Module 3: Managing for Quality and high Performance
Review Questions
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
•
•
•
Explain the different components of Quality Cost. (R1), (R2).
What do you understand by zero defect concept? ( R1)
Differentiate internal and external customers.
Compare and contrast Deming Prize with Malcolm Baldrige Quality
Award(MBQNA).(R1)
Explain the award and seven criteria for performance excellence of a firm for
MBQNA.(R1) (R2)
Explain in detail the core value of TQM organizations.
What are quality improvement teams?
What are Quality manuals? Discuss the various elements of Quality Manual?
(R1)
What is ISO-9000? How is it structured? Explain the steps to be followed for
registration and implementation of the programme.
Explain the relevance of ISO-9000 to TQM.
What is ISO 9000-2000?
Write Short notes on :
JIT
ISO 14000
Employee resistance to change
CMR IT- JESSY NAIR
IV Sem – A & B ‘09
Module 4 :Process Management and
Quality Control Tools
CMR IT- JESSY NAIR
IV Sem – A & B ‘09
Process management and Quality Controls
4
4.2
Tools for quality planning
Quality Function Deployment (QFD) -Concepts and techniques
4.3
Six sigma concept
4.4
Deming’s PDCA cycle, Poka Yoke
4.5
7 QC tools
4.6
4.7
CMR IT- JESSY NAIR
Kaizen
IV Sem – A & B ‘09
Tools and Techniques for Quality Management
Strategic
Statistical (7) Tools
Radical
aids
Histograms
Pareto Charts
Cause and Effect
Diagrams
Run Charts
Scatter Diagrams
Flow Charts
Control Charts
•Planning
•Improvement
Tools for
Quality Planning
Continuous Improvement
Market Research
Demings PDCA
QFD
Benchmarking
Concurrent
Engineering
Kaizen
New Tools /
Managerial Tools
CMR IT- JESSY NAIR
JIT
Poka Yoke
Zero Defect
IV Sem – A & B ‘09
Benchmarking
Business Process
Reengineering (BPR)
Six Sigma
QFD
Concurrent Engineering
Seven Quality Tools
The Seven Tools
1.
2.
3.
4.
5.
6.
7.
Histograms
Pareto Charts
Cause and Effect Diagrams
Run Charts
Scatter Diagrams
Flow Charts
Control Charts
CMR IT- JESSY NAIR
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Ishikawa’s Basic Tools of Quality
• Kaoru Ishikawa developed seven basic visual tools of
quality so that the average person could analyze and
interpret data.
• These tools have been used worldwide by companies,
managers of all levels and employees.
Kaoru Ishikawa (Ishikawa Kaoru) (1915-1989) was a Japanese
University professor and influential quality management
innovator.
Best known for the Ishikawa or Cause and Effect (CE) diagram
(also known as Fishbone Diagram) that are used in the analysis
of industrial process.
He is considered one of the Quality Gurus.
CMR IT- JESSY NAIR
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Three SQC Categories
•
Statistical quality control (SQC) is the term used to describe the set of statistical
tools used by quality professionals
•
SQC encompasses three broad categories of;
– Descriptive statistics
• e.g. the mean, standard deviation, and range
– Statistical process control (SPC)
• Involves inspecting the output from a process
• Quality characteristics are measured and charted
• Helpful in identifying in-process variations
– Acceptance sampling used to randomly inspect a batch of goods to determine
acceptance/rejection
• Does not help to catch in-process problems
CMR IT- JESSY NAIR
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Sources of Variation
•
Variation exists in all processes.
•
Variation can be categorized as either;
– Common or Random causes of variation, or
• Random causes that we cannot identify
• Unavoidable
• e.g. slight differences in process variables like diameter, weight, service
time, temperature
– Assignable causes of variation
• Causes can be identified and eliminated
• e.g. poor employee training, worn tool, machine needing repair
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Histograms
• Histogram Defined
– A histogram is a bar graph that shows
frequency data.
