Quality Management

Contents
• Quality Management Principles & Practices
• Tools & techniques
Balance Between Technical and Human Management Skills

Typical Scenario
HIGH
Technical Skills
Skill Level Engagement

Human
Management
Skills

LOW
Senior Middle Senior President &
Junior Supervisor
Corporate
Team Member Team Member Management Management
Management
 Quality Management System

Leadership, Organization goals/strategy, Team-building,

Management customer satisfaction, supplier quality, process/quality
Aspects management & improvement, product/process
development…etc
Statistical Process Control Quality
Management
Acceptance Process Measurement
Statistical Quality by Sampling Control System &
Capability System Framework
Aspects Design Charts
Analysis Analysis

Statistical Quality Control

Technical
Subject Matter Expertise and Domain Knowledge
Aspects
 Total Quality Management – Core

• TQM is the application of quantitative methods and human

resources to improve all the processes within an organization,
and to exceed customer needs

• TQM requires
• organization culture change
• management commitment & involvement with top to bottom organization
support – company wide engagement
• Unwavering focus on customer
• Continuous improvement drive of all business and production processes
• Partnership with suppliers
• Establishment of quantitative performance measurements
• Widespread training, quality awareness, workforce quality circle
 Total Quality Management
• In 1970s, it was recognized that quality could not be viewed from
solely from quality technical techniques perspective (Little q), it
should include management and permeate across the entire business
enterprise (Big Q)

• Started in 1961, Feigenbaum defined “Total Quality Control” (US

Naval Air Systems Commands in 1980 renamed as TQM)

• Main Pitfalls:
• Training often turned over to HR and/or Quality function, with little senior top
management leadership and engagement
• Not enough emphasis on quality control and improvement tools, poor follow-
through, no project-by-project implementation strategy
• As a result, TQM was largely unsuccessful
 Categories of Quality Costs

Quality Costs

Cost of Poor Cost of Good

Quality Quality

Internal External Appraisal Prevention

Failure Costs Failure Costs Costs Costs

Feigenbaum was first to define "Total Quality Costs" in a 1956 Harvard Business Review article entitled, Total Quality Control.
Dr W Edwards Deming: Quality Philosophy and Management Strategy

W. Edwards Deming (1900-1993)

• Taught engineering, physics in the 1920s, finished PhD in 1928

• Met Walter Shewhart at Western Electric
• Long career in government statistics, USDA, Bureau of the
Census
• During WWII, he worked with US defense contractors,
deploying statistical methods
• Sent to Japan after WWII to work on the census, asked by JUSE
to lecture on statistical quality control to management
• Japanese adopted many aspects of Deming’s management
philosophy
• Deming stressed “continual never-ending improvement”

• Authored many books, including

• “Out of crisis” in 1986
• “The New Economics for Industry, Government,
Education” in 1993
 Deming’s 14 Points
“Out of Crisis” chapter 2, “14 Points” for transformation of western style management
1. Create constancy of purpose toward improvement
2. Adopt a new philosophy, recognize that we are in a time of change, a new economic age
3. Cease reliance on mass inspection to improve quality
4. End the practice of awarding business on the basis of price alone
5. Improve constantly and forever the system of production and service
6. Institute training
7. Improve leadership, recognize that the aim of supervision is help people and equipment
to do a better job
8. Drive out fear
9. Break down barriers between departments
10. Eliminate slogans and targets for the workforce such as zero defects
11. Eliminate work standards
12. Remove barriers that rob workers of the right to pride in the quality of their work
13. Institute a vigorous program of education and self-improvement
14. Put everyone to work to accomplish the transformation

Note that the 14 points are about change

 Shewhart Cycle (or Deming Cycle)
Quality improvement is a never ending spiral process
 Joseph M. Juran
• Born in Romania (1904-
2008), immigrated to the US
• Worked at Western Electric,
influenced by Walter
Shewhart
• Emphasizes a more strategic
and planning oriented
approach to quality than
does Deming
• Juran Institute is still an
active organization
promoting the Juran
philosophy and quality
improvement practices
 Management Aspects of Quality Improvement
Effective management of quality requires the execution of three activities:
The Juran Trilogy
1. Quality Planning
2. Quality Control (Incl Quality Assurance)
3. Quality Improvement

