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World-Class Quality 1 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Using Lean in a Baldrige Environment.

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Presentation on theme: "World-Class Quality 1 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Using Lean in a Baldrige Environment."— Presentation transcript:

1 World-Class Quality 1 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Using Lean in a Baldrige Environment to Transform Organizations Tim Olson, President Lean Solutions Institute, Inc. (LSI) MBNQA, Baldrige Examiner, (760) (Office) © by Process Assets, LLC (PAL). All Rights Reserved. VA Conference - October 27, 2010 Presentation based on NIST 2010 MBNQA Material. Used with Permission.

2 World-Class Quality 2 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) “I have made this letter longer than usual because I lack the time to make it shorter” Blaise Pascal Lean Quotes to Live By… “Keep things as simple as possible, but no simpler” Albert Einstein

3 World-Class Quality 3 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Presentation Objectives Present an overview of lean. Present latest industry trends. Summarize strengths and weaknesses of Baldrige. Summarize strengths and weaknesses of Lean. Describe how lean can strengthen Baldrige Results. Answer any questions.

4 World-Class Quality 4 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Outline Introduction Baldrige Overview Lean Overview CMMI Overview Using Lean to Strengthen Baldrige World-Class Quality Summary

5 World-Class Quality 5 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Who is LSI? - (1) The mission of Lean Solutions Institute, Inc. (LSI) is to help organizations to measurably: •become “best-in-class” or “world-class” leaders in their respective markets (e.g., using benchmarking) •improve quality and productivity (e.g., lower product defect rates, increased KSLOC per person month, etc.) •reduce non-value added activities and the cost of poor quality (e.g., rework, waste, scrap, etc.) •become lean and apply Lean Solutions TM - (e.g., processes, metrics, checklists, templates, etc.)

6 World-Class Quality 6 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Who is LSI? - (2) LSI is an improvement organization. LSI focuses on Lean Solutions TM for your organization (e.g., Baldrige, CMMI, ISO, etc). •LSI uses an “ISO Approach” to improvement (i.e., separate improvement organization from certification/appraisal organization). •LSI is NOT an ISO Registrar, SEI Appraisal organization, etc. •LSI specializes in lean improvement and Lean Solutions TM in systems engineering, software engineering, IT, service, healthcare, test engineering, manufacturing, etc.

7 World-Class Quality 7 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) 21st Century Business Needs The usual business needs (e.g., “time and money”): • Save Money (e.g., ROI) • Reduce Cycle Time • Improve Performance (e.g., CPI, SPI) • Improve Productivity • Improve Quality New 21st Century business needs: • Agility, Lean, etc. • Complexity, Architectures, Models, Reuse, etc. • Innovation, Diversity, etc. • Special Topics: Reliability, Safety, Security, Usability, etc.

8 World-Class Quality 8 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Growing Complexity Systems are getting more complex very year. Example: Software Engineering Automobiles now have over 1 million lines of code. For example, the Toyota brake problem on the Prius was due to software defects. Combines and tractors have multiple controllers and multi-millions lines of code. Many organizations (e.g., manufacturing, hardware, etc.) are becoming mostly software organizations.

9 World-Class Quality 9 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Multiple Needs: Multiple Models Organizations have many needs. “All models are wrong; some are useful”. Every quality approach has strengths and weaknesses. No one model can meet all business needs. Which models to choose? Example quality approaches: • Baldrige (multi-models) • CMMI ® (multi-models) • ISO (multi-models) • ITIL ® • Lean (Multi-Models) • Six Sigma (Multi-Models) • New Maturity Models (Security; Usability) • Etc. CMMI is a registered trademark in the US Copyright and Patent Office by Carnegie Melon University.

10 World-Class Quality 10 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) The Quality Crisis The cost of poor quality: •“In most companies the costs of poor quality run at 20 to 40 percent... In other words, about 20 to 40 percent of the companies’ efforts are spent in redoing things that went wrong because of poor quality” (Juran on Planning for Quality, 1988, pg. 1) •Crosby’s Quality Management Maturity Grid states that if an organization doesn’t know it’s cost of quality, it’s probably at least 20%. (Crosby, Quality is Free, 1979, pg )

