CHAPTER 9 Lean 6 Sigma 1.

Create and publish a company mission

Quality Management
What does the term quality mean?
Quality is the ability of a product or service to
consistently meet or exceed customer
expectations.
Evolution of Quality Management
1924: Statistical process control charts
1930: Tables for acceptance sampling
1940s: Statistical sampling techniques
1950s: Quality assurance/TQC
1960s: Zero defects
1970s: Quality assurance in services
Late 70s: Strategic approach to quality
Quality Assurance vs. Strategic Approach
Quality Assurance
-Emphasis on finding and correcting defects before
reaching market
Strategic Approach
-Proactive, focusing on preventing mistakes from
occurring
-Greater emphasis on customer satisfaction
statement and commit to it.
2. Learn the new philosophy.
3. Understand the purpose of inspection.
4. End business practices driven by price alone.
5. Constantly improve system of production
and service.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear and create trust.
The Deming 14 Points
9. Optimize team and individual efforts.
10. Eliminate exhortations for work force.
11. Eliminate numerical quotas and M.B.O.
Focus on improvement.
12. Remove barriers that rob people of pride
of workmanship.
13. Encourage education and self-improvement.
14. Take action to accomplish the transformation

The Quality Gurus

1. Walter Shewhart
“Father of statistical quality control”
2. W. Edwards Deming
3. Joseph M. Juran
4. Armand Feignbaum
5. Philip B. Crosby
6. Kaoru Ishikawa
7. Genichi Taguchi
8. Taiichi Ohno and Shigeo Shingo
The Deming 14 Points
The Juran’s Quality Trilogy
1. Quality planning
2. Quality control
3. Quality improvement
Key idea
Juran proposed a simple definition of quality:
“fitness for use.” This definition of quality suggests
that it should be viewed from both external and
internal perspectives; that is, quality is related to
“(1) product performance that results in customer
satisfaction;
(2) freedom from product deficiencies, which
avoids customer dissatisfaction.”
Crosby’s Absolutes of Quality
Absolutes of Quality Management:
 Quality means conformance to
requirements
 Problems are functional in nature
 There is no optimum level of defects
 Cost of quality is the only useful
measurement
 Zero defects is the only performance
standard
Three Steps to Quality
A.V. Feigenbaum
Quality Leadership, with a strong focus on planning
Modern Quality Technology, involving the entire
work force
Organizational Commitment, supported by
continuous training and motivation
Kaoru Ishikawa
Instrumental in developing Japanese quality
strategy
Influenced participative approaches involving all
Dimensions of Quality
workers
Performance: main characteristics of the
Advocated the use of simple visual tools and
product/service
statistical techniques
Aesthetics: appearance, feel, smell, taste
The Ishikawa Diagram
Special features: extra characteristics
A cause-and-effect diagram/Fish Bone Technique is
Conformance: how well the product/service
a simple graphical method for presenting a chain of
conforms to the customer’s expectations
causes and effects and for sorting out causes and
Reliability: consistency of performance
organizing relationships between variables.
Durability: useful life of the product/service
Perceived quality: indirect evaluation of quality
(e.g. reputation)
Serviceability: service after sale
 - Each customer contact is a “moment of
truth”
- Customer participation can affect
perception of quality
- Fail-safing must be designed into the
system

