1. Total Quality Management

2. 2 A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction. ◦ Continuous improving ◦ Involvement of everyone ◦ Customer satisfaction T Q M

3. 3  Find out what the customer wants?  Design a product or service that meets or exceeds customer wants  Design processes that facilitates doing the job right the first time  Keep track of results  Extend these concepts to suppliers

4. 4  Continual improvement: Kaizen  Competitive benchmarking  Employee empowerment  Team approach  Decisions based on facts  Knowledge of tools  Supplier quality  Quality at the source: The philosophy of making each worker responsible for the quality of his or her work.

5. 5  Lack of: ◦ Company-wide definition of quality ◦ Strategic plan for change  Resistance to a change ◦ Customer focus ◦ Real employee empowerment ◦ Strong motivation ◦ Time to devote to quality initiatives ◦ Leadership

6. 6  Six Sigma is the measure of quality that strives for near perfection.  It is a disciplined, data-driven methodology focused on eliminating defects.  Six Sigma is a reference to a statistical measuring system, equivalent to just 3.4 defects per every million opportunities  Conceptually ◦ Program designed to reduce defects ◦ Requires the use of certain tools and techniques

7.  Intense competitive pressures – especially from rapid globalization.  Greater consumer demand for high quality products and services, little tolerance for failures of any type.  Top management (and stockholder) recognition of the high costs of poor quality.  The availability and accessibility of large data bases and the increasing ability to explore, understand, and use the data.

8. Defects per Million% Accuracy Opportunities (DPMO) One Sigma691,50030.85% Two Sigma308,500 69.15% Three Sigma 66,81093.32% Four Sigma6,210 99.38% Five Sigma 23399.977% Six Sigma3.499.9997% Seven Sigma0.02099.999998

10.  Motorola is known for its cool cell phones, but the company's more lasting contribution to the world is the quality-improvement process called Six Sigma.  In 1986 an engineer named Bill Smith, sold then- Chief Executive Robert Galvin on a plan to strive for error-free products 99.9997% of the time. It is the origin of ‘Six Sigma’.

11. Motorola saved $17 Billion from 1986 to 2004, reflecting hundreds of individual successes in all Motorola business areas including: ◦ Sales and Marketing ◦ Product design ◦ Manufacturing ◦ Customer service ◦ Transactional processes ◦ Supply chain management

12. “First, what it is not. It is not a secret society, a slogan, or a cliché. Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services” ◦ Saved $750 million by the end of 1998 ◦ Cut invoice defects and disputes by 98 percent, speeding payment, and creating better productivity ◦ Streamlined contract review process, leading to faster completion of deals and annual savings of $1 million

13. 13  Six Sigma programs ◦ Improve quality ◦ Save time ◦ Cut costs  Employed in ◦ Design ◦ Production ◦ Service ◦ Inventory management ◦ Delivery

14. Define Measure Analyse Control Improve

15. 15  Identify projects that are measurable  Define projects including the demands of the customer and the content of the internal process.  Develop team charter  Define process map 1. Define 2. Measure3. Analyze4. Improve5. Control

16. 16  Define performance standards  Measure current level of quality into Sigma. It precisely pinpoints the area causing problems.  Identify all potential causes for such problems. 5.0 Control 2. Measure 1. Define 3. Analyze4. Improve5. Control

17. 17  Establish process capability  Define performance objectives  Identify variation sources 3.0 Analyze Tools for analysis Process Mapping Failure Mode & Effect Analysis Statistical Tests Design of Experiments Control charts Quality Function Deployment (QFD) 3. Analyse 1. Define2. Measure 4. Improve5. Control

18. 18  Screen potential causes  Discover variable relationships among causes and effects  Establish operating tolerances  Pursue a method to resolve and ultimately eliminate problems. It is also a phase to explore the solution how to change, fix and modify the process.  Carryout a trial run for a planned period of time to ensure the revisions and improvements implemented in the process result in achieving the targeted values. 4. Improve 1. Define2. Measure3. Analyse 5. Control

19. 19  Monitor the improved process continuously to ensure long term sustainability of the new developments.  Share the lessons learnt  Document the results and accomplishments of all the improvement activities for future reference. 5. Control 1. Define2. Measure3. Analyse4. Improve

20. 20  Flowcharts  Check sheets  Histograms  Pareto Charts  Scatter diagrams  Control charts  Cause-and-effect diagrams  Run charts

21. Operation Decision Start/ Finish Operation Decision Flowcharts

22. Billing Errors Wrong Account Wrong Amount A/R Errors Wrong Account Wrong Amount Monday

23. 23  A bar chart of the frequency of outcomes

24. Percent from each cause Causes of poor quality Machine calibrations Defective parts Wrong dimensions Poor Design Operator errors Defective materials Surface abrasions 0 10 20 30 40 50 6070(64) (13) (10) (6) (3) (2)(2)

25. 25 Determine the correlation between quality and operations factors

26. 970 980 990 1000 1010 1020 0123456789101112131415 UCL LCL

27. 27 Cause-and-Effect Diagram or Fishbone diagram

28. Time (Hours) Diameter

29. UCL LCL UCL Process not centered and not stable Process centered and stable Additional improvements made to the process

30. 30  Brainstorming generate a free flow of idea in a group of people  Quality circles Group of workers who find ways of improving  Interviewing:  Benchmarking: Measure against best  5W2H: what, why, where, when, who, how, how much

31. 31  Team approach ◦ List reduction  Choosing a movie with friends on a Friday night ◦ Balance sheet  Choosing an apartment to stay, pros and cons of each option ◦ Paired comparisons  Eliminate alternatives by comparison

32. 32  Identify a critical process that needs improving  Identify an organization that excels in this process ◦ Not necessarily from the same industry  Contact that organization ◦ Confidentiality is important  Analyze the data  Improve the critical process Benchmarking numbers is much more common than benchmarking processes