11 World-Class Quality 11 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) The Quality Crisis According to Dr. Juran: 1. “There is a crisis in quality. The most obvious outward evidence is the loss of sales to foreign competition in quality and the huge costs of poor quality.” 2. “The crisis will not go away in the foreseeable future.” 3. “Our traditional ways are not adequate to deal with the quality crisis.” 4. “To deal with the crisis requires some major breaks with tradition.” • Quoted from Juran, Joseph. “The Quality Trilogy”, Quality Progress, 1986

12 World-Class Quality 12 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Major COQ Categories Cost of Quality Cost of Good Quality Cost of Poor Quality PreventionAppraisal Internal Failure External Failure •Training •Quality Planning •Defect Prevention •Inspections •Peer Reviews •Audits •Testing •Rework •Scrap •Re-Testing •Fixing Internal Defects •Warranty •Returned Products •Fixing External Defects

13 World-Class Quality 13 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Some Quality Lessons Learned Most organizations have about 33% in costs of poor quality (e.g., rework, waste, scrap, etc.) About 80% of all quality efforts have no measurable results. According to Dr. Juran, most failures in quality are due to a poor choice of strategy. In order to choose a quality strategy wisely, organizations need to know how to manage for quality.

14 World-Class Quality 14 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Evolutionary vs. Revolutionary Quality Improvement Increased Quality & Productivity Time Company B Company A 30-50% 5-15% • Adapted from Juran on Leadership for Quality, Juran, 1989

15 World-Class Quality 15 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) The Quality Chain Reaction Productivity improves Improve quality Costs decrease because of less rework, fewer mistakes, fewer delays, better designs, efficient use of resources and materials Capture the market with better quality and lower price Stay in business Provide jobs and more jobs • Adapted from Deming, W. Edwards, Out of the Crisis, MIT CAES, 1986

16 World-Class Quality 16 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Raytheon - Cost of Quality Reference: “Process Improvement and the Corporate Balance Sheet”, Dion, IEEE Software, July % OF TOTAL PROJECT COST Begin Improvement $16 Million Appraisal Cost Prevention Cost Cost of Rework

17 World-Class Quality 17 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Raytheon - Productivity Productivity Increase - % Reference: “Process Improvement and the Corporate Balance Sheet”, Dion, IEEE Software, July 1993

18 World-Class Quality 18 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Raytheon: Cost Performance Index Reference: “Measuring the ROI of Software Process Improvement”, Dion, SEI Presentation, August On Budget Percent Over Budget Percent Under Budget

19 World-Class Quality 19 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Presentation based on NIST MBNQA 2010 Material. Used with Permission.

20 World-Class Quality 20 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Steps Toward Mature Processes Presentation based on NIST MBNQA 2010 Material. Used with Permission.

21 World-Class Quality 21 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Quality Maturity • Based on “The Eternally Successful Organization”, by Crosby, the SEI CMM, the Baldrige Award, & Dilbert Comics • Acronyms are (COQ=Cost of Quality; BA=Baldrige Award; DCF=Dilbert Correlation Factor; SEI=SEI CMMI) STAGE Comatose Progressive Care Wellness Prevention COQ 33% 25% 18% 10% 5% SUMMARY “What quality problems?” “We don’t know why we have quality problems, but they hurt.” “Management commitment and continuous improvement resolve quality problems.” “Quality planning, control, and improvement are routine.” “We know why we have happy customers.” SEI Intensive Care BADCF % 80% 60% 40% 20%

22 World-Class Quality 22 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Outline Introduction Baldrige Overview Lean Overview CMMI Overview Using Lean to Strengthen Baldrige World-Class Quality Summary

23 World-Class Quality 23 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Baldrige Criteria Framework: A Systems Perspective Presentation based on NIST MBNQA 2008 Material. Used with Permission.

24 World-Class Quality 24 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Brainstorm What are the Strengths of Baldrige? •

25 World-Class Quality 25 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Baldrige Category Point Values 1Leadership 120 2Strategic Planning 85 3Customer and Market Focus 85 4Measurement, Analysis, and Knowledge Management 90 5Workforce Focus 85 6Process Management 85 7Results 450 TOTAL POINTS 1,000 Presentation based on NIST MBNQA 2008 Material. Used with Permission.

26 World-Class Quality 26 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Core Values and Concepts Visionary Leadership Customer-Driven Excellence Organizational and Personal Learning Valuing Workforce Members and Partners Agility Focus on the Future Managing for Innovation Management by Fact Social Responsibility Focus on Results and Creating Value Systems Perspective Presentation based on NIST MBNQA 2010 Material. Used with Permission.

