OPRE 6364
Quality Management
Systems
1
OPRE 6364
‰ Quality Management in Service Industries
‰ The Baldrige and Deming Awards
‰ QS 9000
‰ ISO 9000 family of standards (then and now)
‰ Elements of TQM
Topics to cover:
2
1930
1940
Inspection
SPC
…
1985
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1975
DOE
1990
1995
2000
Six Sigma…
Quality
Mgmt
Systems
Taguchi
Evolution of QA Methods…
3
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Quality is the ability of a product or
service to consistently meet or exceed
customer expectations.
What does the term Quality
really mean?
4
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5
• Quality has emerged now as a business strategy
– Consumerism: a response
• Eli Whitney and Henry Ford
– Mass production
– Uniform quality
– Loss of understanding of purpose
• Long supply chains
• Unskilled labor (division of labor)
– Industrial revolution
• One person / common purpose among tasks
• Closeness of producer and consumer
– Artisanship
• Quality Assurance
Historical Summary
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– Checklist in Summary
• Long term perspectives
• Consider the Japanese
6
– Not a flavor of the month (i.e., typical management fad)
• Entire organization
• All products and processes
• All aspects (management, design, control)
– What does total mean?
Total Quality Management
Total Quality
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• Failure Costs - costs incurred by defective
parts/products or faulty services.
• Internal Failure Costs
– Costs incurred to fix problems that are detected
before the product/service is delivered to the
customer.
• External Failure Costs
– All costs incurred to fix problems that are detected
after the product/service is delivered to the
customer.
Costs of Quality
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• Appraisal Costs
– All product and/or service inspection costs.
• Prevention Costs
– All TQ training, TQ planning, customer
assessment, process control, and quality
improvement costs to prevent defects from
occurring
Costs of Quality (contd)
8
Cost per good unit of product
0
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Quality level (q)
Prevention
and appraisal
costs
Internal
and external
failure
costs
100%
Minimum
total cost
Optimum
quality level
Total
quality
costs
Quality Cost: Traditional View
9
Increased
defect-free
output
Improved
competitive
position
Reduced
cost of
operations
Increased
market
share
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or
Higher
prices
Increased
profits
Cost-Route
Benefits
Increased
revenue
10
Market-Route
Benefits
Quality and Competitiveness
Continuous Quality Improvement
- 7
3
Cost per good unit of product
0
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Quality level (q)
Prevention
and appraisal
costs
Internal
and external
failure
costs
Optimum 100%
quality level
Minimum
total cost
Total
quality
costs
Quality Cost Minimized at Zero Defects
11
L
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d
12
Upper
Target
Spec Limit
τ
Any deviation from target causes a loss to society
Lower
Spec Limit
Loss
Customer's Tolerance Band
Taguchi's Quality Loss Function
Loss ($)
Market share and profitability
Customer satisfaction
Quality
Costs
Employee relations
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13
– Directly related to ROI
– Six Sigma programs have proven the value of
quality
•
•
•
•
•
– Impacts of quality efforts on performance
• Value of Quality
Quality and Competitiveness
1.
2.
3.
4.
5.
6.
7.
8.
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Customer-focused Organization
Leadership
Involvement of People
Process Approach
System Approach to Management
Continual Improvement
Factual Approach to Decision Making
Mutually Beneficial Supplier Relationships
Total Quality Management
Principles
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• Reliability - consistency of performance
• Safety - Risk of injury
• Conformance - how well product/service conforms to
customer’s expectations
• Special features - extra characteristics
• Aesthetics - appearance, feel, smell, taste
• Performance - main characteristics of the
product/service
How do Customers see Quality
15
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• Service after sale - handling of customer complaints
or checking on customer satisfaction
• Perceived Quality - indirect evaluation of quality (e.g.
