2. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Module 3: Managing for Quality and high Performance Review Questions 1.Explain the different components of Quality Cost. (R1), (R2). 2.What do you understand by zero defect concept? ( R1) 3.Differentiate internal and external customers. 4.Compare and contrast Deming Prize with Malcolm Baldrige Quality Award(MBQNA).(R1) 5.Explain the award and seven criteria for performance excellence of a firm for MBQNA.(R1) (R2) 6.Explain in detail the core value of TQM organizations. 7.What are quality improvement teams? 8.What are Quality manuals? Discuss the various elements of Quality Manual? (R1) 9.What is ISO-9000? How is it structured? Explain the steps to be followed for registration and implementation of the programme. 10.Explain the relevance of ISO-9000 to TQM. 11.What is ISO 9000-2000? 12.Write Short notes on : JIT ISO 14000 Employee resistance to change

3. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Module 4 :Process Management and Quality Control Tools

4. CMR IT- JESSY NAIRIV Sem – A & B ‘09 4 Process management and Quality Controls 4.2 Tools for quality planning 4.3 Quality Function Deployment (QFD) -Concepts and techniques 4.4 Six sigma concept 4.5 Deming’s PDCA cycle, Poka Yoke 4.6 7 QC tools 4.7 Kaizen

5. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Tools and Techniques for Quality Management Strategic Statistical (7) ToolsRadical Planning Improvement Quality Planning Continuous Improvement aids Tools for Market Research QFD Concurrent Engineering New Tools / Managerial Tools Demings PDCA Benchmarking Kaizen JIT Poka Yoke Zero Defect Histograms Pareto Charts Cause and Effect Diagrams Run Charts Scatter Diagrams Flow Charts Control Charts Benchmarking Business Process Reengineering (BPR) Six Sigma QFD Concurrent Engineering

6. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Seven Quality Tools The Seven Tools 1.Histograms 2.Pareto Charts 3.Cause and Effect Diagrams 4.Run Charts 5.Scatter Diagrams 6.Flow Charts 7.Control Charts

7. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Ishikawa’s Basic Tools of Quality Kaoru Ishikawa developed seven basic visual tools of quality so that the average person could analyze and interpret data. These tools have been used worldwide by companies, managers of all levels and employees. Kaoru Ishikawa (Ishikawa Kaoru) (1915-1989) was a Japanese University professor and influential quality management innovator. Best known for the Ishikawa or Cause and Effect (CE) diagram (also known as Fishbone Diagram) that are used in the analysis of industrial process. He is considered one of the Quality Gurus.

8. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Three SQC Categories Statistical quality control (SQC) is the term used to describe the set of statistical tools used by quality professionals SQC encompasses three broad categories of; –Descriptive statistics e.g. the mean, standard deviation, and range –Statistical process control (SPC) Involves inspecting the output from a process Quality characteristics are measured and charted Helpful in identifying in-process variations –Acceptance sampling used to randomly inspect a batch of goods to determine acceptance/rejection Does not help to catch in-process problems

9. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Sources of Variation Variation exists in all processes. Variation can be categorized as either; –Common or Random causes of variation, or Random causes that we cannot identify Unavoidable e.g. slight differences in process variables like diameter, weight, service time, temperature –Assignable causes of variation Causes can be identified and eliminated e.g. poor employee training, worn tool, machine needing repair

10. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Histograms Histogram Defined –A histogram is a bar graph that shows frequency data. –Histograms provide the easiest way to evaluate the distribution of data.

11. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Histograms Creating a Histogram –Collect data and sort it into categories. –Then label the data as the independent set or the dependent set. The characteristic you grouped the data by would be the independent variable. The frequency of that set would be the dependent variable. –Each mark on either axis should be in equal increments. –For each category, find the related frequency and make the horizontal marks to show that frequency.

12. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Histograms Examples of How Histograms Can Be Used –Histograms can be used to determine distribution of sales. –Say for instance a company wanted to measure the revenues of other companies and wanted to compare numbers.

13. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Pareto Charts Pareto Chart Defined –Pareto charts are used to identify and prioritize problems to be solved. –They are actually histograms aided by the 80/20 rule adapted by Joseph Juran. Remember the 80/20 rule states that approximately 80% of the problems are created by approximately 20% of the causes.

14. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Pareto Charts Constructing a Pareto Chart –First, information must be selected based on types or classifications of defects that occur as a result of a process. –The data must be collected and classified into categories. –Then a histogram or frequency chart is constructed showing the number of occurrences.

15. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Pareto Charts An Example of How a Pareto Chart Can Be Used –Pareto Charts are used when products are suffering from different defects but the defects are occurring at a different frequency, or only a few account for most of the defects present, or different defects incur different costs. –What we see from that is a product line may experience a range of defects. The manufacturer could concentrate on reducing the defects which make up a bigger percentage of all the defects or focus on eliminating the defect that causes monetary loss. Actual chart is on the next slide »Example and chart were obtained from:

16. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Pareto Charts

17. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Cause and Effect Diagrams Cause and Effect Diagram Defined –The cause and effect diagram is also called the Ishikawa diagram or the fishbone diagram. –It is a tool for discovering all the possible causes for a particular effect. –The major purpose of this diagram is to act as a first step in problem solving by creating a list of possible causes.

18. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Cause and Effect Diagrams Constructing a Cause and Effect Diagram –First, clearly identify and define the problem or effect for which the causes must be identified. Place the problem or effect at the right or the head of the diagram. –Identify all the broad areas of the problem. –Write in all the detailed possible causes in each of the broad areas. –Each cause identified should be looked upon for further more specific causes. –View the diagram and evaluate the main causes. –Set goals and take action on the main causes.

19. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Cause and Effect Diagrams An Example of When a Cause and Effect Diagram Can Be Used –This diagram can be used to detect the problem of incorrect deliveries. Diagram on next slide –Diagram obtained from: –When a production team is about to launch a new product, the factors that will affect the final product must be recognized. The fishbone diagram can depict problems before they have a chance to begin.

20. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Cause and Effect Diagrams Diagram of the Incorrect Deliveries Example:

21. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Scatter Diagrams Scatter Diagrams Defined –Scatter Diagrams are used to study and identify the possible relationship between the changes observed in two different sets of variables.

22. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Scatter Diagrams Constructing a Scatter Diagram –First, collect two pieces of data and create a summary table of the data. –Draw a diagram labeling the horizontal and vertical axes. It is common that the “cause” variable be labeled on the X axis and the “effect” variable be labeled on the Y axis. –Plot the data pairs on the diagram. –Interpret the scatter diagram for direction and strength.

23. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Scatter Diagrams An Example of When a Scatter Diagram Can Be Used –A scatter diagram can be used to identify the relationship between the production speed of an operation and the number of defective parts made.

24. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Scatter Diagrams An Example of When a Scatter Diagram Can Be Used (cont.) –Displaying the direction of the relationship will determine whether increasing the assembly line speed will increase or decrease the number of defective parts made. –Also, the strength of the relationship between the assembly line speed and the number of defective parts produced is determined. –Example obtained from:

25. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Flow Charts Flow Charts Defined –A flow chart is a pictorial representation showing all of the steps of a process.

26. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Flow Charts Creating a Flow Chart –First, familiarize the participants with the flow chart symbols. –Draw the process flow chart and fill it out in detail about each element. –Analyze the flow chart. Determine which steps add value and which don’t in the process of simplifying the work.

27. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Flow Charts Examples of When to Use a Flow Chart –Two separate stages of a process flow chart should be considered: The making of the product The finished product

28. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Run Charts Run Charts Defined –Run charts are used to analyze processes according to time or order.

29. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Run Charts Creating a Run Chart –Gathering Data Some type of process or operation must be available to take measurements for analysis. –Organizing Data Data must be divided into two sets of values X and Y. X values represent time and values of Y represent the measurements taken from the manufacturing process or operation. –Charting Data Plot the Y values versus the X values. –Interpreting Data Interpret the data and draw any conclusions that will be beneficial to the process or operation.

30. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Run Charts An Example of Using a Run Chart –An organization’s desire is to have their product arrive to their customers on time, but they have noticed that it doesn’t take the same amount of time each day of the week. They decided to monitor the amount of time it takes to deliver their product over the next few weeks.

31. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Control Charts Control Charts Defined –Control charts are used to determine whether a process will produce a product or service with consistent measurable properties.

32. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Control Charts Steps Used in Developing Process Control Charts –Identify critical operations in the process where inspection might be needed. –Identify critical product characteristics. –Determine whether the critical product characteristic is a variable or an attribute. –Select the appropriate process control chart. –Establish the control limits and use the chart to monitor and improve. –Update the limits.

33. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Control Charts An Example of When to Use a Control Chart –Counting the number of defective products or services Do you count the number of defects in a given product or service? Is the number of units checked or tested constant?

34. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Class Activity Consider you are the student coordinator incharge of conference being conducted by MBA dept on 7 th and 8 th May. Chart your plan of action in a Flow Chart to make a presentation to the conference committee which includes : Prez, CMRIT, Principal CMRIT, Coordinator MBA Dept.

35. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Summary This presentation provided learning material for each of Ishikawa’s seven basic tools of quality. Each tool was clearly defined with definitions, a step-by-step process and an example of how the tool can be used. As seen through the presentation, these tools are rather simple and effective.

36. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Works - Cited Histograms and Bar Graphs. Your MBA: The Business Study Reference Site. http://yourmba.co.uk/pareto_diagram.htm http://yourmba.co.uk/pareto_diagram.htm Hci Home Services. Cause and Effect Diagram. http://hci.com.au/hcisite/toolkit/causeand.htm http://hci.com.au/hcisite/toolkit/causeand.htm Scatter Diagram. http://sytsma.com/tqmtools/Scat.htmlhttp://sytsma.com/tqmtools/Scat.html Flowchart. Run Charts/Time Plot/ Trend Chart. Foster Thomas S. Managing Quality An Integrative Approach. New Jersey: Prentice Hall, 2001

37. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Question: What are costs of quality? Task: Create your list of quality costs and share with the class. What is the relationship between quality and productivity?

38. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Why Metrics! A strategy without metrics is just a wish. And metrics that are not aligned with strategic objectives are a waste of time. –Emery Powell Be careful what you measure -- you might just get it. If you don’t keep score, you’re only practicing. –Tom Malone You get what you inspect, not what you expect.

39. CMR IT- JESSY NAIRIV Sem – A & B ‘09 The Real Bottom Line: Mission and Measures One of the most powerful management disciplines, the one that more than any other keeps people focused and pulling in the same direction, is to make an organization’s purposes tangible. Managers do this by translating the organization’s mission – what it, particularly, exists to do – into a set of goals and performance measures that make success concrete for everyone. This is the real bottom line for every organization – whether it’s a business or a school or a hospital. Its executives must answer the question, “Given our mission, how is our performance going to be defined?” –Magretta & Stone, Management. 2002, p. 129

40. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Why Metrics Now! The “never satisfied” customer. Managing the “total” supply chain. Shrinking product life cycles. More (not necessarily better) data. Profit margin squeezes. Presence of an increasing number of alternatives.

41. CMR IT- JESSY NAIRIV Sem – A & B ‘09 So What Surviving in this new environment means working with: –Less lead time –Less inventory –Less cost –More reliance on the supply chain metricsSurviving means having “better” metrics.

42. CMR IT- JESSY NAIRIV Sem – A & B ‘09 What are Metrics? A verifiable measure stated in either quantitative (e.g., 95% inventory accuracy) or qualitative (e.g., as evaluated by our customer,we are providing above average service) terms. A metric is intended to close the gap between value, strategy, and specific activities. Metrics –Measure, direct, teach.

43. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Cost of Quality

44. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Quality cost A quality cost is considered to be any cost that the company would not have incurred if the quality of the product or service were perfect. Quality costs: Total quality costs are the sum of : prevention costs, appraisal costs, and internal and external failure costs

45. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Classifying Quality Costs

46. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Quality costs increase over time Failure Costs Time when failure found Prevention Costs Failure found during design phase Failure found at onset of manufacture Failure found at final inspection Failure found at installation Field repair costs Failure found by customer Liability costs

47. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Reprocessing Rejects Customer returns Warranty expenses Lost sales Overtime to correct errors Extra inventory Premium freight costs Extra process capacity Loss of goodwill Process downtime Delays Extra inventory Hidden Costs of Poor Quality

48. CMR IT- JESSY NAIRIV Sem – A & B ‘09 IMPLICATIONS OF THESE COSTS NEXT LET US LOOK AT: FINANCIAL AND NON-FINANCIAL MEASURES OF MEASURING CUSTOMER SATISFACTION AND INTERNAL PERFORMANCE Dr Robert Kaplan and Dr David Norton developed that takes into account Financial and non-financial measures in internal performance, customer satisfaction, etc.

