2. Product and Process Measures Drive Continuous Product Quality and Business Improvement Angelo G. Scangas, President Quality Support Group, Inc. 978-430-7611 www.qualitysupportgroup.com QSG Quality Support Group, Inc.

3. What is on your mind? Do you have any questions? What have you tried? Worked or not? Why? Your feedback and engagement QSG Quality Support Group, Inc.

4. Continuous Improvement is the relentless effort of top management to seek out and eliminate waste at all levels of the organization. This is achieved through a sustained, results oriented process to instill this culture changing mindset into all levels of the organization through leadership, tools and training. Continuous Improvement Vision / Definition QSG Quality Support Group, Inc.

5. Align your QMS with the achievement of organizational and business success. Continuous Improvement Vision / Definition QSG Quality Support Group, Inc.

6. Cost Of Poor Quality Revenues - (Cost of Operations) -(Cost of Poor Quality) -(Cost Recovery) Profits

7. Scrap Rework Supplier Scrap/Rework Audits Equipment Maintenance Inspection Testing Customer Cost Warranty Cost Returned Material Customer Service/Complaints Quality Planning Training Process Control Process Planning Internal Failure (IF)Appraisal (AP) External Failure (EF) Prevention (PC) COQ = IF + AP + PC + EF TMC COQ = Cost of Quality IF = Internal Failure AP = Appraisal PC = Prevention Cost EF = External Failure TMC = Total Mfg. Cost Cost of Quality - Definition

8. We have only hit the tip of the iceberg, There is much more to capture !! Inspection Rework Premium Freight ECNs Lost clients Floor Space Warranty Morale Excess Inventory

9. Business Excellence Model QSG Quality Support Group, Inc.

10. Business Excellence Model SUPPLIER & PARTNERSHIP PERFORMANCE PEOPLE SATISFACTION CUSTOMER SATISFACTION IMPACT ON SOCIETY ENABLERS RESULTS LEADERSHIP PROCESSES ORGANIZATIONAL RESULTS Policy & Strategy Customer & Market Focus People Management Resource & Info Management

11. The ISO Model Continual Improvement of the Quality Management System Resource Management Measurement, Analysis, Improvement Management Responsibility Product Realization Product Inputs Outputs

12. The new ISO 9001:2008 requirements demand that a company: understand its operations as a series of linked, interactive processes manage each process by allocating resources, defining methods and criteria for monitoring and improvement taking action when a process fails to meet expectations. QSG Quality Support Group, Inc.

13. Effectiveness Extent to which planned activities are realized and planned results achieved. ISO 9000:2000 3.2.14

14. Improvement and Effectiveness Top Management shall ensure that the quality policy includes a commitment to comply with requirements and continually improve the effectiveness of the quality management system. ISO 9001: 2008 5.3 The organization shall continually improve the effectiveness of the quality management system through the use of the quality policy, quality objectives, audit results, analysis of data, corrective and preventive actions and management review. ISO 9001: 2008 8.5

16. Production Process (Major Elements & Boundaries) *Start- 1. Production schedule 2. Verify Work Instructions 3. Perform machine set-up(s) 4. Material Prep 5. Build and verify first piece 6. Build lot 7. Final product audit *End- 8. Transact to Non-netable Limbo Process Owners: Cell Administrators Inputs/Materials (With what?) Demand Parts Equipment Computers Facility Suppliers (By whom?) Cell Administrator Cell Leader M. Q. Engineer Material Handler Asemblers Set-Up Technician Customers (For whom?) Shipping Customer Service External Customers Outputs Products Transactions Measures (Trend Charts) Defect Per Million Productivity OTD to Customers Methods (How?) Work Instructions Training Non-conforming Material Preventive Maintenance Calibration Documentation Control Records (test results) PROCESS MAP FOR PRODUCTION Skills/Training & Competency (Of whom?) Qualifications (Job Descriptions) PFP for Salaried Skills matrix for direct labor Ergonomic/Safety Policies and Procedures

17. Pane 2 – Why are we here? $0.00 $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 $300,000.00 $350,000.00 1 2 3 4 5 6 7 8 9 Pane 1 – Where are we? 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% September FY05 October FY05 November FY05 December FY05 January FY05 February FY05 March FY05 April FY06 May FY06 June FY06 July FY06Aug FY06 Month Percentage of Paid Shipments with Exception Run Chart Data Exceptions by Month MonthPaid shipments # ExceptionsExceptionsGoal September FY05886434.85%2.50% October FY051139322.81%2.50% November FY051103454.08%2.50% December FY051346483.57%2.50% January FY05993383.83%2.50% February FY05856364.21%2.50% March FY051056444.17%2.50% April FY06923333.58%2.50% May FY06877131.48%2.50% June FY06891141.57%2.50% July FY0677991.16%2.50% Aug FY0692370.76%2.50% Pane 3 – How did we get here?Pane 4 – What do we do now? Action Plan Action Resp Date Comment 4 Panel Report - Example

18. The QSG Model In the following example, an organization has identified several quality objectives and has collected data on the results of these objectives. Using a gap analysis technique, the results are compared to the objectives and the degree of effectiveness of the QMS is established for a given time period.

19. Examples of results recorded by the Organization Analysis of Data Organizational Results Customer satisfaction Statutory & regulatory compliance Quality system metrics Inspection and test Supplier performance Organizational Objectives Customer requirements Statutory & regulatory requirements Defect rate and customer returns QMS controls Purchasing

20. Effectiveness of the QMS Organizational Objectives Organizational Results 00 100 The gap measures the lack of effectiveness of the quality management system. The narrower the gap, the more effective the QMS. Things are looking good!

21. Effectiveness of the QMS Organizational Objectives Organizational Results 00 100 Management should get a wake up warning! The gap measures the lack of effectiveness of the quality management system.

22. Effectiveness of the QMS Organizational Objectives Organizational Results 00 100 The Organization is in trouble! The gap measures the lack of effectiveness of the quality management system.

23. Improvement in the QMS Organizational Objectives Organizational Results % 100 75 50 25 0 Improvement in the QMS

24. Organizational Objectives Organizational Results Customer Focus Corrective Action Procurement Improvement Initiatives These actions may cause the organization to revise its objectives. What actions are taken when gaps are identified? In this example, the organization identified three key areas for improvement.

25. Management Review Organizational Objectives Organizational Results 00 100 Customer Focus Corrective Action Procurement Improvement Initiatives Management Review The improvement processes are also evaluated during management review meetings and appropriate action taken. Which may cause the organization to again revise its objectives.

26. Conclusion The effectiveness of the quality management system in meeting both quality and/or business objectives is likely to be the key attribute that ensures the on-going support and resource allocation to maintain the quality management system within the corporate environment. The overall result of using the QSG model is an enhanced pro-active approach to meet QMS objectives and more importantly their related corporate business and/or financial objectives.

27. THANK YOU! Angelo G. Scangas President Quality Support Group, Inc. 978-430-7611 WWW.QUALITYSUPPORTGROUP.COM QSG Quality Support Group, Inc.