1. 10-1 Project Management from Simple to Complex

2. 10-2 This work is licensed under the Creative Commons Attribution-Noncommercial-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA

3. 10-3 Chapter 10 Managing Project Quality

4. 10-4 Learning Objectives Define quality Define and explain statistics terms used in quality control Estimate the likelihood of samples falling within one, two, or three standard deviations of the mean given a normal distribution caused by random factors

5. 10-5 Learning Objectives Describe the historical events and forces that lead up to today’s emphasis on quality as a competitive requirement Describe quality awards in Japan and the United States Describe quality programs and standards such as TQM, Six Sigma, and ISO 9000 Describe and calculate the cost of quality

6. 10-6 Learning Objectives Identify the similarities between process quality management and project quality management Identify the differences between process quality management and project quality management Define statistical measurement terminology

7. 10-7 Learning Objectives Identify sources of information for the planning process Identify and describe the techniques for controlling project quality Describe the results of planning and controlling quality Describe the purpose and methods of quality assurance

8. 10-8 Quality and Statistics Quality: Degree to which a set of inherent characteristics fulfill requirements Grade: Category of product or service requirements Quality is determined by how well something meets the requirements of its grade

9. 10-9 Statistics Terminology Statistics: Mathematical interpretation of numerical data Control limits: Upper and lower extremes of allowable variation Central limit theorem: Idea that if variation is caused by several random factors, they will generally cancel each other out and most measurements will be near the middle of the range of variation

10. 10-10 Statistics Terminology Bins: Equal size ranges into which measurements are sorted to obtain a frequency distribution Frequency distribution: The number of measurements that fall into defined bins Normal distribution: Frequency distribution that looks like a bell that is the result of offsetting random variations

11. Figure 10.1 - Normal Distribution of Measurements of Gasoline Samples Click below to view full-size 10-11

12. 10-12 Statistics Terminology Mean (μ): Average found by summing the values and dividing by the number of values Sample standard deviation (σ): A type of average that takes into account positive and negative values and that a sample is used instead of all the measurements 68-95-99.7 rule: Approximate percentages of measurements that are within one, two, and three standard deviations of the mean

13. 10-13 Statistics Terminology To calculate standard deviation: – Subtract each measurement from the central value and then square that difference – Sum these squared values and divide by the number of values minus one – Take the square root

14. Standard Deviation - Exercise Find the standard deviation of 4, 8, 9, 12, 17

15. Standard Deviation - Exercise Step 1: Calculate the mean (4+8+9+12+17)/5 = 50/5 = 10 Step 2: Subtract each measurement from the central value and then square that difference XM(X-M)(X-M) 2 410-636 810-24 9101 121024 1710749

16. Standard Deviation - Exercise Step 3: Find the sum of (X-M) 2 36+4+1+4+49 = 94 Step 4: Divide by the number of values minus one 94/5-1 = 94/4 = 23.5 Take the square root √23.5 = 4.84

17. The 68-95-99.7 Rule Click below to view full-size 10-17

18. Statistical Control Before World War II Products parts were adjusted to each other so they could work together In 1790 in France, Honoré Blanc demonstrated that a musket could be assembled from bins of parts chosen at random The use of interchangeable parts became the founding principle of assembly line manufacturing The leaders in improving quality were the manufacturers of firearms and weapons 10-18

19. Development of Quality as a Competitive Advantage During World War II, important improvements in quality control were made Walter Shewhart – Separated the causes of variation into chance causes and assignable causes – Introduced the control chart, a type of runchart 10-19

20. Development of Quality as a Competitive Advantage Chance causeVariation due to random events Assignable causeVariations that can be attributed to a particular event or influence Control chartScatter chart with time on the horizontal axis and measurement scale on the vertical axis Run chartChart of measurements that shows variations as the process progresses in time 10-20

21. Figure 10.6 - Control Chart Displaying Variations Due to Chance Causes 10-21 Click below to view full-size

22. Figure 10.7 - Control Chart Displaying Variations That Might Be Due to an Assignable Cause 10-22 Click below to view full-size

23. Development of Quality as a Competitive Advantage W. Edwards Deming helped apply Shewhart’s ideas to American manufacturing processes during World War II Postwar Deming was asked by the U.S. Department of the Army to assist with the statistics of the 1950 census in Japan 10-23

24. Development of Quality as a Competitive Advantage Deming described his philosophy as a system of profound knowledge, which has four parts: – Appreciation of a system – Knowledge of variation – Theory of knowledge – Knowledge of psychology The Deming prizes are awarded to individuals and companies for major advances in quality improvements in his honor 10-24

25. Development of Quality as a Competitive Advantage Principles of management described in Deming’s book - Out of Crisis – Create constancy of purpose toward improvement of product and service – Adopt a new philosophy – Cease dependence on inspection to achieve quality – End the practice of awarding business on the basis of price tag – Improve constantly and forever the system of production and service to improve quality and productivity and thus constantly decrease costs – Institute training on the job – Institute leadership 10-25

