improving productivity with the help of the management systemimproving productivity with the help of...
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Feb 2011 (c) Nigel H Croft 2011 1
Improving productivity with the
help of the management system
Nigel H Croft
Chairman, ISO/TC176/SC2 – Quality Systems
Member, ISO/TC176 Chairman’s Strategic Advisory Group
Member, ISO/CASCO Chairman’s Policy Committee
Member, IAF/ILAC/ISO Joint Working Group
Member, ISO/CASCO WG21 (for ISO/IEC 17021)
Presentation outline
The basis for management systems
Process approach
PDCA
Productivity
Creating the right environment
Reducing variation
Eliminating waste
Solving problems and driving improvement
Using the management system for productivity
improvement
The role of a certification body auditor
Feb 2011 (c) Nigel H Croft 2011 2
The basis for
management systems
Feb 2011 (c) Nigel H Croft 2011 3
Feb 2011 4
“set of
interrelated or
interacting elements
to
establish policy and
objectives
and to
achieve those
objectives”
Hardware
(equipment)
Software
(methods)
Humanware
(people)
Interact within processes
Management System.......
In other words……..
RESULTS FOCUSED (c) Nigel H Croft 2011
ISO 9001
“Specifies quality management system
requirements for organization to:
demonstrate its ability to consistently provide
product that meets customer and applicable
regulatory requirements
enhance customer satisfaction………”
NOTE: “Services” are a specific kind of product, and
are also covered by ISO 9001
Feb 2011 5 (c) Nigel H Croft 2011
Feb 2011 6
The focus of ISO 9001
Focuses on “process control” and “results”
A “documented system” – NOT a “system of
documents”
2 core concepts…………
Identify the processes needed
Manage the processes using “P-D-C-A”
These same 2 basic concepts are key to
most productivity-focused initiatives
(c) Nigel H Croft 2011
DEFINE WHAT TO DO AND HOW TO DO IT
(Methods, procedures etc)
May or may not be documented
PRODUCT
(“Result of a
process”)
MONITORING AND
MEASUREMENT OPPORTUNITIES (Before, during and after the process)
Output Input PROCESS (“Set of interrelated
or interacting activities”)
EFFECTIVENESS
OF PROCESS =
Ability to achieve
desired results
(Focus of ISO 9001)
EFFICIENCY OF
PROCESS =
Results achieved vs
resources used
(Focus of ISO 9004)
(Includes
Resources)
Process from the “quality”
perspective
Feb 2011 7 (c) Nigel H Croft 2011
Plan •What to do?
•(“Objective”)
•How to do it?
•(“Procedure”)
Do •Do what was
planned
Check • Did things happen
according to plan?
Act •How to improve
next time?
Feb 2011 8 (c) Nigel H Croft 2011
Plan (Strategic level):
What do we want to achieve? Vision
Mission
Objectives
How can we achieve it? Strategic planning
Tactics
Resources
Dr Deming – “It‟s pointless to establish an objective without defining a method to achieve it”
Feb 2011 9 (c) Nigel H Croft 2011
Do:
Get everyone involved, committed, and
motivated (“Leadership”!)
Carry out “the plan”
Deploy throughout the organization
Break down the objectives to the appropriate
functions and levels
Feb 2011 10 (c) Nigel H Croft 2011
Check:
Is this what we expected? (Any anomalies?)
Are the results OK?
Can they be improved?
Any waste (non-value adding activities)?
Look for trends
Feb 2011 11 (c) Nigel H Croft 2011
Act Correct what went wrong (Correction)
Plan to do it right next time (Corrective action)
Learn to make things “error-proof” (Preventive action)
Think – how can we do this…….. More consistently?
Faster?
Cheaper?
Better?
Safer?
More environmentally friendly?
