Deming s 14 Points for TQM

1 Deming s 14 Points for TQM 1. Constancy of purpose Create constancy of purpose for continual improvement of products and service to society, allocating resources to provide for long range needs rather than only short term profitability, with a plan to become competitive, to stay in business, and to provide jobs.

2 Deming s 14 Points for TQM 2. The new philosophy Adopt the new philosophy. We are in a new economic age, created in Japan. We can no longer live with commonly accepted levels of delays, mistakes, defective materials, and defective workmanship. Transformation of Western management style is necessary to halt the continued decline of business and industry.

3 Deming s 14 Points for TQM 3. Cease dependence on mass inspection Eliminate the need for mass inspection as the way of life to achieve quality by building quality into the product in the first place. Require statistical evidence of built in quality in both manufacturing and purchasing functions.

4 Deming s 14 Points for TQM 4. End lowest tender contracts End the practice of awarding business solely on the basis of price tag. Instead require meaningful measures of quality along with price. Reduce the number of suppliers for the same item by eliminating those that do not qualify with statistical and other evidence of quality. The aim is to minimize total cost, not merely initial cost, by minimizing variation. This may be achieved by moving toward a single supplier for any one item, on a long term relationship of loyalty and trust. Purchasing managers have a new job, and must learn it

5 Deming s 14 Points for TQM 5. Improve every process Improve constantly and forever every process for planning, production, and service. Search continually for problems in order to improve every activity in the company, to improve quality and productivity, and thus to constantly decrease costs. Institute innovation and constant improvement of product, service, and process. It is management's job to work continually on the system (design, incoming materials, maintenance, improvement of machines, supervision, training, retraining).

6 Deming s 14 Points for TQM 6. Institute training on the job Institute modern methods of training on the job for all, including management, to make better use of every employee. New skills are required to keep up with changes in materials, methods, product and service design, machinery, techniques, and service.

7 Deming s 14 Points for TQM 7. Institute leadership Adopt and institute leadership aimed at helping people do a better job. The responsibility of managers and supervisors must be changed from sheer numbers to quality. Improvement of quality will automatically improve productivity. Management must ensure that immediate action is taken on reports of inherited defects, maintenance requirements, poor tools, fuzzy operational definitions, and all conditions detrimental to quality.

8 Deming s 14 Points for TQM 8. Drive out fear Encourage effective two way communication and other means to drive out fear throughout the organization so that everybody may work effectively and more productively for the company.

9 Deming s 14 Points for TQM 9. Break down barriers Break down barriers between departments and staff areas. People in different areas, such as Leasing, Maintenance, Administration, must work in teams to tackle problems that may be encountered with products or service.

10 Deming s 14 Points for TQM 10. Eliminate exhortations Eliminate the use of slogans, posters and exhortations for the work force, demanding Zero Defects and new levels of productivity, without providing methods. Such exhortations only create adversarial relationships; the bulk of the causes of low quality and low productivity belong to the system, and thus lie beyond the power of the work force.

11 Deming s 14 Points for TQM 11. Eliminate arbitrary numerical targets Eliminate work standards that prescribe quotas for the work force and numerical goals for people in management. Substitute aids and helpful leadership in order to achieve continual improvement of quality and productivity.

12 Deming s 14 Points for TQM 12. Permit pride of workmanship Remove the barriers that rob hourly workers, and people in management, of their right to pride of workmanship. This implies, among other things, abolition of the annual merit rating (appraisal of performance) and of Management by Objective. Again, the responsibility of managers, supervisors, foremen must be changed from sheer numbers to quality.

13 Deming s 14 Points for TQM 13. Encourage education Institute a vigorous program of education, and encourage self improvement for everyone. What an organization needs is not just good people; it needs people that are improving with education. Advances in competitive position will have their roots in knowledge.

14 Deming s 14 Points for TQM 14. Top management commitment and action Clearly define top management's permanent commitment to ever improving quality and productivity, and their obligation to implement all of these principles. Indeed, it is not enough that top management commit themselves for life to quality and productivity. They must know what it is that they are committed to that is, what they must do. Create a structure in top management that will push every day on the preceding 13 Points, and take action in order to accomplish the transformation. Support is not enough: action is required!

15 Chapter 10 Project Management

16 OBJECTIVES Definition of Project Management Work Breakdown Structure Project Control Charts Structuring Projects Critical Path Scheduling

17 Project Management Project is a series of related jobs usually directed toward some major output and requiring a significant period of time to perform Project Management are the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project

18 Pure Project A pure project is where a self-contained team works full-time on the project Structuring Projects: Pure Project Advantages The project manager has full authority over the project Team members report to one boss Shortened communication lines Team pride, motivation, and commitment are high

19 Structuring Projects: Pure Project Disadvantages Duplication of resources Organizational goals and policies are ignored Lack of technology transfer Team members have no functional area "home"

20 Functional Project A functional project is housed within a functional division President Research and Development Engineering Manufacturing Project A Project B Project C Project D Project E Project F Project G Project H Project I Example, Project B is in the functional area of Research and Development.

