QUALITY MANAGEMENT. Philosophy & Concepts Tools and Techniques used in Total Quality management International Quality Standards and Awards

Transcription

1 QUALITY MANAGEMENT Philosophy & Concepts Tools and Techniques used in Total Quality management International Quality Standards and Awards 1

2 Literature Quality Management for Organizational Excellence by David L.Goetsch and Stanley B.Davis Juran s Quality Handbook by Joseph M. Juran and Joseph A De Feo 2

3 Part 1 Philosophy & Concepts 3

4 QM Philosophy & Concepts The Total Quality Approach Quality and Global Competitiveness Strategic Management Ethics Partnering Quality Culture Customer Satisfaction Employee Empowerment Leadership and Change Teambuilding and Teamwork Effective Communication Training 4

6 Quality Quality has been defined in a number of ways. When viewed from a consumer s perspective, it means meeting or exceeding customer expectations...providing him with superior value 6

7 Dimensions of Quality Dimension Product example Mobile phone Performance Signal, Battery charge Features Internet, camera,... Conformance Workmanship Reliability Mean-time-to-failure Durability Useful life Serviceability Ease of repair Response Courtesy of dealer Aesthetics Surface finish Reputation Customer report ranking 7

8 Two Views of Quality How well the features of a product or service meet the customer need and therefore provide them with satisfaction => higher quality costs (usually) more Freedom from failures => higher quality costs (usually) less 8

9 Total Quality Total quality is an approach to doing business that attempts to maximize an organization s competitiveness through the continual improvement of the quality of its products, services, people, processes, and environments. 9

10 Managing for Quality (Juran) A set of universal methods that any organization, whether a business, an agency, a university or a hospital can use to attain superior results by designing, continuously improving and ensuring that all products, services and processes meet customer and stakeholder needs. 10

11 Juran s trilogy Designing and planning for Quality Compliance, controlling and assuring quality Improving quality 11

12 Juran s trilogy Creating processes to design goods and services to meet needs of the stakeholders (internal and external). Understand needs of customers Creating processes to control quality. Ensure compliance to design criteria Creating a systematic approach to improve continuously. Failures must be discovered and remedied. => Create functions and skills to do the things above 12

13 Financial trilogy Financial planning Annual financial and operational budgets (revenues, costs and profits) Financial goals for the organization and its divisions Financial control Evaluation of actual financial performance and taking action on the differences Cost control, expense control, risk management, inventory control, etc. Financial improvement Improvement of financial results Cost reduction projects, new facilities, new product development, M &A, joint ventures, etc 13

14 Quality planning Establish the project and design goals Identify the customers Discover the customer needs Develop the product or service features Develop the process features Develop the controls and transfer to operations => Customer customer needs- product features process features- process control features 14

15 Quality planning tools Benchmarking Brainstorming Competitive analysis Control charts FMEA Flow diagram Process capability Scatter diagram Etc. 15

16 Quality Control Assure Repeatable and Compliant Processes 16

17 Quality Control Tools SPC (Statistical Process Control) Problem Solving methods Poka Yoke 17

18 Quality Improvement Create breakthroughs in Performance 18

19 Quality Improvement Tools Six Sigma RDMAIC process Recognize Define Measure Analyze Improve Control 19

20 Juran s trilogy 20

21 The Total Quality Approach to Quality Management Key characteristics of the total quality approach are as follows: strategically based, customer focus, long-term commitment, teamwork, employee involvement and empowerment, continual process improvement, education and training, 21

22 The Total Quality Approach to Quality Management The rationale for total quality can be found in the need to compete in the global marketplace. Countries that are competing successfully in the global marketplace are seeing their quality of living improve. Those that cannot are seeing theirs decline. 22

23 The Total Quality Pioneers W. Edward Deming is best known for his Fourteen Points, the Deming Cycle Joseph M. Juran is best known for the Pareto Principle, and the Juran Trilogy. Armand V. Feigenbaum is best known for his Total Quality Control. Philip B. Crosby is best known for his Quality is Free and the Zero Defects program 23

