1 © 2010 Nkumbwa™. All Rights Reserved. Total Quality Management in Engineering Sir. Eng. R. L. Nkumbwa™

2 © 2010 Nkumbwa™. All Rights Reserved. Objectives What is Quality What is Quality Evolution of Quality Evolution of Quality Total Quality Management Total Quality Management Employee Involvement Employee Involvement Cost of Quality Cost of Quality Quality Awards Quality Awards The Quality Management System The Quality Management System 1. Leadership 1. Leadership 2. Strategic planning 2. Strategic planning 3. Customer satisfaction 3. Customer satisfaction 4. Performance management 4. Performance management 5. Human resources 5. Human resources 6. Construction quality 6. Construction quality 7. Supplier partnerships 7. Supplier partnerships 8. Results 8. Results

3 © 2010 Nkumbwa™. All Rights Reserved. What Is Quality? “The degree of excellence of a thing” “The degree of excellence of a thing” (Webster’s Dictionary) “The totality of features and characteristics that satisfy needs” ( ASQC) “The totality of features and characteristics that satisfy needs” ( ASQC) Fitness for use Fitness for use

4 © 2010 Nkumbwa™. All Rights Reserved. What are the dimensions of Product Quality Quality Performance Features Reliability Conformance Durability Serviceability Aesthetics Safety

5 © 2010 Nkumbwa™. All Rights Reserved. Dimensions of Service Quality Quality Time & Timeliness Completeness Consistency Courtesy Accessibility & Convenience Accuracy Responsiveness

6 © 2010 Nkumbwa™. All Rights Reserved. Evolution of Quality Management Quality Control Quality Control Testing and Inspection Testing and Inspection Quality Dept. as a police force— protecting the customer Quality Dept. as a police force— protecting the customer Higher quality implied higher cost Higher quality implied higher cost Conformance to spec Conformance to spec Workers the source of most problems Workers the source of most problems Quality Management Quality Management Building Process Capability Building Process Capability Everyone owns the quality of their work Everyone owns the quality of their work Quality is the key to improving cost and performance Quality is the key to improving cost and performance Fitness for use Fitness for use Process source of most defects Process source of most defects From To

7 © 2010 Nkumbwa™. All Rights Reserved. Deming’s 14 Points 1. Create constancy of purpose 2. Adopt philosophy of prevention 3. Cease mass inspection 4. Select a few suppliers based on quality 5. Constantly improve system and workers 6. Institute worker training 7. Instill leadership among supervisors 8. Eliminate fear among employees 9. Eliminate barriers between departments 10. Eliminate slogans 11. Remove numerical quotas 12. Enhance worker pride 13. Institute vigorous training & education programs 14. Implement these 13 points

8 © 2010 Nkumbwa™. All Rights Reserved. Total Quality Management Encompasses entire organization, from supplier to customer Stresses a commitment by management to have a continuing company-wide drive toward excellence in all aspects of products and services that are important to the customer.

9 © 2010 Nkumbwa™. All Rights Reserved. Total Quality Management Practices 1. Customer defined quality 2. Top management leadership 3. Quality as a strategic issue 4. All employees responsible for quality 5. Continuous improvement/Benchmarking 6. Shared problem solving 7. Statistical quality control 8. Training & education for all employees

10 © 2010 Nkumbwa™. All Rights Reserved. Quality as a Strategic Issue Quality is key to effective strategy Quality is key to effective strategy Clear strategic goal, vision, mission Clear strategic goal, vision, mission High quality goals High quality goals Operational plans & policies linked to goals Operational plans & policies linked to goals Feedback mechanism Feedback mechanism Strong leadership Strong leadership

11 © 2010 Nkumbwa™. All Rights Reserved. TQM Throughout The Organization Marketing, sales, R&D Marketing, sales, R&D Engineering Engineering Purchasing Purchasing Personnel Personnel Management Management Packing, storing, shipping Packing, storing, shipping Customer service Customer service

12 © 2010 Nkumbwa™. All Rights Reserved. Benchmarking Selecting best practices to use as a standard for performance Determine what to benchmark Determine what to benchmark Form a benchmark team Form a benchmark team Identify benchmarking partners Identify benchmarking partners Collect and analyze benchmarking information Collect and analyze benchmarking information Take action to match or exceed the benchmark Take action to match or exceed the benchmark

13 © 2010 Nkumbwa™. All Rights Reserved. Continuous Improvement: The Deming Wheel Identify problem Develop plan for improvement Implement plan on test basis Is the plan working Institutionalize improvement Continue cycle 1. Plan 2. Do 3. Study / Check 4. Act P-D-C-A Cycle

14 © 2010 Nkumbwa™. All Rights Reserved. Employees & Quality Improvement Quality circles Quality circles Employee suggestions Employee suggestions Process improvement teams Process improvement teams Self-managed work teams Self-managed work teams Participation in the Companies Quality Planning Participation in the Companies Quality Planning

15 © 2010 Nkumbwa™. All Rights Reserved. Seven Quality Control Tools 1. Pareto analysis 2. Flowcharts 3. Check sheets 4. Histograms 5. Scatter diagrams 6. Control charts 7. Fishbone diagram

16 © 2010 Nkumbwa™. All Rights Reserved. A Flowchart—Understand the Process and select performance measures

17 © 2010 Nkumbwa™. All Rights Reserved. Scatter Diagram—collect data.