– Histograms provide the easiest way to
evaluate the distribution of data.
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Histograms
• Creating a Histogram
– Collect data and sort it into categories.
– Then label the data as the independent set or the
dependent set.
• The characteristic you grouped the data by would be the
independent variable.
• The frequency of that set would be the dependent variable.
– Each mark on either axis should be in equal increments.
– For each category, find the related frequency and make
the horizontal marks to show that frequency.
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Histograms
• Examples of How Histograms Can Be Used
– Histograms can be used to determine
distribution of sales.
– Say for instance a company wanted to
measure the revenues of other companies
and wanted to compare numbers.
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Pareto Charts
• Pareto Chart Defined
– Pareto charts are used to identify and prioritize
problems to be solved.
– They are actually histograms aided by the 80/20 rule
adapted by Joseph Juran.
• Remember the 80/20 rule states that approximately 80% of
the problems are created by approximately 20% of the
causes.
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Pareto Charts
• Constructing a Pareto Chart
– First, information must be selected based on
types or classifications of defects that occur
as a result of a process.
– The data must be collected and classified into
categories.
– Then a histogram or frequency chart is
constructed showing the number of
occurrences.
CMR IT- JESSY NAIR
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Pareto Charts
• An Example of How a Pareto Chart Can Be Used
– Pareto Charts are used when products are suffering from
different defects but the defects are occurring at a different
frequency, or only a few account for most of the defects present,
or different defects incur different costs.
– What we see from that is a product line may experience a range
of defects. The manufacturer could concentrate on reducing the
defects which make up a bigger percentage of all the defects or
focus on eliminating the defect that causes monetary loss.
• Actual chart is on the next slide
» Example and chart were obtained from:
<www.yourmba.co.uk/pareto_diagram.htm>
CMR IT- JESSY NAIR
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Pareto Charts
CMR IT- JESSY NAIR
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Cause and Effect Diagrams
• Cause and Effect Diagram Defined
– The cause and effect diagram is also called the Ishikawa
diagram or the fishbone diagram.
– It is a tool for discovering all the possible causes for a particular
effect.
– The major purpose of this diagram is to act as a first step in
problem solving by creating a list of possible causes.
CMR IT- JESSY NAIR
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Cause and Effect Diagrams
• Constructing a Cause and Effect Diagram
– First, clearly identify and define the problem or effect for which
the causes must be identified. Place the problem or effect at the
right or the head of the diagram.
– Identify all the broad areas of the problem.
– Write in all the detailed possible causes in each of the broad
areas.
– Each cause identified should be looked upon for further more
specific causes.
– View the diagram and evaluate the main causes.
– Set goals and take action on the main causes.
CMR IT- JESSY NAIR
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Cause and Effect Diagrams
• An Example of When a Cause and Effect Diagram Can
Be Used
– This diagram can be used to detect the problem of
incorrect deliveries.
• Diagram on next slide
– Diagram obtained from:
<http://www.hci.com.au/hcisite/toolkit/causeand.htm>
– When a production team is about to launch a new
product, the factors that will affect the final product
must be recognized. The fishbone diagram can
depict problems before they have a chance to begin.
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Cause and Effect Diagrams
Diagram of the Incorrect Deliveries Example:
CMR IT- JESSY NAIR
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Scatter Diagrams
• Scatter Diagrams Defined
– Scatter Diagrams are used to study and
identify the possible relationship between the
changes observed in two different sets of
variables.
CMR IT- JESSY NAIR
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Scatter Diagrams
• Constructing a Scatter Diagram
– First, collect two pieces of data and create a summary
table of the data.
– Draw a diagram labeling the horizontal and vertical
axes.
• It is common that the “cause” variable be labeled on the X axis and
the “effect” variable be labeled on the Y axis.
– Plot the data pairs on the diagram.
– Interpret the scatter diagram for direction and
strength.
CMR IT- JESSY NAIR
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Scatter Diagrams
• An Example of When a Scatter Diagram Can Be
Used
– A scatter diagram can be used to identify the
relationship between the production speed of
an operation and the number of defective
parts made.