reputation)
• Durability - useful life of the product/service
Dimensions of Quality (Cont’d)
16
Design
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Conformance to
design
Ease of
use
Service
Determinants of Quality
17
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Costs:
Poor quality increases certain costs incurred by the
organization
Productivity:
Productivity and quality are often closely related
Liability:
Damage or injures resulting from faulty design
Loss of business:
Poor designs or defective products or services can
results in loss of business
Not meeting Quality is…
The ability of a product or service to consistently meet or
exceed customer expectations
Recall that Quality is…
Consequences of Poor Quality
18
•
•
•
•
•
•
•
•
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Top management
Design
Procurement
Production/operations
Quality assurance
Packaging and shipping
Marketing and sales
Customer service
Responsibility for Quality
19
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Having knowledge of this and failing to correct
and report it in a timely manner is unethical.
– Defective products
– Substandard service
– Poor designs
– Shoddy workmanship
– Substandard parts and materials
• Substandard work
Ethics and Quality
20
•
•
•
•
•
•
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Edward Deming
– Plan - Do- Check – Act; statistical methods
– Fourteen Points for Transformation Management
J. M Juran
– Managerial Practices, Training, Cost of Quality
Armand Feigenbaum
– Total Quality Control, “hidden plant”
Kaoru Ishikawa
– Quality Circles, 7 Tools
Philip Crosby
– Zero defects and Quality is free
Genichi Taguchi
– Design of experiments
– Quality loss function
– Robust design
Quality Gurus
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22
• ISO 9000 series standards, briefly, require firms
to document their quality-control systems at every
step (incoming raw materials, product design, inprocess monitoring and so forth) so that they’ll be
able to identify those areas that are causing
quality problems and correct them.
• Set of international standards on quality
management and Quality assurance, critical to
international Business
• ISO 9000, QS 9000
Quality Certification
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– Hierarchical approach to documentation of
the Quality Management System
• ISO 9000 requires companies to document
everything they do that affects the quality of
goods and services.
The ISO 9000 Series Standards
23
Z1
Stds Orgs
Auto
National
Bodies
Trade Orgs
Committees
ANSI
National
Bodies
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ASQ
Technical
Committee
Technical
Committee
User
ISO
176 (Quality)
International Organization for
Standardization (ISO)
24
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common approaches to managing quality and
the environment. They promote dependability
and a consistent use of statistics
9Management system standards promote
purchase items from different manufacturers
and know those items will perform equally
9Product standards allow consumers to
9They promote trade and cooperation
Why International Standards?
25
Formal
Ballot
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Formal
Ballot
Formal
Ballot
Draft International
Std
Final Draft
Int’l
Standard
Formal
Ballot
New Work
Item
Proposal
Published
Standard
Committee
Draft
Working
Draft
Vote to
Release
ISO 9000 Consensus Process
26
Covers companies engaged in final inspection
and testing
The guidelines for applying the elements of
the Quality Management System
ISO 9003
ISO 9004
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Outlines guidelines for companies that
engaged in design, development, production,
installation, and servicing of products or
service
Similar to 9001, but excludes companies
engaged in design and development
ISO 9001
ISO 9002
Helps companies determine which standard
of ISO 9001, 9002, and 9003 applies
ISO 9000
ISO 9000 Series
27
Quality manual development guide
ISO 10013
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Quality system auditing guide
ISO 10011
ISO 10000 Series
28
18 Training
5 Document
& Data
Control
11 Inspection,
Measuring & Test
Equipment
Product Control
6 Purchasing
19 Servicing
Product
Techniques
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29
8 Product
Identification
& Traceability
16 Control of Process Control
12 Inspection
Quality Records
9 Process
10 Inspection & Test Status
Control
& Testing
14 Corrective &
Preventive
Action
7 Control of
CustomerSupplied Product
Vendor
(Sub-Contractor)
15 Handling,
Storage, Packaging,
Preservation &
17 Internal
13 Control of
Delivery
20 Statistical Non-Conforming
Quality Audits
1 Management
Responsibility
2 Quality System
4 Design
Control
3 Contract
Review
Customer
The ISO 9001:1994 Clauses
OPRE 6364
– Know where you are and get better
• Measurement, analysis and improvement
– Design and make it to requirements
• Product realization
– Provide the resources to achieve goals
• Resource management
– Put someone in charge
• Management responsibility
– Put structure in what you do
• Quality management system
New ISO 9001:2000
30
Fundamentals And Vocabulary
Requirements
Guidelines For Performance
Improvements
Measurement Control
QMS/EMS Auditing
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¹ Technical Reports on Everything Else
¹ Greater Compatibility with Environmental Management
10012
19011
9000
9001
9004
The Grand Vision: 2000
31
Customers
Company
Registrar
accredit
assess
hire
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Auditors
certify
train
32
Course Providers
accredit
Registrar Accreditation Board
Third party registration
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The Registrar will:
• Request information from you
• Review your documents (mostly QA manual)
• Review your application
• Audit your facility
• Issue your certificate
• Conduct periodic surveillance
• Renew certificate after three years
Registration steps
33
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• The final audit begins with a review of the
company's Quality Manual, which the
accredited registrar or third party audit team
typically uses as its guide.
