safford 1990

Computers ind. Engng Vol. 19, Nos I-4, pp. 267-271, 1990 0360-8352/90 $3.00 + 0.00 Printed in Great Britain. All rights reserved Copyright © 1990 Pergamon Press pie

OMAX+ AN ADVANCED QUALITY IMPROVEMENT MEASUREMENT SYSTEM

Robert R. Safford, David H. Gobeli, and Kai P. Suen

Department of Industrial and Manufacturing Engineering and the

Oregon Productivity and Technology Center Oregon State University

Corvallis, Oregon

ABSTRACT

This paper describes OMAX+, a microcomputer based quality improvement measurement system developed by the Oregon Productivity and Technology Center at Oregon State Univer- sity.

OMAX+ is a modified and enhanced version of the Objectives Matrix approach for produc- t i v i t y and quality measurement developed by the late James L. Riggs, Head of the Depart- ment of Industrial Engineering. OMAX+ is specifically designed for use byorganizations engaged in Total Quality Control (TQC) efforts. Use of OMAX+ presents the industrial engineer engaged in TQC with a useful measurement tool to quantify and track quality improvements. The paper discusses the approach- es that will enable the OMAX+ measurement system to be integrated into new or on-going quality improvement programs. OMAX+ is a self-contained program for IBM personal computers and true compatibles. A version with additional graphics capabilities is being developed by the Oregon Productivity and Technology Center for use on Macintosh Comput- ers.

OMAX+ has been successfully used by several industries and service organizations in the Northwestern United States.

INTRODUCTION

Total Quality Control (TQC) has been identified by many organizations as the most effective approach toward improvement of quality, productivity, and their competitive position. Applied at f i r s t primarily by manufacturing organizations in foreign countries, i t is now applied extensively in the United States. Service oriented organizations in the United States have, in fact, taken the lead in adapting the TQC procedure to non-manufacturing applications. I t is now widely used to improve the quality of u t i l i t y operations, military support activit ies, and governmental organizations, to name a few.

A major attribute of the TQC process cited by its proponents is that i t is "data based." Yet few measurement procedures have been designed that are specifically tailored toward TQC quality improvement activit ies. OMAX+, a microcomputer based measurement

system, has been developed by the Oregon Pro- ductivity and Technology Center to provide analysts developing TQC programs for organizations with a measurement system designed for use in monitoring and tracking quality improvements.

TOTAL QUALITY CONTROL

The concept of "Total Quality Control" can perhaps be best explained in a brief period of time by contrasting the concept to our traditional concepts of quality and quality control. That traditional concept suggests that:

"There is an optimum level of quality and quality effort that is l imit- ed by the customer's willingness to pay for i t . " The "Total Quality Control" concept, the

feasibi l i ty of which has been demonstrated by a number of foreign industries and an increasing number of continental U.S. industries, is based on the premise that:

"Ever-increasing quality (as per- ceived by the customer) will u l t i - mately reduce costs, increase productivity, and increase market share." The key element in this concept is that

of "ever-increasing" quality. Most TQC (total quality control) projects or TQM (total quality management) activit ies are oriented towards quality improvement. Many organizations in fact call their "total quality" programs "Quality Improvement Programs" or "Total Quality Improvement Programs" (TQIP).

All of these programs as they are applied in actual agency operations or organizations have unique characteristics. They all share, however, certain common characteristics. They all recognize, for example, that • Quality is defined by the customer, the

person who receives the end product or service.

o A quality product or service is one that meets or exceeds customer expectations.

• As quality improves customer expectations increase forcing the need for further quality improvements.

o Most (= 85%) of the problems needing to be solved to improve quality are problems with the process and only a small per-

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centage (= 15% or less) are due to peo- ple. There is also a common core of components

to most quality improvement act iv i t ies. The common elements are shown in the central portion of Figure 1. As indicated in the figure, the major input to the quality improvement process is information from the "customer." Customers, of course, in the context of Total Quality Control may be the external users of an end product or service produced or provided by an organization or they may be internal. An internal customer is one that is employed within the organization but is the user of an item or service produced by some other enti ty in the organization. Total Quality Control is based on data, so customer information is obtained. This information should be quantifiable and result from deliberate structured surveys of the customer. From this customer information, processes which can be looked into to improve customer satisfaction are identif ied.

Next in the process an issue statement is developed. An issue statement is a verbal statement that identif ies: the process that wi l l be looked at for improvement, a quality

Proceedings of the 12th Annual Conference on Computers & Industrial Engineering

indicator (or indicators} for the process, and a direction for each quality indicator that is associated with improvement. Examples of quality indicators would be: accuracy, vari- ab i l i t y , or defects.

Process flow analysis and other process analysis procedures are useful then to identify the operations and act iv i t ies and their interrelationships within a process that impact the quality indicators.

Together the information from the issue statement and the flow process analysis enable the definit ion of Process Performance Mea- sures. Traditionally, Process Performance Measures have been looked at individually in Total Quality Control Processes. A primary analysis tool and tracking tool for monitoring Process Performance Measures has been the control chart adopted from stat is t ical quality control.

From this point the quality improvement procedure act iv i ty can be focused on modifi- cation of the process to produce quality improvements. Causes of problems in a process and an indication of the relat ive impact of causes on the process performance measures can be found by doing cause and effect ("fishbone

Customer Orientation ~ i so s,=ooe,(s, I Measurement Pro¢eu

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i :: Issue Identification I Select~ issue ' ~ 1 Deve!op quaJitYtndicat°r .... I : j

' Diagramp*'°cess ', I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . -

easu el X Establish process ~ performance

I measures I J /

Cause identification ~ / Diagram causes I I

I and effect J

o , , t I

Figure I. Integrated TQC Process.

Safford et al.: OMAX+ Measurement System 269

analysis") and Pareto diagrams. Next, the Deming PDCA (plan, do, check, adopt) approach can be employed in changing the process and evaluating the effect of the changes on the Process Performance Measures.

TOTAL QUALITY CONTROL AND QUALITY IMPROVEMENT MEASUREMENT

Proponents of Total Quality Control emphasize the need for measurement. TQC is based on measurement. Most of the measurement procedures that are suggested for use in the TQC process are simple and are directed toward monitoring one variable, or Process Perfor- mance Measure, or effect (e.g., histograms, control charts, fishbone analysis). Tradi- tional statistical quality control tools are useful, of course, when process performance is being monitored after stabilization at an improved level.

A systematic approach to enable monitoring of several Process Performance Measures during a period of quality improvement has been lacking.

THE OREGON PRODUCTIVITY AND TECHNOLOGY CENTER

The Oregon Productivity and Technology Center (OPTC), located in Corvallis, Oregon, on the campus of Oregon State University, is a cooperative extension activity of the Col- lege of Engineering and the College of Busi- ness. I t has worked with several hundred client organizations in the development of performance measurement systems. Its founder, the late Dr. James L. Riggs, the head of the Department of Industrial Engineering at Oregon State University, was also the developer of the widely used Objectives Matrix approach for measuring productivity and organizational performance.

Currently, the efforts of the Oregon Productivity and Technology Center are oriented toward the development of Total Quality Control programs for client organizations. In its work with its clients the OPTC has identified several points in the TQC process where a measurement system specifically designed for monitoring and tracking quality improvement is useful. These points are shown on the right side of Figure 1. The OPTC has formulated an approach for developing the appropriate measurement system at these points. The idea for this approach originated from consideration of the approach embodied in the OPTC's Objective Matrix. The name OMAX+ reflects the origin of the ideas for the quality improvement measurement tool.

