Quality Progress | June 2013
P
Putting Best Practices to Work
www.qualityprogress.com | June 2013
Minimizing
Impact of Supplier
Inconsistency p. 26
QUALITY PROGRESS
Within
Supply Chain
Reach
Bolstered supply chain
ensures drugs get to
HIV/AIDS patients in
Kenya p. 18
Plus:
Could automated
trading use a dose
of quality? p. 12
Library service
quality in the
digital age p. 40
Volume 46/Number 6
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Contents
Putting Best Practices to Work | June 2013 | www.qualityprogress.com
FEATURES
18
CASE STUDY
To All Corners of Kenya
Delivering medicine to Kenyans living with HIV/AIDS was much
improved through a project that used an ISO 9001 approach
to solidify the supply chain that handled the life-saving drugs.
by Tiffany Darabi
26
SUPPLY CHAIN
The Power of Prediction
Use quality and statistical methods to predict parts demand and adjust
to inconsistent supplier deliveries to stay one step ahead in servicing
customers.
by Gregory A. Kruger
34
STATISTICS
18
Partial View
Repeatability and reproducibility studies can help evaluate the parts of
a measurement system that may need improving.
by Víctor M. Aguirre-Torres and Maria Teresa López-Alvarez
40
SERVICE QUALITY
Getting a Good Read
Implementing quality management helped libraries learn to better serve
their patrons in the internet age.
by Todd Bruns and Rendong Bai
Only @
www.qualityprogress.com
• Keen on Kenya
Hear from Tiffany Darabi, author
of “To All Corners of Kenya,” p. 18,
discuss the project that strengthened
supply chain activities and helped
deliver HIV/AIDS drugs more efficiently
to patients throughout the nation.
• Volviendo a los Fundamentos
Back to Basics translated in Spanish.
• Ready Reference
Brush up on quality fundamentals,
including your vocabulary with our
handy glossary.
26
DEPARTMENTS
6
LogOn
8
Expert Answers
14
47
• Extolling the value of statistics.
• When an audit finding is refuted.
• Banking on customer satisfaction.
Quality Progress/ASQ
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COLUMNS
5
12
QUALITY PROGRESS
Mail
• A new plan for Toyota.
• ASQ World Conference wrap-up.
14
QP
Up Front
Motivating factors.
Perspectives
Fortifying automated trading with
ethics and quality.
50
Author Guidelines
47
Standards Outlook
50
Measure for Measure
52
Quality in the First Person
54
Career Corner
72
Back to Basics
Clarifying some confusion over
ISO 9001 conformance.
How environmental conditions
can impact tests and equipment.
Dealing with diabetes.
Understanding stakeholder
management.
Finding different perspectives
through DMAIC.
2013 Software showcase
& directory p. 56
To learn more about the manuscript review
process, helpful hints before submitting a
manuscript and QP’s 2013 editorial planner,
click on “Author Guidelines” at www.
qualityprogress.com under “Tools and
Resources."
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QUALITY PROGRESS
Means to Motivate
Contribution proves to be key component
Executive Editor and
Associate Publisher
Seiche Sanders
Associate Editor
Mark Edmund
Assistant Editor
WHAt motivates people most in their work lives? Would it surprise you to learn
Amanda Hankel
it’s not money? Recent research reveals that people are motivated most by their ability
manuscript Coordinator
to make steady progress on meaningful work. Daniel Pink, a keynote speaker at ASQ’s
World Conference on Quality and Improvement, talked about this concept at the May
event. (For a brief recap on the conference turn to page 17 or visit http://asq.org/blog.)
By nature, quality professionals are eliciting positive changes within their organizations all the time. Immediate gratification, however, is what’s sometimes lacking. That
is not the case for the organization featured in this month’s cover story, “To All Corners
of Kenya,” p. 18. The organization, Kenya Pharma, delivers much-needed, affordable
HIV/AIDS medication to a network across the African country of Kenya. The work, as is
stated in the article, is truly a matter of life and death.
The ISO 9001-certified Kenya Pharma project is funded by the U.S. Agency for
International Development and implemented by Chemonics International. Its quality
management system (QMS) spans the entire business cycle. The movement toward a
QMS and subsequent certification has allowed the company to make great strides in the
number of customers they serve and how well.
“On a daily basis, ISO 9001 helps ensure problems that do arise in the supply chain
are systematically documented and addressed not only to correct an immediate issue,
but also to gather data on larger trends impacting the project’s ability to serve its customers through the corrective and preventive action process,” according to the article.
Read about how quality really is making a difference in this insightful case study.
Valerie Ellifson
contributing EDITOR
Megan Schmidt
COPY EDITOR
Susan E. Daniels
Art Director
Mary Uttech
Graphic Designer
Sandy Wyss
Production
Cathy Milquet
Advertising production
Barbara Mitrovic
Digital Production specialisTS
Laura Franceschi
Julie Schweitzer
Media sales
Naylor LLC
Lou Brandow
Krys D’Antonio
Norbert Musial
Rob Shafer
Donnie Tuttle (ASQ TV)
Media sales Administrator
Kathy Thomas
Also in this issue, help with handling inconsistency with parts suppliers. If you’ve
Marketing Administrator
ever struggled to get what you want, when you want it, be sure to read “The Power of
Matt Meinholz
Prediction,” p. 26. Finally, in “Getting a Good Read,” p. 40, read about how libraries
Editorial offices
reengineered their processes to better serve customers in the digital age. QP
Phone: 414-272-8575
Fax: 414-272-1734
Advertising offices
Phone: 866-277-5666
ASQ administration
CEO
Paul E. Borawski
Seiche Sanders
Editor
Don’t forget to watch the new episode
Managing Directors
Julie Gabelmann
Brian J. LeHouillier
Michelle Mason
Laurel Nelson-Rowe
To promote discussion of issues in the field of quality and
ensure coverage of all responsible points of view, Quality
Progress publishes articles representing conflicting and minority views. Opinions expressed are those of the authors and not
necessarily of ASQ or Quality Progress. Use of the ASQ logo in
advertisements does not necessarily constitute endorsement of
that particular product or service by ASQ.
June 2013 • QP
5
logon
+Seen&Heard
Statistical ignorance
StayConnected
Find the latest news, quips and targeted
content from QP and its staff
One additional caution to add to
The March 2013 Statistics Roundtable
Anderson-Cook’s article is to avoid the
column by Christine M. Anderson-Cook,
tendency to repeat past plans without
“Let’s Be Realistic,” (pp. 52-54) makes a
adjustment for the current situation. I
number of important points, but misses
specifically mean using past test plans,
QUAlITY PRogRESS | MARCH 2013
P
Putting Best Practices to Work
www.qualityprogress.com | March 2013
5 Takeaways
From the Revised
iSo 19011 p. 38
ISO 22000
QualitY PRoGR
the Right
FooD SAFETY
ingredients
Methods for making
food safer
Quality culture
Risk
management
FDA
Good
manufacturing
practices
Plus:
Closing down the
hidden factory p. 50
HACCP
Food Safety Modernization Act
Creating the perfect
form p. 64
VolUME 46/nUMBER 3
one. I fully agree
sample sizes and measures because
that decision
“that is what we did before.” Each
making is the key
product, production line and situation is
to the value of
different and should have assumptions,
statistical tools.
conditions and analysis checked to be
The intangible
certain the analysis and recommenda-
of slot machine
tions are valid. Sure, it is quicker to
payouts is similar
follow the same steps and repeat past
to the question
analysis rather than think through the
Publisher Seiche Sanders:
@ASQ_Seiche
Associate Editor Mark Edmund:
@ASQ_Mark
Assistant Editor Amanda Hankel:
@ASQ_Amanda
Contributing Editor Megan Schmidt:
@ASQ_Megan
editor@asq.org
www.facebook.com/
groups/43461176682
www.linkedin.com/groups/qualityprogress-magazine-asq-1878386
we hear in business: “What is keeping
problem again. Many would rather avoid
you up at night?“ Many decisions we
opening their statistics books and think-
must make in business have intangible
ing hard about the underlying assump-
qualities. Brand image is one example.
tions. Yet, it is where the value of statisti-
Sorting out what is and is not part of the
cal analysis lies. We owe it to decision
statistical analysis story often helps to
makers to do a proper analysis, check
frame the issue under discussion.
assumptions, apply the right techniques,
QP
popular
state the limitations and encourage an
(All URLs case sensitive)
understanding of statistics.
1.Crunching the Numbers: How
the 2012 Salary Survey data
were compiled. (http://bit.ly/
crunchnumbers)
One of the key issues I see facing those of us active with statistical
thinking is the ignorance of most of
The current climate is prime for
our colleagues. While ASQ provides
expanding the use and understanding
a lot of information, the content may
of statistical methods. We (statisti-
need to focus more on the value of
cally thinking folks) have the skills that
proper statistical thinking to encourage
are in demand. We can add value with
application. The Wall Street Journal ran
our knowledge. I encourage all to read
an article titled, “Data Crunchers Now
Anderson-Cook’s article again, then look
the Cool Kids on Campus,” extolling the
for opportunities to apply your statistical
value businesses are finding in statisti-
knowledge to improve decision making.
Fred Schenkelberg
Los Gatos, CA
cians. The American Statistical Asso1
ciation and others have declared 2013
as the International Year of Statistics.
Consider an online basic statistics class
I’m currently taking though edX that
has 47,000 students enrolled.2 It seems
that we (the business world at large)
are finding statistics of value.
6
Executive Editor & Associate
QP • www.qualityprogress.com
Reference and note
1.Carl Bialik, “Data Crunchers Now the Cool Kids on
Campus,” Wall Street Journal, March 1, 2013, http://bit.
ly/datacrunchers.
2.edX is a nonprofit enterprise of its founding partners
Harvard University and the Massachusetts Institute of
Technology that features learning designed specifically
for interactive study via the web.
’s Most
articles
2.Corrective vs. Preventive
Action: Do you know the difference between corrective and
preventive action? (http://bit.
ly/correctvsprevent)
3.Learning to Fish: The fishbone
diagram can help you achieve
career growth. (http://bit.ly/
learningtofish)
4.Paving the Way: Seven data
collection strategies to enhance
your quality analyses. (http://
bit.ly/pavingtheway)
QP
QP
Online
Extras@
QUALITY PROGRESS
www.qualityprogress.com
PAST CHAIR
• Life-saving improvements
Listen to Tiffany Darabi, author of “To All Corners of Kenya,” p. 18, talk more about the project that helped deliver HIV/AIDS drugs in Kenya more efficiently by improving
supply chain activities in this month’s Author Audio interview.
James J. Rooney, ABS Consulting, Global
Government Division
CHAIR
John C. Timmerman, Gallup Inc.
CHAIR-ELECT
• Volviendo a los Fundamentos
Stephen K. Hacker, Transformation Systems
International
Read this month’s Back to Basics column translated in Spanish.
TREASURER
Chava Scher, RAFAEL—Advanced Defense Systems
(retired)
Quick Poll RESULTS
Each month at www.qualityprogress.com, visitors can take an informal survey. Here are
the numbers from last month’s Quick Poll:
What poses the greatest risk to today’s organizations?
• Market uncertainty. • Data management.
• Technology.
PARLIAMENTARIAN
Karla Riesinger, ASQ
DIRECTORS
44.4%
36.1%
19.4%
Visit www.qualityprogress.com for the latest question:
Are you on Twitter?
• Yes, I actively tweet.
•No, but I’d be open to trying it.
• I plan to set up an account soon.
• I’ll never tweet.
QualityNewsToday
Recent headlines from ASQ’s global news service
(All URLs case sensitive)
Behind the Scenes: Boeing’s Dreamliner Battery Fix
It was a logistical effort Boeing had never faced before: simultaneously moving a small
army of technicians to 13 international locations, transporting 15 tons of tools per
repair kit and installing newly designed equipment in the field, taking five days per
airplane and working around the clock in two 12-hour shifts. (http://bit.ly/boeingbehind
scenes)
London to Create Airport of the Future
London City Airport wants to eradicate the nuisances associated with flying by creating
a streamlined experience with the help of a technology known as the Internet of Things.
Essentially, it is an overarching platform that allows a variety of devices or machines to
communicate with one another. (http://bit.ly/airportoffuture)
Heather L. Crawford, Apollo Endosurgery
Raymond R. Crawford, Parsons Brinckerhoff
Ha Dao, Emerson Climate Technologies Inc.
Gary N. Gehring, Saskatchewan Ministry of
Governmental Relations
Kathleen Jennison Goonan, M.D., Goonan
Performance Strategies
Eric A. Hayler, BMW Manufacturing Co.
James M. Loseke, Sargento Foods Inc.
Joanne D. Mayo
Elías Monréal, Industrial Tool Die and Engineering
Richard A. Perlman, Bayer HealthCare
Steven J. Schuelka, Calumet College
Daniel E. Sniezek, Lockheed Martin (retired)
G. Geoffrey Vining, Virginia Tech Department of
Statistics
Alejandra Vicenttin, Alejandra Vicenttin Advisors
Bharat Wakhlu, Tata Services Ltd., a division of Tata Sons
J. Eric Whichard, JE Whichard and Associates
QP EDITORIAL REVIEW BOARD
Randy Brull, chair
Administrative Committee
Brady Boggs, Randy Brull, Jane Campanizzi, Larry
Haugh, Jim Jaquess, Gary MacLean,
R. Dan Reid, Richard Stump
Technical reviewers
Andy Barnett, David Bonyuet, David Burger, Bernie
Carpenter, L.N. Prabhu Chandrasekaran, Ken Cogan,
Linda Cubalchini-Travis, Ahmad Elshennawy, Mark
Gavoor, Kunita Gear, Daniel Gold, T. Gourishankar,
Roberto Guzman, Ellen Hardy, Lynne Hare, Ray
Klotz, Tom Kubiak, William LaFollette, Pradip Mehta,
Larry Picciano, Gene Placzkowski, Tony Polito, Peter
Pylipow, John Richards, James Rooney, Brian Scullin,
Amitava Sengupta, A.V. Srinivas, Joe Tunner, Manu
Vora, Keith Wagoner, Jack Westfall, Doron Zilbershtein
Want the latest quality-related news and analysis?
The QNT Weekly e-newsletter delivers it every Friday.
Subscribe now at http://email.asq.org/subscribe/qntwk.
June 2013 • QP
7
expertanswe
Doing the right thing
Q: During an audit closeout meeting, what
ing a finding on behalf of their function.
• The finding is wordy, poorly written or
is the right thing to do if the auditee refuses
unclear about what to address or im-
of those involved in the audit. However, with
to accept a correct nonconformance report
prove, so the auditee cannot understand
awareness of the most common root causes,
(NCR) by the lead auditor? Should the lead
what the real gap is.
an auditor will be equipped to avoid most
auditor submit his or her report with or
without the disputed NCR regardless? What if
the auditee—such as a director or CEO—interprets the case according to his or her opinion
and sees there isn’t an NCR?
Ayad Mosab Al-Ani
Salalah Free Zone, Oman
• NC statements appear to be opinionbased rather than fact, failing to provide
sufficient evidence and references.
disagreements over NCs.
Obviously, an auditor’s soft skills, including
tact, reasoning and persuasion, are important.
• An opportunity for improvement is mis-
Having management commitment from the
classified as an NC. Inconsistent use of
auditing and auditee organizations, following
audit terminology and definitions is often a
auditing protocol, adequately planning and
rookie mistake.
preparing for the audits, offering solid value-
• The same finding is unnecessarily
added feedback, promptly verifying corrective
A: If your nonconformance (NC) is factual, has
repeated. An auditor who identifies a
actions, linking audit action effectiveness to
business impact and appropriately references
document control issue and counts sepa-
the organizational bottom line, and presenting
a standard or specification, you should not
rate NCs for the multiple areas in which it
the audit’s effectiveness to management will
drop the finding.
appears, for instance, will be perceived as
also help ensure a healthy audit management
It appears from the question that the
being interested in generating a number
process.
auditee may not have been aware of the NC
of findings rather than providing valuable
until the closing meeting. Don’t keep an NC a
surprise until the closing meeting. If the audit
feedback.
• Issues unrelated to the audit are
Even if the auditee is a high-profile individual, such as a director or CEO, the auditor
should stick to the task. During my audits, if I
is a multi-day event, you should discuss any
bundled with the findings. More often
am convinced of the importance of a finding, I
NCs with the auditee as you find them, ideally
than you would expect, auditors incorpo-
explain it to the auditee, outlining the benefits
during daily caucus meetings with the auditee.
rate known issues for the audit area into
of addressing the gaps and the risks of not
Discussing NCs before the closing meeting
the current audit report, using the audit as
addressing the gaps, and provide references
will provide the auditee an opportunity to
leverage to get things done. There is noth-
to support the NC. I also give the auditee the
clarify the situation or produce evidence.
ing wrong with verifying through samples
opportunity to explain any disagreement. If
Why would an auditee refuse to accept an
whether past issues are still potent and
the reason for objection is not supported by
NCR? The most common root causes are:
reporting them with evidence. Bundling
facts and evidence, I will let the finding remain,
• The audit finding is outside the scope
past issues without verification, however,
and the auditee will have to respond to it.
may cause auditee refusal.
Management should be counted on to respect
of the contract or audit. In the case of
supplier audits, the finding goes beyond
• There is no sign of continued or future
the agreed-on purchasing requirements.1 In
business. A particularly difficult supplier
the case of internal audits, the finding may
audit scenario can occur when an existing
be beyond the responsibility of the auditee
contract is near expiration and there has
function.
been no word on extension while the
• Addressing the NC would not add value, such as recreating missing paperwork
that has no value for the business.
• The auditee is not empowered to ac-
8
Other reasons will likely be as varied as the
personalities, character traits and capabilities
customer is auditing and issuing findings.
• Hostility between the auditor and auditee creates a strained, “gotcha” mentality.
• The auditor bullied the auditee into ac-
cept the findings. Auditees who are too
cepting a finding rather than convincing
junior in the organization’s hierarchy may
the auditee through careful and thorough
worry about the consequences for accept-
reasoning.
QP • www.qualityprogress.com
the integrity and value of the audit process,
upholding findings that are genuinely offered.
Govind Ramu
Director, quality assurance
SunPower Corp., San Jose, CA
reference
1.Govind Ramu, “Expert Answers: Information Collection,”
Quality Progress, March 2013, pp. 8-9.
Bibliography
Russell, J.P., “Exit Meeting,” chapter in The ASQ Auditing Handbook, third edition, ASQ Quality Press, 2005.
Russell, J.P. and Terry Regel, “Chapter 1: Reporting Problems,”
After the Quality Audit: Closing the Loop on the Audit Process,
second edition, ASQ Quality Press, 2000.
rs
Keeping customers happy
determined, they can be translated—using
by changes, running pilots, selecting team
Q: I’m developing a customer-oriented
tools such as critical-to-quality analysis—into
members who will participate, ensuring the
system for updating a service operation that
appropriate customer satisfaction metrics for
project has a sponsor and communicating to
allows managers to gather information, make
each category or segment.
all stakeholders.
changes in service delivery and assess the
More than likely, your customer satisfac-
Your organization may have a preferred
effects of these changes. How do I imple-
tion metrics will involve performance around
implementation approach that is already set
ment that in banking? What is the best way
on-time delivery, quality and subjective mea-
up with software and a database. It would be
to measure customer satisfaction based on
sures of performance, such as friendliness,
wise to make a few inquiries at the outset.
this approach? Which quality system should
product knowledge and helpfulness.
Which quality system?
I use? How do I develop a system framework
for updating these services?
Mahmoud Madgy
Dubai, United Arab Emirates
A: You have asked quite a few questions that
Achieving satisfaction levels
Again, without knowledge of your organiza-
Next, you must determine if your internal
tion, it is difficult to recommend a specific
processes help you meet all of the require-
quality system. Actually, a more basic ques-
ments and how capable they are of achieving
tion is, “Why do you feel the need to operate
the required levels of customer satisfaction.
within a quality system?”
will be difficult to answer in the short space
Where there are deficiencies in meet-
If your organization has already imple-
allotted. Perhaps I can, at least, point you in
ing requirements, processes must be either
mented a quality system, perhaps there is a
the right direction.
modified or new processes put in place.
natural fit for your service delivery system
Where processes are not capable, improve-
within that quality system. If so, I suggest you
ments must be made.
explore that avenue.
The framing of your questions indicates
the focus of your thinking is on the customer
and you are intent on building a closed-
Don’t be surprised to find gaps in require-
Otherwise, if no such system exists, you
loop system. This approach will provide a
ments and processes not capable. In my
might want to complete your service delivery
solid foundation for whatever method you
experience, many organizations never origi-
project before addressing a quality system
develop.
nally designed and built their service delivery
project. That way, you’ll be able to complete
processes with the intent of supporting cus-
your project in the event the organization
Measuring satisfaction
tomer satisfaction. Now that service delivery
does not have an appetite for taking on a
Several important considerations should be
is recognized as an important component of
quality system project. More specifically, if
addressed before you can begin to measure
customer satisfaction and a key differentia-
you must expand the scope of your service
customer satisfaction. These include:
tor—particularly in high transaction environ-
delivery project to include the building of a
• Categorizing and segmenting your cus-
ments—these processes are now receiving
quality system, you may never complete the
the attention they are due.
service delivery project. Keep the project
tomer base to better identify and align
customer requirements.
• Establishing a set of independent listening
scopes distinct and manageable.
Implementation approach
T. M. Kubiak
posts for each customer category or seg-
Without knowledge of your organization, it is
President
ment.
difficult to recommend a specific implemen-
Performance Improvement Systems
• Analyzing customer data obtained
through the listening posts to determine
tation approach.