CMR IT- JESSY NAIR
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Scatter Diagrams
• An Example of When a Scatter Diagram Can Be Used (cont.)
– Displaying the direction of the relationship will determine whether
increasing the assembly line speed will increase or decrease the
number of defective parts made.
– Also, the strength of the relationship between the assembly line
speed and the number of defective parts produced is
determined.
– Example obtained from: <http://www.sytsma.com/tqmtools/Scat.html>
CMR IT- JESSY NAIR
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Flow Charts
• Flow Charts Defined
– A flow chart is a pictorial representation
showing all of the steps of a process.
CMR IT- JESSY NAIR
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Flow Charts
• Creating a Flow Chart
– First, familiarize the participants with the flow chart
symbols.
– Draw the process flow chart and fill it out in detail
about each element.
– Analyze the flow chart. Determine which steps add
value and which don’t in the process of simplifying the
work.
CMR IT- JESSY NAIR
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Flow Charts
• Examples of When to Use a Flow Chart
– Two separate stages of a process flow chart
should be considered:
• The making of the product
• The finished product
CMR IT- JESSY NAIR
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Run Charts
• Run Charts Defined
– Run charts are used to analyze processes
according to time or order.
CMR IT- JESSY NAIR
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Run Charts
• Creating a Run Chart
– Gathering Data
• Some type of process or operation must be available to take
measurements for analysis.
– Organizing Data
• Data must be divided into two sets of values X and Y. X values
represent time and values of Y represent the measurements taken from
the manufacturing process or operation.
– Charting Data
• Plot the Y values versus the X values.
– Interpreting Data
• Interpret the data and draw any conclusions that will be beneficial to the
process or operation.
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Run Charts
• An Example of Using a Run Chart
– An organization’s desire is to have their product arrive
to their customers on time, but they have noticed that
it doesn’t take the same amount of time each day of
the week. They decided to monitor the amount of
time it takes to deliver their product over the next few
weeks.
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Control Charts
• Control Charts Defined
– Control charts are used to determine whether
a process will produce a product or service
with consistent measurable properties.
CMR IT- JESSY NAIR
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Control Charts
• Steps Used in Developing Process Control Charts
– Identify critical operations in the process where
inspection might be needed.
– Identify critical product characteristics.
– Determine whether the critical product characteristic
is a variable or an attribute.
– Select the appropriate process control chart.
– Establish the control limits and use the chart to
monitor and improve.
– Update the limits.
CMR IT- JESSY NAIR
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Control Charts
• An Example of When to Use a Control Chart
– Counting the number of defective products or
services
• Do you count the number of defects in a given
product or service?
• Is the number of units checked or tested constant?
CMR IT- JESSY NAIR
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Class Activity
Consider you are the student coordinator incharge
of conference being conducted by MBA dept on
7th and 8th May.
Chart your plan of action in a Flow Chart to make a
presentation to the conference committee which
includes : Prez, CMRIT, Principal CMRIT,
Coordinator MBA Dept.
CMR IT- JESSY NAIR
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Summary
This presentation provided learning material for each of Ishikawa’s seven
basic tools of quality.
Each tool was clearly defined with definitions, a step-by-step process and
an example of how the tool can be used.
As seen through the presentation, these tools are rather simple and
effective.
CMR IT- JESSY NAIR
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Works - Cited
•
•
•
•
•
•
•
Histograms and Bar Graphs. <http://www.shodor.org/interactivate/lessons/sm3.html>
Your MBA: The Business Study Reference Site.
http://yourmba.co.uk/pareto_diagram.htm
Hci Home Services. Cause and Effect Diagram.
http://hci.com.au/hcisite/toolkit/causeand.htm
Scatter Diagram. http://sytsma.com/tqmtools/Scat.html
Flowchart. <http://http://deming.eng.clemson.edu/pub/tutorials/qctools/flowm.htm>
Run Charts/Time Plot/ Trend Chart.
