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5
Aspects of Quality
UNIT 1
UNIT I
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Total Quality Service Management
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Aspects of Quality
LESSON
1
ASPECTS OF QUALITY
CONTENTS
1.0
1.1
Introduction
1.2
1.3
1.4
Dimensions of Quality
1.5
1.6
1.7
Quality Mission
1.8
Quality Policy
1.8.1
Quality of Services
1.8.2
Customers Satisfaction
1.8.3
1.8.4
1.9
Objectives of Quality
1.10
Concepts of Quality
1.11
1.12
Evolution of Quality
1.12.1
1.13
Determinants of Quality
1.14
1.15
Let us Sum up
1.16
1.17
Keywords
1.18
1.19
Suggested Readings
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1.1 INTRODUCTION
Quality is an abstract concept. Without definition or specification, quality cannot be
assured. Thinkers and writers have been trying to tackle big abstract words like
knowledge and beauty for thousands of years. Quality depends upon various factors
and hence can be defined in a variety of ways.
To start with, we can define it as a product or service free of deficiencies, as the
totality of characteristics of an entity that depend on its ability to satisfy stated or
implied needs. The customer defines quality.
For some, quality means excellence in all aspects. Here, the price or affordability
aspect is ignored and this is a major limiting factor.
The Oxford English Dictionary defines quality as that aspect of things under which
they are considered in thinking or speaking of their nature, condition, or properties.
The Websters Dictionary defines it as degree of excellence.
Quality is the extent to which products, services, processes, and relationships are free
from defects, constraints, and items which do not add value for customers. There are a
variety of perspectives that can be taken into account when defining quality (e.g.
customers perspective, specification-based perspective).
Is reliable,
Quality is defined as the totality of characteristics of an entity that bear on its ability to
satisfy stated or implied needs.
Quality is the ongoing process of building and sustaining relationships by assessing,
anticipating, and fulfilling stated and implied needs.
The quality if a product is determined by how well it suits ones needs in terms of:
z
Reliability
Durability
Safety
Maintainability
Cost
Deming: Quality can be defined only in terms of the agent, who is the judge of
quality. Thus, quality may mean different things to different people.
Juran: Quality is fitness for use. Therefore, quality products should meet or exceed
customer requirements.
Crosby: Quality is conformance to requirements. Thus requirements must be clearly
stated so that they cannot be misunderstood.
Feigenbaum: Quality is the total composite product and service characteristics of
marketing, engineering, manufacture, and maintenance through which the product and
service in use will meet the expectation of the customer.
Kaoru Ishiwaka: Quality does not only mean the quality product but also of after sale
service, quality management, the company itself and the human life.
Genichi Taguchi: Quality is the loss imparted to society from the time the product is
shipped.
It is not easy to formulate a simple definition of what constitutes quality. The
definition of the inverse of quality is rather straightforward. Variation is the enemy
of quality.
ISO 9000:2000 defines quality as the degree to which a set of inherent characteristics
fulfill requirements and as fitness for purpose meets requirements, delighting
customers right first time and all the time.
ANSI/ASQC Standard A3-1978 defines quality as the totality of features and
characteristics of a product or service that bear on its ability to satisfy given
needs. (This definition is also adopted in ISO 8402:1994 and other national
Standards with the word given replaced by the words stated or implied.)
The features and characteristics referred to, in the above definition, may be of several
types. Physical characteristics are those continuous variables such as length, weight,
voltage, viscosity, etc. The feature variables are usually discrete or attribute in nature
such as sensory lines viz. taste, appearance, colour and smell.
Certain characteristics if quality, like reliability, maintainability, serviceability, are
time dependent. The phrase given needs in the definition requires a clear list of needs
to be identified. It is obvious that all the needs of the customer of a product or service,
including safety, design, aesthetics, etc, should be listed in the set of given needs.
The price or affordability of the product or service should also receive major
consideration. The performance or use quality characteristics should be improved ones
if price is not a limiting factor.
Societal needs may be considered in addition to customer needs in certain cases. How
far does the set of characteristics and features meet the given needs? That is, the
ability to satisfy the (customer) needs is the quality built into the product or service
through the features and characteristics.
Quality is thus a multi-dimensional perspective-based concept having dimensions as
under:
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Performance
Features
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Reliability
Conformance
Durability
Serviceability
Aesthetics
Perceived Quality
One thing is certain: the client ultimately decides if the quality of the product
delivered is acceptable. Hence, quality of the product may, therefore, include many
things other than a single deliverable.
Defining quality means developing expectations or standards of quality. Standards
can be developed for inputs, processes or outcomes. A good standard is explicit,
reliable, realistic, valid and clear.
Defined standards or definitions of quality are prerequisites for measuring quality. If
standards dont exist, they must be designed. Although standards are context-specific,
universally accepted standards are often a good starting point for developing local
standards.
Standards of quality can be developed according to the dimensions of quality and
should be based on the scientific evidence available.
Experience,
Measurement,
Value Sharing
Experience: Quality of a product or service will not exist unless and until it is
translated into experience. The ability to translate vision into reality is the primary
impact of this dimension. Experience is the translation into reality of the true state
of vision of the organization. Further, it provides learning. The successful
organization is one that can experiences learn from it.
Inter-connectivity and Paradigm Logic: The first three dimensions give us the
ability to establish a system, as we measure the results of relationships among
various parts of the system and make modifications necessary to produce the
Value sharing is expressed in the phrase, Delight the Customer. In other words,
Give the customer more than what the customer is paying for.
As the relationship with the customer grows, there is mutual consecration of resources
by both parties as each share the value it derives from trade with the other party.
The five dimensions of value sharing involve the integration and fulfillment of all the
other dimensions with respect to all the participants.
Since quality means different things to different people, the dimension of quality is
also different. Dimensions of quality are also different for manufacturing and service
functions.
Example: Quality of Health Care
Quality of care should be defined in light of both technical standards and patients'
expectations. While no single definition of health service quality applies in all
situations, the following common definitions are helpful guides:
Quality Assurance is that set of activities that are carried out to monitor and improve
performance so that the care provided is as effective and as safe as possible (Quality
Assurance Project, 1993).
The application of medical science and technology in a way that maximizes its
benefits to health without correspondingly increasing its risks. The degree of quality
is, therefore, the extent to which the care provided is expected to achieve the most
favorable balance of risks and benefits (Avedis Donabedian, 1982).
Proper performance (according to standards) of interventions that are known to be
safe, that are affordable to the society in question, and that have the ability to produce
an impact on mortality, morbidity, disability, and malnutrition (M.I. Roemer and C.
Montoya Aguilar, WHO, 1983).
The most comprehensive and perhaps the simplest definition of quality is that used by
advocates of total quality management (W. Edwards Deming, 1982): "Doing the right
thing right, right away." Experts generally recognize several distinct dimensions of
quality that vary in importance depending on the context in which a QA effort takes
place. The following nine dimensions of quality have been developed from the
technical literature on quality and synthesize ideas from various QA experts.
Together, they provide a useful framework that helps health teams to define, analyze,
and measure the extent to which they are meeting program standards for clinical care
and for management services that support service delivery. While all of these
dimensions are relevant to developing country settings, not all nine deserve equal
weight in every program. Each should be defined according to the local context and
specific programs.
1. Technical performance: The degree to which the tasks carried out by health
workers and facilities meet expectations of technical quality (i.e., adhere to
standards).
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Through continuously increasing the quality of its services and products, the CRD
CR aims at:
Achieving the very best evaluation of the organisation in main spheres of its
activities in the domestic and foreign markets.
Employees bear personal responsibility for their professional growth and the
utilisation of conditions created by the organisations top management.
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The following five steps should be observed for writing the broad quality objectives
for an organization.
z
Find the optimum input: Analyze the inputs received and take those that are in
tune with the organizations mission and vision.
Resolve differences: Discuss the proposed objectives in detail and resolve the
differences.
Select the final objectives: After resolving the differences, finalize the list. The
objectives are then rewritten and edited to ensure that they are in tune with the
mission and vision of the organization.
Publicize the objectives: Inform all the stakeholders the organizations objectives.
Publish it with vision, mission and guiding principles.
According to industry insiders there are two schools of thought about managing
network quality. One view is that the network has inbuilt mechanisms to control and
heal itselfa view subscribed to by many network equipment vendors. On the other
hand, many feel that, from a business point of view, an overall system of control is
needed. Networks are composed of many desperate elements. Whilst they may well be
generating alarms and be able to heal themselves to some extent, this does not
necessarily take into account any knock-on effects or an unusual combinations of
events. One of the primary aims of network management is to be able to understand
the root cause of performance problems. There also remains a need for quality as
effective management of the service network brings with it a number of benefits:
1. improved performance
2. better return on investment by facilitating maximizing use of resources
3. revenue assurance
4. improved customer satisfaction
5. better forecasting.
Network management draws this information together into reports that are used for
the various activities. Some of these activities can happen automatically and some will
need human intervention. The network monitoring and management process entails
three activities:
1. collecting data from the network
2. sorting and analysing this data
3. presenting the findings as intelligible reports that provide visibility, in
understandable terms, of the behaviour of the networks and the services that ride
upon them.
This overall process is service quality management.
There has been considerable realignment in the service market through mergers,
acquisitions and divestments. This, coupled with the development of new services,
means that operators are increasingly operating in a multi-vendor, multi-technology
environment. Their newly acquired companies may well be using equipment sourced
from different vendors, or may even be offering different services. Network
monitoring and management needs to have the ability to address this type of
environment, and all types of networkfixed, mobile, IP and cable, across all domains
including switching, transport and access. In this climate, the need and importance of
quality remains in benefiting the operators, in understanding the network behaviour
through effective use of the information generated from network monitoring are
broadly:
1. Operations-relatedcentred on protecting the service provider's infrastructure
whilst making the most of its assets and streamlining operations.
2. Business-relatedreducing costs such as SLA penalties, maximising revenues and
satisfying customers.
3. Understanding and controlling network performance.
4. Keeping track of the growing complexity of networks.
Further, the importance of the Quality of Service Management approach lies in the
fact that, it:
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Allows you to predict when upgrades and enhancements will be required so they
can be planned and achieved at lowest possible cost.
Ensures that you can plan and prepare better Service Level Agreement targets,
confident in the knowledge that you can support them without penalty.
Provides the means to measure and maximise the return on your investments
while minimising overall Total Cost of Ownership.
Today's growth in Service Level Agreements and the costs involved with entire
service networks are significant management challenges that need to be addressed.
Skilled workers were promoted into other roles, leaving less skilled workers to
perform the operational jobs, such as manufacturing.
These changes led to the birth of the separate inspection department with a chief
inspector, reporting to either the person in charge of manufacturing or the works
manager. With the creation of this new department, there came new services and
issues, e.g, standards, training, recording of data and the accuracy of measuring
equipment. It became clear that the responsibilities of the chief inspector were more
than just product acceptance, and a need to address defect prevention emerged.
Hence the quality control department evolved, in charge of which was a quality
control manager, with responsibility for the inspection services and quality control
engineering.
In the 1920s statistical theory began to be applied effectively to quality control, and
in 1924 Shewhart made the first sketch of a modern control chart. His work was later
developed by Deming and the early work of Shewhart, Deming, Dodge and Romig
constitutes much of what today comprises the theory of statistical process control
(SPC). However, there was little use of these techniques in manufacturing companies
until the late 1940s.
At that time, Japans industrial system was virtually destroyed, and it had a reputation
for cheap imitation products and an illiterate workforce. The Japanese recognised
these problems and set about solving them with the help of some notable quality gurus
Juran, Deming and Feigenbaum.
In the early 1950s, quality management practices developed rapidly in Japanese
plants, and become a major theme in Japanese management philosophy, such that, by
1960, quality control and management had become a national preoccupation.
By the late 1960s/early 1970s Japans imports into the USA and Europe increased
significantly, due to its cheaper, higher quality products, compared to the Western
counterparts. In 1969 the first international conference on quality control, sponsored
by Japan, America and Europe, was held in Tokyo. In a paper given by Feigenbaum,
the term total quality was used for the first time, and referred to wider issues such as
planning, organisation and management responsibility. Ishikawa gave a paper
explaining how total quality control in Japan was different, it meaning company
wide quality control, and describing how all employees, from top management to the
workers, must study and participate in quality control. Company wide quality
management was common in Japanese companies by the late 1970s.
The quality revolution in the West was slow to follow, and did not begin until the
early 1980s, when companies introduced their own quality programmes and
initiatives to counter the Japanese success. Total quality management (TQM) became
the centre of these drives in most cases.
In a Department of Trade & Industry publication in 1982 it was stated that Britains
world trade share was declining and this was having a dramatic effect on the standard
of living in the country.
There was intense global competition and any countrys economic performance and
reputation for quality was made up of the reputations and performances of its
individual companies and products/services. The British Standard (BS) 5750 for
quality systems had been published in 1979, and in 1983 the National Quality
Campaign was launched, using BS5750 as its main theme. The aim was to bring to the
attention of industry the importance of quality for competitiveness and survival in the
world market place. Since then the International Standardisation Organisation (ISO)
9000 has become the internationally recognised standard for quality management
systems. It comprises a number of standards that specify the requirements for the
documentation, implementation and maintenance of a quality system.
TQM is now part of a much wider concept that addresses overall organisational
performance and recognises the importance of processes. There is also extensive
research evidence that demonstrates the benefits from the approach. As we move into
the 21st century, TQM has developed in many countries into holistic frameworks,
aimed at helping organisations achieve excellent performance, particularly in
customer and business results. In Europe, a widely adopted framework is the so-called
Business Excellence or Excellence Model, promoted by the European Foundation
for Quality Management (EFQM), and in the UK by the British Quality Foundation
(BQF).
Affirmative action
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Training
Labour content
Local materials
Community involvement.
Budgets
Specification
Documentation
Communication systems
Quality is inherent in each of these processes, which should not be reactive, but rather
inherent in dynamic and proactive management of quality-achievement. At the risk of
subordinating the purposes and interests of those who use and live in buildings,
professionals, consultants, developers and contractors must realise the needs of the
market, the people and the community they serve. The danger is that through
"conceptual frameworks we risk isolating fragments of social reality, decontextualising, then recontextualising and, in so doing, creating a different kind of world".
In the final analysis, quality can only be achieved in a specific context, within a
specific environment, for a real community.
The determinants of quality are of importance to operations academics and managers,
and they provide the identification of the determinants of service quality. There are
some quality determinants that are predominantly satisfiers and others that are
predominantly dissatisfiers. It is found that the predominantly satisfying determinants
are attentiveness, responsiveness, care and friendliness; and the dissatisfiers are
integrity, reliability, responsiveness, availability and functionality. Responsiveness is
identified as a crucial determinant of quality as it is a frequent source of satisfaction,
and the lack of it is a major source of dissatisfaction. Contrary to the existing
literature, shows that the causes of dissatisfaction are not necessarily the obverse of
the causes of satisfaction and, furthermore, that reliability is predominantly a source
of dissatisfaction not satisfaction.
Further, determinants of quality include the management activities of control,
improvement and the rest. Using various examples, the use of people and data are
explained in the management of control and improvement. It is concluded that if
companies are to improve their service/ product's quality, they must review the needs
for improvement of data collection and presentation and the quality skills needed at all
managerial levels.
With the recent growing interest in service relationships in the industrial sector, a need
exists to investigate the underlying determinants for service quality for business-tobusiness service encounters.
Example:
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1.17 KEYWORDS
Quality: Defined as that aspect of things under which they are considered in thinking
or speaking of their nature, condition, or properties.
Aesthetics: How a product looks, feels, tastes or smells.
Durability: Useful life or life span of the product.
Persuasiveness: Good leaders are able to use their power and communication skills to
good use. They convert their power into influence.
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LESSON
2
BASIC CONCEPTS OF TOTAL QUALITY MANAGEMENT
CONTENTS
2.0
2.1
Introduction
2.2
2.2.2
Styles of Leadership
2.3
Quality Control
2.4
Costs of Quality
2.5
2.6
2.7
Economics of Quality
2.8
2.9
2.7.1
2.7.2
2.8.2
2.8.3
Armand V. Feigenbaum
2.8.4
2.8.5
2.8.6
2.10
Benefits
2.11
2.12
2.13
2.14
Let us Sum up
2.15
2.16
Keywords
2.17
2.18
Suggested Readings
2.1 INTRODUCTION
Leadership is the ability to motivate people to make a total and voluntary commitment
to attain or exceed organizational goals. Leadership is the ability to inspire confidence
and support, with an aim to achieve organizational goals. The concept of leadership
can be defined as the ability of top management to lead the firm in continuously
pursuing long-term overall business success.
Leadership plays a crucial role in creating the goals, values and systems that guide the
pursuit of continuous performance improvement. The European Quality Award and
the Malcolm Baldrige Quality Award recognize this.
Leaders have to address the values, direction, and expectations of all stakeholders.
The leaders need to ensure the creation of strategies, systems, and methods for
achieving excellence.
Balanced commitment: Good leaders are committed to the jobs and the people
who must do it.
Positive influence: Good leaders set positive examples at all times. They practice
what they preach. They help people to achieve their goals.
Positive role model: Good leaders have positive traits. They are always positive in
their thinking and action. They are able to form a positive aura around them. They
use their hold over the followers in a positive manner. They are dependable and
they are able to influence people. They excel and are thus able to make others
excel.
Persuasiveness: Good leaders are able to use their power and communication
skills to good use. They convert their power into influence. They use this
influence to persuade people.
Customer Focus: Customer is the king. The prime reason for an organization is
delighting the customer. Leadership for quality requires customer focus. Customer
includes both external and internal customer. An organizations senior leaders
need to set directions. They must create clear customer orientation and make
quality values visible.
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Obsession with quality: Leaders obsessed with quality will be breathing and
talking of quality. They can influence the people and make the organization
quality oriented.
Unity of purpose: Unity of purpose is key to a leadership system. Core values and
concepts provide the unity of purpose. The core values and concepts enable a
framework for leaders throughout the organization to make right decisions. They
foster TQM behavior and define the culture. Each organization will need to
develop its own values. The behavior of an organizations leader must create a
clarity and unity of purpose within the organization and an environment in which
the organization and its people can excel.
Team work: Leadership of quality requires teams work and team building.
Teamwork is the fundamental principle in total quality. A team of people working
together toward a common goal can outperform a group of individuals working
towards their own goals. More can be achieved by co-operation than competition.
Free rein or Laissez-faire leadership: Free rein leadership as the name suggests
involves complete delegation of authority. Subordinates themselves take
decisions. The leader here avoids power. He relinquishes the leadership position.
