PTTE 434 Lecture 1 Quality Assurance, Organization

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PTTE 434 - Lecture 1Quality Assurance,Organizati
on Management

• Jim Wixson, CVS, CMfgE
• wix_at_srv.net
• [phone] (mobile)
• [phone] (Everett Apartment)
• [phone] (Boeing Office)

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Lecture 1 - Objectives

• Learn the five definitions of quality
• Learn about some of the various quality
  movements.
• Understand the concept of Cost of Poor Quality.
• Understand the concept of Continuous
  Improvement.
• Talk about some of the continuous improvement
  leaders and tools.
• Learn about the importance of defining the
  problem well before trying to solve it.

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Garvins Five Definitions of Quality

• Transcendent Definition (Relative Quality)
  Quality is universally recognizable it is
  related to a comparison of features and
  characteristics of products.
• Product-Based Quality is a precise and
  measurable variable. Differences in quality
  reflect differences in quantity of some product
  attribute.
• User-Based Definition Quality is fitness for
  intended use.

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Garvins Five Definitions of Quality (Contd)

• Manufacturing-Based Definition Quality is
  conformance to specifications.
• Value-Based Definition Quality is defined in
  terms of costs and prices. A quality product is
  one that provides performance at an acceptable
  price or conformance at an acceptable costs.

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Quality Revolution or Quality Confusion?
Quality Control
Quality Planning
Quality Circles
Zero Defects
Quality Assurance
Continuous Quality Improvement
Defect Prevention
Total Quality Management
Six Sigma
Quality Function Deployment
Statistical Process Control
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Jurans Approach

• Balanced approach using managerial, statistical,
  and technological concepts of quality
• Operational Framework Quality Planning, Control,
  and Improvement

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W. Edwards Deming

• Broad Systems view of quality
• 14 points focused on four parts
• systems approach
• statistical variation
• nature and scope of knowledge
• psychology and understanding of human behavior

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A. V. Feigenbaum

• Emphasized Total Quality Control throughout all
  functions of the organization.
• Total Quality Control means both planning and
  control.
• Provide technical and managerial procedures to
  ensure customer satisfaction and an economical
  cost of quality.

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Philip Crosby

• Defined quality as Conformance to requirements.
• The only performance standard is ZERO DEFECTS.
• All levels of employees can be motivated, but,
  they need the right tools.

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Crosbys Four Absolutes of Quality Management

• Quality is defined as conformance to
  requirements, not as 'goodness' nor 'elegance'.
• The system for causing quality is prevention, not
  appraisal.
• The performance standard must be Zero Defects,
  not 'that's close enough'.
• The measurement of quality is the Price of
  Non-conformance, not indices.

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Kaoru Ishikawa

• Showed the Japanese how to integrate the many
  tools of quality, especially the simpler tools.
• Basic 7 Tools Histograms, Pareto Charts, Cause
  and Effect Diagrams, Run Charts, Scatter
  Diagrams, Flow Charts, Control Charts

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Six Sigma?
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Show Film

• Carving a Career in Quality, Phillip Cosby and
  Assoc., 25 min.

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It cant be done!

• Management wants us to add on these quality
  activities to our regular duties without giving
  us the additional time to accomplish them -- it
  cant be done!
• Discussion - How can it be done?
• Has your employer implemented any quality
  improvement programs?
• How was it done?

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Quality? - Convincing Management

• Loss of production
• Loss of customers
• Loss of business
• Loss of jobs
• Class - Can you list some more reasons?

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Hidden costs of poor quality
Reprocessing
Rejects
Sorting Inspection
Customer returns
Warranty expenses
Downgrading of product
Sea of Competition
Lost sales
Overtime to correct errors
Process downtime
Loss of good will
Extra inventory
Paperwork errors
Lost discounts
Delays
Damaged goods
Obsolete inventory
Premium freight costs
Incorrect orders shipped
Customer allowances
Extra process capacity
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Quality? - Convincing Management

• Quality is no longer just a technical issue, it
  is a business issue.
• In order for a quality program to succeed, top
  management must be involved and committed to its
  success.
• A companys success is directly related to
  managements commitment to quality.

