Continuous Improvement

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Welcome To The Certified Quality Improvement
Associate (CQIA)
Continuous Improvement Tools
CQIA
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Continuous Improvement Tools

• Benchmarking
• Cost of Quality
• Audit

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Benchmarking

• Benchmarking Types
• Organizational Benchmarking
• Process Benchmarking
• Performance Benchmarking
• Project Benchmarking
• Strategic Benchmarking

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Benchmarking

• Identify Benchmarking Type (Step 1)
• Customer Specification
• Actual customer desire
• Current competition
• Best in or related industries
• Best in the world
• Benchmarking Sequence (Step 2)
• Identify key performance factors
• Understand your own processes the processes of
  others
• Select performance criteria based on needs
  priorities
• Measure the performance within the organization
  in the criteria areas
• Determine the leader in the criteria areas
• Collect information data on performance of the
  benchmark leader
• Evaluate compare current practices w/the
  benchmark
• Drive significant improvement changes to advance
  performance levels
• Utilize the new awareness to extend performance
  through breakthroughs
• Incorporate the new information in business
  analysis decision making
• Seek alternate benchmark leaders or process areas
  for further improvement

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Benchmarking

• Benchmarking Sequence (Step 3)
• Determine current practice
• Select the problem area
• Identify key performance factors
• Understand your own processes the processes of
  others
• Select performance criteria based on needs
  priorities
• Identify best practices
• Analyze best practices
• Model best practices
• Repeat cycle

Best
Best
Performance
Your
Performance
Your
Company
Company
Time
Time
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Cost of Quality

• Origin of Quality Cost Measurements
• 1950s and 1960s
• Products became increasingly more complex
• Customers expectations
• Supplier customer costs
• Technical specialists
• Alternatives presented by the quality specialists
• Quality cost reports
• Determine the status of cost control efforts,
• Identify additional opportunities for reducing
  the cost of quality by systematic improvements
• Costs of quality are high (15 to 25)

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Cost of Quality

• Traditional Cost Concepts

Profit
Selling Costs
Revenues
General Admin Cost
Cost of Goods Sold
Fixed Misc. Expenses
Cost of Goods Produced
Overhead Cost
Indirect Labor
Area of Concentration of a Quality Cost Program
Indirect Materials
Direct Labor
Prime Costs
Direct Material
Traditional Cost Breakdown
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Cost of Quality

• Quality Cost Categories
• Cost of Quality
• Three levels of Product Costs
• Preventive
• Appraisal
• Failure
• Internal failure costs (Scrap, Rework, Premium
  Freight)
• External failure costs (Warranty, Field Failure,
  Liability, Recall)

PREVENTIVE
APPRAISAL
FAILURE
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Cost of Quality

• Hypothetical Quality Costs

Hypothetical Quality Costs Trends Over Time
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Cost of Quality

• Quality Cost Improvement
• Define the company quality goals objectives
• Translate the quality goals into quality
  requirements which represent the real workplace
• Estimate capabilities of current processes,
  machines, systems, etc.
• Develop realistic programs projects consistent
  with the company goals
• Determine the resource requirements for approved
  programs projects (including capital expenses
  manpower)
• Set up quality cost categories of prevention,
  appraisal and failure to accumulate costs
• Arrange for accounting to collect present
  quality costs
• Ensure accurate figures or reasonable estimates
  by category
• Analyze the quality cost data for major
  improvement candidates
• Utilize the Pareto principle to isolate specific
  vital areas for investigation

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Cost of Quality

• Other Quality Cost Pitfalls
• Perfectionism in the numbers
• Other data pitfalls
• Inclusion of non-quality costs
• Implications of reducing quality costs to zero
• Reducing quality costs but increasing total
  company costs
• Understatement of quality costs
• Inconsistency of measurement

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Quality Audits

• Audit Purpose
• to examine the effectiveness of management
  directed control programs. The philosophy of
  quality assurance programs is based on prevention
  rather than detection of problems.
• Early detection of the problem
• The depth of the problem
• Discovery of the root cause of the problem
• Specific audit purposes
• Products are fit for use
• Adequate written procedures exist are utilized
• There is adherence to legal or regulatory
  requirements
• Product or management system deficiencies are
  identified
• There is conformance to specification
• Remedial action is taken the result is
  effective
• Information is obtained to identify reduce
  risks
• There is effective use of company resources
• Standardized organizational practices
  improvements exist

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Quality Audits

• Types of Audits

System Audit
Process Audit
Product Audit
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Quality Audits

• Types of Audits
• First Party Audits
• Company monitors adherence to the documented QMS
• Second Party Audits
• Usually performed by the customer, or
  representative of the customer
• Third Party Audits
• Performed by agencies, independent of both
  customer and supplier

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Quality Audits

• Audit Scope
• Client makes the final decisions
• Depth of the audit
• Quality system elements
• Physical locations
• Organizational activities (specified time frame)
• Resources
• Audit Frequency
• Determined by the client
• Changes in management
• Organization
• Policy
• Techniques
• Technologies
• System changes
• Other audit results

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Quality Audits

• Audit Plan
• Be approved by the client
• Be communicated to the auditors auditee
• Be designed to be flexible (permitting changes)
• Define the place date of the audit
• Include the audit objectives scope
• Stipulate reference documents
• Identify audit team members
• Assign auditors tasks
• Define the language of the audit
• Identify the group to be audited
• Define the duration of the audit
• Provide a schedule of meetings w/auditee mgt
• Identify confidentiality requirements
• Stipulate audit report distribution date

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Quality Audits

• Working documents, facilitating the audit, may
  include
• Checklists
• Reporting forms
• Executing the Audit
• Opening meeting
• Evidence collection
• Observation
• Closing meeting
• Audit Report Preparation
• Lead auditor responsibility
• Accuracy Completeness
• Report Distribution
• Audit Completion
• Corrective Action Follow-up
• Record Retention

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CQIA Continuous Improvement Tools
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