• The audit team checks to see that the
documented quality system meets the
requirement of ISO 9000 and that the
organization is practicing what is documented.
34
ISO 9000 Registration Process
OPRE 6364
• When an organization feels that its
quality system is good enough, it may
ask an accredited registrar or other
third party audit team for preassessment.
35
ISO 9000 Registration Process
2.0
1.5
1.0
0.5
0.0
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Decide to go for registration
Form a steering committee
Write your QA Manual
Write process procedures
Conduct internal reviews
Refine your processes
Conduct system audits
Undergo a “mock” audit
Receive registration
Timeline for registration
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• Before a covering process
• Before an irreversible process
• Before a costly operation
• Finished products
• Raw materials and purchased parts
Where to Inspect the Process
37
Accuracy
Appearance, productivity
Cleanliness
Appearance
Health regulations
Safe, well lighted
Accuracy, timeliness
Appearance, safety
Waiting times
Accuracy, courtesy
Quality, quantity
Characteristics
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Inspection
points
Cashier
Counter area
Eating area
Building
Kitchen
Hotel/motel Parking lot
Accounting
Building
Main desk
Supermarket Cashiers
Deliveries
Type of
business
Fast Food
Examples of Inspection Points
38
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• When the registrar is satisfied with the
favorable recommendation of the audit
team, it grants registration and issues a
registration document to the company.
39
ISO 9000 Registration Process
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– automotive (QS-9000 and TS-16949)
– aerospace (AS-9000 / AS-9100)
– telecommunications (TL-9000)
• Sector-specific applications
– medical devices
– pharmaceutical
– health care
• Environmental management systems
• Occupational health & safety
• Regulated industries
International issues
40
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• ISO 14000 - A set of international standards
for assessing a company’s environmental
performance
• Standards in three major areas
– Management systems
– Operations
– Environmental systems
ISO 14000
41
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42
• Management systems
– Systems development and integration of
environmental responsibilities into business
planning
• Operations
– Consumption of natural resources and
energy
• Environmental systems
– Measuring, assessing and managing
emissions, effluents, and other waste
ISO 14000
ISO 9000 based requirements
● Moving closer to TQM
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● Emphasis on Continuous Improvement and Defect
Prevention
● Meeting mandatory requirements for the auto industry
 Section II Customer-specific requirements
 Section I
● Consists of :
● First introduced in North America in Aug 1994
● Common Supplier Quality Standard established by the
Big Three automakers: Chrysler, Ford, GM.
QS 9000
43
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* Production Part Approval Process (PPAP)
Compilation of data for new or changed product
( Cpk, FMEA, Test Results etc )
* Feasibility Review
Confirm manufacturing feasibility
* Advance Product Quality Planning (APQP)
Control Plan (CP)
APQP is required for new and changed products.