However, there are basic elements of
customer requirements.
most implementations that I suggest you
After the customer requirements are
consider, such as: involving those affected
Asked and Answered
Submit your question at www.qualityprogress.com, or send it to editor@asq.org,
and our subject matter experts will help you find a solution.
Weddington, NC
Bibliography
Kubiak, T. M., The Certified Six Sigma Master Black Belt Handbook, ASQ Quality Press, 2012, pp. 148-156.
Kubiak, T. M. and Donald W. Benbow, The Certified Six Sigma
Black Belt Handbook, second edition, ASQ Quality Press,
2009, pp. 66-65.
Shipley, David, Carl W. Keller, James Bossert, Steven S. Prevette,
Duke Okes, Dale Crownover and T. M. Kubiak, “Multiple
Choice—What’s the Best Quality System?” Quality Progress,
July 2003, pp. 25-45.
June 2013 • QP
9
QUALITY COUNCIL OF INDIANA
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SOLUTION TEXTS
Quality Council of Indiana offers detailed solutions to all
questions presented in the corresponding Primer.
CD-ROMS
QCI offers user-friendly interactive software to assist students preparing
for ASQ examinations. Each CD contains 1000 total questions.
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Juran’s
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Sigma
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Technician’s
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6th Edition
2nd Edition
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The essential quality reference
for most ASQ exams
A great CSSBB reference
Great for CQT and CQI exams.
by Forrest W. Breyfogle, III
by Juran & De Feo
En Español
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PRIMER
by Gary K. Griffith
Spanish
Green Belt
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Dictionary
The Spanish version of the
CSSGB Primer.
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Great for any ASQ certification.
The Lean Six Sigma Primer is
written to a QCI BoK. There are
more case studies and lean content
than in any other QCI products. 400
questions are included. A solution
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Contains 2800 definitions.
Helpful for Reliability and
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A convenient book for training internal
auditors to the ISO 9001 expectations.
An instructor CD is available.
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Solve your Weibull, reliability, warranty, Bayesian &
Maintenance, prediction & estimation problems.
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Performs all measurements required in the AIAG manual.
Contains ANOVA methods and excellent graphs.
Site and global license available!!!
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There are generic manuals on
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Details the selection,
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of quality documents.
The disk contains
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instructions.
PERSPECTIVES
BY Andrew Kumiega, Michael Davis
and Ben Van Vliet
Bank on It
Ethics and quality will strengthen automated trading and finance
AUTOMATED TRADING, including high-
ers, mathematicians (usually called quants)
ness implies irresponsibility or imprudence.
frequency trading, now accounts for more
and computer engineers. Each specialty
But what constitutes prudence, or good
than 70% of daily trading volume.1 Though
has well-defined ethical standards. How-
faith, in automated trading system research
not everyone agrees, most academic studies
ever, like most new industries, the ethics at
and development? This is where ordinary
support the claim that automation benefits
the intersections or interfaces among these
regulation ends and the creation of new ethi-
the overall functioning of society and mar-
groups is still evolving. The intersection of
cal codes for automated trading begins.
kets.2-5 Automated trading tends to mitigate
the three professions gives rise to new ethi-
volatility, add liquidity and reduce transac-
cal issues at the organizational level.
Overregulation may stifle competition,
forcing a one-size-fits-all solution to such
problems. Because self-regulation is gener-
tion costs for all market participants.
A matter of ethics
ally thought to be more cost-effective than
occur every day without mistakes. The
In the age of automation, financial innova-
governmental regulation, the financial in-
proportion of incorrect trades is small.
tions—new strategies, methods of analysis,
dustry long ago established self-regulatory
However, automated trading systems oc-
execution venues, instruments, technolo-
organizations, such as exchanges and the
casionally do have quality problems due to
gies and data sources—are the ultimate
Financial Industry Regulatory Authority, as
various types of errors. These occasions
source of competitive advantage. How is
proxy regulators of their markets and mem-
have forced the industry to take stock of its
this innovation to be kept as socially useful
bers. Yet, even exchange regulations cannot
responsibilities to its shareholders, other
as possible? Given innovation’s rapid pace,
cross national borders without significant
market participants and society.
neither governmental nor exchange regula-
international coordination. Only ethics can
Consider what happened to Knight Capi-
tion can keep up. One of the problems—as
provide general principles and specific rules
tal last August. The firm lost $440 million in
John Boatright, professor at Loyola Univer-
that cross national borders, market cultures
less than 45 minutes when its new trading
sity in Chicago, points out— is that “people
and even professional disciplines.
software flooded the market with orders,
(in finance) believe that the task of creating
almost bankrupting the firm.6 Even such
and enforcing ethical rules and standards
exchanges (for example, NASDAQ, New
rare events may reduce investors’ appetite
is the job of legislatures and regulators,
York Stock Exchange and CME Group
Millions of computer-generated trades
As enablers of automated trading, the
not themselves.”7
Inc.) and even the off-exchange execution
No code, public or
venues, consider their ethical responsibili-
private, addresses
ties to include constructing fair markets,
overall ethical
helping to sustain confidence in them.
responsibilities in
As a starting point for fixing this problem,
automated trading
many authors point to the basic premise of
of the professional
Isaac Asimov’s Three Laws of Robotics: “a
groups that create
robot may not harm humanity, or, by inac-
and operate these
tion, allow humanity to come to harm.”8
automated systems.
Regulators are
beginning to address
One problem for ethics in automated
trading and finance is that market outcomes (as with all outcomes) are uncertain
for risk and thereby may cause the average
these ethical issues. For example, while the
and ambiguous. Yet, the best way to pro-
investor to not invest in the stock or futures
Securities and Exchange Commission and
duce the social benefits of free markets is
market. These rare events also invite the
the Commodity Futures Trading Commission
to foster market agents with a robust ethi-
public to view financial markets as casinos,
have long prohibited market manipulation,
cal framework that combines the ethics of
not capital allocation mechanisms.
they have recently lowered the bar to prov-
the various groups. An industrywide ethical
ing it from intent to recklessness. Reckless-
climate can determine how organizations
Automated finance brings together trad-
12 QP • www.qualityprogress.com
and professionals perceive problems,
has been prudent and that its automated
obligations to external stakeholders, and
trading systems function properly, are op-
techniques can provide a structure for un-
formal standards of right and wrong.
erationally safe, and are robust enough to
derstanding and solving the interdisciplin-
behave acceptably during extreme events.
ary ethical problems. Quality techniques
Quality and standards
Of course, the ability of automated
As a starting point, quality management
then can be employed to find solutions
To improve the ethical interface between
trading and finance firms to prove the
for root causes rather than (the industry’s
professions, other industries have turned
stability of their systems depends on the
current mode) containment of individual
to quality management standards. Quality
availability of execution-venue-simulation
outcomes.
is not only a software testing or statistical
facilities to fully test those systems. Such
framework, but also an ethical one (inso-
simulation facilities should provide testing
tures for organizational responsibility,
far as the standards in question are ones
against all manner of extreme market and
regulators can assess the rigor of research,
everyone in the relevant disciplines—at
infrastructure events.
development, operations and control with-
their rational best—want everyone else
Following ISO 9000-style standards tes-
Given formal decision-making struc-
out infringing on the secrecy of propri-
in those disciplines to follow, even if that
tifies to an automated trading firm having
etary trading strategies and their sources
would mean having to do the same).
satisfied its obligations to prove and docu-
of competitive advantage. QP
To be sure, many trading firms, execution venues and third-party vendors of
trading system components perform
ment trading strategies and technologies
that operate safely, reliably and profitably.
Such standards would mean the finan-
rigorous quality control over their pro-
cial industry is taking the lead in improv-
cesses—not strictly out of ethics, but from
ing its own management systems. The fed-
an understanding that a quality approach
eral government then should be less likely
to innovation is, in the end, the source of
to issue prescriptive regulations, allowing
competitive advantage. However, even
it to concentrate its surveillance efforts on
these systems can fail at the interfaces
the integrity of the trading organization as
because methodology has not been coordi-
opposed to the details of individual trad-
nated across professions.
ing systems. (That is how regulators have
Quality processes operationalize (in
responded to the aerospace industry’s
part, at least) an organization’s ethics. In
AS9100 standard.) Likewise, global indus-
the automated trading and finance indus-
try standards should present significant
try today, discussion of quality typically
opportunities for regulatory harmoniza-
focuses on specific guidance for improve-
tion across national boundaries.
ment of trading systems within the professional silos. But beyond simple software
Framing ethical problems
testing, quality in finance can include
To mitigate the possibility of a breakdown
all professionals—computer engineers,
in the global trading mechanism, the
quants and traders alike. automated finance-trading industry needs
The ISO 9000 family of standards—and
a global ethical framework. Properly fram-
its industry-specific derivatives—are the
ing the ethical problems will enable root
most widely recognized standards for a
cause analysis and long-term fixes, rather
quality management system (QMS). In
than short-term regulatory containments
other industries (where public safety must
of undesirable outcomes. A QMS standard,
be ensured), ISO standards define how
such as the (ISO 9000-style) AT 9000 proj-
firms ought to do business in, for example,
ect we are working on, should enable the
aerospace, chemicals, medical devices and
industry to address professional, organi-
food safety.
zational and industrywide responsibilities.
A similar standard for automated trad-
A broad ethical framework must ensure
ing and finance should include software
prudence without infringing on the neces-
and hardware testing that proves the firm
sary independence of trading firms.
REFERENCES
1.Jonathan A. Brogaard, “High Frequency Trading and Its
Impact on Market Quality,” Northwestern University, 2010,
www.futuresindustry.org/ptg/downloads/hft_trading.pdf.
2.Boyan Jovanovic and Albert Menkveld, “Middlemen in
Limit-Order Markets,” New York University, 2011, http://
papers.ssrn.com/sol3/papers.cfm?abstract_id=1624329.
3.Terrence Hendershott, Charles Jones and Albert Menkveld,
“Does Algorithmic Trading Improve Liquidity?” Journal of
Finance, 2011, Vol. 66, No. 1, pp. 1-33.
4.Terrence Hendershott and Ryan Riordan, “Algorithmic
Trading and Information,” NET Institute Working Paper
No. 09-08, 2011, www.im.uni-karlsruhe.de/upload/
publications/218bfa37-798e-44df-8ad3-8289af8a0920.pdf.
5.Frank Fabozzi, Sergio M.Focardi and Caroline Jonas, “HighFrequency Trading: Methodologies and Market Impact,”
Review of Futures Markets, special issue, Vol. 9, 2011, pp.
7-38, www.conatum.com/presscites/hftmmi.pdf.
6.Jenny Strasburg and Jacob Bunge, “Loss Swamps Trading
Firm,” Wall Street Journal, Aug. 2, 2012, http://online.wsj.
com/article/SB100008723963904438664045775647720839
61412.html.
7.John Boatright, ed., “Ethics in Finance,” Finance Ethics,
John Wiley & Sons, 2010.
8. Isaac Asimov, “Runaround,” Astounding Science Fiction,
March 1942.
ANDREW KUMIEGA is the director at a proprietary trading
firm. He is also an adjunct professor at the Illinois Institute of
Technology (IIT) in Chicago. He holds a doctorate in industrial
engineering from the University of Illinois in Chicago. An ASQ
member, Kumiega is a certified quality engineer, a quality
auditor and a software quality engineer. He is the co-author
of Quality Money Management (Academic Press, 2008).
MICHAEL DAVIS is senior fellow at the Center for the Study
of Ethics in the Professions and professor of philosophy at
IIT. He earned a doctorate in philosophy from the University
of Michigan in Ann Arbor. Davis has published more than
200 articles and chapters and authored seven books. His
most recent book is Code Writing: How Software Engineering
Became a Profession (Center for the Study of Ethics in the
Professions, 2009).
BEN VAN VLIET is an assistant professor at IIT’s Stuart School
of Business in Chicago. He holds a doctorate in management
science from IIT. He is an author or co-author of Quality
Money Management (Academic Press, 2008), Building Automated Trading Systems (Academic Press, 2006) and Modeling
Financial Markets (McGraw-Hill, 2004), and has published
several articles in the areas of finance and technology.
June 2013 • QP 13
keepingcurre
automotive
A New Path Forward
A
Toyota details strategy to improve design and production approach
After battling four years of setbacks—including global financial crisis, worldwide recalls,
an earthquake and a tsunami—Toyota Motor
Corp. in Japan, the company that brought
us the Toyota Production System and the
concept of lean manufacturing, is once again
introducing a new approach.
In late April, the organization’s president,
Akio Toyoda, provided details to Automotive
News about an overhauled R&D strategy he
hopes will help lift the automaker to sustained
growth and improve product development
efficiencies by 20 to 30%. Since taking over
as CEO in 2009, Toyoda’s focus has been to
make the organization less susceptible to the
external risks that have plagued the carmaker
during the past few years.
The new method is called the Toyota New
Global Architecture (TNGA), and it focuses
on simultaneous development of multiple
models and massive use of common parts.
The ultimate goal is to boost global sales to 10
million vehicles per year—a feat no carmaker
has accomplished to date.
“If you compare it to soccer, it’s like changing the field formation,” Toyoda said. “As the
head coach, I have changed us from a defen-
Mr. Pareto Head
By Mike Crossen
14 QP • www.qualityprogress.com
sive formation to an offensive one.”
While Toyota announced it was undertaking a new product development strategy last
year, this was the first time details had been
discussed. The first cars built using TNGA will
debut in 2015.
By increasing product development
efficiency, time and money savings will be
reinvested into new technology and designs,
better manufacturing processes and enhanced quality, said Mitsuhisa Kato, executive
vice president and global R&D chief.
Toyota will use more components made
to global standards rather than to proprietary
specifications, which should help in worldwide procurement from large suppliers and
reduce costs. Initially, cars under the same
platform will share 20 to 30% of their parts,
but Kato said the eventual goal is to commonize 70 to 80% of parts.
“Commonization is not new,” Kato said.
“But we are trying to push it to a higher level.”
Additional efforts to maximize efficiencies
include grouping future vehicles by launch
timing and engineering them simultaneously
to take advantage of commonalities. Before,
according to the Automotive News article,
planning was based on individual model without considering the big picture.
To speed R&D processes, in April the
company reorganized into four parts—Lexus,
Toyota-brand vehicles for mature markets,
Toyota-brand vehicles for emerging markets
and the Unit Center, which conducts R&D on
shared core technologies, such as engines
and transmissions.
Also in April, Toyota established new R&D
facilities at its Toyota City headquarters. The
facilities are designed to enhance collaboration among powertrain, prototyping and
production engineers. The facilities are also
equipped with a new aerodynamics lab and
a wind tunnel with a maximum speed of 155
mph. The wind tunnel uses a moving belt
under the cars that better simulates airflow
around a moving vehicle than if it were sitting
on a stationary platform.
With these improvements underway,
Toyoda is confident his organization can get
back on its feet, achieve its goals and sustain
its tradition of continuous improvement.
BIBLIOGRAPHY
Automotive News, “Toyota’s 10 Million Plan,” May
3, 2013, http://asq.org/qualitynews/qnt/execute/
displaySetup?newsID=15926.
nt
manufacturing
asq joins coalition focused on manufacturing
ASQ has joined the Smart Manufacturing Leadership
Coalition (SMLC), a public-private partnership developing platforms for experimentation of large development projects, or testbeds, and training for nextgeneration manufacturing technology platforms.
The SMLC was launched last July to drive improved
manufacturing efficiencies, reduce waste and integrate manufacturing intelligence in real time across an
entire production operation.
ASQ, which has been indirectly involved in SMLC initiatives for
months, recognized that SMLC efforts aligned well with ASQ’s longstanding role in manufacturing. ASQ said it hopes its subject matter
experts can help the coalition develop workforce training, tools and
innovations to implement breakthrough smart manufacturing technologies.
“The Smart Manufacturing Leadership Coalition has
its goals rooted in quality, which is helping companies
perform more efficiently with higher quality outcomes,” said ASQ CEO Paul Borawski. “We are excited
for the opportunity to share our resources with the
SMLC, accentuating quality through the development
and growth of the organization.”
“ASQ’s extensive knowledge in helping organizations increase efficiencies will be an asset to the
Smart Manufacturing Leadership Coalition as we continue to improve
manufacturing productivity,” said SMLC Chairman Dean Bartles. “We
are pleased to have ASQ as part of the SMLC, as both organizations
share the passion for improvement.”
As a member of the SMLC, ASQ joins companies such as Alcoa,
General Motors, Honeywell, Pfizer and Rockwell Automation.
asqnews
CALL FOR PRESENTATIONS ASQ
has issued a call for presentations
for the 2014 World Conference on
Quality and Improvement, which
will be held May 6-7 in Dallas. The
submission deadline is Aug. 2. For
more information, visit http://wcqi.
asq.org/2014/call-for-presentations/
index.html.
TEAM AWARD APPLICATIONS ASQ
is looking for teams to participate in
next year’s International Team Excellence Award process. The deadline
for intent to submit forms is July 1.
For more information, visit http://
wcqi.asq.org/team-competition/
timeline.html.
ASQ TO HOST TC 69 MEETING ASQ
will host the International Organization for Standardization (ISO) annual
meeting for members of Technical
Committee (TC) 69 on applications of
statistical methods June 3-7 in Mil-
waukee. Created in 1948, TC 69 has
representatives from 48 countries
and focuses on standardization in
the application of statistical methods, including generation, collection
(planning and design), analysis, and
the presentation and interpretation
of data. For information about ASQ
standards involvement, visit www.
asq.org/standards.
ASQ QUALITY INSTITUTE ASQ is offering a series of introductory quality
courses July 15-17 at its headquarters
in Milwaukee. The ASQ Quality Institute will feature training not normally available in classroom settings.
Courses include quality basics, integrated quality management, auditing
for improvement, failure mode and
effects analysis, and corrective and
preventive action. Visit www.asq.org/
promotional/milwaukee for details on
the courses, instructors and special
registration offers.
ASQ Journal
spotlight
Every month, QP
highlights an openaccess article from
one of ASQ’s seven
other journals. This
month, make sure you
read “Quantile-based
Optimization of Noisy
Computer Experiments
With Tunable Precision,” which appeared in
February’s edition of Technometrics. ASQ
co-publishes Technometrics four times a
year with the American Statistical Association.
The article, written by Victor Picheny,
David Ginsbourger, Yann Richet and Gregory
Caplin, addresses kriging-based optimization of stochastic simulators.
To access the article, click on the “Current Issue” link on Technometrics’ website:
http://asq.org/pub/techno. From there, you
also can find a link to information about
subscribing to the quarterly publication.
June 2013 • QP 15
keepingcurrent
Q
Who’s Who in
NAME: Timothy J.
Robinson.
RESIDENCE: Laramie, WY.
EDUCATION: Doctorate in statistics from
Virginia Tech in Blacksburg.
CURRENT JOB: Professor of statistics at the
University of Wyoming (UW) in Laramie.
INTRODUCTION TO QUALITY: A response surface methods
course taught by Raymond H. Myers at Virginia Tech and assisting
Myers with a short course on experimental design that Robinson
delivered at the Ethyl Corp.
PREVIOUS EXPERIENCE: Robinson worked as a high school
mathematics teacher in vastly different settings—inner city and
private school environments—before he decided to attend graduate school.
ASQ ACTIVITIES: Robinson is the Statistics Division’s chair for
student and early career grants for the Statistics Division’s Fall
Technical Conference.
OTHER ACTIVITIES: Robinson and his wife, Dawn, operate a small
statistical consulting company with contracts with the U.S. Fish
and Wildlife Service and the National Park Service. Previous clients
have included Merck, Southwest Airlines, Ethyl Corp., the New
Zealand Department of Conservation, and the American Samoa
Government’s Department of Marine and Wildlife Resources.
PUBLICATIONS: Robinson has had more than 40 peer-reviewed
manuscripts published. He is also the co-author of Generalized
Linear Models With Applications in Engineering and the Sciences
on a Generalized Linear Models, second edition (Wiley, 2010).
RECENT AWARDS: Robinson was included in the 2012 class
of ASQ fellows. He and his colleagues who presented “Multiple
Objective Pareto Frontier Optimization for Split-Plot Experiments”
received the Shewell Award for the best presentation at last
year’s Statistics Division Fall Technical Conference. Last spring,
he also won a UW Promoting Intellectual Engagement Award for
Classroom Teaching. In 2007, he received the John P. Ellbogen
Award for Meritorious Classroom Teaching, UW’s highest award
for classroom teaching.
PERSONAL: He and Dawn have four children, ages 2 to 12.
FAVORITE WAYS TO RELAX: Spending time with family, hunting
big game in Wyoming and hiking in the wilderness areas outside
of Laramie.
16 QP • www.qualityprogress.com
dateinqualityhistory
QP occasionally looks back on a person or event that made
a difference in the history of quality.
June 18, 1926
Philip B. “Phil” Crosby was born in
Wheeling, WV.
Crosby was a businessman and
author who contributed to management theory and quality management practices. He is widely recognized for promoting the concept of
zero defects and for defining quality
as conformance to requirements.
Crosby is credited with reinforcing the message to do things right the first time. He also
became well-known for acquainting quality professionals
with the following theories: The price of nonconformance is
a measure of poor quality; prevention is a means to eliminate quality problems; leadership is a requirement to make
progress, teamwork is the principle for work; and customer
requirements define the standard of quality performance.
Crosby’s first book, Quality is Free, has been credited in
part with igniting the quality revolution in the United States
and Europe. He wrote 13 books, including The Absolutes of
Leadership in 1996 and Quality and Me, an autobiography
published in 1999.
Crosby was diagnosed with and treated for esophageal
cancer in early 2001. A few months later, he developed adult
respiratory distress syndrome. His condition worsened, and
he died in August 2001.
