit is an audit to regulatory requirements. This includes government agency audits.4. Process Audit is a focused audit on a set of processes within your organization. It examines adherence to procedures and specifications during production or service activities. 5. Product Audit is @ focus audit on the product itself. This may be an inspection activity or an out of the box audit. 6. Department Audit is a focus audit on one department that looks at the processes, specifications, and systems in one department only. It will look at the different operations with in that department. It will also examine department organization and training, Audit Stages: 1, Determine the audit focus 2. Prepare for the audit 3. Perform the audit, 4, Report the findings in the initial findings report 5. Determine the corrective action 6. Update the findings report with the corrective action 7. Conduct the corrective action 8. Update the findings report when actions are completed 9. Follow Up 10.Closure Quality Audit Benefits: 1. It drives continuous improvement 2. Lets management know problems or potential problems 3. Provides input into management decisions 4. Accesses training and effectiveness 5 6 Shows management support of the quality program Verifies compliance Therefore quality audit is an important tool for continuous improvement and the auditee and auditing organization must follow the above stages. During auditing the auditor must follow some important guidelines to fulfil the objectives: Do not be biased Keep an open mind Do not be argumentive Be patient Remind the participant that the audit is for continuous provement 6. Always state the facts waepe