Mba IV Total Quality Management [12mba42] Notes
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Mba IV Total Quality Management [12mba42] Notes...
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Total Quality Management
12MBA42
TOTAL QUALITY MANAGEMENT Sub Code: 12MBA42 IA Marks: 50 No. of Lecture Hrs/week: 04 Exam Hrs. 03 Hours Total No. of Lecture Hrs. 56 Exam Marks: 100 Practical Component: 01 Hr/ Week Module I (6 hours) Introduction to TQM,Meaning of the terms quality, quality control and quality assurance, importance of quality, quality dimensions of products and services, quality and competitive advantage, cost of quality, TQM, Evolution of TQM, Basic principles of TQM, TQM VS Traditional management, advantages of TQM Module II (10 Hours) Philosophical Framework to TQM Contribution of various gurus of TQM,Deming-Demings chain reaction, Demings principles, deadly sins, PDCA cycle, Jurans Quality triology, Jurans breakthrough sequence, Philips Crosby- Quality is free, Taguchi‟s Quality loss function, Ishikawas contributions and Quality Circles. Module III (6 Hours) Benchmarking Definition, reasons for benchmarking, types of benchmarking, process of benchmarking what to benchmark, understanding current performance, planning, studying others, using findings, Xerox model of Benchmarking, Advantages and pitfalls of benchmarking Concept of Kaizen and its applications Module IV (6 Hours) Business Process Re-engineering (BPR) Introduction, Need for BPR, Implementing BPR, Steps in BPR, Re-engineering vs. TQM, BPR Vs. Kaizen, Re-engineering the structure, change management and BPR, BPR and IT, Advantages and Limitations, Indian examples of BPR Module V (8 Hours) Quality Management Systems(QMS) Introduction, meaning of QMS, ISO 9000, Benefits of ISO, ISO 9000-2008 series, implementation of ISO 9000,Problems related to ISO 9000, QS 9000, Need for QS 9000, QS 9000 series ENVIRONMENTAL MANAGEMENT SYSTEM (EMS), ISO 14000 series, Benefits of ISO 14000, Integrating ISO 9000 & 14000, SEI-CMM level 5 Module VI (6 Hours) Quality Awards : Introduction, Need for Quality Awards, Deming Prize and its features, MBNQA and its features, European quality award and its features, Golden peacock award, TQM models. Module VII (8 Hours) Quality Control tools: Introduction, 7 tools of quality control (Old & New), Poka-yoke, Quality Function Deployment. Module VIII (6 Hours)
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Introduction to Six Sigma Historical developments, statistical framework for six sigma, DPU and DPMO concepts, DMAIC methodology, Training for Six Sigma, Benefits of Six Sigma, Six sigma and TQM. Practical Component: Students have to study any Indian organization which has won Deming prize and identify the quality initiatives of that organization Students are expected to study various quality awards given in India like CII Business excellence award, Rajiv Gandhi national quality award and Tata groups Excellence Award and compare with international awards Students can identify any 2 products and 2 services and develop Quality attributes for the same. Students can identify industry from any sector and conduct a benchmark study with respect to best in the class.
RECOMMENDED TEXT BOOKS: 1. Management and Control of Quality, James R. Evans, 8/e 2012, Cengage Learning 2. Total Quality Management, Dale.H. Besterfield, 3rd Edition, Pearson Education 3. Total Quality Management Text and Cases, G. Nagalingappa&Manjunath VS, Excel books. 4. Total Quality Management, ShridharBhat, Himalaya Publication REFERENCE BOOKS: 1. Total Quality Management by PoornimaM.Charantimath, Pearson Education. 2. Quality Control Handbook by JURAN, Mc.Graw Hill Publication
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TABLE OF CONTENTS MODULE NO
CONTENT
PAGE NO
1
Introduction to TQM
04 to 16
2
Philosophical Framework of TQM
17 to 36
3
Benchmarking
37 to 45
4
Business Process Reengineering(BPR)
46 to 57
5
Quality Management Systems(QMS)
58 to 74
6
Quality Awards
75 to 90
7
Quality Control
91to 102
8
Six Sigma and other developments
103 to 109
MODULE – I Dept of MBA, SJBIT
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Introduction to TQM,Meaning of the terms quality, quality control and quality assurance, importance of quality, quality dimensions of products and services, quality and competitive advantage, cost of quality, TQM, Evolution of TQM, Basic principles of TQM, TQM VS Traditional management, advantages of TQM. OBJECTIVE To Understand and appreciate Concepts and Practices of TQM
Meaning of the terms quality, Quality control and Quality assurance, Importance of quality, Quality dimensions of products and services, Quality and competitive advantage, Cost of quality, TQM, Evolution of TQM, Basic principles of TQM, TQM VS Traditional man
INTRODUCTION TO TQM Total quality management (TQM) refers to methods used to enhance quality and productivity in organizations, particularly businesses. TQM is a comprehensive system approach that works horizontally across an organization, involving all departments and employees and extending backward and forward to include both suppliers and clients/customers. TQM is only one of many acronyms used to label management systems that focus on quality. Other acronyms that have been used to describe similar quality management philosophies and programs include CQI (continuous quality improvement), SQC (statistical quality control),QFD (quality function deployment), QIDW (quality in daily work), and TQC (total quality control). Despite the ambiguity of the popularized term "TQM," that acronym is less important than the substance of the management ideology that underlies it. TQM provides a framework for implementing effective quality Dept of MBA, SJBIT
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and productivity initiatives that can increase the profitability and competitiveness of organizations. Although TQM techniques were adopted prior to World War II by a number of organizations, the creation of the total quality management philosophy is generally attributed to Dr. W. Edwards Deming (1900-1993). In the late 1920s, while working as a summer employee at Western Electric Company in Chicago, he found worker motivation systems to be degrading and economically unproductive; incentives were tied directly to quantity of output, and inefficient postproduction inspection systems were used to find flawed goods. Deming teamed up in the 1930s with Walter A. Shewhart (1891-1967), a Bell Telephone Company statistician whose work convinced Deming that statistical control techniques could be used to supplant traditional management methods. Using Shewhart's theories, Deming devised a statistically controlled management process that provided managers with a means of determining when to intervene in an industrial process and when to leave it alone. Deming got a chance to put Shewhart's statistical quality-control techniques, as well as his own management philosophies, to the test during World War II. Government managers found that his techniques could easily be taught to engineers and workers, and then quickly implemented in overburdened war production plants. One of Deming's clients, the U.S. State Department, sent him to Japan in 1947 as part of a national effort to revitalize the war-devastated Japanese economy. It was in Japan that Deming found an enthusiastic reception for his management ideas. Deming introduced his statistical process control, or statistical quality control, programs into Japan's ailing manufacturing sector. Those techniques are credited with instilling a dedication to quality and productivity in the Japanese industrial and service sectors that allowed the country to become a dominant force in the global economy by the 1980s. While Japan's industrial sector embarked on a quality initiative during the middle 1900s, most American companies continued to produce mass quantities of goods using traditional management techniques. America prospered as war-ravaged European countries looked to the United States for manufactured goods. In addition, a domestic Dept of MBA, SJBIT
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population boom resulted in surging U.S. markets. But by the 1970s some American industries had come to be regarded as inferior to their Asian and European competitors. As a result of increasing economic globalization during the 1980s, made possible in part by advanced information technologies, the U.S. manufacturing sector fell prey to more competitive producers, particularly in Japan. In response to massive market share gains achieved by Japanese companies during the late 1970s and 1980s, U.S. producers scrambled to adopt quality and productivity techniques that might restore their competitiveness. Indeed, Deming's philosophies and systems were finally recognized in the United States, and Deming himself became a highly sought-after lecturer and author. The "Deming Management Method" became the model for many American corporations eager to improve. And total quality management, the phrase applied to quality initiatives proffered by Deming and other management gurus, became a staple of American enterprise by the late 1980s. By the early 1990s, the U.S. manufacturing sector had achieved marked gains in quality and productivity. By the late 1990s several American industries had surpassed their Japanese rivals in these areas. MEANING OF THE TERMS QUALITY, QUALITY CONTROL AND QUALITY ASSURANCE CONCEPTS OF QUALITY Q- Quest for excellence U- Understanding customers’ needs A- Action to achieve customer’s appreciation L- Leadership-determination to be a leader I- Involving all people T- Team spirit to work for a common goal Y- Yardstick to measure progress
Quality –Definitions “The ability of a product or service to meet customer needs” “The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs”-American Society for Quality Dept of MBA, SJBIT
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“Meeting or exceeding customer requirements now and in the future”. This means that the product/service is fit for customers use, Fitness for use is related to benefits received by the customer and to ensure customer satisfaction. Quality control Quality control denotes all those activities which are directed to maintain and improve quality. Quality control involves. 1. Setting of Quality targets 2. Appraisal of conformance (adhering to rules) 3. Taking any corrective action where any deviation is noticed 4. Planning for improvements in quality Objectives of quality control products which are dependable, satisfactory and economical to a customer SQC (Statistical Quality control) manufactured product with the help of statistical knowledge. assignable causes encountered in the production process. Organising for quality control Traditionally Quality control department has the role of a watchdog over production
department employees employee is responsible for quality which is called as quality at source Quality at source
and product
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problems and to solve quality problems.
Quality control strategy and policy uality right first time” which aims at continuous improvement of quality . To facilitate this Quality policy must be formulated. Quality assurance quality lity assurance is intended to include of all activities performed to ensure that the product performs to the customer’s expectations and many departments are involved in it.
Activities in Quality assurance design will have adequate useful life
product
manuals cates inadequate quality
Quality assurance system method of maintaining quality d as an assembly of elements such as organizational structure, responsibilities, procedures, processes and resources for managing quality. The quality assurance system must be documented in the form of a quality manual covering the following areas: The quality assurance system must be documented in the form of a quality manual covering the following areas: 1. Quality planning Dept of MBA, SJBIT
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2. Quality advice and expertise 3. Training personnel 4. Purchase, process, service appraisal methodology 5. Customer complaints, warranty claims 6. Senior management 7. Marketing 8. Research and development 9. Product design 10. Production and operations 11. After sales/service 12. Stores/distribution/transport Total quality control (TQC) -wide-view of product quality to achieve competitive positions by offering quality products to consumers covering from a shop floor to a board room is termed as Total Quality control (TQC) ality control is an effective system for integrating quality development, quality maintenance and quality improvement efforts of the various groups in an organization so as to enable marketing, engineering, production and service at the most economic levels which allow for full customer satisfaction” Importance of quality Producing superior quality products / service is vital to the continued growth success of a company, therefore benefits of quality are given below. 1. It gives a positive company image 2. It improves competitive ability both nationally and internationally 3. It increases market share, which translates into improved profits 4. Overall it reduces costs which also results in profits 5. It reduces problems & avoids unnecessary costs 6. It creates an atmosphere for high employee morale, which improves productivity .
Quality Dimensions of products and services Quality expected from a product (Tangible) Dept of MBA, SJBIT
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Eg: TV, Computers, Bikes 1. Performance: how well the product performs customer’s use eg: speed of a laser printer 2. Features: special characteristics that attracts a customer eg: power steering and central locking system of an automobile 3. Reliability: frequency of malfunction, breakdown or repairs eg: cartridge of a xerox machine 4. Serviceability: speed , cost and convenience of repairs and maintenance eg: service of washing machines 5. Durability: length of time of use before repairs/replacement eg: a car can be used for 5-10 years 6. Appearances: look, feel, taste , smell or sound of a product eg: look of a bike, smell of a perfume, sound of a music system 7. Customer service: treatment received by customers before, during and after the product sale eg: credit card 8. Safety: how well the product protects users during use eg: helmets Quality concepts of Service Quality expected from service sectors (Intangible) Eg: Hotel, Hospitals, Banks 1. Reliability: consistency and dependability 2. Responsiveness: willingness to provide service 3. Competence: possession of skills and knowledge to perform 4. Access: approachability and ease of contact 5. Courtesy: politeness, respect, neatness and appearance 6. Communication: talking to customers in their language 7. Credibility: trust and belief 8. Security: freedom from danger, risk 9. Understanding the customer needs: learning customer requirement, providing individual attention 10. Tangibles: physical evidence of service (facilities, tools and equipment) eg: a cinema theatre with good seating arrangement Quality and Competitive advantage.