WordtotheWise
To educate newcomers and refresh practitioners and
professionals, QP occasionally features a quality term
and definition:
Supermarket
A lean term meaning the storage locations of parts
before they go on to the next operation. Supermarkets are managed by predetermined maximum and
minimum inventory levels. Each item in the plant is at
a designated location.
SOURCE:
“Quality Glossary,” Quality Progress, June 2007, p. 57.
ASQ World conference
speaker: money isn’t always
the only motivator for workers
Indianapolis served as the backdrop to
ASQ’s 2013 World Conference on Quality
and Improvement, held in May. Thousands
of quality professionals from nearly 50
countries flocked to the Indiana Convention Center for a jam-packed schedule of
educational and networking opportunities,
keynote speakers and a bustling trade
show floor.
Highlights included opening keynote,
author Daniel Pink, who explained what
motivates people to act, and to do their
best work. Guess what? It’s not money.
He discussed the findings of a study
where results showed that tasks requiring
mechanical skills got better results where
there was greater monetary incentive
offered, but surprisingly, the results were
the opposite for tasks requiring “even
rudimentary cognitive skill.” Results, in
fact, were poorer the more reward that
was offered.
Pink referenced W. Edwards Deming’s
early teachings which addressed this subject: Deming said reward as a motivator
squeezes out a person’s intrinsic motivation over the course of their lifetime.
Money still motivates, of course. But
it’s not the core motivator. “Pay people
enough to take the issue of money off the
table,” Pink said.
“Management is a technology from the
1850s that was designed to get compliance,” he said. “We need some measure
of that in the workplace today, but what
we need is engagement. If you really want
engagement, you can’t manage into it.”
Examples of organizations finding ways
to create engagement included Facebook,
which allows new engineers to choose
which team they want to work with, and
FedEx, where employees are given a short
period of time each week where they can
work on whatever they want. It has led to
great innovation.
Finally, Pink discussed what the great-
est motivator is: each day, making progress
on meaningful work.
Karen Martin, Jamais Cascio, James
Melton and Sally Hogshead also gave
keynote or featured speaker presentations
during the three-day conference.
Awards and events
Other highlights of the conference included
the release of ASQ’s Global State of Quality
research and an accompanying panel discussion, with representatives from India,
Finland, Germany and the United States.
“The ASQ Global State of Quality
Research: Discoveries 2013” is the first
of three reports that will be released this
year. “Discoveries 2013” provides a first
view of the data, collected from nearly
2,000 organizations in 22 countries.
Future reports—due out in July and in
November during World Quality Month—
will provide deeper insights and greater
context to the findings.
Key findings? “There are significant gaps
in the governance and management models of quality, and the availability and use
of metrics in manufacturing and servicebased organizations worldwide,” according
to a press release.
“The ASQ Global State of Quality
Research: Discoveries 2013” report also
shows disparities between manufacturing and services in quality management
frameworks and training.
Also of note at the conference was the
always-engaging ASQ International Team
Excellence Awards. Argentina’s Telefonica
de Argentina and Thailand’s Pruksa Real
Estate Public Company Limited-QCI Team
were awarded silver-level status for increasing quality and financial savings.
In its 28th year, 32 teams from 10 countries competed for gold, silver and bronze
status.
No teams in this year’s awards process
earned gold-level status.
shortruns
THE QUALITY FUNCTION DEPLOYMENT
(QFD) Institute has issued a call for
papers for its 19th International Symposium on QFD, which will be held Sept. 6-7
in Santa Fe, NM. For more information,
visit www.qfdi.org/call_for_papers.html.
THE INTERNATIONAL ASSOCIATION for
Food Protection will hold its 2013 conference July 28-31 in Charlotte, NC. Registration and housing information is now
available at: www.foodprotection.org.
NOMINATIONS ARE BEING sought for
the 2013 National Institute of Statistical Sciences’ Jerome Sacks Award for
Outstanding Cross-Disciplinary Research.
For more information about the award,
visit www.niss.org/news/awards/
jerome-sacks-award-outstanding-crossdisciplinary-research.
WORLD ACCREDITATION DAY 2013 will
be celebrated around the globe on June
9. This year’s theme—Accreditation:
Facilitating World Trade—was selected
because it is relevant in developed
and developing economies. For more
information about the day and ways to
join the celebration activities, visit www.
ilac.org.
CORRECTIONs
In an article about his death, the state in which
Donald Feigenbaum resided was incorrectly
reported in the April 2013 edition of QP (“Donald
Feigenbaum Passes Away,” p. 17). Feigenbaum
resided in Pittsfield, MA, until he died of heart
failure in March. QP regrets the error.
In the May 2013 edition of QP, Huawei Technologies Co. Ltd. was inadvertently omitted from
the special section devoted to ASQ Enterprise
and Site Members (pp. 50-52). Huawei Technologies Co. Ltd. is currently one of ASQ’s Site
Members. ASQ apologizes for this oversight.
June 2013 • QP 17
To All
Corners
of Kenya
Project ensures a reliable
supply chain provides
medicines to people
with HIV/AIDS
In 50 Words
Or Less
• Kenya Pharma is a $550
million USAID-funded
project implemented by
Chemonics International, which delivers drugs
to people with HIV/AIDS
throughout the African
country of Kenya.
• The project uses an
ISO 9001 approach to
improve and solidify
supply chain activities
and ensure medicines
are provided to Kenyans
affected by the disease.
by Tiffany Darabi
case study
EFFECTIVE SUPPLY CHAINS deliver products on schedule and within budget to customers. Those customers shouldn’t have to think about the behindthe-scenes process or worry about whether the goods will be delivered on time.
The ISO 9001 requirements for building a quality management system (QMS) provide a framework for business operations that capture the intricacies of supply chain
processes while simultaneously providing a method for improving operations.
A prime example of using an ISO 9001 approach to supply chain management can
be seen in the ISO 9001-certified Kenya Pharma project,
funded by the U.S. Agency for International Development
(USAID) and implemented by Chemonics International,
a development company based in Washington, D.C.
THE SKIPPER OF a taxi boat, along with his young helper, navigate
the waters of Lake Victoria to reach Mfangano Island to deliver
supplies to the Sena Health Center.
(All photos courtesy of Chemonics International)
June 2013 • QP 19
Kenya Pharma ensures a reliable supply of high-qual-
Setting the stage
ity, low-priced pharmaceutical commodities for people
Kenya Pharma operates a demand-driven (pull) distribu-
with HIV/AIDS in Kenya. The project’s customers are
tion system with 169 facilities submitting orders to the
children and adults, including pregnant women, from
central warehouse. In partnership with DHL-Kenya for
some of the poorest and most remote regions in the
distribution and with Phillips Healthcare Services Ltd.
country. The ability of the project to operate a success-
for warehousing, Kenya Pharma effectively engages the
ful supply chain is fundamentally about serving people—
private sector in the developing world to deliver results.
much more than just being a business proposition—because it is quite literally a matter of life or death.
Through a hub-and-spoke distribution network, the
169 ordering points supply 626 antiretroviral therapy
The decision to implement an ISO 9001-certified
(ART) dispensing points, which generally provide a full
QMS was driven by the desire to create a systematic ap-
range of HIV/AIDS prevention, treatment and care ser-
proach for supply chain practices to ensure continual
vices. The ordering points also supply an additional 654
improvement of services to the Kenyans served across
dispensing points that provide only prevention of moth-
the 225,000-square-mile country.
er-to-child transmission (PMTCT) services.
ISO 9001 certification process
/ figure 1
Chief of party
Participates in meetings with the registrar
and ensures that project staff are also
available to meet with registrar as needed.
Launch
(April 5, 2012)
Get ISO 9001
certified
(July 2012)
Management representative
Manages schedule of auditor and staff.
Process leaders
Speak knowledgeably about role
as reflected in quality management system
(QMS).
All staff
Speak knowledgeably about role
as reflected in QMS.
Internal
audits
(May 21-24,
2012 and at
least annually
after that)
Follow processes.
Keep records.
Suggest improvements.
Chief of party
Oversees selection of internal auditors. Oversees
audits to ensure they are done according to
ISO 9001 requirements.
Management representative
Ensures training of internal auditors. Schedules
and oversees internal audits.
Process leaders
Make available at least one member of each
team to participate in internal audits.
Internal auditors
Conduct and report audit results and identify improvements.
All staff
Prepare for and participate in audits.
20 QP • www.qualityprogress.com
Management
review
(June 11-14,
2012, and at least
annually after that)
Certification
assessment/
periodic
reviews
(Certification
assessment
occurs every
three years; periodic
review occurs
annually)
Chief of party and senior staff
Meet at least annually to review data, quality policy
and quality objectives. Identify corrective and
preventive actions to ensure effectiveness of QMS.
Management representative
Aggregates continual improvement and internal audit
data for analysis and facilitates management reviews.
Process leaders
Respond to outputs from the management
review as needed.
All staff
Respond to outputs from the management
review as needed.
case study
BOXES CONTAINING HIV/AIDS medicines are loaded onto a taxi boat to ferry them from Mbita Point on Kenya’s mainland to Sena Health Center on
Mfangano Island.
By the end of 2012, the supply chain was serving more
Implementation approach
than 349,000 ART patients representing about 58% of the
The basics of how to build a QMS and obtain ISO 9001
total treatment population in Kenya. The remaining popu-
certification are known across the quality industry:
lation is supported mainly by a supply chain run by the
• Document what you do—document control.
Kenyan government.
• Do it—product realization.
Kenya Pharma began the process of building its QMS in
2011, obtaining ISO 9001 certification in the summer of 2012
• Keep the proof that you’ve followed what you’ve documented—record control.
(see Figure 1). The journey actually began in 2010, howev-
• Check to make sure you’re doing what you documented
er, when Chemonics International achieved ISO 9001:2008
and examine your work to make improvements and doc-
certification for its home office QMS, a unique distinction
ument them—measurement, analysis and improvement.
amongst international development companies.
1
Chemonics’ QMS spans proposal development to project
•Ensure your management team reviews progress,
drives improvements and champions the system—
management practices—the entire business cycle. Having
management commitment.2
an ISO 9001 approach in place at the company’s home of-
Chemonics’ home office experiences also helped to
fice meant the Kenya Pharma project could build on an es-
provide a clear roadmap for implementing an ISO 9001-cer-
tablished culture of entrepreneurship, employee ownership,
tified QMS. Often, however, the success of an implemen-
systemization and continual improvement of best practices.
tation will hinge not on technical knowledge, but on the
Chemonics currently implements more than 80 inter-
softer side of the equation. Effective
national development projects in 60 developing countries,
change management, team owner-
Check out the May episode
working with donors such as USAID, the U.S. Department
ship and executive commitment are
of ASQ TV, which focused on
of Defense and the U.K.’s Department for International
equally—if not more—important.
supply chain management and
Development. In the company’s $550 million USAID-fund-
Ensuring the effort was grassroots
the Kenya Pharma project. Visit
ed Kenya Pharma project, Chemonics and its client, US-
and designed by and for the project
http://videos.asq.org/home
AID, saw a unique opportunity.
staff was at the forefront of the ap-
to see the
proach.
entire May
Using ISO 9001 logically built on the approach for imple-
episode or
menting the Kenya Pharma supply chain, which was based
On my first trip to Nairobi in early
on employing private-sector, internationally recognized
2011, the Kenya Pharma team spent
the individual
management practices that support supply chain opera-
some time discussing what having
segment on
tions to fight the spread of the HIV/AIDS epidemic in Kenya.
a management system would mean
the project.
June 2013 • QP 21
JOSEPH ACHIENG, who lives in Kibera, a large low-income informal settlement in Nairobi, walks through a maze of footpaths and
trenches to get to the Tabitha Medical Center to pick up his medication.
for the project. The quality policy the team developed—
For example, a notable innovation of the Kenya
with its emphasis on the customer-focused result of an
Pharma project from its onset in 2009 is its field service
optimized, continually improving supply chain—says it
representative (FSR) model. FSRs operate throughout
all and carried the team through the entire process:
the country, serving a similar function to that of pharmaceutical sales reps: acting as customer service liaisons,
Kenya Pharma is committed to using its ISO 9001
but without a sales function. Their role is to regularly
quality management system (QMS) to optimize a sus-
engage with each of the 169 ordering sites that the proj-
tainable supply chain that provides commodities for
ect serves to monitor the ordering and receipt process,
prevention, care and treatment of persons with HIV/
receive feedback on expired or nonconforming product
AIDS in Kenya. The goal of the Kenya Pharma QMS is
and provide advice on appropriate storage.
to continually improve our ability to provide effective
The percentage of orders received on time has in-
service and high-quality supplies to persons in need.
creased from 61 to 78% due in part to the FSRs’ work.
We will do our job ethically and follow all statutory
In this way, the project improved on its already-effective
and regulatory requirements seeking to exceed our
services by using ISO 9001—paired with a strengths-
stakeholders’ expectations. We shall always keep the
based approach—to have the greatest impact for ben-
welfare of our patients in mind, striving to add life to
eficiaries. Although the project was already strong, ISO
their days and days to their life.
9001 brought the following advantages:
• The record control guidelines pushed the staff to
In particular, three themes played a key role in the imple-
reach the next level to institute records naming con-
mentation process, making the project’s ISO 9001-certified
ventions and centrally store its records. This saved
QMS a true operational foundation for the supply chain.
staff time in the long run by making these documents
1. Play to your strengths. The Kenya Pharma project was operating with zero stock-outs—a rare feat in
easier to find and making the staff’s internal operations more efficient.
the developing world for a pharmaceutical supply chain.
• It brought a level of formality to process management
The project sought to take that quality and reliability of
and improvement with a set vocabulary and rubric to
delivery, accuracy and cost-effectiveness to the next lev-
put structure around what was already working well.
el. With clearly documented practices that staff adhered
• It allowed staff members working at different points in
to repeatedly and were held accountable for, the project
the supply chain to understand each other’s roles better.
was able to get more from its margins.
2. Make it collaborative. The process of document-
22 QP • www.qualityprogress.com
case study
ics, including our Washington, D.C.-based quality man-
Pharmaceutical shipment:
time
32%
to clear customs (in days) / figure 2
agement unit (QMU) and Kenya Pharma project manage-
25
ing supply chain practices was intensely collaborative. It
was a cohesive effort among multiple teams at Chemon-
ment unit (PMU), the Nairobi-based Kenya Pharma field
office staff and two QMS specialists from our Washing-
15
with project staff in Nairobi.
10
Pharma field office staff to lead the process, supported
by the QMU and QMS specialists with oversight and co-
21.8
20
ton, D.C., office, who spent months at a time working
A smaller team was formed from within the Kenya
47%
After
QMS
68%
Before QMS
5
5.7
After QMS
2.5
QMS
0 = quality management system
Sea shipments
ordination from the PMU. All worked together to develop the project’s quality policy, and supply chain process
Before QMS
53%
1.8
Air shipments
QMS = quality management system
leads were assigned from among the project staff to take
charge of designing their process documentation using
tools, templates and trackers adapted from Chemonics’
home office ISO 9001 implementation process.
Results of health facility ­supply
chain data quality ­audits / figure 3
Many interactive process mapping and process review sessions were held involving anyone who was part
of a particular process—no matter how small his or her
32%
47%
role might be. This provided some key benefits:
68%
53%
• Diverse perspectives were included, enhancing the
accuracy and utility of the final product.
• Players from different parts of the supply chain—from
Before QMS
quality assurance to quantification to procurement—
were able to understand parts of the supply chain
they had not necessarily been previously exposed to,
fostering a deeper appreciation for each other’s work
Pass
After QMS
Fail
QMS = quality management system
along with empathy for the types of issues co-workers
experienced.
collection, processing and reporting, ensuring consistent
• This collective learning opened the door for innova-
monitoring and evaluation over time, and also for facili-
tive suggestions for how to streamline supply chain
tating continual improvement of supply chain manage-
operations.
ment and performance. Indicator data include definitions,
Through this process, all were learning together. For
units of measure, disaggregation types, management util-
example, those who knew ISO 9001 well were learning
ity, data collection methods, data sources, cost to collect
supply chain operations and vice versa. Everybody had
data, data acquisition schedules, limitations and formats
a role to play.
for data presentation.
3. Results, results, results. As project staff docu-
The project also adheres to World Health Organiza-
mented processes, it was critical to keep the end in sight:
tion (WHO) treatment guidelines and a series of indus-
the client, USAID, and the project’s beneficiaries: the pa-
trywide technical standards in procurement, distribution
tients. The project’s performance management plan in-
and warehousing. These also were purposefully woven
cludes 43 detailed output and outcome indicators across
into the documented processes to ensure the supply
the supply chain, including customer satisfaction, qual-
chain and all of its industry and technical requirements
ity assurance and transportation. These were purposely
were captured and reinforced by the QMS.
woven into each process and documented at the appro-
Using ISO 9001 requirements as an operational founda-
priate steps so staff has results and targets in mind as it
tion for Kenya Pharma’s supply chain was a strategic invest-
executes processes.
ment to holistically capture all aspects of the supply chain
Each indicator includes detailed instructions for data
and serve as a playbook for staff and blueprint for success-
June 2013 • QP 23
How to use our QMS
/ figure 4
Four steps to success
ful supply chain operations in the developing world.
This method, in turn, can be duplicated worldwide and
potentially scaled up across diversified health commodities
and pharmaceuticals that address issues such as malaria, tuberculosis, reproductive health, family planning and emerg-
1
Follow processes
Make sure you are familiar
with our process maps so we’re all on the same page
and clear about roles and responsibilities. Process maps
embody best practices and proven methods for providing
maximum value to our clients: USAID, SDPs, and
ultimately, the Kenyan population touched by the Kenya
Pharma supply chain.
ing pandemic threats, as well as equipment and medical supplies supporting lab services.
Reaping the benefits
In July 2012, DNV Business Assurance conducted the Kenya
Pharma project certification audit, identifying no nonconformities. Richard Dreiman, Chemonics’ CEO at the time,
addressed staff, friends and partners at the certification celebration, emphasizing the real value of the process.
“The project was already operating with high standards
2
Keep records
Each process map describes what records
should be developed and kept. Records prove that our
quality processes have been followed and provide historical
documentation of our work on Kenya Pharma.
of quality management even before seeking certification ...
now we have an official, internationally recognized stamp of
approval,” Dreiman said.
He also noted the importance of Kenya Pharma as “one of
the first USAID projects to become ISO 9001:2008 certified.”
The Kenya Pharma ISO 9001-certified QMS has created a robust foundation for supply chain operations—a home for the
3
Participate in audits
There are two types of ISO 9001
audits: internal and external. Internal audits are
conducted by a trained group of Kenya Pharma staff and
are designed to identify process improvements and
discover areas where we might not be following our
processes or keeping records as our QMS specifies.
External audits are conducted by our registrar, DNV. Our
first audit to obtain our initial ISO 9001 certification will be
this summer. The project will have periodic audits in the
summer of 2013 and 2014. During both types of audits, you
may be asked about the work that you do and your role on
the project.
project’s top-notch supply chain process documentation—
which can be improved continually with the plan-do-checkact framework as part of the ISO 9001 approach.
The focus of ISO 9001 is on the customer—reinforcing
and systematizing the Kenya Pharma quality policy—“…adding life to their [patients’] days and days to their life.” On
a daily basis, ISO 9001 helps ensure problems that do arise
in the supply chain are systematically documented and addressed not only to correct an immediate issue, but also to
gather data on larger trends impacting the project’s ability
to serve its customers through the corrective and preventive
action process.
4
Suggest
improvements
With our QMS, we now have a built-in mechanism to
capture, assess and implement suggestions.
Corrective actions are submitted when you identify a
problem with a business process or when you discover a
trend that could be tied to one or more business processes.
Preventive actions are submitted when a business process
is already functioning well, but you identify ways that Kenya
Pharma can improve it or prevent potential problems.
More specifically, integrating an ISO 9001 approach has
delivered several key benefits for Kenya Pharma that will
help lead to long-term successes:
Flexibility. Having used ISO 9001, it is possible to change
supply chain operations more smoothly and quickly while
maintaining consistency across the board. With ISO 9001
document control, and employee awareness and training requirements, the Kenya Pharma QMS provides a central system
in which all work processes and change notifications are effectively captured. Process improvement becomes seamless,
flowing through all aspects of the supply chain without the
QMS = quality management system
SDP = service delivery point
USAID = U.S. Agency for International Development
risk of being siloed.
This has been especially significant to Kenya Pharma because the project must be sensitive to policy shifts and regula-
24 QP • www.qualityprogress.com
case study
tory requirements from external sources: WHO, USAID,
handout used to educate team members about the QMS.
the U.S. government and the Kenyan government. It can
This effective teamwork could be seen from the begin-
now push out information and updates faster to remote
ning and in the launch week for the QMS. Launch week
FSRs who work around the country and, in some cases,
was constructed with each day having a theme—docu-
in very remote locations. Additionally, the Kenya Pharma
ment control, record control, internal and certification au-
supply chain has improved measurably in a number of oth-
dits and continual improvement. Every session was taught
er areas since the QMS implementation: The average time
by a team of two people—one from our Washington, D.C.
for sea and air shipments to clear customs decreased from
office and one from our Nairobi-based operations.
21.8 days to 5.7 days, and 2.5 days to 1.8 days respectively
By the end of the week, it was important that the in-
(see Figure 2, p. 23). The percentage of health facilities
country staff members were the go-to people and viewed
passing supply chain data quality audits increased from 53
that way by their counterparts. Every session opened
to 68% (see Figure 3, p. 23), and significant improvement
and closed with Q&A contest on material previously cov-
was seen in the project’s performance in forecasting fu-
ered, with prizes for the winners.
ture costs to manage and operate the supply chain.
