tqm briefing by enrico c. mina1 total quality management presented by: enrico c. mina

TQM Briefing by Enrico C. Mina 1

TOTAL QUALITY MANAGEMENT

Presented by:

Enrico C. Mina


The World Is Changing

• Liberalization of trade and globalization of business

• Tougher competition

• More demanding customers

• Faster rate of technological change

• More turbulent environment


MATSUSHITA

• Change of thought makes your behavior change.

• Change of behavior makes your habits change.

• Change of habits makes your personality change.

• Change of personality makes your destiny change.


PARADIGM CHANGES (1)

• THE PRINCIPAL PURPOSE OF A BUSINESS ENTERPRISE

OLD: To make a profit.

NEW: To satisfy customers and win their loyalty and continued patronage, which leads to sales, market share, growth, and profits.



• DEFINITION OF QUALITY

OLD: The totality of the characteristics or features of a product or service; conformance to internal specifications

NEW: Conformance to customer requirements; fitness for customers’ use.


Customer Superordinate Goals

GOALS EXPECTATION LEVELS

Explicit Implicit Customer Delight

Quality

Cost

Delivery


Customer’s Bill of RightsA customer has the right to courteous treatment by

the seller’s representatives at all times and under all conditions.

A customer has the right to the representative’s full time and attention during each and every transaction.

A customer has the right to fast and accurate information about the product or service or the status of the order.


Customer’s Bill of RightsA customer has a right to have his/her

expectations met with a product or service of the quality represented before the purchase.

A customer has the right to complain when the product or service does not meet those expectations--and to a prompt remedy when the product or service is indeed at fault.


Customer’s Bill of Rights

A customer has the right to expect knowledgeability, resourcefulness, problem-solving ability, concern--and results--from those assigned to his/her account.

A customer has the right to expect responsiveness and follow-through in emergencies and special situations.



A customer has the right to the benefits of teamwork in the company he/she deals with--without buckpassing, fingerpointing, or runarounds.

A customer has the right to care, accuracy, and attention to detail in filling his/her orders for services and/or products.



A customer has the right to appreciation on the part of those with whom he/she does business -- appreciation both for the business already given and for the business to be given in the future so long as this Customer’s Bill of Rights continues to be observed.

(From The Customer Communicator, published by Marketing Publications, Inc., Washington, D.C.)



• DEFINITION OF CUSTOMER

OLD: The ultimate buyer or user of the product or service.

NEW: The next person, process, or system; anyone on whom the product or service has an impact.


Chain of Customer-Supplier Relationships

External Suppliers

1 2 3 4 5

End-users or consumers

Intermediaries or distributors

The Company



• HOW QUALITY IS TO BE ACHIEVED

OLD: Produce large quantities, then have quality control inspectors separate the defectives from the good units; rework the defectives if possible.

NEW: Emphasize prevention of defects by improving the product/service and the process that produces and delivers it.


Process• DEFINITION: a series of activities that transform

inputs into desirable outputs

• ELEMENTS:– Man (people)– Machines– Materials– Methods– Measurement– Environment



• RELATIONSHIP BETWEEN QUALITY AND PRODUCTIVITY

OLD: Quality and productivity are mutually exclusive. High quality and low costs cannot go together.

NEW: Quality is the road to productivity. A high-quality process leads to reduced waste, lower costs, and bigger volumes.


Cost of Quality (1)

• Cost of Quality is defined as the cost of keeping customers satisfied. It includes all costs incurred to ensure that customer requirements are ultimately met.

• Components:– Cost of prevention - costs incurred to prevent

failures in each process element


Cost of Quality (2)

– Cost of appraisal - costs of inspection, testing, measurement, and information-gathering to determine the state of the process

– Cost of non-conformance - the costs of failure or poor quality. Two types:

• Internal failure costs - incurred when failures are detected in-house, before sending output to the customer

• External failure costs - incurred when failures are detected by the external customer.


Cost of Quality (3)

• Quality experts estimate that costs of non-conformance are equal to 25% - 35% of gross sales or revenue.

• Not all CONCs are visible because conventional accounting systems do not distinguish between productive vs. non-productive uses of resources.