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1 Market route benefits Continuous quality Improvement Improved competitive position Higher prices and increased market share Increased revenue Increased profits 2 Cost route benefits Continuous quality Improvement Improved defect-free output Reduced costs of operations Increased profits Cost of quality Cost of quality (COQ)/(COPQ) is the sum of cost incurred by an organization in preventing poor quality. There are essentially 4 types of quality costs as below These are certain costs which are associated with product and service quality. There are 4 major categories of quality costs. They are 1. Prevention costs 2. Appraisal costs 3. Costs of internal failures 4. Costs of external failures Prevention costs Are associated with preventing defects before they happen. They include costs of
Appraisal costs
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Internal failure costs ts need to be repaired or scrapped
External failure costs
Total quality management Total Quality covers
Earlier concept of quality related with a product is no more valid. 1. Quality is ultimately decided by all the processes which get included in the quality loop. 2. Total Quality covers every job , not just one involved in making of the product. Eg: secretaries are expected not to make typing errors, accountants not to make accounting errors and CEO’s are expected not to make strategic errors. 3. Total quality recognizes each person is involved for the quality of the individual work and for the quality of the team work. Total means that everyone in organisation is involved in the final product or service to the customer. Quality does not just mean luxury. The original definition was, ‘quality means conformance to requirements.’ Today’s marketplace is now demanding that we go beyond this definition. A powerful definition of quality to meet these perceptions is ‘quality means delighting the customer by continually meeting and improving upon agreed requirements.’ Management recognises that TQM will not happen by accident. TQM is a managed process which involves people, systems and supporting tools and techniques. TQM is therefore a change agent which is aimed at providing a customer-driven organisation. Dept of MBA, SJBIT
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TQM (Total quality management) hy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction
improvement or kaizen) and other is goal is customer satisfaction which involves meeting or exceeding customer expectations 8 essentials of TQM
Evolution of TQM •
In early 1990s F W Taylor the father of Scientific Management brought the concept of product inspection .
•
In 1924 W Shewhart introduced statistical control charts to monitor production.
•
After the World War II a dramatic increase caused W Edwards Deming introduced (SQC) methods to Japanese manufacturing.
•
Joseph Juran formulated his cost of quality concept emphasizing accurate and complete identification and measurement of costs of quality.
•
In 1950s, Armand Fiegenbaum proposed quality control on the product design and incoming raw material.
•
In 1960s, Philip Crosby coined the concept of “Zero defects”.
•
During 1970s there was a dramatic shift from reactive to proactive approach to quality, this in turn giving importance to customer satisfaction with a drive of team work.
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•
The US government ,safety regulations, product recall mandated by consumer product safety commissions changed the society attitude from “let the buyer beware” to “let the producer beware”.
•
Demings contribution to Japanese industry
•
(3 decades earlier) made the US companies seek his help and experience. As a result Ford Motor ,General Motors and Procter and Gamble to take up revolution.
•
In 1985 ,NASA announced an excellence Award for quality and productivity.
•
The Malcolm Baldrige National Award was established in 1987.
•
In Japan, during the II World War the economy was completely disrupted.
•
In 1950 Dr Edward Deming ,introduced the SQC approach in Japan.
•
Dr K Ishikawa of Tokyo University gave his contributions.
•
As a result the rate of economic growth increased to 9 to 10 percent per year and the national product doubled in 7 to 8 years .
•
From 1950 to 1970 ,in the course of 20 years the per capita income has increased roughly by 4 times.
•
Walter Shewart ,the father of stastistical quality control, initiated the SQC movement during 1947 – 48.
•
Dr Edward Deming also visited India in early 1950s
•
In 1982 due to the quality trigger in US the concept of quality circles came into introduction in the public sector units like ,Bharat electronics and Bharat Heavy Electricals.
•
QCFI – Quality Circle Forum in India came into existence.
•
Prof. Ishikawa was invited to by CII – confederation of Indian industries.
•
The year 1987 brought the ISO 9000 .
•
CII organized training course for ISO 9000 in 1989.
•
Companies practice TQM though Quality circles, Suggestion schemes, kaizen and JIT Basic principles of TQM
•
Customer focused approach to all activities and processes in the organization should be directed towards winning customer satisfaction.
•
Strategic planning and leadership :leadership should lead to strong customer orientation in the organization and be willing to make long-term commitments to its customers, employees, vendors, stockholders and to society.
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•
Restructuring of vertical processes to cross – functional horizontal processes to change the work culture to teamwork and making everyone in the process responsible for the quality.
•
Creating a culture of working through internal customer system, where each stage in the processes and each person in the process can be linked as customers to each other.
•
Continuous improvement of all processes and activities ,leading to total customer satisfaction and competitive advantage.
•
Training and development of people : it is the people who drive the processes under TQM system. Therefore people should be trained and developed for understanding the process of TQM,
•
Empowerment and teamwork of people : team approach to work and cross functional process management is an important aspect of TQM work culture.
TQM V/S TRADITIONAL MANAGEMENT TQM • • • • • • •
Customer delight focused with respect to activities/processes. Customer satisfaction through continuous improvement. It is a proactive measure. TQM aims at superior performance Customer delight and benchmarking are the focus. It is a self-driven and self-imposed culture. Aims to satisfy all the stakeholders.
TRADITIONAL MANAGEMENT • • • • • • •
Product/service focused. Short term satisfaction. It is often a corrective measure. It aims at quality conformance. “State of control “ is the focus. It is based on the QMS systems (ISO 9000). Aims to satisfy customers essential needs.
ADVANTAGES OF TQM • • • • • • • •
Better product quality Productivity improvement Reduced quality costs Increased market Increased profitability Reduced employee grievances Effective teamwork Enhancement of job interest
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Improvement in human relation and work area morale Participation culture Customer satisfaction Enhanced problem solving Improved corporate health Better image and goodwill.
**** End of Module ****
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Module 2: Philosophical Framework to TQM Contribution of various gurus of TQM,DemingDemings chain reaction, Demings principles, deadly sins, PDCA cycle, Jurans Quality triology, Jurans breakthrough sequence, Philips Crosby- Quality is free, Taguchis Quality loss function, Ishikawas contributions and Quality Circles. OBJECTIVE To Understand and appreciate the:
Philosophical Framework of TQM Contributions of various gurus of TQM,Deming-Deming‟s chain reaction, Deming‟s principles, deadly sins, PDCA cycle, Juran‟s Quality triology, Juran‟s breakthrough sequence, Philips Crosby- Quality is free, Taguchi‟s Quality loss function, Ishikawa‟s contributions and Quality Circles. PHILOSOPHICAL FRAMEWORK TO TQM
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Gurus • Shewhart • Deming • Juran • Fiegenbaum • Ishikawa • Crosby • Taguchi Principles and Practices • • • •
Leadership Customer satisfaction Employee involvement Supplier partnership
Tools and techniques • • • • • • • •
Benchmarking Information technology Quality management systems Environmental management system Quality by design Management tools Statistical process control Quality engineering
CONTRIBUTION OF VARIOUS GURUS OF TQM CONTRIBUTOR
CONTRIBUTIONS
Deming
14 points, theory on special & common causes of variation Quality is fitness for use, quality trilogy ,cost of quality Quality is a total field, customer defines quality Quality is free, zero defects Cause and effect diagrams, quality circles Taguchi loss function
Juran Feigenbaum Crosby Ishikawa Taguchi
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Figure 1 DEMING W EDWARDS DEMING W EDWARDS
•
An associate of Shewhart, worked in Western electric company as a statistician.
•
He was invited to Japan to led the quality movement.
•
He modified PDCA cycle of Shewhart to the Plan ,Do ,Study and act.(PDSA).
•
He also advocated intensive use of Statistics and control charts and focused on product improvement and service conformance by reducing variations in the process.
•
He joined the US census bureau in the year 1939 and proved that quality control methods could lower costs even in an exclusive service organization.
•
Deming stressed on the importance of suppliers and customers for the business development and improvement.
•
He believed that people do their best and it the system that must change to improve quality.
•
This 14 points formed the basis for this advice to Japanese top management.
•
The 14 points are applicable to every industry in product and service sector
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DR WALTER A SHEWHART
•
Worked in Western electric company and AT&T,USA.
•
He advocated Statistical quality
Control (SQC) and acceptable Quality level (AQL).AQL is the foundation of today's SIX SIGMA. •
He is considered to be the father figure of SQC, who developed control charts for quality assessment and improvements.
•
DrShewhart also developed the Plan,Do,Check,Act (PDCA) cycle for continuous improvement, which is in use even today
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JOSEPH M JURAN
•
Juran also joined Western electric company and developed Statistical quality control handbook.
•
JUSE invited him to Japan in 1954.
•
He identified fitness quality and popularized the same.
•
Jurans fitness of quality
1. Quality of design- through market research, product and concept. 2. Quality of conformance – through management, manpower and technology. 3. Availability – through reliability, maintainability an logistics support. 4. Full service – through promptness, competence and integrity. •
Jurans quality planning road map
1. Identify your customers 2. Determine their needs 3. Translate into your language. 4. Develop a product that can respond to the needs. 5. Develop processes which are able to produce those product features. 6. Prove that the processes can produce the product.
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7. Transfer the result in plans to the operating forces
PHILIP B CROSBY
•
Crosby was vice President of international telephone and telegraph(ITT).
•
He four absolutes of quality are very relevant to TQM.
•
Four absolutes of quality
1. Quality is conformance to requirements, nothing more or nothing less and certainly not goodness or elegance. 2. Quality has to be achieved by prevention and not by appraisal. 3. The performance standard must be zero and not something close to it. 4. The measurement of quality is the price of nonconformance ,ie, how much the defects in design, manufacture, installation and service cost the company.
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ARMAND V FEIGENBAUM
•
He was the president of American Society of Quality control.
•
He said “Quality is in its essence way of managing the organization”.
•
Feigenbaum’s cycle time reduction methodology
1. Define process 2. List all the activities. 3. Flowchart the process. 4. List the elapsed time for each activity. 5. Identify non value adding tasks. 6. Eminent all possible non value adding tasks.
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KAORU ISHIKAWA
•
A quality guru from Japan.
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He advocated the use of cause and effects diagrams to provide a true representation of the organizational impacts and producers.
•
He developed fishbone or Ishikawa diagram for cause and effect analysis.
DEMING’S CHAIN REACTION
•
The theory states that improvements in quality leads to lower costs because they result in less rework, fewer delays ,and better use of time and materials.
•
Lower costs ,in turn, lead to productivity improvements.
•
With better quality and lower prices, a firm can achieve a higher market share and thus stay in business, providing more and more jobs.
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DEMING’S 14 PRINCIPLES 1) Create constancy of purpose for improvement of product and service. importance of stability in jobs ,long term plans as investment in innovation, training, R&D. 2) Adopt the new philosophy for economic stability. Customer driven approach as zero defects,JIT. 3) Cease dependence on mass inspection to achieve quality. results in bottleneck ,increases cost, measures only causes ,divides the responsibility between production and quality people. Use appropriate tools to create a balance between quality and production 4) End the practice of awarding business on price tag alone. Instead, minimize total cost move towards a single supplier for any item, on trust. 5) Improve Constantly and forever the system of production and service. Enterprise systems and services must keep growing in order to catch up with the competitive market. 6) Institute modern methods of training on the job. 7) Adopt and Institute modern methods of supervision and leadership. 8) Drive out fear : Change and survive. 9) Break down barriers between departments and staff . The workers in design, sales, and production must work together to face problems and resolve them. open communication ,sharing knowledge. 10) Eliminate the use of slogans and posters . Slogans “do it right the first time”;; concentrate on the root cause. 11) Eliminate work standards and numerical quotas. This focuses on quantity rather than quality of product. Ex Targets 12) Remove barriers that hinder the hourly worker. Eliminate Monotonous tasks, Abolish annual or merit rating. 13) Institute a vigorous program of education and training. A person must grow after joining a company, and letting them learn new technology and techniques will increase employee longevity. 14) Create a situation in top management that will push every day on the above points. Just like products and services, every employee in a company must work to accomplish the transformation.
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DEMING’S DEADLY SINS 1. Lack of constancy of purpose; short term focus 2. Emphasis on short term profits; cost cutting to meet the quarterly dividend pay. 3. Over reliance on performance appraisals; self-centered NO mutual teamwork. 4. Mobility of management (job hopping); long-term plans are not effective 5. Overemphasis on visible figures; targets cannot give customer satisfaction. 6. Excessive medical costs for employee health care; absenteeism and health care costs 7. Excessive costs of warranty and legal costs ;
DEMING WHEEL/CYCLE(P-D-C-A)
The PDCA cycle is also known as a problem solving process Plan • A plan can be to initiate a new process or improve an existing one • it should be based upon customer needs, and • resolve to more effectively fulfill the organization’s mission Do • Carry out the process /activities as per the plan Check • Review the gathered data to determine if the planned and implemented change has created the quality improvement intended Act • Take action, either to implement the change or change variables to see if the process can be made more effective, or • “Standardize” the new, successful process.
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DEMING’S TRIANGLE
DEMING’S THEORY OF VARIANCE
•
The basic assumption of this theory is variation from the standard activity as a major source of problems for all process.