<http://www.deming.edu.clemson.edu/pub/tutorials/qctools/runm.htm>
Foster Thomas S. Managing Quality An Integrative Approach. New Jersey: Prentice
Hall, 2001
CMR IT- JESSY NAIR
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Question:
• What are costs of quality?
• Task: Create your list of quality costs and share
with the class.
• What is the relationship between quality and
productivity?
CMR IT- JESSY NAIR
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Why Metrics!
• A strategy without metrics is just a wish. And metrics
that are not aligned with strategic objectives are a waste
of time.
– Emery Powell
• Be careful what you measure -- you might just get it.
• If you don’t keep score, you’re only practicing.
– Tom Malone
• You get what you inspect, not what you expect.
CMR IT- JESSY NAIR
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The Real Bottom Line: Mission and
Measures
• One of the most powerful management disciplines, the one that
more than any other keeps people focused and pulling in the same
direction, is to make an organization’s purposes tangible.
Managers do this by translating the organization’s mission –
what it, particularly, exists to do – into a set of goals and
performance measures that make success concrete for
everyone. This is the real bottom line for every organization –
whether it’s a business or a school or a hospital. Its executives must
answer the question, “Given our mission, how is our performance
going to be defined?”
– Magretta & Stone, Management. 2002, p. 129
CMR IT- JESSY NAIR
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Why Metrics Now!
•
•
•
•
•
•
The “never satisfied” customer.
Managing the “total” supply chain.
Shrinking product life cycles.
More (not necessarily better) data.
Profit margin squeezes.
Presence of an increasing number of
alternatives.
CMR IT- JESSY NAIR
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So What
•
•
Surviving in this new environment means
working with:
– Less lead time
– Less inventory
– Less cost
– More reliance on the supply chain
Surviving means having “better” metrics.
CMR IT- JESSY NAIR
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What are Metrics?
•
•
A verifiable measure stated in either quantitative
(e.g., 95% inventory accuracy) or qualitative (e.g.,
as evaluated by our customer,we are providing
above average service) terms. A metric is
intended to close the gap between value,
strategy, and specific activities.
Metrics
– Measure, direct, teach.
CMR IT- JESSY NAIR
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Cost of Quality
CMR IT- JESSY NAIR
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Quality cost
A quality cost is considered to be any cost that the
company would not have incurred if the quality
of the product or service were perfect.
Quality costs:
Total quality costs are the sum of :
• prevention costs,
• appraisal costs, and
• internal and external failure costs
CMR IT- JESSY NAIR
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Classifying Quality Costs
CMR IT- JESSY NAIR
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Quality costs increase over time
Failure Costs
Liability costs
Failure found by customer
Field repair costs
Failure found at installation
Failure found at final inspection
Failure found at onset of manufacture
Failure found during design phase
Prevention Costs
Time when failure found
CMR IT- JESSY NAIR
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Hidden Costs of Poor Quality
Reprocessing
Customer returns
Rejects
Warranty expenses
Lost sales
Loss of goodwill
Overtime to correct errors
Extra inventory
Process downtime
Delays
Premium freight costs
Extra process capacity
Extra inventory
CMR IT- JESSY NAIR
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IMPLICATIONS OF THESE COSTS
NEXT LET US LOOK AT:
FINANCIAL AND NON-FINANCIAL MEASURES OF
MEASURING CUSTOMER SATISFACTION AND
INTERNAL PERFORMANCE
Dr Robert Kaplan and Dr David Norton developed that
takes into account Financial and non-financial measures
in internal performance, customer satisfaction, etc.
CMR IT- JESSY NAIR
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BALANCED SCORE CARD
Gaining widespread popularity now, as many companies are
turning to the balanced score card approach.
BSA takes into account measures from accounting, operations,
human resources, customers and other stake holders in order to
arrive into a more integrative and broader measure of
performance.