• These three activities are interrelated

• Control versus breakthrough
• Project-by-project improvement

Driving for high quality conformance consists of 2 levels of involvement

1. top level of management with clear mission for the whole company, management must play an
active leadership
2. Sub-level including all department, functional group, workforce involvement
 Juran’s Trilogy Stages

Planning Control Improvement New Zone

Sporadic spikes

Cost of Poor Quality

Chronic waste
Wide control zone

Time
 Six Sigma
• Can be viewed as re-packaging of TQM and many other best practices
with more punches
• TQM is typically workforce empowerment, Six Sigma is top driven (top down)
• TQM activities is generally within function or process, Six Sigma is cross functional
• TQM focus on effective use of basic improvement quality tools, Six Sigma is regimented
following a structural problem solving steps DMAIC with more advanced statistical analysis
• TQM focus typically workplace problem with little financial impact, Six Sigma focus on top
priority high impact projects with verifiable financial return

• Baldrige, EFQM, ISO, all embodies TQM, with Six Sigma properly
integrated, it is possible to strengthen many elements in the
• leadership involvement (champion setting strategy, action plan, project identification, goal
setting, project review, recognition, communication)
• resource management (training, BB ,sponsorship, project team )
• data measurement & management by facts
• Improvement & results (project by project of high impact value)
 Quality Awards & frameworks

• Nations in their productivity drive & global market competition pressure,

after witnessing Japanese product quality transformation and economic
growth, recognized the impact of quality management and philosophies of
Deming, Juran, Crosby and others
• Nations started to formulate awards to encourage
• promote quality and productivity improvement
• framework for integrating total quality principles with practices in organization to
attain performance excellence
• platform for recognition of companies achieving outstanding performance
• Most popular frameworks
• US Malcolm Baldrige National Quality award
• ISO 9000 certification process
 MBNQA & Others
Study 1982, recommendation akin to Japan’s Deming Prize Formed 1988, later supported by European Commission
1987, US MBNQ Improvement Act

EFQM Excellence Model

Japan
1946
1994 Deming Prize

1995 JQA
 Six Sigma
• Statistically is reduction of variability to Six Sigma performance of 3.4 ppm
• Six Sigma level performance applies to all business practices,
• company wide incl HR, Finance, S&M, Material, Operations, Development
• Successful implementation of Six Sigma requires a structural approach in
organization, and top down in managing, project selection, goal setting
(incl KPI), resource allocation (BB & supports),
• Vigorous DMAIC problem solving methodology (aided by more advanced
statistical tools & analysis, more than 7 tools), big financial focus (high
impact projects, bottom line) audited by accountants, aggressive
breakthrough improvement, tollgate review
• Decision is data driven, hence learning, knowledge acquisition has sound
foundation
• Deploy across entire organization, across different functional groups,
across processes
 Six Sigma – Brief History
Six Sigma concept developed after a long quality improvement efforts
inside Motorola
• 1979, during company officers meeting, CEO Bob Galvin asked “What’s wrong with out company?”,
Art Sundry, a sales manager of the most profitable business at that time, spoke “…our quality
stinks!” and ignited the company quality improvement efforts
• 1985, Bill Smith, Motorola engineer coined the term “six sigma” for design margin and product
quality requirement
• 1986, Mikel Harry, published white paper “The Nature of Six Sigma Quality”
• 1987, Motorola adopted 2 year 10X improvement, 4 year 100X goal and Six Sigma by 1992; Mikel
Harry invented the Black Belt naming convention
• 1988, Motorola training program formerly recognized as US Navy Best Manufacturing Practices
Program, also won the first Malcolm Balridge National Quality Award
• 1990, Motorola Six Sigma Research Institute was founded & directed by Mikel Harry, formalized
partnership with IBM, Kodak, Digital, ABB and TI in 1992
• 1993, Bill Smith published Six Sigma Design in IEEE Spectrum, Sep 1993; he died of heart attack in
the same year in Motorola cafetaria
• 1994, Mikel Harry founded Six Sigma Academy and provided training to Allied Signal (now
Honeywell) and ABB. In 1995 engaged by GE
• 1996, GE announced Six Sigma as global strategic business initiative. 1999 reported US$2B benefit
 Lean Manufacturing
• Many lean concepts practiced at Ford Motors in 1920s & from works of Frederick
Taylor (scientific management) & Frank and Lilian Gilbreth (motion study);
Toyota’s Taichi Ohno & Shigeo Shingo developed the current system of waste
elimination