25 Quality and Global Competitiveness Several factors can inhibit competitiveness, including those related to business and government, family, and education. In a global marketplace quality is the key to competitiveness. Total Quality approach minimizes the Cost of Quality, making products or services more competitive 25

26 Costs of Quality Prevention Appraisal and inspection Internal failure External failure COPQ COPQ = Costs of Poor Quality 26

27 Prevention Costs Quality Planning activities FMEA analysis Control Plans Quality training Product design Verification 27

28 Appraisal and Inspection Costs Testing product Reviewing documents Inspecting equipment and supplies End of line inspection Product audits Etc. 28

29 Internal Failure Costs Rework on product Scrap of non conforming product Correcting database errors Stocking extra parts to replace defective components Etc, 29

30 External Failure Costs Warranty claims Product recalls Investigating complaints 30

31 Direct Cost of Poor Quality (4 8% of Sales) Scrap Rework Warranty Customer Return Indirect Cost of Poor Quality (15 25% of Sales) Loss of Customer Loyalty Engineering change Excessive inventory Late delivery Excessive overtime Excessive employee turnover Expediting costs 31

32 Costs Cost of Quality Total Failure Appraisal & Prevention Juran s Cost of Quality Freedom from failures 100% 32

33 Cost of Quality Cost of Quality Junk Zone Quality Costs Profit Zone Excess Quality Customer Value of Quality Freedom from Failures 100% 33

34 Quality Cost as % of Sales 34

35 Cost distribution as a % of total cost of Quality 3,5 % 2,5 % 68 % 26 % Prevention Appraisal Internal Failure External Failure 35

36 COPQ car recalls USA January 30, 2013 Toyota Motor on Wednesday announced recalls involving more than 1 million vehicles in the U.S Combined, it's one of the largest recalls so far this year Most are Corollas, some are Lexus IS sedans One recall involves airbags and the other focuses on wipers Last month, Toyota agreed to pay more than $1 billion in the U.S. to settle lawsuits where vehicle owners said the value of their cars and SUVs plummeted after the company recalled millions of vehicles because of sudden-acceleration issues 36

37 Investment in Quality Cost 37

38 Quality and Global Competitiveness The most important key in maximizing competitiveness is the human resource. The Competitive Edge is in the Quality of the People 38

40 Strategic Management Strategic management is management that bases all actions, activities, and decisions on what is most likely to ensure successful performance in the marketplace. The two major components of strategic management are strategic planning and strategic execution. Part of strategic planning is thinking creatively to eliminate sacred cows that work against competitiveness. 40

41 Strategic planning Who are we? Where are we going? How will we get there? What do we hope to accomplish? What are our core competencies? What are our strengths and weaknesses? What are our opportunities and threats? 41

42 Strategic Planning Process Step 1 SWOT Analysis (environmental assessment) Step 2 Step 3 Step 4 Step 5 Develop the Vision Develop the Mission Develop the Guiding Principles Develop the Broad Strategic Objectives Step 6 Develop the Specific Tactics (action plan) 42

43 SWOT analysis SWOT analysis is defined as a structured approach to evaluating the strategic position of a business by identifying its strengths, weaknesses, opportunities and threats SWOT analysis identifies the core competencies of the organization 43

44 Core competencies Core competencies are things an organization does so well they can be viewed as providing a competitive advantage. 44

45 SWOT analysis Opportunities Threats => apply to External Factors Strengths Weaknesses => apply to Internal Factors 45

46 SWOT analysis 46

47 Vision An organization s vision is its guiding force, the dream of what it wants to become and its reason for being. 47

48 Mission An organization s mission describes who an organization is, what it does, and where it is going. 48

49 Guiding Principles An organization s guiding principles establish the framework within which it will pursue its mission. Together, the guiding principles summarize an organization s value system, the things it believes are most important. 49