OMAX+ USED FOR MONITORING PROCESS PERFORMANCE MEASURES AND QUALITY INDICATORS

As indicated previously, the TQC approach leads to the development of issue statements with quality indicators and to process performance measures associated with operations that impact quality indicators. These quality indicators and process performance measures can be monitored during a quality improvement

effort using OK~X+. Figure 2 indicates how these measures are brought together in the development of the measurement system.

Issue Statement

• S~jmrS:; c e

// Process Improvement Measurement System

Process Flow Analysis

/ I \ Cause and Effect Analysis

To enable establishment of bassl~nes and tracking of process improvements

I To enable 1 initiation of specific process improvement activities

Figure 2. Developing Measurements for OMAX+.

More specifically, the steps that are employed in the development of the measurement system include: I) Identify the quality indicators and

Process Performance Measures to be used to indicate process improvement.

2) Identify the current level of performance (the baseline) for each PPM or quality indicator.

3) Identify target levels or goals for each PPM or quality indicator.

4) Identify intermediate targets or goals. 5) Weight the PPMs and quality indicators in

terms of overall relative importance. 6) Prepare a matrix summary of the above

information in the manner prescribed by OMAX+ to be used as a quality improvement tracking tool for the process.

AN EXAMPLE OF OMAX+ APPLICATION

The procedure for using OMAX+ to establish a quality improvement measurement system is perhaps best explained by looking at an example taken from a case developed by one of OPTC's clients, a major electrical u t i l i t y in the northwestern U.S. This u t i l i t y is in the process of installing TQC as a means of improvement of the quality of their service delivery. They are training their employees

270 Proceedings of the 12th Annual Conference on Computers & Industrial Engineering

starting with their supervisory personnel in TQC methods. An issue that was identified by an "internal customer" (service center crews) was with respect to the information obtained on a work order form f i l led out by an "internal supplier" (an office representative who obtains information from new external customers). The issue statement for this situation stated "Improve the accuracy and timeliness of form 2200." The Process Performance Measures identified for this issue, their baseline level, target level, and relative weights are indicated in Table I.

Table l . OMAX+ Inputs Power Company Example

Process Performance Measures Baseline Target Weight

% of Failures to Identify Service Location when Dif- ferent than Mail Address

5% 0% 45%

a matrix format llke that shown in Figure 3. As can be seen in the figure, intermediate target levels for each PPM or quality indicator criteria are computed. These intermediate target levels indicate the points associated with successive 10% increments of improvement to the goal.

Figure 3 also shows a column identified as "level." That column is where the current level of performance is recorded. For our example, that column shows figures of 4, 7, 110, and 45 indicating that OMAX+ Is being used at a point in time after performance in the PPM has changed from the baseline values to those indicated in the level column. Figure 4 shows another OMAX+ matrix for this example at a point in time when performance has improved substantially on all the PPMs. The "progress bars" shown on the matrix output readily indicate the current level of performance. An index number presented at the bottoms of Figures 3 and 4 give a numerical indication of the process improvement. The index value is a weighted average of the "percent of interval to goal" achieved byeach measure to date. The index for Figure 3 would be computed via the manner indicated below:

# of Incorrect Service Location Descriptions/lO0

# of Omissions/1000 in Type of Load Energy Code

12% 2% 10%

100 50 20%

Timeliness of 40 60 25% Transmittal of Form TMU TMU (Wanted Time Minus Transmittal Time)

At this point the OMAX+ microcomputer procedure was introduced by the quality improvement team to develop the measurement system for the efforts that they initiated to improve quality. The information presented in Table I is the input to the OMAX+ programs. The programs then summarize the information in

CRITERIA

% Nonldent Serv Loc wt : 45 % P :

# Serv Loc Desc Err wt : 10 % P =

# Omission Load Code wt = 20 % P =

Timeliness wt = 25 % P =

Overall Weighted Performance - 20%x.4S+S0%x.l-Z0%x.2+Z5%x.25 - 16.25

OMAX+ has the capability of generating a number of managerial reports of progress reports each time i t is employed. An example of such a managerial report is shown in Figure 5.

