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Chapter 2 Foundations of Quality Management
Chapter 2 Foundations of Quality Management
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SKILLED AND EMPOWERED WORK FORCE OPERATING WITH PRIDE AND JOY
COVERAGE
- Japan- census
- Theories and usefulness
- Teaching statistical quality control
- Importance
top management leadership
customer/supplier partnerships
continuous improvement in product development & manufacturing processes
- Union of Japanese Scientists and Engineers- Deming Application Prize in 1951
High level of achievement in quality practices
- Japan’s highest honor, THE ROYAL ORDER OF THE SACRED TREASURE
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
- Virtually unknown in the U.S.
- “If Japan Can… Why Can’t We?”- contributions in Japan and work in Nashua Corporation
- U.S. companies- improve quality
- Seeds of quality knowledge develop their own effective quality management systems
- Death: December 1993- 93
- QUALITY
Helps somebody
Enjoys a good and sustainable market
- VARIATION- chief culprit of poor quality
Variations from specifications inconsistent performance and premature wear and failure
Inconsistencies in human behavior frustrate customers and damage reputation
- CONTINUOUS IMPROVEMENT + STATISTICAL ANALYSIS reduce variation
DEMING’S 14 POINTS
6. TRAINING
7. LEADERSHIP
- Long-term relationships with fewer suppliers loyalty & opportunities – mutual improvement
- Multiple suppliers
Protection against strikes
Protection against natural disasters
- Hidden costs of multiple suppliers
Increased travel to visit suppliers
Loss of volume discounts
Increased setup charges higher unit costs
Increased inventory
Increased administrative expense
- Constantly changing suppliers due to price increases variation in materials
Process of each supplier is different
- Reduced supply base decreases variation reducing scrap, rework and reduced need for adjustment
- Long-term relationship strengthens supplier-customer bond greater production of suppliers improved
communication with customer enhances opportunities for process improvement
- SUPPLY CHAIN MANAGEMENT
Minimizing total supply chain costs
Stronger partnerships with suppliers
- Reprisal
- Failure
- Unknown
- Relinquishing control
- Change
- Mutual respect of managers and workers are needed
- Afraid to report quality problems
Not meet quotas
Reduced incentive pay
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
Blamed for problems in the system
- Afraid to cooperate with other departments
Higher performance ratings and bonuses
Fear takeovers
Reorganizations
- Culture without fear – slow process
Can be destroyed – transition of leadership
Change in corporate policies
- Teamwork
Breakdown barriers- departments and individuals
- Barriers between functional areas
Fear of losing power
- Internal competition – raises and performance ratings
Inhibits teamwork and cooperation
Poor quality
a. Cannot understand the wants of their internal customers
b. Not getting what they need from internal suppliers
- Training and employee involvement
- Cultural change
Must be initiated by top management
Includes everyone
Meets with skepticism and resistance
a. If there are many of the traditional management practices to be eliminated
- Many firms used Deming’s principles and organized quality approaches according to his philosophy
- CRITICISM OF DEMING PHILOSOPHY
Only a philosophy
Lacked specific directions and approaches – how to do it
Not fit into the traditional American business culture
Quality excellence- learning, hard work, and dedication
PROFOUND KNOWLEDGE
1. Appreciation- SYSTEM
2. Understanding- VARIATION
3. Theory of Knowledge
4. Psychology
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
SYSTEMS or SYSTEMS THINKING
- SUB-OPTIMIZATION
Doing the best- individual components
Losses
Win-lose effect
- Purchasing materials at the lowest price
Excessive costs in scrap and repair
Increasing overall costs
- Minimizing the cost of manufacturing
Products- do not meet the designers’ specifications and customer needs
- Applicable to managing people
Pitting individuals / departments against each other – SELF-DESTRUCTIVE
a. Maximizing expected gain of the department, not the whole firm
- Requires internal cooperation
VARIATION
THEORY OF KNOWLEDGE
- Branch of philosophy
- Nature and scope of knowledge
- Presuppositions and basis
- General reliability of claims to knowledge
- Rational plan