26. Development of Quality as a Competitive Advantage – Drive out fear, so that everyone may work effectively for the company – Break down barriers between departments – Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity – Eliminate work standards (quotas) on the factory floor – Remove barriers that rob the hourly worker of his right to pride of workmanship – Institute a vigorous program of education and self-improvement – Put everybody in the company to work to accomplish the transformation 10-26

27. Development of Quality as a Competitive Advantage Ford adopted a Japanese approach to quality known in America as total quality management (TQM) TQM in Japan has four major components: – Kaizen – Atarimae hinshitsu – Kansei – Miryokuteki hinshitsu 10-27

28. Development of Quality as a Competitive Advantage TQM differs from the Deming approach in four fundamental ways: – The Deming approach is used in its entirety or not at all; TQM can be tailored to a particular environment – TQM Deming would drop clients if they started to wane while TQM consultants were less demanding – Deming insists on constancy of purpose; TQM adapts to the situation – Deming requires adoption of his principles of profound knowledge; TQM lacks this unified philosophy 10-28

29. Development of Quality as a Competitive Advantage In 1986, Motorola formulated the Six Sigma (6σ) approach to quality management Six Sigma: Quality management system that give titles to specialists and requires a cost-benefit analysis A process that has six standard deviations from the mean to either control limit that would ensure virtually zero defects In practice, the Six Sigma is really a 4.5 sigma standard that allows approximately 3.4 defects per million products 10-29

30. Development of Quality as a Competitive Advantage To determine the financial return on a quality initiative, the cost of quality (COQ) must be determined – Cost of quality: Cost of preventing low quality offset by the cost of producing low quality 10-30

31. Development of Quality as a Competitive Advantage Malcolm Baldrige National Quality Award: U.S. award for quality named after a former secretary of commerce – The criteria used to determine award winners are as follows: Leadership of senior executives Strategic planning Customer and market focus Measurement, analysis, and knowledge management Workforce focus Process management Results 10-31

32. Development of Quality as a Competitive Advantage International Organization for Standardization (ISO): Degree to which a set of inherent characteristics fulfill requirements – ISO 9000 — Fundamentals and vocabulary for this group of quality standards – ISO 9001 — Standards for evaluating the quality management processes in an organization – ISO 9004 — Ways to extend benefits of ISO 9001 to employees, owners, suppliers, partners, and society in general – ISO 9011 — Guidance for auditing a quality system 10-32

33. Development of Quality as a Competitive Advantage Steps for implementing a quality management system (QMS): – Fully engage top management – Identify key processes and the interactions needed to meet quality objectives – Implement and manage the QMS and its processes – Build your ISO 9001-based QMS 10-33

34. Development of Quality as a Competitive Advantage – Implement the system, train company staff, and verify effective operation of your processes – Manage your QMS—focus on customer satisfaction, strive for continual improvement – If necessary, seek third-party certification and registration of the QMS or alternatively, issue a self-declaration of conformity 10-34

35. Relevance of Quality Programs to Project Quality Similarities between process quality management and project quality management: – A requirement for commitment to quality by all the employees and their partners – An emphasis on error prevention and customer satisfaction 10-35

36. Relevance of Quality Programs to Project Quality Differences between process quality management and project quality management: – Projects are temporary – Fewer opportunities to improve repetitive processes – Cost of prevention is part of the project budget – Cost of failure happens after the project is completed – Separation of costs and benefits can lead to taking short-term savings on the project at the expense of higher cost of failure after the project is complete 10-36

37. Planning and Controlling Project Quality Tolerance: Variation allowed on either side of the mean, often shown with the ± symbol to mean plus or minus The choice of tolerance directly affects the cost of quality It costs more to produce and measure products that have small tolerances The early scope, budget, and schedule estimates are used to identify quality aspects of processes, services, or products Risk analysis is used to determine which risks could affect quality 10-37

38. Planning and Controlling Project Quality Techniques for planning and controlling the quality of a project – Quality management methodology – Flowcharting – Benchmarking – Cost-to-benefit analysis – Design of experiments – Control charts – Cause and effect diagrams – Check sheets, histograms, and pareto charts 10-38

39. Figure 10.8 – Flowchart of a Quality Control Process 10-39 Click below to view full-size

40. Figure 10.9 - Cause and Effect Diagram Click below to view full-size 10-40

41. Figure 10.11 - Histogram Showing Frequency of Power Problems by Likely Cause 10-41 Click below to view full-size

42. Figure 10.12 - Pareto Chart with Problems in Decreasing Order and a Line Showing a Cumulative Total 10-42 Click below to view full-size

43. Planning and Controlling Project Quality The products of planning and controlling quality: – Quality management plan – Data – Analysis documents – Proposals for improvement 10-43

44. Assuring Quality The purpose of quality assurance is to create confidence that the quality plan and controls are working properly To assure quality: – Time must be allocated to review the original quality plan – Compare that plan to how quality is being created during the execution of the project Quality audit: Review of the quality plan, procedures, data collection and analysis by an outside group 10-44