1. LECTURE 1C – GLOBAL ISSUES Global Supply Chain Quality International Standards Awards & Prizes SJSU Bus 142 - David Bentley1

2. Multinational Supply Chains Licensing Partnering Globalization SJSU Bus 142 - David Bentley2

3. JAPANESE QUALITY SJSU Bus 142 - David Bentley3

4. Japanese Quality Postwar (WW II) activity Deming Prize Lean operations and quality Shigeo Shingo (7 wastes) The 5 S’s SJSU Bus 142 - David Bentley4

5. Postwar Japan Limited natural resources Reduced production capacity Strategy for developing international trade based on quality and efficient production Assistance from U.S. occupation forces Recognition of Deming’s contribution SJSU Bus 142 - David Bentley5

6. Deming Prize Background Awarded by Japan: Union of Japanese Scientists and Engineers (JUSE) First awarded in 1951 Named after W. Edwards Deming Categories Deming (Application) Prize Sub-categories until 1995 Divisions (until 1994) Small businesses (until 1994) Deming Prize for Individuals Deming Grand Prize SJSU Bus 142 - David Bentley6

7. Deming Award Areas Deming (Application) Prize winners Most winners before 2001 were Japanese U.S. winners: Florida Power & Light (1989), AT&T Power Systems (1994), Sanden International (2006) Most winners since 2001 Indian (22), Thai (10) Individual Prize winners All Japanese Deming Grand Prize Japan Quality Medal 1970-2011 Most Japanese until 2002, now India, Thailand SJSU Bus 142 - David Bentley7

8. Deming Categories – 1 Policy Organization and operations Collecting and using information Analysis Planning for the future SJSU Bus 142 - David Bentley8

9. Deming Categories – 2 Education and training Quality assurance Quality effects Standardization Control SJSU Bus 142 - David Bentley9

10. Lean Operations Emphasis on value Focus on elimination of waste Development of tools and techniques over time The Toyota Production System SJSU Bus 142 - David Bentley10

11. Toyota Production System Taiichi Ohno (1912 - 1990) “Father of the Toyota Production System” System also known as “Lean Manufacturing” Toyota executive and consultant to suppliers Shigeo Shingo (1902 – 1990) External consultant to Toyota Poka-Yoke (mistake proofing) Setup reduction (SMED) SJSU Bus 142 - David Bentley11

12. Shingo’s 7 Wastes 1. Waste of overproduction 2. Waste of waiting 3. Waste of transportation 4. Waste of processing itself 5. Waste of stocks 6. Waste of motion 7. Waste of making defective products SJSU Bus 142 - David Bentley12

13. The 5 S’s (Organizing / Eliminating Waste) 1. Seiri (“Separating”): get rid of unnecessary 2. Seiton (“Sorting”): orderly workplace 3. Seiso (“Cleaning”): eliminate hidden problems 4. Seiketsu (“Standardizing”): locations and processes 5. Shetsuke (“Sustaining”): discipline in maintaining the other 4 SJSU Bus 142 - David Bentley13

14. Other Japanese Characteristics Involvement of all workers in the company Quality Circles - Kaoru Ishikawa (1915-1989) (as implemented in the U.S.) Limited authority Focus within department Often seen as added work Ongoing Preventive maintenance Deming Individual Prize Winner (1952) SJSU Bus 142 - David Bentley14

15. AMERICAN QUALITY SJSU Bus 142 - David Bentley15

16. American Quality Preoccupation with quantity for years Reliance on inspection (“Quality Control”) Effect of oil embargos in the 1970s Malcolm Baldrige Award President’s Quality Award (PQA) (???) Six Sigma SJSU Bus 142 - David Bentley16

17. Malcolm Baldrige Award source: Wikipedia Awarded by US Dept. of Commerce (National Inst. of Standards and Technology) 1987 congresional legislation Named after Malcolm Baldrige (Howard Malcolm “Mac” Baldrige - American industrialist and former Secretary of Commerce) Promotes awareness of performance excellence Awarded in business, education, health care, non-profit sectors SJSU Bus 142 - David Bentley17

18. Baldrige Award Areas Original award areas: Manufacturing, Service, Small Business Education added in 2001 Health care added in 2002 Non-profit added in 2007 Local winners Granite Rock (1992) Solectron Corp. (1991, 1997) SJSU Bus 142 - David Bentley18

19. SJSU Bus 142 - David Bentley19 Recent Winners ManufactServiceSmall Business Health CareEducationNon-Profit 2009 HoneywellMidwayUSA1)Heartland Health 2)Atlanti Care VA Cooperative Studies 2010 1)MEDRAD 2)Nestlé Purina 1)Studer Group 2)Freese/Nichols 3)K&N Mgmt Advocate Good Sam Hospital Montgomery County Public Schools 2011 1)Schneck Med Ctr 2)H Ford Health Sys 3)Soothcentral Foundation Concordia Publishing 2012 Lockheed Missiles MESAN. Miss. Health SvcsCity of Irving TX 2013 Baylor Reg’l Med Ctr. Sutter Davis Hospital Pewaukee School Dist.

