1. Philosophies and Frameworks
Chapter 3
Philosophies
and
Frameworks
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

2. Leaders in the Quality Revolution
W. Edwards Deming
Joseph M. Juran
Philip B. Crosby
Armand V. Feigenbaum
Kaoru Ishikawa
Genichi Taguchi
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

3. Who’s Who? Deming ____ Juran ____ Crosby ____ b a c
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

4. Deming Chain Reaction Improve quality Costs decrease
Productivity improves
Increase market share with better quality and lower prices
Stay in business
Provide jobs and more jobs
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

5. Key Idea
The Deming philosophy focuses on continual improvements in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of top management.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

6. Deming’s System of Profound Knowledge
Appreciation for a system
Understanding variation
Theory of knowledge
Psychology
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

7. Systems Most organizational processes are cross-functional
Parts of a system must work together
Every system must have a purpose
Management must optimize the system as a whole
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

8. Key Idea
The aim of any system should be for all stakeholders—stockholders, employees, customers, community, and the environment—to benefit over the long term.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

9. Variation
Many sources of uncontrollable variation exist in any process
Excessive variation results in product failures, unhappy customers, and unnecessary costs
Statistical methods can be used to identify and quantify variation to help understand it and lead to improvements
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

10. Theory of Knowledge Knowledge is not possible without theory
Experience alone does not establish a theory, it only describes
Theory shows cause-and-effect relationships that can be used for prediction
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

11. Psychology
People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful
Fear is demotivating
Managers should develop pride and joy in work
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

12. Deming’s 14 Points (Abridged) (1 of 2)
1. Create and publish a company mission
statement and commit to it.
2. Learn the new philosophy.
3. Understand the purpose of inspection.
4. End business practices driven by price alone.
5. Constantly improve system of production
and service.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear and create trust.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

13. Deming’s 14 Points (2 of 2) 9. Optimize team and individual efforts.
10. Eliminate exhortations for work force.
11. Eliminate numerical quotas and M.B.O.
Focus on improvement.
12. Remove barriers that rob people of pride
of workmanship.
13. Encourage education and self-improvement.
14. Take action to accomplish the transformation.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

14. Juran’s Quality Trilogy
Quality planning
Quality control
Quality improvement
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

15. Key Idea
Juran proposed a simple definition of quality: “fitness for use.” This definition of quality suggests that it should be viewed from both external and internal perspectives; that is, quality is related to “(1) product performance that results in customer satisfaction; (2) freedom from product deficiencies, which avoids customer dissatisfaction.”
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

16. Quality is free . . . Phillip B. Crosby
“Quality is free. It’s not a gift, but it is free. What costs money are the unquality things -- all the actions that involve not doing jobs right the first time.”
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

17. Philip B. Crosby Absolutes of Quality Management:
Quality means conformance to requirements
Problems are functional in nature
There is no optimum level of defects
Cost of quality is the only useful measurement
Zero defects is the only performance standard
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

18. A.V. Feigenbaum Three Steps to Quality
Quality Leadership, with a strong focus on planning
Modern Quality Technology, involving the entire work force
Organizational Commitment, supported by continuous training and motivation
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

19. Kaoru Ishikawa Instrumental in developing Japanese quality strategy
Influenced participative approaches involving all workers
Advocated the use of simple visual tools and statistical techniques
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

20. Genichi Taguchi
Pioneered a new perspective on quality based on the economic value of being on target and reducing variation and dispelling the traditional view of conformance to specifications:
No Loss
Loss
Tolerance
0.500
0.520
0.480
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

21. Malcolm Baldrige National Quality Award
Help improve quality in U.S. companies
Recognize achievements of excellent firms and provide examples to others
Establish criteria for evaluating quality efforts
Provide guidance for other American companies
Malcolm Baldrige, former U.S. Secretary of Commerce
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

22. Criteria for Performance Excellence
Leadership
Strategic Planning
Customer and Market Focus
Measurement, Analysis, and Knowledge Management
Human Resource Focus
Process Management
Business Results
Baldrige Award trophy
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

23. The Baldrige Framework – A Systems Perspective
Organizational Profile:
Environment, Relationships, and Challenges 2
Strategic Planning 5
Human Resource Focus
The framework is the 30,000 foot view of the Criteria. [Note: Education and Health Care Criteria have slightly different nomenclature.]
The building blocks, or Categories, are essential -- performance in the Baldrige categories is the cost of entry -- but excellence in the linkages will be the mark of competitive leadership. The arrows point to excellence.
The umbrella over strategy and action plans:
It is the set of customer and market focused company-level requirements.
These are derived from short- and long-term planning.
They are the things that must be done well for the strategy to succeed.
The action plans “bring the strategy to life.”
They guide overall resource decisions.
They drive the alignment of measures for all work units to ensure customer satisfaction and market success.
The system:
The leadership triad -- leadership, strategic planning, customer & market focus -- emphasizes the importance of a leadership focus on strategy and customers.
The results triad is HR focus, process management, and business results. Its focus is on the employees and key processes that accomplish the work of the organization that yields results.
ALL company actions point toward results.
The large arrow in the center connects the leadership and results triads -- a critical linkage for company success -- and shows the role leaders must play in driving results improvement.
Information and analysis are critical to a fact-based system; they are the foundation for the performance management system. 7
Business
Results 1
Leadership 3
Customer & Market Focus 6
Process Management 4
Measurement, Analysis, and Knowledge Management
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24. Key Idea
The Baldrige criteria define both an integrated infrastructure and a set of fundamental practices for a high-performance management system.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