He serves, as a contact to bring the information needed by the subordinates. Free
flow of communication occurs. Control is by self-discipline. There is full scope
for creativity and development of the subordinates.
Participative or democratic leadership style is more suited in total quality setup.
Quality is the responsibility of everyone in the organization. Top commitment is the
foundation of an effective leadership effort. This is exemplified by:
z
Clarity of vision,
Employee empowerment,
Managers can be good leaders only when they have the trust of the people whom they
lead. Managers sometimes, have to make unpopular decisions. If it is seen that the
decision has been taken after due consideration and in an impartial way, it will not
alienate the people from the leader. Good leaders may be popular but they will be
respected always. All good leaders are not popular. However, they are all respected.
Leaders build and maintain follower ship to earn respect. Some of the essential
characteristics, which would earn respect of the people, are:
z
Sense of purpose: Successful leaders have a strong sense of purpose. They know
what they are capable of and the areas where they can contribute for improving
the organization.
Honesty: Successful leaders are trusted by their followers. They are open and
trustworthy. They are seen dealing with other members of organization with
openness and straightforwardness.
Credibility: Successful leaders have credibility. They are knowledgeable and are
consistent, fair and impartial. They adhere to the same standards in their
performance and behaviour.
Common sense: Successful leaders must have good common sense. They must be
able to distinguish between what is important and what is not. They must know
when to be flexible.
Stamina: Successful leaders must have good health and stamina to cope up with
all these.
Steadfastness: Successful leaders are steadfast and resolute. They get going when
it becomes tough also. Their commitment keeps them going.
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Quality gurus as Deming Juran and Crosby have also stressed the role of leadership in
pursuit of continuous quality improvement. Top management must be committed to
allocating sufficient resources to prevent and solve quality problems. They must
provide sufficient resources for employees education and training. They must be
committed to building trustful relationships with employees, and regard them as
valuable resources of the firm.
Top management must train and coach employees to assess, analyze, and improve
work processes. Leadership in quality can only be accomplished by ongoing
improvements and through the active participation of all employees.
Top management should discuss quality frequently. Giving speeches on the topic and
asking questions about quality at every staff meeting can do this. People make things
happen.
Leadership covers the following four sub-criteria that should be addressed:
z
Leaders develop the mission, vision and values and are role models of a culture of
excellence;
It is essential that top management focus on product quality rather than yields alone.
More importantly, it is critical for the firm to pursue long-term business success.
Pursuing short-term business success places quality behind yield, costs and meeting
delivery schedules.
To effectively lead the firm, top management must empower employees to solve the
problems they encounter. Employees can have then the authority to fix problems and
prevent their further occurrence. Empowerment is the process of delegating decisionmaking authority to lower levels within the firm. Particularly dramatic is
empowerment of the workforce.
Check Your Progress 1
1. Define leadership.
.
.
2. Define free rein.
.
.
Ideally, such a team must have a diagonal cross-section of people within the
organization to ensure that all interests are met.
The council sets quality policy and reviews performance goals within the
organization, and it is responsible for the continuous improvement effort, and provides
the best information about what is really happening in the organization.
Both Juran and Crosby have made the establishment of quality control as one of the
steps in TQM. In general, the duties of the quality council are to:
z
Strategic planning of quality improvement projects with goals and the annual
quality improvement program with objectives.
Monitoring the progress of the teams and supporting them to do their work and
provide a periodic critical review process for each project.
Provide for team & individual recognition to account for the new way of doing
business.
Most organizations establish a leadership group that will guide and direct the quality
effort. The quality council meets regularly to deal with the major issues that arise
governing the deployment of TQM throughout the organization. The chairperson of
the council at all levels should be a manager having overall responsibility and
authority for that level.
A coordinator is necessary to assume some of the added duties that a quality
improvement activity requires. He must report directly to the CEO. He has lots of
responsibilities that include
z
He has to play an active role in making the teams aware of their responsibilities,
helping the team leaders to have regular meetings, share lessons learned among teams
etc.
The Quality Council (QC) is the focal point of the Total Quality Management (TQM)
process. Its important to include perspectives from men and women, newcomers and
established employees, people from different racial or ethnic backgrounds, and
different age groups. The plans validity is strengthened by the assurance that all
perspectives are involved in the creative process.
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Recognition dinner.
Benchmarking report.
The quality council activities will become part of the culture of the organization in 3
to 5 years. Then they will become a regular part of the executive meeting. When this
state is achieved, a separate quality council is no longer needed. Quality becomes the
first item on the executive meeting agenda.
TQM has a universal appeal because it is an ongoing, long-term system to achieve
customer satisfaction by continuously improving the quality of a firms goods and
services.
Prevention,
Appraisal,
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External failure.
Prevention cost
The experience gained from the identification and elimination of specific cause of
failure and their costs is utilized to prevent the recurrence of the same or similar
failures in other products or services. The prevention costs of poor quality have been
defined to include the cost of all activities specifically designed for this purpose.
Corrective action that is directed toward elimination of the problem in the future may
be classified as prevention. They are investments made to keep nonconforming
products from occurring and reaching the customer. These could be:
z
Appraisal Costs
Appraisal costs of poor quality have been defined to include all costs incurred in the
planned conduct of product or service appraisals to determine compliance to
requirements. They are associated with efforts to ensure conformance to requirements,
generally through measurement and analysis of data to detect nonconformance. These
are
z
Test and inspection costs associated with incoming materials, WIP, and
finished goods, including equipment costs and salaries.
Process measurement and control costs which involve the time spent by
workers to gather and analyze quality measurements.
Yield losses.
Lost sales
Generally, internal failure costs are less expensive than external failure costs.
Conformance costs include the costs of testing and measuring the environment to
determine whether it conforms to the expected quality standards. Nonconformance
costs are the costs associated with mistakes.
Total quality costs are the sum of Prevention costs, Appraisal costs, Failure costs, and
Intangible costs.
The life cycle model: In the life cycle model, the costs are grouped under different
phases of the life cycle of the product. Quality costs increase over time.
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behavioural rather than economic because they "require vision, innovation and a
break from the status quo."
One underlying principle in dealing with the economic side of quality is that failure
costs are assumed to be higher than prevention (and appraisal) costs. Elshazly (1999)
dealt with accounting for quality costs and provided an outline of seven lessons from
the accounting aspect. One key lesson is that if a company wants to reduce its quality
costs and enhance its product and service quality, then it must be willing to spend
more money on prevention, because there is an obvious trade-off between prevention
and appraisal along with the internal and external failure costs. Elshazly explains that
the underlying premise that failure costs exceed prevention costs means that, as
prevention costs increase failure costs will drop. The main thrust of the argument is
that the accountant can help provide company-wide costs of quality in a number of
different ways, including management involvement and adapting accounting systems
meaningfully.
In his 1998 paper Kume states that "many companies treat the economic problems
pertaining to quality asquality costs". Kume explains that this is not the way things
happen in practice and management should not be concerned with these costs but
should try to minimise the loss using quality management. For example, changes in
what the workers were actually doing in a sub-process in a car manufacturer rendered
the whole process was sub-optimal. His view is that when loss prevention and the
development of new business and sales (which are just two parts of a company) are
well balanced, a company can maximise long-run profit.
As a child, Juran endured the loss of his beloved mother, an indifferent father, bitter
winters, the terror of anti-Semitism. Many residents of his native village in Romania
perished in Nazi death camps - and grinding poverty. Consequently, he entered the
working world bitter and socially inept, yet he was driven to succeed.
Jurans story parallels many of the great events of the 20th century. He landed his first
job at Western Electric, which was the hot growth company of the 1920s. He
weathered the Great Depression, he served his adopted country during World War II
by working in the Lend-Lease Administration, he helped Japan rebuild its devastated
economy and he showed U.S. manufacturers how to compete successfully in the
world market...
Also remarkable is the success of Jurans siblings. They, too, overcame their humble
beginnings and led successful lives. For example, his brother, Rudy, became a
successful bond trader; his brother, Nat, had a successful career in Hollywood, earning
an Academy Award; his sister, Minerva, earned a doctorate degree and became a
college professor - no small feat for a female Romanian immigrant."
Quality Digest issued an article which can be found at here. "No one in the last
hundred years has had more influence on the worldwide practice of quality in business
than Dr. Joseph Juran.. In Architect of Quality, Juran recounts his fascinating life
story, revealing how he overcame dire poverty and childhood tragedy to make a
profound impact on business and society. Juran retraces his inspiring life journey from an impoverished, tragic childhood in a tar-papered shack to his career as the
revered man who helped invent and champion quality management systems, quality
tools, and teams long before they became standard practice. Architect of Quality
delves deep into Jurans motivations, sharing for the first time how the early hardships
he faced and his relentless, aggressive spirit shaped his character and fueled his
determination to succeed."
Juran is considered to be after Deming the most important contributor to quality
management. He became well know after his book publishing Quality Control
Handbook in 1951. In Japan, Juran worked with manufacturers and taught classes on
quality. Even his philosophy is very similar to Deming's philosophy, there exists some
differences: while Deming emphasized the need for organizational transformation,
Juran believed that implementation of quality initiatives does not need dramatic
changes. Juran is the author of definition for quality: fitness for use, rather than
simply conformance to specifications. This way, Juran took into account the client,
in terms of his needs. Quality trilogy "quality planning, quality control and
quality improvement" represents another large contribution to quality. First part of
trilogy is concerned with identification of customers, product requirements and
override of business goals. The second part of trilogy implies the use of statistical
control methods. As for the third part, Juran believe is that improvement should be
continual, as well as breakthrough.
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New-design control,
Product control,
Feigenbaum argues that statistical methods are used in an overall quality control
program whenever and wherever they may be useful. However such methods are only
part of the overall administrative quality control system, they are not the system itself.
The statistical point of view, however, is seen as having a profound effect upon
Modern Quality Control at the concept level. Particularly, there is the recognition that
variation in product quality must be constantly studied within batches of product, on
processing equipment and between different lots of the same article by monitoring and
critical quality characteristics.
Modern Quality Control is seen by Feigenbaum as stimulating and building up
operator responsibility and interest in quality. The need for quality-mindedness
throughout all levels is emphasized, as is the need to "sell" the program to the entire
plant organization and the need for the complete support of top management.
Management must recognize that it is not a temporary quality cost-reduction activity.
From the human relations point of view, the quality control organization is seen as
both:
z
Finally, Feigenbaum argues that the program should be allowed to develop gradually
within a given plant or company. Feigenbaums preface to the third edition of Total
Quality Control in 1983 emphasizes the increased importance of buyers perceptions of
variation in quality between companies and also the variation in effectiveness between
the quality programs of companies. Quality is seen as having become the single most
important force leading to organizational success and company growth in national and
international markets. Further, it is argued that: "Quality is in its essence a way of
managing the organization" and that, like finance and marketing, quality has now
become an essential element of modern management.
Against this background, Total Quality Control is seen as providing the structure and
tools for managing quality so that there is a continuous emphasis throughout the
organization on quality leadership:
genuine investment in, and implementation of, modern technology for quality
throughout sales,
As Feigenbaum says: "In effect, quality and its costs are managed and engineered and
motivated throughout the organization with the same thoroughness and depth with
which successful products and services are themselves managed and engineered and
produced and sold and serviced". Such Total Quality Control programs are highly
cost-effective because of their results in improved levels of customer satisfaction,
reduced operating costs, reduced operating losses and field service costs, and
improved utilization of resources. By-products such as sounder setting of time
standards for labor may also be most valuable. Thus a Total Quality System is defined
as: The agreed company-wide and plantwide operating work structure, documented
in effective, integrated technical and managerial procedures, for guiding the
coordinated actions of the people, the machines and the information of the company
and plant in the best and most practical ways to assure customer quality satisfaction
and economical costs of quality. Operating quality costs are divided into:
z
Reductions in operating quality costs result from setting up a total quality system for
two reasons:
z
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Cost is reduced.
Repairs and installation of equipment and facilities are done more rationally.
To respect human relations and build a happy workshop offering job satisfaction,
These aims are broader than is consistent with a narrow definition of quality as often
used in the West, and Circle activities reflect this. The members of the circle have
mastered statistical quality control and related methods and all utilize them to achieve
significant results in quality improvement, cost reduction, productivity and safety. The
seven tools of quality control are taught to all employees:
z
Pareto charts
Stratification
Check sheets
Histograms
Scatter diagrams
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Quality circles have been vigorously marketed in the West as a means of improving
quality. There seems to be agreement, however, that they cannot be used naively, and
take careful adoption for use in Western companies. Adoptions have been various and
of varying effectiveness; in some companies circles have been successful, or regarded
as such, in others they have failed. Many commentators, such as Philip Crosby, have
warned against the fashion for quality circles as a cure-all for poor employee
motivation or inadequate quality and productivity in either white-collar areas or on the
shopfloor. The senior American Quality Guru Joseph Juran, in particular, has gone
further, in throwing doubts on their likely effectiveness in the West at all where few
company hierarchies are permitted with executives trained in quality management.
Adopt the new philosophy (management should adopt his philosophy, rather than
to expect the employees to do that),
Move towards a single supplier for any one item (working with several suppliers,
automatically involves variation in raw materials),
Improve constantly and forever (it refers to decreasing variation, as a key to better
quality),
Institute training on the job (another source of variation is the lack of training of
workers; train them properly to do a certain job, and they will do it with far less
variation),
Drive out fear (eliminate fear at worker's level to get their support for
improvements. Fear is counter productive),
Break down barriers between departments (here comes the concept of "internal
customer" which is found in TQM; a department is a supplier for next one. The
second one is the client for the first one),
Eliminate slogans (usually, it's not the employee who did it wrong, but it's the
system who allowed that. No need to create tension on worker, as long as the
system fails to prevent problems),
The most important book he wrote among other is Out of the Crisis in 1987. What is
relevant to this book along these 14 principles is that he initiated the movement
toward Total Quality Management, even he didn't used this expression. Nowadays,
there exists Deming Prize, introduced by JUSE (Japanese Union of scientists
Engineers); this prize is awarded annually for best proponent of TQM.
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and intended. Thus, SPC will not improve a poorly designed product's reliability, but
can be used to maintain the consistency of how the product is made and, therefore, of
the manufactured product itself and its as-designed reliability.
A primary tool used for SPC is the control chart, a graphical representation of certain
descriptive statistics for specific quantitative measurements of the manufacturing
process. These descriptive statistics are displayed in the control chart in comparison
to their "in-control" sampling distributions. The comparison detects any unusual
variation in the manufacturing process, which could indicate a problem with the
process. Several different descriptive statistics can be used in control charts and there
are several different types of control charts that can test for different causes, such as
how quickly major vs. minor shifts in process means are detected. Control charts are
also used with product measurements to analyze process capability and for continuous
process improvement efforts.
2.9.1 Benefits
z
Provides mechanism to make process changes and track effects of those changes
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It is true, however, that the main strengths of the Deming Prize criteria are the focus
they have on top management leadership, process control, Kaizen improvement
activities and on future planning to ensure that the gains will be sustained. Kaizen is a
philosophy of continuous improvement of all the organizations employees, so that
they can make an incremental contribution to continuous improvement each day.
The framework looks specifically at the role and effectiveness of the senior
management team. The term control in Japanese implies management, and hence
Japanese quality control really means quality management. In the Western world we
have a different perception of the term quality control.
The purpose of the award, as first defined by JUSE, is:
To award prizes to those companies that are recognized us having successfully
applied Company-wide Quality Control based on statistical control and are likely to
keep it up in the future.
Consequently, criteria such as company policy and planning, results and future plans
are primarily concerned with quality assurance activities and quality results, especially
the elimination of defects.
Nippondenso already had quality circles which involved the employees in changes.
Therefore, now, all employees took part in implementing Productive maintenance.
Based on these developments Nippondenso was awarded the distinguished plant prize
for developing and implementing TPM, by the Japanese Institute of Plant Engineers
(JIPE). This Nippondenso of the Toyota group became the first company to obtain the
TPM certifications.
Implementation
TPM has five goals:
1. Maximize equipment effectiveness.
2. Develop a system of productive maintenance for the life of the equipment.
3. Involve all departments that plan, design, use, or maintain equipment in
implementing TPM.
4. Actively involve all employees.
5. Promote TPM through motivational management.
TPM identifies the 16 types of waste (Muda) and then works systematically to
eliminate them by making improvements (Kaizen). TPM has 8 pillars of activity, each
being set to achieve a zero target. These pillars are:
1. Focused improvement (Kobetsu-Kaizen): for eliminating waste.
2. Autonomous maintenance (Jishu-Hozen): in autonomous maintenance, the
operator is the key player. It involves daily maintenance activities carried out by
the operators themselves that prevent the deterioration of the equipment.
3. Planned maintenance: for achieving zero breakdowns.
4. Education and training: for increasing productivity.
5. Early equipment/product management: to reduce waste occurring during the implementation of a new machine or the production of a new product.
6. Quality maintenance (Hinshitsu-Hozen): This is actually maintenance for
quality. It includes the most effective quality tool of TPM: poka-yoke, which
aims to achieve zero loss by taking necessary measures to prevent loss.
7. Safety, hygiene, and environment: for achieving zero work-related accidents and
for protecting the environment.
8. Office TPM: for involvement of all parties to TPM since office processes can be
improved in a similar manner as well.
TPM Success Measurement - A set of performance metrics, which is considered to fit
well in a Lean/TPM environment, is Overall Equipment Effectiveness, or OEE.
Check Your Progress 3
Fill in the blanks:
1. ______________________ cost is expended to develop data requirements
and measurements.
2. The Quality Council (QC) is the focal point of the __________________.
3. Leadership in quality can only be accomplished by ongoing improvements
and through the active participation of all ___________________.
4. Quality is in its essence a way of managing the ____________________.
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2.16 KEYWORDS
Total Quality Costs: Total quality costs are the sum of Prevention costs, Appraisal
costs, Failure costs, and Intangible costs.
The Life Cycle Model: In the life cycle model, the costs are grouped under different
phases of the life cycle of the product. Quality costs increase over time.
Quality: Defined as that aspect of things under which they are considered in thinking
or speaking of their nature, condition, or properties.
Aesthetics: How a product looks, feels, tastes or smells.
Durability: Useful life or life span of the product.
Persuasiveness: Good leaders are able to use their power and communication skills to
good use. They convert their power into influence.
Statistical Process Control (SPC): The application of Statistical Process Control
(SPC) involves using statistical techniques to measure and analyze the variation in
processes.
Total Quality Control (TQC): A system that integrates quality development,
maintenance and improvement of the parts of an organization. It helps a company
economically manufacture its product and deliver its services.
Statistical Quality Control (SQC): The application of statistical techniques to control
quality. Often used interchangeably with the term statistical process control,
although statistical quality control includes acceptance sampling, which statistical
process control does not.
