Class 2

Quality Management

Managing Quality and Process

Variability

Definition of Quality
Quality Philosophies
The Many Tools of Quality Control
Process Control and Capability
Quality Management Systems

Managing Quality and Process

Variability
Organizational
Culture

Definitions of Quality

Performance
best primary specification in class

Features
the range of options and extras

Reliability
failure rate per unit of time

Conformance
degree to which it meets standards

Durability
product life span

Which definition(s)
is most appropriate
for your
organization?

Serviceability
time to repair, ease of repair

Aesthetics
look, smell, feel, ambiance

Perceived Quality
branding, reputation, habit

From: Competing on the Eight Dimensions of Quality David A. Garvin,

Harvard Business Review, November - December 1987.

Basic Definition of Quality

conformance to customer requirements
Two ways to get conformance:
1) Design products that customers value.
Then
2) Control variability in processes.

1) Design Products That Customers Value !

Value Analysis
simplify products and processes

Design of Experiments (Taguichi)

systematic manipulation of variables to maximize
performance

Quality Functional Deployment (QFD)

cross functional teams from marketing, design
engineering and manufacturing
teams weigh customer attributes for aspects of product
(e.g., car door)
60% reduction in cost of new car at Toyota

Design for Processing

6

2) Design for Quality Processing

Simplify Products an Services

Fewer parts, fewer steps ( improves reliability )
Modular design ( improves serviceability)

Standardize Components
Simplifies coordination ( improves conformance)

Fool-Proofing

( Poka-Yoke )
Make it easy for people to follow specifications
Make it hard for people to deviate from specifications
Make it easy for people to detect an error before its
problem

Automate menial tasks

3) Control Variability in Processes

Variability means inconsistency in meeting customers

requirements

All processes have variability but some have too much

How do you improve?

Control and Minimize Variability.
Process redesign!
Statistical Process Control (SPC) by Employees of Specific
Causes
Better coordination in total supply chain (e.g., suppliers and
customers)

QUALITY PHILOSOPHIES

Some Quality Philosophies

Quality is what your customer thinks it is ( by perception or

experience )
Quality is about conforming to standards
Quality is make it right, make it once
Quality is all about measurement & use of innumerable
tools, statistics and measures

10

Some Quality Philosophies

Quality Control ( usually by 100 % inspection )

Quality Assurance ( usually by systems and sampling )
Total Quality Management (TQM)
Six Sigma
ISO 9000/14000
JIT ( every bit as much a quality approach as a lean
manufacturing approach !)
Cost of Quality

11

Some Quality Philosophies

ISO 9000 (Def): An international standard for documenting

and communicating definitions, measures and procedures
for managing quality within and between firms. There are
other quality standards such as QS 9000 in automobiles or
TS9000 for telecommunications

Total Quality Control (Def): a team based process

improvement program to improve cross-functional
conformance to customer requirements, utilizing SPC
concepts and tools.

Six Sigma (Def) : similar to TQM, a program begun at

Motorola and more recently popularized by GE where
customer requirements demand a process capability of less
than 3.4 errors/defects per million units (e.g., six standard
12
deviations).

Some Quality Philosophies contd

Is Quality always a trade-off with
production/volume ????
Is our Quality structure part of, or
external to, production????
Can we Inspect in Quality ???
Is Quality something entirely
analytical & mechanistic, or
something more??
13

Cost of Quality Concept

14

Deming's Quality Philosophy

15% of all quality problems are related to a particular worker
or tool. The other 85% arise from faults in the companys
system and will continue until that system is changed .
W. Edward Deming

Bring under control the 15 % specific (common) causes of

variance created by workers, machines and materials as
work is done in the existing process. (e.g., machine
breakdowns, human fatigue, interruptions, accidents,
mistakes, random errors)

Eliminate the 85 % common (assignable) causes of

variance inherent in the process as the result of
management decisions (e.g., poor product design, poor
design of planning and operating systems, faulty vendor
policies, dysfunctional incentives, bad marketing research )
15

Demings 14 Points (Abbreviated)

For Controlling Common Causes of Variation
1) Create consistency of purpose.
2) Managers must be leaders of change.
3) Eliminate the need for inspection of quality.
4) Stop awarding and rewarding based on lowest cost.
(e.g. selection of suppliers)
5) Continuously Improve.
6) Institute adequate training, not on the job
7) Management must lead by helping people and machines
perform better.

16

Demings 14 Points (Continued)

8)

Drive out fear.

9)

Break down barriers between departments.

