10 Pages deadline 5 march ( Need In budget )

attached

Course: BUSI4302A – Management of Quality, Winter 2022

Project is worth 25% of final grade.

Due Date: All written reports are due at the beginning of class on March 15th.

Written report: A total of 8 to 10 pages, Times New Roman, font size of 12, APA style, double spaced. The total of 8 to 10 pages does not include the references, the cover page and table of contents. The report should include an introduction (highlighting the quality related issues/ areas of opportunities faced by the organization), body of paper with various relevant headings such as customer focus, workforce focus, process focus, and a section titled ‘conclusions and recommendations’. The conclusions and recommendations should be at least one page in length and must include as least two of your ideas with detailed explanations of what you think can be done to further improve the organization with regards to delivering a quality output. This report should answer the following questions: i) What is the mission/ role of the organization? ii) What are some of the issues/opportunities that it currently faces? iii) What can be done to improve the organization in delivery of a quality output?

Please e-mail me your topic by Monday, February 15th so that I can give the ok on the topic and more than one student should not be working on the same topic.

Examples of Topics:

American Society of Quality (one of the divisions)

Malcolm Baldrige Award

Overview/Analysis of an ISO standard e.g. ISO 9001, ISO/TS16949, ISO 13485, etc

Quality in a specific Manufacturing Organization

Quality in a specific area of the Health Care System

Quality in a specific area of our Education System

Quality in a specific department of the Government Sector

Quality in a not-for-profit organization

Canadian Awards for Business Excellence

Service Quality at a specific organization

The Deming Prize

The Shingo Institute

See below for rubric for the written report.

Rubric for Grading of the Written Report (total 25 points)

Criteria	D (below 60)	C (60 – 69)	B (70-79)	A (80 and above)
Organization (2 points)	Writing lacks logical organization. It shows some coherence but ideas lack unity. Serious errors.	Writing is coherent and logically organized. Some points remain misplaced and stray from the topic.	Writing is coherent and logically organized with transitions used between ideas and paragraphs to create coherence.	Writing shows high degree of attention to logic of points. Unity leads the reader to the conclusion and stirs thought regarding the topic.
Content and Development (15 points)	Shows some thinking and reasoning but most ideas are underdeveloped and unoriginal. Main points lack detailed development. Ideas are vague with little evidence of critical thinking.	Content indicates thinking and reasoning applied with original thought on a few ideas. Main points are present with limited detail and development. Some critical thinking is present.	Content indicates original thinking and develops ideas with sufficient and firm evidence. Main points developed with supporting details. Critical thinking is weaved into points Clearly identifies the quality issues faced by the organization.	Content indicates synthesis of ideas, in- depth analysis and evidences original thought and support for the topic. Main points well developed with high quality and quantity support. Reveals high degree of critical thinking. Clearly identifies the quality issues faced by the organization along with relevant conclusions and recommendations.
Grammar and Mechanics (3 points)	Spelling, punctuation, and grammatical errors create distraction, making reading difficult; fragments, run-ons.	Most spelling, punctuation, and grammar correct allowing reader to progress though essay. Some errors remain.	Essay has few spelling, punctuation, and grammatical errors allowing reader to follow ideas clearly.	Essay is free of spelling, punctuation, and grammatical errors; absent of fragments, comma splices, run-ons.
Style (2 points)	Mostly in elementary form with little or no variety in sentence structure, diction, rhetorical devices or emphasis.	Usage of some variety in sentence patterns, diction, and rhetorical devices.	Tone is appropriate and rhetorical devices used to enhance content; sentence variety used effectively.	Shows outstanding style; rhetorical devices and tone used effectively; creative use of sentence structure and coordination.
Format (3 points)	Fails to follow format and assignment requirements; incorrect margins, spacing and indentation; neatness of essay needs attention. No cover page nor table of contents.	Meets format and assignment requirements; generally correct margins, spacing, and indentations; essay is neat but may have some assembly errors. Has a cover page and table of contents.	Meets format and assignment requirements; margins, spacing, and indentations are correct; essay is neat and correctly assembled. Has a cover page and table of contents. Proper referencing	Meets all assignment requirements and evidences attention to detail; all margins, spacing and indentations are correct; has a professional look. Has a cover page and table of contents. Proper referencing.

Carleton University

BUSI 4302A

Winter 2022

Management of Quality

Instructor:	Lorraine Fraser l
Course Times:	Tuesday 6:00 p.m. to 8:50 p.m.
Office Hours:	By appointment only on Mondays between 5:00 p.m. and 6:00 p.m. Email for appointment
Course Objectives:	This course focuses on three main concepts: i) the foundation principles of quality management including its history, concepts, philosophies, management systems, and impact on competitive and financial returns; ii) tools and techniques to drive and support design, control, and improvement of quality; iii) and the organizational view of performance excellence as reflected by the Malcolm Baldrige Criteria. The management system of quality is explained which is concerned with planning the organizational systems for performance excellence, meeting and exceeding customer needs, managing the change in organizational culture towards quality, and leading and sustaining performance excellence efforts.
Learning Outcomes:	The student will reliably demonstrate the ability to: i) define quality and understand the various perspectives from which quality is viewed; ii) understand quality management philosophies of Deming, Juran, Crosby, Ishikawa, Feigenbaum and their contributions to modern day quality; iii) understand customer driven excellence; iv) relate the concepts of workforce satisfaction and optimized processes to customer satisfaction, and organizational success; v) use the appropriate statistical tools and other analytical techniques for analyzing data; solving problems; designing, controlling and improving processes; and reducing the potential for failure; vi) understand how process improvement methodologies and tools provide the foundations for modern Six Sigma approaches; vii) understand the components of performance excellence including the ISO 9001 Quality Management Standard and the Malcolm Baldrige Framework for Performance Excellence.
Calendar description and Prerequisites:	Quality concepts and methods surrounding the definition, mapping, implementation, improvement of business processes in organizations and global supply chains. Prerequisite: Third-year standing BUSI 2301 with a grade of C or higher and STAT 2606 with a grade of C- or higher.
Course Material:	Textbook: James R. Evans and William K. Lindsay, Managing for Quality and Performance Excellence, 11th Edition, Cengage, Boston, MA 02210, ISBN 978-0-357-44203-6
Course Evaluation:	Grade Distribution: Class Attendance and Class Contribution 10% Project 25% Mid-Term Exam 25% Final Exam 40% Class Attendance and Contribution: Class attendance is essential for engaging with the course material and interacting with the instructor and classmates, and in turn this creates the class experience. Attendance will be logged each class. Participating in class activities and discussion is essential for the student’s learning experience and is encouraged and expected. Participation can be in the form of discussing issues and questions raised by instructor or classmates, generating ideas related to the readings, responding to others’ ideas constructively, commenting, building on others’ contributions. Reading the chapters and other listed materials prior to class will allow for a positive participation experience. Project: Students will be required to write a written report on an organization of their choice demonstrating the organization’s focus on customers, workforce, and processes. Topic approval needs to be obtained from the professor so that no students work on the same organization. The written report is an individual effort and a rubric for the grading of the responses will be provided. Midterm Exam: The exam is closed book and no notes are allowed for the exam. The exam will consist of multiple choice, true/false, and short answer questions. A strict policy towards exam deferral is imposed. Deferring a midterm exam requires a formal application process through the undergraduate students’ office no later than five (5) calendar days after the midterm date. The reason for missing a midterm (and application for a deferred) is only valid with a legitimate excuse, as mentioned on the university regulations. Final Exam: The exam is closed book and no notes are allowed for the exam. The final exam will be comprehensive but will place greater emphasis on post mid-term topics. Both quantitative and qualitative questions can be expected. The scheduling office will determine the student’s eligibility for a deferred final examination. Students are advised that exam papers will not be returned after being marked but will be available for consultation with the instructor.
General Guidelines:	In order to develop a thorough understanding of the subject matter, the chapters in the textbook will have to be studied. Relying on the presentation slides alone will not allow for an adequate understanding of the subject matter.

Tentative Course Schedule

Week

Date

Topic

1

01/11/2022

Introductions
Chapter 1 – Introduction to Quality
‘Skilled Care Pharmacy’ p. 42 – Discussion

2

01/18/2022

Chapter 2 – Foundations of Quality Management
‘Nashville Custom Guitars’ p. 90 – Discussion
Chapter 3 – Customer Focus

3

01/25/2022

Chapter 3 – Customer Focus (continued)
Chapter 4 – Workforce Focus
‘Harley Davidson’ p. 133 – Discussion

4

02/01/2022

Chapter 5 – Process Focus
‘IBM’s Integrated Supply Chain’ p. 243 – Discussion
Chapter 9 – Process Improvement and Six Sigma

5

02/08/2022

Chapter 9 – Process Improvement and Six Sigma (continued)
Chapter 10 – Baldrige Framework for Performance Excellence

6

02/15/2022

Mid-Term Exam (Chapters 1, 2, 3, 4, 5, 9, 10)

7

02/22/2022

Winter Break – Classes Suspended

8

03/01/2022

Chapter 6 – Statistical Methods in Quality Management

9

03/08/2022

Chapter 6 – Statistical Methods in Quality Management (continued)

10

03/15/2022

Chapter 7 – Design for Quality and Product Excellence

11

03/22/2022

Chapter 8 – Measuring and Controlling Quality

12

03/29/2022

Chapter 11 – Strategy and Performance Excellence
Chapter 12 – Measurement and Knowledge Management

13

04/05/2022

Chapter 13 – Leadership for Performance Excellence
Chapter 14 – Building and Sustaining Quality & Performance Excellence

04/12/2022

No Class – Exam Preparation

04/21 – 05/02

Final Exam as scheduled by the university (Chapters 6, 7, 8, 11, 12, 13, 14)

Modality – Hyflex

Contribution to Learning Goals of the Program (BCom, BIB):

Program Learning Goal

Competencies Not Covered

Competencies Introduced (only)

Competencies Taught But Not Assessed

Competencies Taught and Assessed

CHECK (X) ONE PER ROW

BC1 Knowledge

Graduates will be skilled in applying foundational business knowledge to appropriate business contexts.

X

BC2 Collaboration

Graduates will be collaborative and effective contributors in team environments that respect the experience, expertise and interest of all members.

X

BC3 Critical Thinking

Graduates will be discerning critical thinkers, able to discuss different viewpoints, challenge biases and assumptions, and draw conclusions based on analysis and evaluation.

