Chapter 3: Quality Improvement and Cost Reduction Course Instructor: Ibrahim Abdulla

Major Topics Sporadic and Chronic Problems Project-by-Project Approach Example of a project Wide Quality Improvement Initiative Experiences with Project-by-Project Approach Introduction to Six-Sigma Improvement Define Phase Measure Phase Analyze Phase Improve Phase Control Phase Six Sigma Summary and Project Example Maintaining a focus on Continuous improvement

1- Sporadic and Chronic Problems Costs Associated with wastes (cost, quality and time related) are due to Sporadic and Chronic Problems

Sporadic Problem: is a sudden change from Statuesque Chronic Problems: is a long standing adverse situation The differences between Sporadic and Chronic Problems Approach to solving is different Sporadic are dramatic and require immediate attention The reason for chronic waste is the lack of structured approach to identify and reduce waste Structured approach to improvement does not apply only to quality but also to productivity, cycle time, and safety

2- Project-by-Project Approach Most effective approach to improvement Main Steps Proving the need Identifying the project Organizing the project team Quality improvement project tasks: Verifying the project need an mission Diagnosing the cause Providing remedy Dealing with resistance to change Instituting control to hold the gains It is also called Juran’s breakthrough sequence Six-Sigam is an alternative approach

3- Example of a project Verifying the project need an mission (Define Step in Six-Sigma) Reduce the number of defective solder connections

Diagnosing the cause (Measure and Analyze Step in Six-Sigma)

Providing remedy (Improve Step in Six-Sigma) Either the temperature of the soldering need to be raised or the speed of the wave soldering machine need to be reduced Dealing with resistance to change (Improve Step in Six-Sigma) One engineer had pre-defined position, did not change his mind until the experiment proved him wrong Instituting control to hold the gains (Improve Step in Six-Sigma) To insure the improvement was maintained the process was monitored

4 - Wide Quality Improvement Initiative Steps of Major quality improvement initiatives Estimate the size of chronic waste or other quality related issues Estimate the saving and other benefits Set a goal to cut down costs to half in five years Do not imply costs would be reduced to zero Verify unquantifiable benefits Calculate the return on investment resulting from improvement Use a successful case history in the organization to justify a broader program

5- Experiences with Project-by-Project Approach Large cost reductions and improved quality to customers have been achieved. 1$ = 5 to 10$ Investment require for improvement has been modest and not capital intensive Most Projects can be completed in Six months The Key chronic problems cut through departments and thus require cross-functional project team In companies consisting of autonomous units, a project that is successful in one unit can be applied to the other units without need for duplicating diagnostic work

The improvement approach should include suppliers Improvement must include goals in annual business plan that are aligned with other business goals and strategies, etc.

6 - Introduction to Six-Sigma Improvement

7 - Organization Culture and Quality

8 - Assessment of Current Quality Activities

9- National Quality Awards National Institute of Standards and Technology (NIST) Areas: Industry Services Small Business Education Health Care Each country has its own System and regulatory body

10 - ISO 9000 Quality System Standards Developed by International Organization for Standards Minimum Criteria for quality Systems Required to meet domestic and International competition Some industries have their own quality systems (Example QS9000 for Automotive Industry). These systems includes ISO 9000 and additional industry related standards ISO Do not emphasis on results, but rather on Existence of quality systems Baldrige Criteria Focus on Customer Satisfaction. Baldrige and ISO 9000 complement each other

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