Structuring Projects Functional Project: Advantages 21 A team member can work on several projects Technical expertise is maintained within the functional area The functional area is a home after the project is completed Critical mass of specialized knowledge

Structuring Projects Functional Project: Disadvantages 22 Aspects of the project that are not directly related to the functional area get short-changed Motivation of team members is often weak Needs of the client are secondary and are responded to slowly

23 Matrix Project Organization Structure President Research and Development Engineering Manufacturing Marketing Manager Project A Manager Project B Manager Project C

24 Structuring Projects Matrix: Advantages Enhanced communications between functional areas Pinpointed responsibility Duplication of resources is minimized Functional home for team members Policies of the parent organization are followed

25 Structuring Projects Matrix: Disadvantages Too many bosses Depends on project manager s negotiating skills Potential for sub-optimization

Work Breakdown Structure 26 A work breakdown structure defines the hierarchy of project tasks, subtasks, and work packages Level 1 Program Project 1 Project 2 2 Task 1.1 Task 1.2 3 4 Subtask 1.1.1 Work Package 1.1.1.1 Subtask 1.1.2 Work Package 1.1.1.2

Gantt Chart 27 Vertical Axis: Always Activities or Jobs Horizontal bars used to denote length of time for each activity or job. Activity 1 Activity 2 Activity 3 Activity 4 Activity 5 Activity 6 Time Horizontal Axis: Always Time

28 Microsoft Project Example Detailed Gantt Chart

Network-Planning Models 29 A project is made up of a sequence of activities that form a network representing a project The path taking longest time through this network of activities is called the critical path The critical path provides a wide range of scheduling information useful in managing a project Critical Path Method (CPM) helps to identify the critical path(s) in the project networks

30 Prerequisites for Critical Path Methodology A project must have: well-defined jobs or tasks whose completion marks the end of the project; independent jobs or tasks; and tasks that follow a given sequence.

Types of Critical Path Methods 31 CPM with a Single Time Estimate Used when activity times are known with certainty Used to determine timing estimates for the project, each activity in the project, and slack time for activities CPM with Three Activity Time Estimates (P.E.R.T.) Used when activity times are uncertain Used to obtain the same information as the Single Time Estimate model and probability information Time-Cost Models Used when cost trade-off information is a major consideration in planning Used to determine the least cost in reducing total project time

32 Steps in the CPM with Single Time Estimate 1. Activity Identification 2. Activity Sequencing and Network Construction 3. Determine the critical path From the critical path all of the project and activity timing information can be obtained

CPM with Single Time Estimate Example #2 33 Consider the following consulting project: Activity Designation Immed. Pred. Time (Weeks) Assess customer's needs A None 2 Write and submit proposal B A 3 Obtain approval C A 4 Develop service vision and goals D B,C 4 Train employees E C 2 Quality improvement pilot groups F D, E 5

First draw the network Activity Description Activity Time Earliest Start Latest Start Earliest Finish Latest Finish B 3 D 4 Act. Imed. Pred. Time A None 2 B A 3 C A 4 D B,C 4 E C 2 F D,E 5 34 A 2 F 5 C 4 E 2

Determine slack times and Critical Path 35 A 0 2 2 0 2 S= 0 B 2 5 D 6 10 3 3 6 4 6 10 S= 1 S= 0 C 2 6 E 6 8 4 2 6 2 8 10 S= 0 S= 2 F 10 15 5 10 15 S= 0

P.E.R.T. Program Evaluation and Review Technique: CPM with Three Activity Time Estimates 36 Task Immediate Optimistic Most Likely Pessimistic Predecessors A None 3 6 15 B None 2 4 14 C A 6 12 30 D A 2 5 8 E C 5 11 17 F D 3 6 15 G B 3 9 27 H E,F 1 4 7 I G,H 4 19 28

Ex 2. Expected Time Calculations 37 Task Immediate Predecesors Expected Time A None 7 B None 5.333 C A 14 D A 5 E C 11 F D 7 G B 11 H E,F 4 I G,H 18 Opt.Time + 4(Most Likely Time) + Pess.Time Expected Time = 6 3 4(6) 15 Expected Time = 6 Immediate Task Predecesors Optimistic Most Likely Pessimistic A None 3 6 15 B None 2 4 14 C A 6 12 30 D A 2 5 8 E C 5 11 17 F D 3 6 15 G B 3 9 27 H E,F 1 4 7 I G,H 4 19 28