(Improvement)
Feb 2011 12 (c) Nigel H Croft 2011
“Productivity”
“Relative measure of the efficiency of a
person, machine, factory, system, etc., in
converting inputs into useful outputs”
Feb 2011 (c) Nigel H Croft 2011 13
ISO 9004
“Guidelines” for achieving sustained (long-
term) success using the Quality Management
System
Focus on efficiency
Financial resources and results
Use of natural resources
Competence and motivation
Allows for self-assessments (maturity model)
Feb 2011 (c) Nigel H Croft 2011 14
Other related standards
ISO 14001 – Environmental
ISO 27000 – Information Security
OHSAS 18001 – Health & Safety
ISO 26000 – Social Responsibility
ISO 31000 – Risk management
All can be incorporated to the extent needed
into an Integrated Management System and
used to drive productivity improvements
Feb 2011 (c) Nigel H Croft 2011 15
16
The “Plan-Do-Check-Act”
approach to Quality
“Set of interrelated
activities”
INPUTS CUSTOMER
(Internal or external)
DESIRED
OUTPUTS
“PRODUCT”
• Effect on Product conformance
• Environmental Aspects / Impacts
• Health and Safety Risks
• Social implications
UNDESIRED OUTPUTS
(“WASTE”)
MONITOR/MEASURE
How to carry out the process? – (documented or not)
Feb 2011 (c) Nigel H Croft 2011
Feb 2011 17
Cause and Effect PROCESS
“INTENDED
PRODUCT”
“UNINTENDED
PRODUCT” (WASTE)
INEFFICIENCY (c) Nigel H Croft 2011
How to use the
management system to
improve productivity
Feb 2011 (c) Nigel H Croft 2011 18
Creating the right
envronment
Feb 2011 (c) Nigel H Croft 2011 19
5S – Preparing the work
environment
“Pre-requisite” for
sound quality management
productivity improvement
Seiri – “Sort, Systematize or simplify”
Seiton – “Straighten, standardize”
Seiso – “Shine”
Seiketsu – “Sanitize”
Shitsuke – “Sustain”
Feb 2011 (c) Nigel H Croft 2011 20
5S 21
Alphabetical Order A, B, C, D, ….. Z
Numerical Order 1, 2, 3, 4, ……
Dictionary definition:
To put things in order (or organize them)
according to a specific rule or principle.
Industrial definition:
To distinguish between necessary things and unnecessary things, and getting rid of what you do not need.
Seiri = Organization
2 Feb 2011 (c) Nigel H Croft 2011
5S 22
Dictionary definition:
Establishing a neat layout so that you can
always get just as much of what you need
when you need it.
Industrial definition:
It is a way of eliminating
search.
Seiton = Neatness
1 Feb 2011 (c) Nigel H Croft 2011
Laboratory in Cement Factory
Feb 2011 (c) Nigel H Croft 2011 23
5S 24
Definition:
Eliminating trash, filth, and
foreign matters for a cleaner
workplace. Cleaning as a form of
inspection.
Seiso = Cleaning
Feb 2011 (c) Nigel H Croft 2011
5S 25
Definition:
Keeping things organized, neat,
and clean, even in personal and
environmental aspects.
Seiketsu = Standardization
SEIRI SEITON
SEISO
1 Feb 2011 (c) Nigel H Croft 2011
5S 26
Definition:
Doing the right things as a matter of
course.
Shitsuke = Self-discipline
Feb 2011 (c) Nigel H Croft 2011
Reducing variation
and eliminating waste
Feb 2011 (c) Nigel H Croft 2011 27
“All we are doing is looking at the time line; from the moment the
customer gives us an order to the point when we collect cash.
And we are reducing that time line by removing the non-value-
added wastes.”
Taiichi Ohno
The Essence of Lean………..
