Quality Concepts Course Material

1.
Concept of Quality, Quality Control, SPC, TQC and CWQC

A. CONCEPT ‘QUALITY’
It is an accepted fact today that no organisation can progress, grow and be competitive unless it pays continuous attention
to quality of its products and services.
Responsibility for the attainment of quality at economic cost to satisfy the customer depends on all the departments of an
organisation.
There is no such thing as absolute quality. It is different for different people. Whether it is service or a product, quality
matters.
Dr. J M Juran one of the pioneers of the quality philosophy defined quality as ‘FITNESS FOR USE’. Fitness for use will be
changing with time. It is dependent upon various factors such as successful progress in the field, changing expectations
of the customer and his preferences (affluence, knowledge, experience etc. influencing decision) availability and so on.
Fitness for use implies freedom from deficiency, including product features catering to customer satisfaction.
In simple terms, quality can be defined as product or service characteristic or feature that gives customer satisfaction.
If we divide quality as product quality and service quality there are steep changes in parameters for assessing them.
Product quality is decided based upon,

• Customer’s need
• Evolving specifications or designing to meet them
• Conformity to those specifications while making the product
• Keeping similar objective or vigil on bought out items and assemblies received from vendors
• Assured performance and safety
• Proper packing
• Timely availability or delivery
• Easy instruction for use
• Efficient technical service
• Feed - back to plant
• Incorporating customer feed-back in design features / manufacture
In case of service quality
• Speed of response
• Dependability
• Control
• Facilities etc.
became important factors.
ISO definition of Quality
The international organisation for standardisation (ISO) has defined various terms and concepts in the context of adoption
of Quality Management systems in an organisation. The standard ISO 8402 (1986) defines Quality as “Totality of all
features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.”
B. WHAT IS QUALITY CONTROL?

Quality Control is “The operational techniques and activities that are used to fulfil requirements of quality.”
In order to understand ‘Quality Control’ we should know how to achieve the Quality i.e. ‘Fitness for Use’. To achieve this
‘FITNESS FOR USE’, which is ever changing, all levels have the responsibility to maintain quality and will be responsible
for certain specified actions.
1
Top Management:
They have the responsibility to keep track of market conditions, customer reaction etc. This should be converted into
decision and converted as new product, or product with additional or changed features.
Middle Management:
Their job is to understand the requirement and cover them as working systems.
Junior Management / Work Force:
Understand the work systems and conform to the requirements in terms of standards / specifications.
All these functions have to be carried out in an integrated manner, each one keeping the two-way communication alive
and understanding the changing situations and requirements.
In other words everyone in their respective level should understand his/her responsibility, for which he/she should choose
appropriate units of measurement, establish these measurement, as well as standard of performance. Then, measure
the actual performance, interpret the difference and take action on the difference. This is quality control function for all
levels.
Dr. J M Juran explains it as follows:
QUALITY CONTROL
• choose control subjects - what to control?
• choose units of measurements - establish measurements
• establish standards of performance
• measure actual performance
• interpret the difference (actual versus standard) take action on difference
Dr. K Ishikawa says, “the very purpose of quality control is to develop, design, produce and service a quality
product which is most economical, most useful and always satisfactory to the customer.”
To sum up, Quality control activity in an organisation has to be carried out in an integrated manner at all levels from top to
bottom, each level taking responsibility for quality in their sphere of activity, and only then can organisations make continuous
improvement and improve its competitive position.
C. WHAT IS STATISTICAL QUALITY CONTROL / STATISTICAL PROCESS CONTROL?

After having had an insight into the basic concepts of quality, the next question is how to control and achieve it. The first
approach was given by Statistical Quality Control (SQC).
In the words of Dr. K Ishikawa “modern quality control, or statistical quality control (SQC), as we know it today, began in the
1930s with the industrial application of the control chart invented by Dr. W A Shewhart of the Bell Laboratories.”
The second world war was the catalyst that made the control chart’s application possible to various industries in the United
States when mere reorganization of production systems proved inadequate for meeting the exigencies of semi-wartime
and wartime conditions. However by utilising quality control, the United States was able to produce military supplies
inexpensively and in large quantity. The wartime standards published at that time came to be known as Z-1 standards.
From the above brief account, it is clear that application of control chart and other statistical methods played a key role in
achieving the objectives of industrial production. Therefore SQC can be stated as “Application of Statistical Concepts
2
and Techniques in Control of Quality in all areas.”
These statistics have five stages of statistical integrity
1. Collection of data
2. Organisation of data
3. Presentation of data
4. Analysis of data
5. Interpretation of data
Correct and factual data are a must for correct interpretation and sound decision-making.
When statistical system is used for process control purpose it becomes statistical process control.
D. WHAT IS TOTAL QUALITY CONTROL?

Dr. Armand V. Feigenbaum, who was working in General Electric Corporation U S A, originated the theory of “Total
Quality Control”. He published an article in Industrial Quality Control in May 1957 and wrote a book “Total Quality
Control: Engineering and Management’’ in 1961.
Dr. Feigenbaum defined TQC as “an effective system for integrating the Quality development, Quality maintenance and
Quality improvement efforts of the various groups in an organisation so as to enable production and service at the most
economical levels which allow full customer satisfaction”.
Thus, Quality Control can be considered as a function of every individual. Total Quality Control (TQC) is understanding the
necessity and importance of Quality Control by each and everyone and the entire organisation being engaged in that.
According to him, TQC requires participation of all divisions in an organisation. But, he felt that quality which is everybody’s
job in an organisation can become nobody’s job. He suggested that essentially Quality Control specialists might manage
the quality function. But this was not acceptable to Japanese. They had some reservations about the definition given by
Dr. Feigenbaum. They wanted TQC approach to be people oriented and evolved their own version. Here is what Dr. K.
Ishikawa has said about Japanese TQC or CWQC “ Between 1950-1960, we have been going through what may be
called the permeation of CWQC in Japan. When a company wants to apply CWQC, all the employees from top Management
to the foreman and workers study Quality Control methods and participate in Quality Control (QCC reports 1973 JUSE). It
became a reality when Quality Control Circles concept was pioneered in Japan in 1962. Quality Control no more was
confined to Quality specialists or Quality professionals.
E. WHAT IS COMPANY WIDE QUALITY CONTROL (CWQC)?

JAPANESE CONTRIBUTIONS TO QUALITY CONTROL
Japan had the knowledge of British standard 600 in the pre-war years and had them translated during wartime. But they
did not use them, as the mathematical language reportedly was difficult to understand and hence, lacked popular appeal.
After the Second World War, military forces of USA stationed at Japan started to use quality control techniques in
telecommunications area because that was the worst area that the occupied forces of America experienced with respect
to Quality. This was the beginning of SQC use in Japan.
Japanese Standard Association established in 1945 evolved use of SQC for quality assurance under the JIS standards
agency. This was responsible for popularising it.
JUSE (The Union of Japanese Scientists and Engineers) a national body established Quality Control Research Group
(QCRG) with members drawn from universities, industries and government. QCRG conducted its first main course in
1949, but realised the necessity to change the systems to suit their country.
During the 1950’s Dr. W E Deming visited Japan at the invitation of JUSE and conducted seminar on SQC for managers
and engineers. His seminar covered the following topics.
a) How to use PDCA cycle to enhance quality
b) The importance of having a feel for dispersion in statistics.
c) Process control through use of control chart.
Dr. J M Juran visited Japan on the invitation of JUSE in 1954. He conducted seminars for top and middle management
level, explaining their vital roles in promoting QC activities.
Dr. Juran’s visit made a transition in Japan’s quality control activities making it an overall concern of the entire management.
3
His visit made them to realise QC as a tool of the management. This created an opening for the establishment of TQC or
CWQC.
Japanese accepted the basic principles of quality, quality control and SQC system. They also understood Dr. A V
Feigenbaum’s theory of ‘TQC’.
According to Dr. A V Feigenbaum, TQC requires participation of all divisions, including divisions of marketing, design,
manufacturing, inspection, and shipping. Fearing that quality which is everybody’s job in a business can become nobody’s
job he suggested that quality function may be managed essentially by Quality Control specialists.
Thus the above problems are due to lack of involvement of production people. Therefore, from the beginning, the Japanese
involved all the divisions and all the employees in studying and controlling quality. The training received from Dr. Deming
and Dr. Juran enabled them to change their orientation to Quality. (I.e. involving all employees right from the beginning).
They made Quality Control function a part of production function and called it Process Oriented Quality Control System
or Company Wide Quality Control System (but we will call it as TQC improvised version).
Definition of CWQC
“Control or management of Quality of all services, business, human beings etc. and control of everything but this
should be executed through all departments, all employees that is from top management, middle management to
the bottom, QC Circle leaders, members and non-members”.
(Dr. K. Ishikawa)
Later on, Dr. A.V. Feigenbaum, agreed to the modification according to the changes made by the Japanese to his philosophy
as an improvement over his theory.
Hence, today, when we talk about TQC, we talk about the one advocated by the Japanese and accepted by everyone. The
distinguishing features of CWQC are
a) Quality first, profit next
b) Customer oriented Quality Assurance
c) Adoption of the concept ‘Next process is the Customer’
d) Application of SQC techniques
e) Practice of Quality Control Circles
f) Practice of Humanistic thought in management.
F. TOTAL QUALITY MANAGEMENT
If one looks at it carefully, it will be evident that Quality has become an important element for competitive success.
But the initial approach for Quality was final inspection and postproduction adjustment. Quality was not viewed as a
responsibility of all employees. Quality function was separated from such areas as planning, design, production and
sales.
In contrast to this approach, Japanese Companies adopted an innovative and integrated approach to achieve Quality.
They have, no doubt learnt the basics from Dr. W.E.Deming and Dr. J.M.Juran. Dr. W.E.Deming taught them the
importance of statistical systems and mainly the use of control charts and gave a 14-point programme. Japanese on
their own made a systematic approach to the adoption of statistical methods. Dr.K.Ishikawa insisted on everyone
having a thorough knowledge of statistical methods.
Dr. Juran taught them the basic tenets of quality management for achieving total quality on a continuous basis viz.
a) Commitment to Quality at all times and top management leadership for Quality.
b) Continuous education and training on quality for all (Universal).
c) Annual plan for improvement of quality and cost reduction.
Ideas of Dr. W.E.Deming (14 points) and Dr. J.M Juran (3 Points) became the basic quality management principles
in Japanese companies. Japanese added an important dimension viz. Understanding the importance of grass root
level employees and their role in the achievement of quality. All these principles and practices became the foundation
of Total Quality Management and what the Japanese termed as Company Wide Quality Control.
When we say Total Quality Management we mean a new approach to improve product Quality and increased customer
4
satisfaction on a continuous basis by restructuring traditional management practices.
The main features of TQM are
a) Customer driven quality

b) Strong quality leadership
c) Continuous improvement
d) Action based on facts, data and analysis
e) Employees participation
f) Improved two way communication systems. (Top to bottom and bottom to top)
What we should understand is that TQM is not a particular way of function. It talks about certain basic principles that
are needed for proper functioning. Whatever quality concept one may adopt whether it is Total Productive Management
or Business Process Engineering or say even Six Sigma approach these basic ideas cannot be ignored. It has been
developed over a period and can be considered as a foundation for the development of all other new concepts, which
we are aware of today or can be considered as a broad umbrella under which the new concepts can be fitted in.
Hence one should not consider any new idea as a replacement for TQM philosophy.
How do we measure or find out whether an organisation has properly adopted TQM or not? There are many ways
and means, but the most important ones are
i) Employees relation
ii) Operating procedures
iii) Customer satisfaction
iv) Financial performance.
Employees relation
If you find that there is an increased satisfaction among employees and they are regular in their work and higher
number of suggestions is received from them then we can say that there is a better employee’s relation. You will also
notice less turnover, i.e. the number of people leaving the organisation would be less and there is improved safety and
health. The Japanese strongly believe that “employees’ satisfaction precedes customer satisfaction”.
Operating procedure
If there is a higher reliability, prompt delivery, shorter order process time, error free production, better product lead time,
lesser inventory, improved quality cost, higher cost saving and two way communication system we can say that there
is an improved operating procedure.
Customer satisfaction
The improved overall satisfaction, fewer or low complaints and higher customer relation reflect greater customer
satisfaction.
Financial performance
Increased Financial performance is reflected by the higher market share, which means more sales, higher sales per
employee and better returns on investment.
Some people adopted TQM, paying attention to overall improvement, without giving special focus to areas that will give
financial gain and strengthen the organization. But Pareto Principles, which is an essential tool used by all quality
practitioners, emphasizes the importance for prioritization of the tasks.
Dr. J. M. Juran in his Quality Improvement Process in the first lesson states that Managers have to be ‘bilingual’
i.e.should know the language of things and language of money. When putting proposals for improvement they should
present it to the top management about the gains in terms of money.
5
2. BUSINESS EXCELLENCE THROUGH TOTAL QUALITY
In the chapter one we have seen the progress of the concept of quality over the past decades. If one looks at it carefully,
it will be evident that Quality has always been an important element for competitive success. But the initial approach for
Quality was final inspection and post production adjustment. Quality was not viewed as a responsibility of all employees.
Quality function was separated from such areas as planning, design, production and sales.
They have, no doubt learnt the basics from Dr. W.E.Deming and Dr. J.M.Juran. Dr. W.E.Deming taught them the importance
of statistical systems and mainly the use of control charts and gave a 14-point programme. Japanese on their own made
a systematic approach to the adoption of statistical methods. Dr.K.Ishikawa classified them as elementary statistical
methods, intermediary statistical methods and advanced methods. He insisted on everyone having a thorough knowledge
of statistical methods. Dr. Juran taught them the basic tenets of quality process for achieving total quality on a continuous
basis viz.
a) Conviction to Quality at all times and upper management leadership for Quality.
Ideas of Dr. W.E.Deming (14 points) and Dr. J.M Juran (3 Points) became the basic quality management principles in
Japanese companies. Japanese added an important dimension viz. understanding the importance of grass root level
employees and their role in the achievement of quality. All these principles and practices became the foundation of Total
Quality Management and what the Japanese termed as CWQC.
When we say Total Quality Management we mean a new approach to improve product Quality and increase customer
satisfaction on a continuous basis by restructuring traditional management practices.
f) Improved two way communication system.(Top to bottom and bottom to top)
What we should understand is that TQM is not a concept but a philosophy. It has developed over a period and can be
considered as a foundation for the development of all other new concepts which we are aware of today or can be
considered as a broad umbrella under which the new concepts can be fitted in. Hence one should not consider any new
idea as a replacement for TQM philosophy. How do we measure or find out whether an organisation has properly adopted
TQM or not? There are many ways and means, but the most important ones are
* Employees relation
* Operating procedures
* Customer satisfaction
* Financial performance.
Employees relation
If you find that there is an increased satisfaction among employees and they are regular in their work and higher number
of suggestions are received from them then we can say that there is a better employees relation. You will also notice less
turnover, i.e. the number of people leaving the organisation would be less and there is improved safety and health. The
Japanese strongly believe that “employees’ satisfaction precedes customer satisfaction”.
Operating procedure
lesser inventory, improved quality cost, higher cost saving and two way communication system we can say that there is an
improved operating procedure.
6
Greater customer satisfaction is reflected by the improved overall satisfaction, fewer or low complaints and higher customer
relation.
Increased Financial performance is reflected by the higher market share which means more sales, higher sales per
All these things are achieved by organisations focusing on customer quality requirement. In this effort of TQM dissemination,
management should lead. They should empower the employees to continuously improve all the key business processes.
The management has to nurture a flexible and responsive corporate culture. Management systems should support fact
based decision making and another important aspect is partnership with suppliers.
7
3. FIELD QUALITY ASSURANCE
NTPC has embarked upon a very ambitious capacity addition programme for the company in X, XI and XII plan to become
a 66000MW company by 2017. The Construction and Equipment erection activities of ongoing and upcoming projects
have significantly increased and bound to multiply manifolds in near future. NTPC has also diversified into development of
Hydro Power generation and Coal Mining Operation. R & M activities of ageing plants are taken up in a big way for
improved plant availability and efficiency. All These activities call for more concerted efforts in the area of Field Quality
Assurance, to ensure that the processes have a continued focus on Quality.
The role of FQA is significant during erection and overhauling of units. In that perspective, FQA manual proves to be very
useful and effective as it elaborates the framework in which FQA needs to work for successful erection & overhauling of
units in a time bound programme. The FQA activities are guided and implemented as per system manual revised in 2006
with the Doc. No QS-01-FQA-Q-00.
Objectives of Field Quality Assurance
Quality Assurance Organization in NTPC (Corporate level, Regional level and Project / station level) has been structured
to function in a systematic manner for all the Quality related activities during the various stages of design, engineering,
procurement, manufacture, assembly, construction, erection, commissioning, operation and maintenance so as to ensure
Quality and Reliability in all System, Materials and Equipment of Power Plants / Power Stations.
FQA Systems broadly describe the various management & working systems and procedures to be implemented at the
Project sites so as to achieve the specified Quality, consistent with corporate objectives of Quality Management, keeping
in view the specified project schedule to obtain high availability of equipment during Operation. This describes the func-
tions and responsibilities of various Departments in respect of matters affecting Quality and identifies distinct interface of
site functions amongst various departments of Corporate Centre, Region and Site. These also provide guidelines for a
uniform and integrated approach for systematized implementation of lied down procedures for all NTPC Projects / Sta-
tions / Units. The FQA activities play a vital link in the Integrated Quality Management of a Power Project.
The activities related to the achievement of Quality Assurance are not prejudicial to the achievement of the time schedule
and emphasis should be on the advantages of Quality Assurance activities to achieve good Plant performance and high
availability in service, at the same time maintaining the time schedule.
Activities and Responsibilities of FQA
The overall responsibility and Authority for ensuring that all field activities are performed according to the laid down Quality
Systems and fully complying with the approved design & code requirements and the Contract, rests with the Head of the
Project / Power Station. The other concerned Departments, including FQA, shall function to achieve this.
Achievement of Quality is not only the responsibility of CQA, RIOs and FQA Departments, all other concerned Depart-
ments, whose functioning will affect product Quality and Performance are also responsible and is not solely the domain of
the FQA Function at Projects.
The FQA shall exercise control and authority on installation of a Non-conforming items or unsatisfactory conditions at site
until proper disposition has been affected. The authority of Head (FQA) includes the right to stop work, which does not
confirm to QP, drawings or specifications.
Authorization of erection checks as per field quality plans is in three categories :
Category – A The accepting authority is FQA Engineer and Surveillance by Head FQA
Category – B The accepting authority is Executing Engineer and Surveillance by FQA Engineer.
Category – C The accepting authority is Contract Engineer and Surveillance by Executing Engineer.
To review the quality and inspection/testing requirements in the Purchase specifications and finalize the QA requirement.
Co-ordinate with the external inspection and CQA Audit at Site.
Associate with Equipment Erection Contractor in all statutory inspection activities.
Ensure that all welding electrodes are approved by CQA.
Carry out Surveillance Checks during storage of materials and equipments as per FQA guide lines.
Finalization of maintenance quality Plans and categorization of the Checks along with documents and acceptance norms
during Overhauling / Capital Maintenance / Preventive Maintenance
8
Review of completed maintenance checklist.
Updation & regular calibration of testing equipments in FQA lab. , material handling equipments and construction equip-
ment by NTPC/Constructor .
OTHER DEPARTMENTS INVOLVED
1. Equipment Erection / Construction / Execution Department.
2. Materials Management Group at Site.
3. Contract Services Group at Site.
4. Field Engineering Dept.
5. CQA
6. Regional Inspection Services
7. O&M
The above departments are responsible for field quality assurance activities –
Receipt Inspection of Materials at Site
Materials Storage and Preservation
Welding and Heat Treatment at Site
Calibration of Measurement and Testing Equipment
Construction Equipments
Dispositioning pf Non-Conformities
Quality Audit at Site
FQA for Site Awarded Contracts (Manufacturing as well as Execution)
FQA for Overhauling / Capital Maintenance / Preventive Maintenance
CORPORATE QUALITY ASSURANCE (CQA)

