Quality Management & Tools
Evolution
Prior to the Industrial Revolution, skilled craftsmen performed all
stages of production.
Pride of workmanship and reputation often provided the motivation
to see that a job was done right.
Evolution
Industrial Aspects
Quality
Quality The ability of a product or service to consistently
meet or exceed customer expectations
What is TQM?
Meeting quality expectations as defined by the customer
Integrated organizational effort designed to improve
quality of processes at every business level
4
What is quality management all about?
Try to manage all aspects of the organization
in order to excel in all dimensions that are
important to “customers”
Two aspects of quality :
1. Features:
more features that meet customer needs = higher quality
2. Freedom from trouble:
fewer defects = higher quality
Defining Quality – 5 Ways

Conformance to specifications


Fitness for use


Evaluation of usefulness vs. price paid
Support services


Evaluates performance for intended use
Value for price paid


Does product/service meet targets and tolerances defined
by designers?
Quality of support after sale
Psychological

e.g. Ambiance, prestige, friendly staff
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Cost of quality
1. Prevention costs – Cost of preparing and implementing a
quality plan
2. Appraisal costs – Costs of testing , evaluating, and inspecting
quality
3. Internal failure costs – Costs of scrap, rework, and material
losses
4. External failure costs – Costs of failure at customer site,
including returns, repair, and recalls
5. Opportunity costs
A Quality Management System Is…
• A belief in the employee’s ability to solve problems
• A belief that people doing the work are best able to
improve it
• A belief that everyone is responsible for quality
Elements for Success
•
•
•
•
•
•
•
•
•
Management Support
Mission Statement
Proper Planning
Customer and Bottom Line Focus
Measurement
Empowerment
Teamwork/Effective Meetings
Continuous Process Improvement
Dedicated Resources
Modern History of Quality Management
•
Frederick W. Taylor wrote Principles of Scientific Management in 1911.
•
Walter A. Shewhart used statistics in quality control and inspection,
and showed that productivity improves when variation is reduced
(1924); wrote Economic Control of Manufactured Product in 1931.
•
W. Edwards Deming and Joseph M. Juran, students of Shewhart, went
to Japan in 1950; began transformation from “shoddy” to “world class”
goods.
•
In 1960, Dr. K. Ishikawa formalized “quality circles” - the use of small
groups to eliminate variation and improve processes.
•
In the late ‘70’s and early ‘80’s:
– Deming returned from Japan to write Out of the Crisis,
and began his famous 4-day seminars in the United
States
– Phil Crosby wrote Quality is Free
– NBC ran “If Japan can do it, why can’t we?”
– Motorola began 6 Sigma
History : how did we get here…
• Deming and Juran outlined the principles of Quality
Management.
– Tai-ichi Ohno applies them in Toyota Motors
Corp.
– Japan has its National Quality Award (1951)
– U.S. and European firms begin to implement
Quality Management programs (1980’s)
– U.S. establishes the Malcolm Baldridge National
Quality Award (1987)
– Sri Lanka National Quality Award (1995) by SLSI
– Large / Medium / Small categary
– Manufacturing / Service / Education / Health
Care sectors
The Quality Gurus – Edward Deming
Quality is
“uniformity and
dependability”
Focus on SPC
and statistical
tools
“14 Points” for
management
1986
 PDCA method
1900-1993
History of Quality Management
Deming’s 14 Points
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Create constancy of purpose for improvement
Adopt a new philosophy
Cease dependence on mass inspection
Do not award business on price alone
Work continually on the system of production and service
Institute modern methods of training
Institute modern methods of supervision of workers
Drive out fear
Break down barriers between departments
Eliminate slogans, exhortations, and targets for the work force
Eliminate numerical quotas
Remove barriers preventing pride of workmanship
Institute a vigorous program of education and retraining
Take action to accomplish the transformation
History of Quality Management
Deming’s Concept of “Profound Knowledge”
 Understanding (and appreciation) of Systems
- optimising sub-systems sub-optimises the total system
- the majority of defects come from systems, the responsibility of
management (e.g., machines not in good order, defective material, etc.
 Knowledge of Statistics (variation, capability, uncertainty in data, etc.)
-to identify where problems are, and point managers and workers
toward solutions
 Knowledge of Psychology (Motivation)
-people are afraid of failing and not being recognised,
so they fear how data will be used against them
 Theory of Knowledge
-understanding that management in any form is a prediction, and is
based on assumptions
The Quality Gurus – Joseph Juran
Quality is “fitness for
use”
Pareto Principle
Cost of Quality
General management
approach as well as
statistics
1951
1904 - 2008
History of Total Quality
According to Phil Crosby, (1926-2001)
Author of Quality is Free & Quality without Fears
Quality is . . .
An attitude:
- Zero Defects (Martin Company)
- Continuous Improvement
A measurement:
- Price of Conformance, plus
- Price of Nonconformance (defects)
TQ: Transforming an Organization
From
To
Motivation through fear and loyalty
Motivation through shared vision
Attitude: “It’s their problem”
Ownership of every problem
affecting the customer
Attitude: “the way we’ve always done
it”
Continuous improvement
Decisions based on assumptions/
judgment calls
Decisions based on data and facts
Everything begins and ends with
management
Everything begins and ends with
customers
Crisis management and recovery
Doing it right the first time
Choosing participative OR scientific
management
Choosing scientific AND
participative management
Definition:
Total Quality Management
• Total Quality Management (TQ, QM or TQM) and
Six Sigma (6 ) are sweeping “culture change” efforts
to position a company for greater customer
satisfaction, profitability and competitiveness.
• TQ may be defined as managing the entire
organization so that it excels on all dimensions of
products and services that are important to the
customer.
• We often think of features when we think of the
quality of a product or service; TQ is about
conformance quality, not features.
What does Total Quality Management
encompass?
TQM is a management philosophy:
• Continuous improvement
• Leadership development
• Partnership development
Cultural
Alignment
Technical Tools
Customer
(Process Analysis, SPC, QFD)
Quality Function Development
Total Quality Is…
• Meeting Our Customer’s Requirements
• Doing Things Right the First Time; Freedom
from Failure (Defects)
• Consistency (Reduction in Variation)
• Continuous Improvement
• Quality in Everything We Do
Continuous improvement philosophy
1. Kaizen: Japanese term for continuous improvement.
A step-by-step improvement of business processes.
2. PDCA: Plan-do-check-act as defined by Deming.
Plan
Do
Act
Check
3. Benchmarking : what do top performers do?
Quality
Quality Improvement
Traditional
Time
The Process Improvement Cycle
Select a
process
Document
Study/document
Evaluate
Seek ways to
Improve it
Implement the
Improved process
Design an
Improved process
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Seven Basic Quality Tools for
Process Improvements
1.
2.
3.
4.
5.
6.
7.
Check sheets
Process Flowcharts
Scatter diagrams
Histograms
Pareto analysis
Control charts
Cause-and-effect diagrams
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1. Check sheet
Item
-------------------
A
B
C
√√
D
E
√
√√√
√√√
√√
√
√√
F
√
√
√
G
√
√√
Check Sheet

