Quality Awareness.

Quality Awareness

Introduction to Quality

Modern Importance of Quality
“The first job we have is to turn out quality merchandise that consumers will buy and keep on buying. If we produce it efficiently and economically, we will earn a profit, in which you will share.” - William Cooper Procter William Cooper Procter was born on August 25, 1862, in Glendale, Ohio. He was the grandson of William Procter, who established Procter & Gamble in 1837, in Cincinnati, Ohio. During the 1880s, William Cooper Procter assisted his father, William Alexander Procter, in Procter & Gamble's operation. Under their control, the company began to market a new product, an inexpensive, yet high quality, soap. The company called the soap "Ivory." In the decades that followed, Procter & Gamble continued to grow and evolve. The company became known for its progressive work environment in the late nineteenth century. William Cooper Procter established a profit-sharing program—the first in United States history—for the company's workforce in He hoped that, by giving the workers a stake in the company, they would be less inclined to go on strike. In 1907, upon the death of his father, William Cooper Procter became president of Procter & Gamble. Under his leadership, the company began to build factories in other locations in the United States, because the demand for products had outgrown the capacity of the Cincinnati facilities. Procter began to diversify the company's products as well and, in 1911, began producing Crisco, a shortening made of vegetable oils rather than animal fats. In the early 1900s, Procter & Gamble also became known for its research laboratories, where scientists worked to create new products. Procter also pioneered in the area of market research, investigating consumer needs and product appeal. As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs. As a result, these shows often became commonly known as "soap operas." In 1930, William Cooper Procter retired as president of Procter & Gamble. He died on May 2, 1934, in Cincinnati.

Quality Assurance Quality Assurance refers to the process used to create the appropriate deliverables, and can be performed by a manager, client, or even a third-party reviewer. Examples of quality assurance include process checklists, visual aids, and project audits, mistake proofing, etc. Key in on the word appropriate. Look at various products and decide what level of quality is appropriate.

Quality Control Quality Control refers to quality related activities associated with the project deliverables Quality control is used to verify that deliverables are of acceptable quality and that they are complete and correct. Examples of quality control activities include inspection, audit and the testing process.

Qualitative vs. Subjective
Qualitative quality can be measured, and compared using values that are specific, black and white Subjective quality cannot be measured, and comparisons are intuitive, gut level, hard to define

Workshop Quality Comparison
This exercise entails the use of the next two slides. Participants are to look at each product and compare the quality expectations they would have for each of the two similar products. Have them use worksheet 1:1 to write their answers. Let each team talk among themselves.

Mikasa fine china : $70.00 for 5 piece place setting
Corelle dinnerware : $30.00 for 16 piece place setting What quality expectations would you expect from Mikasa chine and Corelle.

2004 Hyundai Sonata $18,000 2004 Jaguar XJ8 $64,000
What type of qualtiy would you expect from a Jaguar over a Hyundai? 2004 Jaguar XJ8 $64,000

History of Quality Assurance
Skilled craftsmanship during Middle Ages Industrial Revolution: rise of inspection and separate quality departments Statistical methods at Bell System Quality control during World War II Quality management in Japan From the end of the 13th century to the early 19th century, craftsmen across medieval Europe were organized into unions called guilds. These guilds were responsible for developing strict rules for product and service quality. Inspection committees enforced the rules by marking flawless goods with a special mark or symbol. Craftsmen themselves often placed a second mark on the goods they produced. At first this mark was used to track the origin of faulty items. But over time the mark came to represent a craftsman’s good reputation. For example, stonemasons’ marks symbolized each guild member’s obligation to satisfy his customers and enhance the trade’s reputation. This is where the term “trademark” originated. Inspection marks and master-craftsmen marks served as proof of quality for customers throughout medieval Europe. This approach to manufacturing quality was dominant until the Industrial Revolution in the early 19th century. The industrial revolution changed this thinking as interchangeable parts started being mass produced. Specifications had to be documented, and people were assigned to check to the specifications. Bell Systems began using mathematical models to avoid the need of 100% inspection in the 1920’s. Modern approaches to quality control had their origins at Western Electric when the inspection department was transferred to Bell Telephone Laboratories in the 1920s. The early pioneers of modern quality assurance-Walter Shewhart, Harold Dodge, George Edwards, and others-developed new theories, and methods of inspection to improve and maintain quality including control charts, sampling techniques, and economic analysis tools. During WWII Edward Deming and Juran brought the purely mathematical quality tools together with systemic and psychological processes and began to formulate Total Quality Management systems.