Ex 2. Expected Time Calculations 38 Task Immediate Predecesors Expected Time A None 7 B None 5.333 C A 14 D A 5 E C 11 F D 7 G B 11 H E,F 4 I G,H 18 Opt.Time + 4(Most Likely Time) + Pess.Time Expected Time = 6 2 4(4) 14 Expected Time = 6 Immediate Task Predecesors Optimistic Most Likely Pessimistic A None 3 6 15 B None 2 4 14 C A 6 12 30 D A 2 5 8 E C 5 11 17 F D 3 6 15 G B 3 9 27 H E,F 1 4 7 I G,H 4 19 28

Ex 2. Expected Time Calculations 39 Task Immediate Predecesors Expected Time A None 7 B None 5.333 C A 14 D A 5 E C 11 F D 7 G B 11 H E,F 4 I G,H 18 Opt.Time + 4(Most Likely Time) + Pess.Time Expected Time = 6 6 4(12) 30 Expected Time = 6 Immediate Task Predecesors Optimistic Most Likely Pessimistic A None 3 6 15 B None 2 4 14 C A 6 12 30 D A 2 5 8 E C 5 11 17 F D 3 6 15 G B 3 9 27 H E,F 1 4 7 I G,H 4 19 28

40 Example 2. Network Start 0 A 7 C 14 D 5 E 11 F 7 Duration = 54 Days H 4 I 18 B 5.33 G 11 Finish 0

41 Example 2. Probability Exercise What is the probability of finishing this project in less than 53 days? p(t < D) Z = D - T E 2 cp D=53 T E = 54 t

Activity Variance 2 Pessim.- Optim. = 6 2 42 Task Optimistic Most Likely Pessimistic Variance A 3 6 15 4 B 2 4 14 C 6 12 30 16 D 2 5 8 E 5 11 17 4 F 3 6 15 G 3 9 27 H 1 4 7 1 I 4 19 28 16 (Sum the variance along the critical path.) 2 = 41

43 p(t < D) Z = D=53 D - T E 2 cp = 53-54 41 = -.156 T E = 54 t p(z < -.156) =.438, or 43.8 % See Excel function NORMDIST There is a 43.8% probability that this project will be completed in less than 53 weeks.

Using Excel function NORMDIST 44 D=53 T E = 54 There is a 43.8% probability that this project will be completed in less than 53 weeks.

45 Ex 2. Additional Probability Exercise What is the probability that the project duration will exceed 56 weeks?

46 Example 2. Additional Exercise Solution p(t < D) T E = 54 D=56 t Z = D - T E 2 cp = 56-54 41 =.312 p(z >.312) =.378, or 37.8 % In Excel use =1-NORMDIST(56,54,sqrt(41),true)

47 In Class Example Activity Immediate Predecessors Optimistic Most Likely Pessimistic A - 1 3 5 B - 1 2 3 C A 1 2 3 D A 2 3 4 E B 3 4 11 F C,D 3 4 5 G D,E 1 4 6 H F,G 2 4 5 1. Draw the Network. 2. What is the critical path? 3. What is the expected project completion time 4. What is the variance of the project 5. What is the probability of completing the project within 16 days?

48 In class Expected Times and Variance Activity Immediate Predecessors Optimistic Most Likely Pessimistic Expected Times Variance A - 1 3 5 3 0.4444 B - 1 2 3 2 0.1111 C A 1 2 3 2 0.1111 D A 2 3 4 3 0.1111 E B 3 4 11 5 1.7778 F C,D 3 4 5 4 0.1111 G D,E 1 4 6 3 5/6 0.6944 H F,G 2 4 5 3 5/6 0.2500

Determine slack times and Critical Path 49 A 3 C 2 F 4 Start D G H 0 3 3 5/6 3 5/6 B 2 E 5 Activity Immediate Predecessors Expected Times A - 3 B - 2 C A 2 D A 3 E B 5 F C,D 4 G D,E 3 5/6 H F,G 3 5/6

Determine slack times and Critical Path 50 A 0 3 3 5/6 3 5/6 C 3 5 2 4 5/6 6 5/6 F 6 10 4 6 5/6 10 5/6 cp cp T E 2 2.83333 1.6832 14.666 Start 0 D 3 6 3 3 5/6 6 5/6 G 7 10 5/6 3 5/6 7 10 5/6 H 10 5/6 14 2/3 3 5/6 10 5/6 14 2/3 B 0 2 2 0 2 E 2 7 5 2 7 Activity Expected Times Variance A 3 0.4444 B 2 0.1111 C 2 0.1111 D 3 0.1111 E 5 1.7778 F 4 0.1111 G 3 5/6 0.6944 H 3 5/6 0.2500

51

Time-Cost Models 52 Basic Assumption: Relationship between activity completion time and project cost Time Cost Models: Determine the optimum point in time-cost tradeoffs Activity direct costs Project indirect costs Activity completion times

53 CPM Assumptions/Limitations Project activities can be identified as entities (There is a clear beginning and ending point for each activity.) Project activity sequence relationships can be specified and networked Project control should focus on the critical path The activity times follow the beta distribution, with the variance of the project assumed to equal the sum of the variances along the critical path Project control should focus on the critical path