Continuous Improvement Philosophies

Transcription

1 Inputs Transformation Process Throughput Managing Operations: A Focus on Excellence Cox, Blackstone, and Schleier, 2003 Chapter 3 The Total Quality Management Philosophy: Managing Operations For Quality Continuous Improvement Philosophies Just-in-Time Theory of Constraints Total Quality Management CBS Chapter Total Quality Management (TQM) defined: A term coined to describe Japanese-style management approaches to quality improvement. 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, goods, services, and the culture in which they work.(apics Dictionary, 97) CBS Chapter 3 3-2

2 CBS Chapter What is Quality? Quality is a concept that does not lend itself to easy description or simple measurement. The definitions of quality vary with those who define it. However, for a total quality perspective any definition of quality must start with the customer -- customer-focused quality. Quality Defined Understanding that quality is defined by the customer is critical to the total quality approach. Key components of any definition of Quality: Quality involves meeting or exceeding customer expectations; Quality applies to products, services, people, processes, and environments; Quality is an ever-changing state (what is quality today may not be considered quality tomorrow.) CBS Chapter The Customer s Perspective The basic definition from the customer s perspective is fitness for use. This definition allows us to differentiate among various products. Is a Ford Focus a quality product compared to a Mercedes SLK? It depends on who is defining quality. That s why markets exist for both automobiles. CBS Chapter 3 3-5

3 CBS Chapter Garvin s Eight Dimensions 1. Performance 2. Features 3. Reliability 4. Conformance 5. Durability 6. Serviceability 7. Aesthetics 8. Perceived value The Producer s Perspective Once the customer s perception of quality is defined (using something like QFD) then the producer must turn this perception into a sellable product. Quality of Design - the ability of the product as designed to satisfy or exceed customer requirements Quality of Conformance - the ability of manufacturing to meet design requirements Defect detection v. defect prevention CBS Chapter Quality: Fitness for Intended Use OR Conformance to Specifications CBS Chapter 3 3-8

4 CBS Chapter Major concepts within TQM Concurrent engineering Statistical quality control Gradual elimination of problems These concepts correspond to the design, execution, and improvement phases of production. Major Concept #1 DESIGN FOR MANUFACTURABILITY & SERVICEABILITY CONCURRENT ENGINEERING CBS Chapter Concurrent Engineering Reduces Cost of Manufacturing Improves Reliability Reduces Cost of Repairs CBS Chapter

5 CBS Chapter Major Concept #2: Statistical Process Control Reduce Variability Major Concept #3: Gradually eliminate problems CBS Chapter Eliminate Problems 1. Stop Line for Problems 2. Fix It 3. Use Pareto Analysis to Find Most Common 4. Ask Why 5 Times 5. Correct Underlying Problem CBS Chapter

6 CBS Chapter Some quality guru s W. EDWARDS DEMING Taught Japanese WALTER SHEWHART Invented SPC KAORU ISHIKAWA Fishbone Diagram SHIGEO SHINGO Mistake Proofing GENICHI TAGUCHI Field Failures Ishikawa Diagram Battery Lights On Out of gas Starter Bad cell Corroded cable Alternator Car Won t Start CBS Chapter The Taguchi Loss Function COSTS $ 0 12-OUNCE AMOUNT CBS Chapter

7 CBS Chapter Cost of Quality Enforcement Cost of achieving good quality Prevention Planning, Product design, Process, Training, Information Appraisal Inspection and testing, Test equipment, Operator Cost of Quality Defects Cost of poor quality Internal failure costs Scrap, Rework, Process failure, Process downtime, Price-downgrading External failure costs Customer complaints, Product return, Warranty, Product liability, Lost sales CBS Chapter Cost of Quality Viewpoint $ Cost of Enforcement Cost of Defects Optimal Quality 100 % QUALITY CBS Chapter

8 CBS Chapter EC of Cost of Quality B Satisfy our customers. (revenue side) D Strive to make 100% quality. A To make more money, now as well as in the future. C Minimize our costs. (cost side) D Strive to make less than 100% quality. The Cost of Quality Viewpoint Does Not Consider: 1. Continuous improvements of process 2. Quality s impact on revenue CBS Chapter Cost of Quality & Traditional Payback Analysis Error Rate Cost to Halve Cost Savings Payback Analysis 2% $100,000 $100,000 1 yr - Yes 1% $100,000 $50,000 2 yrs -? ½% $100,000 $25,000 4 yrs - No 0.5% % CBS Chapter

9 CBS Chapter W.E. Deming: A Loyal Customer is a Profitable Customer. Deming s 14 Points Deming s 14 points highlight the differences between the TQM philosophy and the older cost of quality approaches. CBS Chapter Point One: Create constancy of purpose toward improvement of product and service with a plan to become competitive, stay in business, and provide jobs. Decide whom top management is responsible to. CBS Chapter