History of Quality Assurance (2 of 2)
Quality awareness in U.S. manufacturing industry during 1980s: “Total Quality Management” Malcolm Baldrige National Quality Award (1987) Quality in service industries, government, health care, and education Current and future challenge: keep progress in quality management alive The Quality boom occurred mainly due to the emergence of Japan supplying products of superior quality and a reasonable cost.

Contemporary Influences on Quality
Partnering Learning systems Adaptability and speed of change Environmental sustainability Globalization Knowledge focus Customization and differentiation Shifting demographics

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

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 Focuses on bringing about improvements in product and service quality by reducing uncertainty and variability in the design and manufacturing process.

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 A process is “forever”. Meant to last over a long period of time. A program, however, has a short period of time with definable beginning and end. A system is a set of functions or activities within an organization that work together for the aim of the organization. System must work together if the system is to be effective Management’s job is to optimize the system Management must have an aim, a purpose toward the system will continually strive.

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 Common causes of variation generally account for about 80% of the observed variation in a process Other 20% are special causes (assignable causes) Management should always work to reduce variation Taguchi (talk about later) explained this through economic terms

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 Concerned with the nature and scope of knowledge

Psychology People are motivated intrinsically and extrinsically
Fear is demotivating Managers should develop pride and joy in work Monetary rewards are a way out for managers who do not understand how to manage intrinsic motivation

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.

Juran’s Quality Trilogy
Quality planning (Assurance) Quality control (Control) Quality improvement (CI)

Quality Handbook

Quality is free . . . : Phillip B. Crosby
“Quality is free. It’s not a gift, but it is free. What costs money are the un-quality 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

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

Total Quality

Kaoru Ishikawa Instrumental in developing Japanese quality strategy
Influenced participative approaches involving all workers Advocated the use of simple visual tools and statistical techniques According to Ishikawa, quality improvement is a continuous process, and it can always be taken one step further. With his cause and effect diagram (also called the "Ishikawa" or "fishbone" diagram) this management leader made significant and specific advancements in quality improvement. With the use of this new diagram, the user can see all possible causes of a result, and hopefully find the root of process imperfections. Ishikawa also showed the importance of the seven quality tools: control chart, run chart, histogram, scatter diagram, Pareto chart, and flowchart. W. Edwards Deming, creator of the Plan-Do-Check-Act model. Ishikawa expanded Deming's four steps into the following six: Determine goals and targets. Determine methods of reaching goals. Engage in education and training. Implement work. Check the effects of implementation. Take appropriate action.

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 Design of Experiments

Why Quality?

Workshop Why Quality? Each team is to make a list of every reason they can think of pertaining to why quality is important to a company. Have each team present their list to the other teams.

If you settle for 99.9% quality
One hour per month has unsafe drinking water Over 20,000 wrong prescriptions per year 500 wrong surgical operations per week 16,000 lost articles of mail every hour 22,000 checks from wrong accounts per hour 32,000 missed heartbeats per year per individual 2 long or short landing everyday at each major airport 50 babies dropped by the doctor each day No electricity for 2 hours each month

Competitive Advantage
Is driven by customer wants and needs Makes significant contribution to business success Matches organization’s unique resources with opportunities Is durable and lasting Provides basis for further improvement Provides direction and motivation Quality supports each of these characteristics

Quality and Profitability
Improved quality of design Improved quality of conformance Higher perceived value Higher prices Lower manufacturing and service costs Increased market share Increased revenues Higher profitability

Evidence that Quality Impacts Business Results
General Accounting Office study of Baldrige Award applicants Baldrige stock study (see Hendricks and Singhal study of quality award winners Performance results of Baldrige Award winners

GAO TQ Model Product and service quality Customer satisfaction
Leadership for continuous improvement Quality systems and employee involvement Competitiveness Organization benefits Reliability On-time delivery Error/defects Overall satisfaction Customer retention Complaints Costs Cycle time Turnover Satisfaction Safety & health Productivity Market share Profits General Accounting Office

What is Quality?