• The success & steady growth of Toyota caught attention of the world on its
management philosophies and practices, viz the Toyota Production System

• Originally “Just-in-Time”, later renamed as “Lean Manufacturing” with the

emphasis on efficiency improvement and waste reduction with a set of lean tools
developed, enhanced in the company over many years

• Lean was later integrated with Six Sigma as popularly known as Lean Six Sigma to
tackle many business challenges
 Six Sigma Focus

• Initially in manufacturing
• Commercial applications, e.g.
• Banking
• Finance
• Public sector
• Services
• DFSS – Design for Six Sigma
• Only so much improvement can be wrung out of an existing system
• New process design
• New product design (engineering)
 Lean Focus
• Focuses on elimination of waste
• Long cycle times
• Long queues – in-process inventory
• Inadequate throughput
• Rework
• Non-value-added work activities
• Categorize as “7 wastes”
• Over production, Waiting, Transportation, Defects, Inventory, Motion, extra-
processing
• Makes use of many of the tools of operations research and industrial
engineering
• E.g. visual factory, workplace organization (5S), inventory control, value stream
mapping, Kaizen (continuous improvement), JIT, Kanban, OEE (Overall Equipment
Efficiency), Single Minute Exchange of Die, PDCA, Poka Yoke (Error Proofing)….
Supply Chain Management Processes Focus
• Service management
• Demand management
• Order fulfillment
• Quality
• Manufacturing flow management
• Supplier relationship management
• Logistics and distribution
• Returns management
Systematic Problem Solving Methodology

Process/Subject Data Collection

of Interest

Data Tabulation
Quality
Improvement
Data Analysis

Cost
Result Interpretation Reduction

Result Presentation
Customer
Satisfaction
Decision Making

Continuous
Taking Actions
Improvement
Six Sigma Project/Problem Solving Process
(each encompasses problem solving micro-steps)
Design for Six Sigma (DFSS)
Taking variability reduction upstream from manufacturing (or
operational six sigma) into product design and development
Every design decision is a business decision

E.g. Product Design => IDOV methodology

 Statistical Quality Control, 7th Edition by
Douglas C. Montgomery.
Chapter 1
Copyright (c) 2013 John Wiley & Sons,
 What Makes it Work?

• Successful implementations characterized by:

• Committed leadership
• Use of top talent
• Supporting infrastructure
• Formal project selection process (project important to business, cost of quality)
• Formal project review process with tollgate control
• Dedicated resources
• Financial system integration
• Project-by-project improvement strategy (borrowed from Juran)
Organization may deploy many:
• DFSS for product development
• Lean for waste and cycle time reduction
• Six Sigma for big impact breakthrough quality and process improvement, variability reduction
 Part 2: Tools and Techniques

1. Statistical Process Control

2. Acceptance Sampling
3. Reliability
4. Design of Experiments (DOE)
5. Taguchi’s Quality Engineering
6. Failure Mode Effect Analysis (FMEA)
7. Quality Function Deployment
8. ISO 9000
9. Benchmarking
 Statistical Process Control (SPC)

• SPC is the use of statistical techniques such as control charts to analyze a

process (or its outputs) so as to take appropriate actions to achieve and
maintain a state of statistical control and to improve process capability
• Many SPC tools or simply quality seven basic tools, e.g.
• Check sheet
• Process Flow Diagram
• Cause and Effect Diagram (Fish-bone diagram, Ishikawa diagram )
• Pareto Chart
• Histogram
• Scatter Plots
• Control Charts

