Strategic Quality Management

Prof G R C Nair
Measurement
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Measurement
Empowerment/
Shared Leadership
Process
Improvement/
Problem Solving
Team
Management
Customer
Satisfaction
Business
Results

Strategy for Continuous Improvement
Prof G R C Nair
Six Sigma is not the limit

10
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10K
100K
7 6 5 4 3 2
(66810 ppm)

IRS Tax Advice (phone-in)
Best in Class
(3.4 ppm)
Domestic Airline
Flight Fatality Rate
(0.43 ppm)

(2330 ppm)
Average
Company
Purchased Material
Lot Reject Rate
Air Line Baggage Handling
Wire Transfers
Journal Vouchers
Order Write-up
Payroll Processing
Doctor Prescription Writing
Restaurant Bills







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SIGMA
Prof G R C Nair
Improvement Methods
DMAIC vs. DMADV
Define
Measure
Analyze
Design
Validate
Improve
Control
Continuous Improvement
Re engineering
Prof G R C Nair
DMAIC Process
Measure
Control
Define
Analyze
Improve
Define: Define who your customers
are, and what their requirements are
for your products and services Their
expectations. Define your team goals,
project boundaries, what you will focus
on and what you wont. Define the
process you are striving to improve by
mapping the process.
Prof G R C Nair
DMAIC Process
Measure
Control
Define
Analyze
Improve
Measure: Eliminate guesswork and
assumptions about what customers need
and expect and how well processes are
working. Collect data from many sources
to determine speed in responding to
customer requests, defect types and how
frequently they occur, client feedback on
how processes fit their needs, how clients
rate us over time, etc. The data collection
may suggest process revision.
Prof G R C Nair
DMAIC Process
Measure
Control
Define
Analyze
Improve
Analyze: Grounded in the context of
the customer and competitive
environment, analyze is used to organize
data and look for process problems and
opportunities. This step helps to identify
gaps between current and goal
performance, prioritize opportunities to
improve, identify sources of variation
and root causes of problems in the
process.
Prof G R C Nair
DMAIC Process
Measure
Control
Define
Analyze
Improve
Improve: Generate both obvious and
creative solutions to fix and prevent
problems. Finding creative solutions by
correcting root causes requires
innovation, technology and discipline.
Prof G R C Nair
DMAIC Process
Measure
Control
Define
Analyze
Improve
Control: Insure that the process
improvements, once implemented, will
hold the gains rather than revert to
the same problems again. Various
control tools such as statistical process
control can be used. Other tools such
as procedure documentation helps
institutionalize the improvement.
Prof G R C Nair
DMADV Process
Measure
Validate
Define
Analyze
Design
Design: Develop detailed design for
new process. Determine and
evaluate enabling elements. Create
control and testing plan for new
design. Use tools such as
simulation, benchmarking, DOE,
Quality Function Deployment
(QFD), FMEA analysis, and cost
/benefit analysis.
Prof G R C Nair
DMADV Process
Measure
Validate
Define
Analyze
Design
Validate: Test detailed design
with a pilot implementation. If
successful, develop and execute a
full-scale implementation. Tools
in this step include: planning
tools, flowcharts/other process
management techniques, and
work documentation.
Prof G R C Nair
QUALITY CIRCLE
Kaoru Ishikawa credited with the concept of quality
circle who also suggested the use of fishbone
diagram.
Quality circle is a small group of employees the
average number is nine who volunteer to meet
regularly to undertake work related projects to
advance the Company , improve working conditions
and spur mutual self development all by using
quality control concepts
Prof G R C Nair
QC circles are encouraged by Japanese
Companies and receive substantial training in
quality control concepts and techniques.
Membership in QC circles is purely voluntary
and there are no direct cash incentives .
Members give the principal reasons for
belonging to the group as personal
satisfaction from achievement and from
recognition given at meetings
Prof G R C Nair
Presentation
Implementation
Monitoring
Solution
Problem results
Problem
Analysis
Cause and effect
Data collection
and analysis
Problem
Identification
List alternatives
Consensus
Brainstorming
Training
Group processes
Data collection
Problem analysis
Organization
8-10 members
Same area
Supervisor/moderator
Quality Circle
Prof G R C Nair
Innovation
Innovation as an economic concept includes
development of new:
Products and services
Methods of production or provision
Methods of transportation or service delivery
Business models
Markets
Forms of organization
Stereotypically innovation is considered a product of
genius, a flash of light
Innovation can be systematically planned and
organized
Prof G R C Nair
Core Competencies
Organizational structure designed to cultivate an
experimental and risk taking attitude
It is no longer sufficient to be an expert manager,
marketing professional, or engineer.
Competitors in low-cost countries increasingly also have
experts who are more inexpensive
In addition to being an expert, professionals must be
well-trained and experienced in Six Sigma type
systematic innovation skills
Emphasis on scientific approach to problem solving
Prof G R C Nair
Systematic Innovators
Organizations should decentralize quality
departments
Instead, quality initiatives will be delegated to
innovation agents, namely black belts and green
belts throughout the organization
Innovation should be seen as an integral part of
everyones task rather than the responsibility of a
separate department and a few specialists
Prof G R C Nair
Systematic Innovation
The scientific approach to problem solving has been
with us since Shewharts days
Foundation for the quality profession
Six Sigma body of knowledge can, with minor
adjustments to scope and terminology, be applied to
systematize the innovation process
Guides upper management to realize the strategic
importance of our work, leading to better
recognition
Prof G R C Nair
Business Process Reengineering
The radical redesign of business processes for
dramatic improvement.
Mid- to Late-80s: global competition.
Existing tools were no longer improving cost, poor
quality & bad service.
Good news and Bad news
Far exceeded expectations
Unrecognizable
Prof G R C Nair
The Link Between Quality
and Productivity
Effective quality improvement can be
instrumental in increasing productivity and
reducing cost.
The cost of achieving quality improvements and
increased productivity is often negligible.

