Module 3: Managing for Quality and high Performance Review Questions

CMR IT- JESSY NAIR IV Sem – A & B ‘09

Module 3: Managing for Quality and high PerformanceReview Questions

1. Explain the different components of Quality Cost. (R1), (R2). 2. What do you understand by zero defect concept? ( R1)3. Differentiate internal and external customers.4. Compare and contrast Deming Prize with Malcolm Baldrige Quality

Award(MBQNA).(R1)5. Explain the award and seven criteria for performance excellence of a firm for

MBQNA.(R1) (R2)6. Explain in detail the core value of TQM organizations.7. What are quality improvement teams?8. What are Quality manuals? Discuss the various elements of Quality Manual?

(R1)9. What is ISO-9000? How is it structured? Explain the steps to be followed for

registration and implementation of the programme.10. Explain the relevance of ISO-9000 to TQM.11. What is ISO 9000-2000? 12. Write Short notes on :• JIT• ISO 14000• Employee resistance to change


Module 4 :Process Management and Quality Control Tools


4

Process management and Quality Controls

4.2Tools for quality planning

4.3Quality Function Deployment (QFD) -Concepts and techniques

4.4Six sigma concept

4.5Deming’s PDCA cycle, Poka Yoke

4.67 QC tools

4.7 Kaizen


Tools and Techniques for Quality Management

Strategic Statistical (7) Tools Radical

•Planning

•Improvement

Quality Planning Continuous Improvement

aids

Tools for

Market Research

QFD

Concurrent Engineering

New Tools / Managerial Tools

Demings PDCA

Benchmarking

Kaizen

JIT

Poka Yoke

Zero Defect

HistogramsPareto ChartsCause and Effect

DiagramsRun ChartsScatter DiagramsFlow ChartsControl Charts

BenchmarkingBusiness ProcessReengineering (BPR)Six SigmaQFDConcurrent Engineering


Seven Quality ToolsThe Seven Tools

1. Histograms2. Pareto Charts3. Cause and Effect Diagrams4. Run Charts5. Scatter Diagrams6. Flow Charts7. Control Charts


Ishikawa’s Basic Tools of Quality• Kaoru Ishikawa developed seven basic visual tools of

quality so that the average person could analyze and interpret data.

• These tools have been used worldwide by companies, managers of all levels and employees.

Kaoru Ishikawa (Ishikawa Kaoru) (1915-1989) was a Japanese University professor and influential quality management innovator.

Best known for the Ishikawa or Cause and Effect (CE) diagram (also known as Fishbone Diagram) that are used in the analysis of industrial process.

He is considered one of the Quality Gurus.


Three SQC Categories• Statistical quality control (SQC) is the term used to describe the set of statistical

tools used by quality professionals

• SQC encompasses three broad categories of;

– Descriptive statistics• e.g. the mean, standard deviation, and range

– Statistical process control (SPC)• Involves inspecting the output from a process

• Quality characteristics are measured and charted

• Helpful in identifying in-process variations

– Acceptance sampling used to randomly inspect a batch of goods to determine acceptance/rejection

• Does not help to catch in-process problems


Sources of Variation• Variation exists in all processes.

• Variation can be categorized as either;

– Common or Random causes of variation, or• Random causes that we cannot identify

• Unavoidable

• e.g. slight differences in process variables like diameter, weight, service time, temperature

– Assignable causes of variation• Causes can be identified and eliminated

• e.g. poor employee training, worn tool, machine needing repair


Histograms

• Histogram Defined– A histogram is a bar graph that shows

frequency data.– Histograms provide the easiest way to

evaluate the distribution of data.


Histograms• Creating a Histogram

– Collect data and sort it into categories.– Then label the data as the independent set or the

dependent set.• The characteristic you grouped the data by would be the

independent variable.• The frequency of that set would be the dependent variable.

– Each mark on either axis should be in equal increments. – For each category, find the related frequency and make

the horizontal marks to show that frequency.


Histograms

• Examples of How Histograms Can Be Used– Histograms can be used to determine

distribution of sales.– Say for instance a company wanted to

measure the revenues of other companies and wanted to compare numbers.


