1. McGraw-Hill/Irwin Copyright © 2011 The McGraw-Hill Companies, All Rights Reserved Six-Sigma Quality Chapter 9

2. 9-2 Learning Objectives 1.Understand total quality management. 2.Describe how quality is measured and be aware of the different dimensions of quality. 3.Explain the define, measure, analyze, improve, and control (DMAIC) quality improvement process. 4.Understand what ISO certification means.

3. 9-3 Key Six Sigma Concepts Critical to quality: attributes most important to the customer Defect: failing to deliver what customer wants Process capability: what your process can deliver Variation: what customer sees and feels Stable operations: ensuring consistent, predictable processes to improve what the customer sees and feels Design for six-sigma: designing to meet customer needs and process capability LO 1

4. 9-4 Total Quality Management (TQM) Total quality management: managing the entire organization so that it excels on all dimensions of products and services that are important to the customer Two fundamental operational goals: 1.Careful design of the product or service 2.Ensuring that the organization’s systems can consistently produce the design LO 1

5. 9-5 Malcolm Baldridge National Quality Award Established in 1987 by Department of Commerce Goal is to help companies review and structure their quality programs Has requirement that suppliers demonstrate they are measuring and documenting their quality practices LO 1

6. 9-6 Quality Specifications and Quality Costs Design quality: inherent value of the product in the marketplace Conformance quality: degree to which the product or service design specifications are met Quality at the source: the person who does the work takes responsibility for making sure it meets specifications LO 1

7. 9-7 The Dimensions of Design Quality Performance: primary product or service characteristics Features: added touches, bells and whistles, secondary characteristics Reliability/durability: consistency of performance over time Serviceability: ease of repair Aesthetics: sensory characteristics Perceived quality: past performance and reputation LO 2

8. 9-8 Cost of Quality Basic cost assumptions 1.Failures are caused 2.Prevention is cheaper 3.Performance can be measured Cost of quality 1.Appraisal cost 2.Prevention cost 3.Internal failure cost 4.External failure cost LO 2

9. 9-9 Six-Sigma Quality Six-sigma is a philosophy and methods used to eliminate defects Seeks to reduce variation in the processes One metric is defects per million opportunities (DPMO) LO 2

10. 9-10 Six-Sigma Methodology Uses many of the same statistical tools as other quality movements –Used in a systematic project-oriented fashion through define, measure, analyze, improve, and control (DMAIC) cycle More detailed version of Deming PDCA cycle Continuous improvement: seeks continual improvement in all aspects of operations –Also uses scientific method LO 2

11. 9-11 DMAIC Methodology 1.Define –Identify customers and their priorities –Identify a project –Identify critical-to-quality characteristics 2.Measure –Determine how to measure the process –Identify key internal processes 3.Analyze –Determine most likely causes of defects –Understand why key defects are generated LO 3

12. 9-12 DMAIC Methodology Continued 4.Improve –Identify means to remove causes of defects –Confirm the key variables –Identify the maximum acceptance ranges –Modify process to stay within acceptable range 5.Control –Determine how to maintain improvements –Put tools in place to track key variables LO 3

13. 9-13 Analytical Tools for Six Sigma and Continuous Improvement Flowcharts Run charts Pareto charts Checksheets Cause-and-effect diagrams Opportunity flow diagrams Control charts LO 2

14. 9-14 Six Sigma Roles and Responsibilities 1.Executive leaders must champion the process of improvement 2.Corporation-wide training in Six Sigma concepts and tools 3.Setting stretch objectives for improvement 4.Continuous reinforcement and rewards LO 3

15. 9-15 ISO 9000 and ISO 14000 Series of standards agreed upon by the International Organization for Standardization (ISO) –Adopted in 1987 –More than 160 countries A prerequisite for global competition? ISO 9000 an international reference for quality, ISO 14000 is primarily concerned with environmental management LO 4