Building a Stronger Company - NESEA
Transcript of Building a Stronger Company - NESEA
![Page 1: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/1.jpg)
Building a Stronger Company
Success Through
Quality Management
BUILDINGENERGY Boston 2016
![Page 2: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/2.jpg)
Pyramid of Power
Think in $$
Think in things
![Page 3: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/3.jpg)
Agenda
Creating a common language
Offsetting the cost of high performance options, while increasing profit
How to calculate the cost of inefficiency and poor quality to increase the bottom line
Waste identification
People – Performance - Profit
![Page 4: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/4.jpg)
Quality Requires System Thinking
A system is a whole that derives its characteristics
(good or bad) from the interactions of its essential
parts…..and none taken separately.
All are essential, none are sufficient
![Page 5: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/5.jpg)
Quality Is a System
Quality Management
Quality is system (whole) that derives its characteristics (good or bad)
from the interactions of its essential parts…..and none taken separately.
All are essential, none are sufficient
1. Quality
Control
2. Quality
Assurance
3. Quality
Improvement
![Page 6: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/6.jpg)
1. Do the right thing right
2. Do the right thing wrong
3. Do the wrong thing right
4. Do the wrong thing wrong
Four Ways to Do Work
![Page 7: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/7.jpg)
What’s wrong with this picture?
![Page 8: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/8.jpg)
![Page 9: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/9.jpg)
Four Ways to Do Work
![Page 10: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/10.jpg)
Close is not
good enough
![Page 11: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/11.jpg)
![Page 12: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/12.jpg)
W. Edwards Deming Joseph Juran
3 Quality Greats
Philip Crosby
![Page 13: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/13.jpg)
Three Important Facts
“Do it right the first time.“
Dr W. Edwards Deming
![Page 14: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/14.jpg)
Three Important Facts
"Inspection with the aim of finding the
bad ones and throwing them out is too
late, ineffective, costly. Quality comes not
from inspection but from improvement of
the process.“
Dr. W. Edwards Deming
![Page 15: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/15.jpg)
Three Important Facts
“Fear must be driven out of the workplace”
Dr. W. Edwards Deming
![Page 16: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/16.jpg)
Essential Parts of a More Profitable Company
• Clear requirements, standards, code, policies, procedures
• Focus is on process
• Culture is prevention
• Measurement of quality is the cost of poor quality and inefficiency $$
Taken separately none will
produce a more profitable
company
All are Essential
None are Sufficient
![Page 17: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/17.jpg)
We need to see things differently
![Page 18: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/18.jpg)
![Page 19: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/19.jpg)
![Page 20: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/20.jpg)
Common Language
What is quality?
![Page 21: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/21.jpg)
WHAT IS QUALITY
Quality is doing agreed upon
requirements and standards
Either you did or your did not
Not high quality, not low quality, not good quality, not
bad quality
![Page 22: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/22.jpg)
Creating A Quality Culture-Common Language
Quality definition- Conformance to agreed upon requirements and standards
Quality culture- Prevention
Quality performance standard - Zero defects
Quality measurement- Cost of poor quality, inefficiency and waste
Waste - Anything that does not add value to the end product
Value - Is what the customer wants and is willing to pay for
![Page 23: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/23.jpg)
Sincerity Is Never Enough
![Page 24: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/24.jpg)
Sincerity Is Never Enough
![Page 25: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/25.jpg)
Quality is About…
PEOPLE
Internal & External
PROFIT
ROI
PERFORMANCE
Effective & Efficient
![Page 26: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/26.jpg)
PEOPLE
Internal & External
Respect and Honor Each:• Employees• Customers• Funders• Trade Allies• Suppliers
PATH TO SUSTAINABLE PROFIT
![Page 27: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/27.jpg)
ATTENTION!
• Process fails more than people
• Blame should fall on the process not people
• All defects are caused, all causes can be prevented
ALL WORK IS
A PROCESS
![Page 28: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/28.jpg)
A Quality Culture Must Be Free of Blame
![Page 29: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/29.jpg)
Blame Never Pays
![Page 30: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/30.jpg)
“We must drive fear out of the workplace.”