Simple data check-off sheet designed to
identify type of quality problems at each work
station; per shift, per machine, per operator
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Billing Errors
Monday
Wrong Account
Wrong Amount
Payment Errors
Wrong Account
Wrong Amount
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2.
Process flowchart
Used to document the detailed steps in a
process
Often the first step in Process Re-Engineering
3.
Scatter Diagram
• A scatter diagram helps to show if there is a
relationship between two variables
• The closer data points are to a diagonal line, the more
closely the two variables are related
4. Histogram
Frequency
5. Pareto Analysis
100%
75%
50
40
50%
30
20
10
25%
0%
A
B
C
D
E
F
Percentage
Frequency
60
6. Control Charts
Important tool used in Statistical Process Control –
Chapter 6
The UCL and LCL are calculated limits used to show when
process is in or out of control
Performance Metric
Time
Upper Control Limit
Central Line
Lower Control Limit
Control charts tell you when a process measure is
exhibiting abnormal behavior
7. Cause and Effect Diagram –
Kaoru Ishikakawa (1968) (Fishbone / Herring Bone / Fishikawa)
Machine
Man
Environment
Method
Material
7. Cause and Effect Diagram
Case : Shortening telephone waiting
time…
• A bank is employing a call answering service
• The main goal in terms of quality is “zero waiting time”
- customers get a bad impression
- company vision to be friendly and easy access
• The question is how to analyze the situation and improve
quality
The current process
Customer
A
Customer
B
Operator
Receiving
Party
How can we reduce
waiting time?
Fishbone diagram analysis
Absent receiving
party
Working system of
operators
Absent
Too many phone calls
Lunchtime
Out of office
Not at desk
Not giving receiving
party’s coordinates
Complaining
Absent
Lengthy talk
Does not know
organization well
Takes too much time to
explain
Leaving a
message
Customer
Does not
understand
customer
Operator
Makes
customer
wait
Reasons why customers have to wait
(12-day analysis with check sheet)
Daily
average
Total
number
A
One operator (partner out of office)
14.3
172
B
Receiving party not present
6.1
73
C
No one present in the section receiving call
5.1
61
D
Section and name of the party not given
1.6
19
E
Inquiry about branch office locations
1.3
16
F
Other reasons
0.8
10
29.2
351
Pareto Analysis: reasons why customers have to wait
80% of the problems may be attributed to 20% of the causes
Frequency
Percentage
300
87.1%
250
71.2%
200
49%
150
100
0%
A
B
C
D
E
F
Ideas for improvement
1. Taking lunches on three different shifts
2. Ask all employees to leave messages when leaving
desks
3. Compiling a directory where next to personnel’s
name appears her/his title
Results of implementing the recommendations
…After
Before…
Percentage
Frequency
Percentage
Frequency
100%
87.1%
300
300
71.2%
200
Improvement
200
49%
100
100
100%
0%
A
B
C
D
E
F
0%
B
C
A
D
E
F
In general, how can we monitor quality…?
By observing
variation in
output measures!
1. Assignable variation : we can assess the cause
2. Common variation : variation that may not be possible
to correct (random variation, random noise)
In order to measure variation we need…
The average (Mean) of the observations:
N
1
X 
N

i 1
xi
The Standard Deviation of the observations:
N
 
2
(
x

X
)
 i
i1
N
Example : Capability Index (Cpk)
X = 10 and σ = 2
LTL = 9
UTL = 11
LTL
X
UTL
Example : Capability Index (Cpk)
X = 10 and σ = 0.5
LTL = 9
UTL = 11
LTL
X
UTL
Six Sigma Quality
 6
• A philosophy and set of methods companies use to
eliminate defects in their products and processes
• Seeks to reduce variation in the processes that lead to
product defects
• The name “six sigma” refers to the variation that
exists within plus or minus six standard deviations of
the process outputs
Six Sigma Quality
New Japanese Techniques
• Kaizan – Little Improvement : Continuous minor changes
• Kaikaku – Radical Improvement : entire business is
changed radically initiated by management. The result will
significantly impact business introducing new knowledge, new
strategies, new approaches, new production techniques or new
equipment. Initiated when management see that ongoing
Kaizen work is beginning to stagnate and no longer provides
adequate results in relation to the effort.
• Kakushin – Revolutionary Improvement