•
Variance increases uncertainty and reduces control over the processes.
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TQM assigns managers the task of finding the source of their variance and eliminating it so that the process can be improved.
•
All the variance can be categorized into two :
•
Controlled variance and uncontrolled variance.
1 Controlled variance is a variation from standard process that a worker can correct/manage.
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2 Uncontrolled variance is a variation from the standard process due to the impact of some factor outside the limits of the employee. •
Variances can be corrected by workers or managers by changing its common causes/special causes.
Common causes are as follows •
Weakness in the product design
•
Equipment malfunctions
•
Poor maintenance of machineries
•
Incomplete/inaccurate documents maintenance.
Special causes are short term variations in an operating process as follows • Lack of knowledge/skill and competency • Worker negligence
JURAN- QUALITY TRILOGY
• Quality trilogy includes the following sequence of events: 1 Quality planning 2 Quality control 3 Quality improvement Quality planning 1 Identify the customer – both the external and internal. 2 Determine the customer needs 3 Develop product features that respond needs. Dept of MBA, SJBIT
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4 Establish quality goals that meet the needs of customers and suppliers. 5 Develop a process that can produce the needed product 6 Prove the process capability. Quality Control 1. Choose control subjects. 2. Choose the units of measurement. 3. Establish the measurement 4. Establish the standards of performance 5. Measure actual performance 6. Interpret the difference between the actual and the standard. 7. Take action on the difference Quality improvement 1. Prove the need for improvement 2. Identify the specific projects for improvements. 3. Organize to guide the projects. 4. Organize for diagnosis for discovery of causes 5. Find the causes 6. Provide remedies 7. Prove that the remedies are effective under operating conditions. 8. Provide control mechanisms. JURAN’S BREAKTHROUGH SEQUENCE •
Juran’sbreakthrough sequence identifies a set of actions directed towards achieving major leaps in quality.
•
The following are the steps
Step 1 :proof of need. •
Identifies some fault in the current process that requires an immediate change.it identifiescosts of not changing that exceed the costs of change.
•
Step 2 : project identification
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Identifies specific project to bring about improvements which acts as a catalyst.
•
Step 3: organizing for improvements.
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•
Organizes for successful completion of the selected projects. TOP MANAGEMENT COMMITTEE resources ;task forces
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Step 4 : diagnostic journey
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Traces the root cause from the symptoms (systematic causes, random causes, wilful causes)
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Step 5 : Remedial action
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The project team identifies a set of alternatives and select the appropriate one .it further includes implementation and introducing inspection and testing
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Step 6 :Resistance to change
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Fear of unknown techniques, fear of excel in new environment create resistance among the employees. Formulate actions to overcome fear.
•
Step 7 : Holding on to gains
•
Freeze the new methods and techniques to prevent any return back to old methodology.
PHILIP B. CROSBY 4 Absolutes of Quality Management: •
Quality is defined as conformance to requirements , not “ goodness”
•
The system for achieving quality is prevention, not appraisal
•
The performance standard is zero defects, not that is close enough
•
The measurement of quality is the price of non-conformance, not indexes Crosby’s 6 C’s
•
Comprehension (understanding)
•
Commitment (by all)
•
Competence (Attitude, skill and knowledge)
•
Correction (Elimination of errors)
•
Communication (Support of all people, customers and suppliers)
•
Continuance (improvement)
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CROSBY’S QUALITY VACCINE (CROSBY’S TRIANGLE)
•
Integrity, Policies
Integrity represents an honest attempt by the management to eliminate bureaucracy, improve performance and satisfy customers. •
Systems and operations
Focus on designing new systems and operations to maintain the firm’s new quality environment. •
Communication
Refers to the flow of information ( internal&external) both between the functional departments ,firm ,suppliers and customers. The vaccine requires regular exchange of information about quality problems , performance on quality characteristics, progress towards quality goals and opportunities for improvement
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CROSBY “QUALITY IS FREE” •
Crosby's prescription for quality improvement was a 14 step program.
•
His belief was that a company that established a quality program will see savings more than pay off the cost of the quality program ("quality is free").
•
Crosby’s 14 Steps for quality improvement
1. Management commitment 2. Quality improvement team 3. Quality measurement 4. Cost of quality 5. Quality awareness 6. Corrective action 7. Zero Defects program 8. Supervisor training 9. Zero defects day 10. Goal setting 11. Error cause removal 12. Recognition 13. Quality councils 14. Do it all over again TAGUCHI’S QUALITY LOSS FUNCTION • Taguchi’s asserts the quality of a product is a function of key product characteristics (performance characteristics ). •
The ideal value is its target value.
•
Taguchi’s Quality loss function estimates loss to society from the failure of a product to meet its target value for a particular performance characteristic.
•
A high quality product assures target values consistently throughout its life span under all operating conditions
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This loss can be incurred by the 1 Consumers (short product life, repair costs), 2 Company (increased scrap, rework and warranty costs) and 2 Society ( pollution , safety)
Quality loss function is expressed as L=C (X-T)2 Where L = Total Loss C= a constant X= actual average value of quality characteristics and T= target value of quality characteristic
ISHIKAWA AND QUALITY CIRCLES. •
Dr Ishikawa was instrumental to formulate
1 The concept of CWCQ (companywide quality control) 2 The audit process for selection a company to Deming award. 3 Teambased problem solving Dept of MBA, SJBIT
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4 Quality circles. 5 Cause and effect charts or fish – bone diagrams 6 Bottom – up view of quality
QUALITY CIRCLE A quality circle or quality control circle (Q.C Circle) is a small group of employees 8 to 10 (average number of nine) who volunteer to meet regularly with a facilitator to solve work – related problems in their work area. The group with their leader usually meetonce a week after their working hours. Purpose: To undertake work – related projects designed to improve working conditions, enhance mutual self developmentand to advance the company, all by using quality control concepts.
HOW QC CIRCLE WORKS • • • •
Formation of QC circle Registration of QC circle Improvement of activities QC circle grand meeting of each division
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QC circle grand meeting of plant Companywide QC circle grand meeting
Improvement of activities •
Selection of the problem
•
Study the problem
•
Planning for improvement
•
Execution of the improvement
•
Confirmation of effect
•
Conclusion
•
Presentation Characteristics of Quality circles.
•
Small group of employees : 8 to 10
•
Members are from the same work area or doing similar type of work
•
Membership of the quality circle is voluntary
•
Members meet regularly for about an hour every week
•
Members meet to identify, analyze and resolve work(quality) related problems.
•
Members resolve work related problems leading to improvement.
•
Quality circles enrich the work life of the employees. Benefits of Quality Circles Tangible benefits
•
Better quality
•
Improved productivity
•
Higher safety(reduced number of accidents)
•
Greater cost effectiveness
•
Better housekeeping
•
Increased profitability
•
Waste reduction
•
Reduced absenteeism
•
Reduced grievances.
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Intangible benefits •
Enriched quality of work life.
•
Attitudinal changes
•
Harmony ,mutual trust
•
Effective team working
•
Participative culture
•
Human resource development
•
Promotion of job knowledge
•
Greater sense of belonging.
**** End of Module**** Dept of MBA, SJBIT
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Module 3 Benchmarking Definition, reasons for benchmarking, types of benchmarking, process of benchmarking what to benchmark, understanding current performance, planning, studying others, using findings, Xerox model of Benchmarking, Advantages and pitfalls of benchmarking Concept of Kaizen and its applications OBJECTIVE To understand the meaning of Benchmarking
To identify the various reasons for benchmarking, To list the types of benchmarking, To explore the process of benchmarking To know what to benchmark, To understand current performance, planning, studying others, using findings, To appreciate Xerox model of benchmarking, To realize the advantages and pitfalls of benchmarking To recognize the Concept of Kaizen and its applications BENCHMARKING DEFINITION • Benchmarking is the process of continually searching for the best methods, practices and processes, and adapting their good features and implementing them to become the “best of the best.” •
It is defined as “measuring our performance against that of best-in-class companies, determining how the best-in-class achieve those performance levels and using the information as a basis for our own company's targets, strategies and implementation”
•
EG: Microsoft, FMCG-HLL, Toyota, Ford
REASONS FOR BENCHMARKING •
It acts as a tool to achieve business and competitive objectives.
•
It is a powerful and effective tool to take up right decisions and align with the organizational strategies.
•
It helps organizations to take right decisions in choosing the appropriate markets.
•
It guides the organization to determine the strengths they need to gain competitive advantage.
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•
Benchmarking helps organization to develop strengths and reduce weakness.
•
Benchmarking helps organization to set goals based on the external environment.
TYPES OF BENCHMARKING
Performance or operational benchmarking
• Process or functional benchmarking • Strategic benchmarking Performance or operational benchmarking • Involves pricing, technical quality, features and other performance characteristics of products and services • It also involves comparing competitors’ products, process and analyzing them Process or functional benchmarking • Analyses work processes such as billing, order entry or employee training, manufacturing, work /job design, techniques, procedure/process, sequence of operations. • This identifies the most effective best practices in companies that perform similar functions • Eg: Best practices of L.L.Beancompany was adopted by Xerox which reduced the cycle time by 50 % Strategic benchmarking • Examines the winning strategies of other companies and to construct a key success factor(KSF)
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BENCHMARKING PROCESS
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1 Getting started • Planning • Organizing and
(work technique) ( funds, technical team, technology vendor, training team, top management)
• Managing for benchmarking (adopting changes and adjustments) 2 Preparing to benchmark • Identify key processes • Form team
which processes is to improved core workmen
• Understand your own process
KRA ‘s strength /weakness
3 Conducting research • Collect information “who is best and what is best” org; brand image, market position, competitive secret, competitors , 4 Selecting whom to benchmark • Establish relationship • Plan to collect and share information 5 Collecting and sharing information • Surveys • Site visits • Determine any third parties( to collect the data) 6 Analyzing adapting and improving • Compare data • Plan to surpass • Implement and monitor • improve
Performance Measure Examples Accounting •
Percentage of Late Payments
•
Time to Respond to Customer Requests
•
Number of Billing Errors
•
Number of Payroll Errors
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Information Services •
Number of Errors / Code Line
•
Percent of Reports Received on Schedule
•
Number of Rewrites
•
Number of Errors Found After
Marketing •
Accuracy of Forecast
•
Number of Incorrect Order Entries
•
Overstocked Supplies
•
Contact Errors
Purchasing •
Purchase Order Errors
•
Downtime Due to Shortages
•
Excess Inventory
•
Cycle Time (from start of purchase to receipt in-house)
Product Engineering •
Project Completion Cycle Times
•
Engineering Changes/ Document
•
Number of Errors Found During Design Review
•
Number of Errors Found in Design Evaluation
Quality Control •
Percentage of Lots Rejected in Error
•
Number of Engineering Changes Detected After Design Review
•
Errors in Reports
•
Cycle Time for Corrective Action
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XEROX 12-STEP BENCHMARKING PROCESS
•
Phase 1: Planning
1. Identify what to benchmark; 2. Identify comparative companies; 3. Determine data collection method & collect data. •
Phase 2: Analysis
4. Determine current performance gap; 5. Project future performance levels. •
Phase 3: Integration
6. Communicate finding and gain acceptance; 7. Establish functional goals. •
Phase 4: Action
8. Develop action plans; 9. Implement specific actions & monitor progress; 10. Recalibrate benchmarks. •
Phase 5: Maturity
11. Attain leadership position ; Dept of MBA, SJBIT
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12. Fully integrate practices into processes.
ADVANTAGES OF BENCHMARKING It promotes a thorough understanding of company's processes, strength & weaknesses is well understood. 2. Saves time and money as known practices are adopted as adopts the practices followed by superiors competitors rather than invention 3. Identifies non-value added activities and plans for process improvement 4. Enables comparison of performance measures in different dimensions, like Return on assets, cycle time, delivery time and etc.. 5. It focuses on processes and not on products, it is not restricted to a company boundary 6. It allows organizations to set realistic ,new performance targets to do things in a better way 7. It defines specific gaps in performance and to select that process for improvement, and redesigning the process 8. It provides a basis for training human resources 9.Brings in new changes and ideas. 10.It is a ongoing system. 11. It helps to set goals with reference to external perspective.
LIMITATIONS OF BENCHMARKING it focus on the process not the situation. •
It creates arrogance against competitors.
•
Best practices is not static , but a moving target.
• Benchmarking is not a panacea (solution) that can replace all other quality efforts • Benchmarking is not a “instant pudding”. It will not the improve performance , if top management is not providing all the resources and not adopting quality culture
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KAIZEN AND ITS APPLICATIONS •
Kaizen is a Japanese word for improvement, change for the better, or continuous improvement.
•
the concept of Kaizen has evolved since the 1950s into a business strategy of making small, but continuous changes for the better in company operations.
