1. Chapter 3: Quality Improvement and Cost Reduction
Course Instructor:
Ibrahim Abdulla

2. Major Topics Sporadic and Chronic Problems Project-by-Project Approach
Example of a project
Wide Quality Improvement Initiative
Experiences with Project-by-Project Approach
Introduction to Six-Sigma Improvement
Define Phase
Measure Phase
Analyze Phase
Improve Phase
Control Phase
Six Sigma Summary and Project Example
Maintaining a focus on Continuous improvement

3. 1- Sporadic and Chronic Problems
Costs Associated with wastes (cost, quality and time related) are due to Sporadic and Chronic Problems

4. Sporadic Problem: is a sudden change from Statuesque
Chronic Problems: is a long standing adverse situation
The differences between Sporadic and Chronic Problems
Approach to solving is different
Sporadic are dramatic and require immediate attention
The reason for chronic waste is the lack of structured approach to identify and reduce waste
Structured approach to improvement does not apply only to quality but also to productivity, cycle time, and safety

5. 2- Project-by-Project Approach
Most effective approach to improvement
Main Steps
Proving the need
Identifying the project
Organizing the project team
Quality improvement project tasks:
Verifying the project need an mission
Diagnosing the cause
Providing remedy
Dealing with resistance to change
Instituting control to hold the gains
It is also called Juran’s breakthrough sequence
Six-Sigam is an alternative approach

6. 3- Example of a project
Verifying the project need an mission (Define Step in Six-Sigma)
Reduce the number of defective solder connections

7. Diagnosing the cause (Measure and Analyze Step in Six-Sigma)

8. Providing remedy (Improve Step in Six-Sigma)
Either the temperature of the soldering need to be raised or the speed of the wave soldering machine need to be reduced
Dealing with resistance to change (Improve Step in Six-Sigma)
One engineer had pre-defined position, did not change his mind until the experiment proved him wrong
Instituting control to hold the gains (Improve Step in Six-Sigma)
To insure the improvement was maintained the process was monitored

9. 4 - Wide Quality Improvement Initiative
Steps of Major quality improvement initiatives
Estimate the size of chronic waste or other quality related issues
Estimate the saving and other benefits
Set a goal to cut down costs to half in five years
Do not imply costs would be reduced to zero
Verify unquantifiable benefits
Calculate the return on investment resulting from improvement
Use a successful case history in the organization to justify a broader program

10. 5- Experiences with Project-by-Project Approach
Large cost reductions and improved quality to customers have been achieved. 1$ = 5 to 10$
Investment require for improvement has been modest and not capital intensive
Most Projects can be completed in Six months
The Key chronic problems cut through departments and thus require cross-functional project team
In companies consisting of autonomous units, a project that is successful in one unit can be applied to the other units without need for duplicating diagnostic work

11. The improvement approach should include suppliers
Improvement must include goals in annual business plan that are aligned with other business goals and strategies, etc.

12. 6 - Introduction to Six-Sigma Improvement

13. 7 - Organization Culture and Quality

14. 8 - Assessment of Current Quality Activities

15. 9- National Quality Awards
National Institute of Standards and Technology (NIST)
Areas:
Industry
Services
Small Business
Education
Health Care
Each country has its own System and regulatory body

16. 10 - ISO 9000 Quality System Standards
Developed by International Organization for Standards
Minimum Criteria for quality Systems
Required to meet domestic and International competition
Some industries have their own quality systems (Example QS9000 for Automotive Industry). These systems includes ISO 9000 and additional industry related standards
ISO Do not emphasis on results, but rather on Existence of quality systems
Baldrige Criteria Focus on Customer Satisfaction.
Baldrige and ISO 9000 complement each other

17. Questions/Queries