1. Quality Management Gábor Árva
Dept. of Management and Corporate Economics
Faculty of Economic and Social Sciences
Budapest University of Technology and Economics
5 April 2016

2. Agenda for today Memo: 6 steps for process improvement
Quality Management Tools
Cause and Effect Analysis (Ishikawa)
Pareto Analysis

3. 6 steps to process improvement
Define the problem
Identify and document the process
Measure the performance
Understand why
Develop and test ideas
Implement solutions and evaluate them

4. Fishbone/Ishikawa/Cause and Effect diagram
Identifies, explores and graphically represents all of the possible causes related to a problem or a condition to discover its root causes.
Helps the team to focus on the causes in increasing detail, not on the symptoms.
Reveals the key relationships

5. Fishbone analysis

6. How to use Fishbone analysis
Step 1: Define the effect, or the undesirable result, which is the problem to be solved, and write it to the head of the fish
Step 2: Write the categories of causes as branches from the main arrow, usually according to 4M:
Men
Methods
Machinery
Material
Step 3: Collect all the possible causes of the problem. Ask: Why does this happen? As each idea is given, it is written as a branch from the appropriate category.
Step 4: Continue to ask Why, and generate deeper levels of causes. (5 Why?)

7. Eggs on our sandwich are rotten
Ishikawa example (4M)
Has to serv the customer, prepare the sandwiches
Machinery
not working
Men
refrigerator
Missing staff
age
Dirty hands
Eggs on our sandwich are rotten
Doesn’t wash her hands
Ingerdients are not checked when arriving from supplier
Stood to long in the storage
In a hurry
easiness
Method
Material
Missing staff
Order only once a week

8. Ishikawa exapmle (Process steps)
Preparing of sandwiches
Purchasing ingredients
Storage of ingredients
Dirty hands
Stood to long in the storage
Doesn’t wash her hands
Ingerdients are not checked when arriving from supplier
Order only once a week
In a hurry
Eggs on our sandwiches are rotten
Refrigerator disabled
Missing staff
Same person touch the money and serv the customer
age
Missing staff
Storage of sandwiches
Selling

9. Group work
Draw an Ishikawa diagram about one of the following problems:
Why is it difficult to be an Erasmus Student at BME?
Why are trains delayed?
You can use either the 4M or the process-steps method

10. Pareto-chart
Bar graph: The lengths of the bars represent frequency or cost (time or money), and are arranged with the longest bars on the left and the shortest to the right
Helps to identify the top portion of causes that need to be adressed to resolve the majority of the problems
Displays the relative importance of problems in a simple, quickly interpreted, visual format.
Alternative term, ABC analysis:
A: The most important causes
B: Causes in between, they can be later A items
C: Relative unimportant, though larger in number causes.

11. 80% of problem
20% of sources

12. How to make a Pareto-diagram?
Step 1:
Decide what problems are to be investigated and how to collect the data
Decide what kind of problems you want to investigate (Example: defective items, losses in monetary terms, accidents occurring)
Decide what data will be necessary and how to classify
Determine the method of collecting the data (sample) and the period during which it is to be collected

13. How to make a Pareto-diagram?
Step 2: Calculate the total values (number of occurence, monetary losses) of each cause
Step 3: Make Pareto diagram data sheet listing the items, their individual totals, cumulative totals, percentages of overall total, and cumulative percentages.
Step 4: Arrange the items in the order of quantity and fill out the data sheet. The item “others” should be placed in the last line, no matter how large it is. This is because it is composed of a group of items each of which is smaller than the smallest item listed individually.

14. How to make a Pareto-diagram?
Step 5:
Draw two vertical axes and a horizontal axis.
Vertical axes:
Left-hand vertical axis: mark this axis with a scale from 0 to the overall total.
Right-hand vertical axis: mark this axis with a scale from 0% to 100%.
Horizontal axis: Divide this axis into the number of intervals to the number of items classified.
Step 6:
Construct a bar diagram.

15. How to make a Pareto-diagram?
Step 7:
Draw the cumulative curve (Pareto curve).
Mark the cumulative values (cumulative total or cumulative percentage), above the right-hand intervals of each item, and connect the points by a solid line.
Draw a line at 80% on the right vertical axis running parallel to the x-axis. Then drop the line at the point of interstection with the curve on the x-axis. This point on the x-axis separates the important causes on the left (vital few) from the less important causes on the right (trivial many)

16. Pareto-diagram example
Cause of the delay
Number of
occurence
Cumultative count
percentage
temporary speed limits
440
0,44
waiting for on-coming trains
360
0,8
signal breakdown 65
0,865
waiting for connections 60
0,925
track maintenance 20
0,945
weather 15
0,96
waiting for train staff
0,975
failure of the locomotive 10
0,985
delay from abroad
0,995
accidents 5 1
SUM
1000

17. Vital few
Number of occurence
Trivial many
Cumultative count percentage

18. Avarage duration of delays by causes

19. Types of Pareto-analysis
Pareto diagrams by phenomena
This is a diagram concerning the following undesirable results, and is used to find out what the major problem is.
Quality: defects, faults, complaints, returned items, repairs
Cost: amount of loss, expenses
Delivery: stock shortages, defaults in payments, delays in delivery
Safety: accidents, mistakes, breakdowns
Pareto diagrams by causes
This is a diagram concerning causes in the process, and is used to find out what the major cause of the problem is.
Operator: shift, group, age, experience, skill, individual person
Machine: machines, equipment, tools, organizations, models, instruments.
Raw material: manufacturer, plant, lot, kind.
Operation method: conditions, orders, arrangements, methods.

20. Hints on making and using Pareto diagrams
Hints on making Pareto diagrams
Check various classifications and construct many kinds of Pareto diagrams, it allows different approaches
It is undesirable that “others” represent a higher percentage. A different method of classification should be considered.
If a monetary value can be assigned to the data, it is best to draw the Pareto diagrams with the vertical axis showing this.
Hints on using Pareto diagrams
If an item is expected to be amenable to a simple solution, it should be tackled right away even if it is of relatively small importance.
After identifying the problem by making a Pareto diagram by phenomena, it is necessary to identify the causes in order to solve the problem (e.g with Ishikawa)

21. Pareto analysis…
Separates the the few major problems from the many possible problems so you can focus your improvement efforts
Determines which problems are
the most important by using data
not perceptions
Sets the priorities for many practical application
Allows better use of limited resources
Results of the process improvement can be predicted and evaluated

22. Thank You for Your kind attention!