25. Criteria Evolution (1 of 2)
From quality assurance and strategic quality planning to a focus on process management and overall strategic planning
From a focus on current customers to a focus on current and future customers and markets
From human resource utilization to human resource development and management
From supplier quality to supplier partnerships
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

26. Criteria Evolution (2 of 2)
From individual quality improvement activities to cycles of evaluation and improvement in all key areas
From data analysis of quality efforts to an aggregate, integrated organizational level review of key company data
From results that focus on limited financial performance to a focus on a composite of business results, including customer satisfaction and financial, product, service, and strategic performance
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

27. Key Idea
Approaches that organizations use to address the Baldrige criteria requirements need not be formal or complex, and can easily be implemented by small businesses.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

28. Baldrige Award Evaluation Process
Receive Applications
Stage 1
Independent Review
Judges Select for
Consensus Review? No
Feedback report
to applicant
Stage 2
Consensus Review
Judges Select for
Site Visit Review? No
Feedback report
to applicant
The four-stage evaluation process is illustrated in this chart.
After each stage of review, the Panel of Judges meets to decide which applicants should go forward to the next stage -- consensus or site visit.
The Judges’ guidelines encourage giving “benefit of the doubt” to make certain that all potential Award recipients proceed to each succeeding stage of review.
When it is determined that an applicant will not proceed to the next stage of the process, the feedback report is prepared and sent within 45 days.
All information remains strictly confidential throughout the process.
There are strict conflict-of-interest rules that are followed by all Examiners, Judges, and National Quality Program staff.
Stage 3
Site Visit Review
Stage 4
Judges Recommend Award
Recipients to
NIST Director/DOC
Feedback report
to applicant
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

29. Boeing Airlift & Tanker Programs – 1998 recipient
Self Assessment
A primary goal of the Baldrige program is to encourage many organizations to improve on their own by equipping them with a standard template for measuring their performance and their progress toward performance excellence.
The Baldrige National Quality Program is more than an Award program. A major purpose of the Criteria is to provide a framework organizations can use for self-assessment.
To encourage self-assessment, the Program makes available the materials to accomplish Baldrige assessments in-house. Materials include the Criteria, scoring guidelines, a structure for identifying organizational strengths and opportunities for improvement, and a case study packet that demonstrates the complete process.
Boeing Airlift & Tanker Programs – 1998 recipient
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

30. Deming Prize
Instituted 1951 by Union of Japanese Scientists and Engineers (JUSE)
Several categories including prizes for individuals, factories, small companies, and Deming application prize
American company winners include Florida Power & Light and AT&T Power Systems Division
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31. Other Quality Awards European Quality Award
Canadian Awards for Business Excellence
Australian Business Excellence Award
Chinese National Quality Award (New)
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32. ISO 9000:2000
Quality system standards adopted by International Organization for Standardization in 1987; revised in 1994 and 2000
Technical specifications and criteria to be used as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes, and services are fit for their purpose.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

33. Key Idea
ISO 9000 defines quality system standards, based on the premise that certain generic characteristics of management practices can be standardized, and that a well-designed, well-implemented, and carefully managed quality system provides confidence that the out-puts will meet customer expectations and requirements.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

34. Objectives of ISO Standards
Achieve, maintain, and continuously improve product quality
Improve quality of operations to continually meet customers’ and stakeholders’ needs
Provide confidence to internal management and other employees that quality system requirements are being fulfilled
Provide confidence to customers and other stakeholders that quality requirements are being achieved
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

35. Structure of ISO 9000 Standards
21 elements organized into four major sections:
Management Responsibility
Resource Management
Product Realization
Measurement, Analysis, and Improvement
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

36. ISO 9000:2000 Quality Management Principles
Customer Focus
Leadership
Involvement of People
Process Approach
System Approach to Management
Continual Improvement
Factual Approach to Decision Making
Mutually Beneficial Supplier Relationships
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

37. Key Idea
ISO 9000 provides a set of good basic practices for initiating a quality system, and is an excellent starting point for companies with no formal quality assurance program.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

38. Six Sigma
Based on a statistical measure that equates to 3.4 or fewer errors or defects per million opportunities
Pioneered by Motorola in the mid-1980s and popularized by the success of General Electric
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

39. Key Idea
Six Sigma can be described as a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and a clear financial return for the organization.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

40. Key Concepts of Six Sigma (1 of 2)
Think in terms of key business processes, customer requirements, and overall strategic objectives.
Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtaining resources.
Emphasize such quantifiable measures as defects per million opportunities (dpmo) that can be applied to all parts of an organization
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

41. Key Concepts of Six Sigma (2 of 2)
Ensure that appropriate metrics are identified early and focus on business results, thereby providing incentives and accountability.
Provide extensive training followed by project team deployment
Create highly qualified process improvement experts (“green belts,” “black belts,” and “master black belts”) who can apply improvement tools and lead teams.
Set stretch objectives for improvement.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

42. Key Idea
Although different, Baldrige and Six Sigma are highly compatible and can each have a place in the management system of a successful organization.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing