II. Improving Processes

© Fred Van Bennekom, Great Brook, 2003 Slide 1

II. Improving Processes


II. Improving Processes

Quality Control– Inspection

– SPC

– Capability Analysis

Total Quality Management (TQM) or Continuous Quality Improvement (CQI)– Fishbone Diagrams

– Pareto Analysis

– Scatter Plots

– Check Sheets

Business Process Reengineering (BPR)


Learning or Experience Curve

Cost per Unit

Cumulative Number of Units from Plant

x 2x 4x

Px

P2x

The cost of a unit after cumulative output doubles, compared to the prior cost per unit.

E.g., 70% learning curve indicates the cost per unit

decreases by 30% with each cumulative doubling.


Sources of Learning

Individual– The worker naturally gets better at a task

– Plateau effect

Organizational – Developing better processes

– Improving technology & equipment

– Working with suppliers

– Working with customers

Learning doesn’t “just happen”


Improving the “Factory”

Factory as Laboratory– Performing R&D in the Manufacturing Plant– Chaparral Steel

• Leonard-Barton, Dorothy, “The Factory as a Learning Laboratory,” Sloan Management Review, Fall 1992, pp. 23-38.

The Service Factory– Incorporating Service Attributes into the Factory– Inviting Customer to the Factory

The Exchange of Ideas– Services learning efficiency from Manufacturing– Manufacturing learning effectiveness from

Services


Stages of Knowledge of Process & Quality Control

None – ignorance Know a good outcome from bad Know the characteristics that describe a quality

outcome Prioritization of these quality characteristics Know the variables that lead to these outcomes Know the impact of individual variables Know the interaction effects among variables Able to measure the variables Able to control process to achieve quality

outcomes – repeatedly & consistently

Art

Science


Quality Assurance — When to Inspect?

INPUT PROCESS OUTPUT

RAW MATERIALSPURCHASED PARTS

BEFORE A COSTLY OPERATIONBEFORE A COVERING OR CLOSING OPERATIONBEFORE AN IRREVERSIBLE PROCESS

FINISHED GOODS


Quality Assurance

Achieved through– Inspection

• 100% inspection, sampling inspection– Process Control

Amount of Inspection

Co

st

Cost of Inspection

Total Cost

Cost of passing Defects

Optimum


Competing Quality Control Concepts

Inspect quality in– Acceptable Quality Levels (AQLs)

– Sample from a Lot

– Decision Rule: if X are good, accept the Lot

– Used both for outgoing and incoming testing

– Philosophy: It’s okay to ship s***

Build quality in– Statistical Quality Control (SPC)

– Inherent Capability Analysis


Inherent Capability Analysis

Determine the inherent capability of the process to produce goods at some quality level.– Gather historical data on a process

– If most output (+/-3falls within Design Specs, then process is capable

– Six-Sigma Quality Level: when 12 output (+/- 6falls within Design Specs


Six Sigma Philosophy

Goal: reduce variability in a process to the point where the resulting product becomes more – Robust in use (good for the customer)

– Easier to design because parts can be “spec’d” to tighter tolerance

– Less expensive to manufacture due to lower quality failures (also good for the customer!)

Quality Level at 6 sigma– 3.4 defects per million opportunities


Six Sigma

The Philosophy– Build to Customer Critical To Quality (CTO) criteria

– Fact-driven, measurement-based

– Structured problem solving approach

– Define, Measure, Analyze, Improve, Control (DMAIC)

– Improvement projects become part of everyone’s job

The Players– Champions: Manager in the project area

– Master Black Belts: Mentors the project teams

– Black Belts: Full time team leader, trainer, facilitator

– Green Belts: Team members


Statistical Process Control

Capable processes also must be controlled SPC distinguishes 2 types of variability

– Normal (Random) variability

– Abnormal (Structural) variability

How to apply SPC– Construct charts (and update occasionally!)

– Collect data regularly – sampling plan

– Observations outside of limits indicate the process potential is “out of control”- statistically

– Find “assignable causes”


Developing Control Charts

Identify the process you want to study Check whether the process is running OK Take sample outputs at some fixed intervals For each sample - calculate the Average and the Range After taking sufficient samples,

Calculate the average of the sample averages, and of the ranges

Calculate the Std. Dev.s for both. Set the UCL (Upper Control Limit) at Average + 3*Std.Dev. Set the LCL (Lower Control Limit) at Average - 3*Std. Dev.


Control Charts

Variable Control Chart (assumes normal distribution) Range Chart p - chart

– also known as fraction defective chart (assumes binomial distribution)– s.d. = SQRT(f.d.*(1 - f.d.)/n) {f.d. = fraction defective}

c - chart– also known as defective chart (assumes Poisson distribution)– s.d. = SQRT(mean)

For any control chart: UCL (Upper Control Limit) = mean + z*s.d. LCL (Lower Control Limit) = mean - z*s.d.

where z is set to reflect the assurance that the process is in control.