50 Broad strategic objectives An organization s broad strategic objectives translate its mission into more specific terms that represent actual targets at which the organization aims. The objectives are more specific than the mission, but they are still broad. 50

51 Action plan Well defined, finite projects and activities undertaken for the purpose of specific desired outcomes in support of the broad objectives. 51

52 Strategic Management Strategies that organizations can adopt for gaining a sustainable competitive advantage are cost leadership, differentiation, and market-niche strategies. Total Quality can be the most effective cost leadership or differentiation strategy improve efficiency, cut costs continuous improvement of the product features 52

53 Strategic Management Integration of Quality programs in strategic plan is important for their success This includes annual quality goals and subgoals 53

54 Strategic Execution Even the best strategic plan will serve no purpose unless it is effectively executed. Progress of achieving goals is measured by: KPI s (Key Process Indicators) Quantitative reports on performance Audits 54

56 Ethics Ethics is about doing the right thing within a moral framework. The most common impediment to ethical conduct is human nature because people tend to behave according to perceived personal interest. 56

57 Ethics The Total Quality approach cannot be successfully implemented in an organization that fails to subscribe to high standards of ethical behavior 57

58 Ethics Many of the fundamental elements of total quality depend on trust and ethical behavior, including communication, interpersonal relations, conflict management, problem solving, teamwork, employee involvement and empowerment, and customer focus. 58

59 Ethics Sarbannes Oxley (SOX) Federal law in the US. Top management must now individually certify the accuracy of financial information. Penalties for fraudulent financial activity are much more severe 59

61 Partnering Partnering means working together for mutual benefit. It involves pooling resources, sharing costs, and cooperating in ways that mutually benefit all parties involved in the partnership. Partnerships may be formed internally (among departments) and externally with suppliers, customers 61

62 Partnering with suppliers 85% of the added value comes from suppliers (automotive industry) Traditional model (based on price only) Total Quality model partnership from design to delivery 62

63 Partnering with Customers The rationale for forming customer partnerships is customer satisfaction. The best way to ensure customer satisfaction is to involve customers as partners in the product development process. Doing so is, in turn, the best way to ensure competitiveness. Customer-defined quality is a fundamental aspect of total quality. 63

64 Partnering with Suppliers & Customers Invisible wall Suppliers Customer End Users Suppliers Customer End Users 64

65 QM Philosophy & Concepts The Total Quality Approach Quality and Global Competitiveness Strategic Management Ethics & Corporate Social Responsibility Partnering and Strategic Alliances Quality Culture Customer Satisfaction Employee Empowerment Leadership and Change Teambuilding and Teamwork Effective Communication Training 65

66 Quality Culture One of the greatest obstacles in implementing Total Quality is the cultural behavior Why? Successful Total Quality implementation requires cultural change People do not like to change! Resisting change is natural human behavior Fear Uncertainty Loss of control More work Emotional transition 66

67 Total Quality culture Short vs long term objectives Managers as coaches vs bosses Finger pointing vs problem solving Supplier cooperation Continuous improvement 67

68 Total Quality culture Behaviour matches slogans Customer input is actively sought and used to continually improve quality Employees are both involved and empowered Work is done in teams Executive level managers are both committed and involved, responsibility for quality is NOT delegated Sufficient resources are made available where and when they are needed to ensure the continuous improvement of quality 68

69 Total Quality culture Education and training are provided to ensure that employees at all levels have the knowledge and skills needed to continuously improve quality Reward and promotion systems are based on contributions to the continual improvement of quality Fellow employees are treated as internal customers Suppliers are treated as partners 69

71 Customer Satisfaction ( Every organization has both internal and external customers. An external customer is the one referred to in the traditional definition. An internal customer is any employee whose work depends on that of employees whose work precedes his or hers. 71