Some tools may not have anything to do with “statistics”

 Check Sheet

• To ensure data are collected carefully and accurately for process

control and problem solving
• Check sheet form designed by project team members for individual
situation
• Forced team members to agree on subject or characteristic of interest
• Create easy to enter and easy to understand data to present a clear
picture of facts
• Information to contain product, location, time, operator, inspector or
person involved
Check Sheet Examples
An Aerospace firm’s Tank defects
 Process Flow Diagram

• A schematic diagram showing the flow of the product or services it moves

through the various processing stations or operations
• A visual representation as it is now, with all its flaws and inefficiencies, to
aid spotting of potential trouble spots or improvement opportunities
• Use standardize symbols and can be used as a working document
• Show sufficient details to enable team members
• to understand and agree on the complexity of the actual process involved
• to identify activities that may impact performance
• Improvement opportunities may involve elimination of steps, creation or
simplification of process flow
Process Flow Diagram
 Cause-and-Effect Diagram
(aka Fishbone diagram, Ishikawa Diagram)

• A visual tool used to identify, explore and graphically display, all the
possible causes related to a problem or condition to discover root
causes
• Focuses team on the content of the problem
• Creates a snapshot of the collective knowledge of team
• Creates consensus of the causes of a problem
• Builds support for resulting solutions
• Focuses the team on causes not symptoms
 Cause-and-Effect Diagram

Environment ?
Transaction Situation:
People, Procedures, Policies, Place,
Performance (Measurement),
(Men) Environment
 Pareto Diagram (80/20 Rule)
• Named after Vilfredo Pareto (1848-1923)
• 80% of land in Italy owned by 20% of population
• Joseph Juran recognized the universal application of this concept
• Vital few and trivial (or useful) many
• About “80% of problem (Effect) resulted from 20% of causes”

Pareto Chart of Causes

100 100

80 80 A Frequency
Frequency

Percent
60 60
Distribution Diagram
40 40
order arranged
20 20

0 0
t r t
ion nce e e e ing ur e
Causes
en ur ur ur lle en
ir at ena shm Fail Fail Fail ntr o ulat Fail cem
Va int leni mp p
m s tem n C
o c
cir r ica epla
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on a p u u e
ti M e P P y ge t R lec t de r
ntr a bing nt R tion tolic m S Oxy -O u E o
nce T u - age ir ula ras Alar a te le c tr
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Co R e R ec Pa P E
Frequency 36 16 14 9 6 5 5 5 2 2
Percent 36.0 16.0 14.0 9.0 6.0 5.0 5.0 5.0 2.0 2.0
Cum % 36.0 52.0 66.0 75.0 81.0 86.0 91.0 96.0 98.0 100.0
Example: Copper plating problem in PCB Fabrication Factory
(Montgomery Section 5.6)
 Europe & International
• Forming of European Union in 1992 with the signing of Maastricht Treaty in Germany

• Need for a standard & guideline for quality assurance and management for EU inter-country trade and countries
outside EU intending to sell goods and services to EU members,

• International Organization for Standardization (IOS ) adopted a series of practices, named the ISO series of
standards

• 1987, ISO 9000 series of standards published, evolving from British Standard and US Mil-standards, subsequent
revisions in 1994, 2000,…2008….
• In 1994 the series was updated to an ANSI/ISO/ASQ standard and US companies could become certified to the
standard

• ISO 9000 – Quality Management Systems, Fundamentals & Vocabulary. Core ISO 9001
• Used by “internal and external parties, including certification bodies, to assess the organization's ability to meet
customer, statutory and regulatory requirements applicable to the product, and the organization's own
requirements” – ISO
• Widely implemented world wide
• Requires documentation of all processes affecting quality, compliance by auditing and instituting continuous
improvement process
• Vigorously audited by third party (certification body) for certification, renew 3 yearly for compliance
The ISO 9000 family of standards listed below has been developed to assist
organizations, of all types and sizes, to implement and operate effective quality
management systems.