•
These changes can range from manufacturing steps to productivity, inventory or quality control matters.
Kaizen involves every employee and strongly encourages suggestions for improvements
5S Kaizen Principles •
Seiri means to straighten – up
•
Seitonmeans putting things in order
•
Seisomeans to clean up
•
Seiketsumeans personal cleanliness
•
Shitsukemeans discipline.
•
Seiri means to straighten – up /sort /clear out
•
Differentiate between the necessary and unnecessary and discard the unnecessary
•
It includes
•
Work – in – process
•
Unnecessary tools
•
Unused machinery
•
Defective products.
• •
Papers and documents Seitonmeans putting things in order/Set Things in Order
•
Keep the things in order so that they are ready to use when required.
•
This avoids waste of time due to searching for things like tools, parts, components.
•
“everything should be at its place and there should be place for everything”
•
Seisomeans to clean up /clean and shine
•
“keep the work place clean”
•
Every individual should clean the workplace every day before starting the day’s work and also at the time of closing the work
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•
Seiketsumeans personal cleanliness/Standardize
•
Having good housekeeping practices by personal attention to personal cleanliness
•
Shitsukemeans discipline.
•
Every worker and manager has to follow procedures in the work place with discipline.
**** End of Module3**** Dept of MBA, SJBIT
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Module 4 Business Process Re-engineering (BPR) Introduction, Need for BPR, Implementing BPR, Steps in BPR, Re-engineering vs. TQM, BPR Vs. Kaizen, Re-engineering the structure, change management and BPR, BPR and IT, Advantages and Limitations, Indian examples of BPR OBJECTIVE To understand the meaning of Business Process Re-engineering (BPR) & Introduction, To realize the Need for BPR, To explore the process of BPR Implementation & Steps in BPR, To differentiate between Re-engineering vs. TQM, To distinguish between BPR Vs. Kaizen, To appreciate the need for Re-engineering the structure, change management and BPR, To understand the relation among BPR and IT, To recognize the advantages and Limitations of BPR, To discuss Indian examples of BPR
INTRODUCTION TO BPR Customer satisfaction has increasingly become the cardinal principle governing any successful business Despite emphasis on customer satisfaction, there has been complaints and disappointment , the reasons for this lies in the process and systems In many cases, present systems can no longer be fixed and improvements are not sufficient Hence reengineering of the entire system is needed.
Michael Hammer of the US coined the term re-engineering . “the fundamental rethinking and radical design of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed” It is also known as “process reengineering” or “business process re-engineering” It involves asking basic questions about business processes why do we do it? Why it is done in this way?
Radical redesigning involves tossing out existing procedures and reinventing the process. The goal is to achieve quantum leaps in performance Principles of BPR Rule 1: Organise around outcomes, not tasks Rule 2: Have those who use the output of the process perform the process (work should be carried where it is) Dept of MBA, SJBIT
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Rule 3: Merge information processing work into real work that produces the information Rule 4: Treat geographically dispersed resources as though they work centralized Rule 5: Link parallel activities instead of integrating their results Rule 6: Put the decision point where the work is performed and build control into the process Rule 7: Capture information once-at the source
NEED FOR BPR Develop business vision and process objectives Identify processes to be redesigned Understand and measure existing processes Identify information technology levels Design and build a prototype of the process
THE IMPLEMENTATION OF BUSINESS PROCESS REENGINEERING As more organizations undertake business process reengineering (BPR), issues in implementing BPR projects become a major concern. This field research seeks empirically to explore the problems of implementing reengineering projects and how the severity of these problems relates to BPR project success. Based on past theories and research related to the implementation of organizational change as well as field experience of reengineering experts, a comprehensive list of sixty-four BPR implementation problems was identified. The severity of each problem was then rated by those who have participated in reengineering in 105 organizations. Analysis of the results clearly demonstrate the central importance of change management in BPR implementation success. Resolutions of problems in other areas as technological competence and project planning were also determined to be necessary, but not sufficient, conditions for reengineering success. Further, problems that are more directly related to the conduct of a project such as process delineation, project management, and tactical planning were perceived as less difficult, yet highly related to project success. This situation was also true for human resource problems such as training personnel for the redesigned process. These findings suggest that reengineering project implementation is complex, involving many factors. To succeed, it is essential that change are more contextual (e.g., management support and technological competence) as well as factors that pertain directly to the conduct of the project (e.g., project Dept of MBA, SJBIT
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management and process delineation). As one of the first pieces of empirical evidence based on a field study, this research emphasizes the importance of addressing BPR implementation within the broader context of organizational change in a complex sociotechnical environment.
IMPLEMENTING BPR, STEPS IN BPR
Understanding the process
Streamlining
Measurement & controls
Continuous improvements
Step 1: Formulate / Modify business visions, policies, objectives
Step 2: Formulate / Modify business strategies according to changing customer requirements, technology changes and competition Step 3: Analyze the existing business process cycles & workflows and determine how they may be modified or refined Step 4: Apply IT to setup an optimal Business Information Management Architecture (BIMA) to support the reengineered business process Step 5: Modify or redesign the existing processes according to the reengineering strategies and develop refined Business Process Automation Systems (BPAS) Step 6: Apply IT strategies to map BIMA onto an Enterprise Information Management System (EIMS) that is integrated across the enterprise and that fits into and supports the reengineered Business process cycles and workflows. Step 7: Integrate the EIMS with the BPAS to build up the completed reengineered business system
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Step 8: Repeat steps 1-7 for continuous BPR due to changing customer demands, technology changes and business strategies, which leads to business stability
Reengineering in a service industry Make the customer the starting point for change Design work processes in light of organizational goals Restructure to support frontline performance 3 R‟s of reengineering Rethink: this phase requires examining the organizations current objectives and underlying assumptions to determine how well they incorporate the renewed commitment to customer satisfaction Redesign: This phase requires an analysis of the way the organization produces the products or services it sells-how jobs are structured, who accomplishes what tasks and the results of each procedure. Which element to be redesigned is determined to make the customer satisfied.
Retool: This phase requires a thorough evaluation of the current use of advanced technologies, especially electronic data processing systems, to identify opportunities for change that can improve quality of services and customer satisfaction
RE-ENGINEERING VS. TQM It is very important to understand that Reengineering is not a separate discipline. It is, in fact, a subset of TQM. The essential difference between (Business Process) Reengineering and TQM is that reengineering aims at quantum gains on the order of 30 to 50 percent or more, whereas Total Quality Management programs stress incremental progress, striving for inch-by-inch gains again and again. The two approaches to improve performance are not mutually exclusive; it makes sense to use them in tandem. Reengineering can be used to first produce good basic design that dramatically improves a business process. Total quality programs can be used to work out bugs, perfect the processes, and gradually improve both efficient and effectiveness. Such two-pronged approach to implementing organizational and strategic change is like a marathon race where you run fast four laps as fast as you can, then gradually pick up speed the remainder of the way. Both TQM and BPR are customer-oriented. They both aim on improving the customer satisfaction. Also, they both suggest thinking outside in. On the other words, they both suggest to
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think from the customer's viewpoint. Also, both TQM and BPR are process-oriented. They both target to alter the processes, but not just on the product. Moreover, they both take team approach. Nearly all BPR projects are initiated by top-down approach. Since BPR would results great changes, staff resistance is obvious. Therefore, top management's support and commitment are very important. For TQM, both top-down approach and bottom-up approach are possible. The basic assumptions of TQM and BPR are different. TQM assumes that the existing practices or systems are principally right and useful. The target of TQM is to improve on the basis of the existing system. However, BPR takes an opposite assumption. BPR assumes the existing system is useless and suggests starting it over. Unlike TQM that aims on smoothly and incremental improvements, BPR aims on dramatic results. TQM emphasis on total involvement, including all the stakeholders. The involvement even extends to suppliers and customers. Also, TQM also suggests involving all the processes in the company, including human resources management, order fulfilling, manufacturing, marketing and customer management and others. However, for BPR, the project can be controlled to a specified area only. Standardization is one of the key points of TQM. TQM aims on standardize the practices, thus achieving a consistent performance. It also makes that there is a certain degree of documentation for TQM. However, BPR emphasis on flexibility and believes that standardization would increase the complexity of the process. Therefore, standardization is rare in BPR and the level of documentation is much lower. TQM emphasis on the use of statistical process control. However, there is no similar concern for BPR. On the other hand, BPR emphasis more on the enabling role of information technology. TQM is a cultural issue. Once the culture is built, TQM is absorbed in the daily operation. However, BPR is a project. It is with a clear target that should be achieved as soon as possible. In fact, BPR is a risky project that is suitable for organizations in deep trouble or facing great challenges. However, an organization cannot always be under BPR. TQM, on the other hand, can be treated as a consolidation approach for the organizations to maintain continuously improvements. BPR VS. KAIZEN
BPR assumes lack of processes as the basis of change that might not be true in all cases. Kaizen accepts current state of processes and works towards gradual improvement.
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BPR starts the process of improvement from a clean slate, i.e. totally ignore current status as opposed to kaizen.
BPR is hard to implement, technology oriented and requires and considerable change management ,opposed to kaizen which is simpler, people oriented and long term oriented.
RE-ENGINEERING THE STRUCTURE Restructuring the firm consists of altering its decision-making, operating divisions, and management culture. Reengineering entails changing the procedures by which the work is accomplished and products delivered. Process restructuring, as championed by Michael Hammer and James Champy in their Reengineering the Corporatio, can deliver costs reductions of 50 percent or more. Corporate restructuring, as portrayed by John Womack and colleagues in The Machine that Changed the World, also suggest a law of “halves.”
Womack and his colleagues studied the Japanese
automobile industry, and their research revealed that Toyota and other makers – by applying the principles of teamwork, quality control, customer focus, minimal buffers and continuous improvement – had cut product defects by half, factory space by half, work-time by half, and development time by half. While diversification had been a hallmark of good management during the 1960s, shedding unrelated business had become the measure during the 1980s and 1990s. De-diversification, back to basics, and a return to core competencies emerged as restructuring drivers for good reason. More focused firms, as Robert Hoskisson and Michael Hitt show in Downscoping, display superior performance. Restructuring actions taken in single areas tend to achieve few enduring gains. Downsizing the workforce generates short-term cost savings, but in the absence of a broader reorganization, it brings only temporary relief. Reengineering business process creates immediate gains, but the gains are short-lived without changes in performance measures, compensation incentives, information technologies, employee skills, and organizational structure.
Restructuring and
reengineering, then, should be seen as a multi-faceted revamping of the corporation. Dept of MBA, SJBIT
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Company restructuring has both worsened and improved the lot of those who work there. Lean redesigns, cost reductions, and repeated downsizings have terminated careers and decimated communities. At the same time, reengineering, flexible work, and streamlined hierarchies have improved employee productivity and product quality. The process of restructuring frequently brings long work weeks and high stress levels, but the product of restructuring also often results in greater autonomy and more challenging work. One study of restructuring experience revealed heightened loads, diminished morale, and reduced employee commitment, but it also found enhanced quality, customer service, risk taking, workforce competence, and productivity. The dual impact of corporate restructuring on those who experience and manage it accounts for some of the schizophrenia toward restructuring. Work environments can be filled with high anxiety and low morale. At the same time, however, the quality of work life often improves, with more variety, responsibility, and teamwork. Executives experience stress as they manage the transformation, but in doing so they are also laying a framework for improved company performance, richer compensation packages, and enhanced shareholder return. CHANGE MANAGEMENT AND BPR BPR is all about the process. Change Management is all about the people. In a BPR context, unless you've completely automated the process then you won't get 100% of your ROI until 100% of the people involved have internalized the new process! One of the key reasons that many Hammer and Champy style BPR initiatives failed miserably was that their total focus was on the Q component, to the exclusion of the A component. Alas, for most business initiatives you don't get dollar one of ROI until somebody's behavior changes. I won't repeat the most excellent rant extended polemic of the previous post, but there's more discussion of the topic there if you're interested. All of these three terms relate to change, but to different levels and types of change. The problem with the fuzzy definitions is that it leads to people applying the wrong practice to their business challenge. It’s like someone saying, “We need to dig a tunnel from England to France; let me get my Black & Decker rechargeable drill.” Or equally bad, “We need to place a screw in the living room wall to hang a mirror; hold on while I get the dynamite.” Dept of MBA, SJBIT
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Change Management, Process Reengineering and Corporate Transformation are clearly diffent. They are distinct processes, require special capabilities, and are applied in different ways. Change Management is geared towards communications and training on some specific shift in the use of an information system or process. Business Process Reengineering (BPR) relates to taking an entire end-to-end business process, like billing and collecation or sales as examples, breaking it down to component steps, realignigng the steps to be more efficient and effective, and implmenting the new process. The implementation of BPR projects typically entail major systems changes and significant changes to the organization and how business is conducted. Corproate Transformation is more focused on changing the business overall. A transformation effort is centered on clarifying the corporate strategy and putting a process and discipline in place to drive strategy execution, alignment of the orgnaization and disciplined follow through for performance. The most common mistake we see in selecting the right tool for change is underestimating the level of change that is being called up. What may seem to management as a minor tweak in business process is often received by sales and operations as a major shift that is disruptive to the daily operations and requires much more preparation and considerations to accomplish. My ChangeThis artice titled, “People Don’t Hate Change, They Hate How You’re Trying to Change Them” became one of the fastest downloaded pieces on their site. The team at ChangeThis said that they knew that trying to get corporate change right was one of the biggest frustrations people have and so this was no surprise to them. BPR AND IT IT has penetrated the office and services environment since the 1978.The shift from mainframe to PC based technology is breaking down communication barriers between employees and customers. Now managers and employees from various departments are designing and controlling complex business information systems. IT capabilities involve improving information access and coordination across organizational units. It is so powerful that it can actually create new process design options, rather than simply support it. In his book, Business the Speed of Dept of MBA, SJBIT
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Thought, Bill Gates argues that if the 1980s were about quality and the 1990s were about reengineering, then the 2000s will be about velocity. Gates advocates complete digitalization of all aspects of life. He argues that to be successful in the digital age, companies need to develop a new digital infrastructure similar to the Human nervous system. This new digital system enables companies to run smoothly and efficiently, makes them respond quickly to emergencies and opportunities, provides a mean for quickly getting valuable information to the people in the company who need it. This in turn empowers employees to make decisions and interact with customers .What is the Relation between BPR & Information Technology? Hammer considers IT as the key enabler of BPR . Davenport & Short argue that BPR requires taking a broader view of both IT and business activity, and of the relationships between them. IT capabilities should support business processes, and business processes should be in terms of the capabilities IT can provide. They believe IT's promise and its ultimate impact is to be the most powerful tool for reducing the costs of coordination .It has been argued that innovative uses of IT would inevitably lead many firms to develop new, coordination -intensive structures, enabling them to coordinate their activities in ways that were not possible before. Such coordination -intensive structures may lead to strategic advantages.