Activities and Responsibilities of CQA :
1. Finalizing all the Field Quality Plans (FQPs) and the Categorization of checks for Corporate awarded contracts
2. Providing Technical support and general policy guidelines to FQA at Project/Power Station.
3. Assisting FQA, wherever required, for Audit of Contractor’s FQA system.
4. Conducting periodic Audits on Project/Power Station activities, Identifying the quality issues and suggesting the
corrective actions thereon.
5. Dispositioning of Non-conforming items referred by FQA.
6. Apprising higher Management the status and adequacy of Quality Assurance systems through Audits and Re-
ports.
7. CQA will inform the Head (FQA) and Head (Equipment Erection) or Head (O&M) (as applicable) regarding any
pending works / tests, not performed at the manufacturing works on equipments but agreed to be carried out at
site after the equipments are cleared for dispatch to site by Inspection CQA will consult Head (FQA) regarding
facilities available at site before accepting such a proposal for carrying out such tests at site. CQA will also inform
Head (FQA) and Head (Equipment Erection or O&M) (as applicable) regarding deviations concurred / NCR
Disposition Clearance during manufacture, which will have a bearing on site assembly and erection.
8. CQA will inform Head (FQA) and Head/ Equipment Erection about important testing programme like shop
assembly and testing of Turbine and Turbine Generator, performance test of Boiler, Fans, Pumps, Testing of
EHV Transformer etc. to enable site involvement, if necessary.
9. To accord approval of Field Welding Schedule (FWS) for SG and TG Package and general purpose welding
electrodes to be used at Sites for Corporate and Site awarded packages (Special purpose electrodes required
during O&M/Overhauling/R&M phase of the Project shall be finalized and approved by a committee at Site).
10. To ensure that topic of all final test report / QA documentation are sent to Head (FQA) for onward transmission to
Head (O&M) for their reference and record during the course of commissioning and operation.
11. Standardization of FQPs and finalization of Reference FQPs (RFQPs).
12. Periodical review and issue amendment of FQA System Manual, as per requirement.
9
4. ASSESSMENT AND SELECTION OF VENDORS
This procedure covers evaluation of Vendor for supply of Ancillary items, Raw materials, Intermediaries, Spares compo-
nents, Equipments, Instruments, Machinery, Job work, Services, etc.
PROCEDURE
A. Identification of Vendors
Purchase identifies Vendors in the following ways :
• Through self introductory letters
• Trade Directories
• Paper advertisements
B. Evaluation of Vendors
Purchase sends “Vendor Evolution Chart” to vendors, identified as mentioned above for filling up and return.
C. Visit to Vendors
For selection, depending on the criticality of items to be developed, Purchase/QA personnel may visit Vendor works either
individually or as a team, assess / verify the following.
• Plant/Equipment Capacity
• Quality Assurance Systems in Operation.
• Vendors quality rating as evaluated by existing customers
• Financial soundness
However, visit to Vendor’s Works may not be made in the following cases :
• Vendor is well established.
• Item to be developed, which does not effect product performance.
• Foreign suppliers.
The decision of not visiting is taken jointly by QA and Purchase.
In such cases, Purchase negotiates with the Vendors for price, release letter of intent/Purchase Order and asks the
vendor to supply samples of items for approval.
On approval of sample by QA, vendor is approved for bulk supplies.
VENDOR SELECTION REPORT
Whenever personnel visit Vendor’s Works, Vendor Selection Report is prepared.
Vendor Selection Report is signed by visiting Purchase/QA/personnel and given final assessment of vendor for develop-
ment.
If selected for development, Purchase negotiates with Vendor for prices, release Letters of Intent/Purchase Order and
ask the Vendor to supply samples of item for approval.
On approval of samples by QA/User Dept., Purchase releases purchase order whenever letter of intent only has been
issued earlier.
Vendors become eligible for inclusion on approved vendor list after approval of samples.
SPECIAL CHARACTERISTICS TO BE MAINTAINED BY VENDOR
Vendors are provided with the Following :
Drawing with Special Characteristic identified.
Process Schedule/Inspection Layout.
Parameters and specifications for control of Special Characteristic.
Tool Control affecting Characteristic.
In addition, all Special Characteristic are controlled by adequate sampling size at vendor premise and by receipt inspec-
tion.
10
PROCESSING THE PURCHASING DOCUMENTS
This procedure covers Processing of Purchasing documents for suppliers.
A. Preparation and Issue
Purchase prepares purchasing documents after finalization of prices and other terms and conditions with suppliers.
• Purchasing documents contain :
• Item/code/description
• Drawing No./With latest Revision No.
• Quantity
• Delivery Schedules
• Prices
• Payment Terms
• Mode of dispatch
• Special Instructions
• Items/Quantities purchased are based on average consumption during the previous year.
• In case of job works, the purchasing documents indicate the items provided by the company such as Raw Mate-
rials, Tools, Gauges etc. and the details of the jobs to be performed by the Vendors.
• On Preparation, purchasing documents are reviewed and signed by two authorized signatories, as per office
order.
• Purchasing documents are issued to supplier and copies are sent to Stores and Accounts.
B. Receipts, Inspection, Storage, Issue & Record Maintenance at Stores

The receipts of material in Stores in controlled by Control Register.
Detailed Work Instructions for Receipt Stores activities are as follows:
• Receipt of items in Stores
• Material Movement before Storage
• Storage of Items in Stores.
• Issue of Items from Stores.
• Maintenance of Records in Stores
C. Contingency Purchases
For purchase of stores and spares of contingency nature, the suppliers challan/invoice/cash memo duly authorized by
Purchase is treated as Purchasing Document.
VENDOR RATING
This procedure covers Vendor Quality Rating, Delivery Rating, Overall Vendor Rating, Review of Rating and feedback of
vendors of ancillary items and bought out components. Special indent are procured by reputed suppliers/stockiest and
retail dealers.
The responsibilities are as under :
• Vendor Quality and Supply Rating – QA
• Delivery Rating – Purchase
• Overall Vendor rating – Purchase
• Review of Overall Vendor Rating – Purchase
• Feedback to Vendors – Purchase
OVERALL VENDOR RATING
Overall Vendor Rating is evaluated by Purchase of Vendors. Overall Vendor Rating is combination of Quality rating,
Supply Rating and delivery rating.
11
Over Rating at 10 Point Scale Category
Above 8.0 A+
Above 7.0 & upto 8.0 A
Above 6.0 & upto 7.0 B
Above 5.0 & upto 6.0 C
Below 5.0 D
SELF CERTIFIED VENDORS
Based on the past performance or vendor rating certain selected suppliers are self-certified to supply material from time
to time. Material received does not under go receipt inspection and issued directly to user departments. They are reviewed
annually for quality / delivery performance by QA / Purchase.
REVIEW OF VENDOR RATING
QA prepares the Quality and Supply Rating. Purchase prepare the Delivery Rating and the Overall Vendor Rating (OVER
Rating).
FEEDBACK TO VENDORS
Based on the Over Rating, vendors are categorized into grades. Vendors are informed about their OVER Rating by
purchase for taking corrective action in the subsequent supplies.
RE EVALUATION OF VENDOR
Vendors graded “D” continuously for six months or incase the individual rating of Quality, Supply and Delivery Rating are
less than 2.0 for six months are liable to be excluded from the approved vendor list. However CEO-Works may authorize
to continue procurement on the recommendation of Purchase / QA pending establishing alternate source.
12
5. ISO 9000
1. WHAT IS ISO 9000?
The International Organisation for standardisation (ISO) brought out in 1987 a set of standards called ISO 9000 series of
standards on Quality Management system.
This was brought in for the purpose of establishing a customer oriented quality discipline in marketing, design, engineering,
procurement, production, inspection, testing and related service functions. Thus quality becomes everybody’s job.
In 1979 UK published Quality system standard as,
BS 5750 Part 1 : Specification for design, manufacture and installation.
Part 2 : Specification for manufacture and installation.
Part 3 : Specification for final inspection and test.
BS 5781 : Measurement and calibration system.
Throughout the World various Quality standard systems were getting established.
Seeing the interest, ISO Geneva published in 1987 a series of Quality system models to enable the world communities to
standardise on a common set of Quality System requirements.
The following constitute the ISO 9000 series.
ISO 9000 - 1 : Quality Management and Quality Assurance standards - Part 1 Guidelines for selection and use.
ISO 9000 - 2 : Quality Management and Quality Assurance standards - Part 2 General guide lines for the application
of ISO 9001, ISO 9002, and ISO 9003.
ISO 9000 - 3 : Quality Management and Quality Assurance standards - Part 3 Guidelines for the application of ISO
9001 to the development, supply and maintenance of software.
ISO 9001 - : Quality systems-Model for Quality Assurance in design/development, production, installation and
servicing.
ISO 9002 - : Quality Systems - Model for Quality Assurance in production installation and servicing.
ISO 9003 - : Quality Systems - Model for Quality Assurance in final inspection and test.
ISO 9004 - : Quality Management and Quality system elements - Guidelines.
3. HOW DID THIS BECOME A CERTIFICATION SYSTEM?
In case of Britain, in July 1982 it published a white paper on standards.
The white paper announced the government’s intention to set up arrangements for the accreditation of certification agencies.
Accordingly an independent national accreditation council was established which has as membership, government
department, national industries, professional institutions, insurance and inspection experts and the certification bodies
themselves.
This was established as an independant council by British Standard Institution’s royal charter.
There are four certification categories eligible for accreditation.
a) Certification of Quality Management systems.
b) Product conformity certificate.
c) Product approval.
d) Certification of personnel engaged in Quality verification.
4. WHY AN ORGANISATION SHOULD GO FOR ISO 9000 CERTIFICATION?
• The basic objective of every organisation is to attain excellence in economic performance.
• The most important factor for good economic performance is quality of products/services.
• Quality is the basic customer decision factor. Whether a buyer is a house wife, industrial organisation, government
department or defence programme, departmental store or importer, everyone wants to buy only best quality
product.
13
• A buyer looks for an organisation which has established consistency in quality of products or services.
• Consistantly producing good quality product or service is very important for customer confidence and higher
positioning of buyer perceptions. Such an effort needs a set of rules or guidelines. This can be established at
national level but in the context of trading at international levels, rationalising and standardisation of national
guidelines are the needed efforts. This is the purpose of ISO 9000.
5. HOW CAN ONE ESTABLISH THE QUALITY MANAGEMENT SYSTEM AND GET THE CERTIFICATION?
There is a need for a structured approach which includes preparation, implementation and certification.
a) Preparation - Awareness Training Programme
This calls for creating an awareness amongst all including grass root level employees about why we should go for ISO
9000 certification, where we stand and what is our desired objective.
After awareness management should make clear of their committment to the system and form a committee and
appoint a co-ordinator.
Then comes the necessary training for each and every one. The training time may vary from 4 to any number of hours
depending upon the need but a training is a must for all. Next step is the choice of model. This is normally decided
based on certain parameters like, customer need and the interface with him, complexity of the design process (Is
there any design process?) and its maturity, how complex is the process, characteristics of the product or service,
safety and economic consideration. Above all we should have a clear time frame for implementation.
b) Implementation
First and foremost the organisation should review its business plan, policies and strategies and how they suit with the
implementation.
Next sensible step will be conducting a preliminary assessment of current status. All organisations have written down
standards, but the problem is their effectiveness. So understanding the status is very important.
Then draw out an action plan and get it approved by the Steering committee. Most important aspect in action plan is
consideration of how well and effectively the standard is established. While a quick action is essential it should not
become the sole criteria.
Once action plan is drawn, next step is documentation.
Documentation involves preparation of quality manual, procedures, work instruction, quality plans and quality records.
ISO 9000 calls for documentation of all work that will affect quality. The most important thing is establishing a guideline
explaining the system to be adopted for documentation. Standard systems are available as a guideline for this purpose.
i) Quality Manual: This explains the Quality policy, quality aims and objectives, the organisational structure and
fulfilling the ISO 9000 requirement.
ii) Procedures are the documents which describe how an activity is to be carried out.
iii) Work instruction are documents which specify how a job is to be done.
iv) Quality plans describe what are quality requirements, how they are to be verified, who will do and what measuring
instrument/equipment will be used.
v) Quality records are results of activities carried out as per the documented system.
Next step is not mandatory but advisable i.e getting a second party audit done. This is done by a customer over
a supplier, persons from sister organisation or by an external agency knowledgeable (not the certifying agency)
on the subject.
c) Certification
Now go for certification. For this contact accredited certification body and remit the required fee. On application the
certifying agency will carryout a document review(also called adequacy audit) i.e check up the documentation to
ensure that it covers all the aspects and fulfils the requirements of the chosen standard. Once the adequacy audit is
satisfactory they carry out a conformity audit or compliance audit which is a ‘Third party audit’. Such an audit is carried
out in accordance with the ISO 10011 standard. On satisfactory compliance audit, the agency grants certificate and
includes the organisation in the certified list. Such a certification has a validity period (Currently it is 3 years).
But it does not end here. We have to ensure that the systems established do not die away. Hence the certifying
agency carries out surveillance audit as part of the certification scheme.
To ensure continuity, it is important to carry out internal Quality Audit regularly as per requirement of ISO 9000 standard.
Audit by customer also can be conducted on a regular basis.
After the expiry of the 3 years period recertification audit is carried out.
14
6. Quality Manual?
There are many books available which detail out step by step method. A general guideline is given in ISO 10013. The
contents of the manual are:
Introduction
This normally contains profile of company’s activities, its products and market, top management’s committment and a
table of contents.
Quality Manual Management
This gives manual review, history of revisions carried out and names of registered holders.
Object of the Quality Manual
Here a description of the organisation, scope of the manual and normative references are given.
Upto this it is common for manufacturing as well as service organisations. Quality system requirements vary depending
upon the model chosen.
For ISO 9001 the system elements are
4.1. Management Responsibility
4.2. Quality System
4.3. Contract Review
4.4. Design Control
4.5. Document and Data Control
4.6. Purchasing
4.7. Control of Customer - Supplied Product
4.8. Product Identification and Traceability
4.9. Process Control
4.10. Inspection and Testing
4.11. Control of Inspection, Measuring, and Test Equipment
4.12. Inspection and Test Status
4.13. Control of Nonconforming Product
4.14. Corrective and Preventive Action
4.15. Handling, Storage, Packaging, Preservation, and Delivery
4.16. Control of Quality Records
4.17. Internal Quality Audits
4.18. Training
4.19. Servicing
4.20. Statistical Techniques
For ISO 9002
For this leaving Design Control (clause 4.4) all other sections are applicable
For ISO 9003
In this barring Design Control (4.4), Purchasing (4.6), Process Control (4.9), Preventive Action (4.14) and Servicing (4.19) all other
sections are applicable.
For service organisations ISO 9004 - 2 is the model in which system elements are as follows:
4.1 Management Responsibility
4.1.1 Quality Policy and Customer Satisfaction
4.1.2 Organisation
4.1.3 Resources
4.1.4 Management Review
4.1.5 Continuous Improvement Programs
4.2 Quality System
4.3 Contract Review
15
4.4 Service Design Control
4.5 Document and Data Control
4.6 Purchasing
4.7 Control of Customer- Supplied Product and Service
4.8 Service Identification and Traceability
4.9 Service Delivery Process Control
4.10 Inspection and Testing
4.11 Control of Inspection, Measuring and Test Means
4.12 Inspection and Test Status
4.13 Control of Nonconforming Service
4.14 Corrective and Preventive Action
4.15 Handling, Storage, Packaging, Delivery, and Protection of Customers’ Possessions
4.16 Control of Quality Records
4.17 Internal Quality Audits
4.18 Training
4.19 Servicing and Customer Feedback
4.20 Statistical Techniques
4.21 Interface with Customers
4.22 Service Quality Improvement.
This is followed by Procedures and quality plans (list or references) and terms and definitions
8. What are the advantages of ISO 9000 Quality System?
Major benefits are,
- Reduction in Quality Costs.
- Improvement in work culture and quality of products and services.
- Involvement and commitments of management and employees.
- Regular audit and management reviews establish good communications.
- Increased market share and customer confidence.
- To deal with only one certification agency.
- Benefits to the members of the organisation and society.
- Preference in foreign exchange entitlement.
- Improved pressure in national and international markets.
9. What is a sum-up of ISO 9000 standards?
• Standards on quality system and not on products.
• Complementary to products specifications.
• Twenty elements affecting quality.
• Organisations to establish their own procedures and implement.
• Management responsibility.
• Responsibility and authority of the departments well defined.
• Documented Quality System - quality manual and procedures.
• Training needed to all on quality system standard and organisation procedures.
• User friendly, logical and easily understood format.
16
6. ISO 14000
Section 1 - EMS - Need, Scope and Benefits
1.1.0 Environment
Environment is defined as ‘surroundings in which an Organisation operates including air, water, land, natural resources,
flora, fauna, humans and their interrelation.’
Surroundings in this context extend from within individual households to organisations and then to the entire global
system. Keeping the environment fit for living is the duty of every citizen and Organisation, because a clean environment
enhances the ‘quality of life’ of all species on the earth.
There is an increasing awareness by individuals and organisations to achieve and demonstrate sound environmental
performance by controlling the impact of their activities on the environment.
1.2.0 Causes of environmental degradation
There are many causes that have contributed for the degradation in the environment. Some of them are population
increase, ozone depletion, global warming, air pollution, water pollution and ecosystem disturbance.
1.2.1 Population increase
The World population is increasing rapidly. Current population is around 6 billion and will increase to 12 to 15 billion by
year 2100. There will be great demands on resources such as space, water and food. There will be serious pollution
problems as a result of population growth.
1.2.2 Ozone depletion
CFC’s and other gases are responsible for attacking and reducing the thin layer of high-level of ozone 15 km up in the
troposphere. Ozone, the three atom form of oxygen is destroyed by the CFC’s and other similar chemicals which release
chlorine when exposed to sun light. The chlorine then attacks the ozone converting it into oxygen. During turbulence at
this height the ozone thins out, creating a hole which allows ultra violet light from the sun to the surface of the earth.
Ultra violet radiation has widespread effects on human health, crops, photo synthesis and ecosystems.
1.2.3 Global Warming
The mean temperature on the earth over the past 140 years has gone up by about 0.5 degrees Celsius. The green house
gases that contribute to the global warming are as follows:
Green House Gas Contribution to Global Warming