18 © 2010 Nkumbwa™. All Rights Reserved. Control Chart—collect data Sample number Number of defects UCL = LCL = 1.99 c = 12.67

19 © 2010 Nkumbwa™. All Rights Reserved. Check Sheet—collect data COMPONENTS REPLACED BY LAB TIME PERIOD: 22 Feb to 27 Feb 1998 REPAIR TECHNICIAN: Bob TV SET MODEL 1013 Integrated Circuits |||| Capacitors |||| |||| |||| |||| |||| || Resistors || Transformers |||| Commands CRT |

20 © 2010 Nkumbwa™. All Rights Reserved. Histogram—analyze data

21 © 2010 Nkumbwa™. All Rights Reserved. A Pareto Chart- Analyze data Percent from each cause Causes of poor quality Machine calibrations Defective parts Wrong dimensions Poor Design Operator errors Defective materials Surface abrasions (64) (13) (10) (6) (3) (2)

22 © 2010 Nkumbwa™. All Rights Reserved. Fishbone Diagram—brainstorming causes Quality Problem MachinesMeasurementHuman ProcessEnvironmentMaterials Faulty testing equipment Incorrect specifications Improper methods Poor supervision Lack of concentration Inadequate training Out of adjustment Tooling problems Old/worn Defective from vendor Not to specifications Material- handling problems Deficiencies in product design Ineffective quality management Poor process design Inaccurate temperature control Dust and Dirt

23 © 2010 Nkumbwa™. All Rights Reserved. Cost Of Quality Cost of achieving good quality Cost of achieving good quality Prevention Prevention Appraisal Appraisal Cost of poor quality Cost of poor quality Internal failure costs Internal failure costs External failure costs External failure costs

24 © 2010 Nkumbwa™. All Rights Reserved. The Cost of Quality Distribution of the Costs Prevention Evaluation failures Internal and External Reduce Quality Costs by Increasing Prevention Efforts

25 © 2010 Nkumbwa™. All Rights Reserved. “Quality is Free” For the average company, the cost of quality is about 25% of total sales For the average company, the cost of quality is about 25% of total sales The cost of prevention is a fraction of the cost of fixing mistakes after they are made The cost of prevention is a fraction of the cost of fixing mistakes after they are made Investments in prevention can drastically reduce the total cost of quality Investments in prevention can drastically reduce the total cost of quality

26 © 2010 Nkumbwa™. All Rights Reserved. Quality Indexes Labor index Labor index quality cost / labor hours quality cost / labor hours Cost index Cost index quality cost / manufacturing cost quality cost / manufacturing cost Sales index Sales index quality cost / sales quality cost / sales Production index Production index quality cost / units produced quality cost / units produced

27 © 2010 Nkumbwa™. All Rights Reserved. Quality Index Example Quality Costs Prevention$ 27,00041,50074,600112,300 Appraisal155,000122,500113,400107,000 Internal failure386,400469,200347,800219,100 External failure242,000196,000103,500106,000 Total$ 810,400829,200639,300544,400 Accounting measures Sales$ 4,360,0004,450,0005,050,0005,190,000 Mfg costs1,760,0001,810,0001,880,0001,890,000

28 © 2010 Nkumbwa™. All Rights Reserved. Quality Index YearSales Cost Total quality costs * 100 / base $810,400 * 100 / 4,360,000 = 18.58

29 © 2010 Nkumbwa™. All Rights Reserved. Quality And Productivity Productivity = output / input Productivity = output / input Fewer defects increase output Fewer defects increase output Quality improvement reduces inputs Quality improvement reduces inputs

30 © 2010 Nkumbwa™. All Rights Reserved. Measuring Yield & Productivity where Y = yield I = number units started in production % G = percentage good units % R = percentage of defective units reworked Y = (I)(%G) + (I)(1-%G)(%R)

31 © 2010 Nkumbwa™. All Rights Reserved. Product Yield Example Start 100 motors per day 80% are good 50% of poor quality units can be reworked Y = (I)(%G) + (I)(1-%G)(%R) Y = 100 (0.80) ( ) (0.50) = 90 motors

32 © 2010 Nkumbwa™. All Rights Reserved. Product Cost

33 © 2010 Nkumbwa™. All Rights Reserved. Product Cost Example Direct mfg cost = $30, Rework cost = $ motors started, 20% defective 50% of defective motors can be reworked