CP covers Prototype, Pre-launch & Production
* Implement Failure Mode and Effect Analysis ( FMEA )
44
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The standard possesses tremendous potential in term
of Business Excellent.
• QS 9000 put focus on
• * Continuous Improvement
* Defect Prevention
* Reduction of variation and waste
• QS 9000 emphasizes on meeting customer requirements.
In long run, this will improve competitiveness.
QS 9000 in Summary
45
45
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– Typical steps summarized in the next slide
– Concept and methods are evolving
• Metrics: comparisons (e.g., LT:Content ratio)
• Practices: steps, errors, delays, etc.
– Start by selecting and benchmarking own process
• Competitors (OM Principle 4)
• Other industries
– Definition: Identifying and documenting best
practices
• Benchmarking
Recognizing Quality
46
OPRE 6364
SELECTING
WHOM TO
BENCHMARK
Establish
relationship.
Plan to collect
and share
information.
ANALYZING
ADAPTING AND
IMPROVING
Compare data.
Plan to surpass.
Implement and
monitor.
Improve.
COLLECTING
AND SHARING
INFORMATION
Surveys
Site visits
Determine
any third
parties
Continuous Improvement
CONDUCTING
RESEARCH
Collect
information:
Who's the
best?
What to
ask?
PREPARING
TO
BENCHMARK
Identify key
process.
Form team.
Understand
your own
processes.
GETTING
STARTED
Planning,
Organizing,
and
Managing
for
benchmarking
The Benchmarking Process: Common Steps
47
OPRE 6364
• Juran: criteria summarize TQM
– Baldrige Award criteria
• Path to improved quality
• Recognition (shouldn’t be primary goal)
– Provide
• Statewide awards
• Baldrige Award (established by Congress)
• Deming Prize (first major award)
– Include:
• Quality Awards
Recognizing Quality
48
Baldrige
Award
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Deming Prize
Quality Awards
49
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7.0 Business Results
6.0 Process Management
5.0 Human Resource Development and
Management
4.0 Information and Analysis
3.0 Customer and Market Focus
2.0 Strategic Planning
1.0 Leadership
50
Malcolm Baldrige National Quality Award
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9 A US National Quality Award
9 Started in 1987
9 Awards in three categories – manufacturing, service,
small business – no more than two awards per
category per year
9 Stresses ‘management by fact’
9 Consists of a three level judging process
9 Is a seven-category, 1000-point scoring system
• Leadership, information and analysis, strategic
quality planning, human resource utilization,
quality assurance of products and services, quality
results, customer satisfaction
Baldrige Award details
51
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– Skip-level communication
• Impressive listening skills
• Intimate knowledge of how the work actually gets
done
• Symbolism and Active involvement
– Public responsibility
– Management for quality
– Quality values
– Senior executive leadership
• Contributes 100 points
Leadership
52
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• Use benchmarking as a enabler of change, a learning
process
• Information base must be comprehensive,
accessible, and well validated.
• Must demonstrate fact-based management
– Analysis of quality data and information
– Competitive comparisons and benchmarks
– Scope and management of quality data and
information
• Contributes 70 points
Information and analysis
53
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• Contributes 60 points
– Strategic quality planning process
– Quality goals and plans
Strategic Quality Planning
54
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• Contributes 150 points
– Human resource management
– Employee involvement
– Quality education and training
– Employee recognition and performance
measurement
– Employee well-being and morale
• Empower the employees and unleash the full
potential of the work force
• Quality training involves increased awareness,
problem-solving tools, group process skills, and jobspecific skills
• “Empowerment is in the eyes of the empowered.”