IT Roles in Initiating and Sustaining Reengineering Before the Process Design
During the Process Design
During the Implementation
Create infrastructures and manage information that support evolving organization
Bring vast amounts of information into the process
Create a digital feedback loop
Foster process thinking in organizations
Bring complex analytical methods to bear on the process
Establish resources for critical evaluation of the reengineered process
Identify and select process for redesign
Enhance employees’ ability to make more informed decisions with less reliance on formal vertical information flows
Improve IT processes to meet increasing needs of those divisions that have gone under reengineering processes
Participate in predicting the
Identify enablers for process
Institute a program of
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nature of change and anticipate the information needs to support that change
design
“cleanup” and damage control in case of failure
Educate IT staff in non - technical issues such as marketing, customer relationships, etc.
Capture the nature of proposed change and match IT strategy to that change
Communicate ongoing results of the BPR effort
Participate in designing measures of success/ failures of reengineering
Capture and disseminate knowledge and expertise to improve the process
Help to build commitment to BPR
Communicate ongoing results of the BPR effort
Evaluate the potential investment and return of reengineering efforts
Transform unstructured processes into reutilized transactions Reduce/replace labor in a process Define clear performance goals and objectives to drive the implementation Define the boundaries and scope of the process
ADVANTAGES OF BPR 1. Organization can achieve radical changes in performance by cost , cycle time, service and quality 2. It boosts competitiveness in the operations through simpler, leaner and more productive processes 3. Encourages organization to problem solving thinking approach 4. It helps organizations to make noticeable changes in the pace& quality to respond to customer needs 5. An organization can be transformed from rule driven organization to a marketing structured organization to focus on customer
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6. It helps to get better market share and profitability 7. Workers are encouraged to make suggestions and creates a TQM culture 8. It helps in creating challenging and more rewarding jobs with broader responsibilities
LIMITATIONS OF BPR 1. It is not a panacea, application of it matters a lot. 2. It is not simple or easy to do. Hence companies do not invest time and money on BPR 3. Corporate strategy support is needed 4. BPR cannot be realized without Information technology 5. Processes in functional areas must be improved 6. It requires teamwork from all the employees
Example of FORD company-BPR FORD Company has employed 500 people in North America for Accounts Department The Staff were spending more time in resolving problems between purchase orders, receiving documents and invoices FORD reengineered the Accounts payable process, introducing a system of online database for purchase orders and other documents processing This BPR brought a very good change in FORD company Staff members were reduced by 75% and faster processing was possible which saved time and cost
**** End of Module 4**** Dept of MBA, SJBIT
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Module 5 Quality Management Systems(QMS) Introduction, meaning of QMS, ISO 9000, Benefits of ISO, ISO 9000-2008 series, implementation of ISO 9000,Problems related to ISO 9000, QS 9000, Need for QS 9000, QS 9000 series ,ENVIRONMENTAL MANAGEMENT SYSTEM (EMS), ISO 14000 series, Benefits of ISO 14000, Integrating ISO 9000 & 14000, SEI-CMM level 5. OBJECTIVE To understand the importance of Quality Management Systems (QMS) Introduction, meaning of QMS, ISO 9000, Benefits of ISO, ISO 9000-2008 series, Implementation of ISO 9000, Problems related to ISO 9000, QS 9000, Need for QS 9000, QS 9000 series ENVIRONMENTAL MANAGEMENT SYSTEM (EMS), ISO 14000 series, Benefits of ISO 14000, Integrating ISO 9000 & 14000, SEI-CMM level 5
QUALITY MANAGEMENT SYSTEMS(QMS) INTRODUCTION, MEANING OF QMS A quality management system (QMS) is a collection of business processes focused on achieving your quality policy and quality objectives — i.e. what your customer wants and needs.It is expressed as the organizational structure, policies, procedures, processes and resources needed to implement quality management. Early systems emphasized predictable outcomes of an industrial product production line, using simple statistics and random sampling. By the 20th century, labour inputs were typically the most costly inputs in most industrialized societies, so focus shifted to team cooperation and dynamics, especially the early signaling of problems via a continuous improvement cycle. In the 21st century, QMS has tended to converge with sustainability and transparency initiatives, as both investor and customer satisfaction and perceived quality is increasingly tied to these factors. Of all QMS regimes, the ISO 9000 family of standards is probably the most widely implemented worldwide - the ISO 19011 audit regime applies to both, and deals with quality and sustainability and their integration.
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ISO 9000
ISO 9001: 2000 A revolution occurred in 1947 in the management of quality worldwide when ISO (Geneva,
Switzerland) bought out a set of standards pertaining to the practice of quality assurance methods within a company. Termed as ISO 9000 standards, these standards proved their value around the globe. Many countries including India have adopted ISO. ISO 9000 is not a mandatory system or it is not a government regulation. However it is a very important customer regulation. It provides assurance to a wide variety of customers about an organizations quality assurance methods and quality management practices 5 objectives of ISO 9000 1. Achieve, maintain and seek to continuously improve product quality including service relationships
2. Improve the quality of operations to continuously meet customers and stake holders 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 stake holders that quality requirements are being achieved in the delivered product 5. Provide confidence that quality system requirements are fulfilled Structure of ISO Quality standards ISO 9000
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ISO 9001:2000 – Model
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ISO requirements 1. Management responsibility 2. Quality system 3. Contract review 4. Design control 5. Document and data control 6. Purchasing 7. Control of supplied products 8. Product identification and traceability 9. Process control 10. Inspection and testing 11. Control of inspection, measuring and test equipment 12. Inspection and test status 13. Control of nonperforming products 14. Corrective and preventive action 15. Handling, storage , packaging, preservation and delivery 16. Control of quality records 17. Internal quality audits 18. Training 19. Servicing 20. Statistical techniques
Quality Management System (QMS)- Principles of new standard for ISO
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Principles of new standard
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Quality Manual It is a document containing the quality policy, quality objectives, structure chart, and description of the quality system of an organization. A quality manual often explains how the requirements of a quality standard are to be met and identifies the person responsible for quality management functions. BENEFITS OF ISO CERTIFICATION International competition and customer demands Market realities and perceptions Internal Organisational Health Advantages of ISO 9000 certification Marketing muscle: ISO company offers a better product and service which gives the marketing strength to a company Contractor selection : ISO certification helps in the Selection of contractors in abroad which otherwise becomes difficult to search for a contractor Supplier : Selecting a new supplier can be time consuming and costly. If a supplier is ISO certified , it is easy to select the supplier Benefits for all the parties like companies, suppliers, contractors and customers Dept of MBA, SJBIT
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Continual improvements Criticism (Disadvantages) of ISO • Bureaucratic • Costly • No guarantee that a company that is certified provides a quality service or product • Quality certification only provides a book of procedures and not necessarily better quality • Many companies such a s Hewlett-Packard , Marc and Spencer enjoyed a reputation for quality before certification of ISO • People are demotivated because certification puts a block on individual initiative • Systematic controls and written procedures are considered as being unnecessary “policing” of activities of workers. • Demands more work from employees and hence more human resources are required
ISO 9001:2000 -Transition Process
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Implementation of ISO Establishing a Quality Policy Developing a corrective action process to monitor and control non-conformance (NC) Writing document control procedures (work instructions) Completing drafts of detailed procedures for each ISO element, reviewing and approving them Completing Quality manual which consolidates all procedures Training all employees on the quality policy and audit procedures of the company Conducting internal audits Preparing for registration audit Registration of ISO o Registration is done through a Third party auditor known as registration agency (registrar) o Registrar certifies the company and this certificate is accepted by all of the company‟s customers Registration process 1. Document review : of the quality system documents or quality manual by the registrar 2. Pre assessment : identifies potential non-compliance on the quality system 3. Assessment : of quality system by 2-3 auditors 4. Surveillance : of periodic reaudit to verify conformity with the practices PROBLEMS RELATED TO ISO 9000 Overemphasis on Inspection Questions of Safety "Not a True Quality Program" Administration and Control Required for Basic Survival Employee and Customer Impacts Dept of MBA, SJBIT
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Relationship with Quality Award Programs Lack of Management Support QS9000 QS 9000 is a quality standard developed by a joint effort of the Big Three automakers, General Motors ,Chrysler and Ford. It was introduced to the industry in 1994. It has been adopted by several heavy truck manufacturers in the U S as well. Essentially all suppliers to the domestic automakers need to implement a QS9000 system. Description The standard is divided into three sections with the first section being ISO 9001 plus some automotive requirements. The second section is titled "Additional Requirements" and contains system requirements that have been adopted by all three automakers - General Motors, Chrysler and Ford. The third section is titled the "Customer Specific Section" which contains system requirements that are unique to each automotive or truck manufacturer. On December 14, 2006, all QS9000 certifications were terminated. With QS9000, the middle certification between ISO 9001 and ISO/TS 16949, no longer valid, businesses had a choice between either ISO9001 or TS16949. QS9000 is considered superseded by ISO/TS 16949.
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Need for QS 9000 QS-9000 will help companies to stay ahead of their competition. It will do this by filling gaps in the business and quality systems that can cause problems. QS-9000 eliminates redundant and unnecessary work practices. QS-9000 tells current and potential customers that the product has consistent quality and is manufactured under controlled conditions. This system is globally accepted as proof of quality in the automotive industry and is also a major customer requirement. QS-9000 is sometimes seen as being identical to ISO 9000, but this is not true. Even though each element of ISO 9000 is an element of QS-9000, QS-9000 adds clauses to the majority of the ISO 9000 elements. For example, QS-9000 adds requirements for a business plan, tracking customer satisfaction and bench marking to element 4.1 of ISO 9000, Management Responsibility. QS9000 also uses sector-specific requirements. The following requirements are not based on ISO 9000:
production part approval process
the requirements for gaining approval from the customer to run a new or altered part or process
continuous improvement
automotive suppliers are required to have systems in place to ensure that organized, measurable improvement activities take place for a variety for business aspects
manufacturing capabilities
requirements for planning and effectiveness for equipment, facilities and processes
requirements for mistake proofing, and tooling management. Advantages of QS 9000 Companies minimize deficiencies in supply and support of products and services. Companies identify problem areas and address them quicker. Companies identify customer needs more accurately. Companies become more consistent in their product and services.