SUMMARY

OMAX+ is a straightforward, easy to understand, user friendly microcomputer procedure that has been found to f i l l a void in the current analysis procedures associated with TQC. Additional information about OMAX+ and the manner in which i t can be utilized in TQC activities may be obtained from the Oregon Productivity and Technology Center of the Oregon State University in Corvallis, Oregon.

I " I BASEl + < < M I L E S T ON E S • • ] GOALI

LEVEL -30){ "20)~ "10% 0)~ 10){ 20)~ 305{ 40X 50~ 60)~ 70X 80X 90% IOOX

6.50 6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00

4.00 iii!i!i!ili~.iiiiiili ~!iitliiii!i!!il i!!ii!ii!:.!iiill: 15.0014.00 13.00 12.00 11.00 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00

7.00 ,i~iiii!i~?:iit!:. iii!)!ii!iiiiil iil)i!iiiii!;:!:i, ii iil)ii!ii:. !ii!ii)ii:~i:: ~!!!::!i!!i))!)ii) I15.0 I0.0 105.0 I00.0 95.00 90.00 85.00 80.00 75.00 70.00 65.00 60.00 55.00 50.00

• ..11o.o )!)il)iiii)))))) i)))i))~)))))i)! ))i)))i?))))ill) 34.00 36.00 38.00 40.00 42.00 44.00 46.00 48.00 50.00 52.00)54-00 )6.00 58.00 60.00

45.00 i!i)lll~)i~i iilIiill!)i)il lilI~)i!!i!))::il

* * * WARNING: performance below base LeveL.

OVERALL MEIGHTED PERFORMANCE

Figure 3. Init ial OMAX+ Matrix with First Update Information.

Safford et al.: O M A X + Measurement System 271

CR I TER I A LEVEL

Nonldent Serv Loc wt = 45 ~ p = 1.00

# Serv Loc Desc Err wt = 10 ~ P = 4.00

# Omission Load Code wt = 20 % P = 65.00

Timer iness wt = 25 ~ P = 58.00

I " I BASEl + < <

-30~ - L ~ - lOg O~ 10~ 20~ ]Og

6.50 6.00 5.50 5.00 4.50 4.00 3.50

15.00 14.00 13.00 12.00 11.00 10.00 9.00

115.0 110.0105.0 100.0 95.00 90.00 85.00

~4.00 ~6.00138.00 ¢0.00 cz.oo ¢¢.00 ~6.00

M [ L E S T O N E $ > > I GOALI

40"4 50Z 60X 70Z 80~ 90~ 100~

3.00 2.50 2.00 1.50 1.00 0.50 0.00

8.00 7.00 6.00 5.00 4.00 3.00 2.00

80.00 75.00 70.00 i5.00 60.00 55.00 50.00

48.00 50.00152.00 54.00 56.00 58.00 60.00

OVERALL WEIGHTED PERFORNAMCE

Figure 4. Subsequent Update of OMAX+ Matrix.

UPDATED 8UNI4,~RY REPORT I N P E R F O R N J ~ O E (I"NTERV),L PERCENTAGE)

CURRENT OVERALL CRITERIA WEIGHT(X) BASE PREVIOUS CURRENT GOAL ~ CHAMGE ~ CHANGE

~, Nonldent Serv Loc 45 5.00 4.00 1.00 0.00 75.00 80.00 # Serv Loc Desc Err 10 12.00 7.00 4.00 2.00 DO.O0 80.00 # Omission Load Code 20 100.00 110.00 65.00 50.00 75.00 70.00 Timer iness 25 40.00 45.00 58.00 60.00 86.67 90.00

WEIGHTED AVERAGE 76.42 80.50

Figure 5. OHAX+ Hanagerial Summary R e p o r t .

safford 1990

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