After completing this module, you will be able to:1. Define quality

2. Explain how to manage a quality management program in an organization

3. Understand Six Sigma, TQM and other approaches to Manage Quality

4. Use various Quality Management Tools

5. Participate/Lead quality certification (such as, ISO 9000) efforts in an organization

Concept Demonstrated:1. Variation (inconsistency) Causes Poor Quality

2. Two Causes of Variability Chance Causes—attributed to the causes inherent in the

system.

Assignable Causes or special causes

Two Causes of Variability◦ Chance Causes: attributed to the system

The Management is primarily responsible to control/improve the system

◦ Assignable Causes or special causes Typically, the front line employees take care of this

category.

Responses can be varied

Two broad perspectives:◦ Consumer’s perceptive

Fitness for use

Value

Quality Characteristics

◦ Producer’s perceptive

Conformance to specification

Products◦ Performance --Features --Reliability

◦ Durability --Safety --Conformance

◦ Aesthetics --Serviceability --Perception

Service◦ Time/Timeliness --Completeness

◦ Courtesy --Consistency

◦ Accuracy --Accessibility/Convenience

◦ Responsiveness

A basic business strategy that provides goods and services that completely satisfy both internal and external customers by meeting their implicit and explicit needs (Tennor & DeToro, 1992)

Base Expectation

Requirements

Deligh

tDelight

Source: Tenner & DeToro, 1992

Implicit (Absence of these dissatisfaction)

Explicit (customer demands explicitly)

Latent/Delight (customer didn’t demand but is delighted to have)

Two primary sets of costs are involved in quality:◦ control costs ◦ failure costs

Costs broken into four categories:◦ Prevention costs◦ Appraisal costs◦ Internal costs of defects◦ External costs of defects

Quality Cost Classification

Prevention Appraisal Internal Failure External Failure

Planning Training Process Control Maintenance, etc

Test Inspect, etc.

Scrap Rework Corrective Action, etc.

Goodwill Loss Recall Warranty Returns Law suites, etc.

The Good: Prevention

The Bad: Appraisal and Internal Failure

The Ugly: External Failure

Dr. Shewart began using statistical control at the Bell Institute in 1930s

Military standards developed in 1950s

After World War II, Japanese Union of Scientist and Engineers began consulting with Deming

Deming Prize introduced in Japan in 1951

Quality assurance concept proposed in 1952

Juran makes first trip to Japan in 1954

Quality becomes Japan’s national slogan in 1956

First quality circles created in 1957

10,000 quality circles by 1966

100,000 quality circles by 1977

First U.S. quality circle 1974

1980—The USA learns about Deming through a NBC documentary—If Japan Can, Why Can’t We?

1986 Bill Smith of Motorola develops the Six-Sigma concept

International Organization for Standards (ISO) published the ISO 9000 series in 1987; later modified in 2000.

1988—Malcolm Baldrige National Quality Award is instituted

1990s—TQM becomes a buzz word Late 1990s—ISO 9000/14000 become de facto

requirement for most businesses world-wide. 2000s—Service Industry/Government/Education

Institutions also embrace Quality Management (leading ones are Hospital and hospitality industry)

1. Deming: ◦ Management is responsible for most quality

problems;

◦ advocated use of statistics

2. Juran: ◦ Quality trilogy

Quality planning,

quality control, and

quality improvement

3. Feigenbaum: ◦ Total quality control (TQC/M)

◦ Quality is responsibility of all.

4. Ishikawa: Total company involvement (Fishbone

diagram)

5. Crosby: Quality is free; zero defect; doing the job

right the first time.

Better to produce item right the first time than to try to inspect quality in

Quality at the source - responsibility shifted from quality control department to workers

Continuous Improvement◦ Minor, incremental, everyday improvement (Kaizen)

◦ Break-through improvement

Determine what customers want

Develop products and services

Develop production system

Monitor the system

Include customers and suppliers

Customer Focus

Process Improvement

Total Involvement

Continuous

Improvement

Total

Involvement

Process

Improvement

Customer

Focus

Leadership Education and Training Supportive Structure

Communication Reward and Recognition Measurements

The Six Sigma concept was developed by Bill Smith, a senior engineer at Motorola, in 1986 as a way to standardize the way defects were tallied.

Sigma is the Greek symbol used in statistics to refer to standard deviation which is a measure of variation.

Adding “six” to “sigma” combines a measure of process performance (sigma) with the goal of nearly perfect quality.

In the popular book The Six Sigma Way, Six Sigma is defined as:◦ a comprehensive and flexible system for

achieving, sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinventing business processes. (p. xi)

Six Sigma projects generally follow a well defined process consisting of five phases. ◦ define ◦ measure ◦ analyze ◦ improve ◦ control pronounced dey-MAY-ihk

The define phase of a DMAIC project focuses on clearly specifying the problem or opportunity, what the goals are for the process improvement project, and what the scope of the project is. Identifying who the customer is and their requirements is also critical given that the overarching goal for all Six Sigma projects is improving the organization’s ability to meet the needs of its customers.