Pareto Charts

• Pareto Chart Defined– Pareto charts are used to identify and prioritize

problems to be solved.– They are actually histograms aided by the 80/20 rule

adapted by Joseph Juran.• Remember the 80/20 rule states that approximately 80% of

the problems are created by approximately 20% of the causes.


Pareto Charts

• Constructing a Pareto Chart

– First, information must be selected based on types or classifications of defects that occur as a result of a process.

– The data must be collected and classified into categories.

– Then a histogram or frequency chart is constructed showing the number of occurrences.


Pareto Charts

• An Example of How a Pareto Chart Can Be Used– Pareto Charts are used when products are suffering from

different defects but the defects are occurring at a different frequency, or only a few account for most of the defects present, or different defects incur different costs.

– What we see from that is a product line may experience a range of defects. The manufacturer could concentrate on reducing the defects which make up a bigger percentage of all the defects or focus on eliminating the defect that causes monetary loss.

• Actual chart is on the next slide» Example and chart were obtained from:

<www.yourmba.co.uk/pareto_diagram.htm>


Pareto Charts


Cause and Effect Diagrams

• Cause and Effect Diagram Defined– The cause and effect diagram is also called the Ishikawa

diagram or the fishbone diagram.– It is a tool for discovering all the possible causes for a particular

effect.– The major purpose of this diagram is to act as a first step in

problem solving by creating a list of possible causes.



• Constructing a Cause and Effect Diagram– First, clearly identify and define the problem or effect for which

the causes must be identified. Place the problem or effect at the right or the head of the diagram.

– Identify all the broad areas of the problem.– Write in all the detailed possible causes in each of the broad

areas.– Each cause identified should be looked upon for further more

specific causes.– View the diagram and evaluate the main causes.– Set goals and take action on the main causes.



• An Example of When a Cause and Effect Diagram Can Be Used– This diagram can be used to detect the problem of

incorrect deliveries.• Diagram on next slide

– Diagram obtained from: <http://www.hci.com.au/hcisite/toolkit/causeand.htm>

– When a production team is about to launch a new product, the factors that will affect the final product must be recognized. The fishbone diagram can depict problems before they have a chance to begin.



Diagram of the Incorrect Deliveries Example:


Scatter Diagrams

• Scatter Diagrams Defined– Scatter Diagrams are used to study and

identify the possible relationship between the changes observed in two different sets of variables.


Scatter Diagrams

• Constructing a Scatter Diagram

– First, collect two pieces of data and create a summary table of the data.

– Draw a diagram labeling the horizontal and vertical axes.

• It is common that the “cause” variable be labeled on the X axis and the “effect” variable be labeled on the Y axis.

– Plot the data pairs on the diagram.– Interpret the scatter diagram for direction and

strength.


Scatter Diagrams

• An Example of When a Scatter Diagram Can Be Used– A scatter diagram can be used to identify the

relationship between the production speed of an operation and the number of defective parts made.


Scatter Diagrams

• An Example of When a Scatter Diagram Can Be Used (cont.)– Displaying the direction of the relationship will determine

whether increasing the assembly line speed will increase or decrease the number of defective parts made.

– Also, the strength of the relationship between the assembly line speed and the number of defective parts produced is determined.

– Example obtained from: <http://www.sytsma.com/tqmtools/Scat.html>


Flow Charts

• Flow Charts Defined– A flow chart is a pictorial representation

showing all of the steps of a process.


Flow Charts

• Creating a Flow Chart– First, familiarize the participants with the flow chart

symbols.– Draw the process flow chart and fill it out in detail

about each element.– Analyze the flow chart. Determine which steps add

value and which don’t in the process of simplifying the work.


Flow Charts

• Examples of When to Use a Flow Chart– Two separate stages of a process flow chart

should be considered:• The making of the product• The finished product


Run Charts

• Run Charts Defined– Run charts are used to analyze processes

according to time or order.


Run Charts

• Creating a Run Chart– Gathering Data

• Some type of process or operation must be available to take measurements for analysis.

– Organizing Data• Data must be divided into two sets of values X and Y. X values

represent time and values of Y represent the measurements taken from the manufacturing process or operation.

– Charting Data• Plot the Y values versus the X values.

– Interpreting Data• Interpret the data and draw any conclusions that will be beneficial to the

process or operation.