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Opportunity Cost of Attrition
Number of Households
Dollars (000s)
125,000
124,000
122,500
120,000
Quarters
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Optimum Cost of Quality
Cost per Good Unit of Product
0
100
Quality of Conformance
(No quality)
(Perfection)
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Two Components of Quality
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Quality Progress
Feedback
Market research
Use
Customer service
Retailing
Marketing, administrative support
Specification
Product development and design
Wholesaling
Market research
Inspection
Test
Production Process Control
Operations planning
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Little Q and Big Q
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Continuous Improvement
1. Learn to apply the tools of quality - teach
others. 2. Continuously improve my process -
reduce defects, cycle time, and know
benchmarks. 3. Document and display my process,
defect levels, and CI projects.
1. Agree on and document my requirements with my
supplier. 2. Return defective inputs to my
supplier promptly and tactfully. 3. Feedback
input quality data to my supplier.
1. Understand my customer requirements, and
agree on and document my deliverables. 2. Reduce
defects and variations in my output. 3. Measure
my output quality from my customers perspective.
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Competitive Standing
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Attribute Comparison - Radar Graph
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Performance - Satisfaction Map
Leverage competitive strength
Maintain Status quo
Performance ( satisfied)
Assign little or no priority on action.
Add resources to achieve improvement
Importance
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Convincing upper management

• Return on assets (ROA) Profit margin x Asset
  turnover
• Assume COPQ 10 of sales revenue
• Profit margin 7
• Asset turnover 3.0
• gt ROA 7 x 3.0 21
• Assume COPQ reduced to 6 of sales revenue
• gt Profit margin 7 (10 - 6) 11
• Asset turnover 3.0
• gt ROA 11 x 3.0 33
• A 4 reduction in COPQ results in a 12 increase
  in ROA!!

Cost of Poor Quality
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Convincing upper management

• Estimate the size of quality related losses.
• Identify ways of improving quality.
• Estimate the savings and other benefits.
• Calculate return on investment (ROI)
• Use a successful case history to justify a
  broader program.
• If all else fails, take pictures of waste and/or
  hazards (EIMCO example).

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Are Quality Approaches Influenced By Culture?
Quality Approaches are Influence by Culture
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National and International Quality Awards

• Malcolm Baldrige National Quality Award
• Deming Prize
• European Quality Award
• Shingo Prize

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The Malcolm Baldrige National Quality Award

• Malcolm Baldrige National Quality Award
• The award is open to small (less than 500
  employees) and large firms (more than 500
  employees) in the manufacturing and service
  sectors.
• There can be only two winners per category each
  year. That limits the number of yearly awards to
  six.

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The Malcolm Baldrige National Quality Award

• The President of the United States traditionally
  presents the Awards at a special ceremony in
  Washington, DC. Awards are made annually to
  recognize U.S. organizations for performance
  excellence. The Award eligibility categories are
• manufacturing businesses
• service businesses
• small businesses
• education organizations
• health care organizations
• Recipients are expected to share information
  about their successful performance strategies
  with other U.S. organizations.

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The Malcolm Baldrige National Quality Award

• The Award is named for Malcolm Baldrige, who
  served as Secretary of Commerce from 1981 until
  his tragic death in a rodeo accident in 1987. His
  managerial excellence contributed to long-term
  improvement in efficiency and effectiveness of
  government.

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The Malcolm Baldrige National Quality Award

• The Malcolm Baldrige National Quality Award was
  created by Public Law 100-107, signed into law on
  August 20, 1987.
• The Award Program, responsive to the purposes of
  Public Law 100-107, led to the creation of a new
  public-private partnership.
• Principal support for the program comes from the
  Foundation for the Malcolm Baldrige National
  Quality Award, established in 1988.

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The Malcolm Baldrige National Quality Award

• Key Characteristics of the MBNQA Criteria
• The criteria focus on business results.
  Companies must show outstanding results in a
  variety of areas to win.
• The Baldrige criteria are nonprescriptive and
  adaptive. Although the focus on the Baldrige
  award is on results, the means for obtaining
  these results are not prescribed.

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The Malcolm Baldrige National Quality Award

• Key Characteristics of the MBNQA (cont.)
• The criteria support company-wide alignment of
  goals and processes.
• The criteria permit goal-based diagnosis.
• The criteria and scoring guidelines provide
  assessment dimensions.

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MBNQA Criteria

• The Criteria are designed to help organizations
  use an integrated approach to organizational
  performance management that results in
• delivery of ever-improving value to customers,
• contributing to marketplace success
• improvement of overall organizational
  effectiveness and capabilities
• organizational and personal learning

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MBNQA Criteria

• The Criteria are the basis for organizational
  self-assessments,for making Awards, and for
  giving feedback to applicants. In addition, the
  Criteria have three important roles in
  strengthening U.S. competitiveness
• to help improve organizational performance
  practices, capabilities, and results
• to facilitate communication and sharing of best
  practices information among U.S. organizations of
  all types
• to serve as a working tool for understanding and
  managing performance and for guiding
  organizational planning and opportunities for
  learning