10 CBS Chapter Point Two: Adopt the new philosophy. We are in a new economic age. We can no longer live with commonly accepted levels of delays, mistakes, defective materials, and defective workmanship. Quality - Old and New Concepts OLD IMAGE Low quality caused by people Loss of work ethic Some defects acceptable Inspect for product problems Higher quality means higher costs NEW IMAGE Low quality caused by management of people Need for good management Zero defects is the goal Inspect for process problems Higher quality means higher profits CBS Chapter Quality - Old and New Concepts (Continued) OLD IMAGE Quality comes from inspection Quality is quality control s job Catch mistakes and fix them Suppliers are adversaries NEW IMAGE Quality designed into the product Quality is everyone s job Do it right the first time Suppliers are trusted members of the team CBS Chapter

11 CBS Chapter Quality - Old and New Concepts (Continued) OLD IMAGE Buy from the lowest bidder Quality is a function of manufacturing Errors will be caught by inspectors Management must discover problems NEW IMAGE Buy for quality, reliability and price Quality is a function of every stage Do not pass off defects Employees must discover problems Quality - Old and New Concepts (Continued) OLD IMAGE Statistics is an exotic tool NEW IMAGE Statistics, properly explained, can be used by everyone CBS Chapter Point Three: Cease dependence on mass inspection. Require, instead, statistical evidence that quality is built in to eliminate the need for inspection on a mass basis. (Prevent defects rather than detect defects.) CBS Chapter

12 CBS Chapter Point Four: End the practice of awarding business on the basis of price tag. Instead, depend on meaningful measures of quality, along with price. Eliminate suppliers that cannot qualify with statistical evidence of quality. Move toward a single supplier for any one item, based on a long-term relationship of loyalty and trust. Point Five: Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. increase revenues! It is management s job to work continually on the system (design, incoming materials, composition of material, maintenance, improvement of machines, training, supervision, and retraining). CBS Chapter Point Six: Institute modern methods of training. CBS Chapter

13 CBS Chapter Point Seven: Institute modern methods of supervision. The responsibility of foremen must be changed from sheer numbers to quality...[which] will automatically improve productivity. Management must prepare to take immediate action on reports from foremen concerning barriers such as inherited defects, machines not maintained, poor tools, fuzzy operational definitions. Point Eight: Drive out fear, so that everyone may work effectively for the company. Tolerance for failure CBS Chapter Point Nine: Break down barriers between departments. People in research, design, sales and production must work as a team, to foresee problems of production that may be encountered with various materials and specifications. CBS Chapter

14 CBS Chapter Point Ten: Eliminate arbitrary numerical goals, posters, and slogans for the workforce which seek new levels of productivity without providing methods. Point Eleven: Eliminate work standards and numerical quotas. Point Twelve: Remove barriers that rob employees of their pride of workmanship. CBS Chapter Point Thirteen: Institute a vigorous program of education and retraining. Point Fourteen: Create a structure in top management that will push the prior 13 points every day. CBS Chapter

15 CBS Chapter Summary of Deming s Points Long term view Zero defects Build on quality Single supplier Continuous improvements Modern training Modern supervision Drive out fear No organizational barriers Provide productivity methods Deming s 7 Deadly Diseases 1. Lack of constancy of purpose 2. Emphasis on short-term profits 3. Performance evaluation 4. Mobility of management 5. Management by visible figures alone 6. Excessive medical costs 7. Excessive liability costs CBS Chapter Seven tools of quality defined: Tools that help organizations understand their processes in order to improve them. The tools are cause-and-effect diagram, check sheet, control chart, flowchart, histogram, Pareto chart, and scatter chart. (APICS Dictionary, 87) Covered in detail in the Tools of Quality Chapter. CBS Chapter

16 CBS Chapter $ Cost of Quality Revisited Cost of Defects Cost of Enforcement 100 % QUALITY EC of Cost of Quality Revisited B Satisfy our customers. (revenue side) D Strive to make 100% quality. A To make more money, now as well as in the future. C Minimize our costs. (cost side) D Strive to make less than 100% quality. CBS Chapter Prerequisites of TQM Success 1. People Believe Improvement Will Not Cause Layoffs 2. No Local Efficiency Measures 3. Substantial Training 4. Direct Effort By TOC 5. Follow Group Recommendations CBS Chapter

17 CBS Chapter Framework for Managing Total Quality TQM is an integrated approach to focus all functions and levels of the organization on quality and continuous improvement. TQM process - is not static, but rather continuous. The competition is not sitting still. Customer expectations are continuously increasing TQM is a strategic initiative, not an operational goal. Role of Top Management: Leadership Leaders pull rather than push Leaders know where they want to go Leaders must be courageous and trustworthy. A leader s most important role after forming the vision and setting the course is helping people to do their jobs with pride. CBS Chapter Role of Middle Management Middle management must play the hand dealt them by top management, hence TQ is difficult without top management commitment. Middle managers are often the biggest obstacles to TQ implementation; however, Middle managers are the ones who are charged with achieving specific objectives and therefore must assume the leadership role in their area(s). CBS Chapter