Determinants of Quality
Quality of design
-Intention of designers to include or exclude
features in a product or service
Quality of conformance
-The degree to which goods or services conform to
Dimensions of Service Quality
or achieve the intent of the designers
- Convenience
The Consequences of Poor Quality
- Reliability
- Loss of business
- Responsiveness
- Liability
- Time
- Reduced productivity
- Assurance
- Increased costs
- Courtesy
Responsibility for Quality
- Tangibles
- Top management
- Design
- Procurement
- Production/operations
- Quality assurance
- Packaging and shipping
- Marketing and sales
- Customer service
Costs of Quality Types
Appraisal Costs
-Costs of activities designed to ensure quality or
uncover defects
Prevention Costs
Challenges with Service Quality
-Costs of activities to prevent defects
- Customer expectations often change
-Include training, quality control procedures,
- Different customers have different
planning and administration systems, vendor
expectations
management.
Costs of Quality - People development and involvement
-Failure costs: costs incurred by defective - Results orientation
parts/products or faulty services. International Asia Pacific Quality Award
-Internal failure costs Award given by Asia Pacific Quality Organization
~Costs incurred to fix problems that are detected (APQO)
before the product/service is delivered to the - For organizations in countries bordering
customer. Pacific Ocean and Indian Ocean
-External failure costs - Continuous quality improvement
~All costs incurred to fix problems that are The Deming Prize
detected after the product/service is delivered to - Honoring W. Edwards Deming
the customer. - Japan’s highly coveted award
Ethics and Quality - Main focus on statistical quality control
- Substandard work Quality Certification
- Defective products ISO 9000
- Substandard service -Set of international standards on quality
- Poor designs management and quality assurance, critical to
- Shoddy workmanship international business
- Substandard parts and materials ISO 14000
Quality Awards -A set of international standards for assessing a
1. Baldrige Award company’s environmental performance
2. Deming Prize ISO 9000 Standards
3. Int’l asia pacific Quality Award Requirements
4. European Quality Award - System requirements
Malcolm Baldrige National Quality Award - Management
1. Leadership (120 points) - Resource
2. Strategic Planning (85 points) - Realization
3. Customer Focus (85 points) - Remedial
4. Measurement, analysis and knowledge
management (90 points) ISO 9000 Quality Management Principles
5. Workforce Focus (85 points) - Customer focus
6. Operation (85 points) - Leadership
7. Results (450 points) - People involvement
Benefits of Baldrige Competition - Process approach
- Financial success - A systems approach to management
- Winners share their knowledge - Continual improvement
- The process motivates employees - Factual approach to decision making
- The process provides a well-designed quality - Mutually beneficial supplier relationships
system ISO 14000: a set of international standards for
- The process requires obtaining data assessing a company’s environmental performance
- The process provides feedback Standards in three major areas
European Quality Award Management systems
 Prizes intended to identify role models Operations
- Leadership Environmental systems
- Customer focus ISO 14000
- Corporate social responsibility Management systems
-Systems development and integration of Conceptually
environmental responsibilities into business Program designed to reduce defects
planning Requires the use of certain tools and techniques
Operations Six sigma: A business process for improving
-Consumption of natural resources and energy quality, reducing costs, and increasing
Environmental systems customer satisfaction.
-Measuring, assessing, and managing emissions, Six Sigma programs
effluents, and other waste - Improve quality
Total Quality Management - Save time
A philosophy that involves everyone in an - Cut costs
organization in a continual effort to improve quality Employed in
and achieve customer satisfaction. - Design
The TQM Approach - Production
1. Find out what the customer wants - Service
2. Design a product or service that meets or - Inventory management
exceeds customer wants - Delivery
3. Design processes that facilitate doing the Six Sigma Management
job right the first time - Providing strong leadership
4. Keep track of results - Defining performance metrics
5. Extend these concepts to suppliers - Selecting projects likely to succeed
Elements of TQM - Selecting and training appropriate people
1. Continual improvement Six Sigma Technical
2. Competitive benchmarking - Improving process performance
3. Employee empowerment - Reducing variation
4. Team approach - Utilizing statistical models
5. Decisions based on facts - Designing a structured improvement strategy
6. Knowledge of tools Six Sigma Team
7. Supplier quality - Top management
8. Champion - Program champions
9. Quality at the source - Master “black belts”
10. Suppliers - “Black belts”
- “Green belts”
Six Sigma Process
Continuous Improvement - Define
Philosophy that seeks to improve all factors related - Measure
to the process of converting inputs into outputs on - Analyze
an ongoing basis - Improve
Kaizen: Japanese word for continuous - Control
improvement. Obstacles to Implementing TQM
Quality at the Source  Lack of:
The philosophy of making each worker responsible - Company-wide definition of quality
for the quality of his or her work. - Strategic plan for change
Six Sigma - Customer focus
Statistically - Real employee empowerment
Having no more than 3.4 defects per million - Strong motivation
 - Time to devote to quality initiatives Process Improvement and Tools
- Leadership Process improvement: a systematic approach to
- Poor inter-organizational communication improving a process
- View of quality as a “quick fix” Process mapping
- Emphasis on short-term financial results Analyze the process
- Internal political and “turf” wars Redesign the process
Criticisms of TQM Tools
1. Blind pursuit of TQM programs There are a number of tools that can be used for
2. Programs may not be linked to strategies problem solving and process improvement
3. Quality-related decisions may not be tied to Tools aid in data collection and interpretation, and
market performance provide the basis for decision making
4. Failure to carefully plan a program Basic Quality Tools
5. Pursuing continuous improvement when - Flowcharts
dramatic improvements are needed - Check sheets
6. Quality efforts not tied to results - Histograms
Basic Steps in Problem Solving - Pareto analysis
1. Define the problem and establish an - Scatter diagrams
improvement goal - Control charts
2. Define measures and collect data - Cause-and-effect diagrams
3. Analyze the problem - Run charts
4. Generate potential solutions
5. Choose a solution
6. Implement the solution
7. Monitor the solution to see if it
accomplishes the goal
Process improvement: A systematic approach to
improving a process
Process mapping
Analyze the process
Redesign the process
Methods for Generating Ideas
 Brainstorming
 Quality circles
 Interviewing
 Benchmarking
 5W2H
Quality Circles
 Team approach
- List reduction
- Balance sheet
- Paired comparisons
Benchmarking Process
- Identify a critical process that needs
improving
- Identify an organization that excels in this
process
- Contact that organization
- Analyze the data
- Improve the critical process
Videos
a. A Race without A Finish Line
b. Cost of Quality