10) Eliminate slogans, exhortations and targets asking for

zero defects and new levels of productivity.
11) Eliminate work standards, quotas, management by the
numbers, management by objectives. Substitute
leadership.
12) Eliminate barriers to pride and ownership .
13) Institute continuous self improvement and education.
14) Quality is everyones job.
17

The Process of Improving Processes

PDCA Cycle (Deming Wheel)
4. Institutionalize the change or
abandon or do it again.

1. Plan a change aimed at

improvement.

4. Act

1. Plan

3. Check

2. Do

3. Study the results; did it work?

2. Execute the change.

Similar Idea to the Define, Measure Analyze Improve and

Control (DMAIC) cycle in Six Sigma Programs
18

THE MANY TOOLS OF

QUALITY CONTROL

19

The Many Tools of Quality Control - Analysis

Numerous analytical tools are available to

analyse and improve quality

Explained in great detail in your text

We wont dwell on them in this course

20

The Many Tools of Quality Control Inspection

Where, when what how to inspect?
At your suppliers plant?
On arrival at your plant?
Before costly or irreversible processing?
After each step in the production/transformation
process?
At the end of the process/line?
Prior to shipping/delivery?
At customer contact point?
Mystery shopper ( Ritchies Spies )
.or even not at all !...
21

PROCESS CONTROL &

CAPABILITY

22

How Variability Hurts Performance ?

Bad Product /Process Design
Systemic Causes
85% of time

Routine Local Activity

Specific Causes
15% of time

High Variability in
Output and Quality

Use Statistical
Process
Control (SPC) to
decide when to act
and when not to act

Uncertain Customers and Wasted Time and Money

Loss of Profitability , Market Share and Growth Potential

23

Process Measure

Process Control Chart:

Making Problems Visible While Working

Normal
Distribution

Time

Information:
Monitor process variability over time (e.g., sample)
Control Limits: Average + z Normal Variability

Decision Rule: Ignore variability within limits as normal

Investigate variation outside abnormal

How do we determine what is Normal?

24

From Control to Improvement

Weight
Out of Control

In Control

Improved

UCL

LCL

Time
25

How Good is a Process?:

Measuring Process Capability
Example: Customers will tolerate between 85 and 75 kgs. for the weight of
a garage door. Actual of process output is 4.2 kgs. with an average
weight of 80 kgs.
Cpk = (Upper Limit Lower Limit)/6] = Voice of Customer = (85-75 kgs.)
Voice of Process
(6)(4.2 kgs.)
= 0.3968 process capability ratio
OR

Defects
per
Million

66,810

Sigma = (UL - LL)/2] = (85-75 kgs.)

6,210 233
3.4
(2) (4.2 kgs)
= 1.19 sigma process

Process
Capability
Ratio (Cp )
Sigma (S)

1.33

1.667

2
Normal distribution => 99.73% of output falls within 3
standard deviations on either side of the mean.

6
26

Being In Control Versus Being Capable

Internal stability ( in control) is a necessary but

insufficient requirement for being capable; must consider
customers design specifications relative to process
variability

The process must be centered on the right standard.

if not, shift the mean ( i.e., standard or specification)

The variability of the process must be less than the range of

behavior that is tolerated by the customer.
If not, reduce the variability

27

Some final words on Six-Sigma

Many organizations do not need & cannot

economically justify process performance at SixSigma levels

Six Sigma is not only about statistics, but actually
involves cultural change
Six Sigma demands
Massive and sustained investment in project/service design
Massive and sustained investment in production control,
technology
Massive & sustained investment in training
Massive investment in plant & equipment
Massive & sustained leadership level commitment and real
involvement
The Ed Burns commitment test
28

Some final words on Six-Sigma

Six Sigma is not a universal cure all for quality issues

Six Sigma can be an excellent tool for improving
quality, for certain kinds of organizations, with certain
types of quality problems, in certain markets and
environments, at certain stages in their development, as
long as the culture is aligned and supportive and the
management commitment is real.. maybe some of the
time

The vast majority of attempted Six Sigma installs fail

Six Sigma has not translated well in service
environments

29

QUALITY MANAGEMENT
SYSTEMS

30

Quality Management Systems

At the end of the day..

How do you know what is going out your door is the quality you
want it to be?
What data and information is generated to assure that?
What systems do you rely on?, how good are they?
What controls do you want to have in place?, and how do you know
they are working?
How are you organized to ensure a quality product/service?
Does your internal culture fully align with & support quality, and
how do you know that?
How does your quality regime extend upstream and downstream
into supply chain partners, and how can you assure yourself of
that?

31

CASE STUDY: AGILE

ELECTRIC

32