Workshop What is Quality

Quality is Not! 100% inspection Management fad
Statistical Process Control Employee involvement Another excuse for a “management retreat” Only applies to manufacturing

Quality is… A philosophic way of thinking
All things can be looked at from a quality perspective Manufacturing Managing Driving Using Living Etc., etc., etc.

Dimensions of Quality Definitions of Quality
Quality means fitness for use - quality of design - quality of conformance Quality is inversely proportional to variability.

Dimensions of Quality Quality Improvement
Quality improvement is the reduction of variability in processes and products. Alternatively, quality improvement is also seen as “waste reduction”.

Dimensions of Quality – Transmission Example

Quality Terminology Quality Characteristics
Physical - length, weight, voltage, viscosity Sensory - taste, appearance, color Time Orientation - reliability, durability, serviceability

Quality Terminology Quality engineering is the set of operational, managerial, and engineering activities that a company uses to ensure that the quality characteristics of a product are at the nominal or required levels.

Quality Terminology Two types of data
Attributes Data - discrete data, often in the form of counts. Variables Data - continuous measurements such as length, weight.

Quality Terminology Specifications
Quality characteristics being measured are often compared to standards or specifications. Nominal or target value Upper Specification Limit (USL) Lower Specification Limit (LSL)

Quality Terminology When a component or product does not meet specifications, they are considered to be nonconforming. A nonconforming product is considered defective if it has one or more defects. Defects are nonconformities that may seriously affect the safe or effective use of the product.

Quality Terminology Concurrent Engineering
Team approach to design. Specialists from manufacturing, quality engineering, management, etc. work together for product or process improvement.

Definitions of Quality
Transcendent definition: excellence Product-based definition: quantities of product attributes User-based definition: fitness for intended use Value-based definition: quality vs. price Manufacturing-based definition: conformance to specifications

Quality Perspectives transcendent & product-based user-based
Customer Distribution products and services needs transcendent & product-based user-based manufacturing- based value-based Marketing Design Manufacturing Information flow Product flow

Customer-Driven Quality
“Meeting or exceeding customer expectations” Customers can be... Consumers External customers Internal customers

Dimensions of Quality Performance Serviceability Reliability
Convenience and Accessibility Features Empathy Conformance to Standards Serviceability Durability Aesthetics Consistency Assurance Responsiveness Perceived Quality

Dimensions of Quality ( 1 of 6)
PERFORMANCE How well the output does what it is supposed to do. RELIABILITY The ability of the output (and its provider) to function as promised

Dimensions of Quality (2 of 6)
CONVENIENCE and ACCESSIBILITY How easy it is for a customer to use the product or service. FEATURES The characteristics of the output that exceed the output’s basic functions.

EMPATHY The demonstration of caring and individual attention to customers. CONFORMANCE The degree to which an output meets specifications or requirements.

SERVICEABILITY How easy it is for you or the customer to fix the output with minimum downtime or cost. DURABILITY How long the output lasts. AESTHETICS How a product looks, feels, tastes, etc.

CONSISTENCY The degree to which the performance changes over time. ASSURANCE The knowledge and courtesy of the employees and their ability to elicit trust and confidence.

RESPONSIVENESS Willingness and ability of employees to help customers and provide proper services. PERCEIVED QUALITY The relative quality level of the output in the eyes of the customers.

Why Is Quality Important?
Profit and market share Competitiveness Company’s reputation Customer expectations Product/service complexity Potential liability Employee satisfaction

Total Quality People-focused management system
Focus on increasing customer satisfaction and reducing costs A systems approach that integrates organizational functions and the entire supply chain Stresses learning and adaptation to change Based on the scientific method

Principles of Total Quality
Customer and stakeholder focus Participation and teamwork Process focus and continuous improvement ...supported by an integrated organizational infrastructure, a set of management practices, and a set of tools and techniques

Customer and Stakeholder Focus
Customer is principal judge of quality Organizations must first understand customers’ needs and expectations in order to meet and exceed them Organizations must build relationships with customers Customers include employees and society at large

Participation and Teamwork
Employees know their jobs best and therefore, how to improve them Management must develop the systems and procedures that foster participation and teamwork Empowerment better serves customers, and creates trust and motivation Teamwork and partnerships must exist both horizontally and vertically

Process Focus and Continuous Improvement
A process is a sequence of activities that is intended to achieve some result