X

BC4 Communication

Graduates will be effective and persuasive in their communications.

X

BI5 Global Awareness (BIB ONLY)

Graduates will be globally-minded.

X

Additional Information

Course Sharing Websites
Materials created for this course (including presentations and posted notes, labs, case studies, assignments and exams) remain the intellectual property of the author(s). They are intended for personal use and may not be reproduced or redistributed without prior written consent of the author(s).

Required calculator in BUSI course examinations
If you are purchasing a calculator, we recommend any one of the following options: Texas Instruments BA II Plus (including Pro Model), Hewlett Packard HP 12C (including Platinum model), Staples Financial Calculator, Sharp EL-738C & Hewlett Packard HP 10bII

Group work
The Sprott School of Business encourages group assignments in the school for several reasons. They provide you with opportunities to develop and enhance interpersonal, communication, leadership, follower-ship and other group skills. Group assignments are also good for learning integrative skills for putting together a complex task. Your professor may assign one or more group tasks/assignments/projects in this course. Before embarking on a specific problem as a group, it is your responsibility to ensure that the problem is meant to be a group assignment and not an individual one.
In accordance with the Carleton University Undergraduate Calendar (p 34), the letter grades assigned in this course will have the following percentage equivalents:
A+ = 90-100 B+ = 77-79 C+ = 67-69 D+ = 57-59
A = 85-89 B = 73-76 C = 63-66 D = 53-56
A – = 80-84 B – = 70-72 C – = 60-62 D – = 50-52
F = Below 50
Grades entered by Registrar:
WDN = Withdrawn from the course
DEF = Deferred

Academic Regulations
University rules regarding registration, withdrawal, appealing marks, and most anything else you might need to know can be found on the university’s website, here:

http://calendar.carleton.ca/undergrad/regulations/academicregulationsoftheuniversity/

Requests for Academic Accommodation
You may need special arrangements to meet your academic obligations during the term. For an accommodation request, the processes are as follows:

Pregnancy Accommodation
Please contact your instructor with any requests for academic accommodation during the first two weeks of class, or as soon as possible after the need for accommodation is known to exist. For more details, visit the Equity Services website:
carleton.ca/equity/wp-content/uploads/Student-Guide-to-Academic-Accommodation

Religious obligation
Please contact your instructor with any requests for academic accommodation during the first two weeks of class, or as soon as possible after the need for accommodation is known to exist. For more details, visit the Equity Services website:
carleton.ca/equity/wp-content/uploads/Student-Guide-to-Academic-Accommodation

Academic Accommodations for Students with Disabilities
If you have a documented disability requiring academic accommodations in this course, please contact the Paul Menton Centre for Students with Disabilities (PMC) at 613-520-6608 or
pmc@carleton.ca
for a formal evaluation or contact your PMC coordinator to send your instructor your Letter of Accommodation at the beginning of the term. You must also contact the PMC no later than two weeks before the first in-class scheduled test or exam requiring accommodation (if applicable). After requesting accommodation from PMC, meet with your instructor as soon as possible to ensure accommodation arrangements are made.
carleton.ca/pmc

Survivors of Sexual Violence
As a community, Carleton University is committed to maintaining a positive learning, working and living environment where sexual violence will not be tolerated, and its survivors are supported through academic accommodations as per Carleton’s Sexual Violence Policy. For more information about the services available at the university and to obtain information about sexual violence and/or support, visit:
carleton.ca/sexual-violence-support

Accommodation for Student Activities
Carleton University recognizes the substantial benefits, both to the individual student and for the university, that result from a student participating in activities beyond the classroom experience. Reasonable accommodation must be provided to students who compete or perform at the national or international level. Please contact your instructor with any requests for academic accommodation during the first two weeks of class, or as soon as possible after the need for accommodation is known to exist.
https://carleton.ca/senate/wp-content/uploads/Accommodation-for-Student-Activities-1

For more information on academic accommodation, please contact the departmental administrator or visit:
students.carleton.ca/course-outline

Academic Integrity
Violations of academic integrity are a serious academic offence. Violations of academic integrity – presenting another’s ideas, arguments, words or images as your own, using unauthorized material, misrepresentation, fabricating or misrepresenting research data, unauthorized co-operation or collaboration or completing work for another student – weaken the quality of the degree and will not be tolerated.
Process: If an alleged violation occurs, all relevant documentation will be forwarded to the Dean. If the allegation proves true, the penalties may include; a grade of Failure on the submitted work and/or course; academic probation; a refusal of permission to continue or to register in a specific degree program; suspension from full-time studies; suspension from all studies at Carleton; expulsion from Carleton, amongst others.
For a first offence, at a minimum, the penalty assigned will normally be a

zero on the submitted work and at least a minimum full grade reduction of the final course grade. For a second offence, at a minimum, the penalty assigned will normally lead to a suspension from studies.

Students are expected to familiarize themselves with and follow the Carleton University Student Academic Integrity Policy which is available, along with resources for compliance at:

Academic Integrity

.

Sprott Student Services
The Sprott Undergraduate Student Services Office offers program advising and overall student success support. Our team is available to discuss your academic goals and your program progression plans. We can also work with you to develop strategies for success, including study skills for Business. If you experience any difficulty this term or if you would like to access support, please contact our team at
bcom@sprott.carleton.ca
or at
bib@sprott.carleton.ca
.

Centre for Student Academic Support
The Centre for Student Academic Support (CSAS) is a centralized collection of learning support services designed to help students achieve their goals and improve their learning both inside and outside the classroom. CSAS offers academic assistance with course content, academic writing and skills development. Visit CSAS on the 4th floor of MacOdrum Library or online at: carleton.ca/csas.

Important Information:
– Students must always retain a copy of all work that is submitted.
– All final grades are subject to the Dean’s approval.
– For us to respond to your emails, we need to see your full name, CU ID, and the email must be written from your valid CARLETON address. Therefore, in order to respond to your inquiries, please send all email from your Carleton CMail account. If you do not have or have yet to activate this account, you may wish to do so by visiting

New Students

Chapter 1

Introduction to Quality

2
The Business Imperative
“The first job we have is to turn out quality merchandise that consumers will buy and keep on buying. If we produce it efficiently and economically, we will earn a profit, in which you will share.”
– William Cooper Procter
Quality, productivity, and cost remain imperatives for modern organizations.

Importance of Quality
Quality is uniquely positioned to accelerate organizational growth through better execution and alignment
Quality provides the voice of the customer critical to developing innovative products and services.
Quality can provide an organization with a competitive edge
“No quality, no sales. No sales, no profit. No profit, no jobs.”
3

Quality Profile – Motorola, Inc.
Leader in the U.S. quality revolution during the 1980s
Pioneer in continual reduction of defects and cycle times
Exceptional practices in managing human assets, sharing data and information with employees, customers, and suppliers, and aligning all its business processes with key organizational objectives.
4

Quality Profile – PricewaterhouseCoopers Public Sector Practice
Business advisory services, including risk consulting, management consulting, and technology consulting.
Four strategic goals focused on profit, workforce, customers, and operations, which are aligned to strategic objectives, strategic advantages, strategic challenges, short- and long-term plans, and performance projections/targets.
High customer loyalty and low workforce turnover results.
5

Defining Quality
Perfection
Consistency
Eliminating waste
Fast delivery
Compliance with policies and procedures
Providing a good, usable product
Doing it right the first time
Delighting or pleasing customers
Total customer service and satisfaction
6

7
Formal Definitions of Quality
Transcendent Perspective: excellence
Product Perspective: quantities of product attributes
User Perspective: fitness for intended use
Value Perspective: quality vs. price
Manufacturing Perspective: conformance to specifications
Customer Perspective: meeting or exceeding customer expectations

8
Customers
Consumers
Ultimate buyers of goods and services
External customers
Business-to-business
Internal customers
Anyone who receives goods or services from someone else within an organization

10
History of Quality Management
(1 of 4)
Ancient History
Zhou Dynasty in China
The Age of Craftsmanship
Skilled workers during the Middle Ages
Industrial Revolution
Early 20th Century
Separate quality departments
Ford Motor Company
Statistical methods and quality assurance
Professional societies and publications

11
History of Quality Management
(2 of 4)
Post World War II
Evolution of quality management in Japan
W. Edwards Deming and Joseph Juran
U.S. “Quality Revolution”
Quality crisis around 1980
Growth of product quality awareness in manufacturing industries
Rapid Growth in Business
Malcolm Baldrige National Quality Award (1987)
Books, consulting, training

12
History of Quality Management
(3 of 4)
From Product Quality to Total Quality Management
“Little Q” vs. “Big Q” and TQM
Early Management Failures
Cynicism and disinterest
“No, TQM isn’t dead. TQM failures just prove that bad management is still alive and kicking.”
Performance Excellence
Focus on customer value, organizational sustainability, improvement of effectiveness and capabilities, and organizational and personal learning

History of Quality Management
(4 of 4)
Emergence of Six Sigma
a customer-focused, results-oriented approach to business improvement
Globalization of Quality
National quality efforts
No significant differences among regions around the world
Current and future challenges
Continue to apply the principles of quality and performance excellence.
Quality is “a race without a finish line.”
13

Growth of Modern Quality Management
14

Manufacturing
quality
Improved
product designs
Service
quality
Performance
excellence

15
Contemporary Influences on Quality
Global Responsibility
Consumer Awareness
Globalization
Increasing Rate of Change
Workforce of the Future
Aging Population
Twenty-first Century Quality
Innovation

Quality in Marketing
17
Marketing and sales personnel are responsible for determining the needs and expectations of consumers.

Quality in Product Design
18
Product design and engineering functions develop technical specifications for products and production processes to meet the requirements determined by the marketing function.

Quality in Purchasing
19
A purchasing agent should not simply be responsible for low-cost procurement, but should maintain a clear focus on the quality of purchased goods and materials.

Quality in Production
Planning & Scheduling
20
Poor quality often results from time pressures caused by insufficient planning and scheduling.

Quality in Manufacturing and Assembly
21
Both technology and people are essential to high-quality manufacturing.

Quality in Process Design
22
Manufacturing processes must be capable of producing output that meets specifications consistently.

Quality in Finished Goods Inspection and Testing
23
The purposes of final product inspection are to judge the quality of manufacturing, to discover and help to resolve production problems that may arise, and to ensure that no defective items reach the customer.

Quality in Installation and Service
24
Service after the sale is one of the most important factors in establishing customer perception of quality and customer loyalty.