Conformance to specifications Performance Quick response Quick-change expertise Features Reliability Durability Serviceability Aesthetics Perceived quality Humanity Value

Definition:◦ Search for a better way of doing things by

observing others (perhaps the best-in-class performer)

◦ Continuous search for new ideas, methods, practices, and procedures (Robert Camp)

Successful organizations have a systematic, written procedure for benchmarking:◦ Rank the functions, activities, and processes that

need to be improved. Focus on high ranked items; develop a plan for internal/external benchmarking.

◦ Identify the key cost, time or quality performance indicators (related to customer needs)

◦ Identify sources for benchmarking (most difficult step)

◦ Measure the performance of the indicators (step 2) for the potential benchmark sources. Compare them to your own.

◦ Improve your own process, activities, function to meet and exceed the best benchmark.

Pitfall Don’t just benchmark within the same

industry; otherwise you will just play catch up.

A related concept--Reverse Engineering◦ Carefully dismantling a competitor’s product to

improve one’s own product (not to be confused with stealing)

Reverse engineering is somewhat simple as it is product-oriented.

Benchmarking is process oriented and not so straight forward.

Two key drivers of an organization’s long-term competitive success are the extent to which its new products or services meet customers’ needs, and having the organizational capabilities to develop and deliver such new products and services.

Tools for helping translate customer desires directly into product service attributes.

Output Planning Matrix◦ Customer requirements to Technical

Requirements

Output Specification Matrix◦ Technical Requirements to Component

Characteristics

Process Planning Matrix◦ Component Characteristics to Process

Requirements

Process Deployment Matrix◦ Process Requirements to Process Activities

The measure phase begins with the identification of the key process performance metrics.

Once the key process performance metrics have been specified, related process and customer data is collected.

Two commonly used process performance measures, namely, Defects per Million Opportunities (DPMO) and Process Sigma.

Earlier it was noted that a literal interpretation of Six Sigma is 3.4 defects per million opportunities (DPMO).

How sigma itself can be used to measure the performance of a process.◦ One way to measure the performance of a process

is to calculate the number of standard deviations the customer requirements are from the process mean or target value.

In this phase the objective is to utilize the data that has been collected to develop and test theories related to the root causes of existing gaps between the process’ current performance and its desired performance.

Alfredo Pareto, an Italian economist, noted concentrated distribution of wealth.

Juran noted: 80% of problems are created by 20% of causes.

These 20% of causes (the vital few) are more critical than the remaining 80% of causes (the trivial many).

1. Categorize problem causes.2. Determine how relative importance must

be judged (e.g., Frequency of occurrences, dollar value).

3. Rank the categories form most important to least important.

4. Compute percentage attributed to each problem cause.

5. Plot a bar graph for pictorial representation.

Categories OccurancesLack of medication 17

Lack of Parking spaces 3

Physician not on duty 2

Lack of Nursing Staff 4

Bed not available 36

Lack of registration staff 8

*Resemblance to any actual situation at any hospital is coincidental.

Problem: Hospital Emergency Admission

Categories Occurances Percentage Cummulative %Bed not available 36 51.4% 51.4%

Lack of medication 17 24.3% 75.7%

Lack of registration staff 8 11.4% 87.1%

Lack of Nursing Staff 4 5.7% 92.9%

Lack of Parking spaces 3 4.3% 97.1%

Physician not on duty 2 2.9% 100.0%

Sum 70

0.0%20.0%40.0%60.0%80.0%

100.0%120.0%

Bed

Medic

atio

Regis

tration

Sta

ffN

urs

ing

Sta

ffP

ark

ing

Spaces

Physic

ian

Percentage

Cummulative

%

“Bed not available” and “Lack of medication” are the two vital problem areas

The rest are trivial many (maybe useful many).

The hospital must explore these two problems first.

It should yield biggest “bang for the buck.”

A structured approach to search for possible cause(s) of a problem.

A.K.A.—Fishbone, Ishikawa, feather, or enumeration diagram.

Developed through brainstorming.

It organizes the ideas generated during the brainstorming session (typically).

1. Identify effect: it is a specific problem (it can also be a desired goal).

2. Identify major cause categories: may use the 6 “Ms” or other generic categories. Money, Wo(manpower), methods, machines, material, management.

3. Identify specific minor causes: 5 “Ws” and “how” can help here. Who-what-when-where-why-how.

4. Analysis: determine those causes that lead to greatest potential benefits.

Emergency Department

Admitting ProcessMed/Sug Unit

Environmental Services

Bed not

Available

Example: Bed not available

Emergency Department

Admitting ProcessMed/Sug Unit

Environmental Services

Broken Bed SwitchTime of Discharge

Admitting Communication

Multiple Transfers

Bed Preference

Unit Clerk

Responsibility

High

VolumeUnclear

responsibilities

Policy

Time of Discharge

Time of day

Communication

RN not availablecommunication

Bed not

Available

Example continued…

Improve the target process by designing creative solutions to fix and prevent problems.