27 World-Class Quality 27 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Brainstorm NOTE: All models are wrong; Some are useful. What are the Weaknesses of Baldrige? •

28 World-Class Quality 28 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Baldrige Weaknesses - (1) Architectures (Product, Process, etc.) Configuration Management Decision Analysis Defect Prevention Early Defect Removal Engineering: • Requirements • Design • Implementation • Test

29 World-Class Quality 29 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Baldrige Weaknesses - (2) Integrated Product Teams Lean Managing Technological Change Models and Simulation Process Definition and Maturity Process Tailoring Project Management Risk Management

30 World-Class Quality 30 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Baldrige Summary Strengths: • Based on measurable results (450/1000 points) • Has become an industry standard (State Awards are also based on Baldrige) • Based on performance criteria (best practices) • Has a industry standard assessment method • Award winners are “model organizations” • Cost effective to receive valuable feedback Weaknesses • Does not address engineering strongly • Does not address maturity/capability levels • Run by mostly by “volunteers” • 80% of organizations do not receive site visits

31 World-Class Quality 31 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Outline Introduction Baldrige Overview Lean Overview CMMI Overview Using Lean to Strengthen Baldrige World-Class Quality Summary

32 World-Class Quality 32 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Lean Problems Most organizations have too much waste (e.g., non-value added). Most processes have too many “non-value added” steps. How can organizations focus on “value added” and remove waste? How can organizations measure value and waste? Lean is a recent quality approach to help organizations focus on “value” and remove “non- value”.

33 World-Class Quality 33 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) What is Lean? Lean has its roots in quality and manufacturing, and is a recent popular movement in quality. “Lean Production” is the name for the Toyota Lean Production System. The following are major lean references (books): • “The Machine That Changed The World” • “Learning to See” • “The Toyota Way” • “The Toyota Product Development System” • “Lean Thinking”

34 World-Class Quality 34 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Some Lean Principles - (1) Establish customer defined value (i.e., identify the “value stream”). Process = “value”. Continuously eliminate non-value added activities (e.g., waste, rework, defects). Use leadership and standardization to create a lean culture. Align your organization through visual communication. Create an optimized process flow (e.g., “Flow”, “Pull”, “Just-In-Time”, “Leveled”).

35 World-Class Quality 35 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Some Lean Principles - (2) Use lean metrics to manage the value stream. Front-Load the process for maximum design space. Build a learning organization to achieve lean and continuous improvement. Adapt technology to fit your people and processes. Strive for perfection through continuous improvement.

36 World-Class Quality 36 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Why Lean Processes? Reduce Cost, Schedule, and Size: Lean processes are shorter, cost less, and take less time to use. Better Usability: Lean processes are more usable (require defining “chunks” and labeling them for use). Better Designs: Lean processes require good process design, definition, and writing principles. Visual Diagrams: Lean processes are “visual” (e.g., well thought out diagrams or “lean process models”). Defined Non-Linearly: Designed to find something fast. Lean process models are dynamic and concurrent.

37 World-Class Quality 37 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Some Lean Success Stories Toyota - Best lean documented success story in industry (from manufacturing - see references). Stoner Baldrige Recipient. Used lean afterwards and dramatically improved results! (Reference: 2010 Quest for Excellence Conference). Hewlett Packard - a CMMI success story for software. 25% of the size of a typical CMMI implementation!!! Lean Early Defect Detection - Averages 7:1 ROI!

38 World-Class Quality 38 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Advanced Lean: Architectures Architectures are very powerful because they: • Are graphical (a picture is worth a 1000 words) and can be powerful communication tools. • Provide a framework for how components are related (e.g., interfaces, interdependencies, relationships) and how components fit together. • Promote reuse (e.g., products, components, requirements, designs, tests, interfaces, etc.) and can improve productivity and quality. • Can be modeled in an automated tool.

39 World-Class Quality 39 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) What is an Architecture? Architectures consist of: • Components • Interfaces, interdependencies, and other relationships among components • Ordering and rules for putting components together Simple Architecture Example: Lego’s Numerous Types of Architectures: • Product and Domain Specific Architectures • Business, Data, Technology, etc. Architectures • Discipline Specific Architectures (e.g., software) • Process Architectures • Documentation Architectures

40 World-Class Quality 40 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Advanced Lean: Models Models are very powerful because they: • Are graphical (a picture is worth a 1000 words) and can be powerful communication tools. • Can scale up to complex systems and provide a tool to analyze complex relationships and dependencies. • Promote reuse (e.g., products, components, requirements, designs, tests, interfaces, etc) and can improve productivity and quality. • Can be represented in an automated tool, and simulated.

