demingâ€™s 14 points for tqm - business statistics information system

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Deming’s 14 Points for TQM 1. Constancy of purpose

Create constancy of purpose for continual improvement of products and

service to society, allocating resources to provide for long range needs

rather than only short term profitability, with a plan to become

competitive, to stay in business, and to provide jobs.

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Deming’s 14 Points for TQM

2. The new philosophy

Adopt the new philosophy. We are in a new economic age,

created in Japan. We can no longer live with commonly

accepted levels of delays, mistakes, defective materials,

and defective workmanship. Transformation of Western

management style is necessary to halt the continued

decline of business and industry.

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3. Cease dependence on mass inspection

Eliminate the need for mass inspection as the way of life to achieve

quality by building quality into the product in the first place. Require

statistical evidence of built in quality in both manufacturing and

purchasing functions.

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4. End lowest tender contracts

End the practice of awarding business solely on the basis of price tag.

Instead require meaningful measures of quality along with price. Reduce

the number of suppliers for the same item by eliminating those that do

not qualify with statistical and other evidence of quality. The aim is to

minimize total cost, not merely initial cost, by minimizing variation. This

may be achieved by moving toward a single supplier for any one item,

on a long term relationship of loyalty and trust. Purchasing managers

have a new job, and must learn it

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5. Improve every process

Improve constantly and forever every process for planning, production, and

service. Search continually for problems in order to improve every activity in

the company, to improve quality and productivity, and thus to constantly

decrease costs. Institute innovation and constant improvement of product,

service, and process. It is management's job to work continually on the

system (design, incoming materials, maintenance, improvement of

machines, supervision, training, retraining).

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6. Institute training on the job

Institute modern methods of training on the job for all,

including management, to make better use of every

employee. New skills are required to keep up with changes

in materials, methods, product and service design,

machinery, techniques, and service.

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7. Institute leadership

Adopt and institute leadership aimed at helping people do a better job. The

responsibility of managers and supervisors must be changed from sheer

numbers to quality. Improvement of quality will automatically improve

productivity. Management must ensure that immediate action is taken on

reports of inherited defects, maintenance requirements, poor tools, fuzzy

operational definitions, and all conditions detrimental to quality.

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8. Drive out fear

Encourage effective two way communication and other means to drive out

fear throughout the organization so that everybody may work effectively and

more productively for the company.

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9. Break down barriers

Break down barriers between departments and staff areas. People in

different areas, such as Leasing, Maintenance, Administration, must work in

teams to tackle problems that may be encountered with products or service.

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10. Eliminate exhortations

Eliminate the use of slogans, posters and exhortations for

the work force, demanding Zero Defects and new levels of

productivity, without providing methods. Such exhortations

only create adversarial relationships; the bulk of the

causes of low quality and low productivity belong to the

system, and thus lie beyond the power of the work force.

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11. Eliminate arbitrary numerical targets

Eliminate work standards that prescribe quotas for the work force and

numerical goals for people in management. Substitute aids and helpful

leadership in order to achieve continual improvement of quality and

productivity.

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12. Permit pride of workmanship

Remove the barriers that rob hourly workers, and people in management,

of their right to pride of workmanship. This implies, among other things,

abolition of the annual merit rating (appraisal of performance) and of

Management by Objective. Again, the responsibility of managers,

supervisors, foremen must be changed from sheer numbers to quality.

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13. Encourage education

Institute a vigorous program of education, and encourage self improvement

for everyone. What an organization needs is not just good people; it needs

people that are improving with education. Advances in competitive position

will have their roots in knowledge.

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14. Top management commitment and action

Clearly define top management's permanent commitment to ever improving

quality and productivity, and their obligation to implement all of these

principles. Indeed, it is not enough that top management commit

themselves for life to quality and productivity. They must know what it is that

they are committed to—that is, what they must do. Create a structure in top

management that will push every day on the preceding 13 Points, and take

action in order to accomplish the transformation. Support is not enough:

action is required!

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Chapter 10 Project Management

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Definition of Project Management

Work Breakdown Structure

Project Control Charts

Structuring Projects

Critical Path Scheduling

OBJECTIVES

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Project is a series of related jobs usually directed toward

some major output and requiring a significant period of

time to perform

Project Management are the management activities of

planning, directing, and controlling resources (people,

equipment, material) to meet the technical, cost, and time

constraints of a project

Project Management

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Structuring Projects: Pure Project Advantages

Pure Project

A pure project is where a self-contained team

works full-time on the project

The project manager has full authority over the project Team members report to one boss Shortened communication lines Team pride, motivation, and commitment are high

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Structuring Projects: Pure Project Disadvantages

Duplication of resources

Organizational goals and policies are ignored

Lack of technology transfer

Team members have no functional area "home"

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Functional Project

President

Research and

Development Engineering Manufacturing

Project

A

Project

B

Project

C

Project

D

Project

E

Project

F

Project

G

Project

H

Project

I

A functional project is housed within a functional division

Example, Project “B” is in the functional area of

Research and Development.