The Cost of Non-conformance Iceberg

hidden costs

visible costs


Cost of Quality (4)

What should happen:

External failure cost

Internal failure cost

Prevention costAppraisal cost

Costs

T i m e

Savings

Total costswith improvedprocess quality



• MEASUREMENT OF QUALITY

OLD: Acceptable quality levels (AQL) are good enough.

NEW: Maximum defect incidence must be measured in terms of parts per million (ppm).


99.9% Reliability

• If the human heart were 99.9% reliable, it would miss 36,817 beats a year (@ 70 / minute), equivalent to 8.8 hours without a heartbeat.


6-sigma Reliability

• 99.99966% reliability or 3.4 failures per million

• Equivalent to missing only one free throw out of 300,000 attempts.


Overall Process/System Reliability

R 20 10

5

0.95

0.98

0.99

0.999

0.36

0.67

0.82

0.98

0.60

0.82

0.90

0.99

0.77

0.90

0.95

0.995

Number of steps or elements



• THE CAUSES OF QUALITY PROBLEMS

OLD: It is the fault of the workers. They are not careful enough.

NEW: The deficiency lies in the system or process, over which management has control and is therefore responsible.


Common and Special Causes (1)

• According to W. Edwards Deming, the causes of quality problems fall under two categories:– Common causes, those which are related to the

system of operation, and– Special causes, those that are identifiable with

specific events and people.


Common and Special Causes (2)

• Proportion of the incidence of problems due to these two categories are:

• Common causes 94%

Special causes __6%

100%


Process Muda (1)

• Muda is the Japanese word for waste.• The presence of muda in a process, through one or

more of its elements, deteriorates quality, increases costs, and delays delivery by lengthening the cycle time.

• Muda is non-value-adding and therefore unproductive.


Process Muda (2)

• Overproduction - Each work station or process stage tries to operate at full capacity, leading to a build-up of WIP or FGI. These hide problems by making them tolerable, although at high cost, and prevent them from being addressed. This is the “mother of all muda.”


Process Muda (3)

• Inventory - Excessive supplies and parts are costly to carry: cost of tied-up capital, storage, security and pilferage, supervision, insurance, obsolescence and deterioration.

• Waiting - Waste of time when people and work stations are capable of work but are idle.


Process Muda (4)

• Transportation - Additional cost and time created by transferring the location of people, materials, or products without any value being added.

• Motion - Created by people being made to exert physical efforts that merely add to fatigue and time but do not create value.


Process Muda (5)

• Overprocessing - Created when the process is performing work that is unnecessary from the customer’s point of view.

• Producing failures - Process failures like defects and errors result in customer dissatisfaction, higher costs, and delays.


Process Muda (6)

• In most organizations, mudas are considered normal and have been tolerated over a long period of time. Many are even in budgets.

• Every muda removed and prevented from recurring improves process quality and reduces cost and cycle time, thereby automatically increasing productivity.


Effect of Mudas

• Mudas are non-value-adding.

• They lengthen process cycle times.

• They increase costs.

• They cause quality to deteriorate.

• The value-adding moment is very short. Eliminating mudas will cause QCD to improve, often with very little investment.


Process Flowcharting (1)

• The first step in identifying muda is to draw a flowchart of the process.

• A flowchart is a graphical representation of a process. It is essential to process analysis and improvement.


Process Flowcharting (2)

• The flowchart, to be useful, must be the “as is” flow (based on the actual sequence of activities), not necessarily the theoretical one in the manuals.

• The best sources of information are the people who are actually working on the process.


Basic Symbols (1)

Beginning and end

Operation

Sub-process

Wait/delay


Basic Symbols (2)

Transportation

Storage

Connector A


Basic Symbols (3)

Direction of

process flow

Document

DecisionY

N

?