41 World-Class Quality 41 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) What are Models? Models are abstractions of reality constructed for a (useful) purpose consisting of: • Formal notations and rules for representations • Model components or building blocks • Ways to model interfaces, interdependencies, and other relationships among the model components There are numerous modeling languages and tools. A Few Modeling Examples: • Behavioral Models (e.g., timing, states) • Structural Models (e.g., hierarchy, order) • Functional Models (e.g., input, function, output) • Process Models (e.g., the 5 W’s)

42 World-Class Quality 42 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Architectures Architectures consist of: • Components • Interfaces, interdependencies, and other relationships among components • Ordering and rules for putting components together Simple Architecture Example: Lego’s Numerous Types of Architectures: • Product and Domain Specific Architectures • Business, Data, Technology, etc. Architectures • Discipline Specific Architectures (e.g., software) • Process Architectures • Documentation Architectures

43 World-Class Quality 43 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Brainstorm What are the Strengths of Lean? •

44 World-Class Quality 44 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Brainstorm NOTE: All models are wrong; Some are useful. What are the Weaknesses of Lean? •

45 World-Class Quality 45 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Outline Introduction Baldrige Overview Lean Overview CMMI Overview Using Lean to Strengthen Baldrige World-Class Quality Summary

46 World-Class Quality 46 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Some CMMI Definitions Maturity Level: A maturity level is a set of related process areas that can be rated by a formal appraisal (e.g., CMMI SCAMPI A) and are performed collectively to achieve a set of goals. “Degree of process improvement across a predefined set of process areas in which all goals in the set are attained.” Process Area (PA): Process Area is a set of related practices that are performed collectively to achieve a set of goals. “A cluster of related practices in an area that, when implemented collectively, satisfy a set of goals considered important for making improvement in that area.” Specific Goal (SG): A high level statement of the outcome to be achieved by effective implementation of a group of practices. “A required model component that describes the unique characteristics that must be present to satisfy the process area.”. • Adapted from: “CMMI ® for Development”, Version 1.2, CMU/SEI-2006-TR-008

47 World-Class Quality 47 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) CMMI Staged Representation Level Focus Organizational Innovation and Deployment Causal Analysis and Resolution Organizational Process Performance Quantitative Project Management Requirements Development Technical Solution Product Integration Verification Validation Organizational Process Focus Organizational Process Definition Organizational Training Integrated Project Management Risk Management Decision Analysis and Resolution Requirements Management Project Planning Project Monitoring and Control Supplier Agreement Management Measurement and Analysis Process and Product Quality Assurance Configuration Management Process Areas 5 Optimizing 4 Quantitatively Managed 3 Defined 2 Managed Continuous Process Improvement Quantitative Management Process Standardization Basic Project Management 1 Initial Quality and Productivity Risk • Slide adapted from Process Program, Software Engineering Institute (SEI)

48 World-Class Quality 48 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) CMMI Results • Reference, “Performance Results of CMMI®-Based Process Improvement”, CMU/SEI-2006-TR-004

49 World-Class Quality 49 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) HP Lean CMMI Success Reduced Time: A small unit of HP implemented CMMI Maturity Level 3 in about 7 months (an average 4 year effort). Reduced Money: Cost of about 30-50% of typical cost. Reduced Size: The lean HP Maturity Level 3 process is about 20-25% of the size of the HP India Process (or a typical CMMI Maturity Level 3 process). • Olson, Timothy G., Kellum, Julie, and Tufail,Zia., “Rapidly Defining a Lean CMMI Maturity Level 3 Process”, Presentation, NDIA CMMI Conference, 2006.

50 World-Class Quality 50 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) More Lean CMMI Successes According to LSI data, the number one compliant from CMMI Maturity Level 3-5 companies is that their process is “not lean”. LSI has many lean success stories. What are typical Lean CMMI Results? • Processes are 20-25% of the size, and are more visual and usable. • CMMI Maturity Levels reached in half of the average time (average 1 year instead of 2 years per level). • 33-50% of the average cost.