And—most importantly—everyone from the recep-
Sustainability. “We are focusing on ensuring that
tionist to the project drivers to the project director
this operation is sustainable,” explained Kenya Pharma
participated. This strengthened the project’s culture of
Chief of Party Steve Hawkins. “Chemonics’ model is
inclusiveness—the softer side of business operations,
‘build, operate and transfer.’ ISO certification helps us
which goes a long way in the end to achieving results.
achieve that model.”
Kenya Pharma’s management representative, Jackson
The resulting benefits from this process were not only
Kariithi, said, “The process of rolling out and putting the
to strengthen the supply chain against staff turnover and
QMS in place has created significant cohesion within the
be malleable in the face of client shifts or changes at the
entire team. We now put quality at the forefront of our
global health policy level, but also to transfer supply
every activity.”
chain operations to local Kenyan counterparts at project
For supply chains around the world, there’s no ques-
end in 2014. In effect, Chemonics was hired to work itself
tion ISO 9001 will provide a solid backbone for capturing
out of a job—a different context from what most busi-
operational nuances. Operational efficiency is a chal-
nesses face, but one that we, as an international develop-
lenge for any supply chain to effectively serve its custom-
ment company, encounter on every project.
ers and meet financial expectations. For Kenya Pharma,
This challenge has valuable lessons for any context.
its quality anthem developed by project staff provides a
Design your system with these questions in mind: “Could
testament to how interlinked quality is with the project’s
I turn our supply chain over to someone else to run? Can
mission of delivering HIV/AIDS commodities to Kenyans:
I teach them how to do what I do?”
If the answers are yes, you can be confident in the
Well, well, well, we’re Kenya Pharma
sophistication of your QMS and knowledge that you have
Well, well, well, we’re here to serve
reaped the benefits of an ISO 9001 approach. Asking
Well, well, well, we’re Kenya Pharma
these questions and examining supply chain operations
Quality is our job. QP
from this angle puts a fresh perspective on your business
operations and ensures you develop a robust system that
is attuned to the micro and macro features of your supply chain upstream and downstream.
REFERENCE AND NOTE
1.Tiffany Darabi, “Getting a Boost From Quality Tools,” case study, ASQ, January
2012, http://rube.asq.org/2012/01/social-responsibility/quality-tools.pdf.
2.For a step-by-step guide to implementing ISO 9001, see John Orthaber’s “Get
Your Ducks in a Row,” Quality Progress, October 2010, pp. 40-46.
Project culture. An anecdote shared by project staff
in Nairobi—a team of about 40 people, all but two of
whom are Kenyans—is that this process brought staff
members together as a team and made them more invested in their work on Kenya Pharma. The continual improvement process created a culture in which everyone
had a voice, was learning and had a role in innovating
and improving. See Figure 4 for a condensed version of a
TIFFANY DARABI is the director of the quality management unit at Chemonics International Inc. She has
worked for Chemonics since the fall of 2003, spearheaded the development of Chemonics’ ISO 9001-certified quality management system, and oversaw the Kenya
Pharma ISO 9001 certification process. An ASQ member,
Darabi holds a bachelor’s degree in international relations from John Hopkins University in Baltimore.
June 2013 • QP 25
The Power of
Prediction
by Gregory A. Kruger
In 50 Words
Or Less
• Inconsistent supplier delivery further complicates
already difficult-to-predict
service parts supply needs
and can negatively impact
an organization’s ability to
serve its customers.
• Organizations can use
quality and statistical
methods—each with
benefits and drawbacks—
to predict service part
demand and minimize the
impact of supplier delivery
inconsistency.
SUPPLY CHAIN
Minimize the impact of
inconsistent supplier delivery
by using statistical
quality models
service parts inventory
management can be daunting. You can all relate to needing your car repaired. Say you need
a new water pump. You really don’t care that
demand for your particular model of water
pump is low volume, intermittent and difficult
to forecast. You also don’t care that the supplier of this water pump does not necessarily deliver on time to the regional service parts warehouse. You just want the car fixed—and fast.
Quality in service parts management means
availability without excess inventory. In the
service parts business, low-volume demand
can dry up, leaving you holding the bag with excess and obsolete inventory write-offs. While
my service parts inventory management experience is in the electronic test business, this
situation is directly analogous to the all-too-familiar need for a new water pump in a car.
June 2013 • QP 27
Applying statistical models
can derive a statistical model to determine safety stock
Considerable work has been done in applying statistical
given both demand and supply uncertainty.
inventory stocking models to the service parts situation.1
While the original safety stock model that looked only
For example, the Poisson probability model frequently
at demand uncertainty may have recommended a safety
works well in modeling the variation seen in low-demand
stock of X for a given supply lead time and demand situa-
service parts. An alternative to the Poisson is a hybrid
tion, the new model will recommend a safety stock of X +
model that handles the more intermittent demand situa-
Y where the incremental quantity Y covers the uncertainty
tion by separating the probability of no demand and the
of when any given supply order will actually arrive.
distribution when there is demand.
On the surface, it would appear the problem is
Such statistical models allow for the determination of
solved—but not for the first time—because there are
safety stock to load into the material requirements plan-
also approaches using normal distribution theory.2 Then
ning (MRP) system to achieve a targeted service level.
again, perhaps we have a technically elegant solution no
Experience has shown, however, that the actual service
one wants.
level achieved consistently runs a few percentage points
lower than that advertised by statistical theory.
Transient supplier delivery issues
Digging into that situation, the process improvement
It is frequently the case that supplier delivery problems
team at my organization quickly identified the top factor
come and go due not only to issues unique to the sup-
behind actual parts availability consistently falling below
plier, but also issues across the industry. For example,
projections—imperfect supplier delivery performance.
an industrywide slowdown can prompt suppliers to trim
The statistical models presumed a supply order placed at
capacity as a means of weathering the downturn. When
the suppler lead time would always arrive on time. This
the market returns, there is the problem of ramping back
is simply not reality.
up. During that period, suppliers across the industry are
Perhaps particularly true in the service parts business,
likely to be constrained for a period of time.
with its low volume and intermittent demand, suppliers
Suppose a statistical model incorporating past supplier
do not always deliver needed supply orders precisely at
delivery performance into the safety stock recommenda-
their stated lead times. For example, a little data reveals
tion is implemented. Assume the implementation is look-
supplier delivery on a service part with a stated lead time
ing back over a rolling period of several months of past
of 10 weeks may look something like Figure 1.
supply deliveries to draw its conclusions about what can
This may seem outrageous in a supply chain in which
be expected with future supply orders (see Figure 2).
the purchaser commands considerable power, but it can
Thinking this through, we see the problem. The pe-
be common when the purchasing company does not
riod of supply issues begins, but it takes some time be-
have the volume necessary to exert much influence on
fore enough delivery history is collected to trigger the
the supplier. Remember: These are supply orders for
statistical safety stock model’s recommendation to cover
service parts having intermittent, low-volume demand,
the deteriorated supply delivery performance. After the
so the supply orders themselves are of very low volume.
new, larger safety stocks are loaded into the MRP sys-
Furthermore, if you are in the business of supporting
tem, the new supply orders are now larger, but we are
an installed base of aging technology, the industry has
already well into the period of supply problems—mean-
largely moved on so it is difficult to garner a great deal of
ing it’s too late.
attention from your supply base.
When the supply issues improve, it would once again
take time for the system to purge the period of poor de-
What should you do?
livery performance from history and reduce safety stock
As it turns out, the statistical models for the determination
recommendations back to values appropriate for the
of safety stock can be expanded to incorporate supplier
new delivery reality. Finally, and worst of all, the period
delivery distributions, such as the one depicted in Figure
in which actual inventory on hand reflects the additional
1. By interpreting the chart to say that with the placement
safety stock target values likely begins and ends far too
of the next supply order, there is a 75% chance the order
late. In fact, it is even possible the period of holding the
will arrive at lead time, a 15% chance it will arrive one
incremental safety stock misses the duration of delivery
week late and a 6% chance it will arrive two weeks late, we
problems entirely.
28 QP • www.qualityprogress.com
SUPPLY CHAIN
So, we would have to anticipate the period of supplier delivery problems as well
as the shape of the new delivery perfor-
Supplier delivery performance given
10-week stated lead time / Figure 1
to load the higher safety stock targets into
the MRP system in time to receive supply
timed with the period of delivery problems. All of this looks highly impractical.
Philosophical objections
Suppose we limit the use of a statistical
safety stock model incorporating supplier
delivery performance to only situations in
Percentage of deliveries
mance histogram (as depicted in Figure 1)
100%
80%
60%
40%
20%
0%
10
which there is sustained expectation of
ongoing supply lead time inconsistency.
As it turns out, this can elicit an objection
based on not wanting to reward a supplier
for bad delivery performance.
The thinking goes as follows: Poor
supply lead time consistency leads to
increased safety stock targets, which
11
12
13
Delivery performance in weekly increments
14
Incorporating past supplier
delivery performance / Figure 2
Period of delivery
issues
means incrementally larger orders to the
Period delivery issues
impact SS calculation
supplier, which means more business for
the supplier and, therefore, a reward for
poor delivery. The counterargument is
Period actual SS
on hand is impacted
that it is the company’s job to protect the
customer from the reality of underlying
issues with supply.
This second line of thinking is similar to
Time
SS = safety stock
the well-understood practice of mechanical tolerance stackups. In mechanical tolerance analysis, the engineer accounts for the variation in
buyer may place the order seven or eight weeks in ad-
the manufacturing processes for each of the components
vance of the need date. While understandable, this prac-
going into the assembly. Because component manufactur-
tice raises issues around manual intervention by the buy-
ing processes are not perfect, the variation in output is
er over MRP system ordering recommendations unless
mathematically combined to create the expected varia-
the MRP system itself allows the buyer to enter an early
tion in the final assembly. Similarly in inventory manage-
order time buffer.
ment, we have a tolerance on expected demand and a tolerance on exactly when we will get supply.
Genichi Taguchi raised a similar issue in the parameter design phase of new product development, arguing
These differing perspectives—do not hold incremental
that parameters should be selected to account for ex-
safety stock to buffer against supplier delivery inconsis-
pected variability.3 In this case, our parameter is the lead
tency versus, yes, do so to protect the customer—create
time at which supply orders are placed, and we are se-
tension within the supply chain organization.
lecting a nominal value that is robust enough for delivery
performance variation.
Practical reality
The interesting thing is that such early order practices
In practice, it is common for buyers who are aware of
mean essentially holding safety stock to cover supplier
past lead time inconsistencies to place the supply order
delivery inconsistency while never calling it that. To be
early. If the supplier’s stated lead time is six weeks, a
sure there is no visible increase in the official safety
June 2013 • QP 29
stock targets, but equally as certain, there is an increase
In the real world, supplier delivery is likely to ebb
in average inventory held on hand. Also, the practice
and flow due to dynamics in the industry. The organiza-
suffers from similar problems the safety stock model
tion is likely to push back at the idea of visibly hold-
had with transient supply issues, such as the timing of
ing incremental safety stock inventory to buffer against
when to add such an early order buffer and when to
supply uncertainty.
Lean principles suggest to resolve the delivery is-
take it off.
If the organization is not using a formal statistical
sues. Perhaps a financial analysis would enable a cre-
model, another option is for buyers to rely solely upon
ative supply contract containing incentives for on-time
their judgment in factoring supply and demand varia-
delivery even during periods of industrywide supply
tion into the setting of safety stock targets.
constraints. This approach leads into the topic of struc-
This makes it less visible that supplier delivery per-
tured contracts.4
formance played any role in sizing the safety stock buf-
Certainly, we want a win-win relationship with our
fer. So the practical reality is that the organization subtly
suppliers, and integral to that objective is a foundation
goes about buffering delivery problems with incremental
of social capital between customer and supplier in the
inventory. While bordering on heretical, is the subtle ap-
supply chain.5 It just may be that the supplier is already
proach more acceptable to the organization?
making a substantial commitment by providing the delivery performance depicted in Figure 1 (p. 29), consider-
An unwanted solution
ing the end game is servicing customers using ancient
What is the appropriate strategy for achieving assurance
technology.
of supply in the face of inconsistent supplier delivery
Left alone, the organization will do what it has
performance? A computer Monte Carlo simulation of
learned—ordering early or engaging in other practices
the MRP system demonstrates that our statistical safety
that handle the reality of imperfect delivery in less than
stock model—enhanced to cover supplier delivery varia-
a completely visible fashion. By visible, I mean delineat-
tion—performs as the theory advertises. Yet, there is lit-
ing up front the incremental inventory investment re-
tle motivation to implement it. Such a computer simula-
quired to handle imperfect supplier delivery.
tion presumes supplier delivery will follow a prescribed
It may sound absurd to you if your frame of reference
is a supply chain in which the purchasing company’s
probability distribution.
volumes provide clout, but I still vividly
Impact of increasing minimum
order quantity / Figure 3
35
that part of his job was to grovel at the
feet of the supplier, begging for parts. After working through the Six Sigma define,
measure, analyze, improve and control
process, is the solution to simply main-
30
Inventory on hand
recall a buyer telling me many years ago
tain those excellent groveling skills?
25
In the face of lean
20
The process improvement team pulled
together and brainstormed the ques-
15
tion: How do you reduce the impact of
imperfect supplier delivery? Answer:
10
Reduce the frequency at which you need
5
0
a delivery by increasing the order quantity. Great, but this comes at a cost—in-
0
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
Time period
MOQ = minimum order quantity
30 QP • www.qualityprogress.com
MOQ = 10
MOQ = 30
creasing the average inventory held and
the risk of eventual excess inventory
write-off. A balance must be struck, raising minimum order quantity (MOQ) but
SUPPLY CHAIN
doing so only to a level supported by demand forecasts
the supplier of the need for a last-time buy. As the indus-
while confident of eventually consuming the purchase
try moves on to new technology, suppliers are frequently
quantity.
unwilling to maintain production capability for the ag-
This simple concept is depicted in Figure 3. Note that
ing segments of their portfolios. As a result, a supplier
given expected demand of one per period when ordering
will offer one final build. Now we must determine how
in quantities of 10, we are subject to the supplier’s de-
many parts to buy to balance the following two compet-
livery performance every 10 periods. By increasing our
ing business objectives:6
order quantity to 30, we are now subject to the supplier’s
1. High probability of not stocking out before the end
delivery performance only every 30 periods. The net re-
of the advertised service repair life of the product.
sult will be improved on-time service parts delivery to
2. Low risk of being left with excess and obsolete
the end customer.
inventory write-off at the end of service life.
So, we replaced a potentially complex solution in the
Label the number of parts required to meet customer
form of a statistical safety stock model
with a simple solution. To be fair, however, we would need to compare the
average on-hand inventory expected be-
Three-year demand forecast
/ Figure 4
4
tween the statistical safety stock methapproach raised our average on-hand
inventory substantially higher than the
statistical alternative, while elegant in its
simplicity, the MOQ solution has a clear
drawback.
Speaking of drawbacks, have we for-
Forecast demand
od and the MOQ solution. If the MOQ
3
2
1
gotten the seven forms of waste from
0
lean training?
1.Transportation.
1
3
5
7
9
2. Inventory.
11 13 15 17 19 21 23 25 27 29 31 33 35
Month
3.Motion.
4.Waiting.
5.Overproduction.
6.Overprocessing.
7.Defects.
Here, we are consciously increas-
Poisson distribution for ultimate
usage during 36 months to end of
support life / Figure 5
ing inventory and seemingly ignoring
One of the realities of service parts management is the dreaded notification from
130
126
122
118
114
110
106
102
98
94
90
86
82
The last-time buy
78
make other decisions.
74
part has become more tenuous, we
70
when the simple act of purchasing the
66
cess vision. At the end of the life cycle,
UU quantity at
95% assurance
of supply = 105
62
erate more true to the classic lean pro-
Most likely UU quantity = 89
58
when volumes were high, we could op-
0.045
0.04
0.035
0.03
0.025
0.02
0.015
0.01
0.005
0
50
trade-offs. Early in the part’s life cycle,
Probability density
management. Those are the real-life
54
the principles of just-in-time inventory
Quantity
UU = ultimate usage
June 2013 • QP 31
SUPPLY CHAIN
As the industry moves on to new technology,
suppliers are frequently unwilling to maintain
production capability for the aging
segments of their portfolios.
service repair demand until the end of service life
In the scenario that service repair demand consumes
the ultimate usage (UU) quantity. Suppose the part
all of the last-time buy purchase, we could cannibalize
for which we must make a last-time buy is currently
those instruments for the service parts, getting our cus-
running an average demand of three per month, and
tomers back up and running despite it being years since
we see from history that the Poisson distribution does
the product was in production.
a reasonable job of modeling the variation in actual
monthly demand.
By considering the expected distribution of ultimate
use along with the potential for obtaining supply via
Suppose we expect a slow decline in the demand
unconventional means, such as cannibalization, we can
for this part as our installed base shrinks due to cus-
make a decision balancing the goals of availability and
tomers moving to our newer product generations. As-
write-off risk.
suming we are three years away from the eventual end
of support life, the forecast would look something like
Lesson learned
Figure 4 (p. 31).
Like most of us, I remember humorous expressions
Taking advantage of the knowledge that the sum of
my parents used. I recall my dad saying something was
Poisson distributions is itself Poisson, we can model
“easy as falling off a log.” As a Black Belt, I periodically
the uncertainty in the ultimate use of this part over the
teach lean Six Sigma Green Belt classes. I now make
three years to end of support life with the distribution
sure to point out to my students that just because the
depicted in Figure 5 (p. 31). Note that as the average of
root cause has been identified, arriving at the solution
a Poisson distribution gets large, the distribution be-
is not necessarily as easy as falling off a log. QP
comes more bell-shaped (normally distributed). In this
example, the mean or expected value of the distribution is 89, which is the single best forecast for the UU
quantity during the next three years.
If we would like some assurance that our last-time
buy will cover all demand, we might decide to purchase
at the 95th percentile, leaving a 5% chance of stocking
out and disappointing a future service repair customer.
Unfortunately, that would increase our risk of ending
up with excess and obsolete inventory. Placing a lasttime buy now for a quantity of 105 would leave us with
References
1.Robert Goodall Brown, Advanced Service Parts Inventory Control, Materials
Management Systems Inc., 1982.
2.Donald J. Bowersox, David J. Closs and Omar K. Helferich, Logistical
Management—A Systems Integration of Physical Distribution, Manufacturing Support and Material Procurement, third edition, Macmillan Publishing
Company Co., 1986.
3.Raghu N. Kackar, “Off-Line Quality Control, Parameter Design and the
Taguchi Method,” Journal of Quality Technology, October 1985, pp. 176-188.
4.Bill McBeath, “2012—the Year of Uncertainty: Part Two,” ChainLink Research, January 2012.
5.Roger McGrath Jr. and William L. Sparks, “The Importance of Building Social
Capital,” Quality Progress, February 2005, pp. 45-49.
6.Gregory A. Kruger, “Using Six Sigma to Reduce Excess Service Parts Inventory While Maintaining Service Levels,” presentation at the ASQ Lean Six
Sigma Conference, 2010.
an expected future write-off of 105 − 89 = 16 parts. Are
there other alternatives?
Finding balance
Once again, our process improvement team came
through with an answer. The company owns complete
products that may have been part of the sales demo
fleet or used by other divisions of the corporation.
32 QP • www.qualityprogress.com
Gregory A. Kruger is a statistician and supply
chain inventory analyst for Agilent Technologies in
Colorado Springs, CO. He has a master’s degree in
statistics from Iowa State University in Ames. Kruger
is an ASQ member.
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Parts of the
Process
Evaluating the impact
of the number of parts on
a measurement process
In 50 Words
Or Less
• Repeatability and
reproducibility (R&R)
studies can be used
to pinpoint the parts
of a measurement
system that might
need improvement.
• By using simulation,
there is practically no
difference in using
five or 10 parts in
many R&R studies.
REPEATABILITY AND REPRODUCIBILITY (R&R) studies are based
on the concept of variance components estimation. This is a remarkable achievement of statistical science because people usually think in
terms of means and trends, not variation around
a mean.
These types of studies provide useful information about which human or gage component
of the measurement process should be improved. These studies are a crucial step before
starting a statistical process control procedure.
They are conducted so observations being charted will provide meaningful information and not
just measurement error.
statistics
by Víctor M. Aguirre-Torres and
Maria Teresa López-Alvarez
R&R studies require assembling a protocol
that includes performing blind measurements
on N parts by M operators and repeating the
whole setup n times. If all the operators measure the same set of parts, the study is said to
be crossed. Otherwise, it is nested. This article
addresses crossed studies, but the methods
described can be easily extended to nested
studies.
Usually, the recommendation for R&R studies is to have 10 parts, two or three operators,
and two or three replicates.1-3 This recommendation comes from the automotive industry, a
sector in which most measurements are relatively inexpensive and easy to gather.
June 2013 • QP 35
An in-depth study by Minitab4 shows simulationbased results that relate the number of parts with the
10 samples are used, this means two full working days
for three people.
relative error in the estimation of the part-to-part varia-
2. Cost. Most chemical determinations require one
tion. For 10 parts, the study mentions that the 90% con-
or more reactants, which are expensive because they
fidence interval has a relative error of 35 to 40% and
should be of high quality. Also, most analytical tests
that you would need to use 135 parts to get a relative
are destructive and the testing material can also be
error of about 10%.
expensive.
