Professional Documents
Culture Documents
Pareto Principle - states that eighty percent of the activity is caused by twenty percent of the factors. It is
also known as the “80–20 rule”. The principle suggests that managers must concentrate on the twenty
percent of the factors in order to eliminate the eighty percent of the organizational problems.
EXAMPLE: In a restaurant quality problem, the activity could be customer complaint (eighty percent)
and the factor could be an impolite server (twenty percent).
50 120%
40 100% Percent of Total
80%
30
60%
Frequency
20
40%
10 20%
0 0%
Slow service Cramped Impolite Atmosphere Cold dinner
tables server
Customer Complaints
Frequency Percent of Total
Figure 1 presents the data in a way that shows which complaints are more prevalent. In order to solve for
the percentage of prevalent complaints, add and get the average of the two (2) most dominant complaints
and multiply it by 100%. Based on the given data, the two (2) most dominant complaint accounts under
slow service and cramped tables with data frequency of 42 and 20 respectively.
(42 + 20)
× 100% = 69.7%
89
DECISION POINT: It was clear to the manager which complaints, if rectified, would cover most of the
process failure problems in the restaurant. First, slow service will be addressed by training the existing
staff, adding another server, and improving the food preparation process. Removing some decorative
furniture from the dining area and spacing the tables better will solve the problem with cramped tables.
The Pareto Chart shows that these two (2) problems, if rectified, will account for almost 70% of the
complaints.
Cause-and-Effect Diagrams
• Cause-and-Effect Diagrams relate a key performance problem to its potential causes. It is used to
identify and isolate the causes of a problem. It is sometimes called the “fishbone diagram” because of
its structure.
• It is developed by Kaoru Ishikawa, a Japanese quality expert, so sometimes the diagram is also called
“Ishikawa Diagram”.
To analyze all the possible causes of the problem, the team constructed a cause-and-effect diagram,
shown in Figure 2. The main problem, inadequate header production, is the head of the diagram. The
team brainstormed all possible causes, and together they identified several major categories:
management, manpower, method, measurement, machine, and materials, or the six (6) M’s. Several
suspected causes were identified for each major category.
DECISION POINT: The improvement team noted several immediate issues that were slowing down the
production of headers. These issues included operators batching individual jobs (method branch) into
groups to save walking time, which was further exasperated by the availability of raw materials stocked
on the shop floor (materials branch) and the lack of specific job requirement (management branch).
Furthermore, there were many instances of individual tasks not being done correctly, and thus having to
be redone; such as the 90% rework rate at weld (method branch). The next step in this process
improvement was to eliminate the raw material on the floor, improve quality at the weld machine, and
move each header individually using a header-specific cart.
Check Sheets
A check sheet is a structured form for collecting and analyzing data. The purpose of the check sheet is to
make it easy to collect data for specific purposes and to present it in a way that facilitates conversion from
data to useful information.
Sample Problem: Imagine a book shop placed in the main street of a medium-large city. Regardless of
its convenient location, the sales of the shop are surprisingly lower than expected. The staff pointed
out that many customers are entering the shop but most of them are leaving without buying a single
item. To solve this problem, they organized a brainstorming session where the following causes came
into light:
o The customers did not find what they were looking for.
o The staff did not pay much attention to customers.
o The books were sold out.
o The books were not carried out by the shop.
SOLUTION: The staff found difficulties in identifying the main problem in order to implement a solution
so they decided to politely ask every customer pertaining to the reason why they leave the shop
without buying anything. The survey runs in a period of two (2) weeks and the answers were recorded
in the following check sheet:
DECISION POINT: Through the results presented in the check sheet, the staff can now identify the first
problem that needs to be solved in order to encourage more sales in the book shop.
Histograms
These are the graphical representation of data presented by columns on a graph which vary in height
depending on the frequency or number of times a specific range of data occur.
Sample Problem: From the previous example of the book shop suffering from poor sales, we can use
the previous data from their survey as follows:
Poor lightning 19
Poor ventilation 5
No place to sit 6
Total per week Table 3. Histogram 108
Source: www.innosupport.net
40
35
30
Number of Episodes
25
20
15
10
5
0
Figure 3. Histogram for the causes of poor sales in the book shop
Source: www.innosupport.net
DECISION POINT: Through the results presented in the histogram, the staff of the book shop will be
able to identify the most recurring reason why their customers are not purchasing any items in the
shop.