51 World-Class Quality 51 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) CMMI Strengths & Weaknesses Strengths: • Has become an industry standard • Based on industry best practices • Based on maturity and capability models • Has a industry standard appraisal method Weaknesses • Measurable results are not required (way too much focus on “levels” and “ratings”, and not enough on measurable results) • Leadership requirements are weak • CMMI model is not lean (too large) • SCAMPI is especially not lean (takes too much time and is too expensive)

52 World-Class Quality 52 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Outline Introduction Baldrige Overview Lean Overview CMMI Overview Using Lean to Strengthen Baldrige World-Class Quality Summary

53 World-Class Quality 53 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Lean Strengthens Baldrige Lean is not required for Baldrige. Baldrige mentions “Lean” one time in the notes. Stoner Baldrige Recipient. Used lean afterwards and dramatically improved results! (Reference: 2010 Quest for Excellence Conference). Baldrige award winners may not be lean! One measure of “lean” is “cost of poor quality”. Advanced “lean”: Architectures and Models.

54 World-Class Quality 54 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Reference: Quest for Excellence Conference, Washington D.C., 2010.

55 World-Class Quality 55 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Reference: Quest for Excellence Conference, Washington D.C., 2010.

56 World-Class Quality 56 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Reference: Quest for Excellence Conference, Washington D.C., 2010.

57 World-Class Quality 57 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Reference: Quest for Excellence Conference, Washington D.C., 2010.

58 World-Class Quality 58 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Advanced Lean Architectures: • Promote “reuse” at the highest level (e.g., requirements, design, implementation). • Promote useful “views” of the product, service, or system (e.g., behavior, structure, data, etc.) Models: • Promote “lean” processes and procedures • Promote clear communication Both: Are visual and scale up to complexity

59 World-Class Quality 59 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Outline Introduction Baldrige Overview Lean Overview CMMI Overview Using Lean to Strengthen Baldrige World-Class Quality Summary

60 World-Class Quality 60 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Quality Maturity • Based on “The Eternally Successful Organization”, by Crosby, the SEI CMM, the Baldrige Award, & Dilbert Comics • Acronyms are (COQ=Cost of Quality; BA=Baldrige Award; DCF=Dilbert Correlation Factor; SEI=SEI CMMI) STAGE Comatose Progressive Care Wellness Prevention COQ 33% 25% 18% 10% 5% SUMMARY “What quality problems?” “We don’t know why we have quality problems, but they hurt.” “Management commitment and continuous improvement resolve quality problems.” “Quality planning, control, and improvement are routine.” “We know why we have happy customers.” SEI Intensive Care BADCF % 80% 60% 40% 20%

61 World-Class Quality 61 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Vision of “World-Class” Quality results that are planned and measured: • Strong leadership for quality • Processes are “lean” and “value added” • Cost of Poor Quality (COPQ) is 5-10% • % of all defects are removed early • Lean Metrics: Cycle Times, Performance, Productivity, Quality, ROI, etc., are continuously improving • Customers are satisfied; even delighted • Employees are happy and proud of their work • Processes are mature: Supported by Technology • Most defects are prevented; Strong prevention • Award winning world-class quality (e.g., Deming Award, Baldrige Award, etc.)

62 World-Class Quality 62 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Outline Introduction Baldrige Overview Lean Overview CMMI Overview Using Lean to Strengthen Baldrige World-Class Quality Summary

63 World-Class Quality 63 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Summary Baldrige and Lean work well together (synergistic). “All models are wrong; Some are useful.” The Baldrige Model has strengths and weaknesses; Know the weaknesses of Baldrige. All quality models have strengths and weaknesses; Know the weaknesses of the quality models you use or are going to use. Winning the Baldrige Award is just the beginning! Congratulations! But challenge yourself to keep improving!

64 World-Class Quality 64 Training Material Used with Permission and/or Licensed to Lean Solutions Institute, Inc. (LSI) Apply to Serve as a Baldrige Examiner • Evaluate Award applicants using the Criteria for Performance Excellence. • Earn professional development CEUs (accredited by IACET). • Network with other senior-level professionals from all sectors. • Learn how organizations improve processes and get world-class results. • Attend the annual Award Ceremony given by the President of the United States. • Apply November 5 - January 6 at or call Presentation based on NIST MBNQA 2010 Material. Used with Permission.


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