Carbon Dioxide 50%
Methane 18%
CFC’s 14%
Ozone 12%
Nitrous Oxide 6%
1.2.4 Air Pollution

Air pollution is caused by several factors. Some of the major causes of air pollution are - smog, emissions from vehicle
exhausts, release of hydrocarbons from industries.
Nitrogen dioxide, Carbon monoxide, solvents and complex hydrocarbons cause air pollution. Many different concerns
manifest themselves as ‘acid rain’. Acid rain, particularly caused by sulfurdioxide causes extensive damage to ecosystems.
Low level ozone generation from the release of hydrocarbons from industry and vehicles is a problem, particularly during
summer when sunlight creates a photochemical smog. Air pollution is cause for many disorders like asthma, bronchitis,
eye infections and headaches.
17
1.2.5 Water Pollution
Water pollution is caused by nitrates from agricultural operations, discharges from factories either directly or through
water treatment plants, sewage discharges, spillage of chemicals, run-off from mining and quarrying operations and
ground water contamination due to landfill sites.
Classification scheme for river and canal water is as follows:
Class Potential Use
1A-Good Drinking water. High quality fisheries.
1B Less high quality, but can be used for the same purpose as 1A.
2-Fair Potable water after treatment. Can be used for coarse fisheries.
3-Poor Polluted. No fish. Low grade industrial use. Further use if cleaned.
4-Bad Polluted water. Not recommended for use.
1.2.6 Ecosystem Degradation
In pursuit of industrialisation, large scale destruction of geographical regions is causing massive degradation of the
ecosystem. Inadequate planning and poor management of the resources are resulting in destruction of rain forests and
upland regions. Exploitation of forests for wood (as industrial raw material, fuel and construction material), mineral
extraction and construction of dams for irrigation and power generation are creating imbalance in the ecosystem.
1.3.0 Environmental concerns
Managements of Business organisations are under constant pressure from various groups like Legislation, Customers,
Markets, Insurance, Public and Media to achieve and demonstrate sound environmental performance.
1.3.1 Legislation
Organisations need to adhere to the statutory and regulatory requirements applicable to the country to be in business.
There is no equal pressure in all the countries. In developed and advanced countries, the legislation for protection of
environment has become a high priority.
Environmental regulatory bodies, like the Pollution Control Board play, a significant role in the implementation and monitoring
of the legislative requirements.
1.3.2 Customers
Individual customers and corporate customers would like to purchase products from manufacturers who are committed to
environmental protection. Eco-Label award or certification to ISO 14000 EMS standards provides confidence to the
customers that the suppliers are committed to environmental protection and improvement.
1.3.3 Market Trends
Environmental issues have influenced the consumption patterns of many products. Manufacturers need to study the
market trends to prepare the business plans. Some examples of this changing trend are
• Usage pattern of pesticides, refrigerants and solvents
• Reduction in the use of solvents due to water based alternatives
• Alternatives to wood being developed
• Usage of sodium hexafluoride as insulating gas under threat
1.3.4 Insurance
Insurance companies are creating pressure on the industry to institute an EMS by providing tailored insurance policies
than general policies. Pollution liability is restricted to sudden and accidental and no cover for gradual pollution incidents.
* Sudden and accidental-Bhopal, Chernobyl etc.,
* Gradual - Disposal of toxic waste by burial
- Leakage of pipes, tanks or pits
- Discharge into streams or rivers
- Release of fumes into atmosphere
18
1.3.5 Public and Media
Public consisting of local residents, organisation’s workforce, investors and insurers, customers and environmental interest
groups like Greenpeace and Friends of the Earth are creating awareness on environmental issues. Wide usage of the
Internet and government regulations will lead organisations to provide information on the environmental performance.
1.4.0 Environmental Management Systems - Need
Organisations of all kinds are increasingly concerned to achieve and demonstrate sound environmental performance by
controlling the impact of their activities, products and services on the environment taking into consideration their
environmental policy and objectives. The Environmental Management System of an organisation is expected to meet the
following needs:
* Meet the regulatory, and legislative requirements.
* Improve the control of the environmental impact.
* Provide confidence to the customers that the products and services are manufactured with the aim of reducing the
negative impact on the environment.
* Suitably accommodate changing market trends and gain competitive edge.
* Reduce the costs associated with environmental liabilities and Insurance.
* Gain public and media support.
1.5.0 Environmental Management Systems - Scope
The Environmental Management System enables an Organi-sation to formulate policy and objectives taking into
consideration legislative requirements and significant environmental impacts and specifies the environmental performance
criteria. The scope of the Environmental Management System of an orgnisation consists of :
* Implement. maintain and improve EMS.
* Conformance to the stated policies and objectives.
* Demonstrate conformance to the EMS through certification.
Environment Management System of an organisation shall consider the following issues:
* Improvement to the Quality of life
* Benefits to society
* Commitment to the future generations
* Minimisation of environment risk
* Prevention of pollution
* Environment care and continuous improvements
* Save resources
1.6.0 Environmental Management Systems - Benefits
Environmental Management System benefits the organisation as well as the society. Significant benefits of the EMS are
* Assurance of policy implementation.
- Forces organisations to link policy to objectives and targets.
- Policy linked to operations and activities.
- Management involvement.
- Compliance with the regulatory requirements.
- Continuous environmental improvement.
- Spot and correct potential problems.
* Technology tie-ups.
- Multi-national companies (MNCs) would like to provide technology to companies which have implemented EMS.
19
7. QUALITY CIRCLE CONCEPT AND PHILOSOPHY
BEGINNING OF QUALITY CIRCLE
While Dr. Deming taught the Japanese management Statistical Quality Control, Dr. Juran taught them Quality Management.
Dr. Juran explained that Quality Management is attainable if the following THREE Strategies are implemented in an
organisation.
i) Upper management leadership for quality.
ii) Massive education on quality related subjects (Top-bottom)
iii) Annual Quality improvement plans and annual cost reduction plans and their implementation.
Later in April 1962, when the magazine “Gemba to QC” (QC for foreman) was published Dr. Ishikawa wrote that the study
group be renamed as Quality Control Circles.
It is necessary to recognise here that Japanese started QC circles long after all management had been trained in
Quality control and CWQC was put into operation i.e., Quality Circle came at the end of the total programme of
implementation of Quality Control. Against this some organisations in India attempted starting Quality Circles without
practising CWQC or TQC and hence, failed.
The Quality Circle or Quality Control Circle concept originated in April 1962, and this idea was presented in the
inaugural issue of the JUSE's journal 'Gemba to QC' by Dr. K. Ishikawa. He described Quality Control Circle as,
- a small group
- to perform Quality Control activities
- voluntarily
- within the same workshop/workarea
- the group continuously carries on QC activities
- as a part of CWQC
- for self-development and mutual development
- thereby control and improvement within the workshop
- utilising Quality Control techniques
- with all members participating.
In the last four decades Quality Circle concept has been introduced in as many as 130 countries. But Quality Circle
concept is well established only in ASEAN countries like Japan, South Korea, Peoples Republic of China, Taiwan etc.
Based on the experience and knowledge gained over 30 years and more 'JUSE' the apex body for the movement in
Japan modified the definition of the concept in 1995. Original and Revised Versions are shown here.
The revision was with a view to rectifying certain misconceptions and deviations in its practice, particularly outside
Japan.
Revised
A. QC Circle is a small group in which people who work in the first line work place, continually improve and
maintain the quality of products, services, job and so on.
This small group promotes the activity in such a way as to autonomously administer it, utilize the QC concept
and technique and others, display creativity and make self development and mutual development.
This activity intents to:
* Develop their capability, perform the self actualization for QC Circle members, make its work place full of brightness
and vitality.
* Enhance customer satisfaction and make a social contribution.
B. The executives and the mangers in order to make QC Circle activities successful, contribute to improving the
enterprises, constitute and implement company wide TQM or similar one by themselves. Facilitate the environment
for the activity and continually, conduct appropriate guidance and support based on the respect to humanity, aiming
at the participation by everybody and positioning the activity as important for human resources development and
work place utilization.
20
As may be seen from the Revised Version, it clarifies many important points. This version can be broadly divided
into two aspects i.e.,
A. Connected to workmen.
B. About managerial responsibility and activities needed to be carried out by them to ensure QCC's success.
A. Work man aspect
a. It is a small group activity for the workers in the first line work place i.e., for grass root level employees.
b. The role of QCs:
i. to continually improve and maintain the quality of products, services, jobs and so on.
ii. it is autonomously administered.
iii. to utilize the Quality Control concept, technique and others i.e., utilizing elementary statistical system,
planning tool, new seven tools etc.
iv. to bring about self-development and mutual development of the grass root level employees by enhancing
their capabilities to reach self-actualization level.
v. to make workplace better and with full of brightness.
vi. to enable them to function on their own (autonomously) thereby empowering them and increasing customer
satisfaction (internal and external).
vii. customer satisfaction comes by (producing) high quality product at lower producing cost, free from defects,
timely delivery and prompt service.
viii. make social contribution. After all industries or service organisations exist in society to contribute to the well-
being of society.
B. Managerial Responsibility
In order to make QC Circle successful and contribute to the enterprises, Managers/Executives,
i. should implement TQM or such similar philosophy by themselves so that they can fulfil the primary responsibility
to enterprises.
ii. should use the knowledge gained through TQM to create an environment for conducive Quality Circle activities.
iii. continually give appropriate guidance and support.
iv. based on respect for humanity.
v. ensure participation from every person in the Quality Circle.
vi. should position Quality Circle as important to human resources development and work place utilizations.
The above mentioned revised concept answers many questions often raised by many people on distinctive role of
employees in Quality Circles and the management.
The three dimensions of Quality Circles can be epitomised as Humanistic, Scientific and Spiritual.
The most important aspect of Quality Circle is making the man first. This is amply borne by the statement of Mr.
Matsushita (the proprietor of Masushita Corporation) who said “we make people before we make the products”.
HOW TO INSTITUTIONALISE QUALITY CIRCLES?
We can call installing and sustaining as institutionalising. This process in an Indian organisation has three phases. First,
understanding of the QC philosophy through literature and orientation programmes for top management down to grass
root level personnel. Second, launching of pilot Quality Circles and acquisition of experience and success. Third is
Institutionalising the Quality Circles.
A general frame work for institutionalising will be presented here. However, depending upon localised situation in a
particular organisation, some changes may be done.
Steps to Institutionalise
a) Training:
Proper training is basic to QC movement. Therefore training is required to be given at different levels from senior
management to grass root personnel. The various modules for training are presented in later chapters.
21
b) Steering Committee:
Steering committee should meet once in two months and review in-depth the functioning of Quality Circles. This will
enable in taking corrective steps whenever necessary.
c) Quality Circle operation system.
System for Quality Circle operation should be drawn up and incorporated in the Quality Assurance Manual. This will
ensure legitimacy and enjoin executives and managers to support and guide QC’s, thus becoming accountable for
performance of QC’s in their spheres of responsibility.
d) Periodic reviews
Every division/section within an organisation should set apart one day in a month for middle management presentation by
Quality Circles in that section. Even partially completed studies can be presented. Like wise Divisional Heads should
review once a month the status of Quality Circle activities in their division alongwith review of Quality status and initiate
corrective steps where called for.
e) Competitions:
QC competitions should be conducted regularly Division-wise and unit - wise for multi unit organisations annually and
trophies awarded to winning circles and mementos given to all participating circles. This will enable every Quality Circle to
have a chance to participate in any one of the levels of the competitions like heats 1,2,3 in sports. No Circle would feel that
they did not have the chance to participate in a big event.
f) Recognition to best performing circles:
Consistently best performing circles should be nominated to regional and national conventions (preferably the entire
group of members), the selection should be made through an impartial panel of judges and if the norms for selection are
informed to the circles in advance there will be no room for dissatisfaction. Best performing circle could be asked to
present its study before the “Board of Directors” at the Board’s meetings. This will be another means of motivation.
g) Periodic Assessment:
A periodic assessment as to the health of Quality Circle should be conducted by the coordinator. The study of observations
and actions called for should be presented to the steering committee. (Assessment could be once in 6 months or 12
months). This will enable remedial actions before it is too late.
h) Publicity / Communication
An exclusive Magazine/Newsletter for publicising circle activities, making it as a vehicle of communication for the QC
members and others should be brought out periodically.
i) Participation in Chapter / National Conventions
This must be provided for in the annual plan of Quality Circle activities. Circles should be informed well in advance of such
events and they should be allowed to participate.
j) Budget Provision
A formal provision of budget for Quality Circle activities - training, publication, unit convention, participation in chapter and
National Convention etc. should form a part of TQC budget in the company to enable management of circles successful.
k) Other aspects:
Quality Circle projects need not always be major ones. Even smaller improvements of incremental nature should be
welcome and a record of such improvements maintained divisionally and centrally. They could even be stratified,
computerised, and compiled annually. Such compiled record would be useful for evaluating best performing circles and
also serve as an educational tool for future generation of circles.
A certificate of appreciation can be issued to circles coming up with 100 or more such improvements in a year. More often
than not, such contributions by circles are ignored and Executives often remark “they have not made more than 1.5 or
2 case studies in a year. At this rate, we should consider the progress as unsatisfactory”. Such remarks are
uncharitable to the Quality Circles who have been, indeed making small improvements continuously.
22
8. Total Quality Management
If one looks at it carefully, it will be evident that Quality has become an important element for competitive success.
But the initial approach for Quality was final inspection and postproduction adjustment. Quality was not viewed as
a responsibility of all employees. Quality function was separated from such areas as planning, design, production and
sales.
They have, no doubt learnt the basics from Dr. W.E.Deming and Dr. J.M.Juran. Dr. W.E.Deming taught them the
importance of statistical systems and mainly the use of control charts and gave a 14-point programme. Japanese on
their own made a systematic approach to the adoption of statistical methods. Dr.K.Ishikawa insisted on everyone
having a thorough knowledge of statistical methods.
Dr. Juran taught them the basic tenets of quality management for achieving total quality on a continuous basis viz.
a) Commitment to Quality at all times and top management leadership for Quality.
Ideas of Dr. W.E.Deming (14 points) and Dr. J.M Juran (3 Points) became the basic quality management principles
in Japanese companies. Japanese added an important dimension viz. Understanding the importance of grass root
level employees and their role in the achievement of quality. All these principles and practices became the foundation
of Total Quality Management and what the Japanese termed as Company Wide Quality Control.
When we say Total Quality Management we mean a new approach to improve product Quality and increased
customer satisfaction on a continuous basis by restructuring traditional management practices.
f) Improved two way communication systems. (Top to bottom and bottom to top)
What we should understand is that TQM is not a particular way of function. It talks about certain basic principles that
are needed for proper functioning. Whatever quality concept one may adopt whether it is Total Productive Management
or Business Process Engineering or say even Six Sigma approach these basic ideas cannot be ignored. It has been
developed over a period and can be considered as a foundation for the development of all other new concepts, which
we are aware of today or can be considered as a broad umbrella under which the new concepts can be fitted in.
Hence one should not consider any new idea as a replacement for TQM philosophy.
How do we measure or find out whether an organisation has properly adopted TQM or not? There are many ways
and means, but the most important ones are
i) Employees relation
ii) Operating procedures
iii) Customer satisfaction
iv) Financial performance.
Employees relation
If you find that there is an increased satisfaction among employees and they are regular in their work and higher
number of suggestions is received from them then we can say that there is a better employee’s relation. You will also
notice less turnover, i.e. the number of people leaving the organisation would be less and there is improved safety
and health. The Japanese strongly believe that “employees’ satisfaction precedes customer satisfaction”.
23
Operating procedure
lesser inventory, improved quality cost, higher cost saving and two way communication system we can say that there
is an improved operating procedure.
The improved overall satisfaction, fewer or low complaints and higher customer relation reflect greater customer
satisfaction.
Increased Financial performance is reflected by the higher market share, which means more sales, higher sales per
Some people adopted TQM, paying attention to overall improvement, without giving special focus to areas that will give
financial gain and strengthen the organization. But Pareto Principles, which is an essential tool used by all quality
practitioners, emphasizes the importance for prioritization of the tasks.
Dr. J. M. Juran in his Quality Improvement Process in the first lesson states that Managers have to be ‘bilingual’
i.e.should know the language of things and language of money. When putting proposals for improvement they should
present it to the top management about the gains in terms of money.
24
9. COST OF QUALITY
The conventional accounting processes are not able to catch the cost of quality efficiently. It is not uncommon for
companies to estimate the cost of quality to be around 3 to 7 %. This is generally a low or poor estimate. Quite often cost
of quality may be as high as 15 to 25% of total sales. Generally costing systems account for the defects, wastes and
rejections. What slips from their system is the cost of inspection, testing, attending on calls regarding defective products,
cost of receiving them back, cost of analyzing the defectives received, review meetings of such analysis etc. They are
conveniently not accounted in the cost of quality. The matter does not end there. Rework, retesting, repacking, reship-
ping, redelivery and re-demonstration to the customers cost a lot. Some market share loss may also be there.
Also usually accounting systems miss the time factor of reworking while they are efficient in accounting for wastes. If all
these factors are taken into account, then it will not be surprising that cost of quality may be around 15 to 25%. A lower
estimate of 3 to 7% makes the companies complacent.
The above is from the manufacturing angle. More often, equal amount of errors do occur by not noting the right address
to be delivered, errors in dispatches etc. These come under error in quality of service. Usually such service errors are not
much highlighted. But these do cost to the company.
From a long time Quality Gurus have been emphasizing this factor of Quality Cost. Quality Cost is taught as a separate
subject wherein how to segregate them as prevention cost, appraisal cost and failure cost is explained.
Prevention Costs: Costs of activities that are specifically designed to prevent poor quality, such as prior inspection of
materials supplied, sensory devices, etc.
Appraisal Costs: Costs of activities designed to find quality problems, such as code inspections and any type of testing.
Failure Costs: Costs that result from poor quality, such as the cost of fixing bugs and the cost of dealing with customer
complaints.
a. Internal Failure Costs: Failure costs that arise before your company supplies its product to the customer, along
with costs of finding and rectifying, including costs like lost opportunity.
b. External Failure Costs: Failure costs that arise after your company has supplied the product to the customer, such
as customer service costs, or the cost of replacement and any other payment made in lieu of that. Some of these costs
must be treated with care, for example, the cost of public relations efforts to soften the publicity effects of adverse publicity
about our product or service or about the organization.
Total Cost of Quality: The sum of costs: Prevention + Appraisal + Internal Failure + External Failure.
Once the project manager or quality manager starts measuring the cost of quality including all the components we men-
tioned in the beginning of this section, we will get a real insight into the right figures. Definitely at some point law of
diminishing returns will start showing up. It is at that point; the company or the manager has to decide whether there are
alternate ways of doing the product/process.
Cost Of Poor Quality (COPQ)