Order Cash
Order Cash
Feb 2011 (c) Nigel H Croft 2011 28
“Lean Six-Sigma” Philosophy
All work is a process
All processes have variability which leads to waste
Eliminate harmful sources of variation
Make fewer and fewer mistakes – strive for perfection
Keep customers and their needs at the forefront
Feb 2011 (c) Nigel H Croft 2011 29
Over-Production
Waiting
Inventory Motion Transportation
Defects /
Rejects/
Re-work
Over-Processing
Waiting for…
•Faxes
•System to come up
•Customer feedback
•Customer response
•A handed-off file to come back
•Searching for files / handling paperwork
•Gathering information
•Extra key strokes
•Handoffs
•Repeated manual entry of data
•Use of inappropriate software
•Use of outdated forms •Data entry errors
•Pricing error
•Missing information
•Billing errors
•Open projects
•E-mails unread
•Unused records in database
•Retrieving or storing files
•Going to get signatures
•Going to copy machine or printer
•More information than customer needs
•Creating reports no one reads
•Making extra copies
Recognize and Eliminate Waste
Waste is anything we do that doesn’t create value for the customer!
Feb 2011 (c) Nigel H Croft 2011 30
(Slide courtesy of Dr T N Smith)
Waste
Any activity that consumes resources without
creating value for the customer is waste.
Three categories of waste (“3Mu”)
MURI – (Overburden)
MURA – (Uneven-ness)
MUDA – (Non value adding activities)
Feb 2011 (c) Nigel H Croft 2011 31
“3M’s”
Feb 2011 32
33
Seven Components of Waste
Muda is classified into seven
components: Overproduction
Correction (defects)
Inventory
Motion
Overprocessing
Conveyance
Waiting
Additional forms of muda include: Under use of talent
Lack of safety
Being Lean means eliminating waste. Feb 2011 (c) Nigel H Croft 2011
Measure of Process Capability (Sigma Level)
-6s -5s -4s -3s -2s -1s 0 1s 2s 3s 4s 5s 6s
Lower
Specification
Upper
Specification
-3s -2s -1s 0 1s 2s 3s
Lower
Specification
Upper
Specification
What is Six Sigma?
• All processes will
have variation.
• Reduce variation
relative to customer
requirements to
improve quality.
Feb 2011 (c) Nigel H Croft 2011 34
Six Sigma – The Measure
Sigma Level Defects per Million
Opportunities
3s 66,807
4s 6,210
5s 233
6s 3.4
7s 0.02
Feb 2011 (c) Nigel H Croft 2011 35
σ σ 1 6
The essence of Six Sigma
Define Measure Analyze Improve Control
Feb 2011 (c) Nigel H Croft 2011 36
Process Capability Index - Cp
ND
ET C p =
Cp evaluates the
POTENTIAL capability of
the process, in relation
with the tolerance
Process
Capability
Index (Cp) is:
=
Natural distribution
(ND)
Poor
Cp < 1
Marginal
Cp = 1
Good
Cp > 1
Better
Cp >> 1
LSL USL Nominal
Engineering
tolerance (ET)
ND
ND
ND
USL-LSL
UCL-LCL
Feb 2011 (c) Nigel H Croft 2011 37
Cp is not enough………… Which of these two processes is performing
better?
Cp is called the potential capability of the process
because it tells us how well the process could
perform if it was centered on the specification
target...
LSL USL Nominal
Process
Center
LSL USL Nominal
Process
Center 1 2
Feb 2011 (c) Nigel H Croft 2011 38
Poor Cpk < 1
LSL Nominal
Engineering Tolerance (ET)
Natural Distribution (ND)
USL
Marginal Cpk = 1
Best Cpk = Cp
Good Cpk > 1
Poor Cpk < 0
Cpk values greater than 1.33 are considered GOOD
Cpk values greater than 1.33 and equal to Cp are considered BEST
The Meaning of Cpk
Cpk assesses both the process’ accuracy and precision
Feb 2011 (c) Nigel H Croft 2011 39
Statistical Control is Not the
End
Six Sigma is a measure of process capability
Zero Defect is the goal for Product
Performance
Feb 2011 (c) Nigel H Croft 2011 40
Errors vs. Defects
Defects result from errors/mistakes.