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ISO 9000 series glossary
ction, installation and servicing of products or services
ing the elements of the Quality Management system ENVIRONMENTAL MANAGEMENT SYSTEM Systematic way of managing an organization‟s environmental affairs • Based on Plan-Do-Check-Act Model (PDCA) • Focused on Continual Improvement of system • Addresses immediate and long-term impact of an organization‟s products, services and processes on the environment. • A tool to improve environmental performance To get your environmental ducks in a row! • Struggling to stay in compliance and keep track of regulations/laws • Environmental management just one of many responsibilities • Establish a framework to move beyond compliance • Vehicle for positive change; improved employee morale, enhanced public image • To reduce Employee turnover
ISO 14000 ISO 14000 Family A series of guidance documents and standards to help organizations address environmental issues. Ones below deal with EMS. 14001: Environmental Management Systems
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14004: EMS general guidelines 14010: Guidelines for Environmental Auditing 14011: Guidelines for Auditing of an EMS 14012: Auditing - Qualification criteria To Whom Do the Standards Apply? Standard is Voluntary Large and Small Business & Industry Service Sectors (hospitals, hotels, etc.) City and Country Government Applicable to all types of organizations, of all sizes anywhere in the world Companies who have ISO 14000 system EMS is implemented in companies like o IBM o Xerox o Ford and GM o Toyota ISO 14001 Key Elements 1. Policy Statement 2. Identification of Significant Environmental Impacts 3. Development of Objectives and Targets 4. Implementation Plan to Meet Objectives and Targets 5. Training 6. Management Review
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INTEGRATION OF ISO 9000 AND 14000 Quality Systems Inter-Relationships
Documentation is much talked about. There are different types. At Motorola, for example, there are SOPs (standard Operating Procedures) and maintains a Quality Systems Manual. There is process documentation in the manufacturing areas. Everyone uses documentation outside of work. If you buy something (like a clock), there are instructions in the box. That is documentation. Think of documentation as instructions. Documentation explains how to do things. The auditor‟s job is to make sure everyone is „Following Instructions‟. Typical Types of Records o Contract Review o Purchasing o Identification and Traceability o Process Control Dept of MBA, SJBIT
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o Inspection and Test o Control of Measurement and Test Equipment o Non-conforming Product o Corrective and Preventive Action o Internal Quality Audits o Training
SEI - CMM LEVEL 5 Introduction Customer satisfaction has become the motto of many organisations , in today‟s competitive world.
exceeds budget and ends up in chaotic project
effective process
mature disciplined process practices for planning, engineering, and managing software development & maintenance.
product quality of an organisations software process to the state of the practice of the industry
CMM guides software organisations to gain control of their processes for developing and maintaining software and to evolve of software engineering and management excellence
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Capability Maturity Model (CMM) CMM General Description What is CMM? • Snapshot in business evolution based on evaluation of product or service. • Framework for process improvement • Emphasizes standardization of business process to yield a consistent product or service • Identifies areas of relative strength and weakness of the process through the quality of the product or service • Qualities of change that improve a business process • Basis for a Gap Analysis What CMM is not? • Not a cookbook recipe • Not bound by specific technology • No single answer to achieve process improvement Evolution of CMM The software Engineering Institute (SEI) developed an initial version of a maturity model and maturity questionnaire at the request of the government with advice from the experts from the software industry Objectives of CMM Objective has been to provide a model that 1. Is based on actual practices 2. Reflects the best of the state of the practice 3. Reflects the needs of individuals performing software process improvement, software process assessments or software capability evaluations 4. Is documented 5. Is publicly available Additional knowledge from practice has enriched the CMM concept and CMM version 1.1 is created
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TQM and CMM Organised strategy for improvement is essential for the product success The structure of CMM is based on the quality principles of Walter Shewart, Deming and Juran to establish a project management and engineering foundation for qualitative control of the software process, which is the basis for continuous improvement process (CIP) Capability Maturity Model (CMM) Functional Background CMM is divided into 5 Levels of Process Maturity CMM focuses on systematic process improvement by: Developing tools to measure maturity (i.e. maturity questionnaire) Focus on the overall model, not catering to specific questions • Questionnaire identifies both the strengths and weaknesses • Improvement in the process yields an improved product (goods and/or services)
*** End of Module 5 **** Dept of MBA, SJBIT
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Module VI Quality Awards : Introduction, Need for Quality Awards, Deming Prize and its features, MBNQA and its features, European quality award and its features, Golden peacock award, TQM models. OBJECTIVE To realize the need and importance of Quality Awards: Quality Awards : Introduction, Need for Quality Awards, Deming Prize and its features, MBNQA and its features, European quality award and its features, Golden peacock award, TQM models.
INTRODUCTION The award promotes awareness of performance excellence as an increasingly important element in competitiveness. It also promotes the sharing of successful performance strategies and the benefits derived from using these strategies. To receive a Baldrige Award, an organization must have a role-model organizational management system that ensures continuous improvement in delivering products and/or services, demonstrates efficient and effective operations, and provides a way of engaging and responding to customers and other stakeholders. The award is not given for specific products or services. In the early and mid-1980s, many U.S. industry and government leaders saw that a renewed emphasis on quality was necessary for doing business in an ever-expanding and more competitive world market. But many U.S. businesses either did not believe quality mattered for them or did not know where to begin. The Malcolm Baldrige National Quality Improvement Act of 1987, signed into law on August 20, 1987, was developed through the actions of the National Productivity Advisory Committee, chaired by Jack Grayson. The nonprofit research organization APQC, founded by Grayson, organized the first White House Conference on Productivity, spearheading the creation of the Malcolm Baldrige National Quality Award in 1987. The Baldrige Award was envisioned as a standard of excellence that would help U.S. organizations achieve world-class quality. Dept of MBA, SJBIT
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In the late summer and fall of 1987, Dr. Curt Reimann, the first director of the Malcolm Baldrige National Quality Program, and his staff at the National Institute of Standards and Technology (NIST) developed an award implementation framework, including an evaluation scheme, and advanced proposals for what is now the Baldrige Award. In its first three years, the Baldrige Award was jointly administered by APQC and the American Society for Quality, which continues to assist in administering the award program under contract to NIST. NEED FOR QUALITY AWARDS
Do
it
to
drive
excellence,
not
to
win
the
award.
Many organizations have gotten off track by making the award the ultimate goal. This can result in gaming the system to look better than you actually are. In the meantime, the organizations lose sight of their true purpose of providing value adding products and services to customers.
Use
your
company
language,
not
the
award
language.
The terms and phrases used in award criteria may be good for a generic application, but they may not be the best fit in your company. Company taxonomy is part of company culture. For example, if you refer to employees as associates, then you do not need to change just because the application asks for employee related information. Integrate the concepts into the way you do things, using words that make sense for your organization.
Use
a
long
term
focus.
Once and done is almost always a wasted effort. It is not enough to reach award winning levels of quality leadership. The real goal is to sustain quality leadership performance. Most quality award winning organizations will self assess and apply multiple times over several years. They recognize that achieving and sustaining quality leadership is a journey.
Use
the
feedback.
It is always amazing when an organization goes all the way through the process of compiling and submitting an application and then ignores the feedback they receive from the evaluation process. This is the gold nugget. This can be some of the best advice an organization will ever receive from a team of industry leading experts. Smart
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organizations use this feedback as a major component of strategic and business planning to identify areas of focus.
Focus
on
process.
The results will follow. Most quality award criteria seek information related to business processes and business results. The key to success is to understand how processes drive results and focus on improving the processes so better results can be attained.
Involve
leaders.
Leadership for Quality cannot be delegated. It must be led from the top. Accordingly, organization leaders need to understand the awards process and criteria. Leaders need to use quality award assessment feedback in deciding where to put focus and resources.
Develop
internal
expertise.
The awards cycle will provide valuable feedback to the organization, but it can take a long time to get the information. Organizations which develop internal expertise can strengthen their own assessment processes. This enables the organization to get regular and timely information for improving processes and performance. DEMING PRIZE AND ITS FEATURES The Deming prize, established in December 1950 in honor of W. Edwards Deming, was originally designed to reward Japanese companies for major advances in quality improvement. Over the years it has grown, under the guidance of Japanese Union of Scientists and Engineers (JUSE) to where it is now also available to non-Japanese companies, albeit usually operating in Japan, and also to individuals recognized as having made major contributions to the advancement of quality. The awards ceremony is broadcast every year in Japan on national television. Two categories of awards are made annually, the Deming Prize for Individuals and the Deming Application Prize. Tata Steel is the first integrated steel company in the world, outside of Japan, to win the Deming Application Prize. The steel giant won the 2008 prize for achieving distinctive performance improvements through the application of total quality management (TQM). Avneesh Gupta, chief (TQM) at Tata Steel spoke to Gayatri Kamath about the journey of enlightenment and the sense of responsibility that
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comes with winning this coveted prize awarded by the Japanese Union of Scientists and Engineers (JUSE). FEATURES The Deming Application Prize is considered to be the highest award in the area of TQM. Total quality stands for not just quality of products and services, but also the processes and activities that are needed to achieve quality. In the world of quality awards, this prize is like a gold standard. The prize was started in 1951 in memory of Edward Deming who was instrumental in teaching the concepts of quality to the Japanese. The Deming Application Prize tests the application of TQM within a company. The criteria include:
Objectives and strategies of the company and whether they are challenging and customerfocused How TQM has been applied to achieve these objectives, and the thoroughness, consistency and depth of its application across the organisation The outstanding effects achieved as a result of the application of TQM
The focus here is on application – what sort of systematic methods and activities have been applied to achieve our objectives and strategies and what is the effect of this. The concept is that we need to demonstrate our ability to use TQM to achieve our desired goals rather than our capability (potential).
Firstly, outside Japan, no steel company has won this award. We are the first. Secondly, in the past many years smaller sized companies have won this prize. It’s been almost 20 years since a company the size of Tata Steel has won the award – an indication of the effort that is necessary. Thus
the
impact
is
significant
and
lasting.
Tata Steel has been practising TQM since the late 1980s which was when the company initiated several quality activities – quality circles, ISO certification, quality improvements using Juran methods, etc. After winning the JRD QV Award in 2000, the question we faced was how to achieve the next quantum jump in performance and improvements. By going through the Deming process, we discovered the deeper meaning of TQM. Tata Steel has been preparing for this prize for about four years. In 2005, we conducted a TQM diagnosis along with the JUSE team; that gave us the status of our TQM implementation and helped us uncover a lot of areas that required improvement in both our processes and culture. Dept of MBA, SJBIT
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The TQM diagnosis gave us deeper understanding and clarity on our approach to quality: what areas should be addressed, who should get involved in what activities, etc. We specifically looked at:
Strategic aspects or policy management: relooking at the balanced score card, looking at areas needed to change the business, etc
Daily management: managing the day-to-day operations, ensuring that they are stable, looking for incremental improvements, etc
People involvement: involving people in thinking about improvement activities such as quality circles, suggestion management, knowledge manthan, etc.
The short term impact is that this has galvanised the organisation. Our people had rallied behind the goal of winning the Deming prize and a lot of improvement activities had been further refined.
The long term impact is that we have been able to push forward in our excellence journey. More importantly we have put in place some fundamental approaches in the organisation which will help us to leverage them for the performance improvement of Tata Steel. We have established that TQM is necessary for achieving business goals. Our revised half-yearly (H2) plan has identified enablers that address savings and benefits for the company; many of these methods use TQM approaches – for instance, how to optimise use of consumables such as lime, zinc, etc, how to reduce turnaround or shut down times through critical chain project management, etc. Basically, what has changed is our approach, how we apply TQM to attain our business targets. We are looking at more than double the improvements we have achieved in the past years.
It started with the top leadership and the TQM team, but later on nearly everyone in the organisation was a part of it. We were able to engage many of the front line or operating units in this; there were champions in each of the departments.
The most fundamental challenge was to create a mindset that looks at improvement activities as essential for achieving targets and goals. This is where the examiners focus. The biggest challenges lay in creating this understanding across the organisation, dealing with 35,000 Dept of MBA, SJBIT
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employees, in explicitly stating and documenting improvement targets and how to go about achieving these in a systematic manner, in standardising approaches and creating alignment to profits and goals, and so on. Equally challenging was to bring quality to the forefront, which was addressed by formulating customer focused objectives and strategies in the various divisions and departments. The other problem was that for Tata Steel there were six examination units – the corporate unit and the five major divisions (raw materials, coke, sinter and iron, flat products, long products and shared services). Each unit had two applications – one for the overall unit, and one representing each of the departments of the division. We had to create guidelines and reference manuals to have uniformity and alignment.
The difference is in the focus rather than the content. The Deming award criteria looks for application which runs vertically cutting across processes/ items, rather than looking at processes horizontally the way TBEM criteria are applied. They test the application rather than only the approach. Deming looks at applying the basic principle of TQM – the Plan-Do-Check-Act method.
The other key difference is the rigour of the examination process. It looks for application both in business units and the corporate functions. For us there were six examination units covering 52 departments in all. Each unit was examined for two days, so there were 12 days of examination which spread for about a month (4th of August to the 5th of September). There were 26 examiners, each having a lot of experience and expertise both in theory and application in their field.