The cost of quality, or more accurately the cost of poor quality (COPQ), was described by Dr. J.M. Juran as “the sum of all
cost that would disappear if there were no quality problems”. This definition applies to all sectors; and to for-profit and non-
for-profit organizations.
COPQ consists of those costs which are generated as a result of producing defective materials.
This cost includes the cost involved in fulfilling the gap between the desired and actual product / service quality. It also
includes the cost of lost opportunity due to the loss of resources used in rectifying the defect. This cost includes all the
labor cost, rework cost, disposition costs, and material costs that have been added to the unit up to the point of rejection.
COPQ does not include detection and prevention cost.
Cost Of Non-Conformance
COPQ should contain the material and labor cost of producing and repairing defective goods, you can include a portion of
the appraisal cost if you have an inspection point, but never should you include prevention costs.
25
Cost of Poor Quality from Suppliers
Suppliers can generally affect our cost due to :
a. Producing defective materials
b. Damaging materials during delivery.
Our COPQ will generally cover the followings :
1. Cost of labor to fix the problem.
2. Cost o extra material used.
3. Cost of extra utilities.
4. Cost of lost opportunity.
a. Loss of sales/revenue (profit margin)
b. Potential loss of market share
COPQ Assessment – The First Step

A COPQ assessment is an important first-step for organizational transformation. It involves the identifying the key value
creation, and support process of an organization; and therefore quantifying the chronic waste in these processes, in the
language of management – Money !
Some Examples of COPQ are :

Scrap; Rework; Downtime due to failure; Warranty claims; Lost sales; Complaint investigations; Price discounts due to
quality problems; Excess allowances for material, labour, and expenses that are built into company standards; Annual
inventory write-downs; Accounts receivable write-offs; Rarely used information systems; Memos never read; Financial
reports not used; Irrelevant procedures; Meetings with no objectives or outcomes; and many more…………………..
Stapes for COPQ Assessment

1. Identify Activities That Result In Poor Quality
2. Decide How To Estimate Cost Of Activities
3. Collect Data
4. Estimate Costs
5. Analyze Cost
6. Identify Major Opportunities
7. Improve Quality
26
10. THE CASH-TO-CASH CYCLE
A lean business is a stream of value adding activities that culminate in satisfying the needs of a customer. The key agents
are people, equipments and Cash. Yes, cash is a factor that fuels value stream activity. It is used to acquire and support
activity by other factor of production. Its availability for service constraints is its utility i.e. when it is not available, it cannot
be adding value and therefore a loss and west. When cash sits locked up and out of reach such that it can not be invested
in activities that enhances the value, this is also non-productive and a loss.
One way to detect how lean you are operating with regard to Operating Capital – the funds available for use in day to day
activity of a business - is to measure the length of the cash to cash cycle.
The cash to cash cycle calculates the time cash is out of reach for use by your business. The speedier your cash to cash
cycle, the fewer days your cash is unavailable for use. This can be used to know whether you are operating lean with
regards to cash and also good performance on the cash to cash measurement is associated with the improved earnings
per share.
Cash Out Of Reach

Your business’s cash is out reach when it is uncollected customers and when it is soaked up by inventory that sits on the
shop floor, in office storage areas, or on computer disks.
Uncollected payments are termed “receivables” and are reported on your business’s balance sheet. How quickly a receiv-
able is registered and how long it sits uncontrolled is determined by your business’s order-to-cash-receipt value stream.
Inventory is cash converted into materials and intermediate outputs that are not ready to benefit a customer. Think of
inventory as a cash absorbing sponge. As long as inventory sits, it holds your cash captive. How long it sits is a function
of how well your supply chain and production value streams are synchronized with customer demand. When these
systems flow, are pulled by the customer, and free of all waste – inventory is zero.
Desired Result of Cash – To- Cash Cycle

In a truly Lean system, there is no value in any value stream. Goods are not manufactured or shipped to the customer
unless “pulled” and they are produced by production systems that flow continuously without reliance on inventory. Raw
materials are not acquired and processed unless a customer demands a finished output. Customers are billed and pay
immediately upon receipt of a purchased product or service. In its ideal state, it is a just-in-time system from the origins of
its supply chain through to the receipt and payment by its customer. In this scenario, the lean producer also pays its
suppliers upon receipt as its customers pay upon delivery. There are zero receivables, inventory, and payables and thus
a zero day cash-to-cash cycle time. Although a zero=day cash-to-cash cycle is truly Lean, your business approaches its
best achievable state progressively by shorting the cycle times it initially displays.
While a shorter cash-to-cash cycle is generally considered a positive indicator of Lean operation, you need to look deeper
to be sure. You can achieve shorter or even negative cycle times by means that are inconsistent with Lean.
To properly evaluate your cash-to-cash cycle performance, you need to analyze your cycle time in conjunction with other
information.
How To Improve Cash To Cash Cycle

To improve cash-to-cash cycle begin internally. Start by reducing inventory and increasing inventory turnover. This will
speed the cash-to-cash cycle.
Speed the invoicing process, reduce billing errors, speed response to overdue bills and reduce the incidence of bad
debts.
As your cycle time and error rates come down, cash become available for timely payment to suppliers and redeployment
in business.
Develop a supply chain that reliably provides you exactly what is needed, when it is needed, with the least waste incurred
on the part of suppliers. This will minimize both inventory and the cash you need to spend for the business.
27
11. PROBLEM SOLVING TECHNIQUES
Introduction
Quality Circles commonly use certain basic techniques to identify, analyse and resolve problems. They are:
1. Flow Diagram
2. Brainstorming
3. Data Collection
4. Cause & Effect Diagram
5. Stratification
6. Pareto analysis
7. Histogram
8. Graphs
9. Scatter Diagram
10. Control Charts
These techniques, though simple, are very powerful ones and they help the circles in investigating the causes for their
work related problems and find solutions in a scientific way.
1. FLOW DIAGRAM
Flow Diagram was introduced and popularised by early computer programmers. For a long time, they were identified
solely as a computer programming tool. Today, they find application in a wide variety of areas. It is because of their
usefulness as a tool in:
representing any information in a simple straight-forward manner, and
analysing the logic of any operation. They directly appeal to the analytical human mind and hence they are very easy
to understand.
Any written information on an operation can be broken into easily understandable packets and then arranging them
in a sequential order results in a flow-diagram (also known as flow chart). Flow diagrams can be used in problem
solving and thus as a good quality improvement tool.
Concept of Flow-diagrams:
Definition:
A flow diagram is a graphic representation of the sequence of steps that we perform to produce same output. The
output may be physical products,a service information or a combination of the three.
Symbols used in flow diagram: Flow diagrams constructed using the following set of basic symbols.
Activity Symbol
Decision Symbol
Terminal Symbol
Document Symbol
28
Database Symbol
Flowline Symbol
Connector Symbol
These basic 7 symbols are used to show the actual sequence of steps in a process, running consistently from top
to bottom or left to right.
Flow diagram is used to understand clearly the various steps involved in a process sequentially and for analysing the
logic of the process.
In the context of Quality Circles, the flow diagram can be used as the process flow chart representing the sequence
of operations/steps used for explaining the problem background/present situation and highlight the problem area taken
for solving. The same can be shown after the problem is solved and implemented.
2. BRAINSTORMING
Stimulating generation of ideas in a group is done through brainstorming, which is more effective than trying to
generate ideas alone. Brainstorming helps to release the creative power of the group. It also helps effective group
participation. Its effectiveness would increase with the skill of its application by the leader.
Brainstorming is generally used at four stages by Quality Circle:-
1. While listing out the problems,
2. While listing out the probable causes influencing the effect,
3. While foreseeing the possible resistance to the solution
4. While listing out the suggestions/recommendations.
After all the ideas are exhausted and the brain storming is over, each one is taken up for detailed discussion and a
consensus is arrived at based on the merit of each one of the ideas. An agenda made available to members prior
to the meeting, would enable them to think about the topic in advance and come prepared with ideas when the session
starts. It would be useful to keep record of ideas pooled through brainstorming for future reference.
Guidelines for Brainstorming:
Each member, by rotation, is asked for the ideas (this continues until all ideas are exhausted),
Member having no Idea, just says ‘Pass’,
No idea should be treated as stupid (criticising or ridiculing any idea would inhibit free flow of ideas),
Rigid formality may be avoided. Good natured humour inclarity of expression,
No evaluation of ideas is done during brainstorming.
A black-board or large sheet of paper could be used for listing out the ideas.
Brainstorming technique can be fruitfully used to identify problem affecting the work area, factors which help prevent
potential problems, causes responsible for problems, solutions to problems etc.
3. DATA COLLECTION
Data are nothing but collection of facts in terms of figures, which gives a clear picture of work situation and allows
for comparison. Data collection forms the first step in statistical analysis of a problem. It would also form a sound
basis for decision making and corrective actions. The analysis and solution would depend on the correctness and
accuracy of data.
Why Data?
Data forms the sound and scientific basis for decision making and corrective steps. By collecting data, we will be in
a position to focus attention on the problem or pinpoint it. Based on the data and analysis alone we can identify the
cause/causes, analyse further and recommend solutions to any problem.
29
Type of Data:
Generally data can be two types. One is measurable Eg. Length, weight, time etc., (Variable) and the other one is
countable data Eg. Smooth running of a machine, smell etc. (attribute).
Sources of Data:
There are two sources of data, past data (previous records, previous feedback) and live data (Current observations).
Past Data:
In many cases the required data will be readily available with some agency or recorded through a feedback system
and the data so available are termed as “Past data”. The past data helps to have a preliminary study and to understand
the causes of the problem.
Live Data:
Where such a recorded data is not available we have to systematically collect data through fresh observations over
a period of time and this is termed as “Live Data”.
The advantages of Data are:
Biased opinions or personal impressions are eliminated.
The magnitude of the problem will be known,
One would have specific information to act, by knowing whether causes are uniform or concentrated,
One can check back the extent of improvement after implementing the solution,
One can watch the trend to know if the condition or process is stable.
Collection of Data:
Before the start of the Collection, one should be clear in his mind about the parameters or characteristics and their
periodicity for which data are to be collected. For easier collection of data, a pre-designed checklist/format/check sheet
or any designed format as per the requirement should be used. This would simplify the process of analysis.
Analysis of Data:
After the data are collected, it is analysed and information is extracted by applying statistical methods. Decision
making or further course of action should be based on analysed data.
4. CAUSE AND EFFECT DIAGRAM
Cause and Effect diagram is an investigative tool. This is also called “Ishikawa Diagram” since the technique was
devised and popularised by Dr.Ishikawa, the well known exponent of Quality Circle philosophy, important functionary
in the Japanese Union of Scientists and Engineers, Japan. As a mark of honour, it is named after him.
Because of its shape it is also termed as Fish-Bone diagram.
In this diagram a systematic arrangement of all possible causes which gave rise to the effect is made. It is planned
to present all the possible causes which may have any relationship with the result or effect.
How to construct a Cause and Effect Diagram:
This effect is represented in a box with a horizontal line with an arrow pointing towards the right and touching the box.
Main causes contributing the effect are represented by slanting arrows meeting the main horizontal arrow; sub causes
are shown by horizontal lines meeting the relevant arrows lines indicating the main cause. The tallest column of Pareto
Diagram could be seen in the box of the cause and effect diagram generally.
A cause and effect diagram is an excellent aid in scientific analysis of problems and finding out what really happened
and then to find solutions to avoid their recurrence.
30
The process of finding solutions is done through brainstorming session. Once the solutions are arrived at, necessary
steps for implementing the recommendations are then taken.
5. STRATIFICATION
Data collected should be properly classified if meaningful and correct inferences are to be drawn. The technique of
data collection based on segregated elements is called ”Stratification”, in simple words segregating or regrouping the
data in the form of divided elements for identifying the influencing factors. The stratification is performed as described:
1. Material Base:
Data are stratified on the basis of the supplier of the materials, delivery lot of the materials, preliminary process etc.
By this, the effect that the materials have on the quality of the final product can be traced.
2. Quality Base:
Data are stratified by kinds of products, specifications etc. A phenomenon inherent to a special group of products can
thus be traced.
3. Workers Base:
Stratification on the basis of workers is often very effective.
4. Time Base:
Data is stratified by season, day-and-night,etc. Atmospheric conditions such as temperature, humidity and physiological
conditions of the workers differ from time to time. The influence of these elements on quality by some times found
by time based stratification.
5. Surrounding condition:
The quality of products may be influenced by such surrounding conditions as weather, production schedule, tightness
or slowness of the market etc.
6. Processing:
Elements such as production equipment, measuring instruments, manufacturing methods etc. There are many more
stratification bases other than listed above.
6. PARETO ANALYSIS
Pareto was an Italian economist who discovered a universal relationship between value and quantity and he used this
technique for assessing uneven distribution of wealth. Pareto analysis helps in the identification of “ the vital few from
useful many” at a glance when projected, using the column graph named after Pareto. Pareto diagrams are frequently
used to select the few important problems out of many.
What is a Pareto Diagram? Pareto Diagram is a column graph, drawn after data collection for the purpose of:
a) Differentiating the major factors (vital) that contribute most to the unsatisfactory situation from other minor ones
(trivial).
b) Tackling the major factors responsible for any problem.
How to prepare a Pareto Diagram:
Stratify the problem points according to purpose (by causes, by phenomena, by equipment) and represent them
numerically,
Preferably data could be expressed in monetary value rather than quantity, counts or percentage,
Select a data period proper for the purpose,
31
Arrange the stratified items in descending order of value and draw a bar chart, (on a graph paper)
Draw a smooth line showing cumulative percentage (total = 100%) above the bar chart starting from greatest value.
Pareto Diagrams are used to find out the following points:

1. The most important item.
2. Ratio of each item to the whole.
3. Degree of improvement after remedial action in some limited areas.
4. Improvement in each item compared before and after action.
7. HISTOGRAM
W G T (g )
A histogram is also known as frequency distribution chart. For example let us take a machine which on a continuous
basis is producing a product or a component to a given value or specification. The manufacturing process of this
component is sent in a way to give the desired value. However, there are bound to be certain variations in the value
due to machine conditions, material quality, operator’s capability and systems on which processing is done. We call
this as process variation and are specified is tolerance limit in the process specification. Our desire is to keep this
variation as minimum as possible. We also want the maximum at the mid-value and close to that and minimum at
the tolerance limit. Histogram helps you to find out your process capability. Let us see how a histogram is drawn.
Collect atleast 50 or more samples for making a Histogram. Here we have collected 200 such data.
Class interval is a unit of measurement of a multiple of an integer. In this case, the unit of measurement is 1 mm
and the class interval is 3mm. Normally for a class boundary half measurement of the unit is taken. Here the
boundary is taken as 0.5mm. This is to avoid confusion about grouping the boundary value.
Here we have divided the data into 10 class intervals and the data are classified into each class interval using a tally
system as shown below:
On a graph presents these data in the form of bars. Mark the specification limit. This is Histogram.
A Histogram depending upon the shape will reveal the process condition and capability.
8. GRAPHS
Graphs are the diagramatic representations of the actual observations/conditions/real values drawn on a paper in the
form of diagram and charts. These graphs give more information than figure and information retrieval is very easy
and simple.
A graph is the most familiar and simple technique, the important thing is:
To clarify the object of drawing graph,
To make them correctly is the first step for success.
Any data can be represented in a graph, the major purposes are:
1. For data analysis:
Graphs are very useful for analysing data, checking causes of defects, and recognising problems.
2. For Schedule control:
Plotting data on paper in the order of day or time will often reveal trends or abnormality of data,which makes graph
an important means for both process and schedule control.
3. For recording data:
Data are sequentially represented on graphs,and data which was converted to graph can be used whenever needed
to check data.
4. For explanation to others:
Data can easily be put on graphs to make others understand the facts by showing.
32
Fundamental Graphs:
Fundamental Graphs which are used frequently at the plant are:
1. Bar Graphs:
Used for comparing “quantity”
2. Plotted Graphs:
Used for observing the quality changes. This plotted line graph indicates the trend of quality of operations,signaling
a warning for a corrective action when the graph runs beyond the desired values.
3. Circular Graphs:
Used for showing breakdown of percentages.
4. Line Graph:
Every activity in any organisation has to be carried out within specified limits in terms of time, quality, productivity etc.
In order to keep track of the operations confirming to the desired parameters line graph would be useful.
5. Pictorial Graphs:
Leaving this there are many special graphs which are made combining these basic graphs viz. Namely:
1. Belt graph
2. Radar chart
3. Compound graphs – bar and line
4. Strata graph
5. Float graph
6. Zee graph and
7. Pyramid graph
What is a line graph?
A line graph indicates the actual performance over a period of time. On the “Y” axis the figures of measurement on
the basis of data collected are plotted which could be variations of specification or number of rejections in the case
of manufacturing industries, number of identified errors in documentation in a bank or in an administration department,
No. of patients treated in a hospital, or quantum of goods produced in a given period of time etc. On the “X” axis
time is indicated in terms of hours, days, months etc.
A GL A T
G
9. SCATTER DIAGRAM
LA
A GL O LA G
Scatter Diagram is one of the methods of studying the relationship or correlation between two variable.
It is a dot chart where data are plotted in the form of dots. There will be as many dots as there are observations.
For each pair of (X & Y) observations, values (dot) will be put on the chart.
From a scatter diagram, conclusions can be drawn as to whether or not two variables are related. The more closely
the dots come closer to a straight line, the higher is the strength of relationship. A scatter diagram is a non
mathematical method and it is a first step in investigating the suspected relationship between two variables. We can
get an idea about the nature of correlation and the strength of correlation as in a mathematical method.
How to make a Scatter Diagram:
Draw the horizontal and vertical axis of the graph. Indicate the higher figure on the upper part of the vertical axis
and to the right of the horizontal axis. If you make the length of both the axis about the same, the diagram will be
easier to read. If the relationship between the two kinds of the data is that of cause and effect the cause values are
usually placed on the horizontal axis and the effect values on the vertical axis.
Plot the data on the graph. If the data values are repeated and fall on the same point, make concentric circles,two
or three as needed.
Interpretation
The Scatter diagram may reveal different patterns. If the pattern is such that increasing values of effect variable (Y-
axis) are seen with increasing value of cost variable (X-axis) i.e, if the pattern shows an increasing trend, than the
33
variables are said to be positively correlated. On the other hand, if the values of the effect variable (Y-axis) decrease
with increasing values of cost variable (X-axis), then the two variables are said to be negatively correlated. If there
is no clear increasing or decreasing trend, then the two variables may not be related. These patters are shown below.
10. CONTROL CHARTS
A control chart is a graphic comparison of process performance data with control limit lines on the chart.
T he purpose of drawing a control chart is to determine whether each of the points on the graph
is normal or abnormal, and thus know the changes in the process from which the data has been collected. So each
point on the graph must correctly indicate from which process the data was drawn.
The points on the control chart represent samples from the manufacturing process. These samples are preferred to
as sub-groups.
A control chart has three lines. The centre line is target value are average level of the quality characteristic; two other
lines are lower control limit and upper control limit. Control chart reveals whether the process is under control are
not so that action can be taken to control the process.
Types of Control Charts:
A Control chart’s form varies according to the kind of data. For variable data: the following charts are used:
1. X-R Chart = Average – Range chart
2. Moving Range chart = X-MR
3. Run Chart = X-Chart,
For attribute date the following charts are used:
1. p-Chart = Fraction defective,
2. np-Chart = No.of defectives,
3. c-Chart = No.of defects.
The format of a control chart is illustrated by the following example.
34
12. SIX SIGMA
Introduction
Sigma is Greek letter indicated by the symbol ‘s’. In statistical parlance, Sigma is a measure of variations. The
performance of processes has been measured in terms of sigma such as 3 sigma, 4 sigma, 6 sigma etc. A process
performance level of 6 sigma means defects level in that process is equal or less than 3.4 parts per million. Currently
the concept of Six Sigma is proposed as a management tool for achieving process improvement, reduced costs,
reduced wastage, increased customer satisfaction and above all increased profitability. Customer satisfaction by
reducing defects and increasing the bottom line is the hallmark of this concept. Though it is very deeply rooted in
statistics, it addresses itself to business requirements of management. It is not restricted to only manufactured
products and processes. It is equally applicable to service industries. Six Sigma is also a march towards perfection.
Under six sigma is defined as 'Quality is a state in which value entitlement is realised for the customer and
provider in every aspect of the business relationship without adversely affecting the environment and society"
History
In the early 80’s in one of their management review meetings, Motorola was quite concerned about its outgoing quality
level. At that time the general belief was higher quality leads to higher costs. During this period one of the engineers
of Motorola’s communications section, Mr. Bill Smith, presented a paper in which he said that if a defect was found
and corrected during a process, there are every chance quite a few undetected defects could find their way to the
customer and may fail during the early use of their product.
So the company realized that first time right quality product should be made. Also, if the cost of handling customer
rejections, repair, rework and loss of goodwill were calculated, it may be cheaper to produce quality goods in the first
place. It was this idea that drove Motorola to search and analyze more systematically by applying statistical techniques.
This was really the origin of Six Sigma concept.
What is Sigma?
‘s’ pronounced as ‘sigma’ is a letter in the Greek alphabet. It is used to designate the distribution or spread (variation)
about the mean of a process i.e. where the process is centered around. Generally as we have seen in our example
most of the values will cluster around the mean value. Values away from the central value will ocur with lesser
frequency.
For business or manufacturing process, the sigma value is used to evaluate the capability of the process to produce
defect-free output leading to customer as well as provider’s satisfaction. It also enables us to make comparisons with
similar or dissimilar products, processes or services. It is necessary to understand the relationship between the sigma
value and its implication to meet the required performance specifications of a process.
Change over from per cent (%) to parts per million (PPM)
Now in the changed market conditions performance standard has to be much higher to survive. Dr. Hitoshi Kume, a
famous Japanese quality guru mentions in his book ‘Management by Quality’ how he changed the system of
mentioning defects from %age to parts per million to bring a psychological change in the people involved with the
process. While 0.27% may look small, if it is put as 2700 ppm (parts per million) it looks very high. This will make
people to react and look for action, which can help to reduce the defects further. This is the need of the hour.
Dr. J.M. Juran in his Quality Trilogy states how over a period of time we start accepting defects level as inevitable and
start living with them. He states that if we have to get out of that chronic condition we should question the accepted defects
level to prioritize and select problems for finding solution using project-by-project method. If all managerial level persons
put such an effort, defects level can be brought down over a period. He calls it as a revolutionary approach to bring down
the inefficiency and to reach an incredible level of performance.
When we start making efforts, many of the chance causes, which were persisting, now start disappearing and
improvement start coming in. This will help to reduce the present spread of ± 3‘s’ to lessser and lesser span as shown
in the picture below:
35
Spec. Limit (T)
3σ 3σ
( σ) ( σ)
Spec. e
Sig Sigma concept also professes similar idea with certain approach changes.
With Six Sigma strategy an organization can achieve an incredible level of efficiency i.e., the defects level
Sigma Quality
To achieve Six Sigma Quality, the output of a process/product/service should not only have minimum variation but also
the process average should approach the target. This is indicated by the process capability indices CP and CPK
Higher the CP value, lesser the variation. Higher the CPK value , lesser variation as well as process average is nearer
the target.
A process is said to be at Six Sigma Quality when CP ³ 2 and CPK ³ 1.5.
The following table gives correspondence between process capability value, defect rate and Six Sigma Quality level.
Process Capability i a ality

e ect rate PP
CP CP eel
Less than 1.0 Less than 0. e than 10 Less than .0
1.0 0. 10 .0
1.1 0. 0 .
1. 0. 10 .
1. 0. 1 .
1. 0. .
1. 1.0 10 .
1. 1.1 .
1. 1. 1 .1
1. 1. .1 .
1. 1. 1. .
.0 1. . .0
Steps for Implementation (DMAIC)
Next big question that hovers one’s mind at this stage is what are involved while starting or implementing Six Sigma
in a unit. The following steps are involved.
1. Define
36
2. Measure
3. Analyse
4. Improve
5. Control
1. Define Phase
The “Define” phase is very important in Six Sigma introduction. The “Define” stage should spell out why is the
company adopting Six Sigma. Introduction of Six Sigma should have clear link with the STRATEGIC GOALS and
PLANS of the company. It has to be meshed with it. Also it should be linked to customer satisfaction and profitability.
Companies have introduced Six Sigma in their organization for some of or all the reasons mentioned below:
1. To improve capacity with minimum investments
2. To improve yield of a product or process
3. To gain cost savings
4. To reduce cycle times to meet customer demands
5. To produce better products with reduced defects per million i.e. design for Six Sigma (DFSS)
6. To reduce cost of quality.
7. To improve efficiency in billing, delivery and collections
8. To improve efficiency in accounting, costing and other financial services
9. To improve the market share of a particular product in a particular geographical area
10. To bring out a totally new product or a new service.
The above list is not exhaustive but definitely gives an indication of a range of projects for which many leading
companies have applied Six Sigma strategy. It is not confined to processes and products but also to accounting,
marketing and financial systems as well.
So, before launching Six Sigma strategy the top management has to take into account all products, functions and
services and work out a strategy. It must get a feel of what needs to be invested to get what results.
Prioritization: There will be simultaneous requirements from so many units’ wings and locations of the company,
competing with each other, for resources for Six Sigma implementation. It is for the top management to prioritize the
projects and resource allocations based on the needs and strategies of the company.
Short term and long-term goals: When one goes about prioritization then one has to consider whether the company
has to commit to short-term goals or long-term goals. This is very important. For companies that are operating at
Three to Four Sigma level significant gains can come by concentrating on short-term goals itself. There is really
nothing wrong to pluck “LOW HANGING FRUITS” quickly and make the company cash rich in the short run and
improve its share value. The fruits at the top quite often are sweeter but need a ladder to go there and pluck them!
Bench marking: Companies have to keep a constant watch on their rank compared to the competitors. Many projects
may have to be compulsorily included, so as to match another product or service of a competitor. If not done in time,
market share will slip suddenly.
What, if you are a market leader already? If you are a market leader and your product is moving well and there
is reasonable cash richness in the company, perhaps, this is the best time to launch long term Six Sigma projects.
This is more difficult than imagined! If the company is not doing well, it is more easy to motivate people to do better,
because of the fear of closure of a section of a company or lay off will become the driving force. But when things
are going well, top managements have to work much harder to shake people from their complacency and comfort
zones!
The “DEFINE” stage is the strategic stage; planning stage; goal setting stage; time frame setting stage; Enough home
work has to be done by top management and CEO during this stage. It decides the road map. Where we stand today,
and where we want to go, how, why and by what time? It may also decide the milestones that the company has to
cross on its way. After preparing the road map, the top management has to ensure percolation of the road map to
the rank and file of the organization. Once this step is done well, success in implementing Six Sigma methodology
will follow much easily and more smoothly.
2. The measurement phase
After having completed the Define phase after having defined the priorities, after having mentally visualized the “Big
Picture” and the “Road Map” of the company
37
in the Six Sigma journey, comes the “Measurement phase.” Measurement of where we stand today in terms of
customer satisfaction of various products, in terms of cost of production, in terms of cost of quality, in terms of cost
of rework, in terms of cost of warranty replacements etc. become very important.
Why should we measure?
1. Only by measurement we can differentiate between reality, perception and intuition.
2. Measurements form a common denominator for everyone to see and refer.
3. Only accurate and reliable measurements can enable us to analyse, improve and then control.
4. Measurements will expose the limitations of the process, service or the customer satisfaction.
5. Measurements will help to understand cause and effect dependency of a product over the variances of so many
parameters.
6. Measurements help costing departments to do better cost analysis.
7. Measurements can help to formulate our specifications correctly and later help in documentation also.
8. Let us understand what cannot be measured cannot be improved.
Important factors in the measurement phase
i. Accuracy of measurement
The first and foremost is the accuracy of measurement. All the gauges, sensors used should be accurate and
sensitive enough to make the measurements. One has to question the resolution of the measuring equipment. If the
resolution is not adequate, higher resolution tools and equipments have to be procured. Otherwise only a blurred
picture will emerge. It is management’s responsibility to provide for accurate tools. Very important aspect is using a
standard system of expression.
ii. Adequacy of measurements
The measurements should be as per standard sampling plans and techniques. Insufficient data may not lead to
reliable conclusions.
iii. Repeatability
When the same person on the same product obtains the same measurement then it is called repeatability. The Black
Belts who oversea the measurements must ensure repeatability.
iv. Reproducibility
When different people do the same measurement on the same part or parameter, and if all of them converge to the
same value (within statistical limits)
then the measurement is called reproducible. Corrective actions taken at a later date will have a meaning and validity
only if the measurements are repeatable and reproducible. The supplier and the customer should be able to converge
to same values by using same tools, methods and procedures. Otherwise endless arguments (and even litigations)
may arise.
v. Calibration and traceability
Measuring equipments used must have been calibrated against certain known standards. The standards themselves
should have traceability against national/international standards.
Companies, which have gone through ISO 9000 certification, have an edge on this matter. ISO 9000 certification
demands periodic calibration and display of the day of calibration and next calibration due. It also demands national/
international standard traceability certificates. While certification is not essential for Six Sigma, calibration and traceability
to standards are necessary for the veracity of the measurements.
vi. Cause and effect measurements
Traditionally companies measure the product quality cycle time, profitability etc. Six Sigma measurements generally
go beyond this. Usually, Black Belts go deep into the cause and effect relationships. If y = f (x), i.e. if product y is a
function of parameter x, then, the exact relationships, optimization or maximization if any between these relations are
studied. For this some hypothesis is made based on fundamental principles of science and engineering or known
theories and they are tested. To give an example, if the cycle time of a process is directly proportional to the
temperature at which the product is produced, the effect of yield at various temperatures are studied to get the best
yield. Data collection will be focussed on effect of various temperatures. It is such functional analysis, rather than
product, that yields long term Six Sigma benefits.
38
vii. Measurements conducive to cost sensitivity analysis
Integrated with the data collection will be relevant data regarding the grade of critical raw materials, their quantity and
cost. These will be used to analyse the cost of the product under each of these grade of materials. It is not essential
that high purity is always best for all occasions. The classic example is gold ornaments. 24 carat pure gold has higher
value but adding some percentage of copper makes the gold much more malleable and ductile. Hence ornament
grade gold is always 22 carats or lower. Integrating casting requirements is an essential part of Six Sigma data
collection. The contribution to bottom line should never be lost sight of.
viii. Collection of attribute data
Every time, quality characteristics may not be measurable. Statistics provides for attribute data collection and analysis
also. It is said that even in the U.S pay slips in many big companies contain about 6 errors per thousand (6000 per
million)! The data collection format should be designed to capture such errors also (category or error type wise)
similarly, wrong billing, late billing, wrong deliveries, non deliveries etc can also be captured by proper data design
format and analysed. Quite often, even though products of a company may be good, customers may become wary
of billing, delivery errors and switch to alternate suppliers.
ix. Objectivity in data collection
There must be total objectivity in data collection. Very often certain managers may leave out certain factors for the
fear of getting exposed about some deficiency in their sphere of action. Such things will vitiate the results and will nullify
the gains that could be accrued by Six Sigma implementation. A good diagnosis is half cure. It is better to be exposed
to the shortcomings at the earlier stages and get the situation corrected than allow things to hibernate and burst at
some unexpected, unwanted time. Certainly, the damage will be more at that time.
x. Data Matrix
Most often the data matrix may be quite huge. When redundancy and reproducibility are built into it, the format may
be quite big. But it is better to be that way, than have some hotchpotch data collection. With computer facilities
available for analysis; the size of the arrays should not deter one. Usually it is the Green Belts who collect the data
and the Black Belts who analyse them. Statistically trained Black Belts will be able to decide for how long the data
should be collected and whether they have to be repeated again to remove any seasonal or other bias in the data
collection.
xi. Preservation of data sheets
It is generally a good practice to preserve the original data sheets. Once the original data is there, any analysis (or
even a new type of analysis) can be done at a later stage. Further after an year, when the performance of the progress
of implementation of Six Sigma is reviewed, the original data can provide good base line information. Trends or
changes in customer preferences over a time can also be analysed if the data has been preserved. Hence raw data
must be preserved. It can be in a computerized matrix form instead of a paper copy. But, it should be available without
any mutilation and distortion.
Analysis Phase
Having collected data objectively, the next most crucial step is to analyse the data objectively. A good diagnosis is half
cure. It is in this phase Six Sigma heavily relies on statistics. While 80% of the problems can be solved and analysed
by simple statistical tools, the remaining 20% may need more sophisticated and detailed statistical tools. It is in this
phase that Six Sigma scores over other management improvement systems. Even though other Quality systems too
gives lot of emphasis for statistical system, it generally never get forcefully implemented. In case of Six Sigma its black
belts, green belts and senior managers are well trained in statistical analysis. Even accountants, purchase managers,
marketing managers and general administrators are not spared. All of them are exposed to reasonable and required
levels of statistics.
Some of the important tools of analysis
We have briefly given an idea about most often used tools of analysis in a seperate chapter. A detailed description
of each one of these tools is beyond the scope of this book. For them you may refer to books published on the subject
by QCFI and others.
“Improve” Phase
At the end of the “Analysis Phase”, the Master Black Belts and Black Belts will have sufficient data and analysis about
the various parameters of the product, process and service. It is the job of the Master Black Belts and Black Belts
to determine what are the factors that are affecting the critical to Quality (CTQ) , improve process capability etc and
39
implement those set of conditions in the process. Quite often more than one option will give the same result. In such
situations, the Black Belts have to determine the most cost effective solution.
The “Measure - Analyse - Improve” Iteration
Once a particular CTQ option has been chosen, the black belts will be implementing them in the process. They cannot
passively assume that things will happen automatically as anticipated earlier. Once again they have to collect data of
the output of the improved process, measure the parameters, and analyse and confirm. If there are deviations or if
there is scope for further fine timing, then they have to repeat the process of resetting the parameters, measure and
analyse the output. This is an iterative process. Sometimes this iteration has to be done a few time before the final
process parameters are frozen.
ront
o
r roc
control
nl
roc o
ttr
Go to control
The iteterative process applies not only to technical parameters but also to subjective parameters such as customer
satisfaction.
A fleet service company brought down the average delivery time from 8 days to 4 days by taking concious steps inside
the company. When they measured the customer satisfaction again after the improvements, they did not find much
change. So, a team of black belts once again went through the process. They found that the average delivery time
of 4 days was not critical to quality. The company which received the fleet in one day, was not ready with garage and
security arrangements and hence was unhappy to receive the fleet earlier! In another company, there was a delay of
3 days from the committed date. The receiving company had already terminated their existing contracts with an agency
in the hope of getting their own fleet. For 3 days there was utter chaos. This customer was also not satisfied. In these
cases, delivery on the day of commitment was critical to quality. It was the variance that mattered.
Control Phase
The Control phase is the consolidation phase. After the black belts have optimized the process after a few iterations
“ of measure-analyse-implement “ cycle, they should freeze the process parameters. They should determine the yield
as well as well as the process capabilities of various process. These parameters should be used for drawing up a new
“Control Chart”. The upper control limits and lower control limits calculated based on such data should form the basis
of control. Any deviation or change in trend in the process control should be attended to immediately.
Documentation Audit
The process parameters that have been obtained above should be incorporated into the specifications of the process.
The raw material requirements should form part of the material indent specifications. The vendors should be educated
about the critical to quality specifications required. Companies following ISO-9000 should incorporate these specifications
and characteristics in their documents. Once it forms part of ISO documentation, then it comes under the purview of
routine ISO-9000 internal and external audits. Companies which do not have ISO-9000 certification, should establish
a periodic system of auditing the process parameters and material specifications, the packing and delivery parameters
and the customer complaints.
And not the reduction in average per se. After these experiences and analysis, the black belts developed methods to
estimate the time of delivery more accurately. It was thus, the revised system that was finally documented for future
guidance.
40
13. Five S
What are Five S?