Errors/Mistakes are the cause of defects
With the goal of Zero Defects, the key is to
find ways of catching simple mistakes before
they produce defects
Feb 2011 (c) Nigel H Croft 2011 41
Solving problems and
driving improvement
Feb 2011 (c) Nigel H Croft 2011 42
“QC Story”
Define the problem (targets, schedules etc)
Observe (time, places, symptoms etc)
Analyse (Cause/effect diagrams, Control charts,
Pareto analysis, scatter diagrams, histograms etc)
Define actions
Study results and learn
Act/Standardize
Plan for the future (need for further improvement)
Feb 2011 (c) Nigel H Croft 2011 43
Gemba
Refers to the place where value is created;
Can be any "site" such as the factory floor, a
construction site, sales floor or where the
service provider interacts directly with the
customer
Important that problems are visible, and the
best productivity improvement ideas will
come from “going to the gemba”. (Like Tom
Peters‟ “Management by Walking Around”) Feb 2011 (c) Nigel H Croft 2011 44
See the Waste at Gemba
See the flow of materials & information
See what is actually happening
Identify and countermeasure problems
Develop eyes for „seeing waste‟
Identify opportunities for Kaizen
Development of problem-solving skills
Feb 2011 (c) Nigel H Croft 2011 45
Kaizen
Refers to philosophy or practices that focus
upon continual (small-step) improvement of
processes
Kaizen is a daily process, the purpose of
which goes beyond simple productivity
improvement.
Promotes a systematic approach to
improvement to eliminating waste in all
business processes. Feb 2011 (c) Nigel H Croft 2011 46
“The forgetful organization”
Time
Improve Improve Improve
FORGET FORGET FORGET
“SAWTOOTH” EFFECT
Feb 2011 47 (c) Nigel H Croft 2011
Jidoka
"the decision to stop and fix problems as they
occur rather than pushing them down the line
to be resolved later"
Feb 2011 (c) Nigel H Croft 2011 48
“The learning organization”
Time
“LADDER” EFFECT
Improve
Standardize
Maintain (routine)
Feb 2011 49 (c) Nigel H Croft 2011
Kaizen Document
Reality
Plan
Countermeasures
Identify
Waste
Reality
Check Make Changes Verify Change
Measure
Results
Make this
the Standard
Celebrate
Do It
Again
Start Here
Feb 2011 (c) Nigel H Croft 2011 50
Kaikaku
Making fundamental and radical changes to
improve the system
When “Kaizen” is not enough
“Is there a better way to do this??”
“Re-engineering”
Feb 2011 (c) Nigel H Croft 2011 51
Using the management
system for productivity
improvement
Feb 2011 (c) Nigel H Croft 2011 52
ISO 9001 Clause 4.1
The organization shall…………
a) determine the processes needed for the QMS
b) determine their sequence and interaction
c) determine criteria and methods needed to ensure
effective operation and control
d) ensure availability of resources and information to
support operation and monitoring
e) monitor, measure where applicable, and
analyse these processes, and
f) implement actions necessary to achieve planned
results and continual improvement Feb 2011 (c) Nigel H Croft 2011 53
Performance Measures
Peter Drucker - “If you can't measure it, you
can't manage it!”
ISO 9001 requires processes to be monitored
and, where applicable, measured
Monitor = maintain regular close observation;
observe and check over a period of time;
Measure = ascertain the size, amount, or degree
of something by comparison with a standard unit
or with an object of known size Feb 2011 (c) Nigel H Croft 2011 54
Albert Einstein
“Not everything that matters can be measured
and
not everything that can be measured matters”
Feb 2011 (c) Nigel H Croft 2011 55
The role of the
certification body
auditor
How to “add value” without
providing consultancy
Feb 2011 (c) Nigel H Croft 2011 56
Feb 2011 57
Maturity of “Quality culture”
Confo
rmity t
o IS
O 9
001
Low High
Lo
w
Hig
h
Zone 1 Zone 2
Zone 3 Zone 4
ISO/IAF Audit Practice Group
Guidance “Adding Value”
(c) Nigel H Croft 2011
Feb 2011 58
Zone 1:
Low degree of conformity / Low quality
culture
Be clear on what is required and why
Identify and explain clearly any and all NC‟s
Avoid advice on “how to” meet requirements
(consulting!)