72 Customer Satisfaction Supplier The Company and its processes Customer Customer & Supplier Customer & Supplier Customer & Supplier Supplier Customer & Supplier Customer & Supplier Customer & Supplier Customer 72

73 Customer Satisfaction In a total quality setting, customers define quality. Therefore, customer satisfaction must be the highest priority. Customer satisfaction is achieved by producing high-quality products that meet or exceed expectations. =>It must be renewed with each purchase. 73

74 Customer Satisfaction The key to establishing a customer focus is to put employees in touch with customers so that customer needs are known and understood. Once the customer needs and expectations are defined they need to be translated into product specification. One of the tools to do so is Quality Function Deployment (QFD) 74

75 Quality Function Deployment (QFD) Quality Function Deployment (QFD) is a structured approach to defining customer needs or requirements and translating them into specific plans to produce products to meet those requirements. The "voice of the customer" is the term to describe these stated and unstated customer needs or requirements. The voice of the customer is captured in a variety of ways: direct discussion, surveys, customer specifications, observation, warranty data, field reports, etc. 75

76 Quality Function Deployment (QFD) This understanding of the customer requirements is then summarized in a product planning matrix or "house of quality". These matrices are used to translate higher level "what's" or requirements into lower level "how's" or means to satisfy the requirements 76

77 QFD example - computer mouse 77

78 QFD example - computer mouse Customer requirements: Easy to move Does not jam Easy to click Contoured to hand Easy to clean 78

79 QFD example - computer mouse Customer requirements: Easy to move Does not jam Easy to click Contoured to hand Easy to clean Importance to customer:

80 QFD example - computer mouse Engineering Characteristics: Energy needed to move Button resistance Dismantling capabilities Easy to use Product dimensions Sealed ball 80

82 QFD example - computer mouse A = Company A B = Company B X = Us 5 is the best 82

84 QFD example - computer mouse Strongly positive Positive Negative 84

85 QFD Matrices 85

86 Kano model The Kano model is a theory of product development and customer satisfaction developed in the 80s by Professor Noriaki Kano which classifies customer preferences/expectations into following categories: Must-Be One-Dimensional Attractive 86

87 Kano model Must-be / Basic Quality These attributes are taken for granted when fulfilled but result in dissatisfaction when not fulfilled. One-dimensional/ Expected Quality These attributes result in satisfaction when fulfilled and dissatisfaction when not fulfilled. These are attributes that are spoken of and ones which companies compete for. Attractive /Exciting Quality These attributes provide satisfaction when achieved fully, but do not cause dissatisfaction when not fulfilled. These are attributes that are not normally expected,.. 87

88 Kano model 88

89 Customer expectations vs. customer satisfaction V = R E Value = Results - Expectations (There is no perceived value when customers expectations are only met) Karl Albrecht formula 89

90 Customer expectations vs. customer satisfaction Customer expectations Actual performance Customer satisfaction Product A Product B 90

91 Value Analysis / Engineering Value Analysis (VA) and Value Engineering (VE) is a systematic method to improve the "value" of goods or products and services by using an examination of function Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost 91

92 Value Analysis / Value Engineering VALUE ANALYSIS Interpreting existing design for greatest utility at least cost using or optimizing current manufacturing methods. Methodology is applied after capital expenditures. Find and Fix - remove unnecessary cost. VALUE ENGINEERING Understanding design requirements/intent to guide new design and manufacturing methods. Methodology is applied prior to capital expenditure on facilities, equipment or tooling. Prevent unnecessary cost. 92

93 Value, Price and Function Price Market Share Profit Function (Value) Efficiency Cost 93

94 Cost versus Price and Profit Traditional Approach: COST + PROFIT = PRICE Best-In-Class Approach: PRICE - PROFIT = COST FIXED BY THE CUSTOMER FIXED BY YOU 94

95 Value? Function? Cost? Function Value = Cost Function Cost = Things products / processes do to reliably satisfy the customer (performance, reliability, durability, appearance, etc.) = All expenditures in time, people, materials, energy,... 95

