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Introduction to Quality &Productivity
Lean 5S Practitioner CourseJapanese Hose keeping Best Practices
Presented by:Muhammad Kashif AfzalNational Productivity OrganizationMinistry of Industries & Production
Government of Pakistan
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Trainers Introduction
Muhammad Kashif AfzalI'm your Coach
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Participants Introductions
Your name and the department yourepresent.
Your job background.
Your expectations what you will learntoday.
Your favorite activity when not at work
or
Your favorite vacation.
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False(Say yes, mean no)
DONT PARTICPATE
Dominate(Say in my experience
there can only bemy view etc
ONLY PARTICIPATEIF ITS ME
Facts(Say the facts I
share with you are . . .
SOME PARTICIPATING
Agreement(We agree on the
shared facts)
EVERYONEPARTICIPATING
40%
45%
5%
10%
Participation Meter
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The Power of Intersection
based on AGREED facts
Your View
My View
AgreedFacts
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Workshop Ground rules Start on time. (Time Keeper- Volunteer)
Only one conversation.
Listen for understanding.
Be open to new ideas.
AskWhy?
Dont repeat points already made.
Everyone participates.
No rank and no ego
Remember thered key words
Switch off Your mobile phone.
Have fun!
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Quality Problems in
Pakistan
Time lost due toequipment failures
Billing errors
Contract errors
Change workinstruction due toerror in design.
Misspelled writtenmaterial
Wrong data entryand calculation
Missing Files Stock shortages Hotel guest taken to
unmade rooms
Reservations nothonored Purchase order
changes due to error
Rejections due toincompletedescription
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Quality Problems (Cont..)
Checking things because oflack of trust
Rectifying and reworking
Apologizing to customers Scrap, returns
Warranty claims service
Late Reports. Procrastination
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Identifying Parameters to be
benchmarked Productivity
Output/labor hour oremployee
Output/square foot of officespace
Output/information cost
Quality % rework % right the first time Customer complaints % repeat contracts
% incomplete delivery % computer downtime % documentation accuracy % schedule slippage
Timeliness
% on-time to customer % on-time from supplier Cycle time of main service Order processing time Queue time
Others Employee turnover Absenteeism Computer utilization % overtime Market share
New service developed peryear
SERVICE
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Identifying Parameters to beBenchmarked
Productivity- Output/labor hour or employees Output/raw materials Output/energy use Output/packaging costs Output/process water use Output/maintenance hour or cost Output/work-in-process inventory
Quality % scrap of raw materials % rework % first pass yield Customer return rate % miss delivery
% incomplete delivery % WIP due to quality failure % scrap of packaging Unplanned equipment downtime % quality related receivable overdue
Timeliness % on-time to truck- % on-time from supplier Cycle time of main product (order to
delivery) Cycle time of main product (plant start to
truck)
Others Number of reportable accidents Employee turnover Absenteeism Process equipment utilization Computer utilization Vehicle utilization % overtime
Manufactur
ing
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It is not the big thatis eating the small,
it is the fast that is
eating the slow
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Reduce Cost
Cheaper
Customer Price
Net Margin
Production Costs
Faster
Reduce Lead TimeImprove Quality
Better
The future challenges
We need to be able to do three things well, all at the same time!
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Quality ImprovementChallenge for Public & Private Sector Organizations
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Discuss what you think the definition
of Quality is. Give as many examples
as you can
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The Five Erroneous Assumptionsin Quality
Quality means goodness,
elegance
Quality is intangible, not
measurable
The economics of quality
are prohibitive or high priced,
not relevant
Quality problems originatewith the workers
Quality is the responsibility
of the quality department
Quality is conformance torequirements
Quality is measured by the
cost of nonconformance
It is cheaper to do things
right the first time
Most problems start in
planning and development
Quality is shared by every
function and department
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Right First
Time, All thetime. Zero
Defect
Meetimplied/Market
Needs
Conformance tospecification
Build RightCharacteristics
ISO -Language of Quality System
QUALITY
- Degree to which a set of inherent characteristics fulfills
Requirements (9000:3.1.1)
FURNISHED
SUPPORT
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Conforming to specifications. (Phil Crosby)
We need never ending improvement toestablish better economy. (W. Edward Deming)
Quality is everybodys job. (A.V. Feignbaum)
Quality is never an accident, it is always theresult of an intelligent effort. (John Ruskin)
Common Definitions
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11 DIMENSIONS OF QUALITY
Conformance to Specification
Performance
Quick response
Features
Reliability
Durability
Serviceability
Aesthetics
Perceived quality
Humanity
Cost Competitiveness
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What Customers buy/ expects?
Customers do not buy goods and services;they want solutions of problems, and
fulfillment of their needs & wants.
F t St t Q lit
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Fourteen Steps to Quality
Improvement1. Management commitment with an emphasis on defect
prevention and visibility
2. Quality improvement teams composed on members of each
department or functionall the necessary tools
3. Quality measurement to monitor the status and improvement
of activities
4. Cost of quality evaluation with accurate figures
5. Quality awareness by communicating the cost of quality,
encouraging discussion
6. Corrective action to ingrain a habit of identifying problems
and correcting them
7. An ad hoc committee to advocate zero defects
F t St t Q lit
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Fourteen Steps to Quality
Improvement8. Supervisor training so that all managers understand the
programs and can explain it
9. Zero Defects Day to establish zero defects as the
organizational standard
10. Goal setting as teams, specific and measurable
11. Removing thecauses of defects, as described by
individual workers, so that the people know their problems
are heard and answered
12. Genuine recognition for achievement
13. Quality councils of quality professionals and team chairs
for status information and ideas
14. Do it over againrepetition makes the program perpetual
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Greater customer satisfaction
Higher productivity
Lower costs / shorter duration
Higher project team morale Fewer errors / defects
Long term competitive advantage
Why Quality ?