Scatter Diagrams
These are used to show the relationship between two (2) numerical data. In order to determine the
relationship of the data being compared, the variables are placed on the X and Y axis of a graph. If the
variables are correlated, the points will fall along a line or curve. The better the correlation, the tighter
the points will hug the line. The scatter diagrams may result to three (3) different types of data correlation.
To illustrate these relationships, the following are the examples of scatter diagrams indicating the
relationships between paired data.
Source: http://thequalityweb.com/scatter.htm
The strong positive correlation indicates that there is a close relationship between the data that is
paired together. In the middle diagram (Figure 5), you see a slightly different pattern indicating that
there is, in some cases, a relationship and in other cases there is no relationship. The last diagram
(Figure 6) indicates that there is no correlation, or no relationship at all between the paired data.
Sample Problem: A study was conducted to determine the relationship of the scores of the students
to the number of hours they spent studying. In preparing the scatter diagram, we will use the following
data:
60
40
20
0
0 1 2 3 4 5 6
Hours spent studying
Figure 7. Scatter Diagram in comparing the exam scores of the students and the hours they spent studying
Source: http://thequalityweb.com/scatter.htm
DECISION POINT: Based on the result of the scatter diagram, we can derive that the exam scores of
the students have a moderate positive correlation to the hours they spent studying since the data falls
into a line.
Run Charts
This is used to study data for trends or patterns over a specified period of time focusing on vital changes
in the process. It is important to determine if the process has consistent central tendency, variation, and
randomness since processes fall into one (1) of the four (4) states as follows:
Sample problem: Angelo just moved into a new apartment. Over his first couple of days, he noticed
that it doesn't take the same amount of time each day for him to arrive at work. Since Angelo wants
to set a definite time of departure from his apartment and his goal is to arrive at work on time, he
decided to monitor the amount of time it takes for him to get to work over the next four weeks. Angelo
constructed a run chart for his daily record as follows:
DECISION POINT: Now patterns can be seen. The data from reactors 2 and 3 are circled. Even without
doing any calculations, it is clear that reactor 3 has shown a strong positive correlation based on the
principle of scatter diagrams while reactor 2 has shown a moderate positive correlation. On the other
hand, reactor 3 does not show any relationship or correlation.
• Five-S. It represents Japanese words that describe the steps of a workplace organization process as
follows:
o Seiri (Sort). It refers to the practice of distinguishing necessary things and eliminating the
unnecessary things in the workplace.
o Seiton (Straighten, Set). It refers to the practice of creating an orderly storage so items can be
located efficiently.
o Seiso (Shine, Sweep). It refers to the practice of maintaining a clean workplace so problems like
leaks, spills, or furniture damages can be more easily identified.
o Seiketsu (Standardize). It refers to the practice of setting up standards for a clean workplace.
o Shitsuke (Sustain). It refers to the practice of supporting behaviors and habits that maintain
organizational standards for the long-term success of the company.
• Flow Charts. It is a graphic representation of a process. The most commonly used flowcharting method
is to have the team involved in the process to provide inputs in developing the chart. After a process
has been flowcharted, it can be determined what aspect of the process can be improved. The following
are the standard flowcharting symbols for communicating various actions, inputs, and outflows of a
process:
An oval (or rectangle with rounded ends) is customarily used to denote the start
or finish of a process.
A line with an arrow always indicates the path and direction of flow in the
process.
• Survey. It is used to obtain relevant feedback from internal and external customers. It can be
conducted internally in a form of employee feedback, to gain information on problem areas concerning
products and services. It can also be conducted externally with the business customers to gain insights
on the standing/rating of the products and services in the market. The following are the different ways
on how to conduct a survey:
o Interview. It involves two (2) persons: the researcher as the interviewer, and the respondent as
the interviewee. It is a more personal and probing way of conducting a survey since the
interviewer has the freedom to ask follow-up questions to explore the answers of the
respondents.
Kaizen Approach
“Kaizen” is the name given by the Japanese to the concept of continual incremental improvement. “Kai”
means “change” and “zen” means “good.” The underlying value system of Kaizen can be summarized as
continual improvement of all things, at all levels, all the time. Each member of the organization plays an
important role in the implementation of Kaizen as follows:
• Role of executive management. Executive managers are responsible for establishing Kaizen as
the corporate strategy of the organization. They are also assigned in establishing systems,
procedures, and structures that promote Kaizen.
• Role of middle managers. Middle managers are responsible for implementing the Kaizen policies
established by the executive management. They must also ensure that employees receive the
training necessary to understand and implement Kaizen.
