Strategic Quality Management

Strategy for Continuous Improvement

Measurement

Empowerment/ Shared Leadership

Measurement

Measurement

Customer Satisfaction Business Results

Team Management

Process Improvement/

Problem Solving

Measurement

Defects Per Million Opportunities (DPMO)

100K

Six Sigma is not the limit

IRS Tax Advice (phone-in) (66810 ppm)

10K

1K

Average Company

100

Purchased Material Lot Reject Rate

Restaurant Bills Doctor Prescription Writing Payroll Processing Order Write-up Journal Vouchers Wire Transfers Air Line Baggage Handling

(2330 ppm)
(3.4 ppm) (0.43 ppm)

10

Best in Class

Domestic Airline Flight Fatality Rate

4 SIGMA

Improvement Methods
DMAIC vs. DMADV
Define
Measure Analyze
Continuous Improvement Re engineering

Improve

Design

Control

Validate

DMAIC Process
Control Improve Define Analyze Measure

Define: Define who your customers are, and what their requirements are for your products and services Their expectations. Define your team goals, project boundaries, what you will focus on and what you wont. Define the process you are striving to improve by mapping the process.

DMAIC Process
Control Improve Define Analyze Measure

Measure: Eliminate guesswork and assumptions about what customers need and expect and how well processes are working. Collect data from many sources to determine speed in responding to customer requests, defect types and how frequently they occur, client feedback on how processes fit their needs, how clients rate us over time, etc. The data collection may suggest process revision.

DMAIC Process
Control Improve Define Analyze Measure Analyze: Grounded in the context of the customer and competitive environment, analyze is used to organize data and look for process problems and opportunities. This step helps to identify gaps between current and goal performance, prioritize opportunities to improve, identify sources of variation and root causes of problems in the process.

DMAIC Process
Control Improve Define Analyze Measure

Improve: Generate both obvious and creative solutions to fix and prevent problems. Finding creative solutions by correcting root causes requires innovation, technology and discipline.

DMAIC Process
Control Improve Define Analyze Measure Control: Insure that the process improvements, once implemented, will hold the gains rather than revert to the same problems again. Various control tools such as statistical process control can be used. Other tools such as procedure documentation helps institutionalize the improvement.

DMADV Process
Validate Design Define Analyze Measure Design: Develop detailed design for new process. Determine and evaluate enabling elements. Create control and testing plan for new design. Use tools such as simulation, benchmarking, DOE, Quality Function Deployment (QFD), FMEA analysis, and cost /benefit analysis.

DMADV Process
Validate Design Define Analyze Measure

Validate: Test detailed design with a pilot implementation. If successful, develop and execute a full-scale implementation. Tools in this step include: planning tools, flowcharts/other process management techniques, and work documentation.

QUALITY CIRCLE
Kaoru Ishikawa credited with the concept of quality circle who also suggested the use of fishbone diagram. Quality circle is a small group of employees the average number is nine who volunteer to meet regularly to undertake work related projects to advance the Company , improve working conditions and spur mutual self development all by using quality control concepts

 QC circles are encouraged by Japanese Companies and receive substantial training in quality control concepts and techniques. Membership in QC circles is purely voluntary and there are no direct cash incentives . Members give the principal reasons for belonging to the group as personal satisfaction from achievement and from recognition given at meetings

Quality Circle
Presentation
Implementation Monitoring

Organization
8-10 members Same area Supervisor/moderator

Training
Group processes Data collection Problem analysis

Solution
Problem results

Problem Identification
List alternatives Consensus Brainstorming

Problem Analysis
Cause and effect Data collection and analysis

Innovation
Innovation as an economic concept includes development of new:
Products and services Methods of production or provision Methods of transportation or service delivery Business models Markets Forms of organization

Stereotypically innovation is considered a product of genius, a flash of light Innovation can be systematically planned and organized

Core Competencies
Organizational structure designed to cultivate an experimental and risk taking attitude It is no longer sufficient to be an expert manager, marketing professional, or engineer.
Competitors in low-cost countries increasingly also have experts who are more inexpensive

In addition to being an expert, professionals must be well-trained and experienced in Six Sigma type systematic innovation skills
Emphasis on scientific approach to problem solving

Systematic Innovators
Organizations should decentralize quality departments Instead, quality initiatives will be delegated to innovation agents, namely black belts and green belts throughout the organization Innovation should be seen as an integral part of everyones task rather than the responsibility of a separate department and a few specialists

Systematic Innovation
The scientific approach to problem solving has been with us since Shewharts days
Foundation for the quality profession

Six Sigma body of knowledge can, with minor adjustments to scope and terminology, be applied to systematize the innovation process Guides upper management to realize the strategic importance of our work, leading to better recognition

Business Process Reengineering

The radical redesign of business processes for dramatic improvement. Mid- to Late-80s: global competition. Existing tools were no longer improving cost, poor quality & bad service. Good news and Bad news
Far exceeded expectations Unrecognizable

The Link Between Quality and Productivity

Effective quality improvement can be instrumental in increasing productivity and reducing cost. The cost of achieving quality improvements and increased productivity is often negligible.

Economic Focus
Ultimate quality award is improved bottom line profitability More than defects and operations management Economic Focus
Evaluate cost of poor quality Project savings

TQM Results : A Manufacturing Case Study : Before & After

In house Rejection down 23:1 Supplier Rejection down 50:1 Customer returns down 16:1 Inventory Turnover increased 4 times Manufacturing Cost halved Manufacturing line stoppage down to zero Sales per employee increased 1:3 New Product Development time halved

TQM Results : A Manufacturing Case Study

Accidents down to zero Training per person up six-fold Suggestions per person quadrupled Absenteeism almost halved Share of self-designed products up 4 times and many more benefits!

Quality Management
Control Focused management
Performance Levels

Continuous Incremental Improvement

Performance Levels

Time

Time

Reduced Rejection & rework Reduced Cost of Poor Quality Reduced Cost of operations!! Reduced Customer Dissatisfaction Improved Profitability!!

Improved throughput, higher quality of consistency, lower cost Improved Customer satisfaction Improved Volume & market share Improved Profitability

Quality must add to the Business results and Bottom-line it certainly DOES!! ..but it does NOT change Business!!

Three fundamental management themes

Control Improvement Breakthrough
III II I

Example!!
Structure & Key players

ISO 9000 / QA Systems

TQM, Six Sigma

Toyota Production System

Hypothesis of Human behavior!!

Theory X!!

Theory Y!!

Theory Z Crazy!!

Nature of leaders contribution and the role they play differs fundamentally in each thematic model !!

Three fundamental management themes

Control Improvement Breakthrough
III II I

What changes!!

Procedures & Processes Standards & benchmarks Visible

Standards & benchmarks Business Model

Business Model
Values?? & Business Domain??

What does not change!!

Symptoms & Cues
DATA

Observable & analyzable

Dominantly Numeric

Invisible & unknown

Language & Image Data!!

Numeric

Nature of leaders competencies & skills required to make meaningful contributions too differs fundamentally!

 If you lose Control on product, ethics, people, earnings you lose business! Lost control brings in societal & customer wrath!! If you lose out on continuous improvement - you lose competitiveness hence business If you lose out on breakthrough you have no future business CEOs need to keep all three eyes open all the time particularly for high clock speed business Holistic comprehension of all three dimensions and close vigil essential for CEO!