Quality in Services
Service is defined as “any primary or complementary activity that does not directly produce a physical product – that is, the non-goods part of the transaction between buyer (customer) and seller (provider).”
25

Critical Differences Between Service and Manufacturing (1 of 2)
Customer needs and performance standards are more difficult to identify and measure
Services requires a higher degree of customization
Output is intangible
26

Critical Differences Between Service and Manufacturing (2 of 2)
Services are produced and consumed simultaneously
Customers are often involved in actual process
Services are more labor-intensive than manufacturing
Services handle large numbers of transactions
27

Components of Service Quality
People
“If we take care of our people, they will take care of our customers.”
Technology
Computers and information technology
E-commerce
28

Quality in Business Support Functions
Finance and Accounting
Budgeting, cost of quality
Legal Services
Liability
Quality Assurance
Coaching and special studies
29

30
Competitive Advantage
Is driven by customer wants and needs
Makes significant contribution to business success
Matches organization’s unique resources with opportunities
Is durable and lasting
Provides basis for further improvement
Provides direction and motivation
Quality supports each of these characteristics

32
Quality and Business Results
Hendricks and Singhal study of quality award winners
Performance results of Baldrige Award recipients
Example: The overall Net Promoter (NP) scores (a loyalty metric defined by the level of repeat sales and referrals) for MEDRAD, a manufacturer of medical imaging devices, were consistently 60 percent or higher compared to the 50 percent or higher marks for other organizations nationwide. MEDRAD’s global customer satisfaction ratings using the NP system steadily increased from 50 percent to 63 percent, surpassing the best-in-class benchmark of 50 percent.

33
Quality and Personal Values
Personal initiative has a positive impact on business success
Quality-focused individuals often exceed customer expectations
Quality begins with personal attitudes
Attitudes can be changed through awareness and effort (e.g., personal quality checklists)

34
Unless quality is internalized at the personal level, it will never become rooted in the culture of an organization.
Thus, quality must begin at a personal level (and that means you!).

Chapter 4

Workforce Focus

Toyota Georgetown
“We’ve got nothing, technology-wise, that anyone else can’t have. There’s no secret Toyota Quality Machine out there. The quality machine is the workforce — the team members on the paint line, the suppliers, the engineers — everybody who has a hand in production here takes the attitude that we’re making world-class vehicles.”
2

Workforce
…everyone who is actively involved in accomplishing the work of an organization. This encompasses paid employees as well as volunteers and contract employees, and includes team leaders, supervisors, and managers at all levels.
Many companies refer to their employees as “associates” or “partners” to signify the importance that people have in driving business performance.
3

Workforce Focus in ISO 9000
Personnel performing work affecting product quality shall be competent on the basis of appropriate education, training, skills, and experience.
Organizations should determine the level of competence that employees need, provide training or other means to ensure competency, evaluate the effectiveness of training or other actions taken, ensure that employees are aware of how their work contributes to quality objectives, and maintain appropriate records of education, training, and experience.
The standards address the work environment from the standpoint of providing buildings, workspace, utilities, equipment, and supporting services needed to achieve conformity to product requirements, as well as determining and managing the work environment, including safety, ergonomics, and environmental factors.
4

Key Workforce-Focused Practices for Performance Excellence (1 of 2)
Understand the key factors that drive workforce engagement, satisfaction, and motivation.
Design and manage work and jobs to promote effective communication, cooperation, skill sharing, empowerment, innovation, and the ability to benefit from diverse ideas and thinking of employees and develop an organizational culture conducive to high performance and motivation.
Make appropriate investments in development and learning, both for the workforce and the organization’s leaders.
Create an environment that ensures and improves workplace health, safety, and security, and supports the workforce via policies, services, and benefits.
5

Key Workforce-Focused Practices for Performance Excellence (2 of 2)
Develop a performance management system based on compensation, recognition, reward, and incentives that supports high performance work and workforce engagement.
Assess workforce engagement and satisfaction and use results for improvement.
Assess workforce capability and capacity needs and use the results to capitalize on core competencies, address strategic challenges, recruit and retain skilled and competent people, and accomplish the work of the organization.
Manage career progression for the entire workforce and succession planning for management and leadership positions.
6

Quality Profile: VACSP
The Veterans Affairs Cooperative Studies Program (VACSP) Clinical Research Pharmacy Coordinating Center (the Center) is a federal government organization that supports clinical trials targeting current health issues for America’s veterans.
The Center sees engagement as the single most important criterion for workforce satisfaction.
Excellence in the workplace, superior customer service, and personal involvement in organizational improvement are rewarded through the Center’s performance management system with visible, tangible benefits.
7

Quality Profile: PRO-TEC Coating Company
A joint venture between United States Steel Corporation and Kobe Steel Ltd. of Japan, providing coated sheet steel primarily to the U.S. automotive industry.
Culture centered around three fundamental concepts—ownership, responsibility, and accountability.
Associates work in self-directed teams and are empowered, innovative leaders who fix problems as they are identified.
8

Evolution of Workforce Management
Taylor system and scientific management
Improved productivity
Changed manufacturing work into series of mundane and mindless tasks
Promulgated adversarial relationships between labor and management
Failed to exploit the knowledge and creativity of the workforce
9

Workforce Management
Workforce management (which has also been widely known as human resource management, or HRM) consists of those activities designed to provide for and coordinate the people of an organization.
determining the organization’s workforce needs;
assisting in the design of work systems;
recruiting, selecting, training and developing, counseling, motivating, and rewarding employees;
acting as a liaison with unions and government organizations; and
handling other matters of employee well-being.
10

Strategic Human Resource Management
… concerned with the contributions HR strategies make to organizational effectiveness, and how these contributions are accomplished.
It involves designing and implementing a set of internally consistent policies and practices to ensure that an organization’s human capital (employees’ collective knowledge, skills, and abilities) contributes to overall business objectives.
11

High Performance Work Culture
Performance – the extent to which an individual contributes to achieving the goals and objectives of an organization.
High-performance work – work approaches used to systematically pursue ever-higher levels of overall organizational and human performance.
Characterized by:
flexibility
innovation
knowledge and skill sharing
alignment with organizational directions, customer focus, and rapid response to changing business needs and marketplace requirements
12

“Conditions of Collaboration” in a High Performance Work Culture
Respect
Aligned values
Shared purpose
Communication
Trust
13

Workforce Engagement
… the extent of workforce commitment, both emotional and intellectual, to accomplishing the work, mission, and vision of the organization. Engaged workers
find personal meaning and motivation in their work,
have a strong emotional bond to their organization, are actively involved in and committed to their work,
feel that their jobs are important, know that their opinions and ideas have value, and
often go beyond their immediate job responsibilities for the good of the organization.
14

Advantages of Workforce Engagement
Replaces the adversarial mentality with trust and cooperation
Develops the skills and leadership capability of individuals, creating a sense of mission and fostering trust
Increases employee morale and commitment to the organization
Fosters creativity and innovation, the source of competitive advantage
Helps people understand quality principles and instills these principles into the corporate culture
Allows employees to solve problems at the source immediately
Improves quality and productivity
16

Top Drivers of Workforce Engagement
1. Commitment to organizational values.
2. Knowing that customers are satisfied with products and services.
3. Belief that opinions count.
4. Clearly understanding work expectations.
5. Understanding of how personal contributions help meet customer needs.
6. Being recognized and rewarded fairly.
7. Knowing that senior leaders value the workforce.
8. Being treated equally with respect.
9. Being able to concentrate on the job and work processes.
10. Alignment of personal work objectives to work plans.
17

Employee Involvement (EI)
Any activity by which employees participate in work-related decisions and improvement activities, with the objectives of tapping the creative energies of all employees and improving their motivation.
Example: employee suggestion system – a management tool for the submission, evaluation, and implementation of an employee’s idea to save cost, increase quality, or improve other elements of work such as safety.
18

Motivation
Motivation – an individual’s response to a felt need
Theories
Content Theories (Maslow; MacGregor; Herzberg)
Process Theories (Vroom; Porter & Lawler)
Environmentally-based Theories (Skinner; Adams; Bandura, Snyder, & Williams)
19

Designing High-Performance Work Systems
Work and Job Design
Empowerment
Teamwork
Work Environment
Workforce Learning and Development
Compensation and Recognition
Performance Management
21

Work and Job Design
Work design refers to how employees are organized in formal and informal units, such as departments and teams.
Job design refers to responsibilities and tasks assigned to individuals.
22

Hackman-Oldham Model
The model proposes that five core characteristics of job design (task significance, task identity, skill variety, autonomy, and feedback from the job) influence three critical psychological states (experienced meaningfulness, experienced responsibility, and knowledge of results), which in turn, drive work outcomes (employee motivation, growth satisfaction, overall job satisfaction, and work effectiveness).
23

Enhancing Work Design
Job enlargement – expanding workers’ jobs
Job rotation – having workers learn several tasks and rotate among them
Job enrichment – granting more authority, responsibility, and autonomy
24

Empowerment
Giving people authority to make decisions based on what they feel is right, to have control over their work, to take risks and learn from mistakes, and to promote change.
“A sincere belief and trust in people.”
25

Successful Empowerment
Provide education, resources, and encouragement
Remove restrictive policies/procedures
Foster an atmosphere of trust
Share information freely
Make work valuable
Train managers in “hands-off” leadership
Train employees in allowed latitude
26

Teams
Team – a small number of people with complementary skills who are committed to a common purpose, set of performance goals, and approach for which they hold themselves mutually accountable
27

Types of Teams
Management teams
Natural work teams
Self managed teams
Virtual teams
Quality circles
Problem solving teams
Project teams
28

Team Skill Requirements
Conflict management and resolution
Team management
Leadership skills
Decision making
Communication
Negotiation
Cross-cultural training
30

Life Cycle of Teams
Forming takes place when the team is introduced, meets together, and explores issues of their new assignment.
Storming occurs when team members disagree on team roles and challenge the way that the team will function.
Norming takes place when the issues of the previous stage have been worked out, and team members agree on roles, ground rules, and acceptable behavior when doing the work of the team.
Performing characterizes the productive phase of the life cycle when team members cooperate to solve problems and complete the goals of their assigned work.
Adjourning is the phase in which the team wraps up the project, satisfactorily completes its goals, and prepares to disband or move on to another project.
32