Run Charts

• An Example of Using a Run Chart– An organization’s desire is to have their product arrive

to their customers on time, but they have noticed that it doesn’t take the same amount of time each day of the week. They decided to monitor the amount of time it takes to deliver their product over the next few weeks.


Control Charts

• Control Charts Defined– Control charts are used to determine whether

a process will produce a product or service with consistent measurable properties.


Control Charts

• Steps Used in Developing Process Control Charts– Identify critical operations in the process where

inspection might be needed.– Identify critical product characteristics.– Determine whether the critical product characteristic

is a variable or an attribute.– Select the appropriate process control chart.– Establish the control limits and use the chart to

monitor and improve.– Update the limits.


Control Charts

• An Example of When to Use a Control Chart– Counting the number of defective products or

services• Do you count the number of defects in a given

product or service?• Is the number of units checked or tested constant?


Class Activity

Consider you are the student coordinator incharge of conference being conducted by MBA dept on 7th and 8th May.

Chart your plan of action in a Flow Chart to make a presentation to the conference committee which includes : Prez, CMRIT, Principal CMRIT, Coordinator MBA Dept.


SummaryThis presentation provided learning material for each of Ishikawa’s seven basic tools of quality.

Each tool was clearly defined with definitions, a step-by-step process and an example of how the tool can be used.

As seen through the presentation, these tools are rather simple and effective.


Works - Cited• Histograms and Bar Graphs. <http://www.shodor.org/interactivate/lessons/sm3.html>• Your MBA: The Business Study Reference Site. http://

yourmba.co.uk/pareto_diagram.htm • Hci Home Services. Cause and Effect Diagram. http://

hci.com.au/hcisite/toolkit/causeand.htm• Scatter Diagram. http://sytsma.com/tqmtools/Scat.html• Flowchart. <http://http://deming.eng.clemson.edu/pub/tutorials/qctools/flowm.htm>• Run Charts/Time Plot/ Trend Chart.

<http://www.deming.edu.clemson.edu/pub/tutorials/qctools/runm.htm>• Foster Thomas S. Managing Quality An Integrative Approach. New Jersey: Prentice

Hall, 2001

http://yourmba.co.uk/pareto_diagram.htm

http://yourmba.co.uk/pareto_diagram.htm

http://hci.com.au/hcisite/toolkit/causeand.htm

http://hci.com.au/hcisite/toolkit/causeand.htm

http://sytsma.com/tqmtools/Scat.html

http://sytsma.com/tqmtools/Scat.html


Question:Question:

• What are costs of quality?

• Task: Create your list of quality costs and share with the class.

• What is the relationship between quality and productivity?


Why Metrics!

• A strategy without metrics is just a wish. And metrics that are not aligned with strategic objectives are a waste of time.– Emery Powell

• Be careful what you measure -- you might just get it.• If you don’t keep score, you’re only practicing.

– Tom Malone• You get what you inspect, not what you expect.


The Real Bottom Line: Mission and Measures

• One of the most powerful management disciplines, the one that more than any other keeps people focused and pulling in the same direction, is to make an organization’s purposes tangible. Managers do this by translating the organization’s mission – what it, particularly, exists to do – into a set of goals and performance measures that make success concrete for everyone. This is the real bottom line for every organization – whether it’s a business or a school or a hospital. Its executives must answer the question, “Given our mission, how is our performance going to be defined?”– Magretta & Stone, Management. 2002, p. 129


Why Metrics Now!

• The “never satisfied” customer.• Managing the “total” supply chain.• Shrinking product life cycles.• More (not necessarily better) data.• Profit margin squeezes.• Presence of an increasing number of

alternatives.


So What

• Surviving in this new environment means working with:– Less lead time– Less inventory– Less cost– More reliance on the supply chain

• Surviving means having “better” metricsmetrics.


What are Metrics?

• A verifiable measure stated in either quantitative (e.g., 95% inventory accuracy) or qualitative (e.g., as evaluated by our customer,we are providing above average service) terms. A metric is intended to close the gap between value, strategy, and specific activities.

• Metrics– Measure, direct, teach.


Cost of QualityCost of Quality


Quality costQuality cost

A quality cost is considered to be any cost that the company would not have incurred if the quality of the product or service were perfect.