W. Edwards Deming
Fourteen Obligations of Management, point 8
“Quality is impossible if people are afraid to tell the truth.”
![Page 31: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/31.jpg)
“Creating a strategic plan that is customer-focused requires that
leaders become coaches and
teachers, personally involved, consistent,
eliminate the atmosphere of
blame, and make their decisions on the best available data.”
- Juran (1988)
Joseph JuranJuran’s Quality
Handbook, Freedom From Fear, pg., 15.5
![Page 32: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/32.jpg)
“To blame another for a
nonconformance problem is naive
at best.”Philip CrosbyQuality Without Tears
![Page 33: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/33.jpg)
Blame Falls onpeople when…
Wrong doing is done
with -
intention
![Page 34: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/34.jpg)
Innovative Thinking
• NASA needed world class employees, we were behind in the space race.
• Can we develop a test to measure who was a world class innovator?
• The test was given to 1,600 Kindergarteners
• What percentage were world class?
![Page 35: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/35.jpg)
World Class InnovatorsNASA TEST
Source: Breakpoint and Beyond
![Page 36: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/36.jpg)
World Class Innovators
NASA TEST
Source: Breakpoint and Beyond
![Page 37: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/37.jpg)
World Class Innovators
NASA TEST
Source: Breakpoint and Beyond
![Page 38: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/38.jpg)
World Class InnovatorsNASA TEST
Source: Breakpoint and Beyond
![Page 39: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/39.jpg)
A WORKPLACE WITH BLAME
• Drives out honesty
• Drives out improvement
• Stifles learning
• Drives out innovation
![Page 40: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/40.jpg)
What part of the scope don’t they understand?
![Page 41: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/41.jpg)
Quality is About…
PEOPLE
Internal & External
PROFIT
ROI
PERFORMANCE
Effective & Efficient
![Page 42: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/42.jpg)
Quality Interactions
Input Process Output
Process converts input into output
![Page 43: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/43.jpg)
Quality Interactions
Input Process Output
*Clear Scopes,
Requirements,
& Standards
*People
*Tools
*Materials
*Standardized Training
*Standardized Work
*Mistake Proofing
*Critical details
Meets Standards and
desired outcome is
SatisfiedEFFICIENCY OF
PROCESS
Results achieved
vs. resources used
QUALITY ASSURANCE
Monitoring, Measuring and Building Confidence
QUALITY CONTROL
Controlling Variation
EFFECTIVENESS
OF PROCESS
Ability to achieve
desired outcomeBUILD QUILITY IN
DON’T BOLT IT ON
![Page 44: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/44.jpg)
Toyota HR Management
INPUT PROCESS OUTPUT
![Page 45: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/45.jpg)
Quality is About…
PEOPLE
Internal & External
PROFIT
ROI
PERFORMANCE
Effective & Efficient
![Page 46: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/46.jpg)
Consumer Cost Per Housing TypePer Month
Code Energy Star Net Zero Ready
5K
$35.00
12K
$72.00
How can we off set the cost of quality and performance?
![Page 47: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/47.jpg)
Pre and Post Construction Expense
Can Lock Up Opportunity
What does it cost?
![Page 48: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/48.jpg)
Inspection/Re-inspection
Variation
Waste
ReworkDelays/Increased Cycle Time
Customer
Dissatisfaction
High Risk
The obvious and
“visible” costs are a
small portion of the
overall cost
Lost Market Share
The bottom of the
iceberg represents
the majority of the
cost and are not
easily identified and
measured.
Excessive
Overtime
Late Paperwork
Safety Issues
Pricing or
Billing ErrorsEmployee
Turnover
Lack of follow-up
Testing
Employee Unhappiness
![Page 49: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/49.jpg)
What does a hamburger cost?
![Page 50: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/50.jpg)
What does a gallon of regular gas cost?
![Page 51: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/51.jpg)
What does a tube of latex caulk cost?
![Page 52: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/52.jpg)
What does a bucket of mastic cost?