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Functional Project: Advantages

A team member can work on several projects

Technical expertise is maintained within the functional area

The functional area is a “home” after the project is completed

Critical mass of specialized knowledge

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Functional Project: Disadvantages

Aspects of the project that are not directly related to the

functional area get short-changed

Motivation of team members is often weak

Needs of the client are secondary and are responded to slowly

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Matrix Project Organization Structure

President

Research and

Development Engineering Manufacturing Marketing

Manager

Project A

Manager

Project B

Manager

Project C

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Structuring Projects Matrix: Advantages

Enhanced communications between functional areas

Pinpointed responsibility

Duplication of resources is minimized

Functional “home” for team members

Policies of the parent organization are followed

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Structuring Projects Matrix: Disadvantages

Too many bosses

Depends on project manager’s negotiating skills

Potential for sub-optimization

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Work Breakdown Structure

Program

Project 1 Project 2

Task 1.1

Subtask 1.1.1

Work Package 1.1.1.1

Level

1

2

3

4

Task 1.2

Subtask 1.1.2

Work Package 1.1.1.2

A work breakdown structure defines the hierarchy of project tasks, subtasks, and work packages

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Gantt Chart

Activity 1

Activity 2

Activity 3

Activity 4

Activity 5

Activity 6

Time

Vertical Axis: Always

Activities or Jobs

Horizontal Axis: Always Time

Horizontal bars used to denote length of time for

each activity or job.

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Microsoft Project Example

Detailed Gantt Chart

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Network-Planning Models

A project is made up of a sequence of activities that form a network representing a project

The path taking longest time through this network of activities is called the “critical path”

The critical path provides a wide range of scheduling information useful in managing a project

Critical Path Method (CPM) helps to identify the critical path(s) in the project networks

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Prerequisites for Critical Path Methodology

A project must have:

well-defined jobs or tasks whose completion marks the end of the project;

independent jobs or tasks;

and tasks that follow a given sequence.

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Types of Critical Path Methods

CPM with a Single Time Estimate Used when activity times are known with certainty

Used to determine timing estimates for the project, each activity in the project, and slack time for activities

CPM with Three Activity Time Estimates (P.E.R.T.) Used when activity times are uncertain

Used to obtain the same information as the Single Time Estimate model and probability information

Time-Cost Models Used when cost trade-off information is a major consideration in

planning

Used to determine the least cost in reducing total project time

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Steps in the CPM with Single Time Estimate

1. Activity Identification

2. Activity Sequencing and Network Construction

3. Determine the critical path

From the critical path all of the project and activity timing

information can be obtained

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CPM with Single Time Estimate

Example #2

Consider the following consulting project: Activity Designation Immed. Pred. Time (Weeks)

Assess customer's needs A None 2

Write and submit proposal B A 3

Obtain approval C A 4

Develop service vision and goals D B,C 4

Train employees E C 2

Quality improvement pilot groups F D, E 5

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First draw the network A None 2

B A 3

C A 4

D B,C 4

E C 2

F D,E 5

Act. Imed. Pred. Time

A

2

B

3

C

4

E

2

D

4

F

5

Activity

Description

Earliest

Start

Earliest

Finish

Activity Time Latest

Start

Latest

Finish

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Determine slack times and Critical Path

A 0 2

2 0 2

B 2 5

3 3 6

C 2 6

4 2 6

E 6 8

2 8 10

D 6 10

4 6 10

F 10 15

5 10 15

S=

S=

S= S=

S=

S= 0

0

1 0

2

0

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P.E.R.T. Program Evaluation and Review Technique:

CPM with Three Activity Time Estimates

Task Immediate

Predecessors

Optimistic Most Likely Pessimistic

A None 3 6 15

B None 2 4 14

C A 6 12 30

D A 2 5 8

E C 5 11 17

F D 3 6 15

G B 3 9 27

H E,F 1 4 7

I G,H 4 19 28

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Ex 2. Expected Time Calculations

Task

Immediate

Predecesors

Expected

Time

A None 7

B None 5.333

C A 14

D A 5

E C 11

F D 7

G B 11

H E,F 4

I G,H 18

Task

Immediate

Predecesors Optimistic Most Likely Pessimistic

A None 3 6 15

B None 2 4 14

C A 6 12 30

D A 2 5 8

E C 5 11 17

F D 3 6 15

G B 3 9 27

H E,F 1 4 7

I G,H 4 19 28

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Time Pess. + Time)Likely 4(Most + Time Opt. = Time Expected