Quality costsQuality costs::

Total quality costs are the sum of :• prevention costs,• appraisal costs, and• internal and external failure costs


Classifying Quality Costs


Quality costs increase over timeQuality costs increase over timeFa

ilure

Cost

s

Time when failure found

Prevention Costs

Failure found during design phase

Failure found at onset of manufacture

Failure found at final inspection

Failure found at installation

Field repair costs

Failure found by customer

Liability costs


ReprocessingReprocessing

RejectsRejectsCustomer returnsCustomer returns

Warranty expensesWarranty expenses

Lost salesLost sales

Overtime to correct errorsOvertime to correct errors

Extra inventoryExtra inventory

Premium freight costsPremium freight costs Extra process capacityExtra process capacity

Loss of goodwillLoss of goodwill

Process downtimeProcess downtime

DelaysDelays

Extra inventoryExtra inventory

Hidden Costs of Poor QualityHidden Costs of Poor Quality


IMPLICATIONS OF THESE COSTS

NEXT LET US LOOK AT:

FINANCIAL AND NON-FINANCIAL MEASURES OF MEASURING CUSTOMER SATISFACTION AND INTERNAL PERFORMANCE

Dr Robert Kaplan and Dr David Norton developed that takes into account Financial and non-financial measures in internal performance, customer satisfaction, etc.


BALANCED SCORE CARD

Gaining widespread popularity now, as many companies are turning to the balanced score card approach.

BSA takes into account measures from accounting, operations, human resources, customers and other stake holders in order to

arrive into a more integrative and broader measure of performance.


TQM Element Financial Measure Non-financial Measure

Customersatisfaction

External failure cost.Field service expense.

Results of customersatisfaction survey.On-time delivery.Number of customercomplaints.

Internal performance

Appraisal cost.Internal failure cost.Prevention cost.

Defect ratesYieldsLead timesIdle capacityUnscheduled machinedowntime

Balanced Score CardBalanced Score Card


Cost of Quality: COQ as motivatorCOQ as motivator

• Companies under TQM do not focus on quality cost minimization.

• Quality improvement projects tend to focus on zero defects or defect reduction to the six-sigma level.

Costs of Conformance: prevention & appraisalCosts of Non-Conformance: Internal Failure & External


COQ ThemeCOQ Theme

• Costs are not incurred or allocated, but rather caused.

• Cost information does not solve quality problems, nor does it suggest specific solutions.

• Problems are solved by tracing the cause of a quality deficiency.


“A.V.Fiegenbaum estimates that 15 to 40% of the manufacturer’s cost of almost any American product that one brought was for waste embedded in ie. Waste of human effort, waste of machine time, non-productive use of accompanying burden” (QUALITY PROGRESS, Nov. 1977)

“With the storehouse of skills and knowledge contained in its millions of unemployed and with the even more appalling under use, misuse and abuse of skills and knowledge in the army of employed people in all ranks in all industries, the United States may be today the most underdeveloped nation in the world” (OUT OF CRISIS by Dr.Edward Deming).


Most people are not intentionally bad.

It is our experience that more people commit mistakes out of ignorance than arrogance.

Those costs not directly contributing for the enhancement of the value of the product can be termed as “Waste.” In other words, that cost which does not add value to the product is termed as waste. For example, a person who is transporting the material (for the next process), which can be transported through a conveyor is only adding cost and not value to the product.

As Dr.Deming Says: “Work SMARTER and Not HARDER” must be the motto. People’s sense of value can be satisfied only when they know that they are dong something worthwhile. To make people work harder and produce more is not RESPECT FOR HUMANITY.


Waste - MUDA

• Production system of Toyota is dedicated to total to total elimination of waste. Due to continuous elimination of waste. Due to elimination of waste and improvement in the process, the production output of Toyota has improved as follows:

• In 1952: 10 employees produced on car per month• In 1961: 1 employee produce one care per month• In 1984: 1 employee produced five cars per monthMr.Taiichi Ohno says: “Work improvement means to discover the best method of doing things within the frame work of existing facilities. It is not to make equipment. It is to think about the way of doing your work”.


Waste – MUDA……

• Toyota Production System and Canon Production System are dedicated towards the elimination of waste in all spheres.

• Toyota Production System identifies “Seven kinds of waste” where Canon Production System identifies “Nine kind of waste”


MUDA – Toyota Production System

Waste arising from:• Overproducing• Time on hand (waiting)• Transporting• Processing itself• Unnecessary stock on hand• Unnecessary motion• Producing defective goods

Each must be managed to improve

quality and reliability.