Human Resource Utilization
55
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• Contributes 140 points
– Design and introduction of quality products and
services
– Process quality control
– Continuous improvement of processes
– Quality assessment
– Documentation
– Business process and support service quality
– Supplier quality
• Instead of functional lines, emphasize on process
Quality Assurance of Products &
Services
56
OPRE 6364
• Contributes 180 points
– Product and Service Quality results
– Business process, operational, and support
service quality results
– Supplier quality results
• Look for ‘meaning trends’
• Sustained improvements on critical measures over a
period of at least three years
• Use statistical methods to correlate objective quality
results with measures of customer satisfaction
Quality Results
57
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58
• Contributes 300 points
– Determining customer requirements and expectations
– Customer relationship management
– Customer service standards
– Commitment to customers
– Complaint resolution for quality improvement
– Determining customer satisfaction
– Customer satisfaction results
– Customer satisfaction comparison
• Customer information from a wide range of sources – focus
groups, surveys, one-to-one meetings, sales visits etc.
• Measures are objective and validated, not anecdotal
Customer Satisfaction
OPRE 6364
• Main focus on statistical quality
control
• Japan’s highly coveted award
• Honoring W. Edwards Deming
The Deming Prize
59
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– Cross-training can build better understanding
• Exploit division of labor (hire unskilled)
• Inhibits pride in workmanship
– Must be considered as investment, not expense!
– Old (and still prevalent) approach
• Basic job skills
• Tools for continuous improvement, SPC, etc.
• Cross-training (OM Principle 7)
– Involves
• Training (and education)
Employee-Driven Quality
60
OPRE 6364
– Team training: team dynamics; problem-solving;
quality tools
• Gangs versus teams
– Quality circles
– Cells and teams (pioneered in manufacturing)
– Project teams: when work flows are separated
• Typical formats
– Uniting workers for constancy of purpose
• Close supplier/customer (next process) contact
• Multi-functional teams, etc.
– Involves
• Organization
Employee-Driven Quality
61
–
–
–
–
–
–
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Constancy of purpose
New philosophy
Mass inspection
Price tag
Continuous improvement
Training
• The 14 Points -- Not a Menu!
– Quality problems lie with the system
– The system is under the control of management
• Focus On Management
Deming’s 14 Points (I)
62
• Management
• Front-line
Supervision (leadership)
Fear
Barriers
Slogans
Quotas
Pride in workmanship
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– Education
– Organizational structure/culture; top management
–
–
–
–
–
–
• The 14 Points (Continued)
Deming’s 14 Points (II)
63
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• Process Quality
– Ensuring conformance with user requirements
– Identifying defects
– Monitoring the product through its phases of
development
• Product Quality
– Identifying user specified quality needs
– Prioritizing quality needs
– Resolving quality conflicts, if any
– Building them into the development process
– Allocating effort and time for them
Software Quality
64
Derived req’s
Req spec
User opinions
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Factor and criteria definitions
Engineering criteria
Document SW
Quality
requirements
65
Software qrs
Quality specification guideline
Traceability matrix
Criteria for good
requirements
Cost of quality
Quality conflicts
Convert quality
needs to
requirements
Level of quality matrix
Quality needs data base
Analyze need
for quality
Needs data base
Quality factors
A Step in Assuring Software Quality
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The product is only the result of the process
which makes it.
If the process is correct, the product will be good.
No need to inspect.
World-Class Approach to Quality
Control the quality of the product by inspection.
Acceptable quality levels (AQL).
Some defects will slip through.