The focus of this article is not oriented toward vari-
3. Delicateness of samples. In analytical mea-
ance component estimation. Although R&R studies
surement processes, testing is often destructive, and
make use of variance components, the end result is
samples suffer deterioration over time. Consider
not the separate estimation of the components but an
measuring humidity. If the process has 10 operators
estimation of a function of them.
in the three shifts, and 10 parts are repeatedly used,
Variance component estimation is an extensively
this implies 200 samples. Even if the evaluation of
developed science in and of itself. The estimation of
humidity doesn’t take very long, you may not obtain
variance components is important in animal breeding
200 determinations quickly enough to guarantee all
or sampling from finite populations with sample sizes
the samples of the characteristics will be preserved
of hundreds or thousands. For R&R studies, however,
during the entire measurement process. If testing
we look for evidence that the relative sizes of variance
time is too long, the samples can be expected to
components are acceptable.
change, and this adversely affects the results of the
Usually, the end result of an R&R study is the percent
R&R study.
R&R (%R&R), which could be the ratio of the standard
4. Certification process. When certifying a mea-
deviation of the measurement error relative to the total
surement process during a lean Sigma or Six Sigma
standard deviation, which is called %R&R1, or the ratio
project, the number of R&R studies that must be per-
of the 99% interval due to measurement error divided by
formed could be very large. In practice, we have found
the span of the tolerance, which is called %R&R2.
a production line requires a minimum of 10 to 15 gage
There are guidelines to evaluate the measurement
R&R studies. If this is multiplied by the total number
system based on the %R&R. In the automotive indus-
of lines and processes in a plant, this could result in an
try, a measurement system with the %R&R less than
enormous amount of work devoted just to certify the
10% is usually considered acceptable.5 For example,
measurement systems.
this would be restrictive in the food industry. In our
This article intends to provide evidence that the end
experience, the 30% limit is taken as a minimum re-
result of an R&R study is basically the same, whether
quirement at Kraft Foods. Here, let’s consider that if
it’s for five or 10 parts. To do this, we focus on the prob-
this percentage is less than 30%, the measurement
ability of acceptance of the measurement system—
system is said to be acceptable. Otherwise it is con-
that is, the probability that the %R&R is less than 30%.
sidered marginal or unacceptable—depending on
how far it is from 30%.
We refer to the probability of acceptance because
when we run an R&R study, we observe only a sam-
If we focus on another industry besides automo-
ple from the process and, hence, we do not observe
tive, such as the food industry, it is important to define
the real %R&R. In fact, the estimate of %R&R is a
an adequate size for the R&R study that considers the
random quantity that is subject to random variation,
following crucial aspects:
which is characterized by means of a frequency dis-
1. Time required to complete the R&R study.
tribution.
When the measurement requires analytical determi-
We will show that not only the probability of ac-
nations, the time required to make the measurement
ceptance is close for the two numbers of parts, but
is usually long because it involves several steps. Con-
also that the profiles of the frequency distributions are
sider the determination of protein. It is first a diges-
similar. To do so, we then describe the model and the
tion, then a titration and finally a distillation. Using five
estimation procedure to be considered. Later, we will
samples (parts), three operators and one replication
show the simulation results of %R&R for different sce-
require a minimum of eight hours for three people. If
narios and the two numbers of parts.
36 QP • www.qualityprogress.com
statistics
The model
The model that we consider for the measurements is a
random effects model without interaction given in equa-
Frequency distribution of % R̂&R1
for system one / Figure 1
tion one:
yijk = µ + τi + βj + εijk
Equation 1
i = 1,…, N; j = 1,…, M; k = 1,…, n.
10
els the part-to-part variation, βi represents the operator
σ2β +and
σ2ε ε models the variation
variation or reproducibility,
ijk 100%.
%R&R1 =
2
due to the gage or repeatability.
there is no inσ2τ + σ2β + σAssume
ε
Density
The parameter µ represents the overall mean, τi mod-
teraction between the operator and parts, which will be
yijk = µ + τi2+ βj + εijk
Equation
Equation 1
Equation 1
yijkN;= jµ=+1,…,
τi + β
+ εijk 1,…, n.
i = 1,…,
M;
j k =
i = 1,…, N; j = 1,…, M; k = 1,…, n.
5
explained later.6
i = 1,…, yN; j==µ 1,…,
1,…, n.
σβ2εjk+=εijk
+_σ2τβ i++M;
Nijk _
22
2
%R&R
=
100%.
σ
+
σ
SS
=
–
y
,
y
(
)
1
β
ε
P
i.. =2 1,…,
i%R&R
= 1,…,i=1
k2 β
= 1,…,
= µ 2+M;
τ +
+ εijk n.
=N; jyσ
ijkτ + σ β + iσ ε 100%.
j
1
2
2
2
σ
+
σ
+
σ
N
–
1
.
MSP =i SS
/(
)
τ =jµ=β
= 1,…,
yijkN;
+1,…,
τi +ε M;
βj +k ε=ijk1,…, n.
P
When a tolerance (TOL)
the correspond2 is available,
2
σ
+
σ
β
ε
i = 1,…, N; j = 1,…, M; k = 1,…, n.
ing %R&R%R&R
is defined
as
equation
three:
=
100%.
1
2 2
2 2
++σσ
σ2τ +σσ
βσ
β2 + ε σ
ε2
ε 100%.
%R&R1 = _5.15_ 2β
2
%R&R2 M= 5.152 2σ β2 σ+2 σ+2ε2 σ100%
σ
SSO =
, β +β σ ε ε
y.j.σ– τy+
(
)
TOL
j=1
%R&R
=
100% 100%.
%R&R
=
2
2
2
1
TOL
2 σ +2 σ
2
SSO /(M=– 1).σ τ +β σ β +ε σ ε 100%.
MSO =%R&R
1
2 2
2 2
Notice the constant
5.15
corresponds
to the span of a
2
σ
+
σ
5.15
βσ τ + εσ β + σ ε
100%normal distribu%R&R
= Nzero
_ a22 standard
_ for
99% interval
around
2
SSP =
– yσ) β, + σ2ε
y TOL
(5.15
i=1 _ i.. _ data
N
2
tion. After %R&R
the experimental
available, the analSS
=
–
y) , are100%
y
=
(
P
i..
2 i=1
2
2
TOL
σ
+
σ
=
SS
N
–
1
.
5.15
/(
)
_
_
β
ysis begins MS
with
the
computation
of
the
P
N P M
n
2 εsums of squares
100%
%R&R
=
SSMS
=
–
y
.
y
(
)
=
SS
N
–
1
.
) notation
2
2 j=1
T
i.. 2
P /(
k=1
σ β + σfor
TOL
5.15
(SS). ConsiderP thei=1
usual
average over
ε
_dot
N _
2
100%
%R&R
=
SS =
(−y2i..– ythe
) , overall
a subindex, Pand let
TOL mean. The sum of
i=1 y be
_ 2
N _
SSmean
y
(y_i..––1(MS)
squares and
= SSPsquare
MS
_).) 2, due to part variation is
M/( N
P
SSO = i=1 (_y.j.N– _y_) , _ 2
j=1
M
represented
by:
= (yN – (y1y)i..2. ,– y) ,
SS
=SS
= SS
MS
P P /(
OP
.j.
i=1
_1 . –_SS
SSE
=
SSMN–– SS
2 ,
= SS=j=1
MSO SS
O /( T ( y ) P– y ) , O
P
=/(SS
N)i... – 1).
MS
/(
i=1
=
SS
M
–
1
MS
P
P
MSEO= SSEO_/(NMn
_ 2 – N – M + 1) .
M
SSO = MSP (=y.j.SS
– Py/() N, – 1).
j=1
_ 2
M _
The SS MS
and
MS
SSOO =
(yto.j.––operators
SSdue
1y).) , _ is _represented as:
/(M
ON
j=1
M
n
_(y2i..– y)2.
SST =
M _
i=1
j=1
k=1
SS
=
y
–
y_) , _ 2
N
M
n
(
=
SS
M
–
1
.
MS
/(
)
O
.j.
2
= {0,O MSj=1
– y) .
σ̂ SS
= Omax
– MSE(y}/Mn.
P _ k=1 _ 2i..
τ T
M
i=1
j=1
SS
=
yM.j. –– y1)).,
(
O = SS
MS
/(
j=1
O
O
N = SS
M /( M
–_1). _ 2 as:
MS
O
O
The total
SS,
of
course,
isnrepresented
SST =
(yi..– y) .
i=1
j=1
k=1
_ _ 2
N
M
n
SS =SSE = SST – SSP (–yi..SS
– Oy, ) .
i=1
j=1– MSE
k=1 }/ Nn.
σ̂ 2β =T max
{
MS
0,
O
SSE
=
SS
,
_ 2
NT – SS
M P – SS
n O_
MSESS
= SSE
= /(NMn – N – M(y+i..–1)y. ) .
T
Finally, the
SS=and
attributable
i=1
j=1
k=1 to gage variation is:
MSE
SSEMS
–
N
–
M
+
1
. 2
/(NMn
)
_
_
N
M
n
SST =
(yi..– y) .
i=1
j=1
k=1
SSE = SST – SSP – SSO,
Σ
Σ
Σ
Σ
Σ Σ Σ
Σ
Σ
Σ
Σ Σ
Σ
Σ
Σ
Σ Σ
Σ Σ
Σ Σ Σ
Σ
Σ Σ Σ
Σ Σ Σ
Σ Σ Σ
Σ Σ Σ
MSE =SSE
SSE=/(SS
NMn
– N –– SS
M +, 1).
– SS
T – MSE
P
O
2 2 = max { 0, MS
}/Mn.
σ̂σ̂
= MSE.
P
ε τ
2
MSE
=
SSE
NMn
–
N
–
M
From the
formulas
for
expected
σ̂
=
max
{
0,
MS
–
MSE
}/
Mn.
/(
),. practice the
SSE =P SST – SSP MS,
– +SS1in
τ
O
MSE SSE
= SSE
= SS
– SS–PN– –SSM
, + 1) .
/(NMn
T
O
MSE
SSE–/(MSE
NMn}/–Mn.
N – M + 1) .
σ̂ 2τ = max
{0,=MS
P
PAi 2= P (% R̂&R1 ≤ 30%).
σ̂2β = max {0,MSO – MSE }/Nn.
σ̂ 2τ = max {0, MSP – MSE }/Mn.
σ̂ β = max {0,MSO – MSE }/Nn.
σ̂ 2τ = max {0, MSP – MSE }/Mn.
Equation 1
σ2β + σ2ε
Equation
Equation
31
0
%R&R
=
1
σ2 +2σ2ε 2 100%.
2 β
σ
+
σ
+ σ ε 100%.
τ
β
%R&R1 = 0
0.2
σ2τ + σ2β + σ2ε
Values
0.4
0.6
Equation 2
Equation 2
Equation 1
MC1_10
MC1_5
2
Equation
1
Five
parts
(MC1_5)
and
10
parts
(MC1_10).
%R&R = 7.3%
Equation 3.1
σ2β2+ σ2ε and reproducibility
5.15 repeatability
%R&R =Equation
percent
1
Equation 3
%R&R2 = Equation
σ2β + σ2ε 100%
5.15 TOL
Equation
3
%R&R2 = Equation 1100%
TOL
Equation
2
Frequency distribution of %R̂&R
1
for system
Equation
_ _ 2
Equation
3two
Σ
Σ
SSP = Equation
,
(yi..– y)3.2
i=1 _Equation
Equation
_ 23
N
SS
=
–
y
,
y
(
)
P
i..
2.5MS
i=1 /( N
= SS
– 1) .
P
P Equation
MSP = SSP /(N – 1).
N
2
1
/ Figure 2
Equation 3.
Equation 3.
2
2
Equation 3
Equation 3.1
Equation 33.1
_ 2
M _
SS = Σ (yEquation
– y) ,
3
1.5 O Equation
j=1 _ .j. _ 23.3
M
SSO = Σ (y.j. – y) ,
3
SSj=1O /(Equation
M – 1)3.1
.
MSO =Equation
1MSO = SSO /( M – 1) .
Equation 3.1
Equation 3.2
Equation
Equation
3.2 3.1
0.5
Equation
3.4
_ _ 2
N
M
n
Equation
SST = Σ Σ
– y) .
(y 3.1
i=1
j=1Σnk=1 _ i.. _ 2
N
M
SST = Σ Σ Σ (yi..– y) .
i=1
j=1
k=1
0
Equation
3.2
2
Density
= µ +2),τβi +~N(0,σ
βj + εijk2) and ε ~ N(0,σ 2)
ijk
Then, assume τiy~N(0,σ
ijk
ε
yijkN;
=jµ=τ+1,…,
βj2ε +k ε=βijk1,…, n.
στ2βi j+ M;
σ
5.15
i
=
1,…,
are independent.
These
are
the
variance
components
in100%
%R&R2 =
i = 1,…, N; j = 1,…, M; k = 1,…, n.
volved in the R&R study.TOL
The %R&R is represented as
equation two: yijk = µ + τi + βj + εijk
Equation 3.
Equation 3.
Equation 3.
Equation 3.
0
0.5
Equation
3.2
Values
Equation
3.3 3.2
Equation
MC2_10
MC2_5
Equation
3.3
Equation
3.5
SSE
= SST – SS
– SSO,
P
FiveEquation
parts (MC2_5)
and 10 parts (MC2_10). %R&R
3.2
SSE
= SS
– SS–P N
– SS
, + 1) .
MSE
= =SSE
–M
/(NMn
T repeatability
O and
%R&R
percent
reproducibility
MSE =Equation
SSE /(NMn 3.3
– N – M + 1) .
1
1
= 41%
Equation 3.
Equation 3.
variance components are estimated as:
3.4
Equation 3.3
• Part-to-partEquation
variation:
Equation3.6
3.4
σ̂ 2τ = max {0, Equation
MSP – MSE }/3.3
Mn.
}/
σ̂ 2τ = max {0, MS
–
MSE
Mn.
Equation
3.3
P
Equation 3.4
Equation 3.
Equation 3.
• Reproducibility or operator-related variation:
Equation
3.4
Equation3.7
3.5
Equation
σ̂ 2β = max
{0,Equation
MSO – MSE
Nn.
Equation
3.5 }/3.4
σ̂ 2β = max {0,MSO – MSE }/Nn.
Equation 3.4
Equation 3.5
Equation
Equation43.5
3.6
Equation
Equation 3.6
σ̂ 2ε = MSE.
σ̂ 2 = MSE. Equation 3.5
ε
Equation 3.
Equation 3.
June 2013 Equation
• QP 37
3.
Equation 3.
σ̂ 2β = max {0,MSO – MSE }/Nn.
Equation 3.4
Equation 3.6
SSE = SST – SSP – SSO,
σ̂ 2 = max {0,MS – MSE }/Nn.
MSE =β SSE /(NMn –O N – M + 1).
σ̂ 2ε = MSE.
The simulation
• Repeatability or gage-related variation:
Let MC be the number
of Monte
Equation
3.5 Carlo replications. The
σ̂ = max
{0, MS – MSE }/Mn.
σ̂ 2ε = MSE. P
2
τ
Equation 3.7
For the measurement process to be useful, the vari-
simulationP procedure
is straightforward:
Given σ2τ, σ2β,
= P (% R̂&R
≤ 30%).
Ai
1
and σ2ε, we generate MC sets of observations (see equa-
ance component due to part-to-part variation should
tion one) with τi ~N(0,σ2τ ) , βj~N(0,σ2β) and εijk~N(0,σ2ε),
be much larger
than
other
two).components. The
=P
%
R̂&R
≤ 30%
σ̂ 2β = Pmax
{0,(the
MS
– 1MSE
}/Nn.
Ai
O
%R&R is estimated by substituting the estimates of the
all independent, and Equation
then estimate
4 equation four with:
variance components in equations two or three, denotˆ
ˆ
ed by % R&R
and % R&R
.
1
2
Equation 3.6
P̂Ai = # (% R̂&R1 ≤ 30%)/ MC.
First, consider PA1. Table 1 shows the results for sev-
The exact distribution of these random variables is
= # (% R̂&R1 ≤ 30%)/ MC.
2
Ai particularly
= P̂MSE.
difficult toσ̂obtain,
because truncation is inε
eral scenarios that represent measurement processes
volved. Making the transformation nondifferentiable,
and different %R&R1. Figures 1 and 2 (p. 37) show a
we resort to simulation to compute:
smoothed version of the histograms of the %R&R1 for
PAi = P (% R̂&R1 ≤ 30%).
Equation 4
with different Equation
magnitudes 3.7
of variance components
^
(equation four)
systems one and two when the number of parts is either five or 10.
Equation 4
This is called the probability of acceptance of
The estimated probabilities of acceptance corre-
the measurement process. Other interests may
spond to the area to the left of 0.3. Similar results are
lead to consideration of other probabilities such
P̂Ai 1= ≤# (%
R̂&Ror
≤ P(%
30%)/R̂&R
MC.1 > 50%), which
as P(% R̂&R
10%)
1
obtained for systems three, four and five. For all cases,
could be handled similarly to that in equation four,
gram is obtained using the command “density plot” from
hence we focus on equation four in this article.
the R (2012) package.7 The area below any curve is one.
Equation
4
we used MC=10,000.
The smoothed
version of the histo-
Table 1 shows the probability of acceptance is practically the same for both numbers of parts. Figures 1
and 2 show the frequency distribution of the random
Estimated probabilities of
acceptance for different
scenarios, %R&R1 / Table 1
st
System
sβ
sε
%R&R1
variable is similar for cases in which the measurement
system is very good, such as system one, or poor, such
as system two. The figures also show the distribution
^
of %R&R1 is just a little narrower for 10 parts.
Parts = 5
Parts = 10
P̂A1
P̂A1
same variance components, but with two different tol-
Now consider PA2. Table 2 shows the results for the
1
0.44
0.012
0.03
7.3%
0.9964
0.9999
erances. Figures 3 and 4 show a smoothed version of
2
3
1
0.9
41%
0.3284
0.3224
the histograms of the %R&R2 .
3
3
1
2
60%
0.0584
0.0413
In these cases, the agreement between distributions
4
4
1
1
33%
0.4813
0.5124
is even closer and, hence, the probabilities of accep-
5
8
0.55
0.2
7.3%
0.9847
0.9977
%R&R = percent repeatability and reproducibility
st
sβ
sε
TOL
%R&R2
tance are also closer. Notice for system six and for
both numbers of parts, there are some experiments in
^
which the %R&R2 is greater than 100%.
If we include an interaction term, the results would
Estimated probabilities of
acceptance for different
scenarios, %R&R2 / Table 2
System
^
be the same. Therefore, we conclude that as far as
the probability of the outcome is concerned, it will
not change noticeably if we use five or 10 parts in the
study. The same approach could be used to evaluate
Parts = 5
Parts = 10
P̂A2
P̂A2
the impact of changing the number of operators or the
number of samples.
As a consequence, if we have a good measurement
6
4
0.55
0.2
10
30.14
0.4291
0.4278
system, the probability that we accept it is basically
7
8
0.55
0.2
20
15.07
0.8862
0.8837
one with five or 10 parts. If we have a lousy measure-
%R&R = percent repeatability and reproducibility
38 QP • www.qualityprogress.com
ment system, the probability that we reject it is near
statistics
one for both five and 10 parts. If the measurement process
is marginal (in the sense that the %R&Ri is a little above
30%), the probability of acceptance is near 50% for both
Frequency distribution of %R̂&R2
for system six / Figure 3
number of parts, and hence the outcome is like that of a
coin toss.
2
^
If we use as a guideline %R&Ri<10%, the results should
be similar because the frequency distributions are close.
8
Worth the effort?
By focusing on the probability of acceptance of a measurement process, changing from 10 to five parts does not
Density
1.5
1
modify this quantity substantially. Hence, this brings into
0.5
question the usefulness of doubling the experimental ef^
fort. The plots also show that the %R&Ri could have a large
variability that decreases very little when we increase the
0
number of parts from five to 10.
0
^
The distribution of values for the %R&Ri is similar and,
0.5
1.5
Values
MC6_10
MC6_5
in some cases, very similar for both five and 10 parts.
Five parts (MC6_5) and 10 parts (MC6_10). %R&R2 = 30.14%
%R&R = percent repeatability and reproducibility
Conclusions are similar if taken as a guideline to accept
^
a process if the %R&Ri<10%. All of these considerations
are particularly important in situations in which measurements require analytical processes. QP
ACKNOWLEDGEMENT
2
Frequency distribution of %R̂&R2
for system seven / Figure 4
Aguirre-Torres thanks Asociación Mexicana de la Cultura A.C. for its financial support in preparing this article.
4
REFERENCES AND NOTES
3
Density
1.Automotive Industry Action Group (AIAG), Measurement Systems Analysis (MSA)
Manual, third edition, Chrysler, Ford, General Motors Supplier Quality Requirements Task Force, 2003.
2.John Raffaldi and Steven Ramsier, “5 Ways to Verify Your Gauges,” Quality Magazine, Vol. 39, No. 3, 2000, pp. 38-42.
3.Pingfang Tsai, “Variable Gauge Repeatability and Reproducibility Study Using the
Analysis of Variance Method,” Quality Engineering, Vol. 1, No. 1, 1988, pp. 107115.
4.“Gauge R&R Study (Crossed),” white paper, Minitab 16 Statistical Software,
Minitab Inc., 2012.
5.Ibid. See p. 11 for an example.
6.Douglas C. Montgomery, Design and Analysis of Experiments, John Wiley and
Sons Inc., 2001. See chapter 12 for a more detailed discussion of the model that
contains the interaction.
7.“The R Project for Statistical Computing,” software environment, R version
2.14.1, 2012, www.r-project.org/index.html.
8.Ibid. The simulation is programmed as an R function and is available from the
authors. Email medmund@asq.org to request the additional information.
2
1
0
0
0.2
0.4
0.6
Values
MC7_10
MC7_5
0.8
Five parts (MC7_5) and 10 parts (MC7_10). %R&R2 = 15.07%
%R&R = percent repeatability and reproducibility
VÍCTOR M. AGUIRRE-TORRES is a professor
at the Instituto Tecnológico Autónomo de
México. He holds a doctorate in statistics
from North Carolina State University in
Raleigh.