Each must be managed to improve

quality and reliability.

• Non-Conformances come from many sources including:

• Variation• Culture • Complexity • Mistakes

Quality Management Tool Box

CultureComplexity

Variation

Mistakes

Everyday Examples

New lawn mowers are required to have a safety bar on the handle that must be pulled back in order to start the engine. If you let goof the safety bar, the mower blade stops in 3 seconds or less.

Fueling area of car has three error-proofing devices: 1. insert keeps leaded-fuel nozzle from being inserted 2. tether does not allow loss of gas cap 3. gas cap has ratchet to signal proper tightness and

prevent overtightening.

3.5 inch diskettes cannot be inserted unless diskette is oriented correctly. This is as far as a disk can be inserted upside-down. The beveled corner of the diskette along with the fact that the diskette is not square, prohibit incorrect orientation.


Poke -Yoke

• Poka-Yoke is fool proofing, which is the basis of the Zero Quality Control (ZQC) approach.

• It is a technique for avoiding and eliminating mistakes.

• Generally this technique is used in manufacturing processes, but has much wider uses, such as; offices - order and invoice processing, hospitals - drug dispensing, aircraft maintenance - particularly with processes having the potential of inducing catastrophic in-service failures.


Poke –Yoke……

The term Poka-Yoke is Japanese and can roughly be translated as mistake or fool proofing.

It is derived from ‘Poka’ - inadvertent mistake and ‘yoke’ - avoid. The concept of fool proofing processes and mechanical devises has

been around for many years (e.g. see photographs of floppy disk drive and electrical plugs)

It was the Japanese Matsushita Industrial Engineer Dr. Shigeo Shingo who was probably most prominent and influential in developing it into a technique.

He turned the idea into a powerful approach for eliminating mistakes and achieving zero defects.

Dr. Shingo used the phrase "error avoidance", as he recognised that people, or more specifically Japanese workers, may take offence at the term fool, particularly when associated with mistakes.


Evidence of the Effectiveness

Source: Productivity Inc. and Shingo prize profiles

Cooper Automotive:– 95% less defects than nearest competitor– 75% less injuries– 99.6% less customer defects (13 ppm)– 88% in-plant defect reduction– 70% less warranty cost– 89% scrap reduction (0.7%)– 60% productivity increase


…and Very Effective

• Dana corporation has reported a $500,000 savings resulting from a $6 device. (83,000:1)

• AT&T Power Systems (Lucent Technologies) reported net saving of $2545 per device (3300 devices) [Marchwinsky, 1997]. (25:1*)

• Weber Aircraft reports saving $350,000 during their first year of implementation of approximately 300 devices. (11:1*)

*Assumes an average devise cost $100


Example:Blood-Loc

• Transfusion error: administering wrong unit of blood to patient

• Code for lock found on patient’s wristband


Examples:Off the Shelf

Pick-to-light bin system with sensors

Metal sensing drill



Miniature barcode readers

Vision systems

Laser part locators



Huck Fasteners: proper tightening without threads or torque



Wireless barcode reading palm-pilot scans the patient, the medication and the care giver, to confirm the patient, medication, dose, time and route are correct.

Point of care automation provides correct medication and dose


Module 4 - Process Management and Quality Control Tools

1. What is Poka – Yoke method? Explain briefly. Give two examples. R12. What is the House of Quality in QFD approach? Outline the process of

building the house of Qulaity?R13. What is meant by quality improvement? Explain Quality action cycle?

Explain CI?R14. Briefly explain the 7 Quality control tools. R1 5. Explain with suitable figures the seven tools of Ishikawa.6. What is Pareto Analysis?7. Explain the steps to be followed in drawing the Cause and Effect diagram

with an example.8. What is Kaizen? How is it implemented in a Total Quality organization? List

the activities that fall under the “ Kaizen Umbella”?R19. Differentiate Kaizen from Innovation10.What is vendor rating index?11.Explain six –sigma Motorola system. What are the benefits?(R1)12.State the objectives of JIT manufacturing. Explain the Kanban system of JIT

manufacturing.

Documents

Module 3: Managing for Quality and high Performance Review Questions