96 Basic and Secondary functions Basic function Primary purpose for the product or service Secondary function Not directly accomplishing the primary function Could be supporting the primary function Could exist to meet specifications and requirements Could be a result of existing design => Almost always, every product or service has only one basic function 96

97 Basic and Secondary functions Pencil Description Function B S Make marks # Eraser Remove marks # Band Secure eraser # Improve appearance # Body Support lead # Transmit force # Accomodate grip # Display info # Paint Protect wood # Improve appearance # 97

98 Cost Drivers Materials: - complexity, uniqueness,... - transport, packaging,... Production method:- complexity, uniqueness,... - labor, scrap,... Machines / tools: - complexity, uniqueness,... - wear, indirect labor,... Specifications: - complexity, uniqueness,... - unbalanced tolerances,... 98

99 VA thinking process What is the product or service in question? What functions are being performed? What does it cost to perform each function? In what other ways might we accomplish the functions? What will those alternatives cost? What is feasible? 99

100 Total Cost Module & Supply Chain 2 TIER SUPPLIER 2 TIER SUPPLIER 2 TIER SUPPLIER 2 TIER SUPPLIER L O G I S T I C S 1 TIER SUPPLIER 1 TIER SUPPLIER L O G I S T I C S YOUR COMPANY L O G I S T I C S CUSTOMER Material tr Capital Labour 100

101 Customer Satisfaction and Retention Quality Function Deployment (QFD) and Value Analysis/ Value Engineering (VA/VE) are two important tools to enhance Customer Satisfaction and Customer Retention 101

102 Customer Satisfaction, Retention and Loyalty Measuring customer satisfaction alone is not enough. => Many customers who found a defect can be satisfied. Organizations should, in addition, measure customer retention. It costs much more to find a new customer than to retain one. Customer loyalty 102

104 Employee Empowerment Empowerment means engaging employees in the thinking processes of an organization in ways that matter Empowerment means giving employees ownership of their jobs ( they are the best experts) but it does not mean that managers abdicate their responsibility or authority Division of labor between managers and workers changes with empowerment Empowerment requires a change in organizational culture (resistance to change) 104

105 Employee Empowerment Best Managers for Empowerement People Oriented Managers Balanced Managers Task Oriented Managers 105

106 Empowerement Why empowerment? it is the best way to increase creative thinking resulting in enhancing an organization s competitiveness. it can be an outstanding motivator. Vehicles: Quality circles Kaizen groups Suggestion Boxes Etc. 106

108 Leadership and Change Implementing Total Quality in an organization is in most cases a significant change The success of this change is depending on many factors but the most important one is the involvement and commitment of the Leadership! 108

109 Leadership and Change Leadership is the ability to inspire people to make a total, willing, and voluntary commitment to accomplishing or exceeding organizational goals. Good leaders overcome resistance to change Good leaders are committed to both the job to be done and the people who must do it. They are good communicators and they are persuasive. 109

110 Management vs. Leadership Management Coping with complexity Planning and budgeting for complexity Developing the capacity to carry out plans through organizing and staffing Ensuring the accomplishment of plans through controlling and problem solving Leadership Coping with change Setting the direction for change thtrough the creation of a vision Aligning people to work towards the vision Motivating and inspiring people to want to accomplish the plan 110

111 Leadership and Change To facilitate change in a positive way, leaders: must have a clear vision and corresponding goals, exhibit a strong sense of responsibility, understand what change management is be effective communicators, have a high energy level, and have the will and ability to change have the skills to lead the change 111

112 Change Management Change management is a process of systematically identifying and facilitating the implementation of new methods and systems in an ongoing organization to minimize the pain and resistance that normally comes with such change 112

113 PRODUCTIVITY Renewal Acceptance / Confusion TIME 113

114 Change Management Transition model of change Transition is the state that change puts people into Transition is NOT automatic (not everybody will make it) Reaction to change: Embrace immediately Take time to adopt Never accept 114