CMR IT- JESSY NAIR
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Balanced Score Card
TQM Element
Customer
satisfaction
Internal
performance
CMR IT- JESSY NAIR
Financial Measure
Non-financial Measure
Results of customer
satisfaction survey.
External failure cost.
On-time delivery.
Field service expense.
Number of customer
complaints.
Appraisal cost.
Internal failure cost.
Prevention cost.
IV Sem – A & B ‘09
Defect rates
Yields
Lead times
Idle capacity
Unscheduled machine
downtime
Cost of Quality: COQ as motivator
• Companies under TQM do not focus on quality
cost minimization.
• Quality improvement projects tend to focus on
zero defects or defect reduction to the six-sigma
level.
Costs of Conformance: prevention & appraisal
Costs of Non-Conformance: Internal Failure & External
CMR IT- JESSY NAIR
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COQ Theme
• Costs are not incurred or allocated, but rather
caused.
• Cost information does not solve quality
problems, nor does it suggest specific solutions.
• Problems are solved by tracing the cause of a
quality deficiency.
CMR IT- JESSY NAIR
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“A.V.Fiegenbaum estimates that 15 to 40% of the manufacturer’s cost of
almost any American product that one brought was for waste embedded
in ie. Waste of human effort, waste of machine time, non-productive use
of accompanying burden” (QUALITY PROGRESS, Nov. 1977)
“With the storehouse of skills and knowledge contained in its millions of
unemployed and with the even more appalling under use, misuse and
abuse of skills and knowledge in the army of employed people in all ranks
in all industries, the United States may be today the most
underdeveloped nation in the world” (OUT OF CRISIS by Dr.Edward
Deming).
CMR IT- JESSY NAIR
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Most people are not intentionally bad.
It is our experience that more people commit mistakes out of ignorance than
arrogance.
Those costs not directly contributing for the enhancement of
the value of the product can be termed as “Waste.”
In other words, that cost which does not add value to the
product is termed as waste.
For example, a person who is transporting the material (for
the next process), which can be transported through a
conveyor is only adding cost and not value to the product.
As Dr.Deming Says: “Work SMARTER and Not HARDER” must be the motto.
People’s sense of value can be satisfied only when they know that they are
dong something worthwhile. To make people work harder and produce more is
not RESPECT FOR HUMANITY.
CMR IT- JESSY NAIR
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Waste - MUDA
• Production system of Toyota is dedicated to total to total
elimination of waste. Due to continuous elimination of
waste. Due to elimination of waste and improvement in
the process, the production output of Toyota has
improved as follows:
• In 1952: 10 employees produced on car per month
• In 1961: 1 employee produce one care per month
• In 1984: 1 employee produced five cars per month
Mr.Taiichi Ohno says: “Work improvement means to discover the best method
of doing things within the frame work of existing facilities. It is not to make
equipment. It is to think about the way of doing your work”.
CMR IT- JESSY NAIR
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Waste – MUDA……
• Toyota Production System and Canon
Production System are dedicated towards the
elimination of waste in all spheres.
• Toyota Production System identifies “Seven
kinds of waste” where Canon Production System
identifies “Nine kind of waste”
CMR IT- JESSY NAIR
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MUDA – Toyota Production System
Waste arising from:
• Overproducing
• Time on hand (waiting)
• Transporting
• Processing itself
• Unnecessary stock on hand
• Unnecessary motion
• Producing defective goods
CMR IT- JESSY NAIR
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Quality Management Tool Box
• Non-Conformances come from
many sources including:
• Variation
• Culture
Complexity
• Complexity
Mistakes
• Mistakes
Variation
Each must be managed
to improve
quality and reliability.
Culture
Everyday Examples
3.5 inch diskettes cannot be inserted unless diskette
is oriented correctly. This is as far as a disk can be inserted
upside-down. The beveled corner of the diskette along with
the fact that the diskette is not square, prohibit incorrect
orientation.
Fueling area of car has three error-proofing devices:
1. insert keeps leaded-fuel nozzle from being inserted
2. tether does not allow loss of gas cap
3. gas cap has ratchet to signal proper tightness and
prevent overtightening.