20. Baldrige Award Categories Leadership Strategic planning Customer and market focus Information and analysis Human resource focus Process management Business results SJSU Bus 142 - David Bentley20

21. Six Sigma Quality - 1 Latest popular approach to Quality Overall objective is to find and eliminate causes of defects in manufacturing and service processes ± 6 standard deviations (6  ) from the process mean = 0.0003% defects Represents a goal 6  ….. 6  ….. 6  SJSU Bus 142 - David Bentley21

22. Six Sigma Quality - 2 Concept developed at Motorola by Bill Smith Best in class = General Electric Certification from ASQ on processes to support Six Sigma Many consulting and training firms on how to implement Six Sigma SJSU Bus 142 - David Bentley22

23. Six Sigma at GE “The central idea behind Six Sigma is that if you can measure how many ‘defects’ you have in a process, you can systematically figure out how to eliminate them and get as close to ‘zero defects’ as possible.” Making Customers Feel Six Sigma Quality SJSU Bus 142 - David Bentley23

24. Other Awards & Prizes President’s Quality Award [PQA] (US) (???) European Foundation for Quality Management (Europe) (see next slide) National Quality Institute (Canada) Business Excellence Award (Australia) Etc., etc., etc. SJSU Bus 142 - David Bentley24

25. European Quality Award SJSU Bus 142 - David Bentley25

26. “Value” of Awards & Prizes Shows effort May largely be dependent on money spent Used in advertising (e.g., Cadillac – 1990) Might not reflect customer view SJSU Bus 142 - David Bentley26

27. CHINESE QUALITY SJSU Bus 142 - David Bentley27

28. Chinese Quality Historic high quality of porcelain, silk, etc. Growth in manufacturing in last 15 years Little infrastructure for appraising and certifying quality of subcontractors and suppliers in past years Recent recalls: pet food, toys, tires, toothpaste, etc. But… making rapid strides in quality SJSU Bus 142 - David Bentley28

29. ISO STANDARDS International Organization for Standardization (ISO) SJSU Bus 142 - David Bentley29

30. ISO Basics Network of national standards bodies in 162 countries Based in Geneva, Switzerland Seeks consensus for international standards Who can propose new standards? SJSU Bus 142 - David Bentley30

31. “Old” ISO 9000 Standards ISO 9000 (series) ISO 9001(design, develop, produce, install, service) ISO 9002 (no design and development) ISO 9003 (final inspection and testing) ISO 9004 (QMS application guidelines) SJSU Bus 142 - David Bentley31

32. Current ISO Standards ISO 9000 family – “Quality management” ISO 9001:2008 (QMS - Requirements) ISO 14000 family – “Environmental management” ISO 19011: 2012 (Guidelines on Quality and/or Environmental Management Systems Auditing) SJSU Bus 142 - David Bentley32

33. Related ISO Standards ISO 10005:2005 (Quality management – Guidelines for quality plans) ISO 10006:2003 (Quality management – Guidelines to quality in project management) ISO 10007:2003 (Quality management – Guidelines for configuration management) ISO/DIS 10012:2003 (Quality assurance requirements for measuring equipment) ISO 10014:2006 (Guidelines for managing the economics of quality) ISO 10015:1999 (Guidelines for training) SJSU Bus 142 - David Bentley33

34. ISO 9000 Principles 1. Customer focus 2. Leadership 3. Involvement of people 4. The process approach 5. A systems approach to management 6. Continual improvement 7. Factual approach to decision making 8. Mutually beneficial supplier relationship SJSU Bus 142 - David Bentley34

35. ISO Registration Process SJSU Bus 142 - David Bentley35

36. Evolution of ISO 9000 Series Source: WikipediaSJSU Bus 142 - David Bentley36

37. ISO/TS 16949:2009 Replaced QS9000 in 2006 Particular requirements for the application of ISO 9001 ~ 30% of 100 auto manufacturers use Applied throughout entire supply chain Design, production, assembly, servicing SJSU Bus 142 - David Bentley37

38. ISO Registration (Certification) What’s been good Focus on quality Demonstrates effort What was bad (mostly fixed in ISO 9000:2000) Became mechanical Emphasized conformance to documentation, not meeting QUALITY Didn’t include customer view SJSU Bus 142 - David Bentley38