MARIA TERESA LÓPEZ-ALVAREZ is
an associate principal scientist at
Kraft Foods in Mexico City. She holds
a doctorate in statistics from North
Carolina State University in Raleigh.
López-Alvarez is a senior ASQ member
and a Six Sigma Master Black Belt.
June 2013 • QP 39
Getting a
Good Read
In 50 Words
Or Less
• The internet has forced
libraries to focus on
enhancing customer
service through quality
management.
• LibQUAL+ is a tool to
evaluate library customer service and engage
patrons as partners to
close the gap between
experienced and expected service.
• Examples of university
libraries using LibQUAL+
illustrate using customer
feedback to improve
service.
service quality
Engaging patrons as
partners helps libraries
achieve total quality
in service
by Todd Bruns and Rendong Bai
in the late 19th century, philanthropist Andrew
Carnegie provided funding for the establishment of hundreds
of libraries in the United States.1 His libraries were the first
to feature open stacks—shelves of books that library patrons
could browse by themselves. Before Carnegie’s libraries, most
libraries had closed stacks, meaning librarians would locate
items on behalf of the patrons and retrieve it for them. This
change to open stacks enhanced the average person’s access
to information and greatly improved the quality of service that
libraries offered.
Although librarians are generally service-oriented, their
traditional training defines service to the patron as a book
retrieved from the closed stacks rather than collaboration
between the librarian and the patron. The patron is rarely perceived as being an equal partner in the transaction.
June 2013 • QP 41
To achieve total quality in library service value, that
customer needs were often not addressed.
value must be technically defined quality as assessed
The quality of a library collection can certainly be
by the librarian—the value of the library collection and
considered an indirect service to the patron, but with
the accuracy of reference service—as well as function-
the arrival of the internet and Google, libraries were
ally defined quality as defined by the patron—the pa-
no longer the sole source of information resources.6 To
tron saying: “I received good service.” To achieve the
compete, libraries must develop a strategy for assess-
latter, a true librarian-patron partnership is required.
ing and responding to customer perceptions of quality
2
Libraries began to see service competition for the
of service.
first time in the 1990s, due to the internet and Google.
Service industries, such as libraries, had been slow
The necessity to be more customer-focused became ap-
to adopt quality management principles. By the 1990s,
parent, and this resulted in the creation of LibQUAL+,
a systematic approach to implementing total qual-
a tool to quantitatively measure the quality of customer
ity was underway.7 The concept of quality manage-
service.3
ment was adapted and defined to fit within the library
While LibQUAL+ serves as a first step toward in-
realm,8-10 and these early attempts embraced quality
creasing quality and value for patrons, library commit-
management concepts, such as the formation of qual-
ment to responding to customer survey results is es-
ity circles among staff11 and the reorganization of the
sential. LibQUAL+ can be used by a range of libraries,
library staff hierarchy.12
but for purposes of this article, we will focus on its use
in academic libraries.
By the late 1990s, however, it became apparent librarians were “better at collection evaluation than ser-
vice evaluation.”13 Although some libraries conducted
Libraries embrace quality
patron surveys, this was the exception and not the rule.
Historically, the main role of a librarian has been to
maintain the quality of the collection itself rather than
Tool development
tend to customer needs or expectations.4, 5 Librarians
As patrons became customers and libraries found
focused on developing their collections and buying
themselves striving to prove their value, they needed
books and journals to fit the needs of their patrons.
to establish a means of quantifying and assessing cus-
As noted by researcher Charles R. Martell Jr., librar-
tomer needs and satisfaction.
ies have been “more inclined to invest in things [than
For many years, service sector industries relied on
in people],” meaning staff development and assessing
a simple Likert scale when testing customer satisfaction.14 Customers were asked to rate their experiences
from one to five. What became apparent, however, was
Number of libraries using
LibQUAL+ per year / figure 1
that not only was it necessary to ask customers their
perception of the quality of service, but it was also necessary to ask what their expectations were. Measuring the gap between experienced service and expected
400
350
Initiative, launched in 1999 by the Association of Re-
250
search Libraries (ARL) with a grant from the U.S. De-
150
100
2002
2003 2004
2005 2006
42 QP • www.qualityprogress.com
2007 2008
2009 2010
The increase in competition and the need to assess
customer expectations led to the New Measurements
300
200
2000 2001
service is the “true measure of satisfaction.”15
partment of Education. Under this initiative, libraries
used and adapted the ServQUAL tool to suit library
services, resulting in the LibQUAL+ survey.
LibQUAL+ was developed by ARL as a survey that
50
would test libraries’ strengths and weaknesses and,
0
because it was standardized, could also be used for
libraries to compare themselves to their peer institutions.16 The survey contained 25 core questions in four
service quality
primary areas: access to information, affect of service,
service that needed improvement to meet customer’s
the library as a place and personal control of informa-
expectations, but that additional analysis was needed:
tion.
The author of an article in the Journal of Library Ad-
Each question was comprised of three parts: the
ministration said, “The wealth of information to be
customer’s perceived level of service, the customer’s
gained from the survey results complicates the iden-
minimal expectation of service and the customer’s de-
tification of areas of clearest opportunity for improve-
sired expectation of service. Since its development,
ment.”21
the LibQUAL+ survey has evolved to comprise 22
A commitment to continual improvement is a key
core questions in three primary
areas: effect of service (nine
questions), information control (eight questions) and the
library as place (five questions)
(see Table 1, p. 44).
LibQUAL+ was first used
in 2000. By 2003, 309 libraries
used the survey (see Figure 1),
To compete, libraries must develop
a strategy for assessing and
responding to customer
perceptions of quality of service.
and more than 1,000 libraries
used the tool by 2007.17 Libraries may opt to participate annually in the survey or par-
aspect of total quality, and Vanderbilt identified the
ticipate in specific years.
need for further evaluation via focus groups, follow-
Although many libraries have used LibQUAL+ to
assess patron satisfaction, it’s important to remem-
up surveys, and follow-up with peer institutions that
scored higher in the LibQUAL+ survey.22
ber that LibQUAL+ is simply a first step in the quality
Two action items were identified for immediate
improvement process. Although a reliable and valid
response:23 First, in response to complaints about li-
assessment tool, LibQUAL+ survey respondents are
brary hours from undergraduate students, Vanderbilt
self-selected, meaning that regardless of survey size
launched a trial program making one of the campus
there will always be some question of selection bias.18
libraries open 24 hours a day. In an executive summary
LibQUAL+ provides libraries with significant amounts
report, Vanderbilt identified a library and developed a
of data, but follow-up activities with customers are a
budget for a trial project in spring 2003.24 Beginning in
necessity, as demonstrated by the experience of two
spring 2003, the Vanderbilt Science and Engineering
institutions that used LibQUAL+: Vanderbilt University
Library established a 24-hour Monday through Friday
in Nashville and the University of Pittsburgh.
schedule that is still in place today, demonstrating the
Vanderbilt University and the University of Pitts-
success of that initiative.
burgh libraries participated in the 2002 LibQUAL+
Second, a service quality improvement program
survey of 46 ARL members across the United States.
was proposed, which was to be developed by three
Both academic libraries published papers in 2004 de-
library directors at Vanderbilt. The service qual-
tailing the results of their respective surveys.
These
ity improvement program team met regularly in 2003
LibQUAL+ surveys were chosen as a starting point to
with the charge that “the team will limit its activities
contrast different academic library approaches to im-
to identifiable issues that seem to be easily fixed. Is-
proving service, comparing information collected and
sues that are not easily fixable or that deal with orga-
reported during the same time period, and assessing
nizational structure or policy will be referred to the
the direction of each institution afterward.
Library Management Council.”25 Reports of the team
19, 20
from 2003 ended with the Sept. 12, 2003, meeting. No
Case study: Vanderbilt University
publicly available final report or conclusions appear
Vanderbilt University’s library reported results of the
to exist.
2002 LibQUAL+ survey with a heavy emphasis on de-
Vanderbilt has since participated in additional
tailed statistics. The library noted it identified areas of
LibQUAL+ surveys in 2006 and 2009. The 2006 survey
June 2013 • QP 43
resulted in a number of substantial initiatives, including:
• The addition of 14 work stations.26
The 2009 survey was conducted by new staff under
• Implementation of a new electronic discovery
the direction of a new dean of libraries and featured
tool, “DiscoverLibrary,” that combined the library’s
a heavier focus on marketing, campus outreach and
catalog and other resources, simplifying patron
project management than the previous surveys.27
searches.
• Creation of a library delivery service for faculty.
Case study: University of Pittsburgh
• The addition of group study rooms.
In contrast to Vanderbilt’s initially cautious approach in
2002, the University of Pittsburgh library
22 core questions of the current
LibQUAL+ survey / table 1
listed several new initiatives and demonstrated a real commitment to quality
improvement as a response to its 2002
survey. A particularly quality manage-
Library service quality survey questions
ment-oriented viewpoint is presented in
Ratings: 1 (low) to 9 (high)
Service level definitions:
• Minimum—the number that represents the minimum level of service you would find
acceptable.
• Desired—the number that represents the level of service you personally want.
• Perceived—the number that represents the level of service your library currently
provides.
the Pittsburgh library’s response to cus-
When it comes to ...
Question #
Effect of service
tomer perceptions: “Even if you disagree
with the information offered [based on
customers’ perceptions], you can’t say
their perceptions are wrong. Your challenge is to address these perceptions ... .”28
A specific example illuminates the
two institutions’ different responses to
1
Employees who instill confidence in users
4
Giving users individual attention
sities’ surveys showed a negative balance
6
Employees who are consistently courteous
between customers’ minimal require-
the 2002 LibQUAL+ results. Both univer-
9
Readiness to respond to users’ questions
ments for having complete collections of
11
Employees who have the knowledge to answer user questions
journal titles and customer perceptions
13
Employees who deal with users in a caring fashion
of the journals offered by the library. For
15
Employees who understand the needs of their users
Vanderbilt’s library, this meant acknowl-
18
Willingness to help users
22
Dependability in handling users’ service problems
Information control
edging the negative balance coupled
with a statistical analysis showing the
complaint primarily came from faculty
and that this complaint was common for
2
Making electronic resources accessible from my home or office
5
A library website enabling me to locate information on my own
7
The printed library materials I need for my work
showed the same negative balance, but
10
The electronic information resources I need
the response was more proactive: The
14
Modern equipment allows easy access to needed information
library followed up with customers and
16
Easy-to-use access tools allow me to find things on my own
discovered patrons wanted complete col-
19
Making information easily accessible for independent use
lections of specific journals.
20
Print and electronic journal collections I require for my work
Library as place
many libraries.29
In contrast, the Pittsburgh library also
The library then developed a dual service response to address this need. First,
electronic back issues of the journals
3
Library space that inspires study and learning
8
Quiet space for individual activities
12
A comfortable and inviting location
17
A getaway for study, learning or research
it was provided.30 This dual approach
21
Community space for group learning and group study
improved access to the specifically re-
44 QP • www.qualityprogress.com
being requested were obtained. Second,
the off-site storage facility was relocated
closer to campus, and shuttle service to
service quality
quested journals and made obtaining print back issues
Customer-focused approach
more convenient for patrons, beginning the process of
Although Vanderbilt had responded to its first
improving customers’ perception of service.
LibQUAL+ survey tentatively by adapting only one (al-
Pittsburgh’s response exemplifies a critical aspect
beit quite important) identifiable change in response
of quality management—embracing customer-defined
to customer desires, subsequent survey responses
value. For the customer, the
product or service must be
what the customer wants, of
expected quality and be delivered courteously and promptly.31 By taking steps to obtain
the specific e-journals customers wanted, Pittsburgh addressed the issue of providing
the product customers desired.
Pittsburgh’s response exemplifies
a critical aspect of quality
management—embracing
customer-defined value.
The relocation of the off-site
storage facility improved speed of access, addressing
demonstrated a movement toward a more engaged
customer desires for faster access. Rather than consid-
approach. In particular, the implementation of “Dis-
ering lack of access to journals a common complaint,
coverLibrary” demonstrates the merging of customer-
Pittsburgh followed the quality management philoso-
defined functional quality and librarian-defined techni-
phy by letting the customer define the value and then
cal quality.
responding accordingly.
At the University of Pittsburgh, a customer-focused
The Pittsburgh library also identified other areas for
approach was in place from the beginning. By ad-
improving service and took steps to do so. A team was
dressing customer perceptions in customer’s terms,
established to rethink and improve public services. It
Pittsburgh fully used its LibQUAL+ survey results to
followed up the LibQUAL+ survey results by inves-
improve customers’ perceptions of the service value.
tigating national research studies and holding open
The commitment to service quality has led Pittsburgh
meetings with staff. Following up on LibQUAL+ results
to focus efforts on developing local assessment tools
proved to be pivotal in establishing new services, in
that fit its patron base.
particular the creation of a peer-to-peer library service
To further ensure success, libraries must not sim-
plan in which students could get assistance in their
ply focus on patron perception discovery tools such as
dorms and in the library from other students.
LibQUAL+, but also engage patrons as full partners in
The Pittsburgh library has since participated in an-
all library endeavors.
nual LibQUAL+ surveys (with the exceptions of 2008
and 2010), although further results and initiatives have
Patrons as partners: UCLA
not to date been published. As of 2011, Pittsburgh opt-
In 2001, the University of California at Los Angeles
ed to develop its own survey “to focus … survey efforts
(UCLA) library needed to obtain a new integrated li-
toward [their] individual community’s concerns and be
brary system (ILS), a system that combines elements
able to utilize the data in a more agile manner.”32
for acquiring, cataloging and loaning materials. The
This shift away from the LibQUAL+ tool demon-
library made the commitment to involve faculty and
strates the importance of connecting with the patron
students in the process of assessing different ILS op-
to ensure quality is a bigger issue than the use of a
tions.
particular tool. While there are clear positives of us-
After three ILS options had been identified, the
ing LibQUAL+, particularly for libraries that have
overview committee tasked with the project estab-
little experience assessing customer-defined value,
lished an advisory group of functional sponsors—
ultimately a library must determine the best way to
faculty and students who assisted the overview com-
keep an ear to the ground and maintain that patron
mittee. The functional sponsors worked with the
connection.
committee to craft a survey focusing on questions
June 2013 • QP 45
service quality
important to customers and to develop test runs of
the ILS options that focused on how patrons would
use the service.33
Bringing in patrons as actual partners added clarity
to the survey questions and identified which features
of the ILS were most important to patrons. Ultimately,
the UCLA library’s selection was influenced by the participation of its customers.
This example demonstrates the quality management strategy of bringing in customers as partners in
innovation.34 By involving patrons in the entire process
of deciding on an ILS, UCLA was addressing customer
needs from the very beginning. The inclusion of faculty and students in crafting a customer survey about
the ILS ensured UCLA was asking the right questions.
Involving customers in the test runs of three different
ILS options gave patrons a voice in the process, ensuring the chosen system had the attributes customers
desired.
Committing to quality
The development of LibQUAL+ as an assessment tool
has assisted libraries to move closer to achieving quality management. As a tool, LibQUAL+ is beneficial, but
embracing quality management organizationally and
committing to service improvement as defined by customers is crucial.
Libraries that commit to a fully engaged quality management philosophy can provide their patrons
with the products and services they want, at a higher
Journal, Vol. 113, No. 7, 1988, p. 52.
12. Fitch, “Turning the Library Upside Down: Reorganization Using Total Quality Management Principles,” see reference 9.
13. Saunders, “The LibQUAL+ Phenomenon: Who Judges Quality?” see reference 3.
14. Ibid.
15. Ibid.
16. Ibid.
17. Ibid.
18. Ibid.
19. Amy Knapp, “We Asked Them What They Thought, Now What Do We Do?
The Use of LibQUAL+ Data to Redesign Public Services at the University
of Pittsburgh,” Journal of Library Administration, Vol. 40, No. 3/4, 2004, pp.
157-171.
20. Flo Wilson, “LibQUAL+ 2002 at Vanderbilt University: What Do the Results
Mean and Where Do We Go From Here?” Journal of Library Administration,
Vol. 40, No. 3/4, 2004, pp. 197-240.
21. Ibid.
22. Ibid.
23. Jean and Alexander Heard Library, “LibQUAL+ Survey: Results From the
Survey, 2002,” 2002, http://libstaff.library.vanderbilt.edu/Admin/LQ/
LibQUALReport.htm#Appendices (case sensitive).
24. Jean and Alexander Heard Library, “LibQUAL+ 2002 Executive Summary,”
2002, http://libstaff.library.vanderbilt.edu/Admin/LQ/LibQUALReport.htm
(case sensitive).
25. Jean and Alexander Heard Library, “Service Quality Improvement Team,”
2011, http://libstaff.library.vanderbilt.edu/service.
26. Jean and Alexander Heard Library, “LibQUAL+ 2009,” www.library.
vanderbilt.edu/libqual2009/faq.html.
27. LibQUAL+ Share Fair, “Proceedings from the 2009 American Libraries
Association annual conference,” 2009, www.libqual.org/documents/admin/
Share_Fair_booklet_2009_2.pdf (case sensitive).
28. Knapp, “We Asked Them What They Thought, Now What Do We Do? The
Use of LibQUAL+ Data to Redesign Public Services at the University of
Pittsburgh,” see reference 19.
29. Wilson, “LibQUAL+ 2002 at Vanderbilt University: What Do the Results
Mean and Where Do We Go From Here?” see reference 20.
30. Knapp, “We Asked Them What They Thought, Now What Do We Do? The
Use of LibQUAL+ Data to Redesign Public Services at the University of
Pittsburgh,” see reference 19.
31. David L. Goetsch and Stanley Davis, Quality Management for Organizational Excellence, sixth edition, Prentice Hall, 2010, pp. 144, 154.
32. Personal communication with John Fudrow, University of Pittsburgh
Library, Feb. 24, 2012.
33. Terry Ryan, “Turning Patrons Into Partners When Choosing an Integrated
Library System,” Computers in Libraries, Vol. 24, No. 3, 2004, pp. 6-8, 54, 56.
34. Goetsch, Quality Management for Organizational Excellence, see reference 31.
quality than they expect and in a timely manner. QP
Bibliography
References
1.George Sylvan Bobinski, Carnegie Libraries: Their History and Impact on
American Public Library Development, American Library Association, 1969,
p. 191.
2.William B. Edgar, “Questioning LibQUAL+: Expanding its Assessment of
Academic Library Effectiveness,” Libraries and the Academy, October 2006,
Vol. 6, pp. 445-465.
3.E. Stewart Saunders, “The LibQUAL+ Phenomenon: Who Judges Quality?”
Reference and Users Quarterly, Vol. 47, No. 1, 2007, pp. 21-24.
4.Charles R. Martell Jr., “The Client-Centered Academic Library: An Organizational Model,” Journal of Academic Librarianship, Vol. 9, No. 5, 1983, pp.
292-293.
5.Saunders, “The LibQUAL+ Phenomenon: Who Judges Quality?” see reference 3.
6.Ibid.
7.Kitty Mackey and Terry Mackey, “Think Quality! The Deming Approach Does
Work in Libraries,” Library Journal, Vol. 117, No. 9, 1992, pp. 57-61.
8.Ibid.
9.Donna K. Fitch, Jean Thomason and Elizabeth Crabtree Wells, “Turning the
Library Upside Down: Reorganization Using Total Quality Management Principles,” Journal of Academic Librarianship, Vol. 19, No. 5, 1993, pp. 294-299.
10. Rush Miller and Beverly Stearns, “Quality Management for Today’s
Academic Library,” College and Research Libraries, Vol. 55, No. 7, 1994, pp.
406-422.
11. Janice Desirey, Christopher Dodge, Nancy Hargrave, Randi Larson and
Susan Nesbitt, “The Quality Circle: Catalyst for Library Change,” Library
46 QP • www.qualityprogress.com
Zbaracki, Mark J., “The Rhetoric and Reality of Total Quality Management,”
Administrative Science Quarterly, Vol. 43, 1998, pp. 602-636.
Todd Bruns is the institutional repository librarian
at Eastern Illinois University in Charleston. He has a
master’s degree in library and information studies
from the University of Wisconsin-Madison and a master’s degree in technology management from Eastern
Illinois University.
Rendong Bai is an assistant professor in the School
of Technology at Eastern Illinois University in Charleston. He received a doctorate in computer science
from the University of Kentucky in Lexington.
Standards Outlook
BY John E. “Jack” West
The Missing Key
Clearing up misunderstandings about ISO 9001 conformance
past perceptions about conformity
product designs be validated to
to ISO 9001 suggest an organization may
ensure they will meet require-
have a good quality management system
ments for given applications, and
(QMS) that conforms to ISO 9001, but
it requires the product be verified
it can still produce junk. In fact, ISO
to ensure those requirements are
9001 contains many requirements that,
met. The overall requirements
taken together, should provide reason-
of clause 7.3 are summarized in
able assurance that the output of the
Table 2 (p. 48).
system—the organization’s products and
services—will indeed meet customer
Pinpointing the problems
requirements.
What, then, is the issue? There
There is also the myth that the design
and development clauses of ISO 9001 can-
are several:
Innovation and product
not be applied to highly innovative product
definition. Some experts
developments because they are too restric-
express the opinion that clause
tive. Yet, we continue to see product and
7 does not adequately address
service disasters in the marketplace that
situations in which the customer
could readily have been prevented by judi-
does not know he even needs the
cious application of these same design and
product, much less its detailed
development requirements.
functional requirements. For ex-
First, the scope of ISO 9001:2008 clear-
ample, many products available
identify product requirements that are
ly states the intent of the document to
today were not even a gleam in the user’s
necessary but not stated by the customer.
meet customer requirements (see Table
eye a few years ago. It is argued that
Also note that the product design must
1). ISO 9001, clause 5.3, also requires that
the formal design process of ISO 9001 is
include as inputs the organization’s own
the quality policy include commitments
too narrow to include such innovative
requirements for the product, and that
to meeting requirements and continual
designs, so it is often ignored.
the product design must be verified and
improvement of the QMS.