Economic Focus
Ultimate quality award is improved bottom
line profitability
More than defects and operations
management
Economic Focus
Evaluate cost of poor quality
Project savings
Prof G R C Nair
TQM Results : A Manufacturing Case
Study : Before & After
In house Rejection down 23:1
Supplier Rejection down 50:1
Customer returns down 16:1
Inventory Turnover increased 4 times
Manufacturing Cost halved
Manufacturing line stoppage down to zero
Sales per employee increased 1:3
New Product Development time halved
Prof G R C Nair
TQM Results : A Manufacturing Case Study
Accidents down to zero
Training per person up six-fold
Suggestions per person quadrupled
Absenteeism almost halved
Share of self-designed products up 4 times
and many more benefits!

Prof G R C Nair
Quality Management
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Control Focused management
Reduced Rejection & rework
Reduced Cost of Poor Quality
Reduced Cost of operations!!
Reduced Customer Dissatisfaction
Improved Profitability!!
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Continuous Incremental Improvement
Improved throughput, higher
quality of consistency, lower cost
Improved Customer satisfaction
Improved Volume & market share
Improved Profitability
Quality must add to the Business results and Bottom-line it certainly
DOES!! ..but it does NOT change Business!!
Prof G R C Nair
Three fundamental management
themes
I
II
III
Example!!
ISO 9000 /
QA Systems
TQM,
Six Sigma
Toyota
Production
System
Structure &
Key players
Hypothesis of
Human
behavior!!
Theory X!! Theory Y!!
Theory Z
Crazy!!
Nature of leaders contribution and the role they play differs
fundamentally in each thematic model !!
Control Improvement Breakthrough
Prof G R C Nair
Three fundamental management
themes
I
II
III
What
changes!!
Procedures
& Processes
Standards &
benchmarks
Business
Model
DATA
Numeric
Dominantly
Numeric
Language & Image
Data!!
Nature of leaders competencies & skills required to make
meaningful contributions too differs fundamentally!
What does
not change!!
Standards &
benchmarks
Business
Model
Values?? &
Business
Domain??
Symptoms
& Cues
Visible
Observable
& analyzable
Invisible &
unknown
Control Improvement Breakthrough
Prof G R C Nair
Holistic comprehension of all three dimensions
and close vigil essential for CEO!
If you lose Control on product, ethics, people,
earnings you lose business!
Lost control brings in societal & customer wrath!!
If you lose out on continuous improvement - you lose
competitiveness hence business
If you lose out on breakthrough you have no future
business
CEOs need to keep all three eyes open all the time
particularly for high clock speed business
Prof G R C Nair