18 CBS Chapter Employee Involvement Give employees ownership of quality. Three of Deming s 14 points are: eliminate quotas; eliminate inspectors; and drive out fear. Organize for quality. Use cross-functional teams, quality circles, and/or process- or project-oriented teams. Quality Training and Education. Let the employees know what is happening, what is expected of them, and, most importantly, give them the tools (physically and mentally) to do the job well. Implementing TQM: Barriers to Successful TQM Misdirected focus - emphasis on the trivial many and not the vital few problems. Emphasis on internal processes while neglecting external (customer) factors. Emphasis on quick fixes and low-level reforms. Training that is irrelevant and lacking focus. Lack of cross-disciplinary/cross-functional efforts. CBS Chapter Cabinets don t fit. 60 Houses are frequently mismeasured. 50 Marketing rep is inexperienced and poorly trained. 40 Moore has an inadequate training program. 30 Moore has a high worker turnover rate. 20 Moore has poor winter pay. 10 Moore has few winter contracts. Figure 3.2. Current Reality Tree for Kent Moore Cabinets. CBS Chapter

19 CBS Chapter A Adequate off-season sales volume B Maintain current profitability C Increase sales volume D Maintain existing prices D Lower existing prices AB -- Moore operates only slightly above breakeven; and therefore must maintain existing profits. AC -- Higher sales volume will enable guaranteed work week. BD -- Cannot lower costs. CD -- Moore is already the leader in price and responsiveness; price is the only barrier to more volume. DD -- Mutually exclusive; price in D means the same thing as price in D. INJECTION -- Price in D means price to existing business, Price in D means price to new business. Offer one-time introductory offer to prospective clients during winter only. 80 Cabinets fit. 70 House is correctly measured. 60 Marketing reps are experienced and well trained. 50 Moore experiences fewer rep turnovers. 40 Moore guarantees rep off-season pay. 30 Moore offers introductory discounts. 20 Moore improves the rep training program. Figure 3.4. Future Reality Tree for Kent Moore Cabinets. CBS Chapter Kent Moore loses money. 25 Kent Moore gets little extra work. Injection: Use idle time to make stock cabinets. 15 Very little off-season work exists. 10 Moore can guarantee off-season pay. 5 Moore offers introductory work discount. Figure 3.5. Negative Branch Reservation on Guaranteed Off-Season Work. CBS Chapter

20 CBS Chapter Significant future sales are lost. 70 Significant current sales are lost. 65 Some customers may not like the quality of the service provided. 55 Approximately 20% of the tables are tied up significantly longer than expected. 60 Potential customers leave because of the long lines. 45 An overcooked steak takes about 16 minutes to correct. 50 An undercooked steak takes about 10 minutes to correct. 30 Some customers don t complain they just don t return. 35 Some customers (3%) request the overcooked steak be replaced. This is about 10% of the tables. 25 The customer is dissatisfied with the steak. 40 Some customers (3%) request the undercooked steak to be redone. This is about 10% of the table. 20 The cook does not prepare the steak to the customer s specifications. 5 The grill is 10 The grill is not too hot. hot enough. 15 The customer does not agree what rare, medium rare, medium, medium well, and well done means with respect to this restaurant. Figure 3.6. CRT of the cost of quality Throughput world thinking THE ENVIRONMENT: GLOBAL COMPETITORS AND SUPPLIERS, GOVERNMENTS, ECONOMIES, CONSUMER TASTES, UNIONS, ETC. MANAGEMENT PHILOSOPHY MANAGEMENT PLANNING & CONTROL PERFORMANCE MEASUREMENTS IMPLEMENTATION DESIGN SUPPLIERS ORGANIZATION INFORMATION SYSTEMS PHYSICAL RESOURCES GOALS & OBJECTIVES PEOPLE STRATEGY MANAGEMENT POLICY CUSTOMERS BUSINESS PROCESSES INPUT TRANSFORMATION THROUGHPUT FIGURE 1.6g. BUSINESS SYSTEM MODEL CBS Chapter Objective Requirements Prerequisites A To have a quality cafeteria. B Good solutions must be developed. C Solutions are Implemented. D Consultants develop solutions. D' Workers develop Solutions. Assumptions - BD - Consultants are much more able than workers to develop solutions. CD'- Workers mistrust solutions developed by others. DD - Mutually exclusive. Injection: Train workers in developing and implementing solutions. Frances s Figure 3.1. Frances s cafeteria cloud CBS Chapter