OPMT 1005 – Process Improvement & Lean Design

Week One – History & Introduc4on

2023-05-10
Land Acknowledgement

We would like to begin this Orienta4on by respec8ully acknowledging that we live,

work, and learn on the tradi4onal, ancestral, and unceded territory of the
Sḵwx̱wú7mesh (Squamish), səlilwətaɬ (Tsleil-Waututh), and xʷməθkʷəy̓əm
(Musqueam) Na4ons.

We take responsibility for working to understand and challenge the constructs of

sePler colonialism as they exist on this land and the spaces we par4cipate in and
strive to uphold the ideals of truth and reconcilia4on.

2 2023-05-10 vcc.ca
Week One – Learning Objec7ves

§ Understand the history behind quality and improvement systems and

methodologies, and how they evolved over the years.
§ Explain and contrast the various quality improvement systems and their relative
importance to the organization.
§ Understand the various costs of quality – both proactive and reactive costs.
§ Discuss the differences and commonalities between Lean and Six Sigma as
proven continuous improvement methodologies.
§ Learn about the various tools used in process improvement, project
management, product development, etc.

3 2023-05-10 vcc.ca
Quality and Strategy

§ Managing quality supports differentiation, low cost, and response strategies

§ Quality helps firms increase sales and reduce costs

§ Building a quality organization is a demanding task

vcc.ca
Total Quality Management (TQM)

§ Encompasses entire organization, from supplier to customer

§ Stresses a commitment by management to have a continuing, companywide

drive toward excellence in all aspects of products and services that are important
to the customer

5 2023-05-10 vcc.ca
Two Ways Quality Improves Profitability

Sales Gains via

§ Improved response
§ Flexible pricing
§ Improved reputation
Improved Increased
Quality Profits
Reduced Costs via
§ Increased produc-vity
§ Lower rework and scrap costs
§ Lower warranty costs

6 2023-05-10 vcc.ca
The Flow of Activities
Organiza6onal Prac6ces
Leadership, Mission statement, Effec4ve opera4ng procedures, Staff
support, Training
Yields: What is important and what is to be accomplished

Quality Principles
Customer focus, Continuous improvement, Benchmarking, Just-in-time,
Tools of TQM
Yields: How to do what is important and to be accomplished

Employee Fulfillment
Empowerment, Organizational commitment
Yields: Employee attitudes that can accomplish what is
important

Customer Sa6sfac6on
Winning orders, Repeat customers
Yields: An effec;ve organiza;on with a
compe;;ve advantage
7 2023-05-10 vcc.ca
Defining Quality

§ An operations manager’s objective is to build a total quality management system

that identifies and satisfies customer needs.

The totality of features and characteristics of a product or service that bears on its
ability to satisfy stated or implied needs.*
*American Society for Quality- ASQ

8 2023-05-10 vcc.ca
Different Views

§ User-based: better performance, more features

§ Manufacturing-based: conformance to standards, making it right the first time

§ Product-based: specific and measurable attributes of the product

9 2023-05-10 vcc.ca
External Measures of Quality

How well does the product design satisfy the wants and needs of the customers?

Consider:
§ Product performance
§ Features
§ Reliability
§ Serviceability
§ Design aesthetics

10 2023-05-11 vcc.ca
Internal Measures of Quality

Does the product meet the design specifications ?

Consider:
§ Manufactured tolerances
§ Upper and Lower control limits
§ Consistent output

11 2023-05-11 vcc.ca
Implications of Quality

1. Company reputation
§ Perception of new products
§ Employment practices
§ Supplier relations

2. Product liability
§ Reduce risk

3. Global implications
§ Improved ability to compete

12 2023-05-11 vcc.ca
Classic Quality Concepts

Walter Shewhart
§ Concept and development of the Control Chart
§ The Shewhart Cycle: Plan-Do-Check-Act
W. Edwards Deming
§ Importance of understanding varia-on in work processes
§ Applica-on of sta-s-cs and promo-on of Plan-Do-Check-Act
§ Role of management in leading for quality
§ 14 Points for Management
Joseph Juran
§ Breakthrough performance and Pareto effect
§ Importance of management principles
§ Quality by design and planning
Armand Feigenbaum
§ Concept of Total Quality Control (TQC)
§ Concept of “Hidden Factory”