New lawn mowers are required to have a safety bar on
the handle that must be pulled back in order to start
the engine. If you let go
of the safety bar, the mower blade stops in 3 seconds
or less.
Poke -Yoke
• Poka-Yoke is fool proofing, which is the basis
of the Zero Quality Control (ZQC) approach.
• It is a technique for avoiding and eliminating
mistakes.
• Generally this technique is used in
manufacturing processes, but has much wider
uses, such as; offices - order and invoice
processing, hospitals - drug dispensing, aircraft
maintenance - particularly with processes having
the potential of inducing catastrophic in-service
failures.
CMR IT- JESSY NAIR
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Poke –Yoke……
The term Poka-Yoke is Japanese and can roughly be translated as
mistake or fool proofing.
It is derived from ‘Poka’ - inadvertent mistake and ‘yoke’ - avoid.
The concept of fool proofing processes and mechanical devises has
been around for many years (e.g. see photographs of floppy disk
drive and electrical plugs)
It was the Japanese Matsushita Industrial Engineer Dr. Shigeo Shingo
who was probably most prominent and influential in developing it
into a technique.
He turned the idea into a powerful approach for eliminating mistakes
and achieving zero defects.
Dr. Shingo used the phrase "error avoidance", as he recognised
that people, or more specifically Japanese workers, may take
offence at the term fool, particularly when associated with mistakes.
CMR IT- JESSY NAIR
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Evidence of the Effectiveness
Cooper Automotive:
– 95% less defects than nearest competitor
– 75% less injuries
– 99.6% less customer defects (13 ppm)
– 88% in-plant defect reduction
– 70% less warranty cost
– 89% scrap reduction (0.7%)
– 60% productivity increase
Source: Productivity Inc. and Shingo prize profiles
CMR IT- JESSY NAIR
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…and Very Effective
• Dana corporation has reported a $500,000 savings resulting
from a $6 device. (83,000:1)
• AT&T Power Systems (Lucent Technologies) reported net
saving of $2545 per device (3300 devices) [Marchwinsky, 1997].
(25:1*)
• Weber Aircraft reports saving $350,000 during their first year of
implementation of approximately 300 devices. (11:1*)
*Assumes an average devise cost $100
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Example:
Blood-Loc
• Transfusion error:
administering wrong unit of
blood to patient
• Code for lock found on
patient’s wristband
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Examples:
Off the Shelf
Pick-to-light bin system
with sensors
Metal sensing drill
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Examples:
Off the Shelf
Miniature barcode
readers
Vision systems
Laser part locators
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Examples:
Off the Shelf
Huck Fasteners: proper
tightening without
threads or torque
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Examples:
Off the Shelf
Wireless barcode reading palm-pilot
scans the patient, the medication and
the care giver, to confirm the patient,
medication, dose, time and route are
correct.
Point of care automation provides
correct medication and dose
CMR IT- JESSY NAIR
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Module 4 - Process Management and Quality
Control Tools
1. What is Poka – Yoke method? Explain briefly. Give two examples. R1
2. What is the House of Quality in QFD approach? Outline the process of
building the house of Qulaity?R1
3. What is meant by quality improvement? Explain Quality action cycle?
Explain CI?R1
4. Briefly explain the 7 Quality control tools. R1
5. Explain with suitable figures the seven tools of Ishikawa.
6. What is Pareto Analysis?
7. Explain the steps to be followed in drawing the Cause and Effect diagram
with an example.
8. What is Kaizen? How is it implemented in a Total Quality organization? List
the activities that fall under the “ Kaizen Umbella”?R1
9. Differentiate Kaizen from Innovation
10. What is vendor rating index?
11. Explain six –sigma Motorola system. What are the benefits?(R1)
12. State the objectives of JIT manufacturing. Explain the Kanban system of JIT
manufacturing.
CMR IT- JESSY NAIR
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