Clause 7 on product realization
A careful reading of ISO 9001 reveals
validated to ensure that the product
this concern is not valid. What can stuffy
meets specified requirements and will be
requires identification of customer
old ISO 9001 do to control such a situ-
suitable for a given application.
requirements. Clause 7.3 requires that
ation? A lot, actually. Note the need to
No product development should
go forward in the absence of a robust
Excerpt from ISO 9001:2008,
Clause 1.1—scope, general /
process to define the design inputs and
outputs, and to verify and validate prod-
Table 1
“This International Standard specifies requirements for a quality management
system where an organization
a)
b)
uct functionality.
Design review. After requirements
are documented and a product development plan has been created, the actual
needs to demonstrate its ability to consistently provide product that meets
customer…requirements, and
work of developing a product can pro-
aims to enhance customer satisfaction through the effective application of the
system, including processes for continual improvement of the system and the
assurance of conformity to customer and applicable regulatory requirements.”
often ignored or treated in an extremely
ceed. One activity of the process that is
superficial manner is design review (subclause 7.3.4).
June 2013 • QP 47
standards outlook
The purpose of this requirement is to
intended to address more than just the
Design reviews are intended to iden-
ensure timely release of a new product
question of whether the product will
tify issues, discuss possible resolutions
that fully meets the needs of the custom-
meet specified requirements. An effective
and determine appropriate follow-up
ers. It also can contribute significantly to
design review should address all the abili-
early enough to minimize cost and sched-
reduced cost. The intent of the standard
ties associated with a new product—man-
ule impact.
is to involve all appropriate individuals as
ufacturability, deliverability, testability,
soon as it is feasible so they can under-
inspectability, capability, serviceability,
of design output to input requirements
stand and address life-cycle issues early
repairability, availability and reliability—
to ensure the development project is on
in the process.
as well as issues related to inventory and
track. Often this step is just ignored but,
production planning.
if done properly, it determines objec-
Design and development review is
Verification is simply a comparison
tively whether the requirements will
Validation—summary of
requirements / Table 2
7.2.1 Determination
of requirements
related to the
product
7.3.1 Design and
development
planning
It is often an incremental process and,
for complex innovative products and
services, can require years of work. In
The organization shall determine:
• Requirements specified by the customer, including the
requirements for delivery and postdelivery activities.
• Requirements not stated by the customer but necessary
for specified or intended use, when known.
• Statutory and regulatory requirements related to the
product.
• Any additional requirements determined by the
organization.
fact, for entrepreneurial start-ups, this
The organization shall plan and control the design and
development of product. Required activities include
determining:
• Design and development stages.
• Review, verification and validation activities appropriate
for each design and development stage.
• Responsibilities and authorities for design and
development.
It is also required that interfaces be managed to ensure
effective communication.
Verification is not complete until you can
7.3.2 Design and
development
inputs
Inputs relating to product requirements shall be
determined. These inputs shall include functional and
performance requirements.
7.3.4 Design and
development
review
Systematic reviews of design and development shall be
performed:
• To identify any problems and propose necessary actions.
• To evaluate the ability of the results of design and
development to meet requirements.
7.3.5 Design and
development
verification
be met by the ultimate product design.
Verification shall be performed to ensure that the design
and development outputs have met the design and
development input requirements and records shall be
maintained.
7.3.6 Design and
development
validation
Design and development validation shall be performed to
ensure that the resulting product is capable of meeting the
requirements for the specified application or intended use,
when known.
7.3.7 Control of design
and development
changes
Design and development changes shall be identified
and records maintained. The changes shall be reviewed,
verified and validated, as appropriate, and approved before
implementation.
Source: ANSI/ISO/ASQ Q9001:2008 (ASQ Quality Press)
48 QP • www.qualityprogress.com
step develops confidence in the startup company’s business case—its very
reason for being.
When verification is complete, the
organization should have high confidence its product will work as intended.
answer the question: Will the product do
what I claim it will do?
Validation is a confirmation the product will meet actual application needs.
This is best conducted directly with users
and may involve having them use product
prototypes or development models.
For services, it may involve test sites
where the service is piloted with actual
clients. User feedback can be critical in
making the best final product design decisions. When users provide negative feedback, you have a golden opportunity for
designers to use their innovative talents
to develop customer-friendly solutions.
It is especially important to rigorously
address verification and validation for the
design and development of innovative
new products or extensions of existing
product lines in which customer requirements are vague or nonexistent.
Customer dissatisfaction with newly
released products can be harmful—even
devastating—to a new product launch
and can even negatively influence the
marketing of unrelated products. Control
of the design and development process
(see Figure 1) can at least minimize
Design and development
planning process / figure 1
the occurrence of widespread “infant
mortality” (for example, new batteries in
Design and development planning
a new airplane).
Design validation is not complete until
you can face your investors and tell them
Design verification
how the product will meet your potential
customer’s needs for specific applications. Will the customer be willing to pay
enough for the new product to cover all
Customer
needs
Design
inputs
our front-end costs with a reasonable
return on investment?
Process capability and capac-
Design
process
phases and
reviews
Design
outputs
Product
Risk analysis and preventive action
ity. There is a note in clause 7.1 of ISO
Design validation
9001:2008 that says: “The organization
may also apply the requirements given
in 7.3 to the development of product
realization processes.”
Perhaps the most significant difficulty
with ISO 9001:2008 is that this note does
expenditures that had been grossly
take corrective action to eliminate the
underestimated.
causes of these problems should not
An organization is not ready for prod-
make claims of conformity to ISO 9001.
not make the use of the design process
uct or service rollout until the product
We must ensure our systems deliver
mandatory for production and service
realization and delivery processes are
conforming product to our customers.
delivery processes. Often, this notion is
capable of delivering conforming product
The standard requires it, and the credibil-
completely ignored until the organiza-
at the needed volume. Note there are not
ity of ISO 9001 certification demands it. It
tion discovers it cannot produce enough
two things here. There is only one: ability
is the output of our QMS that matters to
conforming product to meet customer
to deliver the required volume of product
our customers.
demand, or worse, cannot deliver in suf-
that meets customer needs.
ficient volume to achieve enough positive
Unfortunately, these messages have
not adequately penetrated the world of
Keep the product in mind
the quality professional. There is con-
We need to stop perpetuating the myth
siderable hope, especially for new small
intended. Pilot runs are successful and
that organizations can truly be in confor-
businesses. Venture capitalists and other
delight test customers. But what happens
mance with ISO 9001 and still produce
investors are asking new entrepreneurs
when the demand for volume delivery
product that does not meet customer re-
questions related to these subjects before
hits the organization? In my experience,
quirements. Why does the myth persist?
committing to investments. Due dili-
scale-up of a new product is often the
Because standards implementers and
gence—and perhaps more importantly,
Achilles’ heel of the organization. At the
auditors tend to focus on conformance
common sense—demand it. QP
point when solid process capability and
to the details of ISO 9001 and often lose
capacity are needed, it is too late to think
sight of the basic requirements. Never
about these subjects. They must be ad-
lose sight of the product.
cash flow to survive.
Prototypes get tested and work as
dressed during product design.
I have even seen situations in which
A claim that an organization conforms
to ISO 9001 should mean the organi-
high-tech products could be produced
zation’s customers will consistently
easily in low volume, but the entrepre-
receive a product or service that meets
neurs involved never realized that scale-
its requirements. An organization that
up of their great idea was technologically
consistently produces nonconforming
impossible or required capital equipment
product and is unable or unwilling to
John E. “Jack” West is a member of
Silver Fox Advisors in Houston. He is
past chair of the U.S. Technical Advisory Group to the International Organization for Standardization Technical
Committee 176 and lead delegate of
the committee responsible for the ISO
9000 family of quality management
system standards. He is an ASQ fellow and has co-authored
several ASQ Quality Press books.
June 2013 • QP 49
Measure For Measure
BY Christopher L. Grachanen
Know Your Surroundings
Environmental influences impact tests and calibration
Ambient conditions during tests
Initial impact
as a rule, specified at 20°C (68°F)—often
and calibration activities can have a big in-
The acceptance of a metallic rod used in a
referred to as standard temperature. This
fluence on measurement results, depend-
precision mechanical device requires that
is the reason many precision measure-
ing on the measurement scenario. Some of
its length be held to 1 inch plus or minus
ment laboratories are controlled to 20°C
these influences may be obvious—some
50μin (1 +/- 0.005%). The rod is made
(68°F)—to forego having to apply correc-
not so obvious. Some of these influences
of aluminum to conserve weight, and is
tion factors for dimensional and volu-
affect the device being measured; some
manufactured and measured in a machine
metric measurement made at other than
affect the measurement system; and some
shop with an ambient temperature of 25°C
standard temperature.
affect both—though not necessarily pro-
(77°F). After leaving the machine shop,
portionally between the two.
the rod is taken to a quality inspection lab
deemed the critical influence affecting
to be measured again and is found to be
the measurement. If the aforementioned
out of tolerance.
measurements had been performed in an
Environmental influences include temperature, humidity, vibration, barometric
pressure, ambient particulate concentra-
The quality inspection lab has an ambi-
In this example, temperature was
environment subject to excessive ambi-
tion, magnetic fields, electrical fields,
ent temperature of 22°C (72°F). Due to
ent particulate concentration (as can be
ambient light and sound. Depending on
aluminum’s inherent linear temperature
possible in a machine shop with milling
the measurement application, there may
expansion coefficient of 23.1E-06 (23.1μin
operations), foreign material may rou-
be only one environmental influence that
per inch per 1°C), this equates to 139%
tinely lodge between the rod’s surface and
an operator should be concerned with
of the 50μin tolerance (3°C difference x
the styluses of the measurement device,
regarding unwanted measurement biases.
23.1μin = 69.3μin) that can be attributable
adversely affecting measurement results.
to just the temperature difference be-
In this scenario, ambient particulate con-
is significant requires an understanding
tween the two locations without consider-
centration would be another environmen-
of the measurement system and what is
ing any other source of measurement bias.
tal influence to consider.
being measured. A simple example will
It is noteworthy that linear temperature
Determining if a particular influence
illustrate this point.
expansion coefficients for materials are,
Continue monitoring
Not only is it important to evaluate
environmental conditions initially when
measurements are being made, but it also
may be necessary to monitor environment conditions during the duration of
measurements. This depends on the measurement application and the length of
time to make the measurements. Another
example will illustrate this point.
The calibration of air discharge electrostatic (ESD) simulators is influenced
by moisture content in the air as characteristically disclosed by manufacturers in
terms of relative humidity operating range.
ESD simulator calibration is characteristically based on relative agreement between
the simulator’s output impulse and the
International Electrotechnical Commis-
50 QP • www.qualityprogress.com
Determining if a particular influence is significant
requires an understanding of the measurement system
and what is being measured.
sion’s accepted waveform specifications
started at 30% relative humidity could in-
evaluating the measurement results of
for the ESD phenomena. Calibration of an
clude some measurement readings taken
others and consequently making business
ESD simulator may take from 30 minutes
outside the manufacturer’s operating lim-
decisions based on their evaluations.
to 2.5 hours, depending on the simulator’s
its (a no-no when calibrating to manufac-
sophistication and installed options.
turer’s published specifications). It should
surement data with descriptive verbiage
It is always prudent to accompany mea-
be noted that most humidity monitoring
in regards to the measurements made. For
reputable manufacturer specifies one of
devices (sensors) have an accuracy
instance, the following descriptive ver-
its popular ESD simulators over a relative
specification of 2 to 5% relative humidity,
biage could be used in the first example:
humidity range of 20 to 80%. It has been
adding to the measurement error.
Continuing with this example, a
“Measurements were made with digital
caliper (serial No. 12345) on Feb. 14, 2012,
my experience that generic room temperature controllers can create relative
Avoid assumptions
after cleaning and a one-hour soak time at
humidity swings of 10% or more during an
The examples show that environmental
23°C and 45% relative humidity.”
hour while attempting to maintain a set
influences can cause measurement errors
temperature (dependant on surrounding
and can even invalidate a calibration
measurement helps ensure everybody is
ambient conditions, environmental system
when deviating beyond acceptable limits.
on the same page and helps avoid errone-
design/feedback and set point tempera-
It is always a best practice to question
ous assumptions, which can be a real cost
ture).
measurement applications in terms of
avoidance in terms of product reworks
environmental influences. This advice
and field failures. QP
Unless relative humidity is continuously monitored during the calibration, it
also extends to those who do not actually
is conceivable that a 2.5-hour calibration
make measurements but are tasked in
more to measure
QP has featured the Measure for Measure column for more than a decade.
Check out past columns, including those written by Christopher L. Grachanen,
under the Departments and Columns tab at www.qualityprogress.com.
Including descriptive verbiage about
Christopher L. Grachanen is
a master engineer and operations
manager at Hewlett-Packard Co. in
Houston. He earned an MBA from
Regis University in Denver. Grachanen
is a co-author of The Metrology Handbook (ASQ Quality Press), a senior
member of ASQ, an ASQ-certified
calibration technician and the treasurer of the Measurement
Quality Division.
Do the Write Thing in 2013
We’re looking for writers who want to
contribute articles about these topics:
September Standards and auditing
If you want to write for a specific issue, please submit your article at
least three months before the issue date. If you miss that deadline, don’t
worry. Send the article and we might use it in a different issue. And if
there’s a topic you would like to write about that’s not listed as one of
October
Social responsibility
our featured topics in the editorial calendar, don’t let that dissuade you
November
Global quality
from submitting the manuscript. We will
publish all accepted articles, whether they
align with an issue theme or not.
Visit www.qualityprogress.com and click on “Author Guidelines” at the bottom of
the page for more details.
QUALITY PROGRESS
June 2013 • QP 51
Quality in the First Person
BY John W. Jennings III
It’s a Process
DMAIC helps manage diabetes
More than half of Americans will have
diabetes or be pre-diabetic by 2020.1 I have
body’s ability to regulate its BSL.
Statistical thinking supports BSL control
Design of experiments can determine
factor levels for minimizing glucose level
been a Type 2 diabetic for 40 years—about
with three basic assumptions:
variation after exercise. This approach also
as long as I’ve been in the quality field.
• Work occurs in a system of intercon-
can help determine calorie limits, meal
Currently, there is no cure for diabetes. But
nected processes.
it can be managed. I found that statistical
• Variation exists in all processes.
thinking and the define, measure, analyze,
• Understanding and reducing variation
improve and control (DMAIC) method can
are the keys to success.
times and what to eat.
Analysis of variance (ANOVA) can analyze the effects of medication changes. In
August, I began a new weight loss medication, Victoza. Using ANOVA single-factor
reduce variation in diabetes management
Measure
test, I evaluated my BSL averages, which
An Excel spreadsheet is useful for recording
are shown in Figure 2. The null hypothesis
Define
BSL readings, medication use and comments.
represents June and July daily averages
Insulin converts glucose into cell nutrients.
I use Excel functions to calculate averages
without Victoza. The test shows u1 and u2
Type 1 diabetics produce little to no insulin
and standard deviations on a daily, weekly
equals August’s daily averages with Victoza
and need insulin injections. Type 2 diabet-
and monthly basis. Figure 1 shows an ex-
(u3). Because the null hypothesis is ac-
ics either produce too little insulin or have
ample of a truncated data collection matrix.
cepted, I can determine the medication has
and create control.
become insulin resistant. They control their
not affected my BSL.
blood sugar levels (BSL) by modifying their
Analyze
diet, exercising and, in some cases, taking
Landmark studies published in the 1990s
Improve
medication.
showed the benefit of tightly controlled
The hardest part about managing diabetes
Type 1 and 2 diabetics use a device to
BSLs in the management of both types
is changing your lifestyle into a disciplined
measure their BSLs. Most diabetics aim to
of diabetes.4, 5 Key factors that influence
process. That usually means participation in
maintain a BSL between 80 and 150 mil-
BSL—exercise, weight and medication—
an exercise program, controlling carbo-
2
ligrams per deciliter. Monitoring provides
are identified by doctors. Modifications to
hydrate intake, monitoring BSLs, taking
input data for statistical tools to evaluate the
these factors help establish a zone of tight
medication and sometimes abstaining from
level of control the diabetic has on his or her
control.
alcohol and nicotine.
3
Doctors set BSL goals and diabetics
achieve them with lifestyle changes. A dietician helps plan a proper diet and identify
foods to avoid. Medication may be a part of
the management plan. Support from your
family, friends and medical team is crucial.
Control
Statistical process control (SPC) is used to
monitor and analyze variation in manufacturing processes. Processes are in control
when there are no special causes of variation present. A diabetic’s BSL is similar
to a process with special cause variation
because BSL regulation does not occur
automatically.
52 QP • www.qualityprogress.com
Data collection matrix
/ figure 1
Blood sugar levels (BSL) and insulin dosages
Date
AM BSL Dosage Noon BSL Dosage
PM BSL
Comments
Dosage Night BSL Dosage Victoza started 8/31/2012
9/1/2012
124
16
138
20
279
36
204
9/2/2012
147
16
106
20
185
32
158
9/3/2012
119
16
160
22
156
32
158
9/4/2012
154
18
116
20
99
30
130
9/5/2012
172
18
106
20
89
30
157
Average
141.8
134.8
143.8
161.4
Standard deviation
20.9
36
46
42.4
Most diabetics track their BSL daily
and may need to modify their food intake,
exercise and medication accordingly. Figure
3 is an X-bar chart of my daily BSL averages
2
Ate too much in afternoon
Started new Apridra pen
Started new Lantus pen
ANOVA single factor test
ANOVA: Single factor
α
/ figure 2
0.05
Ho: u1= u2= u3
Summary
in September. There were several days with
Groups
Count
Sum
Average
Variance
daily averages on the high end due to special
June
30
4,462
149
444.6713
cause variation. My BSL was managed with
July
30
4,350
145
386.7152
more insulin, less food and more exercise.
August
30
4,278
143
199.9885
It is possible for diabetics to experience
a high quality of life. The key to achieving
Accept null hypothesis
ANOVA
because p > 0.05 (means are the same)
treatment goals is a combination of lifestyle
Source of variation
changes, close monitoring and heeding doc-
Between groups
tors’ advice. DMAIC and statistical think-
Within groups
health. QP
References
1. Bill Berkrot, “Half of Americans facing diabetes by
2020: report,” Reuters, Nov. 23 2010, www.reuters.com/
article/2010/11/23/us-unitedhealth-diabetes-idusTRE6AM0NH20101123.
2. American Diabetes Association, www.diabetes.org.
3. “Hyperglycemia: When Your Blood Sugar is Too High,” Diabetic Gourmet, http://diabeticgourmet.com/articles/206.html.
4. National Institute of Diabetes and Digestive and Kidney Diseases, “The Diabetes Control and Complications Trial,” Health
Trends, 1994, http://diabetes.niddk.nih.gov/dm/pubs/control.
5. B.M. Margetts, United Kingdom Prospective Diabetes
Study (UKPDS) 13, BMJ, 1995, www.ncbi.nlm.nih.gov/
pubmed/7833731.
John W. Jennings III is a compliance
manager for Vertex Business Services
in Richardson, TX. An ASQ fellow,
Jennings is an ASQ-certified Six Sigma
Black Belt, quality engineer, reliability
engineer, software quality engineer,
quality auditor, quality technician,
biomedical auditor and a manager of
quality/organizational excellence. He is an RABQSA-certified
ISO 9001:2008 lead auditor, is certified by the National
Association of Radio and Telecommunications Engineers as
an electrostatic discharge control engineer, and is a senior
examiner for the Texas Quality Award program.
DF
MS
F
P-value
F crit
0.832202
0.439
3.101296
572.208
2
286.104
29,909.87
87
343.7917
ANOVA = Analysis of variance
SS = Sum of squares
DF = Degrees of freedom
MS = Mean square
F = (found variation of the group averages)/
(expected variation of the group averages)
P-value = The probability of obtaining a test
statistic at least as extreme as the one that
was actually observed, assuming that the
null hypothesis is true.
F crit = The value of F at the threshold probability α of mistakenly rejecting a true null
hypothesis.
