2. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1 Philosophies and Frameworks

3. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ritz Carlton 1890’s pg 90 “Ladies and gentlemen serving ladies and gentlemen.” Anticipating the needs of guests Resolving their problems Exhibiting genuine and caring conduct towards guests and each other Skilled and empowered workforce operating with pride and joy. 2

4. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ritz Carlton 1890’s pg 90 Two-time Malcolm Baldrige National Quality Award winner “pride and joy” in work, and its impact on quality, are concepts developed by Deming 3

5. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Leaders in the Quality Revolution pg 90 W. Edwards Deming Joseph M. Juran Philip B. Crosby Armand V. Feigenbaum Kaoru Ishikawa Genichi Taguchi Comparison of their Philosophies… 4

6. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Texas Nameplate Company pg 90 Small company (43 employees) Manufactures and sells ID labels International sales Small company attributes honed… Streamlined communications Rapid decision making Shared goals and accessible leaders Now are competitive advantages 5

7. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Texas Nameplate Company pg 90 “Fear is useless; what is needed is trust” Closely knit organization Finely tuned to needs of customers Customer site visit TNC team visits various sites Identifies opportunities to improve products and services Findings shared with entire company 6

8. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Texas Nameplate Company pg 90 Customer service reps empowered Without management approval Factory workers responsible to tailor processes Optimize contributions to company goals 7

9. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Texas Nameplate Company pg 90 Defects reduced from 3.5% to 1% Customers give 5 of 6 rating 12 key business areas Quality, on-time delivery Reliable performance, overall satisfaction Employees satisfied Fair pay, job content, recognition, fairness/respect, career 8

10. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cedar Foundation pg 91 Delivers its mission by living and upholding its values of respect for the individual, equality of opportunity, pursuit of excellence, openness and accountability, teamwork and partnership, and commitment to enthusiasm. 9

11. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cedar Foundation pg 91 Committed to continuous improvement Applied numerous quality management tools Use of balanced scorecard Achieved financial growth High employee satisfaction 10

12. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Deming Philosophy pg 91 Most influential individual in quality management Ph.D in physics Trained in statistics Worked for Western Electric Developed a sense of viewing management processes statistically 11

13. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Deming Philosophy pg 91 Taught quality control courses Part of national defense effort Mostly engineers and factory staff Realized it would not solve quality problems Attempts to convey quality message to upper level management in the U.S. was unsuccessful 12

14. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Deming Philosophy pg 91 Traveled to Japan for census job Japanese were aware of his theory Began teaching SQC / SPC Preached: Importance of top management leadership Customer / supplier partnerships Continuous improvement 13

15. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Deming Philosophy pg 92 Japanese embraced philosophy Deming influence profound Japanese established Deming prize in 1951 Received highest honor in Japan Royal Order of the Sacred Treasure Presented by the Emperor If Japan can, why can’t we?...1980 Invited to work with Ford, GM, others 14

16. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Deming Philosophy pg 92 “A product or a service possesses quality if it helps somebody and enjoys a good and sustainable market” Variation is chief culprit of poor quality Mechanical variations lead to wear Human inconsistencies hurt customer service 15

17. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Deming Philosophy pg 92 “A product or a service possesses quality if it helps somebody and enjoys a good and sustainable market” Variation is chief culprit of poor quality Mechanical variations lead to wear Human inconsistencies hurt customer service 16

18. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 Deming Chain Reaction pg 93 Improve quality Costs decrease Productivity improves Increase market share with better quality and lower prices Stay in business Provide jobs and more jobs

19. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 Key Idea pg 92 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.

20. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Deming’s 14 Points pg 93 He practiced his 14 points Sometimes misunderstood He synthesized his 14 points System of profound knowledge Insights needed to design management practices 19

21. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Deming’s System of Profound Knowledge pg 94 Appreciation for a system Understanding variation Theory of knowledge Psychology 20

22. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Appreciation for a System pg 94 Components of a system must work together to be effective Traditional organizations manage according to functions vertically (silo) Managers must understand the whole system and not just their function Actions must be aligned with organization and common goals 21

23. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Appreciation for a System pg 94 It is poor management to purchase materials at the lowest cost if it is at the expense of the of the system Possible cost to mfg system Possible cost to customer Systems must be focused towards a purpose Pitting departments is detrimental 22

24. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Appreciation for a System pg 94 Traditional appraisals do not consider interactions within the system Factors affecting employees performance: Training received Information and resources provided Leadership of supervisors & managers Disruptions on the job Management policies and practices 23

25. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24 Key Idea pg 94 The aim of any system should be for all stakeholders—stockholders, employees, customers, community, and the environment—to benefit over the long term.

26. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Understanding Variation pg 95 Many sources of uncontrollable variation exist in any process Hitting golf balls Meals and service in a restaurant Quincunx example Same drop pattern, bell-shaped curve Excessive variation results in product failures, unhappy customers, and unnecessary costs 25

27. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Understanding Variation pg 95 Variation occurs due to factors uncontrolled Controllable factors include: Tool wear Machine wear Speeds / feeds Management should focus on understanding variation and reducing it Less inspection, less scrap, less rework 26

28. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27 Key Idea pg 96 Excessive variation results in products that fail or perform erratically and inconsistent service that does not meet customers’ expectations.

29. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Understanding Variation pg 95 Statistical methods are the primary tools used to identify and quantify variation. Deming proposed all employees understand and utilize these tools These tools can become the common tool used to communicate. No ambiguitity, no interpretation 28

30. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Theory of Knowledge pg 97 Knowledge is not possible without theory Experience alone does not establish a theory, it only describes And is limited Theory shows cause-and-effect relationships that can be used for prediction 29

31. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Theory of Knowledge pg 97 Deming never provided any solutions in his assignments He helped them learn to analyze concrete data Objective data and systematic problem-solving process provides a rational basis for making decisions 30

32. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 31 Key Idea pg 97 Experience only describes – it cannot be tested or validated – and alone is no help in management. Theory, on the other hand, helps one to understand cause- and-effect relationships that can be used for prediction and relational management decisions.

33. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Psychology pg 97 Deming’s philosophy… Understand human behavior Treat people fairly People differ from each other Effective leaders know and understand this and use their strengths and preferences Rotek purchasing staff 32

34. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Psychology pg 97 People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful Fear is demotivating It prevents one from reaching full potential Managers should develop pride and joy in work 33

35. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Psychology pg 97 Psychology helps us to nurture and preserve the positive innate attributes of people Otherwise, people resort to the “carrot and stick” tactics are not long- term solutions Deming believed pay is not a motivator (controversial, GM) 34

36. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Impacts of Profound Knowledge pg 98 When people do not understand systems… When people do not understand variation… When people do not understand psychology… When people do not understand the theory of knowledge… 35

37. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Profound Knowledge pg 98 It is not all original to Deming’s first principles Walter Shewhart’s distinction between common and special causes of variation is an addition Business schools began to teach these These concepts became the theory of management 36

38. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Deming’s 14 Points (Abridged) (1 of 2) pg 99 1. 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. 37

39. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 38 Deming’s 14 Points (2 of 2) pg 102 9. 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. www.deming.org

40. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 1 – Create a Vision… pg 99 Define values, mission and vision Do not exist simply for profit Business is a social entity Purpose is to serve customers and employees Take long-term view, invest in training Top management commitment Many mgrs do not change…denial, excuses 39

41. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 2 – Learn the New Philosophy … pg 99 Historical mgmt built on early practices Quotas Work measurement Adversarial relationships Call centers still operated this way Companies must produce quality Users must have a positive outcome Companies must value customer first 40

42. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 3 – Understand Inspection … pg 100 Inspection does not add value Encourages defects by allowing someone else to catch and fix them “get it out of my area, higher rate of prdn” Higher bonus based on higher output Workers must take responsibility Statistics help few managers understand this 41

43. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 4 – Stop Making Decisions … pg 100 Purchasing and reductions Price…no meaning without quality (Shewart) Typically evaluated by cost Establish long-term relationships with fewer suppliers Fewer means less variation in quality / process SCM 42

44. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 5 – Improve Constantly and Forever pg 100 In both design and operations Understand customer needs feedback Understand the mfg and delivery process Reduce causes of variation Solicit all employees to innovate Continuous improvement was not a common practice, now it is mandatory 43

45. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 6 – Institute Training pg 101 People are the most important resource They want to do a good job, possible? Management must take responsibility Morale improves Company dedicated to helping Reduces barriers between workers and supervisors Honda of America in Marysville 44

46. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 7 – Institute Leadership pg 101 Lack of is an impediment to improvement Management task is to lead, not supervise Coach Eliminates fear in employees Encourages teamwork 45

47. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 8 – Drive Out Fear pg 102 Fear of reprisal, failure, teardown, unknown, relinquishing control, and change… Managers and workers must respect each other or system will not work Workers cannot be afraid to report Firms must create a culture without fear 46

48. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 9 – Optimize the Efforts of Teams pg 102 Teamwork optimizes the efforts between departments and individuals Barriers between functional areas occur when managers fear loss of power Lack of cooperation results in poorer quality Cannot understand what internal customers seek Training and employee involvement! 47

49. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 10 – Eliminate Exhortations pg 102 All improvements cannot be eliminated by posters “Zero defects” Directed at the wrong people Assume all quality problems are due to human behavior Cannot be changed through motivationals Must be eliminated by the “system” 48

50. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 11 – Eliminate Numerical Quotas and MBO pg 102 Measurement often used punitively Often devised by short-term goals Workers often short-cut to achieve Buy less quality for less money Goals without means to achieve have no meaning 10% reduction in inventory at Rotek Variation in demand v. supply Management must cont. improve 49

51. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 12 – Remove Barriers to Pride in Workmanship pg 103 Factory workers treated as “commodity” Given monotonous tasks Work on inferior machines, tools, mat’ls Directed to process defective goods Performance appraisal one of biggest barriers to pride in workmanship Promotes competition for limited resources Objectives driven by boss’s wants 50

52. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 13 – Encourage Education and Encouragement pg 103 Training is job specific Provide training per point 1 Education is self-development Per point 13 Improve the value of the individual Developing the worth of the individual is a powerful motivation Kent State Lorain Campus 51

53. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 13 – Encourage Education and Self-Improvement pg 103 Measurement often used punitively Often devised by short-term goals Workers often short-cut to achieve Buy less quality for less money Goals without means to achieve have no meaning 10% reduction in inventory at Rotek Variation in demand v. supply Management must cont. improve 52

54. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 14 – Take Action pg 103 Cultural changes begin with top management They include everyone Typically are met with skepticism Fundamental mission is to provide jobs Also to improve the value of the individual Many benefits from improving them Early response training 53

55. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 14 – Take Action pg 103 Deming’s is a philosophy Lacks direction and specific approaches Does not fit into traditional mgmt. “No instant pudding” Still others follow (Hillerich & Bradsby) 54

56. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 14 – Hillerich & Bradsby pg 103 Challenges Market competition and changes CEO attends Deming seminar What changes could be made? Old company Old union Persuades union officials to study Deming Developed joint strategy for company Build trust 55

57. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pt. 14 – Hillerich & Bradsby pg 104 Challenged to make something together Employees interested but skeptical Managers examined 14 points Demonstrated a willingness to change Eliminated quota system Overall productivity improved Team-based approach implemented Pride in performance improved Eliminated performance appraisals 56

58. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Juran Philospophy pg 104 Pioneered development of statistical methods at Western Electric Wrote “Quality Control Handbook” One of the most comprehensive written Taught quality principles to Japanese 57

59. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Juran Philospophy pg 104 Direct quality from sr. mgmt level Train entire mgmt. in quality principles Strive to improve at revolutionary rates Report progress on quality to executives Involve workforce in quality Revise reward and recognition structure Include quality 58

60. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Juran Philospophy pg 105 Quality should be viewed from both external and internal perspectives Product performance that results in customer satisfaction Freedom from product deficiencies that results in customer dissatisfaction 59

61. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Juran Philospophy pg 105 How products are designed, manufactured, delivered and serviced contribute to “fitness for use” Mission of firm is to achieve high quality design Mission of each department is to achieve high-conformance quality 60

62. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Juran Philospophy pg 105 Juran advocated: Market research Product development Design Planning for manufacture Purchasing Production process control Inspection, testing and sales 61

63. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Quality Trilogy pg 105 Quality planning Quality control Quality improvement www.juran.com 62

64. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Quality Trilogy pg 105 Quality planning The process of preparing to meet quality goals Quality control The process of meeting quality goals Quality improvement Unprecedented levels of quality 63

65. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 64 Key Idea pg 105 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.”

66. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Philosophy pg 105 Begins with understanding the customer’s needs Translate into specifications Develop processes capable of meeting those needs Employees to know customer and needs Strategic planning of quality Short and long term goals 65

67. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Philosophy pg 105 Unlike Deming, Juran detailed a program for quality improvement All breakthroughs follow a commonsense sequence of: Discovery Organization Corrective action control 66

68. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Breakthrough Sequence pg 106 Proof of the need Managers need to be convinced quality is good economics Data collection, information on poor quality, low productivity All can be translated into money Can be used to justify quality program 67

69. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Breakthrough Sequence pg 106 Project identification: All breakthroughs are achieved project by project Participation in a project increases its chances for success and involvement 68

70. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Breakthrough Sequence pg 106 Organization for breakthrough: Specific groups determine breakthroughs The path is through… Symptom to cause Diagnostic journey Cause to remedy Remedial journey 69

71. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Breakthrough Sequence pg 106 Diagnostic journey: Collectors of data, statistics are needed Some experts may be needed Blackbelts 70

72. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Breakthrough Sequence pg 106 Remedial journey: Choose an alternative that optimizes total cost Implement remedial action Implement change 71

73. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Breakthrough Sequence pg 106 Remedial journey: Choose an alternative that optimizes total cost Implement remedial action Implement change 72

74. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Juran’s Breakthrough Sequence pg 106 Holding the gains: Establish new standards Establish new procedures Train the workforce Sustain the breakthrough 73

75. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Phillip B. Crosby “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.” 74

76. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Crosby Philosophy 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 www.philipcrosby.com 75

77. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Basic Elements of Improvement pg 107 Conformance to requirements, not elegance: Requirements must be clearly stated To avoid misunderstanding Then measurements may be taken Non-conformance to these requirements is lack of quality These must be defined by management 76

78. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Basic Elements of Improvement pg 107 There is no such thing as a quality problem: Problems must be identified by those individuals or departments that cause them Accounting, manufacturing, etc. Quality originates in the department These departments should measure and identify 77

79. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Basic Elements of Improvement pg 107 There is no such thing as economics of quality…: This has no meaning Doing the job right the first time is always less costly Examples of problems in one’s home 78

80. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Basic Elements of Improvement pg 107 The only performance measurement is the cost…: The expense of the non-conformance is the measurement of the cost Well-run companies are less than 2.5% cost of quality 79

81. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Basic Elements of Improvement pg 107 Zero Defects…: The only performance standard is “zero defects” It is not a motivational theory It is a true performance standard ZD is do it right the first time Prevent them rather than find and fix them 80

82. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. A.V. Feigenbaum Three Steps to Quality Quality Leadership, with a strong focus on planning Modern Quality Technology, involving the entire work force Organizational Commitment, supported by continuous training and motivation 81

83. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. A.V. Feigenbaum pg 109 Popularized the phrase “Hidden Factory” That portion of capacity wasted due to rework and scrap Many of his ideas are embedded in the foundation of the Baldrige Award 82

84. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kaoru Ishikawa pg 110 Instrumental in developing Japanese quality strategy Influenced participative approaches involving all workers Advocated the use of simple visual tools and statistical techniques 83

85. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kaoru Ishikawa pg 110 Quality begins with education and ends with education The first step in quality is to know the requirements of the customer The ideal state of quality control occurs when inspection is no longer necessary 84

86. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kaoru Ishikawa pg 110 Remove the root cause, not the symptoms Quality control is the responsibility of all workers and all divisions Do not confuse the means with the objectives Put quality first and set your sights on long-term profits 85

87. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kaoru Ishikawa pg 110 Marketing is the entrance and exit of quality Top management must not show anger when facts are presented by subordinates 86

88. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kaoru Ishikawa pg 110 95% of problems in a company can be solved with simple tools for analysis and problem solving Data without dispersion information (i.e., variability) are false data 87

89. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 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: No LossLoss Tolerance 0.5000.5200.480 88

90. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Genichi Taguchi What is real difference if tolerance is 0.479 ? Taguchi argues that the smaller the variation, the better the quality His approach is to implement during design stage rather than after a product is found not to be in conformance Design products based on existing or possible manufacturing capabilities 89

91. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Malcolm Baldrige National Quality Award pg 111 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 Malcolm Baldrige, former U.S. Secretary of Commerce 90

92. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Malcolm Baldrige National Quality Award pg 111 Signed by Reagan administration to improve U.S. productivity Called for a national conference Award should be similar or based on same context as the Deming prize Named after former secretary of Commerce Killed in plane accident 91

93. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Criteria for Performance Excellence pg 114 Designed to improve systems and overall performance in companies Delivery of ever-improving value to customers, resulting in improved marketplace success Improvement of overall company performance and capabilities Organizational and personal learning 92

94. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Criteria for Performance Excellence pg 115 Leadership Strategic Planning Customer Focus Measurement, Analysis, and Knowledge Management Workforce Focus Process Management Business Results Baldrige Award trophy 93

95. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 94 The Baldrige Framework – A Systems Perspective pg 116

96. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Category Structure Items (1.1, 1.2, 3.1, etc.) Areas to address (6.1a, 6.1b, etc.) Questions (How, What, Who…?) Example: Leadership Category 1 1.1 Senior Leadership a. Vision, Values, and Mission b. Communication and Organizational Performance 1.2 Governance and Social Responsibilities a. Organizational Governance b. Legal and Ethical Behavior c. Societal Responsibilities and Support of Key Communities 95

97. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Questions from Vision, Values, and Mission Area to Address pg 117 1. How do senior leaders set organizational vision and values? How do senior leaders deploy your organization’s vision and values through your leadership system, to the workforce, to key suppliers and partners, and to customers and other stakeholders, as appropriate? How do senior leaders’ personal actions reflect a commitment to the organization’s values? 2. How do senior leaders promote an environment that fosters, requires, and results in legal and ethical behavior? 3. How do senior leaders create a sustainable organization? How do senior leaders create an environment for organizational performance improvement, the accomplishment of your mission and strategic objectives, innovation, competitive, or role-model performance leadership, and organizational agility? How do they create an environment for organizational and workforce learning? How do they develop and enhance their personal leadership skills? How do they personally participate in succession planning and the development of future organizational leaders? 96

98. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Ritz-Carlton Hotel pg 117 / 118 Horst Schulze philosophy and leadership All members go through same training All hotels must live up to a continuously improving “gold standard” Senior leaders and seven specific decisions 97

99. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 98 Key Idea pg 118 The Baldrige criteria define both an integrated infrastructure and a set of fundamental practices for a high- performance management system.

100. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Core Values of Baldrige Criteria pg 118 Visionary Leadership Customer-Driven Excellence Organizational and Personal Learning Valuing Workforce Members and Partners Agility Focus on the Future Managing for Innovation Management by Fact Societal Responsibility Focus on Results and Creating Value Systems Perspective 99

101. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Criteria Evolution pg 119 1988: primarily a manufacturing model with “little q” emphasis 1995: revised to capture a more comprehensive business model; focus on overall performance more than just quality Updated regularly to reflect current issues in business; for example, organizational governance and sustainability, customer and workforce engagement 100

102. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 101 Key Idea pg 120 Approaches that organizations use to address the Baldrige criteria requirements need not be formal or complex, and can easily be implemented by small businesses.

103. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Impacts of Baldrige pg 121 Net social benefits exceeding $24 billion in 2000 dollars Changed the way many organizations around the world now manage their operations Improved results for all stakeholders Spawned a network of local, state, and national award programs around the world 102

104. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Baldrige & Deming pg 121 Deming not a supporter of the Baldrige Award Competitive nature at odds with his teachings Juran highly influential in its development 103

105. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Deming Prize pg 122 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 104

106. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Deming Prize Criterion pg 123 Management policies and their deployment regarding quality management New product development and / or work process innovation 105

107. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Deming Prize Criterion pg 123 Maintenance and improvement of product and operational qualities Establishment of systems for managing quality, quantity, delivery, costs, safety, environment, etc. 106

108. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Deming Prize Criterion pg 123 Collection and analysis of quality information and utilization of information technology Human resources development 107

109. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Other Quality Awards pg 124 - 127 European Quality Award (European Excellence Award) Canadian Awards for Business Excellence Australian Business Excellence Award Chinese National Quality Award Many others… 108

110. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ISO 9000:2000 pg 128 Quality system standards adopted by International Organization for Standardization in 1987; revised in 1994 and 2000; minor revision in 2008 Technical specifications and criteria to be used as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes, and services are fit for their purpose. 109

111. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 110 Key Idea pg 128 ISO 9000 defines quality system standards, based on the premise that certain generic characteristics of management practices can be standardized, and that a well-designed, well-implemented, and carefully managed quality system provides confidence that the out-puts will meet customer expectations and requirements.

112. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objectives of ISO Standards pg 129 1. Achieve, maintain, and continuously improve product quality 2. Improve quality of operations to continually meet customers’ and stakeholders’ needs 3. Provide confidence to internal management and other employees that quality system requirements are being fulfilled 4. Provide confidence to customers and other stakeholders that quality requirements are being achieved 111

113. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Structure of ISO 9000 Standards pg 129 21 elements organized into four major sections: Management Responsibility Resource Management Product Realization Measurement, Analysis, and Improvement 112

114. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ISO 9000:2000 Quality Management Principles pg 131 Customer Focus Leadership Involvement of People Process Approach System Approach to Management Continual Improvement Factual Approach to Decision Making Mutually Beneficial Supplier Relationships 113

115. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 114 Key Idea pg 136 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.

116. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Six Sigma pg 133 Based on a statistical measure that equates to 3.4 or fewer errors or defects per million opportunities Pioneered by Motorola in the mid-1980s and popularized by the success of General Electric 115

117. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 116 Key Idea pg 133 Six Sigma can be described as a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and a clear financial return for the organization.

118. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Key Concepts of Six Sigma (1 of 2) pg 134 Think in terms of key business processes, customer requirements, and overall strategic objectives. Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtaining resources. Emphasize such quantifiable measures as defects per million opportunities (dpmo) that can be applied to all parts of an organization 117

119. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Key Concepts of Six Sigma (2 of 2) pg 134 Ensure that appropriate metrics are identified early and focus on business results, thereby providing incentives and accountability. Provide extensive training followed by project team deployment Create highly qualified process improvement experts (“green belts,” “black belts,” and “master black belts”) who can apply improvement tools and lead teams. Set stretch objectives for improvement. 118

120. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 119 Key Idea pg 137 Although different, Baldrige and Six Sigma are highly compatible and can each have a place in the management system of a successful organization.