MANAGING QUALITY SIX SIGMA

SPCJMP 5023 OPERATIONS &

TECHNOLOGY MANAGEMENT

Managing Quality and Six Sigma

• Quality management refers to systematic policies, methods, and procedures used to ensure that goods and services are produced with appropriate levels of quality to meet the needs of customers.

• Organizations today integrate quality principles into their management systems, using tools such as Total Quality Management (TQM), Six Sigma, and Lean Operating Systems.

Understanding Quality

• Quality can be a confusing concept, partly because people view quality in relation to differing criteria based on their individual roles in the value chain such as:

perfection,doing it right the first time, and/orconsistency.

• Fitness for use is the ability of a good or service to meet customer needs.

The GAP Model

The GAP model recognizes that there are several ways to mis-specify and mismanage the creation and delivery of high levels of quality.

Gap 1 is the discrepancy between customer expectations and management perceptions of those expectations. Gap 2 is the discrepancy between management perceptions of what features constitute a target level of quality and the task of translating these perceptions into executable specifications.

The GAP Model

• Gap 3 is the discrepancy between quality specifications documented in operating and training manuals and plans, and their implementation.

• Gap 4 is the discrepancy between actual manufacturing and service delivery system performance and external communications to the customers.

• Gap 5 is the difference between the customer's expectations and perceptions. The fifth gap depends on the other four.

Gap Model of Quality

Quality in Operations

• Fitness for Use: the ability of a good or service to meet customer needs.

• Quality of Conformance: extent to which a process is able to deliver output that confirms to design specifications.

• Specifications: targets and tolerances determined by designers of goods and services.

Quality in Operations

• Quality Control: means of ensuring consistency in processes to achieve conformance.

• Service Quality: consistently meeting or exceeding customer expectations and service delivery system performance criteria during all service encounters.

Quality in Operations

Principles of Total Quality

1. A focus on customers and stakeholders.

2. A process focus supported by continuous improvement and learning.

3. Participation and teamwork by everyone in the organization.

Quality and Business Results

Investment in Quality Yields Business Results Increased employee

participation Improved product and service

quality Improved customer satisfaction Improved productivity Improved employee skills Improved financial performance

W. Edwards Deming

Bringing about improvements in product and service quality

by reducing uncertainty and variability in goods and services

design and associated processes

(the beginning of his ideas in 1920s and 1930s).

The Deming Chain Reaction

Joseph Juran

• Wrote Quality Control Handbook in 1951, a comprehensive quality manual.

• Defined quality as “fitness for use.”

• Advocated use of quality cost measurement.

• Quality Trilogy: quality planning, quality control, and quality improvement.

Philip B. Crosby

• Wrote Quality is Free in 1979, which brought quality to the attention of top corporate managers.

• Quality means conformance to requirements, not elegance.

Philip B. Crosby

• There is no such thing as the economics of quality; doing the job right the first time is always cheaper.

• The only performance measurement is the cost of quality which is the expense of nonconformance.

• The only performance standard is Zero Defects (ZD).

ISO 9000:2000

• Quality standards were created in 1987 and revised in 1994 and 2000 to improve product quality, improve the quality of operation’s processes, and provide confidence to organizations and customers that quality system requirements are fulfilled.

• Internationally recognized (and sometimes required to do business in certain countries).

• Standardizes key terms in quality and provides a set of basic principles for initiating quality management systems.

Designing Quality Management and Control Systems

Repeatability, or equipment variation, is the variation in multiple measurements by an individual using the same instrument. This is a measure of how precise and accurate the equipment is.

Reproducibility, or operator variation, is the variation in the same measuring instrument when it is used by different individuals to measure the same parts. This indicates how robust the measuring process is to the operator and environmental conditions.

Designing Quality Management and Control Systems

Records, documentation, and audits

• All the elements required for a quality system, such as control processes, measuring and test equipment, and other resources needed to achieve the required quality of conformance, should be documented in a quality manual, which serves as a permanent reference for implementing and maintaining the system.

Six Sigma

• Six Sigma is a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and results in a clear financial return for the organization.

• Used by companies including Motorola, Allied Signal, Texas Instruments, and General Electric.

