4 4 Philosophies and Frameworks Dr. EzzElarab Elawoor MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1

Leaders in the Quality Revolution W. Edwards Deming Joseph M. Juran Philip B. Crosby Armand V. Feigenbaum Kaoru Ishikawa Genichi Taguchi MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 2

Deming Chain Reaction MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 3 Improve quality Costs decrease Productivity improves Increase market share with better quality and lower prices Stay in business Provide jobs and more jobs

Key Idea MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 4 The Deming philosophy focuses on continual improvements in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of top management.

Deming’s System of Profound Knowledge Appreciation for a system Understanding variation Theory of knowledge Psychology MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 5

Systems Most organizational processes are cross- functional Parts of a system must work together Every system must have a purpose Management must optimize the system as a whole MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 6

Variation Many sources of uncontrollable variation exist in any process Excessive variation results in product failures, unhappy customers, and unnecessary costs Statistical methods can be used to identify and quantify variation to help understand it and lead to improvements MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 7

Theory of Knowledge Knowledge is not possible without theory Experience alone does not establish a theory, it only describes Theory shows cause-and-effect relationships that can be used for prediction MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 8

Psychology People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful Fear is demotivating Managers should develop pride and joy in work MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 9

Deming’s 14 Points (Abridged) (1 of 2) MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing Create and publish a company mission statement and commit to it. 2. Learn the new philosophy. 3. Understand the purpose of inspection. 4. End business practices driven by price alone. 5. Constantly improve system of production and service. 6. Institute training. 7. Teach and institute leadership. 8. Drive out fear and create trust.

Deming’s 14 Points (2 of 2) MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing Optimize team and individual efforts. 10. Eliminate exhortations for work force. 11. Eliminate numerical quotas and M.B.O. Focus on improvement. 12. Remove barriers that rob people of pride of workmanship. 13. Encourage education and self-improvement. 14. Take action to accomplish the transformation.

Juran’s Quality Trilogy Quality planning Quality control Quality improvement MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 12

Key Idea MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 13 Juran proposed a simple definition of quality: “fitness for use.” This definition of quality suggests that it should be viewed from both external and internal perspectives; that is, quality is related to “(1) product performance that results in customer satisfaction; (2) freedom from product deficiencies, which avoids customer dissatisfaction.”

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 14 Phillip B. Crosby Quality is free... “Quality is free. It’s not a gift, but it is free. What costs money are the unquality things -- all the actions that involve not doing jobs right the first time.”

Philip B. Crosby Absolutes of Quality Management: Quality means conformance to requirements Problems are functional in nature There is no optimum level of defects Cost of quality is the only useful measurement Zero defects is the only performance standard MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 15

Kaoru Ishikawa Instrumental in developing Japanese quality strategy Influenced participative approaches involving all workers Advocated the use of simple visual tools and statistical techniques MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 16

Genichi Taguchi Pioneered a new perspective on quality based on the economic value of being on target and reducing variation and dispelling the traditional view of conformance to specifications: MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 17 No LossLoss Tolerance

Malcolm Baldrige National Quality Award Help improve quality in U.S. companies Recognize achievements of excellent firms and provide examples to others Establish criteria for evaluating quality efforts Provide guidance for other American companies MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 18 Malcolm Baldrige, former U.S. Secretary of Commerce

The Baldrige Framework – A Systems Perspective MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 19 4 Measurement, Analysis, and Knowledge Management 5 Human Resource Focus 3 Customer & Market Focus 2 Strategic Planning 1 Leadership 6 Process Management Organizational Profile: Environment, Relationships, and Challenges 7 Business Results

Criteria Evolution (1 of 2) From quality assurance and strategic quality planning to a focus on process management and overall strategic planning From a focus on current customers to a focus on current and future customers and markets From human resource utilization to human resource development and management From supplier quality to supplier partnerships MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 20

Criteria Evolution (2 of 2) From individual quality improvement activities to cycles of evaluation and improvement in all key areas From data analysis of quality efforts to an aggregate, integrated organizational level review of key company data From results that focus on limited financial performance to a focus on a composite of business results, including customer satisfaction and financial, product, service, and strategic performance MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 21

Key Idea MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 22 Approaches that organizations use to address the Baldrige criteria requirements need not be formal or complex, and can easily be implemented by small businesses.

Baldrige Award Evaluation Process MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 23 Receive Applications Judges Select for Consensus Review? Judges Select for Site Visit Review? Stage 1 Independent Review Stage 2 Consensus Review Stage 3 Site Visit Review Stage 4 Judges Recommend Award Recipients to NIST Director/DOC Feedback report to applicant Feedback report to applicant Feedback report to applicant No

Self Assessment MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 24 A primary goal of the Baldrige program is to encourage many organizations to improve on their own by equipping them with a standard template for measuring their performance and their progress toward performance excellence. Boeing Airlift & Tanker Programs – 1998 recipient

Key Idea MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 25 Although different, Baldrige and Six Sigma are highly compatible and can each have a place in the management system of a successful organization.

Deming Prize Instituted 1951 by Union of Japanese Scientists and Engineers (JUSE) Several categories including prizes for individuals, factories, small companies, and Deming application prize American company winners include Florida Power & Light and AT&T Power Systems Division MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 26

ISO 9000:2000 Quality system standards adopted by International Organization for Standardization in 1987; revised in 1994 and 2000 Used as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes, and services are fit for their purpose (document what you do and then do as you documented). MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 27

Objectives of ISO Standards Achieve, maintain, and continuously improve product quality Improve quality of operations to continually meet customers’ and stakeholders’ needs Provide confidence to internal management and other employees that quality system requirements are being fulfilled Provide confidence to customers and other stakeholders that quality requirements are being achieved MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 28

Key Idea MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 29 ISO 9000 provides a set of good basic practices for initiating a quality system, and is an excellent starting point for companies with no formal quality assurance program.