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Chapter 3

Philosophies
and
Frameworks

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, 2008 Thomson Higher Education Publishing

Leaders in the Quality


Revolution
W.

Edwards Deming
Joseph M. Juran
Philip B. Crosby
Armand V. Feigenbaum
Kaoru Ishikawa
Genichi Taguchi

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, 2008 Thomson Higher Education Publishing

Deming Chain Reaction


Improve quality
Costs decrease
Productivity improves
Increase market share with better
quality and lower prices
Stay in business
Provide jobs and more jobs
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, 2008 Thomson Higher Education Publishing

Key Idea
The Deming philosophy focuses on
continual improvements in product and
service quality by reducing uncertainty
and variability in design, manufacturing,
and service processes, driven by the
leadership of top management.

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, 2008 Thomson Higher Education Publishing

Demings System of Profound


Knowledge
Appreciation

for a system
Understanding variation
Theory of knowledge
Psychology

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, 2008 Thomson Higher Education Publishing

Systems
Most

organizational processes are


cross-functional
Parts of a system must work together
Every system must have a purpose
Management must optimize the
system as a whole

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, 2008 Thomson Higher Education Publishing

Key Idea
The aim of any system should be for all
stakeholdersstockholders, employees,
customers, community, and the
environmentto benefit over the long
term.

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, 2008 Thomson Higher Education Publishing

Variation
Many

sources of uncontrollable
variation exist in any process
Excessive variation results in product
failures, unhappy customers, and
unnecessary costs
Statistical methods can be used to
identify and quantify variation to help
understand it and lead to
improvements
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Theory of Knowledge
Knowledge

is not possible without

theory
Experience alone does not establish
a theory, it only describes
Theory shows cause-and-effect
relationships that can be used for
prediction

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Psychology
People

are motivated intrinsically and


extrinsically; intrinsic motivation is the
most powerful
Fear is demotivating
Managers should develop pride and joy
in work

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Demings 14 Points (Abridged)


(1 of 2)

1. Create and publish a company mission


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.

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Demings 14 Points (2 of 2)
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.
www.deming.org

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Jurans Quality Trilogy


Quality

planning
Quality control
Quality improvement

www.juran.com
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Jurans Quality Trilogy


consists

of quality planning, quality


control, and quality improvement.
Quality Planning provides a system
that is capable of meeting quality
standards.
Quality Control is used to determine
when corrective action is required.
Quality Improvement seeks better
ways of doing things.
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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.
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Phillip B. Crosby

Quality is free . . .
Quality is free. Its not a gift, but it is
free. What costs money are the unquality
things -- all the actions that involve not
doing jobs right the first time.

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Philip B. Crosby
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
www.philipcrosby.com
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A.V. Feigenbaum
Three

Steps to Quality

Quality

Leadership, with a strong


focus on planning
Modern Quality Technology, involving
the entire work force
Organizational Commitment,
supported by continuous training and
motivation

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Kaoru Ishikawa
Instrumental

in developing Japanese
quality strategy
Influenced participative approaches
involving all workers
Advocated the use of simple visual
tools and statistical techniques

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Genichi Taguchi

Pioneered a new perspective on quality based


on the economic value of being on target and
reducing variation and dispelling the
traditional view of conformance to
specifications:

Loss

No Loss
0.480

0.500

Loss
0.520

Tolerance
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Malcolm Baldrige National


Quality Award
Help

improve quality in
U.S. companies
Recognize achievements
of excellent firms and
provide examples to others
Establish criteria for
evaluating quality efforts
Provide guidance for other
American companies

Malcolm Baldrige,
former U.S.
Secretary of
Commerce

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Criteria for Performance


Excellence
Leadership
Strategic

Planning
Customer and Market Focus
Measurement, Analysis, and
Knowledge Management
Human Resource Focus
Process Management
Business Results
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, 2008 Thomson Higher Education Publishing

Baldrige
Award trophy

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The Baldrige Framework


A Systems Perspective
Organizational Profile:
Environment, Relationships, and
Challenges

2
Strategic
Planning

5
Human
Resource
Focus
7
Business
Results

1
Leadership
3
Customer &
Market
Focus

6
Process
Management

4
Measurement, Analysis, and Knowledge Management
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Key Idea
The Baldrige criteria define both an
integrated infrastructure and a set of
fundamental practices for a highperformance management system.