Daily blood sugar level averages
211
/ figure 3
201.6
UCL
191
171
151
Upper specification limit
150
CL
145.5
131
111
91
71
LCL
Lower specification limit
89.3
80
9/1/2012
9/2/2012
9/3/2012
9/4/2012
9/5/2012
9/6/2012
9/7/2012
9/8/2012
9/9/2012
9/10/2012
9/11/2012
9/12/2012
9/13/2012
9/14/2012
9/15/2012
9/16/2012
9/17/2012
9/18/2012
9/19/2012
9/20/2012
9/21/2012
9/22/2012
9/23/2012
9/24/2012
9/25/2012
9/26/2012
9/27/2012
9/28/2012
9/29/2012
9/30/2012
approach for making decisions about your
Daily average mg/dl
ing provides a disciplined and data driven
SS
mg/dl = milligrams per deciliters
June 2013 • QP 53
Career Corner
BY Henry J. Lindborg
Stake Your Ground
Unearthing the origins of stakeholder management
Stakeholder analysis has become
stakeholders to ensure alignment with
of Pennsylvania in Philadelphia, where he
standard practice among quality prac-
strategic objectives. Higher education’s
realized stakeholder theory was underde-
titioners. Whether conducting strategic
Academic Quality Improvement Program
veloped and deserved attention. “I never
planning, exploring an organization’s lead-
of the Higher Learning Commission has a
looked back,” Freeman said.
ership and governance using the Baldrige
similar requirement. As management tools
criteria, chartering Six Sigma projects,
and approaches become more sophisticat-
Separation fallacy
assessing enterprise risk or auditing cor-
ed and commonplace, we may forget their
In the 1980s, concerns about economic
porate social responsibility, it’s important
origins and broader implications. This
competitiveness led corporations and
to identify individuals or groups affected
month, let’s take a look at the discipline of
government to embrace strategic formu-
by an organization’s actions. In light of
stakeholder management.
las, such as Michael Porter’s “five forces”
volatility and complexity in organiza-
Modern stakeholder thinking arose in
model.3 Freeman sought to understand the
tions’ internal and external environments,
the 1930s in midst of a legal debate on the
ethics of strategic decisions and wondered
stakeholder analysis can guide them to act
responsibilities of corporations to their
if it was possible to integrate ethics with
responsibly and mitigate risk.
stockholders and other constituencies. So-
organizational strategy. He discovered
ciety began to ask, “What do corporations
widespread “separation fallacy”—busi-
in ASQ’s body of knowledge for quality
owe those who aren’t investors?” Legally,
ness decisions were separate from ethical
managers. It is practiced by revenue-driv-
stockholders came first. As health, safety,
considerations. Making decisions without
en corporations and nonprofits alike—in-
environmental and community relations
factoring in ethics can lead to dire conse-
cluding the United Nations and the World
evolved, other stakeholder groups were
quences, as we’ve witnessed in dramatic
Bank. The Malcolm Baldrige National
included. Few CEOs today would repeat
instances of corporate misconduct—from
Quality Award requires applicants to iden-
J.P. Morgan’s statement, “I owe the public
Enron and WorldCom to Lehman Brothers
tify and differentiate the needs of various
nothing,” even if they privately agree.1
Holdings Inc. and Bernie Madoff.
A stakeholder approach is enshrined
Though the Stanford Research Institute
is credited with first using the modern
Everyone counts
definition of stakeholder in 1963, the con-
To Freeman, the essence of business is
cept wasn’t fused with management think-
value creation. Maintaining relationships
ing until R. Edward Freeman published his
with customers, suppliers, employees,
influential book, Strategic Management: A
financiers and communities encourages
Stakeholder Approach, in 1984.2 Freeman
leaders to spark conversations about how
remains a thought leader in stakeholder
their companies create value and manage
management. Recently, I interviewed Free-
the needs of all stakeholders. Tradeoffs
man and we discussed stakeholder theory
never work. “Great companies figure out a
and its connection to quality.
win-win strategy,” he said.
Freeman, a professor at the Darden
54 QP • www.qualityprogress.com
Freeman’s thinking evolved as quality
School of the University of Virginia in
gained ground in the United States. He
Charlottesville, studied mathematics and
sees his work as complementary to the
philosophy at Duke University in Dur-
quality movement. When I asked Freeman
ham, NC, before earning a doctorate in
for his opinion on W. Edwards Deming, he
philosophy from Washington University
called him a hero and a true philosopher.
in St. Louis. Postdoctoral work took him
“Deming’s principles of driving fear out
to the Wharton School of the University
of the workplace and supporting human
We don’t need more theory.
We need more stories where we
don’t see tradeoffs.
the profound knowledge embedded in
stakeholder management and Deming’s
approach to quality and the potential for
transformational change when putting
those principles in action. They may find
their passion for service and organizational change in the deeper dimensions of
stakeholder management, which is gather-
dignity have a moral basis,” he said. While
to make red blood cells. We need them, but
ing new energy in business thinking and
Freeman thinks Deming’s teachings are
they are not our purpose. Risk takes our
practice. QP
“incredibly important,” he finds it interest-
eyes off of what we want to do. We have
ing that the core principles of his work are
to remain engaged, open, committed to
continually revisited. “Have we become so
purpose and answer the key question: Is
messed up that we need to be told what
this worth doing?”
Freeman hopes stakeholder manage-
5-year-olds know?” he said.
Our conversation shifted to risk manage-
ment will continue to integrate with other
ment and its entry into the quality arena.
disciplines. “We don’t need more theory.
“Risk isn’t interesting,” he said. “What’s
We need more stories where we don’t see
more interesting [and important] is how
tradeoffs,” he said. Freeman cited the con-
organizations engage multiple stakeholders.
scious capitalist movement and values-
[Risk] enters the equation when share-
based vision outlined in Whole Foods co-
holder value needs to be maximized to
founder John Mackey’s book, Conscious
satisfy Wall Street.” Freeman said he thinks
Capitalism: Liberating the Heroic Spirit
risk and profit hold too much power. “It’s
of Business,4 as an example.
as if one were to say the purpose of life is
Share
Your
Quality
Journey
Quality professionals sometimes forget
References
1. Roland Marchand, Creating the Corporate Soul, University
of California Press, 1998.
2. R. Edward Freeman, Stakeholder Theory: The State of the
Art, Cambridge University Press, 1984.
3. Michael E. Porter, Competitive Strategy, Free Press, 1980.
4. John Mackey and Rajendra Sisodia, Conscious Capitalism:
Liberating the Heroic Spirit of Business, Harvard Business
School Press, 2013.
Henry J. Lindborg is executive
director and CEO of the National
Institute for Quality Improvement
in Fond du Lac, WI, which provides
consulting in strategic planning,
organizational development and
assessment. He holds a doctorate
from the University of WisconsinMadison and teaches in a leadership and quality graduate
program. Lindborg is past chair of ASQ’s Education Division
and of the Education and Training Board. He also chairs the
IEEE-USA’s Career Workforce Policy Committee.
QP occasionally includes an interesting,
personal quality story in its “Quality in
the First Person” column. If you are interested
in sharing your story—how you got into
the quality field, how it has helped your
organization or your career or how quality
has enhanced your personal life—email
manuscripts@asq.org.
June 2013 • QP 55
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June 2013 • QP 57
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June 2013 • QP 59
Company Contact Information
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TECHNOLOGY
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ING
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BENC
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RKIN
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CALIB
RATIO
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CAPA
BILIT
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COM
DIES
PUTE
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CONS
ULTIN
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CORR
ECTIV
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TION
CUST
OME
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VICE
CUST
OMIZ
ED S
OFTW
DATA
ARE
ACQU
DEVE
ISITIO
LOPM
DESIG
N
ENT
N OF
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X
PERIM
DOCU
ENT
ME N
T MA
NAGE
E-CO
MME
ME N
R CE
T
GAUG
E R EP
E
A
TABIL
INSP
ITY A
ECTIO
ND R
N
EP R O
ISO 9
DUCIB
000
ILITY
ISO 1
4000
MAN
AGEM
ENT
MEA
SURE
ME N
T
PR EV
ENTIV
E AC
TION
PROB
LE M
SOLV
ING
PROC
ESS D
OCUM
QS-9
ENTA
000/T
TION
S 169
/MAP
49
QUAL
PING
ITY A
SSUR
QUAL
ANCE
ITY F
UNCT
ION A
R ECA
LL M
ND D
ANAG
E P LO
YMEN
RELIA
E ME N
BILIT
T
T
Y
SIMU
LATIO
N
SIX S
IGMA
SOFT
WAR
E
STAT
ISTIC
AL M
ETHO
STAT
DS
ISTIC
AL PR
OCES
SUPP
S CO
LIER
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ITY A
TAGU
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CHI T
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QualityProgress_HalfPage_03-25-13.indd 1
3/25/2013 1:46:44 PM
June 2013 • QP 61
Company Contact Information
RealityCharting®
OTHE
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VICE
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EP R O
ISO 9
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ISO 1
4000
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OCES
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P R EP
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Training RATION
Special Advertising Section
x
731 Commerce Street, Floor 2
Tacoma, WA 98402
Phone: 877-722-2770
www.realitycharting.com
Apollo Root Cause AnalysisTM
methodology and RealityCharting®
software provide a better
understanding of problems and
identifying effective solutions used
by organizations around the world!
SigmaXL
x
110 Cumberland Street,
Suite 356
Toronto, ON M5R 3V5 Canada
Phone: 416-236-5877
www.sigmaxl.com
x
x
x
SigmaXL + Excel = easy statistical
and graphical analysis. SigmaXL
and DiscoverSim are cost-effective,
powerful, user-friendly and ideal
for Lean Six Sigma training! Free
30-day trial.
StatPoint Technologies Inc.
P.O. Box 208
Orlean, VA 20128
Phone: 540-229-0090
www.statgraphics.com
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Statgraphics Centurion XVI—make
sense of it all. Leading companies
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Make informed decisions that drive
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StatSoft
2300 E. 14th Street
Tulsa, OK 74104
Phone: 918-749-1119
www.statsoft.com
x
StatSoft provides award-winning,
industry-specific enterprise
solutions that integrate analytics
with your data repositories for
process monitoring, root cause
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62 QP • www.qualityprogress.com
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Apollo Root Cause Analysis™ By Dean L. Gano
Free Book
Free Software Solutions
Go to realitycharting.com/rcbook
Go to realitycharting.com/downloads
for free software and 30-day trial
provideds a text entry interface that simply asks the questions a
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2012 Statpoint Technologies, Inc. All rights reserved. The logo’s and service names mentioned herein are registered
trademarks or trademarks of Statpoint Technologies. Copyright 2012 Statpoint Technologies, Inc.
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June 2013 • QP 63
Company Contact Information
Waypoint Global (formerly
Powerway)
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6910 N. Shadeland Avenue
Indianapolis, IN 46220
Phone: 317-624-4000
www.waypointglobal.com
Waypoint Global Suite—with more
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Reduce manufacturing waste, rework and
raw material usage
OEE Performance Monitoring
Monitor and nd ways to correct the
‘Six Big Losses’
Instant Capability Studies
Review product and process capability in
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Supplier quality monitoring
Prevent substandard materials entering
your process
64 QP • www.qualityprogress.com
x
OTHE
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TECHNOLOGY
AUDIT
ING
BALD
RIGE
AWA
RD
BENC
HMA
RKIN
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CALIB
RATIO
N
CAPA
BILIT
Y STU
COM
DIES
PUTE
RS
CONS
ULTIN
G
CORR
ECTIV
E AC
TION
CUST
OME
R SER
VICE
CUST
OMIZ
ED S
OFTW
DATA
ARE
ACQU
DEVE
ISITIO
LOPM
DESIG
N
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N OF
E
X
PERIM
DOCU
ENT
ME N
T MA
NAGE
E-CO
MME
ME N
R CE
T
GAUG
E R EP
E
A
TABIL
INSP
ITY A
ECTIO
ND R
N
EP R O
ISO 9
DUCIB
000
ILITY
ISO 1
4000
MAN
AGEM
ENT
MEA
SURE
ME N
T
PR EV
ENTIV
E AC
TION
PROB
LE M
SOLV
ING
PROC
ESS D
OCUM
QS-9
ENTA
000/T
TION
S 169
/MAP
49
QUAL
PING
ITY A
SSUR
QUAL
ANCE
ITY F
UNCT
ION A
R ECA
LL M
ND D
ANAG
E P LO
YMEN
RELIA
E ME N
BILIT
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SIMU
LATIO
N
SIX S
IGMA
SOFT
WAR
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STAT
ISTIC
AL M
ETHO
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DS
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AL PR
OCES
SUPP
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LIER
NTRO
QUAL
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TAGU
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CHI T
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ECHN
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P R EP
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training
CERTIFICATION
CONFERENCEs
MEMBERSHIP
PUBLICATIONS
QPToolbox
Portable analyzer
Spectro Analytical Instruments’ Spectroscout portable energy dispersive x-ray
fluorescence (ED-XRF) analyzer enables
rapid, laboratory-class elemental analysis
of environmental and geological samples
in remote locations.
The portable analyzer is ideal for on-site
environmental and geological analysis. In
shale gas boundary layer detection, for
instance, it allows for data-based direction
changes that increases drilling productivity.
The Spectroscout portable ED-XRF
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GAGEpack from PQ Systems is gage cali-
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66 QP • www.qualityprogress.com
system that sends reminders.
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Vibration monitor meter
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from Quality Bearings and Components
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Flexible zone control
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Rotary encoders
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Heidenhain has released the ECN/EQN
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shaft with a 12mm diameter.
high-density accumulation and increased
Models ECN 413 and EQN 425 rotary
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handling efficiency and allow for carton
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switch configuration and LED diagnostics
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In regards to connectivity, users of
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Got a quality product?
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June 2013 • QP 67
QPReviews
Enterprise Analytics: Optimize
Performance, Process and
Decisions Through Big Data
pathway to future management thinking.
bringing forward a summary and recom-
All leaders and corporate officers should
mendations. As a resource, the book is
read this book to understand the future
well-organized and offers effective sec-
Thomas H. Davenport, editor, FT Press,
and develop their action plans accord-
tion headings to guide the reader. There
2012, 288 pp., $44.99 (book).
ingly.
is also a useful author and subject index.
Davenport’s career
Bill Baker
as a thought leader
Speed to Excellence
and business process
Santa Fe, NM
analyst allows him to
The STEM agenda is considered a continuing initiative and not a trial curriculum.
This content can be used by those in the
K-12 school programs as well as academic
programs in colleges and universities.
ing trends in big data
Advancing the STEM Agenda:
Quality Improvement
Supports STEM
and integrating those
Cindy P. Veenstra, Fernando F. Padró and
explorations related to teaching learning
with a future. With
Julie A. Furst-Bowe, edittors, ASQ Quality
programs.
corporate backing,
Press, 2012, 304 pp., $38 member, $63 list
continue pushing the
envelope by identify-
he formed the International Institute for
The academic areas of interest relate to
the subject fields and the pedagogical
Jerry Brong
(book).
Ellensburg, WA
Analytics where extensive research is per-
This book presents
formed to understand big data, its impact
insights, operational
and current position in the industry.
suggestions for pro-
Standard Work for
Lean Healthcare
grams and guidance
Thomas L. Jackson, editor, Productivity
sisting of 18 chapters. The book starts with
The book is divided into five parts con-
in moving a STEM
Press, 2011, 124 pp., $29.95 (book).
an overview of big data and proceeds with
(science, technol-
Standard work is one
applications, technologies, the human side
ogy, engineering,
of the fundamental
and case studies. Big data are character-
and mathematics)
concepts in lean, and
ized as “data that are either too volumi-
curriculum forward.
this book explains
nous or too unstructured to be managed
The book is a collection of selected papers
how it can be applied
and analyzed through traditional means.”
from the July 2011 ASQ Education Divi-
and implemented in
This is a challenge and an opportunity
sion conference on Advancing the STEM
a healthcare setting.
to get a complete view of your custom-
Agenda in Education, the Workplace and
The book has seven
ers by linking and projecting needs from
Society. Papers selected from the confer-
computer clicks.
ence present perspectives about STEM,
the definition of standard work and its ap-
strategies for implementation and sug-
plications in healthcare.
In part four, the discussion turns to how
big data analysts could be structured in
gestions for bridging the gap between the
organizations. The challenge is to leverage
workplace and educational programs.
their knowledge and generate value, defin-
Value from this book can be derived
chapters that cover
The book is readable with margin
assists that delineate sections with
examples, key points and how-to steps.
ing roles and responsibilities and gover-
from the reports by the authors of
Given that this book’s intended reader
nance in different-sized organizations. Part
individual papers on their strategies and
is someone learning lean methods, the
five presents some insightful case studies
tactics working with a STEM agenda,
margin assists are good aids.
and the organizations’ journeys.
overcoming challenges, assessing learner
This book outlines the terminology and
In addition, the how-to sections of the
and program outcomes, and preparing for
book go into great detail on how to fill
importance of dealing with big data and
follow-steps. The editors of this collec-
the charts, such as the standard work
its impact on being competitive. It is the
tion of papers offer a concluding chapter
sheet, percentage load chart, standard
68 QP • www.qualityprogress.com
work combination sheet and the stan-
subject, but it does deliver on the purpose
ment his baby-step approach to dealing
dard work instruction sheet.
and value of the internal audit process. I
with typical managerial challenges. These
Overall, this book is worthwhile for
would recommend this book to all person-
include boosting morale, cutting costs,
anyone who is interested in implementing
nel either managing or performing audits.
improving quality and service, develop-
standard work in a healthcare setting.
And unlike the first edition, you can stop
ing new products, increasing sales and
searching.
reducing healthcare expenses. He further
Brian Cocolicchio
New City, NY
Wayne Sander
Dove Quality Consulting
How to Audit the
Process-Based QMS
Dousman, WI
connects with managers by frequently
relating the discussion to actual business
situations or past clients.
Maurer’s relatively short work emphasizes the key points that are nicely
208 pp., $44 member, $72 (book, second
The Spirit of Kaizen:
Creating Lasting Excellence
One Small Step at a Time
edition).
Robert Maurer, McGraw-Hill Professional,
anyone new to kaizen, as well as internal
2012, 176 pp., $22 (book).
kaizen leaders in any organization.
Dennis R. Arter, Charles A. Cianfrani and
John E. (Jack) West, ASQ Quality Press, 2012,
I had the pleasure of
presented in language that any reader will
find helpful. This book is recommended for
reviewing the first
Maurer presents a
Dale Farris
edition of this book.
relatively brief—but
Groves, TX
At that time, I be-
powerful—expla-
lieved it was a good
nation of how the
source of information
weighty principles
for those who need-
of kaizen can help
ed to understand the
ensure significant
basics of auditing and
and lasting change
how to set up an audit program at their
in an organization.
organization. But for quality practitioners, I
Following a succinct introduction to
suggested they continue searching for the
kaizen, Maurer explains how to imple-
Recent Releases
Permission to Forget, 10th
Anniversary Edition: And Nine
Other Root Causes of America’s
Frustration with Education
Lee Jenkins, ASQ Quality Press, 2013, 210 pp.,
$30 member, $51 list (book).
process to audit the process approach. As
with a lot of things, time helps us mature
and continuously improve. This is true of
the book’s second edition.
The authors have hit the mark with this
book. They are direct and frank in their
approach to auditing. Auditing is about
understanding requirements, looking for
opportunities for improvement and best
practices, asking questions, gathering
information, analyzing what is seen and
heard, forming opinions, and reaching
conclusions. And believe it or not, they do
a good job of explaining how to do it all.
The book is not lengthy and doesn’t go
into a great deal of explanation on every
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QiSoft
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Quality Council of Indiana
10, 11 800-660-4215 www.qualitycouncil.com
RealityCharting
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SigmaXL
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StatPoint Technologies Inc.
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StatSoft Inc.
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June 2013 • QP 71
Back to Basics
BY scott force
Light Bulb Moment
DMAIC powers new perspective
Newly certified Six Sigma Black
weren’t painted that could not be seen
Leading the way
Belts often struggle with understand-
while standing upright. Lying on the floor
As shown in Figure 1, the process map
ing how the various quality tools work
provided me with a new perspective.
leads to the use of other tools that help
together. It took me a few projects before
Several months later while on my lad-
break the process down. For example,
I began to see linkage. As I teach and men-
der replacing a light bulb, I found more
failure mode and effects analysis can help
tor new Belts, I use an analogy that hits
areas that were missing paint. If it wasn’t
uncover process steps that are error prone
close to home.
for the new point of view, I never would
and pose greater risk to the customer. Key
have noticed these minor defects. In lean
inputs to the process map can be analyzed
house. Before moving day, we conducted
Six Sigma (LSS) projects, the define,
using measurement systems analysis
a final walkthrough with the contractor. I
measure, analyze, improve and control
(MSA) to determine whether there are
remember pointing out areas on the walls
(DMAIC) approach helps a team view a
issues with data quality.
that needed a touch up with paint, the
process or problem from many different
spackling smoothed out and other minor
perspectives.
In 2001, my family and I moved to a new
cosmetic improvements. It wasn’t until
After MSA, the team can conduct a process capability analysis to determine how
DMAIC is a disciplined and systematic
well the key process variables are meeting
months later, while wrestling with our kids
approach to drive process improvement.
customer requirements. A cause and effect
on the living room floor, that something
While DMAIC can be used on its own, it
matrix narrows the key inputs listed on
caught my eye. I noticed little areas that
also helps guide LSS projects. The method
the process map and separates the trivial
Tool linkage
/ figure 1
forces the team to
many from the vital few. Process control
view a process from
plans document the controls in place in
many different angles
the current state and pinpoint where criti-
and to turn to a vari-
cal process controls are needed.
ety of tools to solve
FMEA/risk
analysis
Process
control
plan
VA/NVA
analysis
Process
map
It is important for LSS practitioners to
a problem. Issues,
consider the DMAIC roadmap and to max-
concerns, root causes
imize quality tools along the improvement
and solutions are un-
journey. By adhering to this disciplined
covered more quickly
approach, there is a higher probability that
and easily.
the team will reach its goals and achieve
Belts are taught to
continuous improvement. Like a doctor di-
always map the pro-
agnosing an ailment or a carpenter build-
cess being improved
ing a home, you must use the tools at your
in the early stages
disposal to uncover variables preventing
of the project. After
the process from running at its best. QP
the process map is
Cause and
effect
matrix
Measurement
systems
analysis
complete, the Belt
uses tools in his or her
tool kit to evaluate the
Process
capability
analysis
VA = value added
NVA = nonvalue added
FMEA = failure mode and effects analysis
72 QP • www.qualityprogress.com
process from various
perspectives and determine what activities
are value added and
nonvalue added.
Scott Force has more than 22 years
of quality improvement experience in
the healthcare, automotive and power equipment industries. He earned a
bachelor’s degree in manufacturing
engineering from Miami University
in Oxford, OH. A senior member of
ASQ, Force is an ASQ-certified quality
engineer and a Sigma Breakthrough Technologies-trained
Master Black Belt.
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