Prediction concerning conditions
Behavior grounded on theory
Comparison of performance
- Understanding – assumptions and theory behind statistical tools and techniques correct application
- Copying an example of success without understanding the theory disaster
PSYCHOLOGY
- Understanding:
People
Interaction between people and circumstances
Interactions between leaders and employees
System of management
- Important in designing a work environment
Employee well-being
Employee satisfaction
- Understanding human behavior
- Fair treatment of people
- People differ from one another
- True leader
Aware of people’s differences
Working to optimize the abilities and preferences of everybody
- Motivation
Intrinsic- most powerful motivators
Extrinsic
- People – need love and esteem
Need dignity and self-esteem
- Fear – not motivator
Prevents the system from reaching its full potential
Cannot enjoy the work not productive and focused on quality principles
- Helps us to nurture and preserve positive innate attributes of people
- Carrots and sticks – no long-term values
- Pay is not a motivator
- Monetary rewards – way of managers- not understanding the management of intrinsic motivation
- Joy in work is next to getting good ratings
Ruled by external forces
Act to protect what they have
Avoid punishment
- Events- individual events, not a net result of many interactions and interdependent forces
- Seeing the symptoms, not the deep causes of problems
- No understanding of the impact of intervention in one part to the another place or time
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
- Blaming people- little or no ability to control the events
- Don’t understand- whole village in raising a child
- WALTER SHEWHART
Common and special causes of variation- 1920s synergized and developed into a
- Business schools- behavioral theories unified universal theory
- Management scientists refined systems theory – 1950s-1970s of management
- Scientists- understand - relationship – prediction, observation and theory
- QUALITY PLANNING
Identifying customers- internal & external
Determination of needs
Translation of needs to specifications
Development of product features- response to needs
Development of processes capable of producing product or delivering service
- Employees should know their customers- internal (department) or external (another organization)
- Quality goals
Meeting needs of customers and suppliers
Minimum combined cost
- Design of the process – produce the product satisfy customers + meet quality goals
- Strategic planning – quality
Short-term and long-term goals
Setting priorities
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
Comparing results with previous plans
Meshing plans with other corporate strategic objectives
QUALITY CONTROL
QUALITY IMPROVEMENT
- BREAKTHROUGH SEQUENCE
Discovery organization diagnosis corrective action control
2. PROJECT IDENTIFICATION
Converting atmosphere of defensiveness or blame into a constructive action
Participation in a project increases the likelihood of the action of the participants on the results
4. DIAGNOSTIC JOURNEY
Data collection
Statistics
Problem-solving tools
Full-time specialized experts (SIX SIGMA BLACK BELTS)
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
Management-controllable problems and operator-controllable problems
a. Different methods- diagnosis & remedy
5. REMEDIAL JOURNEY
Several phases
a. Alternative- optimizes total costs
b. Implementing remedial action
c. Dealing with resistance to change
- Juran + Deming
Top management commitment
Need for improvement
Use of quality control techniques
Traomomg
- Difference
Juran- Deming is wrong to drive out fear
a. Fear can bring out the best in people
c. Became common to believe that error is inevitable, accepting it and anticipating it, to err is human
d. In our personal life- we do not tolerate errors dual standard
e. Most human error- lack of attention – due to assumption that error is inevitable
f. Careful consideration + pledging to make a constant conscious effort to do the jobs right the first time
a. Eliminating waste of rework, scrap, repair decreasing cost and increases individual opportunity
- Juran + Deming
Majority of quality problems- not from human error,
a. From poorly designed systems- responsibility of management
- Approach – behavioral
- Management and organizational processes change corporate culture and attitudes
- Fit well within existing organizational structures