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UNIT 1
UNIT II
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LESSON
3
TOTAL QUALITY MANAGEMENT
CONTENTS
3.0
3.1
Introduction
3.2
Definition
3.3
3.2.1
3.2.2
3.2.3
A Comprehensive Definition
TQM as a Foundation
3.4
TQM in Manufacturing
3.5
3.6
3.7
Leadership
3.6.2
Customer Focus
3.6.3
Teamwork
3.6.4
Measurement
3.6.5
Benchmarking
3.6.6
Continuous Improvement
3.6.7
3.6.8
3.7.2
3.7.3
Tools
3.8
Let us Sum up
3.9
3.10
Keywords
3.11
3.12
Suggested Readings
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3.1 INTRODUCTION
Total Quality Management (TQM), a buzzword phrase of the 1980's, has been killed
and resurrected on a number of occasions. The concept and principles, though simple
seem to be creeping back into existence by "bits and pieces" through the evolution of
the ISO9001 Management Quality System standard.
"Total Quality Control" was the key concept of Armand Feigenbaum's 1951 book,
Quality Control: Principles, Practice, and Administration, in a chapter titled "Total
Quality Control" Feigenbaum grabs on to an idea that sparked many scholars interest
in the following decades, that would later be catapulted from Total Quality Control to
Total Quality Management. W. Edwards Deming, Joseph Juran, Philip B. Crosby, and
Kaoru Ishikawa, known as the big four, also contributed to the body of knowledge
now known as Total Quality Management.
The American Society for Quality says that the term Total Quality Management was
used by the U.S. Naval Air Systems Command "to describe its Japanese-style
management approach to quality improvement." This is consistent with the story that
the United States Navy Personnel Research and Development Center began
researching the use of statistical process control (SPC); the work of Juran, Crosby, and
Ishikawa; and the philosophy of W. Edwards Deming to make performance
improvements in 1984. This approach was first tested at the North Island Naval
Aviation Depot.
Companies who have implemented TQM include Ford Motor Company, Phillips
Semiconductor, SGL Carbon, Motorola and Toyota Motor Company.
The latest changes coming up for the ISO 9001:2000 standards "Process Model"
seem to complete the embodiment. TQM is the concept that quality can be managed
and that it is a process.
Total Quality Management (TQM) is a management strategy aimed at embedding
awareness of quality in all organizational processes. TQM has been widely used in
manufacturing, education, government, and service industries, as well as NASA space
and science programs.
3.2 DEFINITION
3.2.1 TQM is composed of Three Paradigms
z
Total: Involving the entire organization, supply chain, and/or product life cycle
Quality: With its usual Definitions, with all its complexities (External Definition)
Management: The system of managing with steps like Plan, Organize, Control,
Lead, Staff, provisioning and the likes.
One major aim is to reduce variation from every process so that greater consistency of
effort is obtained.
Improvement Teams
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It took people a while to develop tests to find emergent problems. One popular test is
a "life test" in which the sample product is operated until a part fails. Another popular
test is called "shake and bake", in which the product is mounted on a vibrator in an
environmental oven, and operated at progressively more extreme vibration and
temperatures until something fails. The failure is then isolated and engineers design an
improvement.
A commonly-discovered failure is for the product to disintegrate. If fasteners fail, the
improvements might be to use measured-tension nut drivers to ensure that screws
don't come off, or improved adhesives to ensure that parts remain glued.
If a gearbox wears out first, a typical engineering design improvement might be to
substitute a brushless stepper motor for a DC motor with a gearbox.
The need to improve the quality of a certain portion of the company information is
identified, and an improvement process is INITIATED (1). This is activated by
any of the following information stakeholders: customers (users), providers,
solutions' suppliers, MIS organization, or company management.
In the PLAN phase (3), the customer needs are examined and translated into IQ
dimensions and then into IQ METRICS specifications (4), which become a
critical part of the information solution specification.
In the CHECK (7) phase, the team uses the METRICS to compare solution
performance with a pre-defined target. Gaps between customer needs/expectations
and actual IQ are identified.
In the ACT (8) phase, activities to close these gaps are agreed and implemented.
A new PDCA cycle begins (9), in order to further improve the same information
or handle a different portion of the information used by the company.
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Deploy IQ
culture
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3.6.1 Leadership
Concept: management should demonstrate leadership by:
a) recognizing IQ as a strategic issue,
b) Allocating the appropriate resources to IQ improvement- capital, management
attention, vision and priorities.
c) Setting an example as the first to require, use or provide better quality
information. This role is the responsibility of all management levels, from the
company president down to team leaders.
3.6.3 Teamwork
Specification of IQ needs and metrics, as well as fulfillment control are based on
teamwork operation. All stakeholders are included in the team. A typical team hosts
representatives from the information users' group, information providers, information
solutions' suppliers, information organization and other relevant parties. A certain
level of management participation is required as well. All the above functions are
responsible for higher quality of information.
3.6.4 Measurement
IQ metrics are used to translate the information user needs into measurable
specifications. These specifications should be designed into the information solution.
Once the solution is provided, IQ metrics are used to asses the solution's actual
performance against the requirements, and effectively against user needs. Due to the
special importance of this concept to the InfoQual methodology.
3.6.5 Benchmarking
In order to achieve "world class" IQ, it is necessary to explore what IQ levels are
achieved in the "external world". We refer here to other functions in your
organization, other organizations in your industry or even other industries and
professional domains. Benchmarking supports the IQ improvement team in setting
high but realistic targets that energize the process. Benchmarking is also a useful tool
to discover new and practicable metrics and methods to measure IQ.
DO: Here the actual improvement activities are conducted (e.g., introduction
of a new information solution)
ACT: The actions required to close the gaps between the required and actual
IQ performance are designed and conducted.
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Level B: IQ Users Needs, which reflect users' expectations. They are specified by
the user, in his words (voice of the customer). "Ease of Use" is a common
example. When there are many stated customer needs, they can be grouped in
order to allow easier manipulation.
Description
Output Examples
EXTRACT needs
TRANSLATE needs
Translate abstract
concrete metrics.
needs
into
Need= Accuracy
Metrics= error rate, precision
DEFINE metrics
ANALYZE metrics
Completeness
&
Contd
MEASURE current
Measure the current IQ performance Response time= 8 days (average)
performance
BENCHMARK
performance
SET
values
TARGETS
NORMALIZE
metrics
COMMUNICATE
Communication
of
metrics
performance
and information to all stakeholders, Graphical report
targets
including management
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Information solution suppliers: Can use the methodology in order to identify the
critical IQ factors and performance required for a winning information product.
MIS function: can use the methodology to aid the rational selection of solutions
to their internal customers.
3.7.3 Tools
The process used in InfoQual is based on the TQM framework to IQ improvement. IQ
needs and metrics are at the centre of the framework. Three tools to manipulate these
objects are integrated into the TQM framework in order to form the methodology.
These tools are QFD, Metrics database and IQ graphical presentation. Table 3.2 maps
these tools onto InfoQual operations. Then, the following sections briefly describe
these tools.
Table 3.2: InfoQual tools and operations
Operation
Tool
Notes
EXTRACT needs
QFD
TRANSLATE needs
QFD,
DATABASE
DEFINE metrics
METRICS DATABASE
ANALYZE metrics
QFD
METRICS
METRICS DATABASE
SET
TARGETS
QFD
(target values)
NORMALIZE
metrics
METRICS DATABASE
COMMUNICATE
IQ
GRAPHICAL
Used throughout the improvement project cycle life
performance
and
PRESENTATION
targets
are at the heart of the process. These metrics are manipulated through a set of
operations like selection, prioritization and presentation. Three tools that facilitate
these operations are integrated into the TQM framework, creating the InfoQual
methodology.
The methodology represents an explicit and manageable approach to the improvement
of information quality. It suggests that the stakeholders should invest meaningful
effort in explicitly defining and tracking IQ needs and metrics, using a formal and
structured process. More research is required in order to test its usefulness. The
following questions arise: what is the cost of implementation? How can effort be
minimized, in order to make it acceptable to all stakeholders? What are the direct
effects on information quality? What are the side effects and benefits? In what
information domains is the methodology more practical?
Many quality approaches are added on top of the regular business processes without
eliminating or replacing any existing activity. The pre-quality way hangs around with
some extra work in the form of the new way .Such redundancy must be avoided.
Therefore, the InfoQual methodology is designed to be integrated into common and
existing operational approaches to information systems specifications. The next phase
of this research will test the practicality of InfoQual in real-life implementations.
3.10 KEYWORDS
Total Quality Management (TQM): is a management approach aimed at satisfying all
customer requirements, needs and expectations using a Continuous Improvement
approach.
Metrics: translate the customer needs into technical characteristics of the desired
information solution.
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LESSON
4
CUSTOMER - SUPPLIER RELATIONSHIP
CONTENTS
4.0
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
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4.1 INTRODUCTION
Suppliers have strong and important impacts on the products, services work processes
and distribution. Suppliers are at the beginning of the chain of process steps for
product or service. The quality of the raw material will have an impact on the quality
of the end product.
Purchases account for more than 60% costs to most companies and they are the source
of more than 50% of the quality problems. Therefore, it is essential that the delivery
and quality of suppliers be actively managed.
The make or buy decision is one of the fundamental and strategic decisions that the
top management has to take. Theoretically every item currently purchased can be
considered for making and every item that is being made currently can be considered
for purchase from outside.
Make or buy decisions are complex, time consuming and affect many parts of the
organizations. Majority of them are made on the basis of cost, but there are many
non-cost factors that are important.
Make or buy decisions are made by the organizations when
z
Volume of production
Capacity utilization
Fixed cost
Availability of infrastructure
Marketing: This depends on the demand, margin, competition, sales potential etc.
for the item in the market
Delivery commitments
Quality levels
Cost
Strategic: This aspect takes into considered of the overall objectives of the
organization giving due importance to economy, secrecy and flexibility.
Customers and suppliers have the same goal of satisfying the end user. Every one is a
supplier as well as a customer. Both the supplier and customer have limited resources.
Hence they must work together to maximize their return on investment.
Customer Satisfaction is the prime goal of all business or job situations. External
suppliers are at the beginning of the chain of process steps for the product or service.
Each step is a supplier for the next process step. There is a long chain of internal
suppliers and customers as we trace from the external supplier before the finished
product or service reaches the ultimate external customer.
To satisfy and delight our customer, it is essential that our suppliers provide us with
quality parts and services. This includes both internal and external suppliers.
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This is because at each stage we can add value only what has come to us. If there is a
problem in the product that we receive, we cannot add value to it, or it may go to our
customer at least with the same problem.
The nine primary activities needed for purchase are:
1. Define product and program quality requirements,
2. Evaluate alternative suppliers,
3. Select suppliers,
4. Conduct joint quality planning,
5. Cooperate with the supplier during the execution of the contract,
6. Obtain proof of conformance to requirements,
7. Certify qualified suppliers,
8. Conduct quality improvement program as required, and
9. Create and use supplier quality ratings.
In modern industrial production, the interdependence of buyers and suppliers has
increased dramatically. The supplier becomes an extension of the buyers organization
to a certain extent.
Both supplier and customer are equally responsible for the control of quality.
Both supplier and customer must be independent and respect each others
independence.
Customer is responsible to provide the supplier the correct and clear requirements
so that the supplier is able to understand the exact requirements of the customer.
The supplier is responsible to provide the quality desired by the customer and
must submit necessary data on customers request.
This contract between the customer and supplier must also spell out the method of
settlement of any disputes that might arise in an amicable way.
Both customer and supplier must decide jointly the methods to evaluate the
quality of the product or service to the satisfaction of both parties.
Both the customer and supplier must exchange information continuously for
improving the product or service by using multifunctional teams etc.
The best interest of the end user must be in the mind of the customer and supplier
in their business transactions.
The way to be sure that the supplier will provide quality goods and services is to form
customer-supplier partnership with him. The long-term objective should be to develop
Economic Planning optimizing quality costs and buying value rather than
conformance to specifications
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Commitment,
Competency of people,
Good communication
To maintain and develop the relationship into higher levels the following areas also
need to be addressed.
z
Inspection
Training
Team Approach
4.4.1 Inspection
Inspection is done to confirm that the product supplied is as per requirement.
Inspection is to be reduced and finally eliminated in about five years. These can be
done in four phases as given below:
z
Tightened: The supplier and customer do both 100% inspection of the critical
characteristics of items. When the supplier gains confidence it goes to the next
phase.
Sampling: In this phase the supplier uses Statistical process control for the
process using control charts and process capability. The customer does audit
using R and D sampling methods.
Audit: The supplier continues with the use of statistical process control of the
process. He also initiates his own auditing. The customer now has complete
confidence in the supplier and customer performs only the identity checks.
4.4.2 Training
Training is also imparted to the supplier. This will help him to understand the
requirement of the customer. The training may be provided at the suppliers place or
at the customers place. Such training can improve the quality of the product. Further
it will strengthen relationships between the supplier and customer.
More suppliers will offer ancillary services, like storage, accounting, etc.
Consortium buying
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Note that the first requirement has nothing to do with any external consumer groups,
but is rather a purely internal initiative. In fact, this initiative might cause the company
to do things that would conflict with the wants and desires of consumer groups. For
example, in an effort to increase accessory sales, the company might make
modifications on their rifles that require the use of their own proprietary scopes (even
though certain customers may prefer Bushnell or other scope manufacturers
equipment).
The companys second business requirement (Comply with U.S. Federal & State
regulations) does not reference a consumer of Glasgows goods either. However, it
does refer to a customer of sorts who has the ability to impose requirements that can
stop Glasgow from being able to sell their product to other consumer groups. The
following table lists some of the government requirements that Glasgow has to keep in
mind when producing rifles and ammunition for general civilian ownership. Since
none of these regulations are any more important (or any less-enforceable) than
another, each of them is granted the same relative weighting.
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The third through fifth Business Requirements in the first table are essentially rating
the relative priority of different consumer groups for Glasgow. Imagine that Glasgow
surveys each of the different customer groups and comes back with the following lists
of requirements:
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* Correlation to IQ need X
* Benchmarks (values +
context)
(Phase:
metric
specificat
ion)
benchmarks values
target values
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DO
(IMPLEMENT
THE CHANGE)
DEFINE
THE
PROBLEM
IDENTIFY
POSSIBLE
CAUSES
EVALUATE MAKE
POSSIBLE A
CAUSES
CHANGE
1. Recognize
that what you
are doing is a
"PROCESS"
6."BRAINSTORM" 8. Determine
what is causing the the
problem.
relationship
between
7. Determine what cause and
2. Identify the past data shows.
effect
commodity
o Frequency
o Scatter
being
distribution
diagrams
processed.
o Pareto charts
o Regression
- Process
o Control charts
analysis
Inference
- sampling
9. Determine
what the
3. Define some
process is
measurable
doing now
characteristics
o Control
of value to the
charts
commodity.
- sampling
4. Describe the
"PROCESS"
o Process Flow
Analysis's
o Flow charts
o List of steps
CHECK
(OBSERVE
THE
EFFECTS)
ACTION
(EMBED THE
FIX INTO
THE
PROCESS
FOR GOOD)
TEST
THE
CHANGE
TAKE
PERMANENT
ACTION
10. Determine
what change
would help
Your
knowledge
of the process
Scatter
diagrams
Control Charts
- sampling
Pareto analysis
****Then make
the change.
5. Identify the
"Big" problem
Brainstorming
o Checklists
o Pareto
analysis
Product,
Process,
Systems,
Humanistic,
Society,
Cost-oriented, and
QFD is the mechanism to achieve primary objective of any manufacturer of bring new
products to the market faster than the competition, with lower costs and improved
quality. It is a team-based management tool in which customer expectations are used
How well different providers of products that address benefits are perceived to
perform?
QFD usually focuses on implementing business strategies and tactics especially lean
thinking. It extends the, measurement concept from implementation on the shop floor
to the design of the whole production process. Conflicting characteristics or
requirements that are identified early in the QFD process can be resolved before
production.
QFD is a disciplined approach to product design, engineering and production and
provides in-depth evaluation of a product. It is particularly the less tangible customer
requirements such as responsiveness and individualized attention. It makes invisible
requirements and strategic advantages visible, and then allows prioritizing and
delivering on them.
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Identify the customers vital requirements for the product or service and translate
them into design requirements.
Implement the newly designed process for delivery of the product or service.
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4.10.1 Groups
In most organizations there are groups. Groups can be divided as under:
1. Strategic focus group/standing committees,
2. Project groups, and
3. Natural work groups.
1. Strategic focus groups and standing committees: These groups represent the
most sensitive and critical situation for facilitation. Strategic focus groups live a
short life, and work on a particular project that has a defined beginning and end.
These groups deal with the implementation of major organizational change, such
as Total Quality, Just in Time, World-class Manufacturing and the like.
2. Project groups: Project groups like strategic focus groups have a short life. They
have a single purpose, such as reduction of set-up time, or process improvements
of certain work operations. They can be called Quality Improvement Teams,
Process Improvement Teams, or Problem Action Teams.
Group members usually come from many functions. Supervisors and line workers
usually make up the group, and higher management often delegates the task o
them.
Because the problems they deal with are technical rather than
organizational, this type of group may need subject-matter knowledge in the
processes they are improving
3. Natural work groups: Natural work groups report to the same on a permanent
basis. These groups live a long time and have supervisors who are appraisal.
Because of these factors, facilitation provides special opportunities.
Unfortunately, the usual meeting management skills of charting, creating an
agenda and keeping the meeting focused on the task are not enough to take
advantage of this situation.
Team building involves assessing of a groups functioning, feedback of this
assessment to the group and its head, and problem solving by the group on the
issue raised. Team Building is a facilitated process consisting of the following set
of behaviors that helps a group:
Facilitation must define who their customers are, find out their needs, and delight
them. Facilitation is needed because the group needs a neutral third party to assure,
members follow group norms, and to provide impartial feedback on group processes
and management style. Behaviors such as charting, active listening, flowcharting,
problem solving they cannot do themselves. Knowledge of group dynamics,
organizational development and implementation of change.
A team involves the coordinated activities of two or more persons who are organized
cooperatively for the attainment of a recognizable organizational goal(s). TQM
implementation is accomplished through team building and problem solving. The
Coordination.
Teams are made up of individuals with diverse skills and talents. Each team member
has a clearly defined skill set that needs to be identified and measured against the skill
sets of other team members.
Some of the characteristics of a team are that a team is composed of a highly
communicative group of people. Poor communication means no team. A team must
have members with different backgrounds, skills and abilities, so that the team can
pool these things to be effective. A team with no diversity in it will be unlikely to
work in an innovative fashion. A team must have a shared sense of mission. Whether
it is a temporary work improvement team, or a branch, all members must share the
sense of mission. A team must have clearly identified goals. A team must be able to
gauge its success, and know what it is trying to accomplish.