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The Malcolm Baldrige National Quality Award
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The first phase of the Award cycle is to
establish that the applicant meets the
eligibility requirements. Applicants submit an
Eligibility Certification Package certifying that
the organization is eligible to apply for the
Award.
In the second phase, Board of Examiners to
conduct a rigorous evaluation of an
organization's performance management system and
the results of its processes.
The third phase of the Award cycle involves the
review of the application package. Applications
are reviewed and evaluated by members of the
Board of Examiners, all of whom adhere to strict
rules regarding conflict of interest. The review
is conducted in three stages Stage 1 -
Independent ReviewStage 2 - Consensus
ReviewStage 3 - Site Visit Review
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The Malcolm Baldrige National Quality Award

• Being a Baldrige Examiner
• Appointment to the board of Trustees for the
  MBNQA Board of Examiners is a very prestigious
  designation.
• Examiners are unpaid volunteers, and must be
  willing to give up approximately 10 of their
  year to serve as an examiner.

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The Malcolm Baldrige National Quality Award

• For more information on the Malcolm Baldridge
  National Quality Award, visit
• http//www.quality.nist.gov/

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Quality Improvement The Japanese Way

• Deming Prize
• The Deming Prize for quality was established in
  1951 by the Japanese Union of Scientists and
  Engineers (JUSE).
• The Deming Prize is much more focused on
  processes than is the Baldrige.

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What is the Deming Prize?

• The Deming Application Prize Given to companies
  or divisions of companies that have achieved
  distinctive performance improvement through the
  application of TQM in a designated year.
• The Deming Prize for IndividualsGiven to
  individuals who have made outstanding
  contributions to the study of TQM or statistical
  methods used for TQM, or individuals who have
  made outstanding contributions in the
  dissemination of TQM.
• The Quality Control Award for Operations Business
  UnitsGiven to operations business units of a
  company that have achieved distinctive
  performance improvement through the application
  of quality control/management in the pursuit of
  TQM in a designated year.

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The Deming Prize

• For more information on the Deming Prize visit

http//www.deming.org/demingprize/
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Other Japanese Contributions to Quality Thought

• Lean Manufacturing (Toyota Production System)
• Lean is a method of systematically eliminating
  waste in a production system.
• Lean dramatically reduces cycle time.
• Lean focuses on the companys value stream to
  identify wasted movement, wasted time, wasted
  inventory, and wasted space.
• Lean has been adopted by many US manufacturers
  and other firms and has aided them in achieving
  dramatic improvements in operations

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Other Japanese Contributions to Quality Thought -
5 Ss

• Other Japanese Contributions to Quality (cont.)
• The Five Ss. The five Ss are a sequential
  process that companies follow to literally clean
  up their acts. The Ss are
• Seri (Sort) organizing by getting rid of the
  unnecessary.
• Seiton (set in order) neatness that is achieved
  by straightening offices and work areas.
• Siso (Shine) cleaning plant and equipment to
  eliminate dirtiness that can hide or obscure
  problems.
• Seiketsu (Standardize) standardizing locations
  for tools and other materials.
• Shetsuke (Sustain) discipline in maintaining the
  prior four Ss.

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Other Japanese Contributions to Quality Thought

• Other Japanese Contributions to Quality (cont.)
• Quality Circles
• Are natural work teams made up of workers that
  are empowered to improve processes they use.
• Total Productive Maintenance (TPM)
• The idea behind this concept is that the worst
  condition a machine should ever by is on the day
  you purchase it.

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Shingo Prize for Excellence in Manufacturing

• Named for Japanese industrial engineer Shigeo
  Shingo who distinguished himself as one of the
  worlds leading experts in improving
  manufacturing processes.
• The Prize was established in 1988 to promote
  awareness of Lean manufacturing concepts
• Recognizes companies in the United States,
  Canada, and Mexico that achieve world-class
  manufacturing status.

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Shingo Prize for Excellence in Manufacturing

• The Shingo Prize recognizes organizations and
  research that is consistent with its mission and
  model with two types of prizes
• Business Prizepromotes use of world-class
  manufacturing strategies and practices to achieve
  world-class results.
• Research Prizepromotes research and writing
  regarding new knowledge and understanding of
  manufacturing processes.
• Business Week referred to the Shingo Prize as the
  Nobel prize of manufacturing, because it
  establishes the standard for world-class
  excellence.