34 © 2010 Nkumbwa™. All Rights Reserved. Multistage Product Yield Y = (I) (%g 1 )(%g 2 )...(%g n ) where I = input batch size %g i = percent good at stage I

35 © 2010 Nkumbwa™. All Rights Reserved. Multistage Process Yield Motors produced in four-stage process Start with 100 motors Stage % Good quality Y = (I) (%g 1 )(%g 2 )...(%g n ) = (100)(0.93)(0.95)(0.97)(0/92) Y = 78.8 motors

36 © 2010 Nkumbwa™. All Rights Reserved. Input Required For Output Of 100 Good Motors

37 © 2010 Nkumbwa™. All Rights Reserved. Quality Awards And Certifications The Malcolm Baldrige Award The Malcolm Baldrige Award The Deming Prize The Deming Prize Industry, regional, and company awards Industry, regional, and company awards Institute of Industrial Engineers Institute of Industrial Engineers NASA NASA European Quality Award European Quality Award ISO 9000 ISO 9000

38 © 2010 Nkumbwa™. All Rights Reserved. Quality Management System Overview 1. Leadership 2. Strategic planning 3. Customer satisfaction 4. Performance management 5. Human resources 6. Construction quality 7. Supplier partnerships 8. Results

39 © 2010 Nkumbwa™. All Rights Reserved. Leadership Leaders align everyone in the organization with a common purpose, values, and priorities. Strong leadership is the key to becoming world class.

40 © 2010 Nkumbwa™. All Rights Reserved. This Means Senior managers set direction and priorities. Senior managers set direction and priorities. Senior managers actively reinforce the message. Senior managers actively reinforce the message. Employees actions are aligned with company priorities. Employees actions are aligned with company priorities.

41 © 2010 Nkumbwa™. All Rights Reserved. Successful Organizations Share a culture of common values—ALIGNMENT Share a culture of common values—ALIGNMENT Senior managers actively communicate mission, vision, and values Senior managers actively communicate mission, vision, and values Everyone walks the talk Everyone walks the talk Get feedback from employees and use it to improve Get feedback from employees and use it to improve Are good corporate citizens Are good corporate citizens

42 © 2010 Nkumbwa™. All Rights Reserved. Links Senior leaders ensure that the company’s values and priorities are embraced throughout the organization. Senior leaders ensure that the company’s values and priorities are embraced throughout the organization.

43 © 2010 Nkumbwa™. All Rights Reserved. Action Steps Develop mission, vision, and values statements. Develop mission, vision, and values statements. Actively seek daily opportunities to reinforce the company culture. Actively seek daily opportunities to reinforce the company culture. Survey employees annually. Survey employees annually. Devote time to charitable community activities. Devote time to charitable community activities.

44 © 2010 Nkumbwa™. All Rights Reserved. What to Measure Review operational results and employee performance data. Review operational results and employee performance data.

45 © 2010 Nkumbwa™. All Rights Reserved. Critical Success Factors Constant Reinforcement Constant Reinforcement Alignment Alignment Walk the Talk! Walk the Talk!

46 © 2010 Nkumbwa™. All Rights Reserved. Strategic Planning Achieving a future vision of what the company can become requires creating and executing a strategic plan for getting there.

47 © 2010 Nkumbwa™. All Rights Reserved. This Means There is a difference between business planning and strategic planning. Successful companies do both. There is a difference between business planning and strategic planning. Successful companies do both. You have a long-range view of how you want your company to operate in the future. You have a long-range view of how you want your company to operate in the future. There is a roadmap that keeps everyone focused on the important changes needed to make it happen. There is a roadmap that keeps everyone focused on the important changes needed to make it happen.

48 © 2010 Nkumbwa™. All Rights Reserved. Successful Organizations Use a structured approach for strategic development Use a structured approach for strategic development Measure 5-7 key success drivers Measure 5-7 key success drivers Evaluate the competitive environment in detail Evaluate the competitive environment in detail Have clear goals for the company’s future Have clear goals for the company’s future Senior managers translate goals into action plans. Senior managers translate goals into action plans. Engage everyone to make the changes Engage everyone to make the changes Monitor and control progress monthly Monitor and control progress monthly

49 © 2010 Nkumbwa™. All Rights Reserved. Links Leadership direction drives strategic plans. Leadership direction drives strategic plans. Strategic plans drive: Strategic plans drive: HR development HR development product and market innovations product and market innovations customer satisfaction improvements customer satisfaction improvements quality improvements quality improvements partnering initiatives partnering initiatives

50 © 2010 Nkumbwa™. All Rights Reserved. Action Steps Integrate strategic planning in the annual business planning process. Integrate strategic planning in the annual business planning process. Define measurements for each key success driver. Define measurements for each key success driver. Develop strategic goals. Develop strategic goals. Involve employees to develop action plans. Involve employees to develop action plans. Review progress against the plan monthly. Review progress against the plan monthly.