As far as we know no company applies for this award every year. It is a very intense and time consuming effort both for the company and the examination body. Usually organisations continue to reap benefits out of one such effort for many years and put some internal diagnosis (assessment) system in place. Tata Steel will also not apply again for the Deming award in 2009.
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There is a next level – called the Japan Quality Medal. You become eligible three years after winning the Deming prize. We will decide in due course. Malcolm Baldrige National Quality Award (MBNQA) o Helped to improve quality in U.S. companies o To Recognize achievements of excellent firms and provide examples to others o To Establish criteria for evaluating quality efforts o To Provide guidance for other companies
Criteria for Performance Excellence Leadership Strategic Planning Dept of MBA, SJBIT
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Customer and Market Focus Information and Analysis Human Resource Focus Process Management Business Results
The Baldrige Framework – A Systems Perspective
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Baldrige Award Evaluation Process
The Baldrige Award Scoring System • Three evaluation dimensions - Approach, Deployment, and Results • Scoring is linked to the importance to the applicant‟s business
Self Assessment and the Baldrige National Quality Program A primary goal of the Program is to encourage many organizations to improve on their own by equipping them with a standard template for measuring their performance and their progress toward performance excellence.
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EUROPEAN QUALITY AWARD MODEL (EQA)
Chapter 1. – LEADERSHIP 1-1 How does the Management team lead the implementation of Quality Approach within the Organization ? 1-2 How does the Management team show the examples through internal and external actions ? 1-3 How does the Management Team encourage effort and success as regard to quality, with individuals and teams ? 1-4 How does the Management team interact with customers, partners and representatives of society ? Chapter 2. - STRATEGY AND QUALITY OBJECTIVES 2-1 How does the Organization‟s strategy integrate its Policy on quality ? 2-2 How is the quality policy translated into measurable goals throughout the entire Organisation ? 2-3 How does the Organization improve its strategy and action plans ? 2-4 How is the Policy and strategy on quality communicated and deployed through a framework of key processes ?
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Chapter 3. – PEOPLE MANAGEMENT 3-1 How are people informed on the Organization‟s strategy, quality policy and results ? 3-2 How are people trained to embrace the quality processes and to achieve quality objectives ? 3-3 How does the Organization encourage individual commitment into the implementation of quality ? 3-4 How does people propose improvements to quality ? Chaper 4. – RESOURCES MANAGEMENT 4-1 How are financial resources managed ? 4-2 How are information‟s resources managed ? 4-3 How are Partners associated with the Quality approach? 4-4 How are all the other resources managed ? Chapter 5. – PROCESSES 5-1 How are key processes identified, which one are they ? 5-2 How does the Organization listen to the Customers ? 5-3 How are all the customer‟s needs integrated ? 5-4 How does the Organization manage innovation ? 5-5 How are competitor‟s performances or similar organization‟s results known ? 5-6 How is products and/or Services Quality controled ? 5-7 How are indicators selected and used to improve quality ? 5-8 How are quality improvement actions managed ? Chapter 6. – CUSTOMER SATISFACTION 6-1 What are the results of external measurements of customer‟s perception of products and/or services and relationship ? 6-2 What are the results of internal measurements to evaluate customer satisfaction ? Chapter 7. – PEOPLE SATISFACTION 7-1 What are the results of direct measurements of people satisfaction ? 7-2 What are the results of indirect measurements to evaluate people satisfaction and involvement ? Chapter 8. – INTEGRATION INTO THE COMMUNITY Dept of MBA, SJBIT
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8-1 What actions and results show that the Organization provides answers to local Community‟s needs and expectations ? 8-2 What are the results of the society´s perception of the organization obtained from surveys, press articles, public meetings, public and governmental authorities ? Chapter 9. – OPERATIONAL RESULTS 9-1 What are the results in terms of global performance ? 9-2 What are the results coming from internal management indicators ? GOLDEN PEACOCK AWARD Golden Peacock Awards, instituted by the Institute of Directors, India in 1991, are now regarded as a benchmark of Corporate Excellence worldwide. Today Golden Peacock Awards Secretariat receives over 1,000 entries per year for various awards, from over 25 countries worldwide. The achievement of the Golden Peacock Award is the most powerful way to build your brand. The Award winners are eligible to use the Golden Peacock Awards logo on all printed and promotional materials for next one year, which evidences to all its customers and suppliers the highest accolade acclaimed by the company. No business award today receives the kind of recognition and adulation among peers that the Golden Peacock does. They provide not only worldwide recognition and prestige, but a competitive advantage in driving business in this tumultuous world .All sector of our business both in manufacturing and service, whether Public, Private ,Government , NGO’s self accounting Institution , Business Units , are eligible to apply for the award . Individual leadership awards are determined through nomination only, based on complete career profile and achievements. Justice P.N. Bhagwati, former Chief Justice of India and acting Chairman, UN Human Rights Committee,
is
the
Chairman
of
the
Golden
Peacock
Awards
Committee.
The Award applications are assessed at 3 three levels by independent assessors and finally by a grand Jury. The Global Awards are finalized by a Jury headed by Dr. Ola Ullsten, former Prime Minister of Sweden.
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All institutions whether public, private, non-profit, government, business, manufacturing and service sector are eligible to apply. Leadership Awards are determined through nomination. They provide not only world- wide recognition and prestige but also a competitive advantage in driving business in this tumultuous world under Golden Peacock Award models. The Awards are bestowed annually and are designed to encourage total improvement in each sector of our business.
The only award, which has a meticulously defined and transparent selection criteria and is determined by a highly elaborate and independent assessment process.
The award builds your BRAND EQUITY and worldwide recognition.
Award winners are eligible to use the Golden Peacock Awards LOGO on all promotional literatures.
Preparation for award application helps to inspire and align the entire workforce and rapidly accelerates the PACE OF SYSTEM IMPROVEMENT .
Even, if you don’t win the award, the PREPARATION & FEEDBACK helps your strategic learning process to put you, on your way to achieving world-class status.
The Awards Secretariat has constituted an Expert Evaluation Committee comprising from various sectors are invited to examine the applications. Each of the applications is reviewed independently by two assessors those satisfies the basic review requirements and are short listed for Awards. The applications are assessed on an exhaustive set of parameters as mentioned in the guidelines for a total score card of 1000 marks. Cut-off applied on each application is 80 percent. Entries occupying top positions are recommended for consideration of the Jury. In some cases the short listed finalist companies by the Assessors for Award are also asked to make a 10 min presentation followed by questions and answers for 5 min during the Jury meeting for the final consideration of Grand Jury. The phenomenal interest that Companies have shown in competing for these awards and the quality of entries is evidence of their commitment to achieve world-class status. Golden Peacock Awards have given boost to the Industry worldwide.
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TQM MODELS The roots of Total Quality Management (TQM) go back to the teachings of Drucker, Juran, Deming, Ishikawa, Crosby, Feigenbaum and countless other people that have studied, practiced, and tried to refine the process of organizational management. TQM is a collection of principles, techniques, processes, and best practices that over time have been proven effective. Most all world-class organizations exhibit the majority of behaviors that are typically identified with TQM. No two organizations have the same TQM implementation. There is no recipe for organization success, however, there are a number of great TQM models that organizations can use. These include the Deming Application Prize, the Malcolm Baldrige Criteria for Performance Excellence, the European Foundation for Quality Management, and the ISO quality management standards. Any organization that wants to improve its performance would be well served by selecting one of these models and conducting a self-assessment Dept of MBA, SJBIT
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The
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model of TQM is shown in this diagram. The model begins with understanding customer needs. TQM organizations have processes that continuously collect, analyze, and act on customer information. Activities are often extended to understanding competitor's customers. Developing an intimate understanding of customer needs allows TQM organizations to predict future customer behavior. TQM organizations integrate customer knowledge with other information and use the planning process to orchestrate action throughout the organization to manage day to day activities and achieve future goals. Plans are reviewed at periodic intervals and adjusted as necessary. The planning process is the glue that holds together all TQM activity. TQM organizations understand that customers will only be satisfied if they consistently receive products and services that meet their needs, are delivered when expected, and are priced for value. TQM organizations use the techniques of process management to develop cost-controlled processes that are stable and capable of meeting customer expectations. Dept of MBA, SJBIT
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TQM organizations also understand that exceptional performance today may be unacceptable performance in the future so they use the concepts of process improvement to achieve both breakthrough gains and incremental continuous improvement. Process improvement is even applied to the TQM system itself The final element of the TQM model is total participation. TQM organizations understand that all work is performed through people. This begins with leadership. In TQM organizations, top management takes personal responsibility for implementing, nurturing, and refining all TQM activities. They make sure people are properly trained, capable, and actively participate in achieving organizational success. Management and employees work together to create an empowered environment where people are valued. All of the TQM model's elements work together to achieve results.
**** End of Module 6****
Module 7 Quality Control tools: Introduction, 7 tools of quality control (Old & New), Poka-yoke, Quality Function Deployment. OBJECTIVE To understand the meaning & importance of Quality Control tools: Introduction, Dept of MBA, SJBIT
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To appreciate the applications of 7 tools of quality control (Old & New), To recognize the practices of Poka-yoke and its benefits, To know about Quality Function Deployment(QFD) INTRODUCTION The tools and techniques along with management practices and the organisational infrastructure are fundamental components of TQM. Many of these are associated with the practice of process management. In TQM design tools ,managers have a set of procedures and techniques that can help them to design either a product or a process to ensure consistent quality TQM practitioners use design tools to prevent quality problems by eliminating variance in products/processes and to enhance customer satisfaction by meeting customer‟s requirements TQM involves other areas like Marketing: must identify exactly what the targeted customers wants and are willing to pay for Accounting : contributes product costing support Purchasing: must identify outside resources that might enhance the product or process development activities Engineering and R&D: must identify what is technically possible Organisational design: must provide the type of learning organisation to effectively utilise TQM design tools Various techniques or tools for improving design process are Statistical experimentation or experimental design or design of experiments (DoE) Taguchi‟s methods/Taguchi loss function Quality function Deployment (QFD) and Poka yoke or fail safing or fool proofing Statistical experimentation A products performance is affected by manufacturing imperfections, environmental factors and human variations in operating the product. A high quality product performs consistently under all operating conditions.
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Good design identifies the settings of products or process parameters that minimise the sensitivity of design or sources of variation in use. Products that are not sensitive to external sources of variation are called robust Ex: a television whose picture quality varies with environmental conditions such as room temperature and humidity is not a robust product. A television must function in different room temperatures to be called as a robust product A Japanese engineer,Dr Genichi Taguchi, proposed the use of statistically planned experiments for parameter design. Experimental design is one of the most powerful techniques for improving quality and increasing productivity. Through experiments changes are intentionally introduced into the process or system in order to observe their effects on the performance of the products Any experiment that has the flexibility to make desired changes in the input variables of a process to observe response is known as experimental design. Goals of a designed experiment are to Determine the variables and their magnitude that influence the response (output) Determine the levels for these variables Determine how to manipulate these variables to control the response According to Taguchi, it is not sufficient to control only process, inspect output, identify and remove defects, it also necessary to have a quality design This approach is called as design of experiments (DoE)
7 TOOLS OF QUALITY CONTROL (OLD & NEW), POKA-YOKE Elementary Statistical Methods Dr K. Ishikawa considers them as seven indispensable tools to be used by everyone i.e. Company Managing Directors, Company Directors, Middle Management, Foreman and line workers. Dept of MBA, SJBIT
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It can be used anywhere. According to him 95% of all the problems in a company can be solved by these tools. In Japan these tools are used effectively by top management to line workers. Along with these tools, facilitators and workers must also be trained in the following basic concepts for efficient functioning of Quality Circles. a. The concept of quality. b. Principles and implementation concerning „ management and improvement. ' c. Statistical way of thinking. As Dr K Ishikawa says “It was due to the use of this that the quality level has risen, reliability has risen, and cost has fallen. The key has been the dogged use of process analysis and quality analysis without fanfare for a long period of time. This has brought about improvement in technology. Some contend that engineering technology enhances technology and management technology maintains it. I do not subscribe to that claim. I cannot see any difference between engineering technology and management technology. The socalled control technique is part of proper technique. One must utilize all the technology at his disposal to strive towards advancing quality and efficiency. After the Second World War, Japan imported many new technologies from the West. Nowadays, Japan can export her technologies to the West as well. This is in large measure a result of the introduction of statistical quality control and the use of statistical analysis, process analysis and quality analysis.” Elementary Statistical Methods- (7 QC-tools) 1. Check-sheet (for data collection) 2. Graph and Control Chart 3. Stratification 4. Pareto Chart 5. Cause and Effect Diagram 6. Histogram 7. Scatter Diagram Dept of MBA, SJBIT
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Check sheet
Data collection: To understand the magnitude of the problem and understand the problem. It is the foundation for statistical analysis. 2. Graphs : Presentation of large amount of data in a cohesive manner in the pictorial form to enable better understanding of the data and the problem and also to comprehend the trend at a glance.