49. CMR IT- JESSY NAIRIV Sem – A & B ‘09 BALANCED SCORE CARD Gaining widespread popularity now, as many companies are turning to the balanced score card approach. BSA takes into account measures from accounting, operations, human resources, customers and other stake holders in order to arrive into a more integrative and broader measure of performance.

50. CMR IT- JESSY NAIRIV Sem – A & B ‘09 TQM ElementFinancial MeasureNon-financial Measure Customer satisfaction External failure cost. Field service expense. Results of customer satisfaction survey. On-time delivery. Number of customer complaints. Internal performance Appraisal cost. Internal failure cost. Prevention cost. Defect rates Yields Lead times Idle capacity Unscheduled machine downtime Balanced Score Card

51. CMR IT- JESSY NAIRIV Sem – A & B ‘09 COQ as motivator Cost of Quality: COQ as motivator Companies under TQM do not focus on quality cost minimization. Quality improvement projects tend to focus on zero defects or defect reduction to the six-sigma level. Costs of Conformance: prevention & appraisal Costs of Non-Conformance: Internal Failure & External

52. CMR IT- JESSY NAIRIV Sem – A & B ‘09 COQ Theme Costs are not incurred or allocated, but rather caused. Cost information does not solve quality problems, nor does it suggest specific solutions. Problems are solved by tracing the cause of a quality deficiency.

53. CMR IT- JESSY NAIRIV Sem – A & B ‘09 “A.V.Fiegenbaum estimates that 15 to 40% of the manufacturer’s cost of almost any American product that one brought was for waste embedded in ie. Waste of human effort, waste of machine time, non-productive use of accompanying burden” (QUALITY PROGRESS, Nov. 1977) “With the storehouse of skills and knowledge contained in its millions of unemployed and with the even more appalling under use, misuse and abuse of skills and knowledge in the army of employed people in all ranks in all industries, the United States may be today the most underdeveloped nation in the world” (OUT OF CRISIS by Dr.Edward Deming).

54. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Most people are not intentionally bad. It is our experience that more people commit mistakes out of ignorance than arrogance. Those costs not directly contributing for the enhancement of the value of the product can be termed as “Waste.” In other words, that cost which does not add value to the product is termed as waste. For example, a person who is transporting the material (for the next process), which can be transported through a conveyor is only adding cost and not value to the product. As Dr.Deming Says: “Work SMARTER and Not HARDER” must be the motto. People’s sense of value can be satisfied only when they know that they are dong something worthwhile. To make people work harder and produce more is not RESPECT FOR HUMANITY.

55. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Waste - MUDA Production system of Toyota is dedicated to total to total elimination of waste. Due to continuous elimination of waste. Due to elimination of waste and improvement in the process, the production output of Toyota has improved as follows: In 1952: 10 employees produced on car per month In 1961: 1 employee produce one care per month In 1984: 1 employee produced five cars per month Mr.Taiichi Ohno says: “Work improvement means to discover the best method of doing things within the frame work of existing facilities. It is not to make equipment. It is to think about the way of doing your work”.

56. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Waste – MUDA…… Toyota Production System and Canon Production System are dedicated towards the elimination of waste in all spheres. Toyota Production System identifies “Seven kinds of waste” where Canon Production System identifies “Nine kind of waste”

57. CMR IT- JESSY NAIRIV Sem – A & B ‘09 MUDA – Toyota Production System Waste arising from: Overproducing Time on hand (waiting) Transporting Processing itself Unnecessary stock on hand Unnecessary motion Producing defective goods

58. Each must be managed to improve quality and reliability. Each must be managed to improve quality and reliability. Non-Conformances come from many sources including: Variation Culture Complexity Mistakes Quality Management Tool Box CultureComplexity Variation Mistakes

59. Everyday Examples New lawn mowers are required to have a safety bar on the handle that must be pulled back in order to start the engine. If you let go of the safety bar, the mower blade stops in 3 seconds or less. Fueling area of car has three error-proofing devices: 1. insert keeps leaded-fuel nozzle from being inserted 2. tether does not allow loss of gas cap 3. gas cap has ratchet to signal proper tightness and prevent overtightening. 3.5 inch diskettes cannot be inserted unless diskette is oriented correctly. This is as far as a disk can be inserted upside-down. The beveled corner of the diskette along with the fact that the diskette is not square, prohibit incorrect orientation.

60. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Poke -Yoke Poka-Yoke is fool proofing, which is the basis of the Zero Quality Control (ZQC) approach. It is a technique for avoiding and eliminating mistakes. Generally this technique is used in manufacturing processes, but has much wider uses, such as; offices - order and invoice processing, hospitals - drug dispensing, aircraft maintenance - particularly with processes having the potential of inducing catastrophic in-service failures.

61. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Poke –Yoke…… The term Poka-Yoke is Japanese and can roughly be translated as mistake or fool proofing. It is derived from ‘Poka’ - inadvertent mistake and ‘yoke’ - avoid. The concept of fool proofing processes and mechanical devises has been around for many years (e.g. see photographs of floppy disk drive and electrical plugs) It was the Japanese Matsushita Industrial Engineer Dr. Shigeo Shingo who was probably most prominent and influential in developing it into a technique. He turned the idea into a powerful approach for eliminating mistakes and achieving zero defects. Dr. Shingo used the phrase "error avoidance", as he recognised that people, or more specifically Japanese workers, may take offence at the term fool, particularly when associated with mistakes.

62. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Evidence of the Effectiveness Source: Productivity Inc. and Shingo prize profiles Cooper Automotive: –95% less defects than nearest competitor –75% less injuries –99.6% less customer defects (13 ppm) –88% in-plant defect reduction –70% less warranty cost –89% scrap reduction (0.7%) –60% productivity increase

63. CMR IT- JESSY NAIRIV Sem – A & B ‘09 …and Very Effective Dana corporation has reported a $500,000 savings resulting from a $6 device. (83,000:1) AT&T Power Systems (Lucent Technologies) reported net saving of $2545 per device (3300 devices) [Marchwinsky, 1997]. (25:1*) Weber Aircraft reports saving $350,000 during their first year of implementation of approximately 300 devices. (11:1*) *Assumes an average devise cost $100

64. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Example: Blood-Loc Transfusion error: administering wrong unit of blood to patient Code for lock found on patient’s wristband

65. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Examples: Off the Shelf Pick-to-light bin system with sensors Metal sensing drill

66. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Examples: Off the Shelf Miniature barcode readers Vision systems Laser part locators

67. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Examples: Off the Shelf Huck Fasteners: proper tightening without threads or torque

68. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Examples: Off the Shelf Wireless barcode reading palm-pilot scans the patient, the medication and the care giver, to confirm the patient, medication, dose, time and route are correct. Point of care automation provides correct medication and dose

69. CMR IT- JESSY NAIRIV Sem – A & B ‘09 Module 4 - Process Management and Quality Control Tools 1.What is Poka – Yoke method? Explain briefly. Give two examples. R1 2.What is the House of Quality in QFD approach? Outline the process of building the house of Qulaity?R1 3.What is meant by quality improvement? Explain Quality action cycle? Explain CI?R1 4.Briefly explain the 7 Quality control tools. R1 5.Explain with suitable figures the seven tools of Ishikawa. 6.What is Pareto Analysis? 7.Explain the steps to be followed in drawing the Cause and Effect diagram with an example. 8.What is Kaizen? How is it implemented in a Total Quality organization? List the activities that fall under the “ Kaizen Umbella”?R1 9.Differentiate Kaizen from Innovation 10.What is vendor rating index? 11.Explain six –sigma Motorola system. What are the benefits?(R1) 12.State the objectives of JIT manufacturing. Explain the Kanban system of JIT manufacturing.