Before learning about it let us look into an example of an improperly managed Storeroom.
Suppose you are given the task to set it right, what are the steps, you have to take?
After studying the condition first, you may have to sort them out as necessary and unnecessary items. Will you then
start straight away keeping the necessary items in the stores? Certainly not!
First you will get the place thoroughly cleaned, do the necessary repairs, and then keep the needed items in a proper
way, keeping safety in view. You will also ensure easy removal and put back things in the right place.
But does it remain like this? After sometime we may again see disorder created and also accumulation of unwanted
things. This means, we should check up periodically to ensure this does not happen and also create a written system
or a standard practice for proper house keeping. Next step will be to make sure that it becomes a habit with the
people. Then only we can say that we have a culture of keeping things in a proper way ensuring easy functioning,
cleanliness and safety.
Now let us look into the steps you have taken to make the storeroom remain in a proper way. You will observe that
five steps have been taken - organisation, neatness, cleaning, standardisation and discipline. This is what Japanese
followed and integrated them as workplace management.
Japanese in their language call these steps as SEIRI, SEITON, SEISO, SEIKETSU and SHITSUKE.
SEIRI - Organisation or re-organisation.
SEITON - Neatness
SEISO - Cleaning
SEIKETSU - Standardization
SHITSUKE - Discipline
Thus Five S is an integrated concept for housekeeping or workplace management.
Importance of Five S
Five S is the silent informer of a company's attitude to quality.
Easiest way to determine a company's attitude towards improvement activities is simply to walk around the factory and
observe the house keeping practices on the shop floor. Housekeeping often tells us more about the company than
any financial statement. One can judge the level of improvement activities from the way tools are stored, swath and
chips from machines handled, work table organised, inspection points indicated, factory floor swept, machines cleaned,
toilet condition etc. Of course, housekeeping practices reflect the management's general attitude towards work. We
should understand the linkage between the level of Five S and the amount of defective products produced, the number
of machine breakdown, inventory level and so on. Five S should therefore, be among the first steps management
should take for improving the company's quality status.
Five S for teamwork
Takashi Osada says that nowadays we are all talking about top-down and bottom-up management and so on. They
are all nothing but indicating teamwork. Five S are an important aspect of teamwork. If we don't do five S, we can't
do any other work efficiently. They are features, which are common to all places and are the indicators of how well
an organization is functioning.
Five S starts with each individual practicing it.
Unfortunately there are many things we do without thinking about Five S. They can be considered as a mirror reflection
of one's attitude and behavioural pattern. When we go to work we notice many things, which are not in order, but
we overlook them and turn a blind eye to them. Unfortunately we do not realise that many of our problems will
disappear if we pay attention to Five S.
One important point to be observed is that we should not think that they are for others to implement. First take a look
at yourself and carryout the improvement needed from your side. Let the Five S practice start from you.
41
Five S for marketing a product:
Action speaks louder than words. Five S are not merely a factory process. In fact it can now be used also for
marketing a product effectively. A clean factory always impresses everyone and also helps to create confidence on
the quality of the output and the product marketed.
Five S for improving the quality of human behaviour:
Think that you are in a place, may be a temple, garden, airport, which is very neat and clean. Do you like to throw
anything there? Even if your normal habit is not caring for cleanliness, you don't do such a thing in these places. Why
has your behaviour changed? It is because the condition prevalent there will make your behaviour odd and you start
following the standard set.
Why does anybody want to go to a neat and clean restaurant? Because this reflects the quality and the hygienic
conditions of the food served. The same thing is applicable to workplace also.
If our work place is neat and clean, our way of working will be better. Better workplace will give better working
environment. This also changes our way of behaviour. We have observed that those who were not interested to hear
about the modern quality concepts, now after implementing Five S are taking a lot of interest not only to learn these
concepts but also in introducing in their home.
Five S for good housekeeping practices:
It is believed that good housekeeping and workplace organization are directly linked to achieving discipline in
manufacturing. If production control, maintenance, quality assurance, layout etc. are not done properly then problems
will appear. A general attitude of cooperation should be established so that people are willing to practice good house
keeping not only in their own area but also to help in other areas. Five S concept is considered the basis for
continuous productivity and quality improvement. Only when these practices are coordinated can a world class
manufacturing operation be achieved.
Five S is the software for safety
Space-full, bright and unobstructed workshop will show the flow of things at a glance. Keeping things in proper way
taking safety into consideration e.g. regulations about height, putting items on the basis of weight, size, quality of
material and applying visual management, Colour coding for paths and storage give a sense to observe traffic
regulations faithfully (utmost attention is paid to avoiding accidents).
Brief description of each S:
SEIRI
The literal meaning of the Japanese word 'SEIRI' is 'to straighten and contain. It can be understood as 'discard
unnecessary things i.e., get rid of waste and put things in such a way as to have quick access. This is how 'straighten
and contain' can be interpreted.
If we apply this idea to a factory, office, house, farm or shop, waste of time in searching for an item and having
unnecessary things taking up space will be reduced. Developing a system can bring consistency in what we do. 'SEIRI'
thus means 'organisation' or more appropriately 'Reorganisation'.
By practicing 'SEIRI', we can discard unwanted things and above all stop further waste. Generally we have the
tendency to cling to things. We don't want to throw away a thing easily, be it milk bag, newspaper, empty containers,
broken part or defective items. We store these things, saying that they will come for use at a later date, but the only
pitiable thing is that when we want them we will not be able to locate them!
Such an attitude was perhaps alright earlier as there was scarcity of items and saving things in those days was
meaningful.
In this information age we have many things in abundance. All are talking about functional efficiency and such an
accumulation of unwanted items, particularly the precious space, affects efficiency.
In major cities like Bombay, Delhi etc., people use lots of space paying high rent to keep records. None are interested
in scanning and putting them into Compact Discs (CD's). One CD can store thousands of pages of information and
wanted information can easily be located. With the introduction of 'DVD' (Digital versatile disc) system millions of
pages can be stored in one disc. Still people would like to stick to old ways. Practice of 'SEIRI' involves several steps.
42
They are,
• Planning and training
• Method of sorting.
• Categorisation (use-frequency classification)
• Survey (stock verification and similar checks)
• Cleaning
Procedure for 'Seiri':
1. Form a team.
2. Decide on the scope of the operation (what workplace and zones) and the targets that group has to achieve.
3. Get ready.
4. Define objective and teach people to recognise what is unnecessary, what to discard, what things to save so that
they can be accessed later.
5. Put red tag for unnecessary items and yellow tags for the items to be sent to stores.
6. Apply stratification management
Advantages of 'SEIRI'
a. Saving in use of space.
b. Removal of excess equipments/parts
c. More space made available in filing cabinet/shelf
d. Avoidance of error
e. Easy access to things
f. Eliminate unsafe situation
g. Preventing rusting or damage to materials
h. Reduced inventory by sale of scrap material/excess materials
SEITON
While 'SEIRI' helps us to decide what are the items needed, 'SEITON' helps to decide the way things are to be placed
so that our working is smooth. 'SEITON' involves safety and productivity.
First we should decide where things belong. Everything should have a place and they should be kept in that place
always. This will help us to pick up things needed without wasting the time on searching for them.
Three rules to be followed for this are:
1. Decide where things need to be placed
2. Keep things in that place
3. Always follow the system.
This may look simple but difficult to follow. Success depends upon how well these simple rules are folllowed.
'Seiton' it is an activity carried out along with 'Seiri'. To state simply we sort out things as wanted and unwanted and
then keep the wanted in an orderly way or organize them properly. It is said 'Seiri Seiton' activities are done. However,
for detailed understanding let us understand them separately.
Seiton can be called as 'straightening' or neatness. Neatness is not just collection but putting them in a way which
should help in our regular working. Things should be kept in such a way that they could be easily located and used
without any time loss. If we don't find the right material we may use a substitute which may have an adverse effect
on quality. Hence, Seiton helps in upkeep of Quality.
Points to be remembered are:
• Keeping things in the best way
• What to keep, where to keep, how to keep and how much to keep.
• Having ground rules for organising things neatly
• Marking areas and cautions
• Proper place for things:
43
Jigs, fixtures, tools and cables
Consumables
Storing defective items
Emergency items
Storage of liquids and fire hazard items
• Filling removable containers
Advantages of SEITON
a. Helps reducing time consumed in searching materials for use.
b. Easy to inspect and recognize when materials are taken out from their location.
c. Creates work effectiveness.
d. Creates safety atmosphere.
e. Helps in inventory control.
f. Improves work place utilization.
g. Better identification by using colour coding.
SEISO
Since olden days we in India have given great importance to cleaning. Our Gurus, Saints used to teach us about it.
According to them "Create an atmosphere and environment of sanctum - sanctorum where Gods and Goddess will
be enshrined". "Seiso' is nothing but, cleaning up. In Five S practice, cleaning is looked upon as an activity wherein
each and every employee has a role. It is a philosophy and commitment to be responsible for all aspects of the things
you use and to ensure that they are in tip-top condition. Dust, dirt, grim, foreign matters etc., are looked upon as prime
causes for unexpected failures of equipment, unhygienic environment and even accidents.
The literal meaning of the word 'SEISO' is clean up. It means take up the job of cleaning. Such cleaning is not
restricted merely to the machines, table, kitchen cabinet, etc., i.e., whichever area we have taken up. It should be
extended to the entire surroundings. The word starting with 'S' for this is 'Scrubbing' or 'Scrub'.
Cleaning is getting rid of bad things and purifying. Cleaning first calls for an inspection and then acting on it. Why
should things we use or deal with become dirty? It is mainly because of not taking timely action and lack of attention.
If a work place and the place where we live are dirty it means that something is wrong with our system and/or care.
In India we always worship those things which are responsible for our living. We call them 'Pancha Bhootha' viz. fire,
water, air, earth, and sky. A farmer worships the hull, his land and the bulls, which help him in ploughing. A workman
worships the machine he works and the tools he uses. Every year factories observe 'Vishwakarma Puja' or 'Ayudha
Puja'.
But with the time they have become rituals and value for machines, equipment, tools etc. are going down. Availability
in abundance has created complacency amongst people. We often feel that it is cheaper to buy than repair. We do
not for a moment think why in the first place it went out of order or got damaged. Is it because of a defect or because
of our carelessness? We can see people using cast iron items in place of hammer (e.g. spanner) and breaking them.
The damage and wastage is due to sheer misuse.
Seiso is inspection:
The essence of cleaning is not just making things or place clean. Thorough cleaning will help us to quickly detect or
see defects with our eyes. Abnormal sound can be observed and by touching with hands one can feel vibration,
temperature etc. Observation by looking, listening and feeling (LLF) at the time of cleaning, can identify abnormalities
like abnormal smell, discolouration, loose parts, knocking, abnormal sounds, over heating, leaks and dispersion,
vibration and shaking, misses and skipping, irregular movement, abrasion, trash and dirt, damage, etc. These can
be quickly discovered and attended to. Hence we can say Seiso is to reveal potential defects.
Points to be remembered:
• Who should do the cleaning? Is it a separate function?
• Assigning roles and responsibilities
• Providing implements and tools
• Making SEISO a day-to-day routine
• Care of special and sophisticated equipment
44
• Education on SEISO
Advantages of Seiso
a. Good, neat and clean working place motivates for effective functioning.
b. Increases the efficiency of machines and equipment.
c. Extends machine and equipment life.
d. Creates safe environment and working place.
e. Helps in identifying the potential cause of problems.
f. Helps in developing the skill of operator for doing autonomous maintenance.
g. Reduction of wastage.
SEIKETSU
Seiri, Seiton and Seiso are easy to do once, but it is very difficult to maintain. To maintain, we have to standardize
the system. Seiketsu is nothing but standardization. In Five S this means ensuring whatever cleanliness and orderliness
have been achieved through Seiri, Seiton and Seiso, they are maintained. We should keep a strict control over the
situation.
We cannot achieve this by one time effort of carrying out the activities of cleaning. We should make sure that whatever
is achieved is not allowed to deteriorate. If we face any problem, our capabilities coupled with the system should be
able to overcome that problem. Hence Seiketsu is only complete when its horizons have been expanded to include
the entire working environment. It is a proof of good 'Seiri, Seiton and Seiso'. For healthy and vital environment, along
with work place management, personal cleaning, neat and clean work clothes, work hats, safety shoes, aprons are
also essential. Hair, beard and nails must be kept trimmed and neat so that work can be done easily.
• Standardization is to systematize.
• Knowledge of putting the finger at the trouble spots
• Imparting knowledge systematically
• Visual Management
• Sensory alertness and control
• Position marking
• Ways of promotion of Seiketsu
• Incentive at workshop level:
• Incentive at the factory level.
Advantages of SEIKETSU
a. Proper and nice working areas
b. Help in synchronising the activities of SEIRI,SEITON and SEISO.
c. Helps in educating the new persons joining the area on standard methods in practice.
d. Reduce breakdown and increase MeanTime Between Failure (MTBF).
e. Reduction in defects and breakdowns.
f. Visual management improves work efficiency.
SHITSUKE
Shitsuke means discipline. Discipline is following a system, which calls for changing from our present unsystematic
way of adherence to set procedures. Systems function to an orderly manner. You might have heard a joke about
a gentleman who entered his friend's house, was surprised to see that his friend was writing a letter sitting on a chair
and his wife was shaking the chair. When he inquired the reason for shaking the chair, the friend's wife replied that
he had the habit of writing any thing only in this condition, as he is a bus conductor. This may be a joke, but imagine,
can we write sitting in a moving bus? How does a bus conductor write and make a report neatly? This all depends
upon practice. Hence keep practicing Seiri, Seiton, Seiso and Seiketsu activities until they become habit.
If you make this task of bringing changes as teamwork you will find it easier. It is due to two reasons. One, instead
of as an individual if we do things as a team, it becomes fun and not a work that is disliked. Secondly, if the job is
difficult, teamwork makes it easier. Tougher the job, easier the teamwork makes it. Teamwork does not mean that
all have to do the same job. Each one may be carrying out one of the tasks of the entire operation by sharing. Starting
from a relay race to a space journey, success depends upon teamwork. Remember Apollo 13's near disaster. It was
45
the teamwork, which was responsible for saving the lives of the astronauts.
• Routine and complacency
• Make the tasks small or big a habit
• Instructions/communications should be clear
Advantages of SHITSUKE
a. Promotes habit for complying with workplace rules and procedures.
b. Creates healthy atmosphere and good workplace.
c. Improves safety and hygiene.
d. Improves morale of the employees.
e. Develops Teamwork.
f. Develops ability to think and analyse causes for improving control system.
g. Improvement of company culture, rules, safety devices etc.
Why should things go wrong in spite of introducing Five S?
We should try to find out why in certain areas things tend to go wrong again and again. The simple reason is lack
of sincere practice. Practice can make things perfect and should be a way of life. Anyone of the following can be
the reason.
(i) Checkup whether it is easy to clean, there is anything out of the way, etc. If people are not able to carryout
the job the way we want or that a particular method is responsible for the disorderliness then try to find out the
reason and also whether there is any other easy method of doing it.
(ii) The systems should be such that all involved should be able to understand whatever is happening and why it
is carried out in that way. Another important requirement is ownership and happiness derived from it. Check
up whether the people are proud of cleanliness and feel that it is their achievement.
Somebody asked an artist the secret for his melodious voice. His answer was simple 'practice'. Practice makes
things perfect. There is no alternative to that. Everyone in the unit should practice till they learn it better.
(iii) When things are not normal no point in getting upset. Check up to find out the reason for it. See whether they
are following the system. Are things kept and handled in the way it should be.
(iv) How do you do this in a systematic way? The answer is simple, Audit.
Audit shows the situation properly. Problems can be due to not following the instructions. Make it a system
and ensure that it is followed. Another problem can be that systems are there but not helping. Then one should