![Page 53: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/53.jpg)
What does it cost to go back and fix attic hatch weather-stripping done improperly?
![Page 54: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/54.jpg)
What is the level of our quality?
• The level of quality of any company is its acceptance to non-conformance to requirements, standards and codes, etc.
• What is the Cost of Poor Quality (COPQ) or inefficiency?
• Quality is measured in money
![Page 55: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/55.jpg)
"The cost of poor quality consists of all costs that would disappear if therewere no deficiencies."
J.M. Juran
How much does it cost?
![Page 56: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/56.jpg)
STEP 1 Name Cost Areas of
Doing Business
![Page 58: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/58.jpg)
www.advancedenergy.org/success_with_quality_management
You can get the spreadsheets free at…
![Page 59: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/59.jpg)
60
Tile
Framing
Foundation
Lighting
Electrical
Cabinet
HVAC
Roofing
Carpet
Appliance
Shelving
Gutter
Landscape
Insulation
Paint
Windows
Lumber
Plumbing
Concrete
____ reworks, ___% houses (100) = ___ Reworks
$ _____________
Trim
Water proofing
Drywall
Doors
![Page 60: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/60.jpg)
A Sustainable Process Must Be Founded OnDefect Prevention
DEFECT
BEFORE DURING
DEFECT
AFTER
DEFECT
Detection
Three Types Of Inspection
Prevention
![Page 61: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/61.jpg)
Advantages to Cost Control
• Improves profits
• Improves financial position
• Improves competitive capabilities
• Serves as an index of efficiency
• Company serves as a trend setter for other companies
• Efficient utilization of scarce resources
![Page 62: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/62.jpg)
Cost Control and Waste
1. Processing - Scope variation
2. Rework - Any repair
3. Transport – People, materials
4. Waiting - Waiting on material or people
5. Waste - Time, materials
6. Intellect - Failure to fully utilize the time and talents of people
Waste: Anything that consumes resources
and does not add value to the end product
![Page 63: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/63.jpg)
We must stop wasting money
![Page 64: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/64.jpg)
A Sustainable Process Must Eliminate Complexity/Waste
65
Complexity: Any
unnecessary work that
absorbs resources but
creates no value
Mistakes
Rework
Delays
Waste
Inefficiencies
Variations
![Page 65: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/65.jpg)
$1.00 Spent on Prevention Saves
• Prevention
Cost
• Correction
Cost
• Failure
Cost
Source: Total Quality Management, Joel E. Ross
![Page 66: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/66.jpg)
• A homeowner, had a beautiful view of the mountains, until a new neighbor purchased the lot below his house and built a new home.
• The new home was 18 inches higher than the ordinances would allow, so the homeowner with a view got mad about his lost view, went to the city to make sure they enforced the lower roof line ordinance.
• The new neighbor had to drop the roof line, at great expense.
• Recently, the first homeowner called the city again, and informed them that his new neighbor had installed some vents on the side of his home and he did not like them.
• When the city went to see what the vents looked like, this is what they found ...
ANGRY HOMEOWNERS = LOSS
![Page 67: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/67.jpg)
LOYALTY
If you lock your best friend and your dog
in a trunk for 2 hours, which will be happy to see you,
when you open the trunk?
![Page 68: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/68.jpg)
One is the function of another
Profitability & Job Security
Satisfied and Loyal
Customers
Quality Products and
Services
Satisfied & Loyal
Employees
“Companies can’t give job security, only customers can.”
- Jack Walsh
1.
2.3.
4.
![Page 69: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/69.jpg)
Delivering what the customer wants and is willing to pay for…THAT IS THE DEFINITION OF VALUE
CUSTOMER WANTS NOT
NEEDS
1
DEFECT FREE PRODUCTS, ON TIME AND PRICED RIGHT
2
INCREASED PROFIT3
DNA of Building a More Profitable Company
![Page 70: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/70.jpg)
![Page 71: Building a Stronger Company - NESEA](https://reader033.fdocuments.net/reader033/viewer/2022051315/627abd389f4cf87eda47aab2/html5/thumbnails/71.jpg)
16 Attributes of a Quality Company