Total Quality Management TQMBH14-5

Session 02 Quality Culture + Six Sigma

(Basic Concepts)

Contribution of Various Functional

Disciplines
Discipline

Example of contribution

Finance

Measuring the cost of poor quality

Industrial engineering

Design of integrated system/ Measurement/ Problem solving/

Work analysis

Information technology

Measurement, analysis, reporting on quality

Market research

Competitive standing on quality/ Understand customer desires

Operations management

Management of integrated system

Operations research

Analyzing product design alternatives for optimization

Organizational behavior

Understanding quality culture/ Making teams effective

Organizational effectiveness

Satisfying needs of both external and internal customers

Strategic planning

Quality as a measure of unique competitive advantage

System engineering

Translating customer needs to product and process features

Value engineering

Analysis of essential functions needed by customer

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Training Needs
Subject Matter

Top
Management

Quality
Managers

Other Middle
Managers

Specialists

Facilitators

Workforce

Quality awareness

Basic concepts

Strategic quality management

Personal roles

Three quality processes

Problem solving methods

Basic statistics

Advanced statistics

Quality in functional areas

Motivation for quality

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Developing Quality Culture

Goals &
Measurement
Recognition &
Rewards
Participation

Leadership

Self-development
& Empowerment

Departmental
quality activities

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Obstacles to Achieve Quality Goals

Lack of leadership by higher management

Lack of infrastructure for quality
Failure to understand the skepticism about New quality
culture
Assumption by management that exhortation will work
Failure to start small and learn from pilot activities
Reliance on specific techniques as primary means of
achieving quality goals
Underestimate the time and resource required

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Teams

Quality council

Quality project team

Project champion/ Project team leader/ Recorder/
Team member/ Facilitator

Workforce team
Normally through quality circle
Benefits on people attitude and behavior

Self-directed team
Contradicts Taylors system of work design
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Quality Circle

A group of employees
6-12 members from same work area

Receives training in
Problem solving/ Statistical quality control/ Group
process

Recommend solutions which

Management may implement

Typical objectives
Quality improvement/ Productivity enhancement/
Employee involvement
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Phases

Start-up
Initial problem solving
Presentation and approval of solutions
Implementation of solutions
Expansion and continued problem solving
Decline

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Six Sigma (Basic Concepts)

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Six Sigma Quality

The process
Centered between the limits
With small variation so that each limit is six standard
deviations from the mean
Normally distributed

Needs to be clear on
Unit being judged
What constitutes a defect
How we calculate opportunities for defects

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Interpretation of Six Sigma

Six Sigma as a metric

Used as a measure for process capability/performance
A common yardstick for the organization
Six Sigma as a philosophy
Six sigma process may not bring down the defect at 3.4
DPMO
But the philosophy ensures employees understand the
importance of reducing sigma through projects
Six Sigma as a management system
Organization should express quality in terms of
capability level
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Three Emphasis Areas for Six Sigma

Design for Six Sigma

Product design excellence/ DFM
Within all components of the development and new
product introduction process
Transactional Six Sigma
Operational excellence
Within all components of the operation. Areas of focus
include Sales, HR, Finance, Materials, etc.
Production Six Sigma
Production excellence/ variation and defect reduction/
lean production techniques
Within all components of the production and delivery
process
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Choosing Candidates for Six Sigma

Projects Basic Terminologies

Critical To Quality (CTQ)

Customer generated/ Process generated/ Business
generated
CTQ Metric or XY Metric
Process metric/ Business result metric Input = X
Product metric = Y = f (X)
Determine the critical Xs which affect the Y most
Defect / Defective
Opportunity & Defects Per Million Opportunities (DPMO)
Cost Of Poor Quality (COPQ)

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XY Metric
Y
Dependent

= f (X1, X2.Xn)
Independent

Output

Input

Effect
Symptom

Cause
Problem

Monitor

Control

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Tree Diagram Critical to Quality

(CTQ)
Detailed Specifications
Response
(Y)

Customer
Needs

Measure

Better
Delivery

CTQ Driver

Product
arrives on-time
Customer
Requirement

Target

Specification
Limit(s)
Allowable
defect Rate

Performance to
Schedule

Deviation from schedule in

completed units
100% of committed ships
prior to 5:00 pm as received
on Customer receiving dock
LSL = 0 hours late
USL = 6 hours early

< 3.4 DPMO

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Some Calculations

Defects Per Million Opportunities (DPMO)

= ((Total Defects) / (Total Opportunities)) * 1,000,000

Defects (%)
= ((Total Defects) / (Total Opportunities)) * 100

Yield (%)
= 100 (Defects Percentage)

Process Sigma
= NORM.S.INV(1 ((Total Defects)/(Total Opportunities)))
+ 1.5
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Some Additional Calculations

Process Yield (PY) Dont include rework in calculation

Final Yield (FY) Product of individual PY
Throughput Yield (TPY) Includes rework in calculation
Also called First Pass Yield (FPY)
DPU and TPY Defects assume Poisson distribution
DPU = LN(TPY)
Rolled Throughput Yield (RTY) Probability of the entire
process producing zero defects
Product of individual TPY
RTY and TDPU TDPU = LN(RTY)
Normalized Yield (NY) Geometric mean of TPY
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Yield Calculation Example

Input =100 units

Process A Scrap = 5 units; Rework = 9 units
Process B Scrap = 3 units; Rework = 6 units
Process C Scrap = 4 units; Rework = 5 units
Calculate PY for each process and overall PY or FY
Calculate TPY or FPY for each process, RTY, NY, DPU and
TDPU
PY-1 = 0.95; PY-2 = 0.968; PY-3 = 0.9565
FY = Overall PY = 0.88
TPY-1 = 0.86; TPY-2 = 0.905; TPY-3 = 0.902 (also FPY)
RTY = 0.7024
NY = (0.7024)^(1/3) = 0.8889
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Yield Calculations Another Example

A process produces 50000 pencils. Three types of defect

can occur
Blurred printing 40
Wrong dimensions (Length & Diameter) 125
Rolled ends 10

Calculate DPU, TPY, PPM, DPMO

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DMAIC

Define
From potential problem identification to team
formation for selected project
Measure
From identification of key product parameter/process
characteristics to measurement of current state
Analyze
Identifies causes of variation by analyzing past/present
data
Improve
Remedy/ effectiveness of remedy/ implementation plan
Control
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DMAIC Questions

Define
What are customer expectations of the
product/process?
Measure
What is the frequency of defects?
Analyze
Why/when/where do defects occur?
Improve
How can we fix the process?
Control
How can we make the process stay fixed?
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TQMBH14-5 Assignment (Define)

Each group should have 5-6 students

At least 2 BM & 2 HRM students in each group
Submit Group member names on or before
15th September, 2015
Submit by email with Subject TQMBH14-5 Group
details
Details of Assignment (Define) Total 5 marks
Choose any organization
Identify one process with long existing problem
Which impacts their business
Calculate approximate weekly loss due to the problem
1 Marks
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TQMBH14-5 Assignment 1
Continued

Details of Assignment (Define) Continued

Prepare Business case, Problem statement, Mission
Statement, SIPOC chart of the process having problem
1+1+1+1 = 4 Marks
Submission Deadline
On or before 29th September, 2015
You may discuss the draft version
Submit by email with Subject TQMBH14-5
Assignment (Define)
Remaining Assignments (Measure, Analyze, Improve) 5
+ 10 + 5 = 20 Marks
Will be given to different groups separately
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