review and find out the changes needed to get the desired results and implement them.
(v) For effective implementation of Shitsuke one should internalize the rules. Each and everyone should pledge to
his job. They should thoroughly know what they are doing and that it matches the requirement. Ask people
to memorize. But here too we will face one problem. If there is a change brought out in the system people
may not see and continue to do it in the old way. To avoid this, ensure whenever changes are there, wide
publicity is given and make sure that everyone involved comes to know about it. This information should make
every one's responsibility clear and should give time wherever possible for learning. Knowledge of basic
mathematics is needed.
As we said practice is the best way to ensure cleanliness. Make it a habit. But routine things are boring. So add
colours and make it interesting. Campaigns, contests etc. should be arranged. Arrange cleaning campaign with time
limit. Lumberjacks have yearly contests like who climbs the tree fast, cuts the wood faster etc. Similarly organize
scrubbing contest, picking contest etc., as annual and half-yearly event.
Five S in offices
Office is also like a factory where main inputs are paper; processing is in paper and output is also in paper. Office
management is management's job. Offices need the Five S to eliminate inefficiencies, to prevent mistakes, and to
keep things running smoothly.
Five S can be carried out in any place including home. Only the objective will have variations. In case of offices the
needs are elimination of inefficiencies, error free function, keeping things in a tidy way and a smooth way of functioning.
Now a days a lot of attention is paid for aesthetics. Offices in the olden days used to have cabins, and a big group
46
sitting outside in rows. There used to be noise, paper every where but such things can now be noticed only in
government organizations.
Now, even executives sit in cute cubicles, everyone has a separate location, well lit office space, glass panels as
entrances, revolving chairs, enough provisions to stick papers needed for constant reference, to put charts etc. All
are done in a colourful way with the help of interior decorators. Plants are kept in places and periodically changed,
centralized coffee/tea centre etc. add colour to the entire office environment.
They all add up and create a healthy atmosphere for efficient functioning. Many organizations are giving good brand
name dresses to all i.e., from executives to grass root level employees.
Shredders are provided to shred out unwanted papers. Computers have come as handy. Many things are stored in
computers. People refer to information through local area network thereby eliminating unnecessary paper work. Now-
a-days compact discs are used to store old data thereby reducing the space needed for keeping volumes of files and
papers. All of them help in a big way for the Five S implementation.
Still offices have problems. One of the important reason is that people have individuality and have their style of
functioning. This makes standardization process a difficult one. Again, in information generation there is a lot of
variation, which is very difficult to monitor.
Few important tips for office Five S
1. In lockers, file cabinets, almirah, side racks no irrelevant material to be kept. Necessary items to be kept in a
proper way. There should not be any loose paper in any file. File index should be prepared neatly so that a
file should be kept/taken out without loosing any time.
2. There is a normal practice to put papers, greeting cards, slogans, photographs etc., below glass top at one table.
The table area is for your work. This should be neat and clean. Hence nothing should be below the glass table.
There should be prefixed location for telephone, desk calendar, in-out tray etc.
3. In-out tray should not be storage place. Most of the times you will find that for months together, the unnecessary
papers are lying on tray.
4. Desk calendar to be used properly. Their pages should not be used as slip pad.
5. Paperweights should be used. Don't use nut, bolt, scale, pencil, stapler etc., in place of paperweight.
6. Calendar and all visual displays of the room should be updated.
7. Inside the drawers of table, things to be kept properly in a specified place.
8. Every thing should be stored in a fixed place. Old records to be kept with proper identification.
9. All dividing lines and notice boards to be clearly indicated.
10. Cleaning of floor, windows, windowsills and shelves, corners of the wall, ceiling, grills tearoom, toilets, etc.
11. For clean and odourless atmosphere, ventilation system should be proper.
12. Floor conditions, electrical fittings, proper plugs, sufficient light, condition of table and chair to be taken care of.
13. There should not be any water leakage and foul odours in toilet.
14. There should be prefixed location for waste box and system for getting rid of waste paper.
How to make Five S to work effectively
For any important activities taken up in an organization we always need the support of the top management. Five
S are not an exception to that. But it is not necessary that whatever is initiated by the top management will be
acceptable to all. They may say 'yes' because top management accepts it but their heart will not be in that. In that
case you will have to keep a constant vigil in ensuring that activities are carried out in the way we want them to, which
is a difficult task. What we need is compliance willingly, which will call for convictions on the part of everyone involved.
How do we do that?
Planning Stage
First make a decision to implement. This will call for proper planning. As step number one, decide a date and time
for the activity. Give it wide publicity. Such an activity will call for many items. Not only publicity materials but items
47
for implementation also. They can be shelves, labels, red tags, paints, etc. They will cost money, which means a
budget. Then take up jobs, which will involve everyone. Many times spectators may not appreciate the good work
out of jealousy. You should ensure that they also contribute so that they feel proud of the achievements. Such an
involvement is not only at the implementation stage but also at the time of planning the input.
To sum up you should plan a date, workout a schedule with targets. But again it is not merely carrying out the job.
People involved should understand the significance and benefit of such a system. This means wide publicity and
education. In spite of all activity, after sometime, people lose interest. Here the top management should be firm in
their belief and should have continuous interest and zeal. As a part of this activity we should educate people on the
importance and benefit of continuous improvement.
When you get into the job of Five S, it is not necessary that you take it up in all areas simultaneously. You may pickup
a conducive area and also one which badly needs such an activity. If you do it in a place already well maintained,
differences may not be visible. What you do there, should demonstrate to others its benefit and significance. When
you carryout such operations, you can even fix up awards for people who do good jobs. It should create an interest
and a healthy competitive spirit amongst all.
The actual job should be planned as follows:
a) First step is Seiri i.e., removal of unwanted things and sending them away
b) Second step is to find out the reason for untidiness. Clean them up and create a clean place. Next step is
maintaining that place in that clean way. This may call for even change of present layout. Ensure changes, which
will help in visual control. The final step is going into micro level of improvement.
48
14. KAIZEN
1. What is Kaizen ?
Kaizen is based on the simple principle that, whatever the field in our lives, be it social life, working life, domestic life
or even leisure life, we need continuous improvement in order to progress and advance as opposed to status
quo and stagnancy. For such an effort we must have participation and involvement of one and all whether it is society
or an enterprise.
The Japanese economic miracle is attributable to this unique approach in all walks of their lives and we could see
the demonstrative evidence of this continuous improvement in all their products or service.
In industry, they felt that, to stay in business and compete, there should be an unending improvement and progress
to provide the leverage against other competitors.
2. Can you explain the degree of responsibilities of each category in the practice of KAIZEN and
management's function in particular?
Management has two major functions in KAIZEN
i) Create a conducive environment and encourage continuous improvement (technological, managerial and operative)
and establish standards.
ii) Maintaining the standards established.
It can be seen from Fig.1 that, as we go from the bottom, the improvement function increases and the top and middle
management have a greater role in it. Similarly, as we come down from the top, the supervisors and workers have
a greater role in maintenance function.
The important role of management in maintenance function of Kaizen are:
- policies and procedures.
- establish the standards.
- ensure that standards are followed by all.
- review and monitor improvements.
- educate and train people to enable them to follow the standards with emphasis on its importance to follow them.
In Kaizen, new standards are not static, though they are to be maintained. They, nevertheless, yield place to new
standards as a part of continuous improvement, one succeeding the earlier one.
Though maintenance of standards play a vital part in worker's function, they are also expected to suggest small,
incremental continuous improvements.
49
3. What are the perceptual differences between Japanese and Western nations' with regard to job
functions?
Western Approach Japanese Approach
1. Impportance to systems and procedures. 1. Systems and procedures, important are not rigid.
They are subject to change.
2. Establish organisational setup with functional 2. Though heirarchies are there, they are closely
responsibilities and authority at each level. knit horizontally and vertically and no barriers
between each other.
3. Processes are kept under control by 3. Continuous process control starting from the
management by ensuring that processes bottom level ensuring that variations are kept
operate on chance cause variation levels. kept under chance causes.
4. Act when assignable causes occur 4. Improvements and changes are all pervasive
activities.
5. Changes are only through innovatons, a 5. Continuous improvements from all levels of the
new system or new machineries. empoyees (top to bottom).
Responsibility for this lies with top and middle
middle management in different degrees.
As far as changes are concerned they were mainly through innovations i.e., any major change in process is due
to invention.
a. Status quo organizations.
This category of organizations are those which neither attempt innovations nor improvement until change is forced
on them by the market conditions where survival depends on the ability of an organization to compete. The status
quo management will be in a quandary in such a situation and all sorts of fire fighting would start when external
pressure is brought on them. (Fig.3)
b. Innovation centered organizations.
This is yet another type of High Technology industries which appear on the horizon like a bright meteor,
and stay for some time and disappear. These are innovation centered organizations. This is also explained
pictorially.(Fig.2)
But perception of Japanese varied from this. While technological and process innovations fall largely in the domain
of top and middle management, improvements are an all pervasive activity from top to bottom with varying degrees.
(Fig.4)
4. Briefly, explain what are the roles to be played by the four important functional categories i.e., Top
Mgnt., Middle Mgnt., Supervisors and workers in the implementation of KAIZEN in an organization?
The Following Table Explains it.
5. KAIZEN or continuous improvement - What are its wider connotations? (KAI - Change; ZEN - Better) (For
the better)
The interpretation of the meaning of improvement goes far beyond the Western perceptions about it. For the
50
Western management improvement simply implies only improvement in equipments, processes and maintenance.
But, the Japanese perception of improvement starts with the improvement of the human element. Thus, KAIZEN
covers every aspect of human activities.
6. Is not KAIZEN an off-shoot of other improvement concepts, tools and techniques already developed and
adopted by the Japanese right from the early fifties, say like TQM/CWQC?
Yes, Masaaki Imai himself says in his book that “Such terms as QC (Quality Control), SQC (Statistical Quality Control)
or CWQC (Company Wide Quality Control) often appear in connection with KAIZEN”. Again, Imai says that any serious
discussion on Quality would boil down to its definitions, methods of measurement and relating to the benefits
therefrom. However, the basic thing in all the concepts, he maintains, is improvement or KAIZEN and it is
without any complications in definition. KAIZEN is to first develop a mind-set for continuous improvement.
7. What were the various chronological developments that preceded the birth of the idea of KAIZEN ?
i. 1950s - Dr. W.E.Deming’s visit to Japan and his teachings on statistical methods.
ii. 1954 - Dr.J.M.Juran’s visit to Japan and his teachings on Quality Management and particularly the following
three tenets.
a) Upper management leadership for quality.
b) Massive education on quality related subjects (top-bottom).
c) Annual quality improvement plans and annual cost reduction plans and their implementation.
iii. 1956 - Japan’s short wave broadcasts on Quality Control Education.
iv. 1960 - Declaring November of every year as National Quality Month and formal adoption of Q-Marks and
Q-Flag.
v. 1962 - Issue of “Gemba to QC”, a JUSE Journal edited by Dr.K.Ishikawa, to educate foreman and through
them workers on Quality Control Methods.
vi. 1962 - As a sequel to “Gemba to QC” birth of QC Circles as a small group activity.
vii. 1962 - Dr.K.Ishikawa’s emphasis that QC Circles is only a part of TQC or CWQC.
8. Is KAIZEN a part of TQC ? How do they relate to one another ?
Though Masaaki Imai has mentioned in the introductory part of his book that even TQC or CWQC would come under
KAIZEN umbrella, he mentions elsewhere as follows; “Japan has developed an elaborate system of KAIZEN strategies
as management tools within TQC movement” He further says “TQC in Japan is a movement centered on improvement
of managerial performance at all levels”.
As pointed out by Masaaki Imai, “TQC undergoes perpetual change and improvement”. One of TQC’s indispensable
tool is seven statistical tools and is widely used by management, Engineers as well as QC Circles. Japanese
management has been using TQC as a tool for improving overall performance. TQC has been directed by the
Japanese Management for the purposes of education, systems development, policy deployment and management,
cross-functional management and quality goals deployment. In today's world wide accepted terminology of TQM
covers all these aspects referred to above as a part of it.
KAIZEN needs and uses various problem solving tools. Improvement comes through every problem solved and it
heightens improvement. So, KAIZEN is the essence and purpose of all tools and techniques.
9. Are KAIZEN and Suggestion Scheme one and the same ?
According to Masaaki Imai, “Japanese management makes a concerted effort to involve employees in KAIZEN through
suggestions. Thus, the suggestion system is an integral part of the established management system”.
Imai also states that the Quality Control System and suggestion system work in concert where the companies are
active in KAIZEN.
Apparently KAIZEN also seems to be a form of suggestion system. “The suggestion system is an integral part of
individual oriented KAIZEN” says Imai. From this statement of Imai it is clear that KAIZEN and individual suggestion
system are inter-related, maybe with some variations in practice. Whenever a suggestion is made by an employee
and is implemented, then standards are established and he takes pride in it because it is based on his suggestion.
In Toyota Motor Co., it is said that employees provide 1.5 Million suggestions a year, 95% of which are implemented.
51
10. Western oriented suggestion system and Kaizen - a comparison.
Western Approach Japanese Approach
1. Suggestion system is based on rewards for. 1. Kaizen is a continuous improvement process.
2. Rewards are proportionate to the worth of 2. Mostly token rewards. A most coveted reward
the suggestions. could be a fountain pen with the suggester's
name engraved on it from the President and
named as President's reward. Toyota gives such
token reward for QC Circles.
3. Suggestions can be given by anyone and 3. Suggestions of Kaizen are restricted to the area
can relate to any area other than their own of one's function or work only.
work area.
11. What are the areas and aspects in which KAIZEN is encouraged to be applied to bring results?
a) Areas: The driving forces for competition (internal to the country or external to it) are PRICE, QUALITY, DELIVERY
and SERVICE. KAIZEN programmes immensely help in these areas.
b) Aspects: KAIZEN (a) For process Improvement (b) For Results.
Management have to address themselves to these two aspects. To get results, processes have to be improved first.
So, process precedes result.
KAIZEN - People oriented approach
In KAIZEN process improvements are people-oriented. It provides opportunities for the participation and
involvement of the workers through the creation of conducive environment, providing education, training and
encouragement. It is different from just result oriented thinking and approach in western systems of management.
Though results are very important in a result oriented world for progress, for lasting continuous improvement as in
KAIZEN, people focus is very much necessary. “Winning is neither everything nor the only thing” .
Process oriented approach
Process oriented approach calls for long term outlook whereas only result oriented approach is short term. All the
Japanese concepts which are people focused are process oriented approaches.
The concerns of a process-oriented and people-oriented manager should be:
i. Discipline .
ii. Time management.
iii. Skill development.
iv. Participation and involvement.
v. Morale boosting.
vi. Communication (two-ways)
12. Comparison of Improvements - East Vs West.
While comparing the approaches of East and West with respect to improvements, Mr.Masaaki Imai, compares particularly
the Japanese approach of KAIZEN, which is continuous incremental improvements, as against the dramatic,
sudden, once in a way innovative big steps of improvement seen in the Western organizations.
GEMBA KAIZEN
“Eliminating the 7 Wastes (MUDA) for Leaner Operation”
The MUDA refers to a Japanese word, meaning WASTES in workplace and the wastes refers to the wasteful and unpro-
ductive practices in workplace that add no value to the products and services being offered to the customers.
Wastes at workplace
MUDA of Motion
MUDA of Waiting
MUDA of Transportation
MUDA Over-production
52
MUDA of Process
MUDA of Inventory
MUDA of Correction
We also shall address of MURA – inconsistency and MURI – Overburden. All these have been found and proven to be
causing sub-optimal performance, irrespective of type of industries.
Steps for Elimination of MUDA at GEMBA