Traditional Approach to Quality
Approaches to Attain Quality
- 6
5
66
Prevention
Mode
Detection
Mode
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67
- 7
5
• Very little inspection
• QC is a resource of Manufacturing - teamwork
• Problem elimination
• Smooth operations - continual improvement
• Decreasing costs
• Increased sales
• More competitive
• Heavy use of inspection
• Manufacturing & QC are adversaries
• Firefighting
• Management by crisis
• High costs
• Lost sales
• Loss of competitive position
Quality Control Modes a Company can be in
Market and
Environmental
Forces
Technology
Materials
Energy
Capital
People
Inputs
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Transformation
Processes
Services
Goods
Outputs
68
Operations are a Transformation Process
Management
Methods
Materials
Machines
Maintenance
Personnel
Information
Energy
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– Transformation (macro/micro views)
– Outputs (components / finished goods / services)
•
•
•
•
•
•
•
•
– Process inputs
• Operation = Transformation Process
The Process Focus
69
s
a
e
M
ce
u
t
es
ng
th
(Inches)
OPRE 6364
THE NEXT PROCESS
ls
ir a
e
at
M
Le
Process
performance:
Quality
characteristics
er
s
ls
w
d
a
n
i
o
p
hi
ho
er
t
c
n
t
e
a
a
a
M
M
M
M
m
e
r
en
PROCESS: 3-inch machine bolt
M
e
nt
i
a
n
a
n
Distribution
of bolt lengths
g
a
an
M
em
t
en
The Process Focus: Contributing Variables
70
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– Recall Input/Process/Output model:
– Input components change over time
Æ instability
• Process
– Result from series of activities (process)
– Not from single aspect (e.g., physician)
– Therefore, for each product, entire process
needs study for improvement
• Problems
Managing the Process
71
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– General tools
– Coarse grained tools
– Fine grained tools
• Apply Scientific Method
• Incorporate Tools
72
Process Improvement and Control
in a nutshell
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7. Otherwise, return to step 1 and start again with a
new problem.
6. Evaluate and revise if required.
5. Implement the improvement and measure results.
73
4. Evaluate alternatives and choose the preferred one.
3. Generate possible solution alternatives.
2. Study the existing situation;collect necessary data.
1. Identify and define the problem.
Scientific Method for Process Improvement
7.
8.
9.
10.
11.
3.
4.
5.
6.
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Fine-grained Tools
Fail-safing (Pokayoke).
Design of Experiments (DOE)
Scattergrams.
Run diagram.
Process control chart.
Coarse-grained Tools
Process flowchart.
Check sheets and histograms.
Pareto analysis.
Fishbone charts.
General Tools
1. Team-building and group-interaction tools.
2. Specific process/technology tools.
Tools for Process Improvement
74
2) Evaluate
• Benchmark Process
Entitlement
• Data Analysis
• Determine Critical
Factors
Evaluate
Measure
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Improvement
1) Measure
• Identify Project Scope / Goal
• Define Key Process Elements
• Establish Process Capability
• Validate Measurement System
Process Characterization
4) Control
• Implement Long Term
Control Plan
• Leverage to Similar
Products/Processes
• Document & Standardize
75
3) Improvement
• Develop Improvement Plan
• Understand/Optimize Vital
Process Elements
• Reduce Variation / Defects
• Verify Impact
Process Optimization
A 4-Step Methodology for Process Improvement
The Six Sigma Methodology
Control
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• Top management’s direct involvement
• Strong customer orientation
• Companywide participation to meet or exceed
customer expectations; empowerment
• Systematic problem solving
• A philosophy of Continuous Improvement:
Never-ending push to improve
TQM
76
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– Companywide definition of quality
– Strategic plan for change
– Customer focus
– Real employee empowerment
– Strong strong motivation
– Time to devote to quality initiatives
– Leadership
Lack of
Obstacles to Implementing TQM
77
•
•
•
•
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Poor intraorganizational communication
View of quality as a “quick fix”
Emphasis on short-term financial results
Internal political and “turf” wars
Obstacles to Implementing TQM
78
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¾ TQM is a great foundation, but TQM does not
directly relate to business results
¾ Six Sigma is the latest quality management
innovation: It is a focused method + a philosophy
TQM requires
‰ Top management’s direct involvement
‰ Strong customer orientation
‰ Everyone participates: empowerment
‰ Systematic problem solving
‰ Continuous improvement
Summary
79
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http://home.att.net/~iso9k1/tqm/tqm.html
An overview of TQM
80
http://www.iqs.com/Presentations/SALE6108_files/frame.htm
Overview of QS 9000
http://www.mindtools.com/swot.html
SWOT analysis for strategy development
Useful links