Continuous Improvement
Enhancing value through new products and services Reducing errors, defects, waste, and costs Increasing productivity and effectiveness Improving responsiveness and cycle time performance

Deming’s View of a Production System
Suppliers of materials and equipment Receipt and test of materials Design and Redesign Consumer research A B C D Production, assembly inspection Tests of processes, machines, methods Distribution Consumers INPUTS PROCESSES OUTPUTS

Learning The foundation for improvement … Understanding why changes are successful through feedback between practices and results, which leads to new goals and approaches Learning cycle: Planning Execution of plans Assessment of progress Revision of plans based on assessment findings

Infrastructure, Practices, and Tools
Leadership Strategic HRM Process Data and information Planning mgt management Practices Performance Training appraisal Tools Trend chart

TQ Infrastructure Customer relationship management
Leadership and strategic planning Human resources management Process management Data and information management

Three Levels of Quality
Organizational level: meeting external customer requirements Process level: linking external and internal customer requirements Performer/job level: meeting internal customer requirements

Quality and Personal Values
Personal initiative has a positive impact on business success Quality begins with personal attitudes Quality-focused individuals often exceed customer expectations Attitudes can be changed through awareness and effort (e.g., personal quality checklists)

Growth of Modern Quality Management
Manufacturing quality Improved product designs Service Performance excellence

The Costs of Quality

Workshop Cost

The Cost of Quality (COQ)
COQ – the cost of avoiding poor quality, or incurred as a result of poor quality Translates defects, errors, etc. into the “language of management” – $$$ Provides a basis for identifying improvement opportunities and success of improvement programs

Quality Cost Classification
Prevention Appraisal Internal failure External failure

Quality Cost Management Tools
Cost indexes Pareto analysis Sampling and work measurement Activity-based costing

Return on Quality (ROQ)
ROQ – measure of revenue gains against costs associated with quality efforts Principles Quality is an investment Quality efforts must be made financially accountable It is possible to spend too much on quality Not all quality expenditures are equally valid

Managing Data and Information
Validity – Does the indicator measure what it says it does? Reliability – How well does an indicator consistently measure the “true value” of the characteristic? Accessibility – Do the right people have access to the data?

Analysis Basic Advanced Statistical summaries and charts
Trends over time Comparisons with key benchmarks Aggregate summaries and indexes Cause-and-effect linkages and correlations (interlinking) Data mining Advanced

Interlinking Quantitative modeling of cause and effect relationships between external and internal performance criteria customer satisfaction rating time on hold (telephone) * * *

Communication

Workshop Listening

Listening The most difficult thing to do
We have not been taught to listen We have a preset bias We drift to things that have happened to us We apply our experiences to another

Vertical communication
Horizontal communication Multi-communicaation

Barriers to communication
Differences in perception Differences in listening ability Differences in interpretation of words/symbols Differences in status Personal bias due to race, sex or nationality Psychological climate or communication environment Lack of clarity Lack of definite communication plans Language or reading barriers Differences in perception – do the green glasses/ red glasses presentation Differences in listening ability – do the quick speaking exercise Differences in interpretation of words/symbols – do symbol interpretation exercise Differences in status – Boss versus worker exercise Personal bias due to race, sex or nationality – flip chart exercise Psychological climate or communication environment – traditional exercise Lack of clarity – big word exercise Lack of definite communication plans - Language or reading barriers – sign in French

Huddles Conduct day-to-day communications and business Make a decision
Correct a problem or problems Assign duties Confer and make an adjustment

Communication Cycle Communicate Receive Interpret Action

Balancing Quality

Workshop Balancing Act

The Golden Goose

When is there too much Quality
The cost of quality erodes the profit The quality is too far exceeding customer expectations Rational turns to Irrational

Risk Analysis 1. Define the problem or issue for the group
2. Evaluate the issue’s importance in light of time, other team priorities and the deadline for making the decision 3. Collect data 4. Analyze the data 5. Generate ideas for solutions to the issue 6. Select a mutually agreeable option for a decision or solution to the issue 7. Develop and agree on an action plan, including the assignment of team member responsibilities for implementing the team’s decision or solution 8. New teams pass on the decision and action plan to the Leadership Team 9. Implement the action plan 10. Evaluate the outcome 11. If the results are negative, return to original scenario and revisit step 6.