13 2023-05-10 vcc.ca
Classic Quality Concepts

Kaoru Ishikawa
§ Company-wide Quality Control (CWQC)
§ Cause and effect diagram (fishbone diagram)
Philip Crosby
§ Customer requirement is performance standard.
§ Quality maturity is a journey
§ Preven-ve ac-on as basic approach
Genichi Taguchi
§ Cost of poor quality is loss to society as a whole – Loss Func-on.
§ Robust quality is designed for consistent produc-on.
§ Design control is more important than produc-on control.
§ User-friendly system of frac-onal experimental designs
§ Analysis of mean and varia-on using signal-to-noise ra-o

14 2023-05-10 vcc.ca
Shewhart’s PDCA Model

4. Act: 1.Plan:
Implement the Iden6fy the
plan document paQern and plan

3. Check: 2. Do:
Is the plan Test the
working? plan

15 2023-05-10 vcc.ca
Deming’s 14 points

1. Create consistency of purpose

2. Lead to promote change

3. Build quality into the product; stop depending on inspections

4. Build long-term relationships based on performance instead of awarding business on price

5. Continuously improve product, quality, and service

6. Start training

7. Emphasize leadership

16 2023-05-10 vcc.ca
Deming’s 14 points

8. Drive out fear

9. Break down barriers between departments

10. Stop haranguing (lecturing) workers

11. Support, help, and improve

12. Remove barriers to pride in work

13. Institute education and self-improvement

14. Put everyone to work on the transformation

17 2023-05-10 vcc.ca
Malcolm Baldrige National Quality Award

§ Established in 1988 by the U.S. government

§ Designed to promote TQM practices

§ Recent winners include:

Lockheed Martin Missiles and Fire Control Henry Ford Health System

MESA Products Inc. North Mississippi Health Services

City of Irving Concordia Publishing House

MEDRAD Nestlé Purina PetCare Co.

Montgomery County Public Schools

18 2023-05-10 vcc.ca
Malcolm Baldrige Criteria

Applicants are evaluated on:

http://www.nist.gov/baldrige/

19 2023-05-10 vcc.ca
ISO 9000 Interna7onal Quality Standards

§ Interna4onal recogni4on

§ Encourages quality management procedures, detailed documenta4on, work

instruc4ons, and recordkeeping

§ Over one million cer4fica4ons in 178 countries

§ Cri4cal for global business

https://www.iso.org/iso-9001-quality-management.html

20 2023-05-10 vcc.ca
ISO 9000 International Quality Standards

ISO 9001:2015 specifies requirements for a quality management system when an organization:
needs to demonstrate its ability to consistently provide products and services that meet customer and
applicable statutory and regulatory requirements, and
aims to enhance customer satisfaction through the effective application of the system, including processes
for improvement of the system and the assurance of conformity to customer and applicable statutory and
regulatory requirements.

All the requirements of ISO 9001:2015 are generic and are intended to be applicable to any
organization, regardless of its type or size, or the products and services it provides.*
*www.iso.org/standard

21 2023-05-10 vcc.ca
Costs of Quality

§ Quality costs are the costs connected with both attaining and missing the
desired level of quality in a service or product.

§ They may be seen as the costs of preventing quality problems, measuring quality
levels, controlling and/or inspecting quality levels, or failing to accomplish the
desired quality levels.

§ To develop the concept of quality cost, it is important to understand the

difference between the quality cost and the cost of quality organization – do not
view quality costs as the cost of the quality function

22 2023-05-10 vcc.ca
Costs of Quality

§ Prevention costs - reducing the potential for defects

§ Appraisal costs - evaluating products, parts, and services

§ Internal failure costs - producing defective parts or service before delivery

§ External failure costs - defects discovered after delivery

23 2023-05-10 vcc.ca
Costs of Quality

Have you ever heard about the term “Hidden Factory”?

This is the porZon of any exisZng organizaZon that:

§ Rework
§ Touch-up unsaZsfactory component
§ Replaces products recalled from the field
§ Retest
§ Re-inspect rejected or reworked units
§ Store unsaZsfactory and rejected work unZl they can be reworked, touched-up, retested, re-
inspected or disposed of

24 2023-05-10 vcc.ca
Costs of Quality

Testing
Inspection Inventory Correction
Calibration

Training Rework
Back Orders

Repeated Training Extra Operators

Downgraded Material Warranty Work
Reduced Sales
Overtime Extra Communica;ons
Indirect Labour
Machine Repairs Recalls

Discounted Products Slowed Production

25 2023-05-10 vcc.ca
Costs of Quality Strategy

The strategy for using COQ is quite simple:

1. Take direct attack on failure costs in an attempt to drive them to zero
2. Invest in the “right” prevention activities
3. Reduce appraisal costs according to the results achieved
4. Continuously evaluate and redirect prevention efforts to gain further improvements

This strategy is based on the premise that:

§ For each failure, there is a root cause
§ Causes are preventable
§ Prevention is always cheaper

26 2023-05-10 vcc.ca
Six Sigma Methodology

Six Sigma is a management strategy to use sta4s4cal tools and project work to
achieve breakthrough profitability and quantum gains in quality.