115 Change Management ADVOCATES OF CHANGE - Desired change - Benefits of Change RESISTERS OF CHANGE - Desired status quo - Potential Negative Consequences of Change 115

116 Change Management Resistance can occur because people fear: Loss of credibilty or reputation Lack of career or financial advancement Possible damage to relationships with boss Loss of employment Interpersonal rejection Change in job role Job transfer or demotion 116

117 Change Management People will support change if they: believe the change will improve the situation expect personal gain in security, money, status had some input in the decision respect the person or people who are behind the change 117

118 Change Management Force-field analysis Management technique for diagnosing situations In any situation there are both driving and restraining forces that influence any change Driving forces: tend to initiate change and keep it going Restraining forces: are acting to restrain or decrease the driving forces 118

119 Change Management Driving forces examples: Pressure from supervisor Incentive earnings Competition Restraining forces examples: Apathy Hostility Poor maintenance of equipment 119

120 Change Management 120

121 Reaction to Stress ADAPT FIGHT AVOID Change Management Victim Change Critic -Reactions to change- Resists Feels angry or depressed Will not ask for help Goes back to old ways of doing things Actively looks for reasons it will not work Will not see the positive side Challenges appropriateness Bystander Change Agent Reluctant to get involved Waits to see if another will take lead Attempts to minimize negative reactions Accepts explanations of causes and reasons Asks to help implement Nurtures others and forms relationships 121

122 Change Management 30 % Resistors 50 % Late Adapters Critics/Victims 20 % Innovators Early Adapters Change Agents Bystanders Low Level of Resistance High 122

123 Change Management Proposed Change Automate production processes Initiate employee empowerement Establish a supplier partnership Establish and employee training and education program Perception of Advocates Improved productivity More resources available for CI Mutually beneficial business alliances More knowledgable, more highly skilled workforce Perception of Resisters Threat to job security Loss of authority Disruption of established purchasing networks Too expensive 123

124 Change Management It is the task of the leaders to understand what happens during a change It is also their task to assure Communication Emotional support Direction and Guidance 124

125 Commitment of Top Management Our feedbacks have made clear that the most influential factor in successful quality leadership has been the active participation of upper management. In fact to our knowledge, every successful quality revolution has included the active participation of upper management. We know of no exceptions. J.M.Juran 125

126 Commitment of Top Management It is not enough that top management commit themselves for life to product quality and productivity. They must know what it is they are committed to i.e. what they must do. These obligations cannot be delegated. More resolutions or approval are not enough. W.Edwards Deming 126

127 Commitment of Top Management The heart of quality is not technique. It is a commitment of management to its people and product stretching over a period of decades and lived with persistence and passion. Tom Peeters A Passion for Excellence 127

129 Team Building and Teamwork A team is a group of people with a common, collective goal. The rationale for the team approach to work is that two heads are better than one 129

130 Teamwork Quality Circles Kaizen Team oriented problem solving 8D methodology (Ford) 130

132 Communication Message received Communi cation Message understood 132

133 Effective communication Communication is the transfer of a message that is both received and understood. Effective communication is a higher order of communication. It means the message is received, understood, and being acted on in the desired manner. Communication is the oil that keeps the total quality engine running. Without it, total quality breaks down. 133

134 Effective communication In Total Quality, the success of the following elements is depending on effective communication: Customer focus Leadership Decision Making Teamwork Problem solving Employee empowerment 134

136 Training Training is an organized, systematic series of activities designed to enhance an individual s work-related knowledge, skills, understanding, and motivation

137 Training Benefits of training Fewer production errors Increased productivity Improved quality Decreased turnover rate Improved safety and health Increased flexibility of employees Better response to change Improved communication Better teamwork 137

138 Training Chinese proverb: You hear you forget You see you remember You do you understand 138