In terms of direction, teams generally come in two categories, leader-directed and
self-directed.
The leader directed team has the following characteristics:
z
Members are usually hand-picked based on expertise by the leader from the
various departments, and
It is of crucial importance that the members within a team as well as the teams within
a system collaborate with each other. To create teams that value high collaboration is
a must.
Teams have proven to be more responsive to demands of a competitive market place
than traditional hierarchies. Teamwork involves the entire organization. The team
concept gives employees an opportunity to be involved in meaningful decisionmaking.
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The best results are obtained when people work together with a sense of commitment
to one another as well as to the organization. Teamwork is the essence of teams
where collaboration, cooperation and coordination among and within team members
are effective.
Building an effective team brings about tremendous improvements in employee
performance, satisfaction and retention. When employees begin working together as a
team, the company benefits from a corresponding increase in productivity, sales,
responsiveness, and overall customer satisfaction.
Teams that are empowered become the building blocks of truly empowered system.
Empowerment is based upon a trusting relationship.
Disagreements happen in even the best of teams, and sometimes theyre quite sharp.
Managing disagreements requires the active commitment of ll sides, especially the
winners. Team unity must be placed above short-term victory. Creatively managed,
they can become occasions for growth and learning.
Conflicts are not a disaster but an Opportunity. Effective teams seize on conflicts to
reinforce their on-going win-win ethic. They try to generate as many alternatives by
brainstorming. The more creative options available, the more likely the group is to
reach a mutual solution.
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Lack of continuous Training and Education: Lack of training is the next most
important obstacle. This gives rise to confusion about the various aspects of the
programme. This is like building walls and ceiling without laying the foundation.
Naturally, such a structure would collapse. Training and education is an ongoing
process for everyone in the organization. When senior management conducts the
training on the principles of TQM, it s effectiveness increases. Needs must be
determined and a plan must be developed to achieve those needs. They could be a
lack of training in group discussion and communication techniques, quality
improvement skills, problem identification, for problem solving affects
implementation of TQM.
3.
Improper Planning: Planning accounts for more than 50% of the job. Planning
works well all the concerned people are involved. TQM is no exception. TQM is
about empowerment of people and participative management. All constituents of
the organization should be the goal. Financial or sales goals take a back seat.
8. Paying inadequate attention to internal and external Customers: The needs and
expectations of customers will be changing over time. There are internal suppliers
and internal customers. If we want to take care of the ultimate external customer,
it is essential that the internal customers enroute have to be properly attended to.
Organization needs to understand this through effective feedback mechanisms.
9. Failure to Continually Improve: One of the cardinal principles of TQM is
continuous improvement. This continuous improvement is a journey and not a
destination. A lack of continuous improvements of the process, product, and/or
service is bound to make the implementation a failure.
10. Apparent lack of business experience and knowledge: This aspect of continuous
improvement in all the activities of an organization implies continuous learning
and improving knowledge and experience. Every mistake is a valuable lesson in
experience. People have to upgrade not only their knowledge about the product
and process but also about customers perception changes.
11. Taking narrow dogmatic approach: Some organizations are determined to follow
the Deming approach or Juran approach or Crosby approach etc. It must be
remembered that the each of the quality gurus and other experts have made
valuable contribution. For TQM to be successful, it is imperative that organization
has to assimilate from all these philosophies and create a blue print for their
success.
Attitudes
Management styles
Misdirected focus emphasis on the trivial many problems facing the company
rather than a critical few
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4.15 KEYWORDS
Suppliers: are at the beginning of the chain of process steps for product or service.
Quality Circles: are a participative philosophy woven around Quality Control and
Problem solving at the grass root level.
Team Building: means to develop the team and the individuals in it to be stronger and
work more closely as a unit.
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UNIT 1
UNIT III
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LESSON
5
MANAGEMENT PROCESS - 1
CONTENTS
5.0
5.1
Introduction
5.2
5.3
5.4
5.5
Let us Sum up
5.6
5.7
Keywords
5.8
5.9
Suggested Readings
5.1 INTRODUCTION
Similarly to manufacturing organizations, service organizations are challenged to
continuous productivity improvement. Both in the case of globally operating and
competing companies as well as in locally operating public welfare organizations,
there is a need to make sure that service production is effective and efficient and that
resources are optimized, properly allocated and exploited. This means that a key target
for service organizations is the improvement of service operations productivity. This
poses different issues, such as in particular:
z
How to measure service productivity when the output is intangible and cannot be
counted similarly to goods (physical products)?
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Intellectual capital has been an active research theme during the past decade.
Significant research efforts have been used to develop frameworks and tools for
understanding, analyzing, measuring and managing the intangible and knowledge
assets of organizations. There are many different services and service organizations,
and probably as many different ways to improve productivity. This issue aims to
investigate the contribution of the intellectual capital research stream to service
productivity improvement.
The unique qualities of serviceMany of the core processes of a service organization
are not linear and even processes which are repeated from one customer to the next
are typically tailored to specific customers and their unique expectations and
requirements. Service employees are often less interdependent with one another than
employees in manufacturing. And their activities do not always lend themselves to
collaborative or team approaches.
Servicerelated jobs can be more meaningful and whole in nature, inherently
providing service employees with greater skill variety, task identity, task significance,
autonomy and feedback than is characteristically found in manufacturing settings.
Even more routine service jobs, such as grocery or department store clerks or bank
tellers, are more meaningful and satisfying because they require a variety of
interpersonal skills to effectively interact with a diverse set of customers, involve
some level of decision-making and receive direct feedback from customers.
Work redesign in the service world is differentThese unique qualities mean that work
redesign efforts in service organizations must be approached from a different
perspective.
The true service organization cannot be effectively redesigned using either traditional
linear or non-linear socio-technical systems approaches. It requires an integration of
fundamental service quality principles and frameworks with traditional work redesign
structures and processes.
Work redesign in service, requires the application of some design principles unique to
service. In addition, there are some specific ways of approaching work redesign in
service organizations that differ from those used in other settings. The examples in
this lesson will help you to illustrate the usefulness of the approaches and improve the
redesign of work in service organizations.
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Compliant employees can't give quality service: The attempt to control employees
results in an atmosphere of compliance. People comply to management directives, or
policies and procedures, out of fear, a sense of duty, or the desire for financial reward.
The problem with that approach is that the ambiguous, intangible service world
demands employees who use their minds and hearts to meet the ever changing needs
and expectations of their unique and very human customers and go the extra mile to
create moments of truth for the customer that ensure satisfaction and loyalty.
Empowered employees can give quality service: Front line people must be
empowered to make effective decisions, act in ways which will inspire customer
confidence and quickly resolve problems as they arise. They need to be directed and
guided through a clear strategy and an empowering culture that provides employees
with standards or guidelines for their decision making and actions.
What are the values now and what do we want them to be tomorrow...The intense
nature of the service process requires a thorough understanding of the shared values of
the current culture before initiating work redesign in service organizations.
Auditing the culture: An audit of the organizational culture, therefore, becomes a
critical piece during the social systems analysis phase of work redesign in a service
organization. It can be described as a three part process:
1. An organization's culture is assessed through interviews with key organizational
leaders, focus group sessions with additional employees and other data gathering
techniques.
2. This information is then analyzed to determine the key values which drive the
decision making and behavior of people in the organization.
3. These values are reviewed with members of the organization for validity and then
assessed to determine their impact upon organizational performance.
An insurance company culture audit...As a part of the social systems analysis
completed during the redesign of a large policy processing office of a major auto and
homeowners insurance carrier, design team members did an audit of the organization's
existing values.
Identifying current core values...Team members identified the five core values which
were dominating the decisions and behavior of the employees in the organization.
Identifying and understanding these core cultural values provided the design team
with valuable information. As the values were assessed, it became obvious that many
of them not only hindered front line employees' ability to meet or exceed customer
expectations, but were also potential barriers to implementing the redesign
recommendations. Following this analysis, key organizational leaders agreed upon a
new set of core values and guiding principles and then shared these with all
employees.
These new values and operating guidelines became design criteria for work done by
the design team during the rest of the redesign process.
Surveying employees about the climate, or culture...Understanding the current climate
of the organization is a key step in designing a high performing service organization.
Numerous research studies have shown that employees' feelings of satisfaction and
commitment are directly mirrored in their interactions with customers. When these
needs are met, they are free to focus on customer needs rather than their own. Another
way of stating this concept is: employees model the service they provide to customers
after the service they receive from the organization and its leaders.
To accurately describe and analyze the social systems in an organization, it is
important, therefore, to assess the satisfaction levels of the employees and the climate
they perceive is being supported, or created by their leaders. This type of assessment
highlights gaps between employees' current perceptions and those expected if the new
values were in place and provide important data for designing the new organization.
Check Your Progress 2
Fill in the blanks:
1. Service is considered as _______________ source.
2. The person who reports on the user organization's financial statements is
known as ___________________ .
3. The _____________ report on controls placed in operation.
Control environment
Risk assessment
Control activities
Monitoring.
Service organization: The entity (or segment of an entity) that provides services
to a user organization, which are part of the user's information system.
Service auditor: The auditor who reports on controls of a service organization that
may be relevant to a user organization's internal control as it relates to a financial
statement audit.
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User organization: The entity that has engaged a service organization and whose
financial statements are being audited.
User auditor: The auditor who reports on the user organization's financial
statements.
5.7 KEYWORDS
User organization: The entity that has engaged a service organization and whose
financial statements are being audited.
User auditor: The auditor who reports on the user organization's financial statements.
Service organization: The entity (or segment of an entity) that provides services to a
user organization, which are part of the user's information system.
Service auditor: The auditor who reports on controls of a service organization that
may be relevant to a user organization's internal control as it relates to a financial
statement audit.
Service organization controls: Controls at a service organization that may be a part of
a user organization's information system in the context of an audit of the user's
financial statements.
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LESSON
6
THE SEVEN TOOLS OF QUALITY
CONTENTS
6.0
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
6.10
6.11
6.12
6.13
6.14
6.15
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The Seven Tools of Quality
6.1 INTRODUCTION
One of the basic principles of TQM is management by facts. Management by facts
call for decisions based on relevant data and appropriate analysis and not by
institution, gut feeling and experience.
Management cannot expect employees to effectively participate in problem solving
and continuous improvement programs (i.e. to be empowered) unless they are
provided training in how to address problems.
The seven tools of quality make it easy for the collection and analysis of the data for
management by facts. They can assist the quality professional in root cause analysis.
They help organizations understand their processes in order to improve them.
A picture can convey ideas better than many words. The seven tools of quality are the
cause-and-effect diagram, check sheet, control chart, flowchart, histogram, Pareto
chart, and scatter diagram. They are simple but powerful tools that can be of
significant value throughout the problem solving and continuous improvements
processes.
The seven classical tools for Quality and process improvements and their use are
given below:
Tool
Use
Check sheet
Histogram
Scatter Diagram
Flow chart
Pareto Diagram
Control Chart
These tools, like physical tools exist to help to do a job. Each of them is some form of
chart for the collection and display of specific kind of data. They make the data
collected usefully by making them as information that can be used for problem
solving and enhance decision-making. They keep track of the work done and can even
anticipate future performance and problems.
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Tools used
Flow chart
II Measurements
With the exception of process control charts, they do not require any knowledge of
statistics to be used effectively. And these tools are equally effective in both service
and manufacturing environments. Training in the use of these tools is often
incorporated into the early phases of employee empowerment training programs.
Each of these quality tools is simple and do not require any special theoretical
education to implement them. They organize data so nicely that the message can be
comprehended easily. These tools are usually used to complement each other, rather
than employed as stand-alone techniques.
III
IIII
III
IIII
IIII
IIII
III
IIII
IIII
IIII
IIII
IIII
IIII
II
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The Seven Tools of Quality
II
IIII
Check Sheet
Creatively plays a major role in the design of a check sheet. It should be user-friendly
and, whenever possible, include information on time and allocation. Whenever
possible, check sheets are also designed to show location.
Determine other information about the source of the data that should be recorded,
such as shift, date, or machine.
Determine the time period for data collected and who will collect the data.
Pilot the check sheet to determine ease of use and reliability of results.
Spend adequate time explaining the objective of the data collections to those
involved in recording the data to ensure the data will be reliable.
Check sheets are often confused with data sheets and checklists. Checklist is a tool
used to ensure that all important steps or actions in an operation have been taken.
Checklists contain items that are important or relevant to an issue or situation.
6.3 HISTOGRAMS
Histogram is a fundamental statistical tool of SPC. It is a very effective graphical and
easily interpreted method for summarizing data.
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Histogram is useful tool for estimating the density (for random variables) or
probability mass function (for discrete random variables) of the population.
Histogram provides clues about the characteristics of the population from which the
samples are taken.
Before constructing frequency distribution one must determine the number of classes
to be used. Though this is purely arbitrary, too few or two many classes will not
provide a clear a picture as can be obtained with some nearly optimum number of
classes.
Sturges rule may be used as a useful guide to determine the optimal numbers of
classes (K) given by
K = the smallest integer greater than or equal to 1 + 3.332 Log(n)
Where K is the number of classes, Log is in base 10, and n is the total number of the
numerical values which comprise the data set.
Therefore, class width is : [highest value lowest value) / (1 + 3.332 Log (n)] where n
is the total number of item in the data set.
7. Create the framework for the horizontal and vertical axes of the histogram. On
the horizontal axis plot the lower and upper limits of each class determined above.
The scale on the vertical axis should run from zero to the number greater than the
largest than the largest frequency count determined above.
8. Plot the frequency data on the histogram framework by drawing vertical bars each
class. The height of each bar represents the number or frequency of values
occurring between the lower and upper limits of the class.
9. Interpret the histogram for skew and clustering problems:
The shape shows the nature of the distribution of the data.
The central tendency (average) and variability are easily seen.
Specification limits can be used to display the capability of the process.
Example: The data below are the number of defectives pieces from 20 samples (each
containing 200 units): 48,49,50,46,47,47,35,38,40,42,45,47,48,44,43,46,45,42,43,47.
The largest number is 50 and the smallest is 35. Thus, the range, R = 15. Using 5
classes, so K=5. The interval width I = R/K = 15/5 = 3.
Making the lowest value as the lower limit, the lower limit for the first class 35.
Thus the first upper limit is 35 + 3 or 38. The second class will , have a lower limit of
38 and as upper limit of 41. The completed table (with frequencies tabulated) will
look like the following.
Lower Limit
Upper Limit
Frequency
35
38
38
41
41
44
44
47
47
50
Frequency
Class
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3. Compare distributions.
4. Determine means and modes.
5. Identify population control limits mixtures, abnormally, or errors.
It is used for interpreting skew problems. Data may be skewed to the left or right. If
the histogram shows a long on the left side of the histogram, the data is termed left or
negatively skewed. If a tail appears on the right side, the data is termed right or
positively skewed. Decisions may need to be made to determine the appropriateness
of the direction of the skew.
It is used for interpreting clusters problems. Data may be clustered on opposite ends
of the scale or display two or more peaks indicating serious inconsistencies in the
process or procedure.
Indicates that a process is running normally (only common causes are present
2. Bi-Modal
z
Many indicate that data from more than process are mixed together
3. Cliff-lake
z
4. Saw-Toothed
z
5. Skewed
Appears as an uneven with values tapering to one side. The two types are skewed left
and skewed right.
Histogram gives no indication whether the process was operating at its best when the
data was collected. This lack of information on process control may lead to incorrect
conclusions being drawn and, hence, inappropriate decisions being made.
Histograms are effective only when the data is representative of typical process
conditions and the sample size is large enough to provide good conclusions.
Histograms are only effective for data that come from a process that is in a state of
statistical control (because trends can be masked).
Inspite of all these limitations the histograms simplicity of construction and ease of
use make it an invaluable tool in the elementary stage of data analysis.
Check Your Progress 1
1. Define check sheet.
.
.
2. What is a histogram chart used for?
.
.
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3. Plot the data pairs on the diagram by placing a dot at the intersections of the X
and Y coordinates for each data pair.
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Within each symbol, write down what the symbol represents. This could be the start
or finish of the process, the action to be taken, or the decision to be made.
Symbols are connected one to the other by arrows, showing the flow of the process.
Example:
The example below shows part of a simple flow chart which helps receptionists route
incoming phone calls to the correct department in a company:
Flow charts show the progress of work like the flow of material or information
through a sequence of operations. Flow charts or process maps were used to visualize
the flow of product or documents through a series of process steps. It is a pictorial
representation showing all of the steps of a process. It is used for:
1. Defining and analyzing processes
2. Building a step-by-step picture of the process for analysis, discussion, or
communication purposes
3. Defining, standardizing, or finding areas for improvements in a process.
Unnecessary tasks (eliminating tasks that are in the process for no apparent
reason)
Flow charts are useful in an initial process analysis and should be complemented by
process flow sheets or process flow diagrams (more detailed) if available. Everyone
involved in the project should draw a flow chart of the process being studied so as to
reveal the different perceptions of how the process operated
Structured flow diagrams are created using a single entry (with inputs), a single exit
(with outputs), and a combination of three building structure:
z
Choice a decision between two or mire paths (structured sub paths) [e.g., ifthen, case/select]
Loop structured sub path (single entry and single exit) that is executed 0 n
times.
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Dispersion Analysis Type Place cause within a major cause and applying the 5
Whys.
Process Classification Type uses the major steps of the process in palce of the
major cause
The cause-and-effect diagram (or fishbone diagram or also Ishikawa diagram) are
diagrams, that shows the causes of a certain event. A common use of the Ishikawa
diagram is in product design, to identify desirable factors leading to an overall effect.
People
Machine
Milieu
Effect
Material
Methods
Message
5. Brainstorm potential cause of the problem. Decide as a group where to place them
on the Cause and Effect Diagram. It is acceptable to list a possible cause under
more than one major cause category.
6. Review each major cause category. Circle the most likely cause on the diagram.
7.
Review the causes that rate circled and ask, Why is this cause? Asking Why
will help get to the root cause of the problem.
Making the diagram educates and trains personnel to make decisions and correct
problems autonomously.
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or Pareto (pah-ray-toe) Diagrams. They are histograms (i.e. bar charts) that help to
identify and prioritize problem areas.
Analysis of Pareto charts help to make best use of limited resources by targeting the
most important problems to tackle.
Create the horizontal and vertical axes of the Pareto Chart as under. The
horizontal axis will be the categories of problems ion descending order with the
most frequently occurring category on the far left.
