Total Quality Management. 2 A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

Total Quality Management

2

Total Quality ManagementA philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

◦ Continuous improving◦ Involvement of everyone◦ Customer satisfaction

T

Q

M

3

Find out what the customer wants?

Design a product or service that meets or exceeds customer wants

Design processes that facilitates doing the job right the first time

Keep track of results Extend these concepts to suppliers

The TQM Approach

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Elements of TQM

Continual improvement: Kaizen Competitive benchmarking Employee empowerment Team approach Decisions based on facts Knowledge of tools Supplier quality Quality at the source: The philosophy of

making each worker responsible for the quality of his or her work.

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Lack of:◦Company-wide definition of quality◦Strategic plan for change Resistance to a change

◦Customer focus◦Real employee empowerment◦Strong motivation◦Time to devote to quality initiatives

◦Leadership

Obstacles to Implementing TQM

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Six Sigma

Six Sigma is the measure of quality that strives for near perfection.

It is a disciplined, data-driven methodology focused on eliminating defects.

Six Sigma is a reference to a statistical

measuring system, equivalent to just 3.4 defects per every million opportunities

Conceptually◦ Program designed to reduce defects◦ Requires the use of certain tools and techniques

Intense competitive pressures – especially from rapid globalization.

Greater consumer demand for high quality products and services, little tolerance for failures of any type.

Top management (and stockholder) recognition of the high costs of poor quality.

The availability and accessibility of large data bases and the increasing ability to explore, understand, and use the data.

WHY SIX SIGMA?

Defects per Million % AccuracyOpportunities (DPMO)

One Sigma 691,500 30.85%Two Sigma 308,500 69.15%Three Sigma 66,810 93.32%Four Sigma 6,210 99.38%Five Sigma 233 99.977%Six Sigma 3.4 99.9997%Seven Sigma 0.020 99.999998

Six sigma and % accuracy

Cost of poor quality

0%

5%

10%

15%

20%

25%

30%

3 4 5 6 7

Cos

t of p

oor

qual

ityas

% o

f ear

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s

Sigma Level

Cost of poor quality versus Sigma level

Motorola is known for its cool cell phones, but the company's more lasting contribution to the world is the quality-improvement process called Six Sigma.

In 1986 an engineer named Bill Smith, sold then-Chief Executive Robert Galvin on a plan to strive for error-free products 99.9997% of the time. It is the origin of ‘Six Sigma’.

Inventor of Six Sigma

Motorola saved $17 Billion from 1986 to 2004, reflecting hundreds of individual successes in all Motorola business areas including: ◦ Sales and Marketing ◦ Product design ◦ Manufacturing ◦ Customer service ◦ Transactional processes ◦ Supply chain management

Six Sigma at Motorola

“First, what it is not. It is not a secret society, a slogan, or a cliché. Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services”◦ Saved $750 million by the end of 1998 ◦ Cut invoice defects and disputes by 98 percent,

speeding payment, and creating better productivity

◦ Streamlined contract review process, leading to faster completion of deals and annual savings of $1 million

General Electric: What Is Six Sigma?

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Six Sigma Programs

Six Sigma programs ◦ Improve quality◦ Save time◦ Cut costs

Employed in ◦ Design◦ Production◦ Service◦ Inventory management◦ Delivery

Six Sigma Methodology (DMAIC)

Define

Measure

Analyse

Control

Improve

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DMAIC Steps 1. Define

Identify projects that are measurable Define projects including the demands of

the customer and the content of the internal process.

Develop team charter Define process map

1. Define 2. Measure 3. Analyze 4. Improve 5. Control

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DMAIC Steps 2. Measure

Define performance standards Measure current level of quality into Sigma. It

precisely pinpoints the area causing problems. Identify all potential causes for such problems.

5.0Control

2. Measure1. Define 3. Analyze 4. Improve 5. Control

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DMAIC Steps 3. Analyse

Establish process capability Define performance objectives Identify variation sources

3.0 Analyze

Tools for analysis Process Mapping Failure Mode & Effect Analysis Statistical Tests Design of Experiments Control charts Quality Function Deployment (QFD)

3. Analyse1. Define 2. Measure 4. Improve 5. Control

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DMAIC Steps 4. Improve

Screen potential causes Discover variable relationships among causes

and effects Establish operating tolerances Pursue a method to resolve and ultimately

eliminate problems. It is also a phase to explore the solution how to change, fix and modify the process.

Carryout a trial run for a planned period of time to ensure the revisions and improvements implemented in the process result in achieving the targeted values.

4. Improve1. Define 2. Measure 3. Analyse 5. Control

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DMAIC Steps 5. Control

Monitor the improved process continuously to ensure long term sustainability of the new developments.

Share the lessons learnt Document the results and accomplishments of

all the improvement activities for future reference.

5. Control1. Define 2. Measure 3. Analyse 4. Improve

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Basic Quality Tools

Flowcharts Check sheets Histograms Pareto Charts Scatter diagrams Control charts Cause-and-effect diagrams Run charts

Flowcharts

Check Sheet

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Histograms A bar chart of the frequency of outcomes

Pareto Chart P

erc

en

t fr

om

each

cau

se

Causes of poor quality

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cal

ibra

tion

s

Def

ective

par

ts

Wro

ng d

imen

sion

s

Poor

Des

ign

Ope

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r er

rors

Def

ective

mat

eria

ls

Surfac

e ab

rasi

ons

0

10

20

30

40

50

60

70(64)

(13)(10)

(6)(3) (2) (2)

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Scatter diagram

Determine the correlation between quality and operations factors

Control Chart

970

980

990

1000

1010

1020

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

UCL

LCL

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Cause-and-Effect Diagram orFishbone diagram

Run Chart

Time (Hours )

0.440.460.480.50.520.540.560.58

1 2 3 4 5 6 7 8 9 10 11 12

Time (Hours)

D

iam

ete

r

Tracking Improvements UCL

LCL

LCL LCL

UCL

UCL

Process not centered and not stable

Process centered and stable

Additional improvements made to the process

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Methods for Generating Ideas

Brainstorming

generate a free flow of idea in a group of people

Quality circles

Group of workers who find ways of improving Interviewing: Benchmarking: Measure against best 5W2H:

what, why, where, when, who, how, how much

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Team approach◦ List reduction

Choosing a movie with friends on a Friday night◦ Balance sheet

Choosing an apartment to stay, pros and cons of each option

◦ Paired comparisons Eliminate alternatives by comparison

Quality Circles

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Identify a critical process that needs improving

Identify an organization that excels in this process◦Not necessarily from the same industry

Contact that organization◦Confidentiality is important

Analyze the data Improve the critical processBenchmarking numbers is much more

common than benchmarking processes

Benchmarking Processes

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