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Criteria Evolution (1 of 2)
From

quality assurance and strategic


quality planning to a focus on process
management and overall strategic planning
From a focus on current customers to a
focus on current and future customers and
markets
From human resource utilization to human
resource development and management
From supplier quality to supplier
partnerships
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Criteria Evolution (2 of 2)
From individual quality improvement activities
to cycles of evaluation and improvement in all
key areas
From data analysis of quality efforts to an
aggregate, integrated organizational level
review of key company data
From results that focus on limited financial
performance to a focus on a composite of
business results, including customer
satisfaction and financial, product, service,
and strategic performance

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, 2008 Thomson Higher Education Publishing

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Key Idea
Approaches that organizations use to
address the Baldrige criteria
requirements need not be formal or
complex, and can easily be implemented
by small businesses.

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Baldrige Award Evaluation


Process
Receive Applications
Stage 1
Independent Review

Judges Select for


Consensus Review?

No

Feedback report
to applicant

No

Feedback report
to applicant

Stage 2
Consensus Review
Judges Select for
Site Visit Review?

Stage 3
Site Visit Review
Stage 4
Judges Recommend Award
Recipients to
NIST Director/DOC

Feedback report
to applicant

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Self Assessment
A primary goal of the Baldrige program is
to encourage many organizations to
improve on their own by equipping them
with a standard template for measuring
their performance and their progress
toward performance excellence.
Boeing Airlift & Tanker
Programs 1998 recipient

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Deming Prize
Instituted 1951 by Union of Japanese
Scientists and Engineers (JUSE)
Several categories including prizes for
individuals, factories, small companies, and
Deming application prize
American company winners include Florida
Power & Light and AT&T Power Systems
Division

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Other Quality Awards


European

Quality Award
Canadian Awards for Business
Excellence
Australian Business Excellence Award
Chinese National Quality Award (New)

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ISO 9000:2000
Quality

system standards adopted by


International Organization for
Standardization in 1987; revised in 1994
and 2000
Technical specifications and criteria to be
used as rules, guidelines, or definitions of
characteristics to ensure that materials,
products, processes, and services are fit
for their purpose.
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Key Idea
ISO 9000 defines quality system
standards, based on the premise that
certain generic characteristics of
management practices can be
standardized, and that a well-designed,
well-implemented, and carefully managed
quality system provides confidence that
the out-puts will meet customer
expectations and requirements.
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Objectives of ISO Standards


Achieve, maintain, and continuously improve
product quality
Improve quality of operations to continually
meet customers and stakeholders needs
Provide confidence to internal management
and other employees that quality system
requirements are being fulfilled
Provide confidence to customers and other
stakeholders that quality requirements are
being achieved

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Structure of ISO 9000


Standards
21

elements organized into four major


sections:
Management

Responsibility
Resource Management
Product Realization
Measurement, Analysis, and Improvement

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ISO 9000:2000 Quality


Management Principles
1.
2.
3.
4.
5.
6.
7.
8.

Customer Focus
Leadership
Involvement of People
Process Approach
System Approach to Management
Continual Improvement
Factual Approach to Decision Making
Mutually Beneficial Supplier Relationships
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Key Idea
ISO 9000 provides a set of good basic
practices for initiating a quality system,
and is an excellent starting point for
companies with no formal quality
assurance program.

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Six Sigma
Based

on a statistical measure that


equates to 3.4 or fewer errors or
defects per million opportunities
Pioneered by Motorola in the mid-1980s
and popularized by the success of
General Electric

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Key Idea
Six Sigma can be described as a
business improvement approach that
seeks to find and eliminate causes of
defects and errors in manufacturing and
service processes by focusing on outputs
that are critical to customers and a clear
financial return for the organization.

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Key Concepts of Six Sigma


(1 of 2)

Think in terms of key business processes,


customer requirements, and overall strategic
objectives.
Focus on corporate sponsors responsible for
championing projects, support team activities,
help to overcome resistance to change, and
obtaining resources.
Emphasize such quantifiable measures as
defects per million opportunities (dpmo) that
can be applied to all parts of an organization

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Key Concepts of Six Sigma


(2 of 2)

Ensure that appropriate metrics are identified early


and focus on business results, thereby providing
incentives and accountability.
Provide extensive training followed by project team
deployment
Create highly qualified process improvement
experts (green belts, black belts, and master
black belts) who can apply improvement tools and
lead teams.
Set stretch objectives for improvement.

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Key Idea
Although different, Baldrige and Six
Sigma are highly compatible and can
each have a place in the management
system of a successful organization.

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