The chart has two vertical axes. The one on the left shows frequency (as in a
histogram). The one on the right hand shows the cumulative percentage of
frequency curve identifies the few vital factors that warrant immediate managerial
attention.
2. Plot the bars on the Pareto Chart. Draw the corresponding bars in decreasing
height from left to right using the frequency scale on the left vertical axis.
To plot the cumulative percentage line, place a dot above each bar at a height.
Corresponding to the scale on the right vertical axis. The connect these dots from
left to right, ending with the 100% point at the top of the right vertical axis.
3. Interpret the Pareto Chart. The most frequent event is not always the most
important. Find out what has the most impact on the goals of the business and
customers. Investigate from all angles to help solve the problems.
4. Draw a vertical scale on the right and add a percentage (0 to 100 percent scale).
5. Plot a cumulativepercentage line.
Pareto analysis is often used as the first step of a quality improvement programme. It
can be used for many applications like identifying quality costs, customer complaint
analysis, supplier analysis, formulating specifications and so on. With the use of
computers, this has become all the more easier.
Variation Characteristics
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Localized in nature
Considered abnormalities
Often specific to a
Certain operator
Certain machine
Investigation and removal of variations due to special causes are key to process
improvement.
On a control chart, random points inside the chart indicate common cause variation. It
can only be changed by changing one of the 5 Ms (Men (includes women also),
Materials, Measuring Devices, Machinery, or Methods.
Elements of a Control Chart: A control chart consists of:
z
A central line,
2. Data Collection
3.
Upper and lower warning limits, drawn as separate lines, typically two
standard deviations above and below the centre line
However in the early stages of use the inclusion of these items may confuse
inexperienced chart interpreters.
In general, the chart contains a Centerline that represents the mean value for the incontrol process. Two other horizontal lines, called the upper control limit (UCL) and
the Lower Limit (LCL), are also shown on the chart. These control limits are chosen
so that almost all of the data points will fall within these limits as long as the process
remains in-control.
Control limits are lines on the charts that represent the current acceptable level of
variation in the process. They are functions of the natural variability of the process.
They describe the process spread. They are usually chosen so that nearly all of the
sample points would fall between them in the absence of any special causes of
variation affecting the process.
The control limits represent the maximum amount that the average or range should
vary if the process does not change. A point outside the control limits indicates that
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the process has changed. When the control chart identifies a change, an investigation
should be made as to the cause of the change.
If all process values are plotted within the upper and lower control limits and no
particular tendency is noted, the process is referred to as In Control. If the process
values are plotted outside the control limits or show a particular tendency the process
is referred to as Out Of Control.
The determination of the control limits, along with the sample size and the sampling
frequency, is one of the most important tasks in designing a control chart.
If a single quality characteristic has been measured or computed from a sample, the
control chart shows the value of the quality characteristics versus the sample number
or versus time.
To monitor a process, we typically use two control charts (1) mean (or some other
central tendency measure) and (2) variation (typically using range or standard
deviation). To monitor output, we use a control chart to check things like the mean,
range, standard deviation.
In a control chart, control limits are calculated by the following formula:
(Average Process Value) (3 X (Standard Deviation which represented by ))
Where the standard deviation is due to unassigned variation only.
Control charts make assumptions about the plotted static, namely.
z
It is independent, i.e., A value is not influenced by its past value and will not
affect future values.
It is normally distributed, i.e. the data has a normal probability density function.
Control charts work on the basis of 6 sigma control. The six-sigma value is derived
from looking at distance 3 from the mean (), for a range of 6 total.
When applying control charts it is common practice to establish the control limits
based on the process capability study and then use fix limits on the chart during
production. They should be reevaluated regularly depending on production volume,
but at least once every 3 months to minimize error in control chart analysis.
Control limits can be managed to prioritize the efforts of operators and help allocate
limited resources on the shop floor. This is done by setting control limits at 3 sigma
for critical characteristics and perhaps 4 or 5 sigma for less critical characteristics.
5. When points go out of the control limits, the process must have shifted. Such
points outside the control limits can be attributed to a special cause. The control
chart is used to identify the occurrence of these special causes.
6. The limits are determined by estimating the short-term variation in the process.
The process stability (or process control) is defined when the short-term variation
is used to estimate the longer-term variation.
When a process is in statistical control, the points on a control chart fluctuate
randomly between the control limits with no recognizable pattern.
General rules for examining a process to determine if it is in control:
z
The number of points above and below the center line are about the same
The points seem to fill randomly above and below the center line
Most points, but not all, are near the centerline, and only a few close to the control
limits.
These rules are based assuming that the distribution of sample means is normal. For
small sample sizes, the distribution of the original data must be reasonably normal for
this assumption to hold.
The upper and lower control limits are computed to be three standard deviations from
the overall mean. Thus the probability that any sample mean falls outside control
limits is very small.
A process is said to be out of control if
z
A single point falls outside the 3 Sigma limit (beyond UCL and LCL)
Two out of three successive points fall in between 2 sigma and UCL or beyond or
-2sigma and LCL or beyond, the odd point may be anywhere
Find out of Five successive points fall in between 1 sigma and 2 sigma or
beyond, or between 1 sigma and 2 sigma or beyond the odd point may be
anywhere
The seven run rule: The seven run rule is also used with control charts. Any seven
consecutive varying data points indicate a need to investigate the process being
monitored. Any seven consecutive increasing or decreasing measurements, regardless
of where they begin or end relative to the mean, indicates a need to inspect the
process.
Also, any seven consecutive measurement that all above the mean or below the mean,
even if they are not all increasing or decreasing, indicate a need to inspect the process.
Depending on the number of process characteristics to be monitored, there are two
basic types of control charts.
z
Control charts are constructed with two different basic types of measurements:
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One point outside control limits: indicates variation due to a special cause like a
sudden power surge, a broken tool, measurement error, or an incomplete or
omitted operation in the process.
Sudden shifts in the process average: indicates sudden shifting of the process
average.
Cycle: Short and repeated patterns in the chart with alternating high peaks and
how valleys called cycles are the result of cause that come and go on a regular
basis.
Trends: A trend is the result of some cause that gradually affects the quality
characteristics of the product and causes the point on a control chart to gradually
move up or down from the center line.
Hugging the center line: It occurs when nearly all the points fall close to the
center line indicating that the control limits are too wide.
Hugging the control limits: The pattern shows up when many points are near the
control limits with few in between.
______________ records the output result of a process over time and shows
the trends.
Continuous efforts to achieve stable and predictable process results (i.e. reduce
process variation) are of vital importance to business success.
Features that set Six Sigma apart from previous quality improvement initiatives
include
z
A clear focus on achieving measurable and quantifiable financial returns from any
Six Sigma project.
The term "Six Sigma" derives from a field of statistics known as process capability
studies. Originally, it referred to the ability of manufacturing processes to produce a
very high proportion of output within specification. Processes that operate with "six
sigma quality" are assumed to produce defect levels below defects per million
opportunities (DPMO). Six Sigma's implicit goal is to improve all processes to that
level of quality or better.
Six Sigma is a registered service mark and trademark of Motorola, Inc. Motorola has
reported over US$17 billion in savings from Six Sigma as of 2006.
Other early adopters of Six Sigma who achieved well-publicized success include
Honeywell International (previously known as Allied Signal) and General Electric,
where the method was introduced by Jack Welch. By the late 1990s, about two-thirds
of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of
reducing costs and improving quality.
In recent years, Six Sigma has sometimes been combined with lean manufacturing to
yield a methodology named Lean Six Sigma.
Graph of the normal distribution, which underlies the statistical assumptions of the Six
Sigma model. The Greek letter marks the distance on the horizontal axis between
the mean, , and the curve's point of inflection. The greater this distance is, the greater
is the spread of values encountered. For the curve shown in red above, = 0 and
= 1. The other curves illustrate different values of and .
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6.10.3 Methodology
Six Sigma has two key methodologies: DMAIC and DMADV, both inspired by
Deming's Plan-Do-Check-Act Cycle. DMAIC is used to improve an existing business
process; DMADV is used to create new product or process designs.
1. DMAIC
The basic methodology consists of the following five steps:
z
Define process improvement goals that are consistent with customer demands and
the enterprise strategy.
Measure key aspects of the current process and collect relevant data.
Improve or optimize the process based upon data analysis using techniques like
Design of Experiments.
Control to ensure that any deviations from target are corrected before they result
in defects. Set up pilot runs to establish process capability, move on to production,
set up control mechanisms and continuously monitor the process.
2. DMADV
The basic methodology consists of the following five steps:
z
Define design goals that are consistent with customer demands and the enterprise
strategy.
Measure and identify CTQs (characteristics that are Critical To Quality), product
capabilities, production process capability, and risks.
Design details, optimize the design, and plan for design verification. This phase
may require simulations.
Verify the design, set up pilot runs, implement the production process and hand it
over to the process owners.
Executive Leadership includes the CEO and other members of top management.
They are responsible for setting up a vision for Six Sigma implementation. They
also empower the other role holders with the freedom and resources to explore
new ideas for breakthrough improvements.
Champions are responsible for Six Sigma implementation across the organization
in an integrated manner. The Executive Leadership draws them from upper
management. Champions also act as mentors to Black Belts.
Black Belts operate under Master Black Belts to apply Six Sigma methodology to
specific projects. They devote 100% of their time to Six Sigma. They primarily
focus on Six Sigma project execution, whereas Champions and Master Black
Belts focus on identifying projects/functions for Six Sigma.
Green Belts are the employees who take up Six Sigma implementation along with
their other job responsibilities. They operate under the guidance of Black Belts
and support them in achieving the overall objectives.
Yellow Belts are employees who have been trained in Six Sigma techniques as
part of a corporate-wide initiative, but have not completed a Six Sigma project
and are not expected to actively engage in quality improvement activities.
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5 Whys
Analysis of variance
Histograms
Axiomatic design
Homogeneity of variance
Pareto chart
Pick chart
Process capability
Regression analysis
Run charts
Control chart
Correlation
Stratification
Cost-benefit analysis
Taguchi methods
CTQ tree
Customer survey
TRIZ
Design of experiments
6.13 KEYWORDS
Restricted-use Report: is a "restricted-use" report intended for use by the service
organization, user organizations and user auditors.
Service Auditor: The auditor who reports on controls of a service organization that
may be relevant to a user organization's internal control as it relates to a financial
statement audit.
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LESSON
7
MANAGEMENT PROCESS - 2
CONTENTS
7.0
7.1
Introduction
7.2
Control Chart
7.3
7.4
Types of Charts
7.5
X-Bar/R Chart
7.6
X-Bar-S Charts
7.7
P-Chart
7.8
NP-Chart
7.9
CUSUM
7.9.1
Method
7.10
Acceptance Sampling
7.11
Sampling Plans
7.11.2
7.11.3
7.12
Vendor Selection
7.13
Vendor Rating
7.13.1
Pricing
7.13.2
Sales/Distribution
7.14
Let us Sum up
7.15
7.16
Keywords
7.17
7.18
Suggested Readings
7.1 INTRODUCTION
The control chart was invented by Walter A. Shewhart while working for Bell Labs in
the 1920s. The company's engineers had been seeking to improve the reliability of
their telephony transmission systems. Because amplifiers and other equipment had to
be buried underground, there was a business need to reduce the frequency of failures
and repairs. By 1920 they had already realized the importance of reducing variation in
a manufacturing process. Moreover, they had realized that continual processadjustment in reaction to non-conformance actually increased variation and degraded
quality. Shewhart framed the problem in terms of Common- and special-causes of
variation and, on May 16, 1924, wrote an internal memo introducing the control chart
as a tool for distinguishing between the two. Dr. Shewhart's boss, George Edwards,
recalled: "Dr. Shewhart prepared a little memorandum only about a page in length.
About a third of that page was given over to a simple diagram which we would all
recognize today as a schematic control chart. That diagram, and the short text which
preceded and followed it, set forth all of the essential principles and considerations
which are involved in what we know today as process quality control." Shewhart
stressed that bringing a production process into a state of statistical control, where
there is only common-cause variation, and keeping it in control, is necessary to predict
future output and to manage a process economically.
Dr. Shewhart created the basis for the control chart and the concept of a state of
statistical control by carefully designed experiments. While Dr. Shewhart drew from
pure mathematical statistical theories, he understood data from physical processes
never produce a "normal distribution curve" (a Gaussian distribution, also commonly
referred to as a "bell curve"). He discovered that observed variation in manufacturing
data did not always behave the same way as data in nature (Brownian motion of
particles). Dr. Shewhart concluded that while every process displays variation, some
processes display controlled variation that is natural to the process, while others
display uncontrolled variation that is not present in the process causal system at all
times.
In 1924 or 1925, Shewhart's innovation came to the attention of W. Edwards Deming,
then working at the Hawthorne facility. Deming later worked at the United States
Department of Agriculture and then became the mathematical advisor to the United
States Census Bureau. Over the next half a century, Deming became the foremost
champion and exponent of Shewhart's work. After the defeat of Japan at the close of
World War II, Deming served as statistical consultant to the Supreme Commander of
the Allied Powers. His ensuing involvement in Japanese life, and long career as an
industrial consultant there, spread Shewhart's thinking, and the use of the control
chart, widely in Japanese manufacturing industry throughout the 1950s and 1960s.
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The control chart is one of the seven basic tools of quality control (along with the
histogram, Pareto chart, check sheet, cause-and-effect diagram, flowchart, and scatter
diagram).
A control chart consists of the following:
z
A centre line, drawn at the process characteristic mean which is calculated from
the data
Upper and lower control limits (sometimes called "natural process limits") that
indicate the threshold at which the process output is considered statistically
'unlikely'
Upper and lower warning limits, drawn as separate lines, typically two standard
deviations above and below the centre line
However in the early stages of use the inclusion of these items may confuse
inexperienced chart interpreters.
If the process is in control, all points will plot within the control limits. Any
observations outside the limits, or systematic patterns within, suggest the introduction
of a new (and likely unanticipated) source of variation, known as a special-cause
variation. Since increased variation means increased costs, a control chart "signaling"
the presence of a special-cause requires immediate investigation.
The control limits tell you about process behaviour and have no intrinsic relationship
to any specification targets or engineering tolerance. In practice, the long-term process
mean (and hence the centre line) may not coincide exactly with the ideal value (or
target) of the quality characteristic because equipment simply can't deliver the process
characteristic at the desired level or because it's too costly to put the process on target.
Control charts omit specification limits or targets because of the tendency of those
involved with the process (e.g., machine operators) to focus on performing to
specification when in fact the least-cost course of action is to keep process variation as
low as possible. Attempting to make a process whose natural centre is not the same as
the target increases process variability and costs significantly and is the cause of much
inefficiency in operations. Process capability studies do examine the relationship
between the natural process limits (the control limits) and specifications, however.
The purpose of control charts is to allow simple detection of events that are indicative
of actual process change. This can be difficult where the process characteristic is
continuously varying, the control chart provides statistically objective criteria of
change. When change is detected then if the change is good its cause should be
identified and possibly become the new way of working, where the change is bad then
its cause should be identified and eliminated. The purpose in adding warning limits or
subdividing the control chart into zones is to provide early notification if something is
amiss. Instead of immediately launching a process improvement effort to determine
whether special causes are present, the Quality Engineer may temporarily increase the
rate at which samples are taken from the process output until it's clear that the process
is truly in control. Note that with three sigma limits, one expects to be signaled
approximately once out of every 370 points on average, just due to common-causes.
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Management Process - 2
Size of
shift to
detect
characteristic
within
one Independent
Variables
Large (
1.5)
characteristic
within
one Independent
Variables
Large (
1.5)
characteristic
for
one Independent
Variables
Large (
1.5)
characteristic
within
one Independent
Variables
Large (
1.5)
Chart
Process observation
XbarR chart
Quality
measurement
subgroup
XbarS chart
Quality
measurement
subgroup
Shewhart
Quality
individuals control
measurement
chart (ImR chart
observation
or XmR chart)
Process
observations
relationships
Three-way chart
Quality
measurement
subgroup
p-chart
Fraction
nonconforming
Independent
within one subgroup
Attributes
Large (
1.5)
Attributes
Large (
1.5)
Number of nonconformances
Independent
within one subgroup
Attributes
Large (
1.5)
np-chart
c-chart
Contd
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u-chart
Nonconformances per
within one subgroup
Independent
Attributes
Large (
1.5)
EWMA chart
Exponentially
weighted
moving average of quality
Independent
characteristic
measurement
within one subgroup
Attributes
variables
or Small (<
1.5)
CUSUM chart
Attributes
variables
or Small (<
1.5)
Attributes
variables
or
Quality
Time series model measurement
subgroup
unit
characteristic
within
one Autocorrelated
N/A
cause such as a broken tool will then show up as an abnormal pattern of points on the
chart.
Xbar-R chart is used for plotting variability when sub-group size is less than 10.
7.7 P-CHART
In industrial statistics, the p-chart is a type of control chart that is very similar to the
X-bar chart except that the statistic being plotted is the sample proportion rather than
the sample mean. Since the proportion deals with the percentage of successes, clearly
the appropriate data for p-charts needs to be attribute data where the outcomes for
each trial can be classified as either a success or a failure (conform or non-conform,
yes or no, etc.). The subgroup size should ideally be equal, although unequal sample
sizes can be accommodated. The features of the p-chart can be enumerated as under:
1. The "p" in the p-chart comes from use of the proportion of nonconforming items
2. P-chart needs a good definition of nonconforming items usually a categorical
definition
3. P-chart can be of equal or unequal subgroups
4. Normally p-charts need large subgroups can even be up to total for the period
Control limits for the p-chart are calculated on the basis of the binomial distribution
and an approximation based on the central limit theorem.
7.8 NP-CHART
In industrial statistics, the NP-chart is a type of control chart that is very similar to the
p-chart except that the statistic being plotted is a number count rather than a sample
proportion of items. For example, an np-chart often shows the number of
nonconforming items in each sample. Since we are counting failures or successes,
clearly the appropriate data for np-charts need to be attribute data. The subgroup size
must be constant, as comparisons of counts would otherwise be meaningless.
NP-chart
1. The "np" stands for the number of nonforming items, which can be expressed as n
(sample size) times p (proportion of nonconforming items)
2. Need a good definition of nonconforming items usually a categorical definition
3. Subgroup size must be constant
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4. Normally need large subgroups can even be up to total for the period
Control limits for the NP-chart are calculated on the basis of the binomial distribution
and an approximation based on the central limit theorem.
7.9 CUSUM
CUSUM is a sequential analysis technique due to E. S. Page of the University of
Cambridge. It is typically used for monitoring change detection. CUSUM was
announced in Biometrika a few years after the publication of Wald's SPRT algorithm.