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
COMPARING DEMING, JURAN, AND CROSBY
SIMILARITIES
- Understand the nature and differences of philosophies and their fitness to own unique culture
- Developing an approach specifically tailored to own culture and management style
- A.V. FEIGENBAUM
- KAORU ISHIKAWA
A.V. FEIGENBAUM
3. ORGANIZATIONAL COMMITMENT
a. Continuous training
b. Motivation
c. Integration of quality in business planning – importance of quality
- HIDDEN FACTORY
Portion of plant capacity wasted due to poor quality
- Contemporary thinking
- Important elements of Malcolm Baldrige National Quality Award
- Customer is the judge of quality
- Quality and innovation- interrelated and mutually beneficial
- Managing quality = managing business
- Quality- continuous process of improvement
- Customers and suppliers – involvement in the process
KAORU ISHIKAWA
- ISO 9000:2000
From collective experience and knowledge of international experts in ISO Technical Committee (ISO/TC 176),
Quality Management, and quality Assurance responsible for ISO 9000 standards
Comprehensive and fundamental rules or beliefs- leading and operating an organization
Basic principles and practices of quality- evident in Deming, Juran and Crosby Philosophy
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
a. Customer focus
1. Understanding current and future customer needs
2. Meeting customer requirements
3. Exceeding customer expectations
c. Continual improvement
1. Must be a permanent objective
d. Leadership
1. Unity of purpose and direction
2. Internal environment – full involvement of people
e. Process approach
1. Management of activities and resources as a process higher efficiency
LEADERSHIP
- Accounting for the needs of stakeholders
- Clear vision
- Setting goals and targets
- Shared values, fairness and ethical role models
- Trust
- Elimination of fear
- Responsibility and accountability
Resources
Training
Freedom to act
- Inspiration / encouraging
- Recognition of people’s contributions
INVOLVEMENT OF
PEOPLE - Understanding
Importance of contribution
Importance of their role
- Identification of constraints to performance
- Accepting ownership of problems & responsibility for solution
- Evaluation of performance against personal goals & objectives
- Seeking opportunities
Competence
Knowledge
Experience
- Freely sharing knowledge and experience
- Openly discussing problems & issues
PROCESS APPROACH
- Defining activities desired result
- Clear responsibility & accountability – management of key activities
- Analysis and measurement of capability of key activities
- Interfaces of key activities- within and between the functions
- Factors- resources, methods, materials improve key activities
- Evaluation of risks, consequences, and impacts of activities
Customers
Suppliers
Other stakeholders
SYSTEMS
APPROACH TO - Structuring a system most effective and efficient way objectives
MANAGEMENT - Understanding – interdependencies – processes
- Structured approaches – harmonization and integration of processes
- Better understanding – roles & responsibilities common objectives reducing
cross-functional barriers
- Understanding capabilities
- Resource constraints
- Defining the normal operation of specific activities
- Continuous improvement
Measurement
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
Evaluation
CONTINUAL
IMPROVEMENT - Consistent organization-wide approach to continual improvement
- Training- methods and tools
- Every person – objective continuous improvement – products, processes, and
systems
- Goals
Guide continuous improvement
Measurement – continual improvement
- Recognition and acknowledgement of improvements
FACTUAL
APPROACH TO - Accurate & reliable data and information
DECISION-MAKING - Accessibility of data
- Valid methods- data & information analysis
- Decisions and actions – factual analysis + experience + intuition
MUTUALLY
BENEFICIAL - Balancing short-term gains and long-term considerations
SUPPLIER - Expertise and resources with partners
RELATIONSHIP - Key suppliers
Identification
Selection
- Communication
Clear
Open
- Sharing
Information
Future plans
- Joint development activities
- Improvement activities
- Improvements and achievements – SUPPLIERS
Inspiring
Encouraging
Recognizing
- Tools
Plan data
Collect data
Analyze results
Monitor progress
Solve problems
- Excel chart – trends of manufacturing defects effectiveness of training