Source: The Six Sigma Green Belt Primer – Quality Council of Indiana

Project
Management Sta6s6cs
Tools Tools

27 2023-05-10 vcc.ca
What is Six Sigma?

StaDsDcs:
Project Management:
§ Data collec-on
§ Structured approach
§ Measurement system
§ Focused on customer
§ Data analysis
§
§
Rigorous closure
Data-driven 6σ § Change is sta-s-cally valid

Deployment:
§ Projects are top-driven
§ Linked to strategic objective
§ Management commitment
§ Full time professionals

28 2023-05-10 vcc.ca
DMAIC – A Logical flow to Problem Solving

Define the Problem Measure the Analyze the Process

Process

Control the Process Improve the Process

29 2023-05-10 vcc.ca
What is Lean?

Lean is a systema4c approach to iden4fying and elimina4ng waste (non-value-

added ac4vi4es) through con4nuous improvement by flowing the product at the
pull of the customer in pursuit of perfec4on.

Value Added
Activities

Non-value Added
Ac3vi3es
Source: The Na>onal Ins>tute of Standards and Technology (NIST)

30 2023-05-10 vcc.ca
What is Lean?

Lean seeks to eliminate or reduce waste by use of:

§ Teamwork with well-informed, cross-trained employees

§ Clean, organized, a well-marked workspace

§ Flow system instead of batch and queue

§ Pull system instead of push system

§ Reduced lead time though more efficient processing, setups and scheduling

Source: The certified Six Sigma Black Belt Handbook; T. M. Kubiak & Donald W. Benbow
31 2023-05-10 vcc.ca
The House of Lean

Customer-defined Value
Highest Quality
Lowest Cost
Delivery Shortest Lead Time Cost
JIT JIDOKA
Involvement
Flexible, motivated team
Just-In- members continually Quality at
Time seeking a better way the Source

StandardizaDon

Stability
32 2023-05-10 vcc.ca
Integration of Lean and Six Sigma

§ Six Sigma focuses on reducing process variation and enhancing process control,
whereas Lean drives out waste (non-value-added) and promotes work
standardization and flow.

§ Lean achieves its goals by using less technical tools such as kaizen, workplace
organization, and visual controls, whereas Six Sigma tends to use statistical data
analysis, design of experiments, and hypothesis tests.

33 2023-05-10 vcc.ca
Lean and the Six Sigma DMAIC Structure

Define Measure Analyze

§ Define Value § Process Cycle Efficiency § Value Stream Mapping (VSM)
§ House of Quality (QFD) § Lead & Takt 4me § Time Value Maps
§ Overall Equipment Effec4veness § Value Added Charts
§ Spaghetti Diagrams

Control Improve
§ Total Productive Maintenance § Single Minute Exchange of Dies
(TPM) (SMED)
§ Kanban § One Piece Flow
§ 5S § Error Proofing
§ Standardization of Processes

34 2023-05-10 vcc.ca
Building a Lean Six Sigma Program

§ Upper management commitment and dedication

§ Management awareness and communication

Process & Mindset &
Methodology Culture
§ Program management

§ Program control and reporting

§ Coaching and support

Tools &
Techniques
§ Training

35 2023-05-11 vcc.ca
The Lean Six Sigma Project Spectrum
From Leaner projects…
Local Improvement Projects
§ Rapid incremental improvements
§ Just do it approach
§ Smaller teams
§ Local scope
§ Lower project savings
§ Local deployment
§ Practical, cheaper solutions
36 2023-05-10
…to the more Six Sigma oriented
Advanced improvement projects
§ In-depth analysis
§ Larger teams with senior sponsorship
§ Broader scope
§ Strategically critical
§ Higher project savings
§ Local and company-wide deployment
§ Mixture of practical and sophisticated
solutions
vcc.ca
Where do Lean Six Sigma Projects come from?