Create innovate solutions using technology and discipline

Develop and deploy implementation plan (Source: http://www.isixsigma.com/dictionary/DMAIC-57.htm)

Please watch the “process improvement” immediately following this video clip.

Statistical Quality Control

Chance variation is variability built into the system.

Assignable variation occurs because some element of the system or some operating condition is out of control.

Quality control seeks to identify when assignable variation is present so that corrective action can be taken.

Inspection for Variables: measuring a variable that can be scaled such as weight, length, temperature, and diameter.

Inspection of Attributes: determining the existence of a characteristic such as acceptable-defective, timely-late, and right-wrong.

Developed in 1920s to distinguish between chance variation in a system and variation caused by the system’s being out of control -assignable variation.

Repetitive operation will not produce exactly the same outputs.

Pattern of variability often described by normal distribution.

Random samples that fully represent the population being checked are taken.

Sample data plotted on control charts to determine if the process is still under control.

Observation should be spread out on either side of the center line, representing the 68%, 95% and 99.7% rule.

No perceivable pattern

Flow process charts

Run charts

Cause-and-effect chart

Pareto Analysis

Histogram

Control Chart

Scatter Diagram

SUBJECT: Customer Order fulfillment (Fast food)

Dist (ft) Time (min) Symbol Description

D Take order

Walk to cup Storage

D Pick right cup

D Walk to dispenser

= Operation; = Transport; = Inspect; D = Delay; = Storage

D18

30

Take Order

Plot of Sample Data Over Time

0

20

40

60

80

1 5 9 13 17 21

Time

Sam

ple

Val

ue Sample

ValueUCL

Average

LCL

Time (Hours)

ML

Dis

pen

sed

Reaction time in Minutes

0

20

40

60

0 5 10 15

Medication in mg

Y

Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount

Monday

Malcolm Baldrige Award Deming Award ISO 9000 ◦ Establish quality through detailed documentation,

work instructions and recordkeeping.◦ Process (NOT product) Certification.◦ ISO= equal or uniform in Greek

ISO 14000◦ Environment management standard

Process Certification (not product)

International Organization for Standards (ISO) published the ISO 9000 series in 1987

De facto requirement in Europe

Adopted by EC in 1989

US companies are adopting the standard at a rapid rate now (though resistance and criticisms are abundant)

◦ Principle 1: Customer focus

◦ Principle 2: Leadership

◦ Principle 3: Involvement of people

◦ Principle 4: Process approach

◦ Principle 5: System approach to management

◦ Principle 6: Continual improvement

◦ Principle 7: Factual approach to decision making

◦ Principle 8: Mutually beneficial supplier relationships

Understand customer needs and strive to meet/exceed

Benefits:◦ Enhanced customer satisfaction, loyalty, and

repeat business

Must:◦ organization objectives linked to customer needs

and communicated throughout the organization◦ Measure customer satisfaction and act◦ Balanced approach to satisfying customers as

well as other stakeholder

Establish unity of purpose and direction Create environment that encourages people

to become fully committed to organization goals.

Benefits:◦ Motivated people; activates are evaluated, aligned

and implemented in a unified way.

Must:◦ Create challenging goals/targets◦ Inspire, encourage and recognize people’s

contribution◦ Establish trust and eliminate fear

Involve everyone fully Benefits:◦ Motivated, committed people◦ Self accountability and eagerness for continual

improvement

Must:◦ People understand the worth of their contribution◦ People accept ownership of problems and

responsibility to solve them◦ People actively enhance their competence◦ People freely share knowledge and experience

Activities and resources to be managed as a process

Benefits:◦ Lower cost, effective use of resources◦ Improved results

Must:◦ Establish clear responsibilities◦ Analyze and measure capabilities of key activities◦ Focus on resources, methods, and material to

improve key activities

Managing interrelated processes for effectiveness and efficiency

Benefit:◦ Integration and alignment of processes will lead

to desired results

◦ Ability to focus on the key processes

Must◦ Functional integration (local vs. global

optimization)

◦ Must understand interdependencies between processes

It is a never-ending process Benefits:◦ Improved capabilities◦ Flexibility to react quickly◦ Improved value to the customer

Must:◦ Use organization-wide approach to continual

improvement◦ Continual improvement of product, process and

system—everyone’s responsibility◦ Provide training and tools of continuous

improvement

Effective decisions are based on data and information

Benefits:◦ Better and informed decision◦ Increased ability to review, challenge and change

opinions and decisions

Must:◦ Accurate/reliable data and information is

maintained◦ Valid data analysis methods are used.◦ Balance between factual analysis and

experience/intuition.

Organization and its suppliers are interdependent and can together create value

Benefits:◦ Flexibility and speed to handle changing

customer needs◦ Cost optimization (price-minus rather than cost-

plus pricing)

Must:◦ Carefully select key supplier; long-term

relationship◦ Sharing mutual information◦ Partnership rather than “we vs. them.”

Management

Responsibility

Resource

Management

Product/

Service

Realization

Measurement

Analysis &

Improvement

Outp

ut