Statistical Process Control Charts

Upper Control Limit

Lower Control Limit

1 2 3 4 5 6

Observation Block

x

x

x

x

x

x

xx

7 8

Center line


SPC – Types of Measures

Attributes– Physical measures: weight, height, size

Characteristics– Proportion defective


TQM Defined

American Society of Quality Control

– Simply put, TQM is a management approach to long term success through customer satisfaction

– TQM is based on the participation of all members of an organization in improving processes, products, services, and the culture they work in.

– TQM benefits all organization members and society.


The Start of TQM...

Everything started by Walter Shewhart– Bell Labs in the 1920s– Developed the concept of Statistical Process

Control– Two young scientists working with him:

• W. Edwards Deming• Joseph Juran


W. Edwards Deming

Key Arguments– The basic cause of sickness in American industry and

resulting unemployment is failure of top management to manage.

– Everyone doing his[/her] best is not the answer. It is necessary that people know what to do.

– Drastic change is required. The responsibility for change rests on management. The first step is in learning how to change.

– Quality and productivity are not to be traded off against each other.

– Productivity is a by-product of quality and of doing the job right the first time.


W. Edwards Deming’sFourteen Points

1. Create constancy of purpose

2. Adopt the new philosophy

3. Cease dependence on mass inspection

4. Don’t award business on price tag alone

5. Improve constantly the system of production and

service

6. Institute training

7. Institute leadership


W. Edwards Deming’sFourteen Points

8. Drive out fear

9. Break down barriers between staff areas

10. Eliminate slogans, exhortations, and targets for

the workforce

11. Eliminate numerical quotas

12. Remove barriers to pride of workmanship

13. Institute a vigorous program of education and

retraining

14. Take action to accomplish the transformation


Deming’s Seven Deadly Diseases

1. Lack of constancy of purpose

2. Emphasis on short-term profits

3. Evaluation by performance rating, merit rating,

or annual performance review

4. Mobility of management

5. Running a company on visible figures alone

6. Excessive medical costs

7. Excessive costs of warranty, fueled by lawyers

that work on contingency


Quality Management

DOCUMENT CHANGESIMPLEMENT IN REST OF

THE ORGANIZATION

PLAN

DOACT

CHECK

IDENTIFY AND ANALYZE THE PROBLEM

DATA COLLECTIONPARETO ANALYSISFLOW CHARTSCAUSE AND EFFECT DIAGRAMSCONTROL CHARTS

IMPLEMENT CHANGES ON A SMALL SCALE

EVALUATE NEW DATA

CONTINUOUS IMPROVEMENT - THE DEMING WHEEL


Joseph Juran

The users of a product or service should be able to count on it to do what it’s supposed to do!

Five dimensions of Fitness for Use– Quality of Design

– Quality of Conformance

– Availability

– Safety

– Field Use

Costs of Quality


Quality Dimensions

Design Quality– Characteristics of the product’s original design

Conformance Quality– Building products (or delivering services) to the

specifications of the product designers


Costs of Quality

Prevention Appraisal Internal Failures External Failures


More Gurus

Crosby - Quality is Free Feigenbaum - Total Quality Control (1954) Taguchi - Robust Manufacturing Ishikawa - Total Quality Control the Japanese Way


Taguchi’s Quality Imperatives

Quality losses are mainly external product failure Robustness results primarily from product design Robust products have strong signal-to-noise ratio Use experimental design to test component part

interaction effects Quality Loss Function: square of deviation from target

value X cost of countermeasure Just in spec = just out of spec Trivial deviation from target will “stack up” Reduction in field failures will reduce factory failures


Taguchi vs. Zero Defects

Who’s the better shot?

• Consistent• Predictable• But not on target

• On target• More variability


Garvin’s Dimensions of Quality

Performance Features Reliability Conformance

“Managing Quality: The Strategic and Competitive Edge,” David Garvin, 1988.

Durability Serviceability Aesthetics Perception


Quality Dimensions

Tangible Goods– Safety

– Durability

– Reliability

– Aesthetics

– Conformance

– Performance

– Serviceability

Services– Reliability

– Responsiveness

– Assurance

– Empathy

– Tangibility


Malcolm Baldrige National Quality Award

Created by Public Law 1987 Named after a Secretary of Commerce Three Purposes

– 1. To encourage quality in American industry

– 2. To promote quality awareness and continuous improvement

– 3. To recognize companies that demonstrate successful quality strategies and quality achievement


Lean Production

A combination of multiple tool sets– JIT production (cellular manufacturing)

– Safe workplace (5Ss)

– Pursuit of perfection

– Visual management

– Empowered teams

– Six sigma


Six Sigma vs. Lean – Complementary

Six Sigma Remove variation from

processes to achieve uniform flow

Problem/project focus Research projects with

longer timeline (3-4 months)

Higher complexity with root cause unknown

Lean Remove waste, rework,

inventory to reduce flow time

Flow focused– Remove bottlenecks– Material velocity

Immediate results(1-2 weeks)