Page referred to a "quality number" , by which he meant a parameter of the
probability distribution; for example, the mean. He devised CUSUM as a method to
determine changes in it, and proposed a criterion for deciding when to take corrective
action.
A few years later, Barnard developed a visualization method, the V-mask chart, to
detect both increases and decreases in
7.9.1 Method
As its name implies, CUSUM involves the calculation of a cumulative sum (which is
what makes it "sequential"). Samples from a process xn are assigned weights Wn, and
summed as follows:
Sn = max(0,Sn 1 + Wn)
Page did not explicitly say that W represents the likelihood function, but this is
common usage. Monitoring stops and action is taken when the sum exceeds a certain
threshold, h. Note that this differs from SPRT by always using zero function as the
lower "holding barrier" rather than a lower "holding barrier". Also, CUSUM does not
require the use of the likelihood function.
As a means of assess CUSUM's performance, Page defined the average run length
(A.R.L.) metric; "the expected number of articles sampled before action is taken." He
further wrote:
When the quality of the output is satisfactory the A.R.L. is a measure of the expense
incurred by the scheme when it gives false alarms, i.e. Type I errors (Neyman &
Pearson, 1936). On the other hand, for constant poor quality the A.R.L. measures the
delay and thus the amount of scrap produced before the rectifying action is taken, i.e.
Type II errors.
It is used to minimize the average total inspection (ATI) per lot product for a given
process average.
Acceptance sampling involves a system of principles and methods to define decision
rules to accept or reject product based on sample data. It depends on
1. The quality requirements of the product in the marketable place
2. The capability of the process
3. The cost and logistics of sample taken
Acceptance sampling is the middle of the road approach between no inspection and
100% inspection. There are two major classifications of acceptance plans: by
attributes and by variables. The attributes case is the most common for acceptance
sampling, and will be assumed for the rest of this section.
Acceptance sampling plans can be applied for inspection of
z
End items,
Components,
Raw materials,
Operations,
Materials in process,
Supplies in storage,
Maintenance operations,
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means that if the sample taken from the batch is not informative enough, another
sample is taken. In multiple sampling, additional samples can be drawn after the
second sample.
Following the acceptance by a sampling plan, one can make confidence statement
such as: With 95% confidence, the defect rate is below 1% defective. A point to
remember is that the main purpose of acceptance sampling is to decide whether or not
the lot is likely to be acceptable, not to estimate the quality of the lot.
For selecting statistically valid sampling plans, one must clearly define the objective
of the inspection and one must demonstrate that the sampling plan allows this
objective to be met.
The selection of a sampling plan must be guided by
z
Protection provided to the producer and customer by the high efficiency of the
sampling.
Ideally, a sampling plan should reject all bad lots while accepting all good lots.
However, because the sampling plan bases it decisions on a sample of the lot and not
the entire lot, these is always a chance of making an incorrect decision.
A well-designed sampling plan would help to achieve
z
Higher productivity
The control limits for the Acceptance Control Chart are computed using the
specification limits and the standard deviation of what is being monitored.
Acceptance charts provide a valid visible means for making acceptance-sampling
decisions. They can be in the case of variable (actual Measurements) data.
Selecting a statistically valid sampling plan requires stating the objective of the
inspection, selecting the appropriate AQL and LTPD, and then choosing a
sampling plan that provides the desired protection.
Companies must know the AQL and LTPD are substantially equivalent
procedures, so costs can sometimes be reduced by using equivalent double,
multiple, or variables sampling plans as alternative to single sampling plans.
SPC cannot serve as a replacement for a acceptance sampling. The two techniques
should be combined by using the same data to control the process and to make
product disposition decisions.
SPC does not eliminate the need for acceptance sampling. In Statistical Process
Control Charts are used to make process control and process improvement decisions,
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and actions are taken on the process to ensure that future products are good. In
contrast, sampling plans are used to make product disposition decisions, and actions
are taken on previously produced lots to ensure the quality of released product.
In an ideal situation with SPC in place no defectives will ever be made and
Acceptance sampling will become unnecessary. However, in practice all processes
have some risk of failure, and thus quality of released product.
How well-run and defined are the vendor's organization and divisional structures?
How well-equipped is the vendor's senior management able to lead the company?
Does the vendor's senior management have the breadth and depth to provide
leadership?
Does the vendor have the "people architecture" (skill sets and best practices) to
fulfill its strategic ambitions?
Evaluator looks into the major product lines and how the vendor delivers, supports
and markets its major products. Vendors may provide products (for example,
Is the vendor tied to specific applications or technologies, and does it allow its
customers to build their own solutions using best-of-breed technologies?
7.13.1 Pricing
Pricing considerations include basic components of competitiveness and fairness.
Prices should be fair, and pricing policies should be made public, with clear terms and
conditions. An evaluator will note a vendor's established pricing practices and
discounting policies. He will also consider whether a vendor is trying to buy its
business (for example, engaging in pricing practices that it cannot sustain in the
future). Low prices do a customer little good if the vendor's pricing strategies are
endangering the vendor's long-term financial health. Without sufficient profit margins
on products and services, customers may go to a vendor for support to find out that the
vendor is no longer there or that its ability to support its products has deteriorated to
the point of uselessness.
7.13.2 Sales/Distribution
Successful vendors will have sales channels that are specifically focused on a vendor's
target, with partnerships that are strong enough to sustain profitable relationships. The
sales strategy will minimize channel conflict while providing enough diversity
through original equipment manufacturer agreements, value-added resellers, and
direct and online sales. Evaluator evaluates the impact of partnerships on sales
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7.16 KEYWORDS
Acceptance Sampling:Acceptance sampling is a quality assurance technique used for
inspecting incoming material and outgoing (finished) products.
Control Chart: In statistical process control, the control chart, also known as the
'Shewhart chart' or 'process-behaviour chart' is a tool used to determine whether a
manufacturing or business process is in a state of statistical control or not.
Check Sheet: It is one of the seven tools of quality and is customized form, or tally
sheet, designed by the user.
Vendor Rating: Vendor rating is a process having strategic implications for managing
a supply chain.
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Management of Quality
UNIT 1
UNIT IV
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143
Management of Quality
LESSON
8
MANAGEMENT OF QUALITY
CONTENTS
8.0
8.1
Introduction
8.2
8.3
8.4
8.3.1
Control Charts
8.3.2
Deming PDCA
8.3.3
Juran
8.3.4
8.3.5
Teams
8.3.6
TQM
8.3.7
ISO/QS9000
8.3.8
8.3.9
8.4.2
8.4.3
8.4.4
8.4.5
8.5
Let us Sum up
8.6
8.7
Keywords
8.8
8.9
Suggested Readings
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8.1 INTRODUCTION
Quality management is not a recent phenomenon. Advanced civilizations that
supported the arts and crafts allowed clients to choose goods meeting higher quality
standards than normal goods. In societies where art and craft (and craftsmanship) were
valued, one of the responsibilities of a master craftsman (and similarly for artists) was
to lead their studio, train and supervise the work of their craftsmen and apprentices.
The master craftsman set standards, reviewed the work of others and ordered rework
and revision as necessary. One of the limitations of the craft approach was that
relatively few goods could be produced, on the other hand an advantage was that each
item produced could be individually shaped to suit the client. This craft based
approach to quality and the practices used were major inputs when quality
management was created as a management science.
During the industrial revolution, the importance of craftsmen was diminished as mass
production and repetitive work practices were instituted. The aim was to produce large
numbers of the same goods. The first proponent in the US for this approach was Eli
Whitney who proposed (interchangeable) parts manufacture for muskets, hence
producing the identical components and creating a musket assembly line. The next
step forward was promoted by several people including Frederick Winslow Taylor a
mechanical engineer who sought to improve industrial efficiency. He is sometimes
called "the father of scientific management." He was one of the intellectual leaders of
the Efficiency Movement and part of his approach laid a further foundation for quality
management, including aspects like standardization and adopting improved practices.
Henry Ford also was important in bringing process and quality management practices
into operation in his assembly lines. In Germany, Karl Friedrich Benz, often called the
inventor of the motor car, was pursuing similar assembly and production practices,
although real mass production was properly initiated in Volkswagen after world war
two. From this period onwards, north American companies focused predominantly
upon production against lower cost with increased efficiency.
Walter A. Shewhart made a major step in the evolution towards quality management
by creating a method for quality control for production, using statistical methods, first
proposed in 1924. This became the foundation for his ongoing work on statistical
quality control. W. Edwards Deming later applied statistical process control methods
in the United States during World War II, thereby successfully improving quality in
the manufacture of munitions and other strategically important products.
Quality leadership from a national perspective has changed over the past five to six
decades. After the second world war, Japan decided to make quality improvement a
national imperative as part of rebuilding their economy, and sought the help of
Shewhart, Deming and Juran, amongst others. W. Edwards Deming championed
Shewhart's ideas in Japan from 1950 onwards. He is probably best known for his
management philosophy establishing quality, productivity, and competitive position.
He has formulated 14 points of attention for managers, which are a high level
abstraction of many of his deep insights. They should be interpreted by learning and
understanding the deeper insights and include:
z
Improve constantly
In the 1950s and 1960s, Japanese goods were synonymous with cheapness and low
quality, but over time their quality initiatives began to be successful, with Japan
achieving very high levels of quality in products from the 1970s onward. For example,
Japanese cars regularly top the J.D. Power customer satisfaction ratings. In the 1980s
Deming was asked by Ford Motor Company to start a quality initiative after they
realized that they were falling behind Japanese manufacturers. A number of highly
successful quality initiatives have been invented by the Japanese (see for example on
this page: Taguchi, QFD, Toyota Production System. Many of the methods not only
provide techniques but also have associated quality culture aspects (i.e. people
factors). These methods are now adopted by the same western countries that decades
earlier derided Japanese methods.
Customers recognize that quality is an important attribute in products and services.
Suppliers recognize that quality can be an important differentiator between their own
offerings and those of competitors (quality differentiation is also called the quality
gap). In the past two decades this quality gap has been greatly reduced between
competitive products and services. This is partly due to the contracting (also called
outsourcing) of manufacture to countries like India and China, as well
internationalization of trade and competition. These countries amongst many others
have raised their own standards of quality in order to meet International standards and
customer demands. The ISO 9000 series of standards are probably the best known
International standards for quality management.
Quality management is a method for ensuring that all the activities necessary to
design, develop and implement a product or service are effective and efficient with
respect to the system and its performance. Quality management can be considered to
have three main components: quality control, quality assurance and quality
improvement. Quality management is focused not only on product quality, but also
the means to achieve it. Quality management therefore uses quality assurance and
control of processes as well as products to achieve more consistent quality. Quality
Management is all activities of the overall management function that determine the
quality policy, objectives and responsibilities and implement them by means such as
quality control and quality improvements within a quality system.
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11. The Toyota Production System reworked in the west into Lean Manufacturing.
12. Kansei Engineering, an approach that focuses on capturing customer emotional
feedback about products to drive improvement.
13. TQM - Total Quality Management is a management strategy aimed at embedding
awareness of quality in all organizational processes. First promoted in Japan with
the Deming prize which was adopted and adapted in USA as the Malcolm
Baldrige National Quality Award and in Europe as the European Foundation for
Quality Management award (each with their own variations).
14. TRIZ meaning "Theory of inventive problem solving".
15. BPR - Business process reengineering, a management approach aiming at 'clean
slate' improvements (i.e. ignoring existing practices).
Proponents of each approach have sought to improve them as well as apply them to
enterprise types not originally targeted. For example, Six Sigma was designed for
manufacturing but has spread to service enterprises. Each of these approaches and
methods has met with success but also with failures. Some of the common
differentiators between success and failure include commitment, knowledge and
expertise to guide improvement, scope of change/improvement desired (Big Bang
type changes tend to fail more often compared to smaller changes) and adaption to
enterprise cultures. For example, quality circles do not work well in every enterprise
(and are even discouraged by some managers), and relatively few TQM participating
enterprises have won the national quality awards. There has been well publicized
failures of BPR, as well as Six Sigma. Enterprises therefore need to consider carefully
which quality improvement methods to adopt, and certainly should not adopt all those
listed here. It is important not to underestimate the people factors, such as culture, in
selecting a quality improvement approach. Any improvement (change) takes time to
implement, gain acceptance and stabilize as accepted practice. Improvement must
allow pauses between implementing new changes so that the change is stabilized and
assessed as a real improvement, before the next improvement is made (hence
continual improvement, not continuous improvement). Improvements that change the
culture take longer as they have to overcome greater resistance to change. It is easier
and often more effective to work within the existing cultural boundaries and make
small improvements (i.e. Kaizen) than to make major transformational changes. Use
of Kaizen in Japan was a major reason for the creation of Japanese industrial and
economic strength. On the other hand, transformational change works best when an
enterprise faces a crisis and needs to make major changes in order to survive. In
Japan, the land of Kaizen, Carlos Ghosn led a transformational change at Nissan
Motor Company which was in a financial and operational crisis. Well organized
quality improvement programs take all these factors into account when selecting the
quality improvement methods.
Check Your Progress 1
1. Define quality.
.
.
2. Define BPR.
.
.
Control charts
Lot sampling
Process capability
Were first used extensively in World War II in response to the need for tremendous
volumes of high quality, lower cost materials. More recently, Quality Circles, TQM,
and Kaizen have demonstrated the power of team-base process improvement. Process
Capability and Design of Experiments (DOE) have come to the fore in Six Sigma.
Brecker Associates has combined Value Analysis and QS9000 techniques with Six
Sigma in a more powerful Process Improvement methodology.
The causes of variations that exceed the upper and lower control limits (UCL and
LCL respectively), such as at "A", must be eliminated in order to bring the process
back into statistical control.
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"Do" It
odify as needed
8.3.3 Juran
Juran focused on quality control with the "trilogy" planning
quality control.
An SPC representation of the trilogy is used in the figure at the right. A spec is
developed usually with a tolerance. A control chart is used to get the process
under control. As special causes are removed to improve the process , variation is
reduced. These are the basic steps in Six Sigma process improvement.
When the total quality management movement (TQM) gained prominence in the
1980's, the product planning step was expanded to include a broader evaluation of
customer needs (similar to VA and QFD ).
8.3.5 Teams
Japanese Quality Circles demonstrated the effectiveness of worker teams in
identifying and solving process problems in their work area. However, most serious
quality problems in non-manufacturing (as well as manufacturing) organizations arise
in activities that involve more than one department/function.
Quality Circles has evolved into Kaizen, which utilizes multi-functional worker and
production engineering teams to improve quality and productivity in a given process.
The teams use TQM techniques in implementing "Lean" manufacturing methods.
8.3.6 TQM
Total Quality Management (TQM) emphasized using multi-functional teams
(professional staff and workers from all departments involved) to solve problems. The
teams were trained to use basic statistical tools to collect and analyze data.
z
Check sheets
Pareto diagrams
Histograms
Run charts
Flow charts
Scatter diagrams
Flow charts or process maps were used to visualize the flow of product or documents
through a series of process steps. The predominant goal of Process Improvement
Teams was to eliminate the non-value adding steps and to resolve quality problems in
order to reduce the (cycle) time needed to complete the process.
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8.3.7 ISO/QS9000
ISO9000 was developed as a standard for business quality systems. To be certified,
businesses needed to document their quality system and insure adherence to it with
reviews and audits. A key element was the identification of non-conformances and a
Corrective Action System to prevent reoccurences. Specific quality improvement
methodologies were not prescribed.
The automotive industry adopted the QS9000 standard for their suppliers to require
the use of specific practices in quality planning and in production operations.
z
The Juran methodology was central to maintaining control of special product and
process characteristics (CTQs).
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Powerful and versatile with a wide range of statistical and graphical methods, SAS
provides software for quality improvement activities across organizations.
8.7 KEYWORDS
Quality Management: It is a method for ensuring that all the activities necessary to
design, develop and implement a product or service are effective and efficient with
respect to the system and its performance.
TQM: Total Quality Management (TQM) emphasized using multi-functional teams
(professional staff and workers from all departments involved) to solve problems.
Kaizen: Japanese for change for the better; the common English usage is continual
improvement.
QFD: Quality Function Deployment, also known as the House of Quality approach.
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LESSON
9
QUALITY IMPROVEMENT METHODS
CONTENTS
9.0
9.1
Introduction
9.2
Kaizen Policy
9.2.1
9.3
Quality Audits
9.3.1
9.4
Medical Audit
9.5
Accredition
9.6
9.7
Six Sigma
9.8
9.7.1
9.7.2
9.7.3
DMAIC
Just-in-Time
9.8.1
Philosophy
9.8.2
Stocks
9.8.3
9.8.4
Environmental Concerns
9.8.5
Price Volatility
9.8.6
Quality Volatility
9.8.7
Demand Stability
9.9
NABL
9.10
Let us Sum up
9.11
9.12
Keywords
9.13
9.14
Suggested Readings
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9.1 INTRODUCTION
Kaizen is management concept originated by the Japanese in order to continuously
effect incremental changes for the better, involving everybody within the
organization. In Japanese Kai means change, and Zen means good or for the
better. Kaizen requires no or little investment. The term Kaizen was made famous by
Masaaki Imai in his book, Kaizeno - The Key to Japans Competitive Success.
Kaizen means continuing improvement involving everyone managers and workers
alike. Kaizen improvements are small and incremental. But the Kaizen process brings
about dramatic results over time. The Kaizen concept explains why companies cannot
remain static for long in Japan.
The philosophy of Kaizen is perhaps the most representative contribution of Japanese
management thinking in the eighties and nineties. It assumes that our way life be it
our working life, our social life, or our home lifeshould be the focus of constant
improvement efforts.
Kaizen is aimed at producing more and more value with less and less wastage (higher
efficiency), attaining better working environment, and developing stable processes by
standardization. Three things required for Kaizen are:
z
Total Involvement: Every employee strives for improvement. Greater coordination and communication between departments.
Everyone in the organization must genuinely believe in the idea of Kaizen and must
be given education and training for contributing to continuously improve. Everyone
must be willing to:
z
Learn
Communication
Be disciplined
Kaizen focuses on small, gradual, and frequent improvements over the long term.
Kaizen has shown that business can and should have a human face.
Kaizen Events when repeated have three effects equally beneficial. They generate
z
Profit
Savings and
A habit of Success
Habits create a culture: Lean manufacturing and other best practices are the results of
this. Kaizen is the emphasis on satisfying the consumer and society in general.
Kaizen concentrates at improving the process rather than at achieving certain results.
Such managerial attitudes make a major difference in how an organization masters
change and achieves improvements.