Ingredients for Successful Teams
Clarity in team goals
Improvement plan
Clearly defined roles
Clear communication
Beneficial team behaviors
33
Well-defined decision procedures
Balanced participation
Established ground rules
Awareness of group process
Use of the scientific approach

Workplace Environment
Key factors:
Health
Safety
Overall well-being
34

Workforce Learning and Development
Research indicates that companies that spend heavily on training their workers outperform companies that spend considerably less, as measured on the basis of overall stock market returns.
Focus on both what people need to know as well as what things they need to know how to do.
Continual reinforcement of knowledge learned is essential.
35

Compensation and Recognition
Compensation and recognition refer to all aspects of pay and reward, including promotions, bonuses, and recognition, either monetary and nonmonetary or individual and group.
Compensation
Merit versus capability/performance based plans
Gainsharing
Recognition
Monetary or non-monetary
Formal or informal
Individual or group
37

Effective Recognition and Reward Strategies
Give both individual and team awards
Involve everyone
Tie rewards to quality
Allow peers and customers to nominate and recognize superior performance
Publicize extensively
Make recognition fun
38

Performance Management
How you are measured is how you perform!
Conventional performance appraisal systems
Focus on short-term results and individual behavior; fail to deal with uncontrollable factors
New approaches
Focus on company goals such as quality and behaviors like teamwork
360-degree feedback; mastery descriptions
39

Assessing Workforce Effectiveness, Satisfaction, and Engagement
Outcome Measures
number of teams, rate of growth, percentage of employees involved, number of suggestions implemented, time taken to respond to suggestions, employee turnover, absenteeism, and grievances; perceptions of teamwork and management effectiveness, engagement, satisfaction, and empowerment.
41

Assessing Workforce Effectiveness Satisfaction, and Engagement
Process Measures
number of suggestions that employees make, numbers of participants in project teams, participation in educational programs, average time it takes to complete a process improvement project, whether teams are getting better, smarter, and faster at performing improvements, improvements in team selection and planning processes, frequency of use of quality improvement tools, employee understanding of problem-solving approaches, and senior management involvement
42

Measuring Workforce Engagement
Gallup Q12 – 12 survey statements that Gallup found as those that best form the foundation of strong feelings of engagement. Factors include:
what is expected in one’s work
having the right materials and equipment to do the job
receiving recognition and feedback on progress and development
having opinions that count
feeling of importance of the job
opportunities to learn grow and develop
43

Gallup Engagement Index Classification
1. Engaged employees who work with passion and feel a profound connection to their company. They drive innovation and move the organization forward.
2. Not-engaged employees who are essentially “checked out.” They are sleepwalking through their workday. They are putting in time, but not enough energy or passion into their work.
3. Actively disengaged employees who aren’t just unhappy at work; they’re busy acting out their unhappiness. Every day, these workers undermine what their engaged coworkers accomplish.
44

Sustaining High-Performance Work Systems
Regular assessment of
workforce capability and capacity needs;
hiring, training and retention of employees; and
career progression and succession planning
45

Workforce Capability and Capacity
Workforce capability refers to an organization’s ability to accomplish its work processes through the knowledge, skills, abilities, and competencies of its people.
Workforce capacity refers to an organization’s ability to ensure sufficient staffing levels to accomplish its work processes and successfully deliver products and services to customers, including the ability to meet seasonal or varying demand levels.
46

Effective Hiring Practices
Determine key employee skills and competencies
Identify job candidates based on required skills and competencies
Screen job candidates to predict suitability and match to jobs
48

Succession Planning
Formal processes to identify, develop, and position future leaders
Mentoring, coaching, and job rotation
Career paths and progression for all employees
49
Succession planning is vital to long-term organizational sustainability

Chapter 5

Process Focus

Wisdom from Texas Instruments
“Unless you change the process, why would you expect the results to change?”
2

Processes
A process is a sequence of linked activities that is intended to achieve some result.
Processes involve combinations of people, machines, tools, techniques, materials, and improvements in a defined series of steps or actions.
Examples:
machining
mixing
assembly
filling orders,
approving loans
3

Key Process Management Principles for Performance Excellence (1 of 2)
Identify vital work processes that relate to core competencies and deliver customer value, profitability, organizational success, and sustainability.
Determine key work process requirements, incorporating input from customers, suppliers, partners, and collaborators.
Design and innovate work processes to meet all requirements, incorporating new technology, organizational knowledge, cycle time, productivity, cost control, and other efficiency and effectiveness factors.
Seek ways to prevent defects, service errors, and rework and minimize costs associated with inspections, tests, and process or performance audits.
5

Key Process Management Principles for Performance Excellence (2 of 2)
Implement work processes and control their day-to-day operation to ensure that they meet design requirements, using appropriate performance measures along with customer, supplier, partner, and collaborator input as needed.
Improve work processes to achieve better performance, reduce variability, improve products and services, and keep processes current with business needs and directions, and share improvements with other organizational units and processes to drive organizational learning and innovation.
Incorporate effective process management practices in the overall supply chain.
6

Quality Profile – Honeywell Federal Manufacturing & Technologies
Multidisciplinary engineering and manufacturing operations for national defense systems.
Checks that ensure processes align with goals, and feedback scorecards, the system identifies, implements, measures, and sustains the “critical-to-quality” needs necessary for desired performance.
Six Sigma Plus Continuous Improvement Model that ensures integration of customer and business requirements into all design projects
7

Quality Profile – Boeing Aerospace Support
Developed a seven-step approach for defining, managing, stabilizing, and improving processes.
Teams of employees who “own” and are responsible for the company’s complex operations and processes are the core of the company’s high performance work environment.
The “AS People System” helps to ensure that employees understand priorities and expectations; have the knowledge, training, and tools they need to do the job and to assess performance against goals and objectives; and are rewarded and recognized for their accomplishments.
8

Process Management
…involves planning and administering the activities necessary to achieve a high level of performance in key business processes, and identifying opportunities for improving quality and operational performance, and ultimately, customer satisfaction.
9

Process Management Activities
Design
Ensuring that the inputs to the process, such as materials, technology, work methods, and a trained workforce are adequate, and that the process can achieve its requirements.
Control
Maintaining consistency in output by assessing performance and taking corrective action when necessary.
Improvement
Continually seeking to achieve higher levels of performance in the process, such as reduced variation, higher yields, fewer defects and errors, smaller cycle times, and so on.
10

Process Management and ISO 9000
The entire set of standards is focused on an organization’s ability to understand, define, document, and manage its processes.
Organizations must plan and control the design and development of products and manage the interfaces between different groups involved in design and development to ensure effective communication and clear assignment of responsibility.
The standards address a wide variety of process management activities, including control of production and service, control of monitoring and measuring devices, and improvement of quality management system effectiveness.
11

AT&T Process Management Principles
Process improvement focuses on the end-to-end process.
The mind-set of quality is one of prevention and continuous improvement.
Everyone manages a process at some level and is simultaneously a customer and a supplier.
Customer needs drive process improvement.
Corrective action focuses on removing the root cause of the problem rather than on treating its symptoms.
Process simplification reduces opportunities for errors and rework.
Process improvement results from a disciplined and structured application of the quality management principles.
12

Types of Processes
Value-creation processes – those most important to “running the business”
Design processes – activities that develop functional product specifications
Production/delivery processes – those that create or deliver products
Support processes – those most important to an organization’s value creation processes, employees, and daily operations
13

Projects as Processes
In many companies, value-creation processes take the form of projects—temporary work structures that start up, produce products or services, and then shut down.
Project management involves all activities associated with planning, scheduling, and controlling projects.
14

Process Requirements
Value creation process requirements usually depend on consumer or external customer needs.
Support process requirements are driven by internal customer needs and must be aligned with the needs of key value-creation processes
15

Process Design
The goal of process design is to develop an efficient process that satisfies both internal and external customer requirements and is capable of achieving the requisite level of quality and performance.
Process design considerations include safety, cost, variability, productivity, environmental impact, “green” manufacturing, measurement capability, and maintainability of equipment.
19

Process Mapping
A process map (flowchart) describes the specific steps in a process.
20

Developing Process Maps
1. Begin with the process output and ask, “What is the last essential subprocess that produces the output of the process?”
2. For that subprocess, ask, “What input does it need to produce the process output?” For each input, test its value to ensure that it is required.
3. For each input, identify its source. In many cases, the input will be the output of the previous subprocess. In some cases, the input may come from external suppliers.
4. Continue backward, one subprocess at a time, until each input comes from an external supplier
21

Analyzing Process Maps
Are the steps in the process arranged in logical sequence?
Do all steps add value? Can some steps be eliminated and should others be added in order to improve quality or operational performance? Can some be combined? Should some be reordered?
Are capacities of each step in balance; that is, do bottlenecks exist for which customers will incur excessive waiting time?
What skills, equipment, and tools are required at each step of the process? Should some steps be automated?
At which points in the system might errors occur that would result in customer dissatisfaction, and how might these errors be corrected?
At which point or points should quality be measured?
Where interaction with the customer occurs, what procedures and guidelines should employees follow to present a positive image?
23

Service Process Design
Designing a service essentially involves determining an effective balance between people and technology.
The five key service dimensions — reliability, assurance, tangibles, empathy, and responsiveness— provide a basis for designing quality into services.
24

25
Key Service Dimensions

Customer contact and interaction
Labor intensity
Customization

Key Questions for Service Process Design
What service standards are required to be met?
What is the final result of the service to be provided?
At what point does the service begin, and what signals its completion?
What is the maximum waiting time that a customer will tolerate?
How long should it take to perform the service?
Who must the consumer deal with in completing the service?
What components of the service are essential? Desirable? Superfluous?
Which components can differ from one service encounter to another while still meeting standards?
26

Design for Agility
Agility refers to flexibility and short cycle times.
Flexibility refers to the ability to adapt quickly and effectively to changing requirements.
Examples:
rapid changeover from one product to another
rapid response to changing demands
the ability to produce a wide range of customized services
Agility is crucial to such customer-focused strategies as mass customization.
27

Mistake-Proofing Processes
Typical reasons for mistakes and errors:
Forgetfulness due to lack of reinforcement or guidance
Misunderstanding or incorrect identification because of the lack of familiarity with process or procedures
Lack of experience
Absentmindedness and lack of attention, especially when a process is automated
28