1. State the wastes i.e. non-value added activities, found at work place related to office work and O&M activities
2. Identify the wastes at work place in NTPC which must be removed;
3. Identify wastes that are to be dealt, with
a. Self – can be done by alone
b. In a group, own functional group or at same level;
c. Help and support of senior management.
4. Prioritize the wastes that need to be addressed in order of importance of safety, monetary implications, ease of
undertaking etc;
5. Formulate a Performance Improvement Project (PIP) on the theme of MUDA identified, along with support required,
potential benefit and time span;
6. Do a process study of their workplace, do 5W-IH and bring out opportunities for improvement;
7. Adopt PDCA & SDCA for making standardized procedures;
8. Incorporate visual controls to their work-place in line with principles of MUDA elimination;
Post – Programme Follow – up:

* The potential PIPs suggested to be undertaken for implementation, shall be forwarded to. Station General man-
agers with copy for information to regional headquarters.
* TQM deptt at respective Station and regional head quarter shall be requested to play the facilitator’s role for early
resolution of the issues.
The 7 Manufacturing Wastes

Waste elimination is one of the most effective ways to increase the profitability of any business. Processes either add
value or waste to the production of a product or service. The seven wastes identified in Japan, where waste is known as
“muda.” “The seven wastes” is a tool to further categorize “muda” and was originally developed by Toyota’s Chief Engineer
Taiichi Ohno as the core of the Toyota Production System, also known as Lean Manufacturing. To eliminate waste, it is
important to understand exactly what waste is and where it exists. While products significantly differ between factories, the
typical wastes found in manufacturing environments are quite similar. For each waste, there is a strategy to reduce or
eliminate its effect on a company, thereby improving overall performance and quality.
The seven wastes consist of:
1. Overproduction.
Simply put, overproduction is to manufacture on item before it is actually required. Overproduction is highly costly to a
manufacturing plant because it prohibits the smooth flow of materials and actually degrades quality and productivity. The
Toyota Production system is also referred to as “Just in Time” (JIT) because every item is made just as it is needed.
Overproduction manufacturing is referred to as “Just in Time.” This creates excessive lead times, results in high storage
costs, and makes it difficult to defect defects. The simple solution to overproduction is turning off the tap; this requires a lot
of courage because the problems that overproduction is hiding will be revealed. The concept it to schedule and produce
only what can be immediately sold/shipped and improve machine changeover/set-up capability.
2. Waiting
Whenever goods are not moving or being processed, the waste of waiting occurs. Typically more than 99% of a product’s
life in traditional batch-and queue manufacture will be spent waiting to be processed. Much of a product’s lead time is tied
up in waiting for the next operation; this is usually because material flow is poor, production runs are too long, and
53
distances between work centers are too great. Goldratt (Theory of constraints) has stated many times that one hour lost
in a bottleneck process is one hour lost to the entire factory’s output, which can never be recovered. Linking processes
together so that one feeds directly into the next can dramatically reduce waiting.
3. Transporting
Transporting product between processes is a cost incursion which adds no value to the product. Excessive movement
and handling cause damage and are on opportunity for quality to deteriorate. Material handlers must be used to transport
the materials, resulting in another organizational cost that adds no customer value. Transportation can be difficult to
reduce due to the perceived costs of moving equipment and processes together. Furthermore, it is often hard to deter-
mine which processes should be next to each other. Mapping product flows can make this easier to visualize,
4. Inappropriate Processing
Often termed as “using a sledgehammer to crack a nut,” many organizations use expensive high precision equipment
where simpler tools would be sufficient. This often results in poor plant layout because preceding or subsequent opera-
tions are located for apart. In addition they encourage high asset utilization (over-production with minimal changeovers) in
order to recover the high cost of the equipment. Toyota is famous for their use of low-cost automation, combined with
immaculately maintained, often older machines. Investing in smaller, more flexible equipment where possible; creating
manufacturing cells; and combining steps will greatly reduce the waste of inappropriate processing.
5. Unnecessary Inventory
Work in Progress (WIP) is a direct result of overproduction and waiting. Excess inventory tends to hide problems on the
plant floor, which must be identified and resolved in order to improve operating performance. Excess inventory increases
lead times, consumes productive floor space, delays the identification of problems, and inhibits communication. By achieving
a seamless flow between work centers, many manufacturers have been able to improve customer service and slash
inventories and their associate costs.
6. Unnecessary / Excess Motion

This waste is related to ergonomics and is seen in all instances of bending, stretching, waling, lifting, and reaching. These
area also health and safety issues, which in today’s litigious society are becoming more of a problem for organizations.
Jobs with excessive motion should be analyzed and redesigned for improvement with the involvement of plant personnel.
7. Defects
Having a direct impact to the bottom line, quality defects resulting in rework or scrap are a tremendous cost to organiza-
tions. Associated costs include quarantining inventory, re-inspecting, rescheduling, and capacity loss. In many organiza-
tions the total cost of defects is often a significant percentage of total manufacturing cost. Through employee involvement
and Continuous Process Improvement (CPI), there is a huge opportunity to reduce defect at many facilities.
8. Waste
In the latest edition of the Lean Manufacturing classic lean Thinking, Underutilization of Employees has been added as
an eighth waste to Ohno’s original seven wastes. Organizations employ their staff for their nimble fingers and strong
muscles but forget they come to work everyday with a free brain. It is only by capitalizing on employees’ creativity that
organizations can eliminate the other seven wastes and continuously improve their performance.
54
55
56
15. BENCH MARKING
This phase calls for answering three general questions.

1. What will be Bench Marking?
2. Who is the best competitor?
3. How will the data be collected?
Planning Phase
8. What will be Bench Marking?
Every function of the business delivers a “Product” in the broadest sense. It may be a financial report, a product or a
service. Competitive Benchmarking process is equally applicable to all of these products. So the first step is to identify
your product.
9. Who is the best competitor?
While competitors who are in the same line of business can be the primary concern, one can and need to benchmark
against other organisations that set the standard in a functional way.
Example: One may benchmark his product with his competitor, but also can benchmark with a company on a different
business for say warehousing and distribution. Look into ‘competitors’ in a broadest sense.
10. How will the data be collected?
There is no one ‘right way’ for this. There is no ready made system available for this. While this may pose as a tough
question at the beginning normally one is able to find a way as he gets into the process and is able to develop and
implement it. Many started by gathering and reading trade journals, corporate reports and other public informations about
their competitors. This mostly yielded general information, but also helped them to crystallise the specifics they wanted to
zero in. As their data needs became more specific so did their approach for gathering it. Some at this stage take the help
of a consultant to help design and conduct a survey to gather the needed information. There may be other situations
where consultants can be useful. Operating units have successfully used consultant to design surveys and gather data,
particularly when benchmarked company had been hesitant to provide detailed information. Consulting firms can usually
alleviate these organisations by promising confidentiality. Others found direct contact with Benchmarked companies was
the best way, especially when there is a mutual exchange of information or when the participating company receives a
copy of the results. One covet to this approach is however, to carefully consider all of the security implication involved with
exchanging information. To sum up there are many methods for gathering. Pick up the method which most suits you.
11. How to measure the competitive data collected?
There is no specific method for this also. Some of the methods are:
Cost and cost related matrics
- Percent of cost of function to revenue
Sales
Service
Customer Management
Distribution
General and Administrative
- Labour Cost
- Material Cost
- Manpower performance ratio
- Months of supply
- Cost per unit
- Cost per order
- Cost per engineering drawing
- Occupancy cost
- Return on Investment
Quality related matrics
- % parts meeting the requirement
57
- % of finished goods quality improvement
- Number of problem free units or products
- internal and external customer satisfaction result.
- Billing error rate
Service related matrics
- Work support ratio
- Rs/Standard available call activity time
- Service response time
- First time fix of service call problem
- % of supplies delivered on time
- % of spare parts available for the service representative.
Once experience is gained other criteria included are:
Reliability and customer satisfaction. Numerous customer satisfaction surveys have been conducted to assess customer’s
perception of product and service in comparison to major competitors. Customer’s attitude towards product failure,
quality level and service response are some of the opinion samples. Sources of competitive data are limited only by one’s
imagination and creativity. They might include one’s own personal and professional contacts, trade associates, technical
journal or even advertisement. You can solicit information directly from competitor or analyse his products. Many have
found interestingly that competitor’s are often willing and eager to share information usually on quid pro quo basis.
Be creative. Remember sometimes we have our customers inside. We have to satisfy them. There too such efforts are
needed.
15. Analysis Phase
Once the data is acquired it must then be analysed. Objective of this phase is to understand the competitor’s strength and
to assess those strength against our own performance. It is therefore essential to ask these basic questions.
1. Is the competition better?
If so, how much?
2. Why are they better?
3. What can we learn from them?
4. How can we apply to our business what we have learned?
Answers to these and to other questions should provide the dimensions of any gap negative or positive between us and
our competitor. Now we have an objective basis upon which to act.
To close a negative gap or extend a positive gap. Things to be remembered is that it is an ever shifting basis. One need
to clearly understand not only where the competitor is today, but where it is likely to be tomorrow. Try to develop sources
that can be kept current through periodic reviews. One must also assess the competitor’s potential performance so that
the dimensions of the gap can be protected over time. For this it is necessary to collect data from readily updateable
sources which will facilitate meaningful analysis now and in the future.
16. Integration Phase
Competitive Benchmarking really begins to “earn its keep”. During this phase we have acquired hard data which has
revealed the areas to benchmark. We have also worked with it to determine the extent of the task. We are now ready to
set our goals to gain our maintain superiority and to weave those goals into formal planning process.
First initiative in this phase is to gain senior management’s acceptance of the competitive benchmarking analysis and its
commitment to develop action plans.
It is essential to success, but it will require time. For this competitive benchmarking data should clearly and convincingly
demonstrate the reliability. In all likelihood, the data will be questioned particularly if it points to a significant negative gap.
So it is necessary to make sure that the methodology is sound.
Once senior management understands and accepts the data and the conclusions, the development of strategies and
action plan can be started by using problem solving process.
17. Problem Solving Process
58
After identifying and selecting a problem the team management identifies problems within their area of responsibility.
- Analysing the Problem
The team determines what is wrong, gathers and interprets factual data, investigates possible causes and zeros in on the
problem. This process includes need for a satisfactory solution in the form of objectives or desired outcomes and also
noting any restriction or limitations on that generating potential solutions. Team members ‘brainstorm’ to generate as
many solutions as possible, without any restriction or prejudgment.
- Selection and Planning the solution
The team evaluates the ideas and comes up with a recommendation. Even though proposed idea may not work by itself,
it may have valuable elements. Time should be taken to combine the good parts of various ideas; each alternative should
be carefully, critically evaluated.
- Implementing the solution
The team anticipated implementation problems makes plans to include those whose support will be necessary, and
assigns and accepts action responsibilities.
- Evaluating the solution
The team follows up later, to determine whether the solution actually worked and takes any corrective action necessary .
Most of the results are mixed; there are few outright failure and few unqualified successes.
18. Investigation of the process
This is the time when the investigation of the practices of competitor is so valuable. Acceptance of the effectiveness of a
competitor is much easier once we understand the methods being used to achieve those results.
Timing is essential. Data should be gathered, analysed and reported so as to be included in the unit’s overall planning
cycle.
Most unit view Competitive Benchmarking data as essential to set long term plan which are based on competitive realities,
determine strategies and document those strategies in the business plan. Keep in mind that benchmarked goals can be
set at any and all levels of operation. Organisation can set overall unit goals like annual productivity increase. Operational
objectives supporting the unit goals i.e., specific targets relating to say, shipping accuracy, productivity and operating
budget. Such cascading of objective downward to all levels ensures that each person clearly understands his or her role
in attaining the overall goal.
19. Summing up
Finally Benchmarking needs to be clearly communicated through formal action plans, down through various organisational
levels:
Action steps for Integration:
1) Results of Competitive Benchmarking are synthesised into proposed goals for the organisation.
2) Findings and proposed goals are established by operating units Senior Management and the mission goals, objectives
and operating principles are approved.
3) Communication process begins on the above items, including discussion to build understanding and to link them with
the units employee involvement problem solving process.
4) Goals are integrated and published in the business plan guidelines with strategic direction.
5) The business plan strategies and action plans are developed to meet these goals, including the strategies required for
employee involvement problem solving activities.
6) The business plan is reviewed and approved by corporate management.
7) Operating unit priorities for operating plan are established, reviewed and approved by operating unit Senior Management.
8) Operating plan guidelines and targets are published along with priorities.
9) Operating plan submission and reviews include plans to meet targets, describing status versus long range goals and
check points for operating plan years.
59
10) Final approval of operating plan establishes commitments for plans and targets performance.
11) Plan and target performance are built into management by objective (MBO)/ performance appraisal process.
12) Subsequent operations review measure interim progress on plans and in meeting target performance.
13) Special management steering committee meetings are held to review specific plans/issues and decisions are reached
and communicated.
14) Recalibration of Competitive Benchmarks is done as part of business plan update each year (repeat step 2 for goals)
15) Progress reports are discussed with employees atleast once a year.
A checklist is given below that
• Are Competitive Benchmarking findings part of the proposed goals of an organisation?
• Are organisation goals, incorporating Competitive Benchmarks published as part of the functional operating plans
and strategic direction each year?
• Are there specific benchmarks in each function?
- Is there clear accountability for generating benchmarks and delivering against benchmark driven targets?
• Are the benchmarks chosen appropriate?
• Are the benchmarks supported by a full understanding of how the competitor does business?
- Are competitive practices better, should they be emulated?
- Can we do it differently and accomplish same/better results?
• What are the specific programs/actions to close the gap?
- Is the value of each action understood and quantified?
- Are program/action plan expectations realistic relative to value and timing?
• Are plants to meet targets, with current status, incorporated into all functional operations reviews?
• Are improvement plans and performance targets incorporated into performance appraisals?
• Are business goals and progress toward performance targets communicated and discussed regularly with all
employees?
- Is value of actual results in terms of quality, schedule and cost clearly documented
• Is recalibration of Competitive Benchmarking done on a regular basis?
- Has best competition/function changed?
• Is Employee involvement linked to Competitive Benchmarking?
- Is there work group identification of performance gaps and development of improvement programs?
- Is there a road map from macro benchmarks to micro work group benchmarks and vice versa?
- Is there an established process for reward and recognition of results?
- Are there targets for participation and are they being monitored?
- Are business knowledge skills deficiencies understood and is education being provided?
20. Action Phase
It is now time to implement the plan and to periodically assess and report your progress in achieving it. Remember some
of the points in the plan may need updating. Generally it is found such updating do not call for an intensive data gathering
like original one. It is enough to indicate what is happening as a result of action as well as what the competitor is doing.
60

Quality Concepts Course Material

Încărcat de

Informații document

Descriere originală:

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Quality Concepts Course Material

Încărcat de

Drepturi de autor:

Formate disponibile

1.

Concept of Quality, Quality Control, SPC, TQC and CWQC

Product quality is decided based upon,

B. WHAT IS QUALITY CONTROL?

C. WHAT IS STATISTICAL QUALITY CONTROL / STATISTICAL PROCESS CONTROL?

D. WHAT IS TOTAL QUALITY CONTROL?

E. WHAT IS COMPANY WIDE QUALITY CONTROL (CWQC)?

F. TOTAL QUALITY MANAGEMENT

a) Customer driven quality

CORPORATE QUALITY ASSURANCE (CQA)

B. Receipts, Inspection, Storage, Issue & Record Maintenance at Stores

1.2.0 Causes of environmental degradation

1.2.1 Population increase

1.2.2 Ozone depletion

1.2.3 Global Warming

Green House Gas Contribution to Global Warming

1.2.4 Air Pollution

Cost Of Poor Quality (COPQ)

COPQ Assessment – The First Step

Some Examples of COPQ are :

Stapes for COPQ Assessment

Cash Out Of Reach

Desired Result of Cash – To- Cash Cycle

How To Improve Cash To Cash Cycle

4. CAUSE AND EFFECT DIAGRAM

Pareto Diagrams are used to find out the following points:

10. CONTROL CHARTS

A process is said to be at Six Sigma Quality when CP ³ 2 and CPK ³ 1.5.

Process Capability i a ality

Steps for Implementation (DMAIC)

What are Five S?

Steps for Elimination of MUDA at GEMBA

Post – Programme Follow – up:

The 7 Manufacturing Wastes

6. Unnecessary / Excess Motion

This phase calls for answering three general questions.

S-ar putea să vă placă și