Kaizen implementation operates on the following principles:
z
That success can not be achieved by some occasional radical changes alone, but
by incremental yet consistently arriving improvements; and
Losses
Equipment efficiency
Setup/adjustment losses
Start up loss
Management loss
Logistic loss
Energy loss
Yield loss.
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Aspect
Sporadic Loss
Chronic Loss
Causation
Remedy
Impact/Loss
Frequency
Corrective action
Specialists in process
engineering, quality assurance
and maintenance people are
required.
Summary of losses
Kaizen register
To check and going to the areas responsible for these items for an actual check or
audit of these items.
Audits should be planned on a regular so that each activity is audited at lease once in
the audit cycle. High-risk areas should be audited more often to ensure conformance.
An audit can also be carried out if a particular problem has risen, to establish the
source of the problem and document any corrective actions.
Reasons for Audits
z
By asking questions,
Reviewing documents,
To ensure that all audit items have adequate documentation and are implemented in
accordance with the documentation.
The Four Phases of Auditing
z
Collection of Information
Preparation of Findings
The Quality Audits need to be documented. It is important that auditing is done with
reference to the Quality Management System. Hence Audits should be constructed
against procedures from the Quality Manual. If it is not in the manual, then it should
not be audited.
Audits can be a positive tool for improving of all staff in the quality system. It helps
an organization accomplish its objectives by bringing a systematic, disciplined
approach to evaluate and improve the effectiveness of risk management, control, and
governance processes.
External
Third-party audits.
1. First-party Audits or Internal Audits: These audits [pertain to audits wherein the
auditors themselves are employees of the company being audited. It includes
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System Audit: A System Audit is an audit where high-level company systems are
reviewed. Systems audits typically probe the interactivity (communication) of the
inter-related company systems and as such often cross functional area
boundaries. Typical Systems Audit includes.
Document Control
Nonconformance
Process Audit: A process Audit is where the companys procedures are validated.
Processes are sub-parts of a system. As such, they are typically a part of a system
audit.
All the audits are useful only if the organization is able to learn from it. The nonconformities that come out of every audit have to be addressed. Efforts have to be
made to see that the same is eliminated. Audit can thus be considered as a journey
towards perfection.
9.5 ACCREDITION
Accreditation is a process in which, certification of competency, authority, or
credibility is presented.
Organizations that issue credentials or certify third parties against official standards
are themselves formally accredited by accreditation bodies; hence they are sometimes
known as "accredited certification bodies". The accreditation process ensures that
their certification practices are acceptable, typically meaning that they are competent
to test and certify third parties, behave ethically, and employ suitable quality
assurance.
One example of accreditation is the accreditation of testing laboratories and
certification specialists that are permitted to issue official certificates of compliance
with established standards, such as physical, chemical, forensic, quality, and security
standards.
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The standard of practice focuses on the provider of care the nurse. It describes what
the nurse does or how the nurse provides patient care to assist the patient to move
toward expected outcomes. It defines and describes how nurse practice at CMH.
Nurse are evaluated by the standard of practice.
The SNC is developed for a group of patients having common problems and needs. It
reflects a current level of practice within the community and national organization
standards. It is applied to a patient in a given population by the nurse providing care
for the patient.
Yield%
DPM
Cost of quality
93.3
66807
25-40
99.379
6210
15-25
99.9767
233
5-15
99.99966
3.4
Less than 1
Customer focused
Eliminate variation
Empowered people
Exponential improvement
The primary unit measure is Process sigma. It is determined from an analysis of the
number of defects observed in a process. Performance is compared to the Best-InClass sigma for that process. This is done to determine whether the process needs to
be improved or the product/service needs to be re-designed.
Achieving Six-Sigma in a process corresponds of not having more than 3.4 Defect
Parts Per Million (PPM) opportunities, also known as Defects Per Million
Opportunities (DPMO), to be produced.
It was intended to improve the quality of process that are already under control. The
output of these processes usually flows a Normal distribution with the process
capability defined as 3 sigma. It would give a six-sigma value of 2 defects per
billion opportunities.
It has been observed that any process in control also will shift from its target over
time. The process mean will vary each time a process is executed using different
equipment, different personnel, different materials etc.
Six Sigma has different meanings depending upon the context.
z
Six Sigma is a statistic: Six sigma processes will produce less than 3.4 defects or
mistakes per million opportunities. Many successful six sigma projects do not
achieve a 3.4-ppm or less defect rate. That just indicates that there is still
opportunity.
Six sigma is process: It is the process used to implement the six sigma
management philosophy and achieve the six sigma level of 3.4 defects per million
opportunities or less. This process is a more quantitative version of Demings
PDCA (Plan-Do-Check-Act) Process. It is known as DMAIC/DMADV
The core elements of Six Sigma comes by incorporating the basic principles and
techniques used in
z
Business,
Statistics, and
Engineering.
Six Sigma means excellent finished products but excellent processes, services, and
administration. Six Sigma improves the process performance, decreases variation and
maintains consistent quality of the process output. This leads to defect reduction and
improvement in profits, product quality and customer satisfaction. Six Sigma
revolves around the following key concepts.
z
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Design for Six Sigma: Designing processes to meet customer needs and process
capability.
Six Sigma encourages leanness, simplicity, and doing things right the first time
resulting in reducing wastes and corresponding costs. It uses statistics-based problem
solving, results-orientation, and quantifiable top and bottom-line returns and is driven
by the voice of the customer.
Six sigma is used for eliminating defects to achieve six sigma between lower and
upper specification limits. Thus a Six-Sigma defect is defined for not meeting the
customers specifications. It is the total quantity of chances for a defect.
Six Sigma is a data-driven approach and methodology with the aim of reduction in
variation. It started with a focus on manufacturing process. Now it has been extended
to marketing, purchasing, customer order, finance, health care etc.
All the tools and techniques of six sigma are found in TQM. It is the application of the
tools on selected important projects at the appropriate time.
Many TQM efforts failed due lack of commitment to the specific improvement action
and to their effective implementation. Six Sigma overcomes that weakness by
focusing on:
z
Re-Engineering
Balanced Scorecard
Design of Experiments
Six Sigma DMAIC is a process that defines measures, analyzes, improves, and
controls existing processes that fall below the Six Sigma specification. It is employed
in situations wherein a producer or process already exists but is not meeting customer
specifications. It improves any existing business process by constantly reviewing and
re-tuning the process.
9.7.3 DMAIC
z
Define resources
Develop resources
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Measure performance: Measure the existing system. Establish valid and reliable
metrics to help monitor progress towards the goal(s) defined at the previous step.
Begin by determining the current baseline. Use exploratory and descriptive data
analysis to help you understand the data. This phase involves collection of data to
measure the current performance of the process.
The DMAIC process is a variation of PDCA that many people find helpful. The
leaders chosen by the company go through rigorous training to be able to implement
these tools to seek out defects and eliminate them.
The DMAIC approach allows the company to address the variability of the testing
process with a prescription for success. The phase allow for
z
Channel implications: Something well known (low risk) or something new (higher
risk).
Six Sigma DMADV defines measures, analyzes, designs, and verifies new processes
or products that are trying to achieve Six Sigma quality. The DMADV method is
employed in situations wherein there is no existing process or product yet catering to a
certain customer requirement, and the company wants to develop one for that purpose.
DMADV stands for:
1. Define opportunities (project goals in relation to customer requirements);
2. Design the process to met these customer needs; and
3. Verify the performance of the process, particularly in terms of its ability to meet
customer requirements
Key product-process performance variables are measured, analyzed, improved, and
controlled using statistical methods. When improvements is necessary, Design of
Experiments (DOE) is used. This is to determine which product or process parameters
are most important. It would also find the specific parameter values that will give the
best performance. SPC is used to continually monitor product and process
performance.
Six Sigma initiatives aim at reduction of process variation and defects. SPC and EPC
are two important techniques for achieving these goals. SPC charts provide a good
check against assignable causes of variation while EPC charts can be used for
prediction and run-on-run adjustment of process average.
Statistical Process control (SPC) is a scientific and inexpensive way to prevent defects
and is an effective check against assignable causes of process variation. SPC is a timetested and effective control scheme used for process capability analysis and process
monitoring. SPC technique consists mainly of
z
Pareto Analysis,
Engineering Process Control (EPC) helps in run process adjustments and reducing
process variability and adds extra power to Statistical Process Control schemes. Both
SPC and EPC are very essential for achieving Six Sigma target of PPM (parts per
million) defect levels.
There are six steps to Six Sigma Quality:
z
Identify suppliers
9.8 JUST-IN-TIME
Just-in-time (JIT) is an inventory strategy implemented to improve the return on
investment of a business by reducing in-process inventory and its associated carrying
costs. In order to achieve JIT the process must have signals of what is going on
elsewhere within the process. This means that the process is often driven by a series of
signals, which can be Kanban ,that tell production processes when to make the next
part. Kanban are usually 'tickets' but can be simple visual signals, such as the presence
or absence of a part on a shelf. When implemented correctly, JIT can lead to dramatic
improvements in a manufacturing organization's return on investment, quality, and
efficiency. Some have suggested that "Just on Time" would be a more appropriate
name since it emphasizes that production should create items that arrive when needed
and neither earlier nor later.
Quick communication of the consumption of old stock which triggers new stock to be
ordered is key to JIT and inventory reduction. This saves warehouse space and costs.
However since stock levels are determined by historical demand any sudden demand
rises above the historical average demand, the firm will deplete inventory faster than
usual and cause customer service issues. Some. Have suggested that recycling Kanban
faster can also help flex the system by as much as 10-30%. In recent years
manufacturers have touted a trailing 13 week average as a better predictor for JIT
planning than most forecasters could provide.
9.8.1 Philosophy
The philosophy of JIT is simple - inventory is defined to be waste. JIT inventory
systems expose the hidden causes of inventory keeping and are therefore not a simple
solution a company can adopt; there is a whole new way of working the company
must follow in order to manage its consequences. The ideas in this way of working
come from many different disciplines including statistics, industrial engineering,
production management and behavioral science. In the JIT inventory philosophy there
are views with respect to how inventory is looked upon, what it says about the
management within the company, and the main principle behind JIT.
Inventory is seen as incurring costs, or waste, instead of adding value, contrary to
traditional accounting. This does not mean to say JIT is implemented without an
awareness that removing inventory exposes pre-existing manufacturing issues. Under
this way of working, businesses are encouraged to eliminate inventory that does not
compensate for manufacturing issues, and then to constantly improve processes so
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that less inventory can be kept. Secondly, allowing any stock habituates the
management to stock keeping and it can then be a bit like a narcotic. Management are
then tempted to keep stock there to hide problems within the production system.
These problems include backups at work centres, machine reliability, process
variability, lack of flexibility of employees and equipment, and inadequate capacity
among other things.
In short, the just-in-time inventory system is all about having the right material, at
the right time, at the right place, and in the exact amount, without the safety net of
inventory. The JIT system has implications of which are broad for the implementors.
9.8.2 Stocks
JIT emphasises inventory as one of the seven wastes (overproduction, waiting time,
transportation, inventory, processing, motion and product defect), and as such its
practice involves the philosophical aim of reducing input buffer inventory to zero.
Zero buffer inventory means that production is not protected from exogenous
(external) shocks. As a result, exogenous shocks reducing the supply of input can
easily slow or stop production with significant negative consequences. For example,
Toyota suffered a major supplier failure as a result of the 1997 Aisin fire which
rendered one of its suppliers incapable of fulfilling Toyota's orders. In the U.S., the
1992 railway strikes resulted in General Motors having to idle a 75,000-worker plant
because they had no supplies coming in.
9.9 NABL
National Accreditation Board for Testing and Calibration Laboratories (NABL) is an
autonomous body under the aegis of Department of Science & Technology,
Government of India, and is registered under the Societies Act. NABL has been
established with the objective to provide Government, Industry Associations and
Industry in general with a scheme for third-party assessment of the quality and
technical competence of testing and calibration laboratories. Government of India has
authorized NABL as the sole accreditation body for Testing and Calibration
laboratories.
In order to achieve this objective, NABL provides laboratory accreditation services to
laboratories that are performing tests / calibrations in accordance with ISO/IEC 17025
and ISO 15189:2003 for medical laboratories. These services are offered in a nondiscriminatory manner and are accessible to all testing and calibration laboratories in
India and abroad, regardless of their ownership, legal status, size and degree of
independence.
NABL has established its Accreditation System in accordance with ISO/IEC
17011:2004, which is followed internationally. In addition NABL has to also comply
with the requirements of APLAC MR001, which requires the applicant and the
accredited laboratories to take part in recognized Proficiency Testing Programmes in
accordance with ISO/IEC Guide 43. An applicant laboratory has to satisfactorily
participate in at least one Proficiency Testing programme, while the accredited
laboratories are expected to cover the major scopes of accreditation in a cycle time of
four years. Towards this objective, NABL has been conducting Proficiency Testing
with the help of selected accredited laboratories as nodal laboratories in different
fields. The performance remains confidential between NABL and each participating
laboratory by using laboratory code numbers. In case of unsatisfactory performance,
laboratory is expected to investigate and take the necessary corrective actions. In case
of repeated failure or gross failure indicated by Z factor, En ratio etc. scope of
accreditation is reduced by NABL
NABL also satisfies the requirements of APLAC MR001. NABL had undergone the
first peer evaluation by a 4 member team of APLAC in July 2000, based on which
NABL qualified as an APLAC MRA (Mutual Recognition Arrangement) Partner as
well as a Signatory to ILAC Arrangements. NABL was reassessed in July 2004 and as
stated earlier the signatory status of NABL within APLAC MRA has been confirmed
for further four years i.e. October 2008. This distinction has brought additional
responsibility on NABL and its accredited laboratories. Annual Surveillance is carried
out to ensure that the accredited laboratories are continuing to comply the
accreditation criteria. NABL and its accredited laboratories are also required to meet
the new challenges arising out of requirements such as satisfactory participation in a
recognized Proficiency Testing Programme and the requirement of estimating the
Uncertainty in Measurements even by the testing laboratories. NABL has already
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9.12 KEYWORDS
Six Sigma Methodology: The Six Sigma is a disciplined method of using extremely
rigorous data-gathering and statistical analysis to pinpoint sources of errors and ways
of eliminating them.
Defect: Failing to deliver what the customer wants.
Process Capability: What your process can deliver.
Variation: What the customer sees and feels.
Stable Operation: Ensuring consistent, predictable processes to improve what the
customer sees and feels.
Design for Six Sigma: Designing processes to meet customer needs and process
capability.
NABL: National Accreditation Board for Testing and Calibration Laboratories
(NABL) is an autonomous body under the aegis of Department of Science &
Technology, Government of India, and is registered under the Societies Act.
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UNIT 1
UNIT V
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Systems Approach to Quality
LESSON
10
SYSTEMS APPROACH TO QUALITY
CONTENTS
10.0
10.1
Introduction
10.2
10.3
ISO 14000
10.3.1
10.4
10.5
10.6
Standards
Advantages
Reengineering
10.5.1
Characteristics of Reengineering
10.5.2
Methodology of Reengineering
10.5.3
Advantages of Reengineering
10.5.4
Criticism of Reengineering
Quality Manual
10.6.2
Quality Procedures
10.6.3
Quality Records
10.6.4
Controlled Documents
10.7
10.8
Let us Sum up
10.9
10.10 Keywords
10.11 Questions for Discussion
10.12 Suggested Readings
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10.1 INTRODUCTION
Introduction to ISO 9000 is a family of standards for quality management systems.
ISO 9000 is maintained by ISO, the International Organization for Standardization
and is administered by accreditation and certification bodies. Some of the
requirements in ISO 9001 (which is one of the standards in the ISO 9000 family)
include:
z
checking output for defects, with appropriate and corrective action where
necessary;
regularly reviewing individual processes and the quality system itself for
effectiveness; and
This is the only implementation for which third-party auditors may grant certification.
It should be noted that certification is not described as any of the 'needs' of an
organization as a driver for using ISO 9001 (see ISO 9001:2000 section 1 'Scope') but
does recognise that it may be used for such a purpose (see ISO 9001:2000 section 0.1
'Introduction').
There are many more standards in the ISO 9001 family, one of many may be Leicester
University which also found out the electronic fingerprinting, but for other standard
see( "List of ISO 9000 standards" from ISO), many of them not even carrying "ISO
900x" numbers. For example, some standards in the 10,000 range are considered part
of the 9000 family: ISO 10007:1995 discusses Configuration management, which for
most organizations is just one element of a complete management system. ISO notes:
"The emphasis on certification tends to overshadow the fact that there is an entire
family of ISO 9000 standards ... Organizations stand to obtain the greatest value when
the standards in the new core series are used in an integrated manner, both with each
other and with the other standards making up the ISO 9000 family as a whole".
Note that the previous members of the ISO 9000 family, 9001, 9002 and 9003, have
all been integrated into 9001. In most cases, an organization claiming to be "ISO 9000
registered" is referring to ISO 9001
10.3.1 Standards
The material included in this family of specifications is very broad. The major parts of
ISO 14000 are:
z
ISO 14001 is the standard against which organizations are assessed. ISO 14001 is
generic and flexible enough to apply to any organization producing and/or
manufacturing any product, or even providing a service anywhere in the world.
ISO 14004 is a guidance document that explains the 14001 requirements in more
detail. These present a structured approach to setting environmental objectives
and targets and to establishing and monitoring operational controls.
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ISO 14020 series (14020 to 14025), Environmental Labeling, covers labels and
declarations.
ISO 14040 series (14040 to 14044), Life Cycle Assessment, LCA, discusses preproduction planning and environment goal setting.
ISO 19011 which specifies one audit protocol for both 14000 and 9000 series
standards together. This replaces ISO 14011 meta-evaluationhow to tell if your
intended regulatory tools worked. 19011 is now the only recommended way to
determine this.
Check Your Progress 1
1. Which company can state that it is ISO 9001 certified?
.
.
2. What does ISO certification does not guarantee?
.
.
10.4.1 Advantages
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The co-operation result of several accreditation and certification organizations all over
the world there is creation of International Standard OHSAS 18001-Occupational
health and safety management systems. This set guideline of occupational health and
safety management assessment (OHSAS) specifies requirements for occupational
healthy and safety management system to enable to manage risks of OH&S
management system and to improve its efficiency.
The guideline OHSAS is effective/ applicable for an organization, which calculates to
certify its OH&S management system.
10.5 REENGINEERING
Reengineering is about achieving dramatic, breakthrough improvements often by the
application of new technologies. It is the opposite of Kaizen. This revolutionary
approach was developed by Hammer and Champy.
Reengineering is the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical contemporary measures of
performance, such as cost, quality, services, and speed. It involves identifying and
abandoning outdated rules and fundamental assumptions.