Low complexity with known solutions


Lean Production

JIT production (cellular manufacturing) Heijunka: Level workloading Pursuit of perfection Visual process management Empowered teams Kaizen: Continuous improvement involving everyone Poka Yoke: mechanism to stop defects or make errors

obvious


Lean Concepts

Kaizen: Continuing improvement involving everyone Poka Yoke: mechanism to stop defects or make errors obvious Heijunka: Level production loading across all product

variations Kanban: “Signboard” signal to authorize production Andon: “Lantern” – board that signals quality issue Jidoka: autonomation 5 Ss

Sources: www.superfactory.com, www.tpmonline.com


Other Kaizen Tools: 5 Ss

Step Name Action Catch Phrase

1Sort

(Seiri)Remove unnecessary items

from the workplace “When in doubt, throw it out”

2Straighten, Set in Order

(Seiton)Locate everything at the point

of use“A place for everything, and

everything in its place”

3Sweep, Shine

(Seiso)Clean and eliminate the

sources of filth“The best cleaning is to not

need cleaning”

4Standardize

(Seiketsu)Make routine and standard for

what good looks like“See and recognize what

needs to be done”

5Self-discipline, Sustain

(Shitsuke)Sustain by making 5S second

nature“The less self-discipline you

need, the better”

Source: http://www.kaizen-consulting.com/training_5s.htm


Mudas – 7 WastesThe 7 Wastes – Definition Examples Causes Countermeasures

Over-|production Producing more than the customer needs right now

Producing product to stock based on sales forecastsProducing more to avoid set-upsBatch process resulting in extra output

ForecastingLong set-ups“Just in case” for breakdowns

Pull system schedulingHeijunka – level loadingSet-up reductionTPM

Trans-portation

Movement of product that does not add value

Moving parts in and out of storageMoving material from one workstation to another

Batch productionPush productionStorageFunctional layout

Flow linesPull systemValue Stream organizationsKanban

Motion Movement of people that does not add value

Searching for parts, tools, prints, etc.Sorting through materialsReaching for toolsLifting boxes of parts

Workplace disorganizationMissing itemsPoor workstation designUnsafe work area

5S, Point of Use StorageWater SpiderOne-piece flowWorkstation design

Waiting Idle time created when material, information, people, or equipment is not ready

Waiting for partsWaiting for printsWaiting for inspectionWaiting for machinesWaiting for informationWaiting for machine repair

Push productionWork imbalanceCentralized inspectionOrder entry delaysLack of priorityLack of communication

Downstream pullTakt time productionIn-process gaugingJidokaOffice KaizenTPM

Processing Effort that adds no value from the customer’s viewpoint

Multiple cleaning of partsPaperworkOver-tight tolerancesAwkward tool or part design

Delay between processingPush systemCustomer voice not understoodDesigns “thrown over the wall”

Flow linesOne-piece pullOffice KaizenLean Design

Inventory More materials, parts, or products on hand than the customer needs right now

Raw materialsWork in processFinished goodsConsumable suppliesPurchased components

Supplier lead-timesLack of flow, Long set-upsLong lead-timesPaperwork in processLack of ordering procedure

External kanbanSupplier developmentOne-piece flow linesSet-up reductionInternal kanban

Defects Work that contains errors, rework, mistakes or lacks something necessary

Scrap, ReworkDefectsCorrectionField failureVariationMissing parts

Process failureMis-loaded partBatch processInspect-in qualityIncapable machines

GembaSigmaPokayokeOne-piece pullBuilt-in quality3PJidoka

Source: www.Gemba.Com


Bibliography

The Six Sigma Way (ISBN 0-07-135806-4) by Pande, Neuman, and Cavanaugh

The Power of Six Sigma (ISBN 0-7931-4434-5) by Subir Chowdhury

Six Sigma (ISBN 0-385-49437-8) by Harry and Schroeder.

The Six Sigma Handbook (ISBN 0-07-137233-4) by Pyzdek is more technical and becoming the 'handbook' for Black Belts.

The Machine that Changed the World, James Womack

www.6-sigma.com www.sixsigma.co.uk www.sixsigmasystems.com www.isixsigma.com www.shawresources.com/pdf/Choosing%2

0a%20Quality%20Improvement%20Methodology.pdf

www.ge.com/en/commitment/quality/whatis.htm

http://www.swmas.co.uk/Lean_Tools/The_7_Wastes.php

http://www.kaizen-consulting.com/training_7w.htm


More References

http://www.strategosinc.com/just_in_time.htm– A GREAT summary of manufacturing improvement concepts from Ford

to lean. A MUST READ. http://hbswk.hbs.edu/item.jhtml?id=2646&t=operations http://www.kaizen-consulting.com/training_5s.htm http://www.kaizen-consulting.com/training_7w.htm

– This site from Gemba Research does a nice job of summarizing lots of the TPS tools and concepts.

II. Improving Processes

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