Control Charts :For maintaining running control on a process. It is a tool for on-line quality control. Dept of MBA, SJBIT
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3 Stratification: To segregate data according to contributing sources (suppliers, machines, operators etc.).
4. Pareto Chart: For identification/selection of major problem or area for improvement or control, to differentiate between vital and trivial problems.
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5 Cause & Effect Diagram: To map out all probable causes and relate the logical linking of causes to the problem to help narrow down to the cause or causes.
6. Histogram : For study of process variation and assess process capability. This is an off-line quality control method.
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7. Scatter Diagram : For examining relationship between two variables, nature and strength of relationship between process factors and product quality. In a way it is also a cause and effect approach between two variables.
7 Advanced (new) Quality Control Tools 1. AFFINITY DIAGRAM 2. INTERRELATIONSHIP DIAGRAPH Dept of MBA, SJBIT
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3. MATRIX DIAGRAM 4. TREE DIAGRAM 5. ARROW DIAGRAM 6. PDPC(PROJECT DECISION PROGRAM CHART) 7. MATRIX DATA ANALYSIS
Process Capability Capability is a measure of the ability of a process to meet specified requirements, usually expressed as an index. Process capability measurement can be made using the data that is obtained for the control chart. The capability assessment compares the process spread with the specified requirements. The process chart does not make any reference to the specified requirements. Process capability is determined by a comparison of process performance versus specification. Process capability: Depends on specification limits; Is assessed with respect to a single characteristic; Depends on process spread (i.e. the standard deviation); Depends on the process average; Is determined by use of control charts; Can be described by capability indices.
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Process Capability – Types re are two types of process capability study:
-going Process Capability Study.
process. -going Process Capability Study uses data from a longer time period to include all common causes of process variation.
Potential and Capability Process Potential is an estimate of the ability of a process to generate consistently a specific characteristic, relative to specification. Process Potential: Measures the best that the process can do; Depends on the process variation and spread; The spread is taken to be 6s; Dept of MBA, SJBIT
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Depends on the width of the specification; Compares the spread of the process with the width of the specification.
Process Capability measures how well a process is generating a specific characteristic with respect to specification limits. Process Capability: Assesses the process spread with respect to the width of the specification; Assesses the process average with respect to the specification; Depends upon process location and spread. Capability Indices
-going Process Potential -going Process Capability
QUALITY FUNCTION DEPLOYMENT. Products are- designed by cross-functional teams, translating customer requirements into detailed technical product specifications can be very difficult Japanese developed an approach called” Quality function deployment” (QFD) to meet customer requirements throughout the design process and also in the design of production systems QFD is a method by which cross-sectional teams translate customer requirements into appropriate design requirements at each stage of the product development process A Means of integrating the design process Voice of the Customer Priorities of Marketing Product design knowledge of the Engineer (Production Planning and Design)
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House of Quality
The four Houses of Quality
Building a House of Quality
Using the House of Quality
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levels (not ranges)
o Parts characteristics o Key process operations o Production requirements
QFD- Disadvantages o Prioritize on important attributes o Analyzes independent subsystems independently o Consider segmenting market o Customers‟ stated preferences and actions differ o Use revealed preference techniques if you suspect a problem o QFD is messy o Not QFD, but rather the interaction between diverse groups is cause o Stick with it, the results are worthwhile
Poka yoke Poka-yoke (ポカヨケ?) [poka yoke] is a Japanese term that means "mistake-proofing". A poka-yoke is any mechanism in a lean manufacturing process that helps an equipment operator avoid (yokeru) mistakes (poka). Its purpose is to eliminate product defects by preventing, correcting, or drawing attention to human errors as they occur. The concept was formalised, and the term adopted, by Shigeo Shingo as part of the Toyota Production System.It was originally described as baka-yoke, but as this means "foolproofing" (or "idiot-proofing") the name was changed to the milder poka-yoke.
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Poka-yoke example: Ethernet cable plug is designed to be plugged in in only one direction.
More broadly, the term can refer to any behavior-shaping constraint designed into a process to prevent incorrect operation by the user. Similarly, a constraint that is part of the product (or service) design is considered Design for Manufacturability or Design for X. A modern Poka-Yoke application is when a driver must press on the brake pedal (a process step, therefore a poka-yoke)) prior to starting an automobile. The interlock serves to prevent unintended movement of the car. An additional poka-yoke would be the switch in the car's gear shift that requires the car to be in Park or Neutral before the car can be started. These serve as behavior-shaping constraints as the sequence of "car in park (or neutral)" and/or "Foot on brake" must be performed before the car is allowed to start. Over time, the driver's behavior is conformed with the requirements by repetition and habit. History of Poka yoke The term poka-yoke was applied by Shigeo Shingo in the 1960s to industrial processes designed to prevent human errors. Shingo redesigned a process in which factory workers, while assembling a small switch, would often forget to insert the required spring under one of the switch buttons. In the redesigned process, the worker would perform the task in two steps, first preparing the two required springs and placing them in a placeholder, then inserting the springs from the placeholder into the switch. When a spring remained in the placeholder, the workers knew that they had forgotten to insert it and could correct the mistake effortlessly. Shingo distinguished between the concepts of inevitable human mistakes and defects in the production. Defects occur when the mistakes are allowed to reach the customer. The aim of poka-yoke is to design the process so that mistakes can be detected and corrected immediately, eliminating defects at the source.
Implementation in manufacturing Poka-yoke can be implemented at any step of a manufacturing process where something can go wrong or an error can be made. For example, a jig that holds pieces for processing might be modified to only
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allow pieces to be held in the correct orientation, or a digital counter might track the number of spot welds on each piece to ensure that the worker executes the correct number of welds. Shigeo Shingo recognized three types of poka-yoke for detecting and preventing errors in a mass production system: 1. The contact method identifies product defects by testing the product's shape, size, color, or other physical attributes. 2. The fixed-value (or constant number) method alerts the operator if a certain number of movements are not made. 3. The motion-step (or sequence) method determines whether the prescribed steps of the process have been followed. Either the operator is alerted when a mistake is about to be made, or the poka-yoke device actually prevents the mistake from being made. In Shingo's lexicon, the former implementation would be called awarning poka-yoke, while the latter would be referred to as a control poka-yoke. Shingo argued that errors are inevitable in any manufacturing process, but that if appropriate poka-yokes are implemented, then mistakes can be caught quickly and prevented from resulting in defects. By eliminating defects at the source, the cost of mistakes within a company is reduced
**** End of Module 7****
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Module 8 Introduction to Six Sigma Historical developments, statistical framework for six sigma, DPU and DPMO concepts, DMAIC methodology, Training for Six Sigma, Benefits of Six Sigma, Six sigma and TQM. OBJECTIVE To understand the meaning, applications and Importance of: Introduction to Six Sigma Historical developments, statistical framework for six sigma, DPU and DPMO concepts, DMAIC methodology, Training for Six Sigma, Benefits of Six Sigma, Six sigma and TQM.
INTRODUCTION TO SIX SIGMA HISTORICAL DEVELOPMENTS Six Sigma at many organizations simply means a measure of quality that strives for near perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process – from manufacturing to transactional and from product to service. The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect. Process sigma can easily be calculated using a Six Sigma calculator. The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement. Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts. Dept of MBA, SJBIT
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According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per project and can complete four to 6 projects per year. (Given that the average Black Belt salary is $80,000 in the United States, that is a fantastic return on investment.) General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of companies around the world have discovered the far reaching benefits of Six Sigma. Many frameworks exist for implementing the Six Sigma methodology. Six Sigma Consultants all over the world have developed proprietary methodologies for implementing Six Sigma quality, based on the similar change management philosophies and applications of tools. STATISTICAL FRAMEWORK FOR SIX SIGMA Six Sigma is a business strategy and a systematic methodology, use of which leads to breakthrough in profitability through quantum gains in service quality, product performance, productivity and customer satisfaction.Today SixSigma has been considered as a strategic approach to achieve excellence in operations and service performance through the effective utilization of statistical and non-statistical tools and techniques .Like other programs emerging under the TQM umbrella,Six Sigma requires a transformational change in an organization’s culture, structure, and processes. The emergence of Six Sigma as a distinct approach to TQM occurred in 1987 at Motorola ,Six Sigma is a disciplined approach to define, measure, analyze, improve and control processes that result in variability and defect reduction. Six Sigma is a business improvement strategy that seeks to find and eliminate causes of defects or mistakes in business processes by focusing on outputs that are of critical importance to customers. It is a powerful approach to process improvement, reduced costsand increased business profitability and revenue growth. Six Sigma originated at Motorola in the early 1980s in response to a challenge to achieve ten-fold reduction in product failure levels in five years. Six Sigma has both management and technical components. The focus of management component is to select the right people for Six Sigma projects, select the right process metrics, provide resources for Six Sigma training, provide clear direction and guidance with regard to project selection, etc. The focus of technical component is on process improvement by reducing variation, creating data which explains process variation, using statistical tools and techniques for problem solving, etc. Dept of MBA, SJBIT
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In statistical terms, Six Sigma means 3.4 defects per million opportunities (DPMO), where sigma is a term used to represent the variation around the average of a process. Today, Six Sigma is exploited by many organisations such as GE, Honeywell, Sony, Caterpillar, J P Morgan, American Express, Common Wealth Health Corporation, Lloyds TSB, City Bank, Jaguar, Kodak, Ford and Starwood Hotel Group . These contrast results make Six Sigma implementation a complex and central process, where the CSFs in its implementation must be recognised. Although different resources are now available on Six Sigma subjects, it seems there are only a few, in which CSFs are addressed. In the following, the efforts made in the literature are reviewed in case of CSFs for successful implementation of Six Sigma projects; then, a case study is presented in which a set of CSFs are analyzed in major car maker companies in Iran.. DPU AND DPMO CONCEPTS Defects Per Unit - DPU Total Number of Defects DPU = -----------------------Total number of Product Units
The probability of getting 'r' defects in a sample having a given dpu rate can be predicted with the Poisson Distribution. Total Opportunities - TO TO = Total number of Product Units x Opportunities Defects Per Opportunity - DPO Total Number of Defects DPO = -----------------------Total Opportunity Defects Per Million Opportunities - DPMO DPMO = DPO x 1,000,000 Defects Per Million Opportunities or DPMO can be then converted to sigma values using Yield to Sigma Conversion Table given in Six Sigma - Measure Phase.
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DMAIC METHODOLOGY
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TRAINING FOR SIX SIGMA Six Sigma Business Improvement training, Lean, FMEA, SPC Six Sigma gives your company a global competitive edge and with a certified quality framework in place, you can be confident in
Cutting costs,
Improving efficiency and
Meeting your business targets
Six Sigma training courses Lean Six Sigma Transactional Black Belt Lean Six Sigma Transactional Green Belt Six Sigma Green Belt Certificate Six Sigma Yellow Belt Lean Practitioner Failure Mode and Effect Analysis Statistical Process Control
BENEFITS OF SIX SIGMA, LIMITATIONS , SIX SIGMA AND TQM. Cost reduction Productivity improvement Market share growth Cycle time reduction Defect reduction Culture change Product / service development
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Six sigma and TQM Quality management tools and methods used in Six Sigma Within the individual phases of a DMAIC or DMADV project, Six Sigma utilizes many established quality-management tools that are also used outside Six Sigma. The following table shows an overview of the main methods used. (Note: In the American universities in the curriculum of Industrial Engineering, the techniques taught in couple of courses are repackaged and sold under the banner of Six Sigma because of the appealing name. Six Sigma does not guarantee Six Sigma yield).
5 Whys
Analysis of variance / ANOVA Gauge R&R /Regression
Axiomatic design
Business Process Mapping
Cause & effects diagram (also known as fishbone or Ishikawa diagram)
Check sheet
Chi-squared test of independence and fits
Control chart
Control plan (also known as a swimlane map)
Correlation
Cost-benefit analysis
CTQ tree
Design of experiments
General linear model
Histograms
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Pareto analysis
Pareto chart
Pick chart
Process capability
Project charter
Quality Function Deployment (QFD)
Quantitative marketing research through use of Enterprise Feedback Management (EFM) systems
Rolled throughput yield
Root cause analysis
Run charts
Scatter diagram
SIPOC analysis (Suppliers, Inputs, Process, Outputs, Customers)
COPIS analysis (Customer centric version/perspective of SIPOC)
Stratification
Taguchi methods
Taguchi Loss Function
TRIZ
Value stream mapping
****End of Module 8****
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