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154(6)3 = Time Expected

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Task

Immediate

Predecesors

Expected

Time

A None 7

B None 5.333

C A 14

D A 5

E C 11

F D 7

G B 11

H E,F 4

I G,H 18

Task

Immediate


A None 3 6 15

B None 2 4 14

C A 6 12 30

D A 2 5 8

E C 5 11 17

F D 3 6 15

G B 3 9 27

H E,F 1 4 7

I G,H 4 19 28

6


6


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Task

Immediate

Predecesors

Expected

Time

A None 7

B None 5.333

C A 14

D A 5

E C 11

F D 7

G B 11

H E,F 4

I G,H 18

Task

Immediate


A None 3 6 15

B None 2 4 14

C A 6 12 30

D A 2 5 8

E C 5 11 17

F D 3 6 15

G B 3 9 27

H E,F 1 4 7

I G,H 4 19 28

6


6


40

B

5.33

A

7

C

14

D

5

E

11

F

7

G

11

H

4

I

18

Start

0

Finish

0

Example 2. Network

Duration = 54 Days

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Example 2. Probability Exercise

What is the probability of finishing this project in less than 53 days?

p(t < D)

TE = 54 t

D=53

2

cp

ET - D = Z

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Task Optimistic Most Likely Pessimistic Variance

A 3 6 15 4

B 2 4 14

C 6 12 30 16

D 2 5 8

E 5 11 17 4

F 3 6 15

G 3 9 27

H 1 4 7 1

I 4 19 28 16

(Sum the variance along the critical path.)

2

2

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Optim. - Pessim.=

Activity Variance

41=2

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There is a 43.8% probability that this project will be completed in less than 53 weeks.

p(Z < -.156) = .438, or 43.8 %

TE = 54 D=53

See Excel function NORMDIST

p(t < D)

t

.156- =41

54-53=

T - D = Z

2

cp

E

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There is a 43.8% probability that this project will be completed in less than 53 weeks.

TE = 54 D=53

Using Excel function NORMDIST

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Ex 2. Additional Probability Exercise

What is the probability that the project duration will exceed 56 weeks?

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Example 2. Additional Exercise Solution

t TE = 54

p(t < D)

D=56

p(Z > .312) = .378, or 37.8 %

In Excel use =1-NORMDIST(56,54,sqrt(41),true)

.312 =41

54-56=

T - D = Z

2

cp

E

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In Class Example

Activity

Immediate

Predecessors Optimistic

Most

Likely Pessimistic

A - 1 3 5

B - 1 2 3

C A 1 2 3

D A 2 3 4

E B 3 4 11

F C,D 3 4 5

G D,E 1 4 6

H F,G 2 4 5

1. Draw the Network. 2. What is the critical path? 3. What is the expected project completion time 4. What is the variance of the project 5. What is the probability of completing the project within 16 days?

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In class – Expected Times and Variance

Activity

Immediate

Predecessors Optimistic

Most

Likely Pessimistic

Expected

Times Variance

A - 1 3 5 3 0.4444

B - 1 2 3 2 0.1111

C A 1 2 3 2 0.1111

D A 2 3 4 3 0.1111

E B 3 4 11 5 1.7778

F C,D 3 4 5 4 0.1111

G D,E 1 4 6 3 5/6 0.6944

H F,G 2 4 5 3 5/6 0.2500

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A

3

C

2

F

4

H

3 5/6

Start

0

B

2

E

5

G

3 5/6

D

3


Activity

Immediate

Predecessors

Expected

Times

A - 3

B - 2

C A 2

D A 3

E B 5

F C,D 4

G D,E 3 5/6

H F,G 3 5/6

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A 0 3

3 5/6 3 5/6

C 3 5

2 4 5/6 6 5/6

F 6 10

4 6 5/6 10 5/6

H 10 5/6 14 2/3

3 5/6 10 5/6 14 2/3

Start

0

B 0 2

2 0 2

E 2 7

5 2 7

G 7 10 5/6

3 5/6 7 10 5/6

D 3 6

3 3 5/6 6 5/6


Activity

Expected

Times Variance

A 3 0.4444

B 2 0.1111

C 2 0.1111

D 3 0.1111

E 5 1.7778

F 4 0.1111

G 3 5/6 0.6944

H 3 5/6 0.2500

6832.1cp

666.14ET

83333.22 cp

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Time-Cost Models

Basic Assumption: Relationship between activity completion time and project cost

Time Cost Models: Determine the optimum point in time-cost tradeoffs

Activity direct costs

Project indirect costs

Activity completion times

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CPM Assumptions/Limitations

Project activities can be identified as entities (There is a clear beginning

and ending point for each activity.)

Project activity sequence relationships can be specified and networked

Project control should focus on the critical path

The activity times follow the beta distribution, with the variance of the

project assumed to equal the sum of the variances along the critical path

Project control should focus on the critical path

demingâ€™s 14 points for tqm - business statistics information system

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