Productivity improvements should be a
natural consequence of understanding
processes and implementing the system
Maturity of “Quality culture”
Confo
rmity
to I
SO
9001:2
000
Low Low High High
Lo
w
Lo
w
Hig
h
Hig
h
Zone 1 Zone 2
Zone 3 Zone 4
Maturity of “Quality culture”
Confo
rmity
to I
SO
9001:2
000
Low Low High High Low Low High High
Lo
w
Lo
w
Hig
h
Hig
h
Lo
w
Lo
w
Hig
h
Hig
h
Zone 1 Zone 2
Zone 3 Zone 4
(c) Nigel H Croft 2011
Feb 2011 59
Zone 2:
Low degree of conformity / Mature quality
culture
Relate QMS to organization‟s current initiatives
(eg Six-sigma, TQM, etc)
Understand organization‟s business needs
Don‟t be intimidated!
Beware not to let productivity concerns
prejudice the QMS!
Maturity of “Quality culture”
Confo
rmity
to I
SO
9001:2
000
Low Low High High
Lo
w
Lo
w
Hig
h
Hig
h
Zone 1 Zone 2
Zone 3 Zone 4
Maturity of “Quality culture”
Confo
rmity
to I
SO
9001:2
000
Low Low High High Low Low High High
Lo
w
Lo
w
Hig
h
Hig
h
Lo
w
Lo
w
Hig
h
Hig
h
Zone 1 Zone 2
Zone 3 Zone 4
(c) Nigel H Croft 2011
Feb 2011 60
Zone 3:
High degree of conformity / low quality culture
Act as a catalyst for the organization to build on
its QMS, and integrate into daily work routine
Stimulate and encourage (but don‟t require)
organization to look beyond conformity to ISO
9001
ISO 9004
Opportunities for improved efficiency (reduced waste)
Identify improvement opportunities
Maturity of “Quality culture”
Confo
rmity
to I
SO
9001:2
000
Low Low High High
Lo
w
Lo
w
Hig
h
Hig
h
Zone 1 Zone 2
Zone 3 Zone 4
Maturity of “Quality culture”
Confo
rmity
to I
SO
9001:2
000
Low Low High High Low Low High High
Lo
w
Lo
w
Hig
h
Hig
h
Lo
w
Lo
w
Hig
h
Hig
h
Zone 1 Zone 2
Zone 3 Zone 4
(c) Nigel H Croft 2011
Feb 2011 61
Zone 4:
High degree of conformity / mature quality culture
Work closely with top management
Relate QMS audit to strategic objectives and
performance / productivity improvements
Be critical and probing
Use ISO 9001 to discipline and maintain performance
improvements
Encourage incorporation of „lean‟ ideas and
methodologies
Maturity of “Quality culture”
Confo
rmity
to I
SO
9001:2
000
Low Low High High
Lo
w
Lo
w
Hig
h
Hig
h
Zone 1 Zone 2
Zone 3 Zone 4
Maturity of “Quality culture”
Confo
rmity
to I
SO
9001:2
000
Low Low High High Low Low High High
Lo
w
Lo
w
Hig
h
Hig
h
Lo
w
Lo
w
Hig
h
Hig
h
Zone 1 Zone 2
Zone 3 Zone 4
(c) Nigel H Croft 2011
(c) Nigel H Croft 2011 62
Conclusions
ISO 9001 and other management systems provide a sound, disciplined base from which to drive productivity improvements
Process approach
PDCA
Third party certification body auditors have an important role to play by encouraging (not requiring!) clients to improve productivity by intelligent use of the management system
Feb 2011