1. Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. 1 Quality Management for Organizational Excellence Lecture/Presentation Notes By: Dr. David L. Goetsch and Stanley Davis Based on the book Quality Management for Organizational Excellence (Sixth Edition)

2. 2 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement Methods with Six Sigma, Lean, and Lean Six Sigma MAJOR TOPICS Rationale for Continual Improvement Management’s Role in Continual Improvement Essential Improvement Activities Structure for Quality Improvement The Scientific Approach Identification of Improvement Needs

3. 3 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) Development of Improvement Plans Common Improvement Strategies Additional Improvement Strategies The Kaizen Approach Goldratt’s Theory of Constraints The CEDAC Approach Six Sigma Concept Lean Operations Lean Six Sigma Major Topics Continued

4. 4 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) The rationale for continual improvement is that it is necessary in order to compete in the global marketplace. Just maintaining the status quo, even if the status quo is high quality, is like standing still in a race. Management’s role in continual improvement is leadership. Executive-level managers must be involved personally and extensively. The responsibility for continual improvement cannot be delegated.

5. 5 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) Essential improvement activities include the following:  Maintaining communication  Correcting obvious problems  Looking upstream  Documenting problems and progress  Monitoring change

6. 6 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) ● Structuring for quality improvement involves the following:  Establishing a quality council  Developing a statement of responsibilities  Establishing the necessary infrastructure

7. 7 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) ● Using the scientific approach means:  Collecting meaningful data  Identifying root causes of problems  Developing appropriate solutions  Planning and making changes. ● Ways of identifying improvement needs include the following:  Multivoting  Seeing customer input  Studying the use of time  Localizing problems.

8. 8 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) Developing improvement plans involves the following steps:  Understanding the process  Eliminating obvious errors  Removing slack from processes  Reducing variation in processes  Planning for continual improvement.

9. 9 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) Commonly used improvement strategies include the following:  Describing the process  Standardizing the process  Eliminating errors in the process  Streamlining the process  Reducing sources of variation  Bringing the process under statistical control  Improving the design of the process.

10. 10 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) Additional improvement strategies include the following:  Reducing leadtime  Flowing production  Using group technology  Leveling production  Synchronizing production  Overlapping production  Using flexible scheduling  Using pull control  Using visual control  Using stockless production

11. 11 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) ● Additional improvement strategies include the following :  Using jidoka  Reducing setup time  Applying in-process control  Improving quality  Applying total cost cycles  Using cost curves  Using the mushroom concept  Making suppliers comakers  Applying total industrial engineering  Applying total productive maintenance

12. 12 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) Kaizen is the name given by the Japanese to the concept of continual incremental improvement. It is a broad concept that encompasses all of the many strategies for achieving continual improvement and entails the following five elements:  Straighten up  Put things in order  Clean up  Personal cleanliness  Discipline

13. 13 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) Goldratt’s theory of Constraints is another approach used to achieve continual improvement in the workplace. It involves the following steps:  Identify  Exploit  Subordinate  Eliminate restraints  Overcome inertia

14. 14 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) The following tools are used in applying Goldratt’s Theory of Constraints:  Effect-cause-effect  Evaporating clouds  Prerequisite trees  The Socratic Method

15. 15 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Nineteen: Continual Improvement (Continued) ● CEDAC is an acronym for Cause-and-Effect Diagram with the Addition of Cards. (This acronym is a registered trademark of Productivity, Inc.) With CEDAC, a cause-and-effect diagram is developed, but fact cards about problems and improvement cards containing ideas for solving the problems are used. ● Six Sigma is a concept that attempts to reduce the defect rate to 3.4 per million or less. Lean is a concept that is used to eliminate waste and improve process flow. Lean Six Sigma links the two concepts in ways that combine the benefits of both. Key concepts in Lean Six Sigma are the DMAIC Roadmap, Green Belts, Black Belts, Masters Black Belts, and Champions.