Preventing Mistakes
1. Designing potential defects and errors out of the process. This eliminates any possibility that the error or defect will occur and will not result in rework, scrap, or wasted time.
2. Identifying potential defects and errors and stopping a process before they occur. Often results in some non-value-added time.
3. Identifying defects and errors soon after they occur and quickly correcting the process. Results in some scrap, rework, and wasted resources.
29

Poka-Yoke
…an approach for mistake-proofing processes using automatic devices or simple methods to avoid human error.
Based on:
Prediction, or recognizing that a defect is about to occur and providing a warning
Detection, or recognizing that a defect has occurred and stopping the process.
30

Examples
Many machines have sensors that would be activated only if the part was placed in the correct position.
A device on a drill counts the number of holes drilled in a work piece; a buzzer sounds if the work piece is removed before the correct number of holes has been drilled.
Computer programs display a warning message if a file that has not been saved is to be closed.
Passwords set for web accounts are entered twice.
Orders for critical aircraft parts use pre-fit foam forms that only allow the correct part to be placed in them, ensuring that the correct parts are shipped.
Associates at Amazon sort products into bins that weigh them and compare the weight to the order; if there is an inconsistency, the associate is prompted to verify the items.
31

Types of Service Errors (1 of 2)
Task errors include doing work incorrectly, work not requested, work on the wrong order, or working too slowly.
Treatment errors in the contact between the server and the customer, such as lack of courteous behavior, and failure to acknowledge, listen, or react appropriately to the customer.
Tangible errors, such as unclean facilities, dirty uniforms, inappropriate temperature, and document errors.
32

Types of Service Errors (2 of 2)
Customer errors in preparation such as the failure to bring necessary materials to the encounter, to understand their role in the service transaction, and to engage the correct service.
Customer errors during an encounter such as inattention, misunderstanding, or simply a memory lapse, and include failure to remember steps in the process or to follow instructions.
Customer errors at the resolution stage of a service encounter include failure to signal service inadequacies, to learn from experience, to adjust expectations, and to execute appropriate post-encounter actions.
33

Process Control
Control – the activity of ensuring conformance to requirements and taking corrective action when necessary to correct problems and maintain stable performance
Control is different from improvement:
34

Elements of Control Systems
Any control system has four elements:
(1) a standard or goal,
(2) a means of measuring accomplishment,
(3) comparison of results with the standard to provide feedback, and
(4) the ability to make corrections as appropriate.
35

Control and Improvement
Control should be the basis for organizational learning and lead to improvement and prevention of defects and errors.
After-action review
What was supposed to happen?
What actually happened?
Why was there a difference?
What can we learn?
37

Process Control in Manufacturing
Control is usually applied to incoming materials, key processes, and final products and services.
Effective quality control systems include
documented procedures for all key processes;
a clear understanding of the appropriate equipment and working environment;
methods for monitoring and controlling critical quality characteristics; approval processes for equipment;
criteria for workmanship, such as written standards, samples, or illustrations; and
maintenance activities.
38

Effective Control Systems
Documented procedures for all key processes;
A clear understanding of the appropriate equipment and working environment;
Methods for monitoring and controlling critical quality characteristics;
Approval processes for equipment;
Criteria for workmanship, such as written standards, samples, or illustrations; and
Maintenance activities.
39

Process Control in Services
Example: The Ritz-Carlton Hotel Company
Self-control of the individual employee based on their spontaneous and learned behavior.
Basic control mechanisms, which are carried out by every member of the workforce. The first person who detects a problem is empowered to break away from routine duties, investigate and correct the problem immediately, document the incident, and then return to their routine.
Critical success factor control for critical processes. Process teams use customer and organizational requirement measurements to determine quality, speed, and cost performance. These measurements are compared against benchmarks and customer satisfaction data to determine corrective action and resource allocation. In addition, The Ritz-Carlton conducts both self-audits and outside audits.
40

Continuous Improvement
…refers to both incremental changes, which are small and gradual, and breakthrough improvements, which are large and rapid.
Continuous improvement is important because
Customer loyalty is driven by delivered value.
Delivered value is created by business processes.
Sustained success in competitive markets requires a business to continuously improve delivered value.
To continuously improve value-creation ability, a business must continuously improve its value-creation processes.
42

Learning
…understanding why changes are successful through feedback between practices and results, leading to new goals and approaches.
A learning cycle consists of four stages:
1. Planning
2. Execution of plans
3. Assessment of progress
4. Revision of plans based upon assessment findings
43

Kaizen
Kaizen – a Japanese word that means gradual and orderly continuous improvement
Focus on small, gradual, and frequent improvements over the long term with minimum financial investment, and participation by everyone in the organization.
44

Kaizen Event
…an intense and rapid improvement process in which a team or a department throws all its resources into an improvement project over a short time period, as opposed to traditional kaizen applications, which are performed on a part-time basis.
Teams are generally comprised of employees from all areas involved in the process who understand it and can implement changes on the spot.
45

Breakthrough Improvement
…refers to discontinuous change, as opposed to the gradual, continuous improvement philosophy of kaizen.
Breakthrough improvements result from innovative and creative thinking; often these are motivated by stretch goals, or breakthrough objectives.
Example (Motorola):
Improve product and services quality ten times within two years, and at least 100-fold within four years
46

Benchmarking
Benchmarking – “the search of industry best practices that lead to superior performance.”
Best practices – approaches that produce exceptional results, are usually innovative in terms of the use of technology or human resources, and are recognized by customers or industry experts.
47

Types of Benchmarking
Competitive benchmarking – studying products or business results against competitors to compare pricing, technical quality, features, and other quality or performance characteristics.
Process benchmarking – identifying the most effective practices in key work processes in organizations that perform similar functions, no matter in what industry.
48

Reengineering
Reengineering – the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.
Reengineering involves asking basic questions about business processes:
Why do we do it?
Why is it done this way?
49

Managing Supply Chain Processes
Suppliers include not only companies that provide materials and components, but also distributors, transportation companies, and information, health care, and education providers.
Many companies segment suppliers into categories based on their importance to the business and manage them accordingly.
50

Supply Chain Management Principles
1. Recognizing the strategic importance of suppliers in accomplishing business objectives, particularly minimizing the total cost of ownership,
2. Developing win-win relationships through long-term partnerships rather than as adversaries, and
3. Establishing trust through openness and honesty, thus leading to mutual advantages.
51

Supplier Certification
…designed to rate and certify suppliers who provide quality materials in a cost-effective and timely manner.
The Pharmaceutical Manufacturers Association defines a certified supplier as one that, after extensive investigation, is found to supply material of such quality that routine testing on each lot received is unnecessary.
Supplier certification processes can be time-consuming and expensive to administer. Using a uniform set of standards such as ISO 9000 can reduce costs..
52

Chapter 2

Foundations of Quality Management

Quality Culture at The Ritz-Carlton Hotel Company
“Ladies and Gentlemen Serving Ladies and Gentlemen”— anticipating the wishes and needs of the guests, resolving their problems, and exhibiting genuinely caring conduct toward guests and each other.
Create a “Skilled and Empowered Work Force Operating with Pride and Joy.”
2

Quality Profile – Texas Nameplate Company, Inc.
“Fear is useless; what is needed is trust.”
A continuous learning environment that enables empowered teams of workers to take charge of processes and to deliver products and services with a “star quality.”
Reduced its defects from 3.65 percent to about 1 percent in four years.
satisfaction rates in five areas employees say are the most important exceed national norms by a significant margin.
3

Sigma Performance Levels – 1 to 6 Sigma

Source: https://www.isixsigma.com/new-to-six-sigma/sigma-level/sigma-performance-levels-one-six-sigma/
© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
4

Quality Profile: MEDRAD
A culture of high performance.
Systematic approaches to capture customers’ expectations and preferences.
The Customer Complaint Process focuses on timely response and successful resolution of customer issues
MEDRAD’s overall Net Promoter (NP) scores (a loyalty metric defined by the level of repeat sales and referrals) have been consistently 60 percent or higher, compared to the 50 percent or higher marks for other organizations over the same time periods.
5

Leaders in the Quality Revolution
W. Edwards Deming
Joseph M. Juran
Philip B. Crosby
Armand V. Feigenbaum
Kaoru Ishikawa
6

Deming Philosophy
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.

© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
7

Deming’s 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.
9

10
Deming’s 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

Deming’s System of Profound Knowledge
Appreciation for a system
Understanding variation
Theory of knowledge
Psychology
11

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
12

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
© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
14

Quincunx Experiment
15

Quincunx Experiment Results
16

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
17

Psychology
People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful
Fear is demotivating
Managers should develop pride and joy in work
18

Intrinsic vs. Extrinsic Motivation
© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
19

Juran Philosophy
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.”
20

Juran’s Quality Trilogy
Quality planning
Quality control
Quality improvement
21

Juran’s Breakthrough Sequence
Proof of the Need
Project Identification
Organization for Breakthrough
Diagnostic Journey
Remedial Journey
Holding the Gains
22

Crosby Philosophy
“Quality is free . . .
… It’s 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.”

© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
23

Crosby’s 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
© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
24

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
25

Kaoru Ishikawa
Instrumental in developing Japanese quality strategy
Influenced participative approaches involving all workers
Advocated the use of simple visual tools and statistical techniques
26

Ishikawa Diagram/ Root Cause Analysis
© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
27

Ishikawa Diagram/ Root Cause Analysis
© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
28

29
Total Quality
Principles – foundation of the philosophy
Practices – activities by which principles are implemented
Techniques – tools and approaches to make practices effective

30
Core Quality Management Principles
Customer focus
Teamwork
Continuous improvement

ISO 9000:2000 Quality Management Principles
Customer Focus
Leadership
Involvement of People
Process Approach
System Approach to Management
Continual Improvement
Factual Approach to Decision Making
Mutually Beneficial Supplier Relationships
31

Representation of the International Standard in the PDCA cycle
© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
32

Customer Focus Practices
Researching and understanding customer needs and expectations.
Ensuring that the objectives of the organization are linked to customer needs and expectations.
Communicating customer needs and expectations throughout the organization.
Measuring customer satisfaction and acting on the results.
Systematically managing customer relationships.
Ensuring a balanced approach between satisfying customers and other interested parties (such as owners, employees, suppliers, financiers, local communities and society as a whole).
33

Leadership Practices
Considering the needs of all interested parties including customers, owners, employees, suppliers, financiers, local communities and society as a whole.
Establishing a clear vision of the organization’s future.
Setting challenging goals and targets.
Creating and sustaining shared values, fairness and ethical role models at all levels of the organization.
Establishing trust and eliminating fear.
Providing people with the required resources, training and freedom to act with responsibility and accountability.
Inspiring, encouraging, and recognizing people’s contributions.
34

Involvement of People Practices
People understanding the importance of their contribution and role in the organization.
People identifying constraints to their performance.
People accepting ownership of problems and their responsibility for solving them.
People evaluating their performance against their personal goals and objectives.
People actively seeking opportunities to enhance their competence, knowledge, and experience.
People freely sharing knowledge and experience.
People openly discussing problems and issues.
35

Process Approach Practices
Systematically defining the activities necessary to obtain a desired result.
Establishing clear responsibility and accountability for managing key activities.
Analyzing and measuring of the capability of key activities.
Identifying the interfaces of key activities within and between the functions of the organization.
Focusing on the factors such as resources, methods, and materials that will improve key activities of the organization.
Evaluating risks, consequences, and impacts of activities on customers, suppliers, and other interested parties.
36

System Approach to Management Practices
Structuring a system to achieve the organization’s objectives in the most effective and efficient way.
Understanding the interdependencies between the processes of the system.
Structured approaches that harmonize and integrate processes.
Providing a better understanding of the roles and responsibilities necessary for achieving common objectives and thereby reducing cross-functional barriers.
Understanding organizational capabilities and establishing resource constraints prior to action.
Targeting and defining how specific activities within a system should operate.
Continually improving the system through measurement and evaluation.
37

Continual Improvement Practices
Employing a consistent organization-wide approach to continual improvement of the organization’s performance.
Providing people with training in the methods and tools of continual improvement.
Making continual improvement of products, processes, and systems an objective for every individual in the organization.
Establishing goals to guide, and measures to track, continual improvement.
Recognizing and acknowledging improvements.
38

Factual Approach to Decision Making Practices
Ensuring that data and information are sufficiently accurate and reliable.
Making data accessible to those who need it.
Analyzing data and information using valid methods.
Making decisions and taking action based on factual analysis, balanced with experience and intuition.
39

Mutually Beneficial Supplier Relationships Practices
Establishing relationships that balance short-term gains with long-term considerations.
Pooling of expertise and resources with partners.
Identifying and selecting key suppliers.
Clear and open communication.
Sharing information and future plans.
Establishing joint development and improvement activities.
Inspiring, encouraging, and recognizing improvements and achievements by suppliers.
40

TQ Techniques
Statistical methods
Visual aids for problem solving, such as flowcharts
Techniques specific to quality assurance activities, such as control charts, measurement systems analysis, reliability models, and so on.

© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
41

Statistical Thinking
All work occurs in a system of interconnected processes
Variation exists in all processes
Understanding and reducing variation are the keys to success
42

Problems Created by Variation
Variation increases unpredictability.
Variation reduces capacity utilization.
Variation contributes to a “bullwhip” effect.
Variation makes it difficult to find root causes.
Variation makes it difficult to detect potential problems early.
44

Variation
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45

Types of Variation
Uncontrollable variation (common causes) are a natural part of a process
Special (assignable) causes of variation can be recognized and controlled
Failure to understand these differences can increase variation in a system
46

Common vs. Special Causes of Variation
© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
47

Two Fundamental Management Mistakes
Treating as a special cause any fault, complaint, mistake, breakdown, accident or shortage when it actually is due to common causes
Attributing to common causes any fault, complaint, mistake, breakdown, accident or shortage when it actually is due to a special cause
48

Deming’s Red Bead Experiment – Round 1
49

Deming’s Red Bead Experiment – Round 2
50

Deming’s Red Bead Experiment – Round 3
51

Deming’s Red Bead Experiment – Round 4
52

Lessons Learned
Quality is made at the top.
Rigid procedures are not enough.
People are not always the main source of variability.
Numerical goals are often meaningless.
Inspection is expensive and does not improve quality.
54

Note to Instructors
The following slides can be used to guide a class demonstration and discussion of the Deming Red Bead experiment using medium size bags of M&Ms, from a suggestion one author found on a TQ newsgroup several years ago. The good output (“red beads”) are the blue M&Ms, with the instructor playing the role of Dr. Deming.
55

We’re Going into Business!!!
We have a new global customer and have to start up several factories. So I need teams of 5 to do the work:
1 Production worker
2 Inspectors
1 Chief inspector
1 Recorder
56

57
Production Setup
Take the bag in your left hand.
Tear a 3/4” opening in the right corner. (only large enough for one piece at a time)

58
Production Process
1. Production worker produces 10 pieces and places them on the napkin.
2. Each inspector, independently, counts the blue ones, and passes to the Chief Inspector to verify.
3. If Chief Inspector agrees, s/he tells
the recorder, who reports it to me.

Do it right
the first
time!

Be a Quality Worker!
Take Pride in
Your Work!
59

Deming’s Funnel Experiment
A funnel is suspended above a table with a target drawn on a tablecloth. The goal is to hit the target. Participants drop a marble through the funnel and mark the place where the marble eventually lands.
Rule 1: Leave the funnel alone
Rule 2. Measure the deviation from the point at which the marble comes to rest and the target. Move the funnel an equal distance in the opposite direction from its current position.
Rule 3. Measure the deviation from the point at which the marble comes to rest and the target. Set the funnel an equal distance in the opposite direction of the error from the target.
Rule 4. Place the funnel over the spot where the marble last came to rest.
60

Quality Management Systems
Quality Management System (QMS) – a mechanism for managing and continuously improving core processes to “achieve maximum customer satisfaction at the lowest overall cost to the organization.”
Objectives
Higher product conformity and less variation.
Fewer defects, waste, rework, and human error.
Improved productivity, efficiency, and effectiveness.
63

Quality Manual
A permanent reference for implementing and maintaining the system.
Typical records
inspection reports
test data
audit reports
calibration data
64

ISO 9000:2000 Objectives
1. Achieve, maintain, and seek to continuously improve product quality (including services) in relationship to requirements.
2. Improve the quality of operations to continually meet customers’ and stakeholders’ stated and implied needs.
3. Provide confidence to internal management and other employees that quality requirements are being fulfilled and that improvement is taking place.
4. Provide confidence to customers and other stakeholders that quality requirements are being achieved in the delivered product.
5. Provide confidence that quality system requirements are fulfilled.
65

ISO 9000:2000 Documents
1. ISO 9000:2005—Fundamentals and vocabulary: This document provides fundamental background information and establishes definitions of key terms used in the standards.
2. ISO 9001:2008—Requirements: This is the core document that provides the specific requirements for a quality management system to help organizations consistently provide products that meet customer and other regulatory requirements.
3. ISO 9004:2009—Guidelines for Performance Improvements: This document provides guidelines to assist organizations in improving and sustaining their quality management systems.
66

ISO 9001:2008
Management Responsibility addresses what top management must do to ensure an effective quality system.
Resource Management ensures that an organization provides sufficient people, facilities, and training resources.
Product Realization refers to controlling the production/service process from receipt of an order or quote through design, materials procurement, manufacturing or service delivery, distribution, and subsequent field service.
Measurement, Analysis, and Improvement focuses on control procedures for assuring quality in products and processes, analysis of quality-related data, and correction, prevention, and improvement planning activities.
67

Benefits of ISO 9000
It provides discipline. The ISO 9001 requirement for audits forces an organization to review its quality system on a routine basis.
It contains the basics of a good quality system. These include understanding customer requirements, ensuring the ability to meet them, ensuring people resources capable of doing the work that affects quality, ensuring physical resources and support services needed to meet product requirements, and ensuring that problems are identified and corrected.
It offers a marketing program. ISO certified organizations can use their status to differentiate themselves in the eyes of customers.
68

Building an Effective QMS
An effective QMS should
Be integrated with enterprise systems such as ERP,MES, and SCM, and should focus on actionable decision making, seeking the root causes of problems, and improving processes and systems.
Drive the principles of quality management throughout the organization by fostering effective practices to implement the principles
69

Chapter 3

Customer Focus

Importance of Customers
“Without customers, you don’t have a business.”
– Don Peppers and Martha Rogers, “Customers Don’t Grow on Trees,” Fast Company magazine, July 2005
“If the customer is satisfied with the whole experience with the product, then you have a quality product.”
– Executive Director of Global Quality Strategy at General Motors
2

Satisfying Customers
To meet or exceed customer expectations, organizations must fully understand all product and service attributes that contribute to customer value and lead to satisfaction and loyalty.
Meeting specifications, reducing defects and errors, and resolving complaints.
Designing new products that truly delight the customer
Responding rapidly to changing consumer and market demands
Developing new ways of enhancing customer relationships
3

Customer Focus in ISO 9000
“Top management shall ensure that customer requirements are determined and are met with the aim of enhancing customer satisfaction.”
The standards require that the organization determine customer requirements, including delivery and post-delivery activities, and any requirements not stated by the customer but necessary for specified or intended use.
The organization must establish procedures for communicating with customers about product information and other inquiries, and for obtaining feedback, including complaints.
The standards require that the organization monitor customer perceptions as to whether the organization has met customer requirements; that is, customer satisfaction.
4

Key Customer-Focused Practices for Performance Excellence (1 of 2)
Identify the most important customer groups and markets, considering competitors and other potential customers, and segment the customer base to better meet differing needs.
Understand both near-term and longer-term customer needs and expectations (the “voice of the customer”) and employ systematic processes for listening and learning from customers, potential customers, and customers of competitors to obtain actionable information about products and customer support.
Understand the linkages between the voice of the customer and design, production, and delivery processes; and use voice-of-the-customer information to identify and innovate product offerings and customer support processes to meet and exceed customer requirements and expectations, to expand relationships, and to identify and attract new customers and markets.
5

Key Customer-Focused Practices for Performance Excellence (2 of 2)
Create an organizational culture and support framework that allows customers to easily contact an organization to conduct business, receive a consistently positive customer experience, provide feedback, obtain assistance, receive prompt resolution of their concerns, and facilitate improvement.
Manage customer relationships that build loyalty, enhance satisfaction and engagement, and lead to the acquisition of new customers.
Measure customer satisfaction, engagement, and dissatisfaction; compare the results relative to competitors and industry benchmarks; and use the information to evaluate and improve organizational processes.
6