• Role of supervisors. Supervisors are responsible for applying the Kaizen approach in their
functional roles by developing plans, improving communication, maintaining morale, providing
coaching for teamwork activities, and for soliciting Kaizen suggestions from employees.
• Role of employees. Employees are responsible for participating in Kaizen by taking part in
teamwork activities, engaging in continual self-improvement activities, and enhancing job skills
through education and training.
Lean Approach
This approach focuses on maximizing customer value while minimizing waste. A lean operation is the
process of developing a better product or service at the minimum amount of resources. Lean focuses on
reducing and, ideally, eliminating the following types of waste:
• Waiting waste. It refers to the idle time of people, machines, or processes because of unavailable
resources.
EXAMPLE: In a manufacturing setting, it might involve an expensive machine and its operator
sitting idly because the parts they are to work on have not been delivered. In a service setting,
the classic example is the airliner idling on the taxiway waiting for clearance to take off.
• Underutilization waste. It refers to the underuse capabilities of technology or underutilized
talents, skills, and creativity of people.
EXAMPLE: In a manufacturing setting, it might involve failing to include the people who operate
processes in brainstorming sessions aimed at improving the performance of those processes. In a
service setting, it might mean failing to use a sophisticated word processing system with a visual
display monitor.
• Visual Workplace Systems. This tool is used to promote ease of communication. It involves the
use of visual aids such as signs, lines, labels, and color coding in the workplace to ensure that
every employee will be properly guided in the work processes.
• Layout. This tool is used to achieve the optimum plant layout that will minimize motion wastes.
It involves placing the inputs near the production process to reduce unnecessary movement of
the employees.
• Standardized Work (SW). This tool is used to ensure that processes involving repetitive tasks are
being accomplished in the most efficient and productive manner. It involves following set of
criteria and standards.
• Quick Changeover (QCO). This tool is used to make process conversions as rapidly as possible. It
involves changing tools quickly in a manufacturing setting or changing a room for a different
purpose in a service setting.
• Productive Maintenance (PM). This tool is used to ensure that all equipment and parts of a
specific process are in good condition and ready for use when needed. It involves periodic
maintenance of machineries and equipment.
DMAIC Approach
This approach refers to a data-driven quality strategy for improving processes. The process steps of DMAIC
are as follows:
1. Define. It involves determining customer requirements, defining variables in production, and
identifying the process standards of a company.
2. Measure. It involves understanding the process, evaluating risks on process inputs, and measuring
current performance of a company through data collection.
3. Analyze. It involves identifying the wastes in production and analyzing collected data to
determine root cause of wastes and opportunities for improvement.
4. Improve. It involves designing process improvements to formulate creative solutions to fix and
prevent problems.
5. Control. It involves development, documentation, and implementation of an ongoing monitoring
plan to ensure that processes are being carried out based on the established standards.
References
ASQ - Learn about quality. (n.d.). Retrieved June 8, 2018, from http://asq.org/learn-about-quality/data-
collection-analysis-tools/overview/stratification.html
Berardinelli, C. & Yerian, L. (n.d.) Run charts: A simple and powerful tool for process improvement.
Retrieved June 8, 2018, from https://www.isixsigma.com/tools-templates/control-charts/run-
charts-a-simple-and-powerful-tool-for-process-improvement/
Explorable – Types of survey. (n.d.). Retrieved June 13, 2018, from https://explorable.com/types-of-
survey
Inno support - Check sheet example. (n.d.). Retrieved June 7, 2018, from
http://www.innosupport.net/uploads/media/Check_sheet_examle-EN.pdf
Gupta, S. & Starr, M. (2014). Production and operations management systems. Florida, FL: Taylor &
Francis Group, LLC
Goetsch, D. (2014). Quality management for organizational excellence: Introduction to total quality.
United Kingdom: Pearson Education Limited.
Krajewski, L., Malhotra, M. & Ritzman, L. (2016). Operations management: Process and supply chains.
United States of America: Courier Kendallville.
Lean six sigma definition - 5S. (n.d.). Retrieved June 8, 2018, from
http://leansixsigmadefinition.com/glossary/5s/
McDonough, M. (2011). Microsoft Excel 2007: Create a scatter plot. Retrieved June 8, 2018, from
https://www.brighthub.com/computing/windows-platform/articles/17778.aspx#imgn_8
Stevenson, J. (2015). Operations management (12th ed.). New York, NY: McGraw-Hill Education.
The quality web - Tool #5 - The scatter diagram. (n.d.). Retrieved June 8, 2018, from
http://thequalityweb.com/scatter.htm