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Shingo Prize for Excellence in Manufacturing

• For more information on the Shigo Prize visit

http//www.shingoprize.org/AboutUs/default.htm
http//www.partnersusu.org/
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Quality Improvement The European Way

• ISO 9000
• Is the European standard for quality that has
  been expanded worldwide.
• The ISO 9000 family is primarily concerned with
  "quality management". This means what the
  organization does to fulfil
• the customer's quality requirements, and
  applicable regulatory requirements, while aiming
  to enhance customer satisfaction, and achieve
  continual improvement of its performance

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Quality Improvement The European Way

• The ISO 14000 family is primarily concerned with
  "environmental management". This means what the
  organization does to
• minimize harmful effects on the environment
  caused by its activities, and to
• achieve continual improvement of its
  environmental performance.

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ISO 9000 and 14000

• ISO 9000 and ISO 14000 are known as generic
  management system standards.Generic means that
  the same standards can be applied to any
  organization, large or small, whatever its
  product - including whether its "product" is
  actually a service - in any sector of activity,
  and whether it is a business enterprise, a public
  administration, or a government department.
• Management system refers to what the organization
  does to manage its processes, or activities in
  order that the products or services that it
  produces meet the objectives it has set itself,
  such as the following
• satisfying the customer's quality requirements,
• complying to regulations, or
• meeting environmental objectives.

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ISO 9000 and 14000

• For more information on the ISO 9000 and ISO
  14000 visit

http//www.iso.ch/iso/en/iso9000-14000/index.html
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European Quality Award

• European Foundation for Quality Management (EFQM)
  was founded in 1988 by the Presidents of 14 major
  European companies
• First European Quality Award issued in 1992
• Endorsed by the EU Commission
• Network has more than 700 members
• Formed the European framework for quality
  improvement along the lines of the Malcolm
  Baldrige Model in the USA and the Deming Prize in
  Japan.

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European Quality Award

• Europe's most prestigious Award for
  organizational Excellence
• Award levels are
• Award Winner
• Prize Winners
• Finalists
• Recognized for Excellence

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European Quality Award

• Prize Winner categories consist of
• Leadership and constancy of purpose
• Customer focus
• Corporate social responsibility
• People development and involvement
• Results orientation
• Management by processes and facts
• Continuous learning, innovation and improvement
• Partnership development

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European Quality Award

• For more information on the European Quality
  Award visit

http//www.efqm.org/model_awards/eqa/intro.asp
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Contributions of Various Disciplines

• Finance Measuring the cost of poor quality
• Industrial Engineering Design of integrated
  systems, measurement, problem solving, work
  analysis
• Information Technology Measurement, analysis,
  and reporting on quality
• Marketing Research Competitive standing on
  quality, understanding customer desires
• Operations Management Management of integrated
  systems

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Contributions of Various Disciplines (Contd)

• Operations research Analyzing product design
  alternatives for optimization
• Organizational Behavior Understanding quality
  culture, making teams effective.
• Organizational Effectiveness Satisfying the
  needs of both internal and external customers.

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Contributions of Various Disciplines (Contd)

• Strategic Planning Quality as a means of
  achieving a unique competitive advantage.
• Systems Engineering Translating customer needs
  into product features and process features
• Value Engineering Analysis of essential
  functions needed by customer to find the lowest
  cost way of providing these functions that meet
  quality, reliability, and performance
  requirements.

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Systems Dynamics

• Most process improvement efforts rely on breaking
  problems down into smaller, more manageable,
  components.
• This reductionist approach sometimes fails to
  recognize that the problem is greater than the
  sum of its parts.
• A systems thinking approach to identify
  interactions between activities and the
  unintended consequences that can arise from
  well-intended corrective actions.

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How SD can facilitate the Improvement Efforts

• SD provides a visual model of the system under
  study.
• Changes to the system can be made easily and
  quickly analyzed
• Repeated iteration of a SD model can optimize the
  system under study

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Approach for Quality Improvement Projects

• Get a champion
• Prove the need
• Identify Projects
• Organize teams
• Perform the study, or Kaisan
• Document recommendations
• Perform a pilot project
• Document results
• Expand to entire organization

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Carrying out the project

• Verify project need and mission
• Diagnose the causes
• Provide a remedy and prove its effectiveness
• Deal with resistance to change
• Institute controls to hold the gains

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Intro to Six Sigma

• Six Sigma Capability Extremely small variation
  in the process mean compared to the range of the
  specification limits.
• Even if process mean shifts by 1.5 sigma gt no
  more than 3.4 parts per million fall out of the
  specification limit.
• Key focus Yf(X1Xn)

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Breakthrough Improvement

• Verify the project need (Six s Define)
• Diagnose the Causes (Six s Measure and Analyze)
• Provide a remedy and prove its effectiveness (Six
  s Improve)
• Deal with resistance to Change (Six s Improve)
• Institute controls to hold the gains (Six s
  Control)

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Six Sigma Process - Click Here

• A) Identify what the customer wants.
• B) Organize an improvement team.
• C) Create a process flow chart - (SIPOC)

Define the Problem

• A) Select Critical to Quality Characteristic
  metrics.
• B) Define Performance Standards.
• C) Validate the measurement System.
• D) Establish baseline performance in terms of
  Sigma Capability - Defects per Million
  Opportunities.