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Discuss what you think the
definition of Productivity is. Give as
many examples as you can
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THE JOURNEY OF PRODUCTIVITY
Initially productivity was interpretedas labor productivity
Over a period materials, energy,capital and other inputs were
brought into the ambit ofproductivity.
waste reduction of all kinds andimproving efficiency of operations
more and more with
less and less
RESOURCE UTILIZATION
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VARIOUS INTERPRETATIONS
As an attitude of mind
As a process of change
Improving quality of life
Working smarter than harder
Higher wages Productivity and quality are two sides
of the same coin
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VARIOUS INTERPRETATIONS
As concept of mind As a march for perfection
As creating wealth
As a journey without an end and a destination Reducing wastes
Human resources
Technology improvement
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VARIOUS INTERPRETATIONS
Organizational objectives Set of results
Effective and efficient use of resources
Highest level of performance Training and development of employees
Sharing gains of productivity
Profits
Customer satisfaction
Sustainable development
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Lead Time ReductionChallenges for Public & Private Sector Organizations
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Time is Money
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To document all steps in a processTo quantify the time and distance of each step in a
process
To identify where value is being added to the
process
To understand how non-value added activities
drive cost in a process
To learn that reducing Lead Time contributesdirectly to improving P, Q,C,D,S,M and
Customer Satisfaction
Purpose of Lead Time Analysis
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What is "Lead Time"?
Lead timebegins with the firstreceipt ofacustomer
orderand ends withcustomer receipt ofthe product or
service. Everything in between is the lead time.
The"customer" can be external or internalto an
organization. The next person or process down the
assembly line is the "customer" for the preceding
process.
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Lead Time Definition
Total time require to complete one unitof a product or service
JIT A Strateg Based on Lead
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JIT - A Strategy Based on Lead
Time
Lead Time
Adding Value
Opportunity
A strategic focus to economicallymakedrastic reductions in lead times to better servethe customer.
JIT - A Toolset For Eliminating
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JIT A Toolset For EliminatingWaste
JIT Tools used
to identify andeliminatewaste from theprocess. $$
$ $
$$
$ $$
Same Value-Add
Reduced lead time
Reduced costs
Result: Shorterlead times,reduced costs.
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Every Process has a Lead Time
Business plan development
Painting Process
Tools & Die Manufacturing
Building a house
Income tax refund
Servicing your car
Receiving material and building customerproducts
Grocery shopping
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Cost ReductionChallenges for Public & Private
Sector Organizations
Traditional Principle of Cost
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Traditional Principle of Cost
Cost + Profit = Price
Cost to Make/
serve
Profit
If we want tomake more profit
we increase price
Price to Customer
Rs.
Today s Principle of Cost
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Todays Principle of Cost
Reduction
Price to Customer
Price - Cost = Profit
Cost to Make/Serve
Profit If we want tomake more profit
we reduce wastein our process
Marketplace Pressure
RS.
Th C t Of P Q lit
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Customer Returns
Inspection Costs
Recalls
Waste
Rejects
Rework
Testing Costs
Customer Allowances
Incorrectly Completed Sales Order
Excess Inventory
Incorrect orders shipped
Time with Dissatisfied Customer
Late Paperwork
Expediting Costs
Planning Delays
Excessive Overtime
Premium Freight Costs
Excessive Field Service Costs
Pricing or Billing Errors
Complaint Handling
Overdue Receivables
Employee Turnover
Development Cost of Failed Products
Unused Capacity
Lost goodwill
Delays
The Cost Of Poor Quality(As a % of Revenue)
C t St t
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Cost StructureSalesmens salary
Traveling
Correspondence
Transportation
Packing
Advertisement
Other sales cost
Directors salary
Clerks salaryWelfare cost
Interest/Rent
Govt. Taxes
R&D
Other admin cost
Sales
Admin
Depreciation
Transportation
Insurance
Maintenance
Utilities
Fuel
Others
Ind. material
Ind. labor cost
Ind. expenseTotalcost
Profit
Mfg.cost
SalesAdmin
Directmfg.
cost
Ind. mfg. c
Material
Labor cost
Expense
Sales
P d f C t R d ti
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Procedure of Cost Reduction1
2
3
4
5
6
7
Selection of cost reduction target
Analysis of existing situation
Problem finding
Setting cost reduction target
Idea creation
Trial operation/Verification
Suggestion
Adoption Execution
ABC AnalysisP-Q Analysis
Productivity Audit3 Gen Approach
3MuAs-Is Analysis
Related to companys policy
Brainstorming5W1H
Finding points to be more studied
To the division in chargeTo the supplierTo the buyer
Deciding after confirming noproblem foreseen
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PRODUCTIVITY,
ABOVE ALL
IS ABOUT
THINKING & MAKING
CHANGES
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BETTER
ORGANIZATIONS
DO NOT GET
BETTER
BY CHANCE
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QUALITY AND PRODUCTIVITY
is no longer a desirable option
Quality
Lead Time Reduction
Cost Reduction
It is the key to SURVIVAL
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Even if you are on the right track,
you will get run over
- ifyou just sitthere.
Sequence of Change
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When you change yourEXPERIENCE
You change your THNKING When you change yourTHINKING
You change yourBELIEFS
When you change yourBELIEFS
You change your EXPECTATIONS
When you change yourEXPECTATIONS
You change yourATTITUDE
When you change yourATTITUDE
You change yourBEHAVIOUR
When you change yourBEHAVIOURYou change yourPERFORMANCE
When you change yourPERFORMANCE
You change yourLIFE !
Sequence of Change
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L 5S P i i
Questions