- Statistical technique of experimental design- optimize process settings reduce scrap or increase yield
- Deming- basic statistics
Statistical methods for quality
Ability to view data and information from a statistical perspective- vital skill
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
- THINK STATISTICALLY
- IF NOT:
Making decisions – single data point
See trends – non-existent
Manipulating financial or operational results – cannot be controlled
- STATISTICAL THINKING- philosophy of learning and action
All work – system – interconnected processes
Variation exists – all processes
Variation
a. Understood
b. Reduced success
- Wealth of information today ability to understand variability in data and statistical thinking important
UNDERSTANDING VARIATION
- INCREASES UNPREDICTABILITY
Understand variation predicting the future performance
- REDUCES CAPACITY UTIIZATION
Increases the load on the process there’s no incorporation of slack
- BULLWHIP EFFECT
Small changes in demand increasingly amplified effect upstream - production & inventory levels
unnecessary costs and difficulties
- DIFFICULT TO FIND ROOT CAUSES
Due to external factors
Residing within the system
- DIFFICULT TO DETECT POTENTIAL PROBLEMS EARLY
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
Unusual variation – existence of a problem
Little inherent variation – easier to detect the existence of a problem
2. All the variation in the production and from the workers – came from the process
a. Eliminated the source of variability- most significant: PEOPLE
b. Each worker – identical
c. Cannot control the production units
d. Cannot do better than the system would allow
e. No influence of motivation or threats
f. Historically, all variation is believed to be controllable and place blame on those who cannot do anything
FUNNEL EXPERIMENT
1. QUALITY POLICY
Formal document
Commitment
a. High quality
b. Meeting customer expectations
3. RESOURCES
Special skills
Training
Workspaces
Manufacturing equipment
Inspection technology
Computer software
Supporting work environment
4. RESPONSIBILITY OF PEOPLE
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
a. Prevent defects and errors
b. Identify and solve quality problems
c. Verify implementation of solutions
QUALITY MANUAL
Permanent reference
a. System implementation
b. System maintenance
Not required to be complex
a. Small company- dozen pages
b. Large company- manuals for all key functions.
Sufficient records
a. conformance to requirements
b. Effective operation of a quality system
RECORDS
a. Inspection reports
b. Test data
c. Audit reports
d. Calibration data
Readily retrievable
a. Analysis – trends
b. Monitoring – effectiveness of corrective actions
OTHER DOCUMENTS- controlled
a. Drawings
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
b. Specifications
c. Inspection procedures and instructions
d. Work instructions
e. Operation sheets
a. INTERNAL AUDITS
a. Conformance to documented procedures
b. Effectiveness of documented procedures
c. Reporting issues – management for corrective action
d. Review of records
a. Process records
b. Training records
c. Complaints
d. Corrective actions
e. Previous audit reports
1. MANAGEMENT RESPONSIBILITY
a. Responsibility of top management effective quality system
b. Promotion – importance of quality
c. Quality management system
a. Development
b. Implementation
d. Customer requirements
a. Identification
b. Meeting
e. Definition:
a. Quality policy
b. Quality objectives
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
f. Responsibilities for quality
g. Documents and records control
2. RESOURCE MANAGEMENT
a. Sufficient people
b. Sufficient facilities
c. Sufficient training resources
3. PRODUCT REALIZATION
a. Controlling the production or service process
a. Receipt of an order or quote
b. Design
c. Materials
d. Procurement
e. Manufacturing or service delivery
f. Distribution
g. Field service
- Advisory in nature
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT
1. DISCIPLINE
a. Reviewing quality system – routine basis
b. Calling for corrective action – upon failure to maintain quality system
3. MARKETING PROGRAM
a. Differentiation
- TOP MANAGEMENT
Commitment to development and implementation of quality management system
Continuous improvement of effectiveness
a. Communicating importance of meeting customer, statutory and regulatory requirements
b. Quality policy
c. Quality objectives
d. Management reviews
e. Availability of resources
CHAPTER 2: FOUNDATIONS OF QUALITY MANAGEMENT