Reengineering capitalizes on the characteristics of Individualism, Self-reliance,
Willingness to accept risk and a propensity for change. The three emerging forces
that will hasten change are Customers, Competition, and Change:
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Change is the only constant. Not only do more things change, but also they
change faster than at any time in the past. Careers and rules change quickly.
Inflexibility, unresponsiveness, the absence of customer focus, and obsession with
activity rather than result, bureaucratic paralysis, lack of innovation, and high
overhead are the legacies of industrial leadership. These things must be changed.
Process centered
Redesign governed
Dramatic
Radical
Customer oriented
Technology can either enable or disable reengineering efforts. Reengineering will not
work for:
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A company that cannot change the way it thinks about information technology
A company that looks for problems first and then seeks technology solutions.
At the macro level, the environmental factors and globalization of economies points to
a need to subject all processes for engineering for survival due to the crisis factors of
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Energy
Conflict
Confusion
Stress and
Culture
Competition
Environmental demands
Advancement of Technology
Reduction of profitability
Companies do not reengineer, people do. There are five roles that need to be
addressed to allow reengineering to proceed:
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Leaderthe senior executive who is authorized and motivates that overall effort.
Process Ownerthe manager for the specific process the reengineering effort will
address.
The success of reengineering can take place only when the following are present:
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Precise vision
Improved quality
Reduction of waste
Reduction in paperwork
Reengineering does not always work. It fails a significant amount of the time. The
key to success lies in knowledge and ability, not in luck.
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Lasting improvements in business processes can be made only with the support of
those who know the business. Leaderships primary task is creating conditions for
continuous, incremental, and adaptive change. Getting rid of people whose skills have
become obsolete reflects the organizations failure to innovate and learn.
To be successful, business redesign depends on the commitment and imaginative
cooperation of your employees. Business process redesign must demonstrate that only
by working together they can improve their long-term opportunities.
A relatively slow and deliberate process-improvement effort is more in tune with the
approach that people normally use to cope with major changes. Only evolutionary
improvements will be effective in the long run. Reengineering offers neither the time
nor the opportunities for an organization to adapt smoothly to changing conditions.
Evidence of conformity to confirm what was planned, has actually been done
Paper
Magnetic
Photograph
The extent of the QMS documentation may differ from one organization to another
due to:
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At the minimum, quality system documentation should include the companys quality
manual and specifications showing the company processes, work instructions in
Effect of quality
Economic risk
Competence of personnel
Complexity of processes
A quality manual
Effective planning,
Operation, and
Required records
Quality policy refers to the statements from Top management regarding their
commitment relative to quality products and services. They are basically the purpose
and vision of the organization. This must be expanded in the quality objectives.
It is essential that the Top management is able to define the quality policy and quality
objectives with clarity that all the employees are able to understand and strive for it.
These are displayed prominently in the work area to act as motivators for all.
Requirements for the quality policy and quality objectives and defined in clauses 5.3
and 5.4.1 of ISO 9001:2000 respectively. These documented quality objectives and
quality policy are subject to document control requirements of clauses 4.2.3.
The next four types of documentation are usually referred as the four levels of ISO
9000 documentation
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4.2.3.Control of Documents
4.2.4.Control of records
8.2.2.Internal audit
8.5.3.Preventive action
There are also to be controlled in accordance with the requirements of clauses 4.2.3.
Quality Documents: In order for an organization to demonstrate the effective
implementation of its QMS, it may be necessary to develop documents other than
documented procedures even though the only documents specially mentioned in ISO:
2000 are:
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Quality documents the process. These documents represent how tasks are executed
such as design specifications, operating instructions and assembly instructions. They
involve the details of how individual or group is to perform specific task or job. This
is very important to maintain uniformity. It also ensures that the job can still be done
even if key employee is unavailable.
Examples of these documents are:
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Organization charts
Specifications
Drawings
Blueprints
Production schedules
Test procedures
Quality plans
Operation sheets
Inspection instructions
Theyre dynamic. They can be changed, modified and enhanced within very short
time periods, or over long life cycles.
They may contain other documents. They can include vital and volatile source
information from CAD, spreadsheets or MRP that needs to be updated regularly.
They can be developed using pencil and paper, a CAD system, a spreadsheet or a
word processor.
They are the circulatory system of an organization. And they must be managed to
be effective.
Inspection reports
Test data
Qualification reports
Defect checklist
Validation reports
Audit reports
Calibration data
Audit reports
Factory log
These records shall be legible, readily identifiable, and retrievable. Using the example
of product testing, the quality record would describe who did the test and would
include the data, location, time which product, test result and then the actions taken.
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A documented procedure shall be established to define the controls needed for the
identification, storage, protect6ion, retrieval, retention time, and disposition of
records. can be used to document tractability and to provide evidence of verification,
preventive action, and corrective action.
Documentation is thus the heart of the ISO 9000 standards. It may be in any form or
type of medium. Many companies fail because important process information does not
reside in documents, but rather in management.
The quality manual drives the ISO 9000 quality system implementation. Policies and
procedures describe the quality practiceswhat each department must do. Quality
documents describe the processhow procedures are to be done, at an individual level.
Quality records report the outcome of processes and support the results.
Managers know what to do. They just do it. Why should we keep records for
everything we do? The answer is that the ISO 9000 standards require you to create
and maintain quality records. Thee quality documents and quality records represent
the work instructions and records that instructions have been followed in your
organization.
These are the vital elements of any ISO 9000 project. Because these documents are
dynamic, the document control is critical to ensure that the right version of these
documents are used and maintained.
Provide for the prompt removal of obsolete documents and identify suitably what
may be retained
Documented procedure means that the QMS shall be controlled. ISO stipulates a
documented procedure to define the control needed to
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Provide for the prompt removal of obsolete documents and identify suitably what
may be retained
A controlled document is a document that, if changed, affects some part of the process
or product. These can be procedures, process documents, product or part drawings
(prints) or other similar documents. Forms a typically controlled document.
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If a document is changed, people who use it must know about the change. This
means thee has to be a distribution list or other effective way to let everyone who
uses it know the document has changed (read Communicate the changes).
Every employee must know how to check to see if documentation they are using
is the most current version.
Check Your Progress 2
Fill in the blanks:
1. OHSAS 18001 is issued for _______________________ purpose.
2. ISO 14001 is the international specification for an ___________________
system.
3. Business Process Reengineering involves the radical redesign of core
business processes to achieve dramatic improvements in
__________________.
4. ISO 19011 is issued for ___________.
2. Identify what others expect of the organization. These are the expectations of
interested parties (stakeholders) such as:
Employees
Suppliers
Shareholders
Society
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4. Decide the type of certification of the quality management system required like
5.
Using ISO 9004:2000 in conjunction with the national quality award criteria
to prepare for a national quality award
Obtain guidance on specific topics within the quality management system. These
topic-specific standards are:
6. Establish the current status and determine the gaps between the current quality
management system and the requirements of ISO 9001: 2000 by
Self-assessment
Purchasing
8. Develop a plan to close the gaps in step 6 and to develop the processes in step 7.
Identify actions needed to close the gaps, allocate resources to perform these
actions, assign responsibilities and establish a schedule to complete the needed
actions. ISO 9001:2000 Paragraphs 4.1 and 7.1 provide the information needed to
consider when developing the plan.
9. Carry out the plan: Proceed to implement the identified actions and track progress
to your schedule.
10. Undergo periodic internal assessment. Use ISO 19011 for guidance in auditing,
auditor qualification and managing audit programmes.
11. Is there a need to demonstrate conformance?
If yes, go to step 12
If no, go to step 13
The need or wish to show conformance (certification/registration) can be for
various purposes, like
Contractual requirements
Regulatory requirements
Risk management
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15. The audit would start with an opening meeting where the auditors would explain
the process of auditing. This will be followed by the audit itself. In the closing
meeting the auditors would discuss the findings of the audit.
16. Any minor non-conformity would be corrected. Once the auditors are satisfied,
they would issue the certification.
Some pitfalls to successful implementation are:
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10.10 KEYWORDS
ISO 9000: It is a family of standards for quality management systems.
ISO 14000: The environmental management standards exist to help organizations
minimize how their operations negatively affect the environment (cause adverse
changes to air, water, or land), comply with applicable laws and regulations).
OHSAS 18001: It is occupational health and safety management systems.
CYP 2
1. Occupational health and safety management systems
2. Environmental management system
3. Productivity
4. Auditing
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LESSON
11
BENCHMARKING
CONTENTS
11.0
11.1
Introduction
11.2
Definition of Benchmarking
11.3
11.4
11.3.1
11.3.2
11.3.3
11.3.4
11.3.5
11.3.6
Types of Benchmarking
11.4.1
Levels of Benchmarking
11.4.2
Strategic Benchmarking
11.4.3
Operational Benchmarking
11.4.4
Product Benchmarking
11.4.5
Performance Benchmarking
11.4.6
Process Benchmarking
11.4.7
Functional Benchmarking
11.4.8
11.4.9
Cooperative Benchmarking
11.6
Benchmarking Process
11.5.1
11.5.2
11.5.3
Benefits of Benchmarking
11.7
Let us Sum up
11.8
11.9
Keywords
11.1 INTRODUCTION
Bench marking is the process of identifying, understandings and adopting outstanding
practices and process from organization anywhere in the world, in order to help an
Organization to improve its performance.
The term benchmark refers to the reference point by which performance is measured
against. It is the indicator of what can and is being achieved. The term benchmarking
refers to the actual activity of establishing benchmarks and best practices.
Taiichi Ohro, who developed the just-in-time (JIT) inventory system in Totota,
invented this process. The term benchmarking refers to the actual activity of
establishing benchmarks and vest practices.
Promote networking;
It is often stated that those who benchmark do not have to reinvent the wheel. By
following others one can make improvements and not focus on stale ideas.
Benchmarking at first glance may be mistaken for a copycat form of developing
strategic plans and for making improvements within an organization. This is not true.
Benchmarking is an ongoing task at all levels of business and its purpose is to delight
the customer by continuous improvement. It is finding the secrets of success of any
given function or process and using the information to improve them.
Benchmarking means examining the methods of another business that is doing things
right and establishing its methods as the minimum standard. It involves studying the
best practices of another organizations to learn, how to do things better and as a means
of setting goals.
Benchmarking as a tactical planning tool originated with Xerox Business Systems in
the late 1970s Japanese affiliates were selling better quality copiers for less then the
manufacturing costs of similar products in the USA.
Benchmarking typically involves two organizations that have agreed to share
information about processes and operation. Benchmarking partners provide a working
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model of an improved process that reduces some of the planning, testing and
prototyping effort.
Benchmarking goes beyond the mere setting of goals. It focuses on practices that
produce superior performance. Benchmarking involves setting up partnerships that
allow both parties to learn from one another. Both organizations anticipate some gain
from the exchange of information. Either organization is free to withhold information
that it considers as proprietary.
Direct competitors are the benchmarking candidates normally. Competitors can also
engage in benchmarking, provided they avoid proprietary issues. Persuading the
benchmark partner to discuss their strategy is really difficult. But information can be
obtained from customers, common suppliers, and public domain information.
Some of the sources to identify benchmarking partners are:
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Consultants etc.
Benchmarking experts trace the origins of the technique to the rise of quality circles in
Japan in the 1950s. Identifying industry best practice for use by researching the
practices of other companies is a vital part of total quality management (TQM).
Benchmarking allows goals to be set objectively, based on external information
It is time and cost efficient as the process involves imitation and adaptation rather than
pure invention. It forces an organization to set goals and objectives based on external
reality.
Benchmarking is a popular method for developing requirements and settings goals.
An organization can discover its strengths and weaknesses and those of other industry
leaders through benchmarking. It can motivate employees to achieve goals by helping
them to see what others can accomplish.
An organization may decide to engage in benchmarking for several reasons. The most
important of these are:
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Benchmarking is not just making changes and improvements for the sake of making
changes. It is about value addition. No organization should make changes to their
products, processes, or their organization if the changes do not bring benefits.
Organizations need to determine the strengths that will enable them to gain
competitive advantage. Benchmarking is a tool that can help organization develop
those strengths. The success stories can inspire and instill confidence.
Benchmarking is the continuous search and adaptation of significantly better practices
that leads to superior performance by investigating the performance and practices of
other organizations (benchmark partners).
Irrespective of the type and scope of benchmarking, it will be important to ensure that
z
The scope of the work is appropriate in the light of the objectives, resources, time
available and the experience level of those involved;
Sufficient resources are available to complete projects within the required time
scale;
Benchmarking teams have the right skills and competencies and have access to
training, advice and guidance over the course of projects;
Stakeholders, particularly staff and their representatives, are kept informed of the
reasons for benchmarking and the progress made throughout the course of
projects. Where practicable, staff should be involved in undertaking benchmarking to make the most of the opportunities for learning from others; and
Opportunities are likely to arise for making the most of benchmarking when it is used
widely across organizations for example, through the:
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partners. Contact the potential partners, narrow the lists. Develop briefing packages
and questionnaires, and set benchmark meeting dates and times with the final partners.
This may be another 25% of the total time.
11.3.3 Contact the Benchmark Organization, Visit it, and Study the
Benchmark Activity
In this step plan for productive Benchmark Sessions. Develop plans; train the
benchmark teams on their responsibilities, complete travel plans and logistics. This
should take 20% of the time.
Strategic intent
Core competencies
Process line
Strategic Benchmarking must begin with the assessment of the needs and expectations
of the customer. Customer Surveys may be conducted to measure customer
satisfaction and the gaps between a companys performance and its customers
standards.
Identifying the process outputs most important to the customers (key quality
characteristics) of that process is the first step. This step applies to every
organizational function, since each one has outputs and customers. The QFD /
customer needs assessment is a natural precursor to benchmarking activities.
Strategic Benchmarking includes:
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It includes:
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Creating awareness and support at the senior executive level, and establishing
dedicated benchmarking resources;
After a benchmark has been identified, the goal is to meet or exceed that standard
through improvements in appropriate process. One of the early steps in any effort is
to understand the current performance. The tools commonly used for benchmarking
are;
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Process re-engineering
There are many types of benchmarking. They are not mutually exclusive and
companies can choose any one or a combination to meet their objectives. It is better
that strategic benchmarking is conducted first to create a context and rationale that
will enhance all other benchmarking efforts.
Competitor costs,
Product concepts,
Most of the processes are in the lower levels of the organization. Performance
improvements are quickly realized by making improvements at this level. This type of
benchmarking results in quick improvements to the organization.
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The partner can be one that has best practices in the area of interest or has won a
major national or international quality award.
The cooperative benchmarking is the most suitable among all these types.
Benchmarking is usually done within the same industry. But it is often done between
organizations that have a similar process but are in different industries.
The first step in benchmarking is determining what to benchmark. To focus the
benchmarking initiative on critical issues, begin by identifying the key quality
characteristics of the critical processes. This step applies to every organization
function, since each one has outputs and customers.
It can be seen that the significant portion of the time spent on the process occurs
during the initial steps in this process. Further benchmarking is an ongoing process.
This is because customers perception varies.
Selecting an industry leader provides insight into what competitor s are doing; but
competitors may be reluctant to share this information. Several organizations are
Quality process: Florida Power and Light, Toyota, and Fuji Xerox
Benchmarking techniques are central to the push for constant innovation. This
involves research into the best practices at the industry, firm or process level and
creates to facilitate the change process.
For benchmarking and best practices sharing to take root, management must create an
environment where there is a greater incentive to use the tools than to ignore them.
Managers must know what benchmarking and best practices sharing are, so there is
consistent implementation. Competency in benchmarking can be obtained from
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training courses, seminars and conferences, articles and books, and networking with
benchmarking practitioners.
The success of benchmarking and best practices sharing depends on senior executive
leadership. They must
z
Commit the necessary resources to develop and train managers and employees to
be involved in benchmarking and best practices sharing.
Designate a member of the senior executive team to manage the initial efforts of
the organization in implementing benchmarking and best practices sharing.
The leadership must be committed to the concept, thereby sustaining and supporting
employees and managers involved in benchmarking and best practices sharing to
generate continuous improvements.
The overall process usually requires three different teams
1. A Needs Assessment Team: to identify key customer needs and their status:
Understand the critical processes and how they are measure both in their own
terms and in the customers terms.
Decide what kind of data is needed and how data will be collected.
3. A Problem Solving Team: to take the action required to change the audit process
identified by the benchmark team. The problem Solving Team also helps to
identify new customer issues for a continuous change management loop.
The benchmarking effort should focus its energies on those customers and customer
needs that are most important. The relative importance can be developed using the
following selection procedure
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Make a list of the different outputs and customers for each output.
Identify those processes that add the most value and the most cost.
Benchmarking projects are likely any other major project. Benchmarking must have a
strutted methodology to ensure successful completion of though and accurate
investigations. However, it must be flexible to incorporate new and innovative ways
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Recalibrate benchmarks
Customer focus
Financial performance
All the winners of Malcolm Baldrige Award winners endorse benchmarking. Bench
marking is more interested in the process to produce, distribute and support of a
product than its cost.
Todays competitive world does not give time for gradual development.
Benchmarking tells a firm
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The processes that need to be changed benchmarking brings out the newness and
innovative ways of managing operations.
It brings together all the divisions and helps to develop a common front for facing
competition.
Benchmarking is based on learning from others, rather than developing new and
improved approaches. It should never be the primary strategy for improvement, as
benchmarking cannot give a sustained competitive advantage.
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Provide assessments of the strengths and weaknesses of the current core business
processes and related critical work processes
Helps to identify weak areas and indicate what needs to be done to improve.
Confirms the brief that there is a need for change and Create a sense of urgency
for improvement.
Allow employees to visualize the improvement that can be strong motivator for
change.
Lack of sponsorship
Copycatting or
Quick fix
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11.9 KEYWORDS
Bench Marking: is the process of identifying, understandings and adopting
outstanding practices and process from organization anywhere in the world, in order
to help an Organization to improve its performance.
Strategic Benchmarking: Strategic benchmarking deals with to management and
looks at what strategies the organizations are using to make them successful.
Operational Benchmarking: Operational Benchmarking is assessing and
implementing the best practices of industry or public service leaders to improve
processes to the extent possible to meet organizational goals.
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Model Question Paper
Direction: There are total eight questions, each carrying 20 marks. You have to
attempt any five questions.
1. Explain the concept of Benchmarking and what are its advantages.
2. What are the steps to be followed to implement the benchmarking?
3. Explain the concept of Business Process Reengineering System.
4. Describe about the ISO standards and what are its advantages.
5. Explain the procedure for documentation of quality system.
6. Briefly explain the different types of charts.
7. Describe the characteristic of good sampling plan.
8. Explain the different types of controls followed in the service organization.
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