Quality Profile: Park Place Lexus
Client-relationship management database that tracks all aspects of the PPL-Client interaction and provides the resulting information to members (employees)
Empowers members to resolve client complaints on the spot by allowing them to spend up to $250 to resolve a complaint, or up to $2,000 by committee.
A focus on personal and organizational learning motivates members, which then results in exceptional understanding of client’s needs and the ability to deliver service to meet those needs.
7

Quality Profile: K&N Management
Vision “to become world famous by delighting one guest at a time.”
Builds and maintains a focus on “guest delight,” relying on innovation and technology to create product offerings that meet or exceed guest requirements.
All leaders carry a personal digital assistant (PDA) that alerts them of guest comments and complaints and daily performance results.
8

Customer Satisfaction
…“the result of delivering a product or service that meets customer requirements.”
Customer satisfaction drives profitability. The typical company gets 65 percent of its business from existing customers, and it costs five times more to find a new customer than to keep an existing one happy.
Businesses with a 98 percent customer retention rate are twice as profitable as those at 94 percent.
9

Customer Engagement
.. customers’ investment in or commitment to a brand and product offerings.
Characteristics:
customer retention and loyalty,
customers’ willingness to make an effort to do business with the organization, and
customers’ willingness to actively advocate for and recommend the brand and product offerings.
10

American Customer Satisfaction Index (ACSI)
Measures customer satisfaction at a national level
Introduced in 1994 by University of Michigan and American Society for Quality
Based on results of telephone interviews conducted in a national sample of 46,000 consumers who recently bought or used a company’s product or service.
Web site: www.theacsi.org
11

Identifying Customers
Consumers – those people who ultimately purchase and use a company’s products.
Internal customers – the recipient of another’s output (which could be a product, service or information)
External customers – those who fall between the organization and the consumer, but are not part of the organization.
13

14
The natural customer-supplier linkages among individuals, departments, and functions build up the “chain of customers” throughout an organization that connect every individual and function to the external customers and consumers, thus characterizing the organization’s value chain.

Customer Segmentation
Demographics
Geography
Volumes
“Vital few” and “useful many”
Profit potential
15

Net Present Value of the Customer (NPVC)
…the total profits (revenues associated with a customer minus expenses needed to serve a customer) discounted over time.
NPVC is often used to segment customers by profit potential.
16

17
Key Product Quality Dimensions
Performance – primary operating characteristics
Features – “bells and whistles”
Reliability – probability of operating for specific time and conditions of use
Conformance – degree to which characteristics match standards
Durability – amount of use before deterioration or replacement
Serviceability – speed, courtesy, and competence of repair
Aesthetics – look, feel, sound, taste, smell

Key Dimensions of Service Quality
Reliability – ability to provide what was promised
Assurance – knowledge and courtesy of employees and ability to convey trust
Tangibles – physical facilities and appearance of personnel
Empathy – degree of caring and individual attention
Responsiveness – willingness to help customers and provide prompt service
19

Kano Model of Customer Requirements
Dissatisfiers (“must haves”): expected requirements that cause dissatisfaction if not present
Satisfiers (“wants”): expressed requirements
Exciters/delighters (“never thought of ”): unexpected features
21

Voice of the Customer
…customer requirements, as expressed in the customer’s own terms
Organizations use a variety of methods, or “listening posts,” to collect information about customer needs and expectations, their importance, and customer satisfaction with the company’s performance on these measures.
22

Customer Listening Posts
Comment cards and formal surveys
Focus groups
Direct customer contact
Field intelligence
Complaints
Internet and social media monitoring
23

25
Analyzing Voice of the Customer Data
Affinity diagram

28
Gap Model – Linking the VOC to Internal Processes

PERCEIVED QUALITY is a comparison of ACTUAL QUALITY to EXPECTED QUALITY

Building a Customer-Focused Organization
1. Making sincere commitments to customers
2. Ensuring quality customer contact
3. Selecting and developing customer contact employees
4. Managing complaints and service recovery
29

Moments of Truth
Customer satisfaction or dissatisfaction takes place during moments of truth—every interaction between a customer and the organization.
Example (airline)
Making a reservation
Purchasing tickets
Checking baggage
Boarding a flight
Ordering a beverage
Requests a magazine
Deplanes
Picks up baggage
30

Customer Contact Requirements
…measurable performance levels or expectations that define the quality of customer contact with an organization.
Technical requirements: response time (answering the telephone within two rings or shipping orders the same day)
Behavioral requirements (using a customer’s name whenever possible)
31

Service Recovery and Complaint Management
The average company never hears from 96 percent of its unhappy customers. Dissatisfied individual and business customers tend not to complain. For every complaint received, the company has 26 more customers with problems, six of whom have problems that are serious.
Of the customers who make a complaint, more than half will again do business with that organization if their complaint is resolved. If the customer feels that the complaint was resolved quickly, the figure jumps to 95 percent.
Customers who remain unsatisfied after complaining result in substantial amounts of negative word of mouth.
33

Complaint Resolution
Acknowledge that a customer had a problem (“We’re sorry you had a problem”)
Express empathy for the inconvenience that the customer encountered; willingly accepting the complaint (“Thanks for letting us know about it”)
Describe corrective action concisely and clearly (“Here’s what we’re going to do about it”)
Appeal to the customer for continued loyalty (“We’d appreciate you giving us another chance”).
34

Manage Customer Relationships
Customer-supplier partnerships – long-term relationships characterized by teamwork and mutual confidence
Customer-focused technology and analytics
Most major companies use advanced analytics to “mine” and understand customer data. Grocery and retail stores use loyalty cards to capture and analyze detailed data about customer purchase behavior.
Customer relationship management (CRM) software, designed to help organizations increase customer loyalty, target their most profitable customers, and streamline customer communication processes.
36

Measuring Customer Satisfaction and Engagement
1. Discover customer perceptions of how well the organization is doing in meeting customer needs, and compare performance relative to competitors.
2. Identify causes of dissatisfaction and failed expectations as well as drivers of delight to understand the reasons why customers are loyal or not loyal to the company.
3. Identify internal work process that drive satisfaction and loyalty and discover areas for improvement in the design and delivery of products and services, as well as for training and coaching of employees.
4. Track trends to determine whether changes actually result in improvements.
37

Designing Satisfaction Surveys
Identify purpose – who will make decisions using the survey results?
Identify the customer
Determine who should conduct the survey (internal, third party, etc.)
Select the appropriate survey instrument (written, telephone, face-to-face, etc.)
Design questions and response scales to achieve actionable results:
responses are tied directly to key business processes, so that what needs to be improved is clear; and information can be translated into cost/revenue implications to support the setting of improvement priorities.
38

Why Customer Satisfaction Efforts Fail
Poor measurement schemes
Failure to identify appropriate quality dimensions
Failure to weight dimensions appropriately
Lack of comparison with leading competitors
Failure to measure potential and former customers
Confusing loyalty with satisfaction
43

Measuring Customer Loyalty
Overall satisfaction
Likelihood of a first-time purchaser to repurchase
Likelihood to recommend
Likelihood to continue purchasing the same products or services
Likelihood to purchase different products or services
Likelihood to increase frequency of purchasing
Likelihood to switch to a different provider
44

Net Promoter Score (NPS)
Developed by (and is a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix
“What is the likelihood that you would recommend us?” evaluated on a scale from 0 to 10.
Promoters: scores of 9 or 10 are usually associated with loyal customers who will typically be repeat customers (“promoters”)
Passives: scores of 7 or 8 are associated with customers who are satisfied but may switch to competitors
Detractors: scores of 6 or below represent unhappy customers who may spread negative comments
NPS is the percentage of promoters minus the percentage of detractors.
45

Customer Perceived Value
CPV measures how customers assess benefits—such as product performance, ease of use, or time savings—against costs, such as purchase price, installation cost or time, and so on, in making purchase decisions.
47

Chapter 9

Process Improvement and Six Sigma

Breakthrough
…the accomplishment of any improvement that takes an organization to unprecedented levels of performance.
Breakthrough attacks chronic losses or, in Deming’s terminology, common causes of variation.
Process improvement methodologies and tools provide the foundation for breakthrough as well as modern Six Sigma approaches.
2

Quality Profile: Iredell-Statesville Schools
Classrooms focus on five key questions:
1. “What do students need to know?”
2. “How will they learn it?”
3. “How will we know they have learned it?”
4. “What will we do if they have not learned it?”
and
5. “What will we do if they already know it?”
Plan, Do, Study, Act (PDSA) cycle is used to identify and implement improvements.
PDSA is also used throughout the school district in operational and support areas
3

Quality Profile: Caterpillar Financial Services Corp. U.S.
CFSC maintains a constant focus on process improvement.
Tools such as Six Sigma, help CFSC prioritize and manage projects, design products, and improve processes.
Ninety-seven percent of employees are trained in Six Sigma procedures for designing new processes and for improving existing ones.
Investments in technology along with a continuing focus on excellence and process improvements are helping CFSC achieve its corporate vision.
4

Process Improvement Methodologies
Redefining and analyzing the problem: Collect and organize information, analyze the data and underlying assumptions, and reexamine the problem for new perspectives, with the goal of achieving a workable problem definition.
Generating ideas: “Brainstorm” to develop potential solutions.
Evaluating and selecting ideas: Determine whether the ideas have merit and will achieve the problem solver’s goal.
Implementing ideas: Sell the solution and gain acceptance by those who must use them.
5

Evolution of the Deming Cycle
Walter Shewhart: specification, production, and inspection for mass production.
These steps correspond to the scientific method of hypothesizing, carrying out an experiment, and testing the hypothesis.
“Deming Wheel”
1. Design the product with appropriate tests.
2. Make the product and test in the production line and in the laboratory.
3. Sell the product.
4. Test the product in service and through market research.
Japanese Implementation: Plan-Do-Check-Act
7

Plan (1 of 2)
Define the process: its start, end, and what it does.
Describe the process: list the key tasks performed and sequence of steps, people involved, equipment used, environmental conditions, work methods, and materials used.
Describe the players: external and internal customers and suppliers, and process operators.
Define customer expectations: what the customer wants, when, and where, for both external and internal customers.
Determine what historical data are available on process performance, or what data need to be collected to better understand the process.
8

Plan (2 of 2)
Describe the perceived problems associated with the process; for instance, failure to meet customer expectations, excessive variation, long cycle times, and so on.
Identify the primary causes of the problems and their impacts on process performance.
Develop potential changes or solutions to the process, and evaluate how these changes or solutions will address the primary causes.
Select the most promising solution(s).
9