Measure

• A) Identify significant characteristics and
  establish process capability.
• B) Define performance targets for significant
  characteristics.
• C) Identify root cause of process variation.

Analyze

• A) Identify and evaluate potential solutions.
• B) Implement short-term countermeasures.
• C) Implement long term corrective actions.
• D) Identify systemic indirect effects and
  unintended consequences of improvement ideas.
• E) Establish operating tolerances for new process.

Improve

• A) Verify corrective actions and validate new
  measurement systems.
• B) Determine process capability.
• C) Establish and implement control plan.

Control

• Move on to next highest priority process.

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Value Engineering

• Value Engineering (VE) is an intensive,
  interdisciplinary problem solving activity that
  focuses on improving the value of the functions
  that are required to accomplish the goal, or
  objective of any product, process, service, or
  organization.
• VALUE METHODOLOGYThe systematic application of
  recognized techniques which identify the
  functions of the product or service, establish
  the worth of those functions, and provide the
  necessary functions to meet the required
  performance at the lowest overall cost.
• John M. Bryant, VM Standard, Society of American
  Value Engineers, Oct. 1998

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Value Engineering/Value Analysis - Why is it
important?

• Last 3 years, 2.7 million manufacturing jobs left
  the U.S.
• The U.S. is loosing the battle to foreign
  competition.
• Labor costs 12 to 30 per hour in U.S., less
  than 1 elsewhere.
• Fewer and fewer people will be required to
  produce the worlds goods.
• Lean and Six Sigma alone are not enough!

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Competitive Advantage

• Quality is defined as conformance to
  specification.

• Value is defined as

• You cant have one without the other!

• Competitive Advantage Quality Value

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Six Step Value Engineering Job Plan

• Clearly identify the problem(s) to be solved, and
  gather information on the background, functions
  and requirements of the product, process, or
  system.

Information Phase

• Brainstorm ideas on how to improve the high cost,
  broken, or inadequately performed key functions.

Creativity Phase

• Screen ideas for acceptance, score remaining
  ideas on a scale and group ideas into categories.
  Develop design scenarios, and selection
  criteria. Rate and rank ideas.

Evaluation Phase

• Plan how to sell ideas to management, identify
  key recommendations, plan management presentation.

Planning Phase

• Give oral presentation to management, or develop
  written report.

Reporting Phase

• Get management approval for go-ahead, make
  management plan, make assignments, implement,
  follow-up.

Implementation Phase
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Mapping VE to 6?
6s
VA/VE
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Vilfredo Pareto
Vilfredo Pareto (1848-1923) was an Italian
economist and a political sociologist. He devised
the law of the trivial many and the critical few,
known as the 8020 rule. Paretos Law states that
in many business activities 80 of the potential
value can be achieved from just 20 of the
effort. The remaining 80 of effort shows
relatively little return.
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Defining the Problem - Pareto Analysis
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Quality Improvement Example

• Solder Defects

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Solder Defects - Pareto Analysis
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Ishikawa or Fishbone Diagram
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Process Data
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Conclusions

• Either raise solder temperature, or slow down the
  conveyor.
• A previous test years ago had been conducted at a
  higher temperature, but, resulted in reflow of
  tin under the solder mask.
• A trial was conducted at a higher temperature
  yielding satisfactory results and broke the
  resistance to change.

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Dont jump to solution!

• An apparel manufacturing company detected a
  problem with its fuseable lining.
• Many customer returns
• Lining falling off after a few washings
• Solution We need a new brand of lining. Our
  current brand is defective!

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Dont jump to solution! - DOE Fusible Lining
Example
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Sporadic v.s. Chronic Problems

• Sporadic problems are dramatic and require
  immediate attention.
• Chronic problems are not dramatic, they occur
  over a long period of time.
• Chronic problems are difficult to solve.
• Chronic problems are accepted as inevitable.

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Sporadic v.s. Chronic Problems

• Sporadic problems are solved by fixing the
  control process.
• Chronic problems are solved using process
  improvement techniques such as Value Engineering
  and/or Six Sigma.
• Value Engineering may be applied to sporadic
  problems as well, e.g., Boeing 737/757 elevator
  feel computer problem.

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Sporadic and chronic quality problems