Philosophies and Frameworks 4650 Spring/ chapt. 3 Philosophies and Frameworks

Leaders in the Quality Revolution W. Edwards Deming Joseph M. Juran Philip B. Crosby Armand V. Feigenbaum Kaoru Ishikawa Genichi Taguchi

Who’s Who? b a Deming ____ Juran ____ Crosby ____ c

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

Deming’s System of Profound Knowledge Appreciation for a system Understanding variation Theory of knowledge Psychology

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

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

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

Psychology People are motivated intrinsically and extrinsically Fear is demotivating Managers should develop pride and joy in work

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.

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. www.deming.org

Juran’s Quality Trilogy Quality planning Quality control Quality improvement www.juran.com

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.”

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 www.philipcrosby.com

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

Kaoru Ishikawa Instrumental in developing Japanese quality strategy Influenced participative approaches involving all workers Advocated the use of simple visual tools and statistical techniques

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

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

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 U.S. companies Malcolm Baldrige, former U.S. Secretary of Commerce

Criteria for Performance Excellence Leadership Strategic Planning Customer and Market Focus Information and Analysis Human Resource Focus Process Management Business Results Baldrige Award trophy

The Baldrige Framework – A Systems Perspective Organizational Profile: Environment, Relationships, and Challenges 2 Strategic Planning 5 Human Resource Focus 1 Leadership 7 Business Results 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. 3 Customer & Market Focus 6 Process Management 4 Information and Analysis

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

The Baldrige Award Scoring System Three evaluation dimensions - Approach, Deployment, and Results Scoring is linked to the importance to the applicant’s business Scoring guidelines (Table 3.5) The system for scoring applicant responses to the 20 Criteria Items involves the assessment of three evaluation dimensions and considers the factor of “importance” to the applicant’s business. The process employs Scoring Guidelines, which are an anchored rating scale. All Baldrige Award Examiners observe a set of published guidelines in assignment of scores to applicants’ responses. This scoring system is spelled out in detail so that an organization can assess itself and so that applicants are completely familiar with the system being used. The three scoring dimensions, critical to evaluation and feedback, are: Approach, which refers to how the applicant addresses the Item requirements, or what method(s) are used. The factors used to evaluate approaches include: (1) appropriateness of the methods to the requirement, (2) the effectiveness of the use of the methods, and (3) evidence of innovation and/or significant and effective adaptations of approaches used in other types of applications or businesses; Deployment, which refers to the extent to which the applicant’s approach is applied to all requirements of the Item. The factors used to evaluate deployment include: (1) use of the approach in addressing business and item requirements, and (2) use of the approach by all appropriate work units; and Results, which refers to outcomes in achieving the purposes given in the Item. The factors used to evaluate results include: (1) current performance, (2) performance relative to appropriate comparisons and/or benchmarks, (3) rate, breadth, and importance of performance improvements, (4) demonstration of sustained improvement and/or sustained high-level performance, and (5) linkage of results measures to key performance measures identified in the Business Overview and in Approach/Deployment Items. Evaluation and feedback must also consider the factor of “importance” of improvements in approach, deployment, and results to the applicant’s business. Areas of greatest importance should be identified in the Business Overview, and in items of particular importance, such as the key customer and process requirements and key strategies and action plans.

Feedback Report Strengths - approaches or results that demonstrate effective response to the Criteria Opportunities for improvement - how the applicant can better address the purposes of the Criteria, or issues that require clarification

Self Assessment and the Baldrige National Quality Program A primary goal of the 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 winner

Growth of State Award Programs Based on the Baldrige

Quality Awards Around the World In addition to the state and local network, an international network has now evolved as well. Over 40 programs exist across the world, and many are Baldrige based. There is even a Baldrige-based Award in Japan, in addition to the Deming prize. Baldrige has truly become a global benchmark and the Criteria have become accepted as a world-wide standard for performance excellence. Programs in place No programs

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.

Objectives of ISO Standards (1 of 2) 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 requirements are being fulfilled

Objectives of ISO Standards (2 of 2) Provide confidence to customers and other stakeholders that quality requirements are being achieved Provide confidence that quality system requirements are fulfilled

Structure of ISO 9000 Standards 21 elements organized into four major sections: Management Responsibility Resource Management Product Realization Measurement, Analysis, and Iimprovement See Table 3.7

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