Top
Down Bottom
Up

§ External VOC feedback § Internal VOC feedback

§ Strategic goals § Localized initiatives
§ Change programs § Employee suggestions

37 2023-05-10 vcc.ca
The Six Sigma Organiza7on

Responsibilities of Executives:
§ Set the challenge: achieve Six Sigma performance levels in products and processes

§ Establish the corporate-level goals and targets for Six Sigma

§ Determine the time frame for performance expectations

§ Establish how the Six Sigma initiative will initially be focused

§ Lead and facilitate change in organizational culture

38 2023-05-10 vcc.ca
The Six Sigma Organization

Responsibilities of Project Champions:

§ Facilitate the identification and prioritization of projects

§ Recruit, coach, and develop Black Belts

§ Remove barriers for Black Belts

§ Review projects

§ Expand projects across boundaries

§ Realize the gains by supporting Six Sigma project teams to achieve and hold the improvements by
implementing recommendations
39 2023-05-10 vcc.ca
The Six Sigma Organization

Responsibilities of Six Sigma Master Black Belts:

§ Responsible for the transfer of Six Sigma knowledge to the Black Belts and Green Belts

§ Teach Six Sigma and mentor Black Belts and Green Belts, coaching them through projects and
advising them in both the application of tools and the interpretation of data

§ Coach and mentor leadership on applications of Six Sigma to general business problems

§ Take lead on large projects, directing teams of Black Belts and/or Green Belts

40 2023-05-10 vcc.ca
The Six Sigma Organization

Responsibilities of Six Sigma Black Belts:

§ Teaching/Coaching: Provide training in new strategies and tools and provide one-on-one support
to local personnel.

§ Discovering: Find application opportunities for the Breakthrough Strategy, both internal and
external, (i.e. suppliers and customers

§ Identifying: Surface business opportunities through partnerships with other organizations

§ Managing Projects: Ensure projects deliver effective solutions in a timely manner

41 2023-05-10 vcc.ca
The Six Sigma Organization

Responsibilities of Six Sigma Green Belts:

§ Support Black Belts in completing projects

§ Apply Six Sigma tools in their area with help of Black Belts/Master Black Belts

§ Assist in project identification

§ Help process owners ensure improvements are sustained

42 2023-05-10 vcc.ca
The Six Sigma Organization

Responsibilities of Process Owners:

§ Own the process

§ Support Black Belts, Green Belts, and Project Teams

§ Remove obstacles

§ Communicate the vision to their employees

§ Sustain the gains

§ Identify opportunities for further Six Sigma projects

43 2023-05-10 vcc.ca
Tools

Process Improvement Product Development

Lean Tools
Tools Tools

Project Management Decision Making Root Cause Analysis

Tools Tools Tools

44 2023-05-10 vcc.ca
Process Improvement Tools

§ Fishbone Diagram §Pareto Chart

§ Process Map §Audit Plan

§ PFMEA §Checklist

§ SIPOC §DMAIC Roadmap

§ DOE Planning §PDCA Roadmap

45 2023-05-10 vcc.ca
Lean Tools

§ Value Stream Mapping § Waste Analysis

§ A3 § Gemba Walks

§ Work Element Time Study § Hoshin Planning

§ 5S § Total Preventive Maintenance (TPM)

§ Kanban & Pull System § Jidoka

§ SMED § Kaizen Events

46 2023-05-10 vcc.ca
Product Development Tools

§ DFMEA § PFMEA

§ Kano Model § Prototyping

§ Value Analysis § Value Engineering

§ Voice of Customer (VOC) § Quality Function Deployment (QFD)

§ SWOT Analysis § Process Development Planning (PDP)

47 2023-05-10 vcc.ca
Project Management Tools

§ Gantt Chart § RACI Chart

§ Meeting Minutes § Project Charter

§ Stakeholder Analysis § Scope Statement

§ Action Plans § AcZvity Network Diagram

§ Project Risk Assessment § Project Variance Analysis

48 2023-05-10 vcc.ca
Dabbawalas
How India’s 130-year-old food delivery system works

https://youtu.be/KDD32skx-zM

49 2023-05-10 vcc.ca
Discussion Questions

After watching the Dabbawalas video, please respond to the following:

1. What are they attempting to do? What are their strategic goals? And what is the stated mission?
2. Provide some analysis about the operational details:
a. How many deliveries per day?
b. How many dabbawalas?
c. How are they organized?
d. How centralized/de-centralized are they?
3. How is the system controlled? Or error prevented?

Please answer the questions in the forum – deadline to submit your answers and share your
thoughts is next week before the start of the next session

50 2023-05-10 vcc.ca