Six Sigma’s DMAIC Process

Define: identify customer and priorities, identify and define a suitable project, identify CTQs (critical to quality characteristics).

Measure: determine how to measure the process, identify key internal processes that influence CTQs.

Analyze: determine likely causes of defects and understand why defects are generated by identifying key variables that cause process variation.

Six Sigma’s DMAIC Process

Improve: identify means to remove defects, confirm key variables, modify the process to stay within acceptable range.

Control: determine how to maintain improvements, put tools in place to ensure that key variables remain within acceptance ranges under the modified process.

Cost of Quality Measurements

• Cost of quality: costs associated with avoiding poor quality or those incurred as a result of poor quality.

• Prevention costs: expended to keep nonconforming goods and services from being made and reaching the customer.

• Appraisal costs: expended on ascertaining quality levels through measurement and analysis of data to detect and correct problems.

Cost of Quality Measurements

• Internal-failure costs: costs incurred as a result of unsatisfactory quality that is found before delivery of good or service to the customer.

• External-failure costs: incurred after poor-quality goods or services reach the customer.

The “Seven QC Tools”

1. Flowcharts: process mapping to identify the sequence of activities or flow of materials/information in a process.

2. Run Charts and Control Charts: line graph with data plotted over time; control charts include control limits.

3. Checksheets: simple tools for data collection, ensure completeness.

4. Histograms: graphically represents frequency of values within a specified group.

The Structure of a Control Chart

Defective Item Checksheet

The “Seven QC Tools”

5. Pareto Analysis: separates vital few from the trivial many causes; provides direction for selecting project improvement.

6. Cause-and-Effect Diagrams: represents chain of relationships; often called a fishbone diagram.

7. Scatter Diagrams: graphical component of regression analysis.

Use of Pareto Diagrams for Progressive Analysis

Cause-and-Effect (Fishbone) Diagram for Hospital Emergency Admission

Application of the Seven QC Tools in Six Sigma

The Deming Cycle

•Plan: study current situation•Do: Implement plan on trial basis•Study: determines if trial is working correctly•Act: standardize improvements

Kaizen: focuses on small, gradual, and frequent improvements over the long term with minimum financial investment and with participation by everyone in the organization.

Poka-Yoke (Mistake-Proofing): an approach for mistake-proofing processes using automatic devices or methods to avoid simple human error.

Managing Quality and Six Sigma

Process Simulation: an approach for building a logical model of a real process, and experimenting with the model to obtain insight about the behavior of the process or to evaluate the impact of changes in assumptions or potential improvements to it.

Managing Quality and Six Sigma

STATISTICAL PROCESS CONTROL

Quality Control Systems

Quality control is to ensure that a good

or service conforms to specifications and

meets customer requirements bymonitoring and measuring processes

andmaking any necessary adjustments tomaintain a specified level of

performance.

Quality Control Systems

Quality Control Systems have three components

1. A performance standard or goal,

2. A means of measuring actual performance,

3. Comparison of actual performance with the standard to form the basis for corrective action.

Quality Control Practices in Manufacturing

• Acceptance Sampling: the process of making decisions on whether to accept or reject a group of items purchased from some external supplier based on specified quality characteristics.

• Producer’s Risk: the probability of rejecting a lot of good quality.

• Customer’s Risk: the probability of accepting a lot of poor quality.

Quality Control Practices in Manufacturing

• Incoming control and acceptance sampling: ensure conformance to requirements before value-adding operations begin.

• In-process control: ensure that defective outputs do not leave the process an prevent defects in the first place.

• Finished goods control: verifying that product meets customer requirements.

Quality Control Practices in Services

• Prevent sources of errors in the first place by using poka-yoke approaches.

• Customer satisfaction measurement with actionable results (responses that are tied directly to key business processes).

• Many quality control tools and practices apply to both goods and services.

Quality Control Practices in Services

• However, the seven differences between goods and services do create major differences in how to apply and use quality concepts and tools such as:

Customers participate in creating the service, and therefore, introduce more uncertainty into the service process than in goods-producing processes.

Customers have a personality that can be difficult for the service-provider to accommodate while physical goods have no personality.