— ISO 9000 describes fundamentals of quality management systems and specifies the
terminology for quality management systems.

— ISO 9001 specifies requirements for a quality management system where an

organization needs to demonstrate its ability to provide products that fulfil customer and
applicable regulatory requirements and aims to enhance customer satisfaction.

— ISO 9004 provides guidelines that consider both the effectiveness and efficiency of
the quality management system. The aim of this standard is improvement of the
performance of the organization and satisfaction of customers and other interested
parties.

— ISO 19011 provides guidance on auditing quality and environmental management

systems.

Together they form a coherent set of quality management system standards facilitating
mutual understanding in national and international trade.
Source: ISO
 Progression
• Earlier versions (pre-2000) led to the criticism:
• “Say what you do, do what you say”
• Companies are more concerned with “passing the test”
• Now => be consistent to do it well and provide evidence In addition, have audit and improvement processes

• ISO 9000:2000, replaced the 1994 version embodied 8 quality management principles:
1. Principle 1 – Customer focus
2. Principle 2 – Leadership
3. Principle 3 – Involvement of people
4. Principle 4 – Process approach
5. Principle 5 – System approach to management
6. Principle 6 – Continual improvement
7. Principle 7 – Factual approach to decision making
8. Principle 8 – Mutually beneficial supplier relationships

• Thereby aligning to the Baldrige & EFQM performance excellence concepts, aiding top managements to guide their
organization for performance improvement

• It demands top management involvement in quality management instead of delegation, introducing process management
model, improvement via key performance metrics and continual improvement

• ISO 9000:2008 - clarify requirements & consistency with ISO 14000:2004 environmental management standards
Model of a Process-based Quality Management System - ISO

Value-added activities ------ All these require Documentation & Supports

Information flow
ISO 9000 Registration in Relation to Malcolm Baldrige Award
• ISO 9000 requires:
• Adequate quality systems
• Objective evidence for every requirement
• Complete, controlled, up-to-date documentation
• Periodic surveillance audits that verify continuing compliance to requirements
• MBNQA looks for:
• Best-of-the-best quality systems
• Clear evidence of product quality superiority
• Clear evidence of customer perception of superiority
• Historic trends that lend credence to one-time audit
 Benchmarking

• Developed in Xerox (1979), management approach to reduce its production

costs
• Benchmarking is a process to determine who else does a particular activity
the best and use that information to improve performance
• E.g. own performance against a set of standards or performance of best-in-class
companies
• widely used in competitive study, gap analysis & strategy development
• Some examples in Xerox’s study:
• Its ratio of indirect to direct staff was twice that of direct competition
• It had nine times the number of production suppliers
• Assembly line rejects were in the order of ten times worse
• Product time to market was twice as long
• Defects per 100 machines were seven times worse
 Benchmarking Focus
• Companies may choose different aspects of operations to benchmark,
e.g.
• Perception Benchmarking
• Regular survey, feedback scoring on management effectiveness, continuous
improvement efforts…
• Compliance Assessment
• ISO 9000 certification – use the scoring in the standards to measure and analyze gaps
• MBNQA scores to benchmark against the best in class
• Competitive Benchmarking
• Focus on performance, in the area needing improvement, against “Best in class” in the
industry or any industry
• E.g. Xerox benchmark against IBM & Kodak on products, while on packaging & shipping
against LL Bean (a catalog sales & clothing company)
• Southwest Airlines benchmarking its turnaround time against Indianapolis car racer pit crew
 Benchmarking Process
• Wide variety of plans per company needs. However, certain steps are parts of
every benchmarking process

1. Identify the
Repeat Cycle for New
benchmark subject
Level of Performance focus

2. Understand your
6. Implement plans
organization &
& Monitor
what to measure

5. Develop action 3. Determine

plans for companies to
improvement benchmark against

4. Collect
performance data
& analyze gaps