Do
Conduct a pilot study or experiment to test the impact of the potential solution(s).
Identify measures to understand how any changes or solutions are successful in addressing the perceived problems.
10

Study
Examine the results of the pilot study or experiment.
Determine whether process performance has improved.
Identify further experimentation that may be necessary.
11

Act
Select the best change or solution.
Develop an implementation plan: what needs to be done, who should be involved, and when the plan should be accomplished.
Standardize the solution, for example, by writing new standard operating procedures.
Establish a process to monitor and control process performance.
12

Creative Problem Solving
Creativity is seeing things in new or novel ways.
Creative Problem Solving Process
Understanding the “Mess”– identify symptoms
Finding Facts – gather data; operational definitions
Identifying Specific Problems – find the root cause
Generating Ideas – brainstorming
Developing Solutions – evaluate ideas and proposals
Implementing Solutions – make the solution work
15

Custom Improvement Methodologies
FADE: focus, analyze, develop, and execute.
DRIVE—Define the problem, Recognize the cause, Identify the solution, Verify the actions, and Evaluate the results. (Park Place Lexus)
Some organizations embed the Deming cycle within a broader framework.
16

DMAIC Methodology
Define
Measure
Analyze
Improve
Control
18

Six Sigma
…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.
The term six sigma is based on a statistical measure that equates to 3.4 or fewer errors or defects per million opportunities (dpmo).
19

Evolution of Six Sigma
Motorola (mid-1980s)
Improve product and services quality ten times by 1989, and at least one hundred fold by 1991. Achieve six-sigma capability by 1992. With a deep sense of urgency, spread dedication to quality to every facet of the corporation, and achieve a culture of continual improvement to assure total customer satisfaction. There is only one ultimate goal: zero defects—in everything we do.
General Electric (mid-1990s)
Rapid growth and interests in subsequent years.
20

Principles of Six Sigma (1 of 2)
1. Think in terms of key business processes and customer requirements with a clear focus on overall strategic objectives.
2. Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtain resources.
3. Emphasize such quantifiable measures as dpmo that can be applied to all parts of an organization: manufacturing, engineering, administrative, software, and so on.
21

Principles of Six Sigma (2 of 2)
4. Ensure that appropriate metrics are identified early in the process and that they focus on business results, thereby providing incentives and accountability.
5. Provide extensive training followed by project team deployment to improve profitability, reduce non-value-added activities, and achieve cycle time reduction.
6. Create highly qualified process improvement experts (“Green Belts,” “Black Belts,” and “Master Black Belts”) who can apply improvement tools and lead teams.
7. Set stretch objectives for improvement.
22

Differences Between Six Sigma and TQM
TQM is based largely on worker empowerment and teams; Six Sigma is owned by business leader champions.
TQM activities generally occur within a function, process, or individual workplace; Six Sigma projects are truly cross-functional.
TQM training is generally limited to simple improvement tools and concepts; Six Sigma focuses on a more rigorous and advanced set of statistical methods and DMAIC methodology.
TQM is focused on improvement with little financial accountability; Six Sigma requires a verifiable return on investment and focus on the bottom line.
23

24
A k-sigma quality level satisfies the equation:
k × process standard deviation = tolerance range/2
Here, k × σ = 12σ/2; thus, k = 6

Calculating DPMO Using Excel
Excel function:
=(1 – NORM.DIST(sigma level, 1.5, 1, TRUE)*1000000 (9.2)
26

Calculating Sigma Level Using Excel
Excel function:
= NORM.S.INV(1 – dpmo/1000000) + 1.5 (9.3)
27

Types of Quality Problems
Conformance problems are defined by unsatisfactory performance by a well-specified system.
Efficiency problems result from unsatisfactory performance from the standpoint of stakeholders other than customers.
Unstructured performance problems result from unsatisfactory performance by a poorly specified system.
Product design problems involve designing new products that better satisfy user needs—the expectations of customers that matter most to them.
Process design problems involve designing new processes or substantially revising existing processes.
29
Six Sigma

Lean tools

Creative thinking

Special tools (Ch. 7)
Combined approaches

Project Management and Organization
Projects are the vehicles that are used to organize and to implement Six Sigma.
The Project Management Body of Knowledge (PMBOK), developed by the Project Management Institute, defines 69 tools that every project manager should master.
Achieving professional certification in project management can significantly assist Six Sigma efforts.
30

Six Sigma Teams
Champions: Senior-level managers who promote and lead the deployment of Six Sigma in a significant area of the business.
Master Black Belts: Full-time Six Sigma experts who are responsible for Six Sigma strategy, training, mentoring, deployment, and results.
Black Belts: Fully-trained Six Sigma experts with extensive technical training who perform much of the technical analysis required in Six Sigma projects, usually on a full-time basis.
Green Belts: Functional employees who are trained in introductory Six Sigma tools and methodology and work on projects on a part-time basis, assisting Black Belts while developing their own knowledge and expertise.
Team Members: Individuals from various functional areas who support specific projects.
31

Factors in Six Sigma Project Selection
Financial return, as measured by costs associated with quality and process performance, and impacts on revenues and market share
Impacts on customers and organizational effectiveness
Probability of success
Impact on employees
Fit to strategy and competitive advantage
32

Return on Quality (ROQ)
…balancing quality costs against expected revenue gains
Principles
Quality is an investment
Quality efforts must be made financially accountable.
It is possible to spend too much on quality.
Not all quality expenditures are equally valid.
33

Toyota A3 Report
1. Theme, which succinctly states the problem being addressed.
2. Background, which contains a description of all pertinent information needed to understand the scope of the problem.
3. Current condition, which deals with developing an understanding of the process using a value-stream map.
4. Cause analysis, which focuses on determining the cause of the problem.
5. Target condition, which specifies possible improvement ideas that could solve the problem.
6. Implementation plan, which identifies the steps that need to be accomplished in order to achieve the improvements.
7. Follow-up, which lists activities that will need to be completed after implementation along with the results of the implementation.
36

Define
Describe the problem in operational terms
Drill down to a specific problem statement (project scoping)
Apply Pareto analysis
Identify the process
Use a SIPOC diagram
Develop a project charter to include
A simple project definition, the project objective, the project team and sponsor, the customers and CTQs on which the project focuses, existing measures and performance benchmarks, expected benefits and financial justification, a project timeline, and the resources needed.
38

Pareto Analysis
A Pareto distribution is one in which the characteristics observed are ordered from largest frequency to smallest.
A Pareto diagram is a graphical description of a Pareto distribution.
39

Measure
Focus on understanding process performance and collecting the data necessary for analysis.
Key data collection questions
What questions are we trying to answer?
What type of data will we need to answer the question?
Where can we find the data?
Who can provide the data?
How can we collect the data with minimum effort and with minimum chance of error?
Operational definitions – clarify performance measures
42

Y = f(X)
Six Sigma uses the notion of a function in mathematics to portray the relationship between process performance and customer value
Y is the set of CTQs and X represents the set of critical input variables that influence Y.
43

Check Sheets
…special types of data collection forms in which the results may be interpreted on the form directly without additional processing
44

Analyze
Analyzing a problem starts with a fundamental understanding of the process
typically accomplished through detailed process mapping, expanding on the SIPOC diagram that is developed in the Define phase.
Value stream map – highlights value-added versus non-value-added activities, and include times that activities take.
Value stream maps are an important tool in lean thinking
48

Why Defects, Errors, or Excessive Variation Occur (1 of 2)
A lack of knowledge about how a process works, which is particularly critical if different people perform the process. Such lack of knowledge results in inconsistency and increased variation in outputs.
A lack of knowledge about how a process should work, including understanding customer expectations and the goal of the process
A lack of control of materials and equipment used in a process
Inadvertent errors in performing work
49

Why Defects, Errors, or Excessive Variation Occur (2 of 2)
Waste and complexity, which manifest themselves in many ways, such as unnecessary steps in a process and excess inventories
Hasty design and production of parts and assemblies; poor design specifications; inadequate testing of incoming materials and prototypes
•Failure to understand the capability of a process to meet specifications
Lack of training
Poor instrument calibration and testing
Inadequate environmental characteristics such as light, temperature, and noise
50

Root Cause Analysis
Root cause -“that condition (or interrelated set of conditions) having allowed or caused a defect to occur, which once corrected properly, permanently prevents recurrence of the defect in the same, or subsequent, product or service generated by the process.”
Root cause analysis is an approach using statistical, quantitative, or qualitative tools to identify and understand the root cause.
“5 Why” technique – forces one to redefine a problem statement as a chain of causes and effects to identify the source of the symptoms by asking why, ideally five times.
Cause-and-effect diagram is a simple graphical method for presenting a chain of causes and effects and for sorting out causes and organizing relationships between variables.
Scatter diagram – the graphical component of regression analysis.
51

Improve
Generate ideas for removing or resolving the problem and improve the performance measures and CTQs.
Brainstorming – a group problem-solving procedure for generating a large number of ideas through combination and enhancement of existing ideas.
Checklists to spawn new ideas.
Evaluation and selection
Scoring models to assess possible solutions against important criteria such as cost, time, quality improvement potential, resources required, effects on supervisors and workers, and barriers to implementation such as resistance to change or organizational culture.
54

Control
Maintain the improvements, which includes putting tools in place to ensure that the key variables remain within the maximum acceptable ranges under the modified process.
establishing the new standards and procedures,
training the workforce, and
instituting controls to make sure that improvements do not die over time using checklists, status reviews, or control charts.
55

Lean Tools
Lean production refers to approaches that originated at the Ford Motor Company in the early 1900s, but which were refined and modernized by the Toyota Motor Corporation later in the century.
Lean approaches focus on the elimination of waste in all forms, including defects requiring rework, unnecessary processing steps, unnecessary movement of materials or people, waiting time, excess inventory, and overproduction.
56

Tools of Lean Production
The 5S’s: seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardize), and shitsuke (sustain).
Visual controls.
Efficient layout and standardized work.
Pull production.
Single minute exchange of dies (SMED).
Total productive maintenance.
Source inspection.
Continuous improvement.
57

Lean Six Sigma
…an integrated improvement approach to improve goods and services and operations efficiency by reducing defects variation, and waste.
Lean production addresses visible problems in processes, for example, inventory, material flow, and safety.
Six Sigma is more concerned with less visible problems, for example, variation in performance.
58

Lean Six Sigma Metrics in Services
Accuracy
Cycle time
Cost
Customer satisfaction
59

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