Balancing the Customer and Company
Setting up a Review Board When a Board should be used Decision making Rules of decision making

Review Boards Present each areas perspectives on the problem
Allow each to weigh the severity and repercussion of decision See if there is a resolution that will ensure the problem will never happen again. Determine if the resolution has value

Meeting Customers Expectation

Workshop Who is the Customer?
Give the teams an outline of a manufacturing company. List the companies suppliers and customers. What do think their expectations are?

Importance of Customer Satisfaction and Loyalty
“Satisfaction is an attitude; loyalty is a behavior” Loyal customers spend more, are willing to pay higher prices, refer new clients, and are less costly to do business with. It costs five times more to find a new customer than to keep an existing one happy.

American Customer Satisfaction Index
Measures customer satisfaction at national level Introduced in 1994 by University of Michigan and American Society for Quality Continual decline in index from 1994 through 1998 with a small improvement into 2000 suggests that quality improvements have not kept pace with consumer expectations

ACSI Model of Customer Satisfaction
complaints Perceived quality Perceived value Customer satisfaction Customer expectations Customer loyalty

Customer-Driven Quality Cycle
Customer needs and expectations (expected quality) Identification of customer needs Translation into product/service specifications (design quality) Output (actual quality) Customer perceptions (perceived quality) measurement and feedback PERCEIVED QUALITY = ACTUAL - EXPECTED

Leading Practices (1 of 2)
Define and segment key customer groups and markets Understand the voice of the customer (VOC) Understand linkages between VOC and design, production, and delivery

Leading Practices (2 of 2)
Build relationships through commitments, provide accessibility to people and information, set service standards, and follow-up on transactions Effective complaint management processes Measure customer satisfaction for improvement

Key Customer Groups Organization level consumers external customers
employees society Process level internal customer units or groups Performer level individual internal customers

Identifying Internal Customers
What products or services are produced? Who uses these products and services? Who do employees call, write to, or answer questions for? Who supplies inputs to the process?

AT&T Customer-Supplier Model
Requirements and feedback Your Suppliers Processes Customers Inputs Outputs

Kano Model of Customer Needs
Dissatisfiers: expected requirements Satisfiers: expressed requirements Exciters/delighters: unexpected features Noriaki Kano

Product Dysfunctional Product Functional
Customer Satisfied Attractive Product Dysfunctional Product Functional Must Be Customer Dissatisfied

Customer Relationship Management
Accessibility and commitments Selecting and developing customer contact employees Relevant customer contact requirements Effective complaint management Strategic partnerships and alliances

Measuring Customer Satisfaction
Discover customer perceptions of business effectiveness Compare company’s performance relative to competitors Identify areas for improvement Track trends to determine if changes result in improvements

Performance-Importance Analysis
Low High Who cares? Overkill Low High Importance Strengths Vulnerable

Difficulties with Customer Satisfaction Measurement
Poor measurement schemes Failure to identify appropriate quality dimensions Failure to weight dimensions appropriately Lack of comparison with leading competitors Failure to measure potential and former customers Confusing loyalty with satisfaction

Continuous Improvement

Workshop Improving the Process
In this workshop, a process is given and the participants are allowed to go through the process a couple of times. Then the group is asked to get together and work through session to find ways to make the process better. Then they are to run the process again and determine how much better the process is than before. What was the improvement? Were there cost improvements? Were there quality improvements? Is the customer still satisfied with the end result.

Sources of Variation in Production Processes
Measurement Instruments Operators Methods Materials INPUTS PROCESS OUTPUTS Tools Human Inspection Performance Machines Environment

Variation Many sources of uncontrollable variation exist (common causes) Special (assignable) causes of variation can be recognized and controlled Failure to understand these differences can increase variation in a system

Importance of Understanding Variation
time PREDICTABLE ? UNPREDICTABLE

Two Fundamental Management Mistakes
Treating as a special cause any fault, complaint, mistake, breakdown, accident or shortage when it actually is due to common causes Attributing to common causes any fault, complaint, mistake, breakdown, accident or shortage when it actually is due to a special cause

Creative Problem Solving
Mess Finding – identify symptoms Fact Finding – gather data; operational definitions Problem Finding – find the root cause Idea Finding – brainstorming Solution Finding – evaluate ideas and proposals Implementation – make the solution work

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