START

Customer Dept. X Dept. Y Dept. Z

A

A

BN

Y

B

C

C

D

N

Y

D

N

Y

E

E

FN

Y

END

FTotal Cycle Time:

Min.: ___hrs

Max.: ___hrs

Ave.: ___hrs

Total Distance Traveled:

Min.: ___m

Max.: ___m

Ave.: ___m


Identifying Muda (1)

• Ask the following questions:– What are we doing? Can we avoid doing it at

all?– Who is doing it? Can it be done better by

someone else (e.g., a subcontractor)?– Where are we doing it? Can it be done better

somewhere else?



– When and how often are we doing it? Can it be done better at other times or with another frequency?

– How are we doing it? Can it be done better through another way?

• If it is done manually, can we automate it?

• Can it be done simultaneously or in parallel?

• Can we apply Information Technology and tele-communications effectively?



• If there is no clear value-added, then that particular activity is muda and should be eliminated.

• Draw a new, “should be” flowchart incorporating all the muda-eliminating features.

• Create, document, and continuously improve standards for each process element. Use the standards for training staff.


Muda Elimination

• The process should be revised to eliminate identified muda. Every such muda eliminated and prevented from recurring reduces costs and cycle time and improves process quality.

• The opportunities for improvement through the continuous elimination of muda are infinite.



• THE ROLE OF PEOPLE

OLD: People should work in strict confor-mance with the instructions given by their superiors.

NEW: The people in the workplace have detailed knowledge, experience, and ideas for improvement. They should be encour-aged to actively participate in improvement.



• TIME FRAME

OLD: Achieve the bottomline targets set for this month or quarter.

NEW: Allocate resources to ensure continuing ability to offer superior value to customers relative to competitors.



• THE ROLE OF QUALITY

OLD: Quality is an internal problem to be solved.

NEW: Quality is our strongest strategic weapon against the competition.


Profit Impact of Market Share

• ACHIEVING COMPETITIVE SUCCESS THROUGH QUALITY– Achieve superior relative perceived quality in

both products and services.– Achieve a high degree of conformance or

process quality.

(From The PIMS Principle by Robert Buzzell and Bradley Gale)



• PHILOSOPHY OF IMPROVEMENT

OLD: “If it ain’t broken, don’t fix it.”

NEW: “If it is not perfect, make it better.”


Continuous Improvement (Kaizen)

• KAIZEN is a system of small-step improvements taking place continuously at all levels and functions of the organization.

• It promotes improvements through projects that do not cost much money.


Kaizen, Maintenance, & Innovation

Top

Mgt.

Middle

Mgt.

Super-

visors

R & F

Innovation

Maintenance

Kaizen


The Gemba (Workplace)

• Kaizen places heavy emphasis on seeking improvements in the gemba, the work-place where processes are in operation and where value is created for customers.

• The opportunities for improvement in the gemba are infinite.


Five Gemba Principles (1)

• When an abnormality takes place, go to the gemba first to get first-hand information.

• Check with the gembutsu (the “real things” inside the gemba: employees, materials, equipment, records, actual rejects, working conditions, etc.).

• Take temporary countermeasures on the spot to relieve the situation.


Five Gemba Principles (2)

• Trace the root causes of the abnormality and take permanent countermeasures that will prevent recurrence.

• Standardize all improvements made.


Superordinate Principles

Kaizen has to be absorbed into the organization’s culture.

• Process and Results

• Total Systems Focus

• Non-blaming/Non-judgmental Behavior


Process and Results

• Process creates results. If results are not satisfactory, the only permanent way to improve them is to improve the process first.

• Results are needed to verify if process improvements are working.

• Therefore, there must be a balanced emphasis on both process and results.


Total Systems Focus

• A system is an integrated whole made up of distinct but interdependent and interacting parts.

• The only real improvement is that which enables the entire organization to serve customer requirements better.

• Systemic problems can only be solved through cross-functional teamwork.


Non-blaming/Non-judgmental Behavior

• A blaming culture causes people to hide problems.

• Problems are really opportunities for improvement in disguise.

• Focus on the problem and make people problem-solvers.

• “The first time you get angry is the last time you get the truth.” (Ishikawa)


Seven Basic Concepts (1)• SDCA to PDCA• The next process is the customer.• Quality first• Market in• Upstream management• Speak with data• Variability control and recurrence prevention


SDCA to PDCA

• Standardization and Improvement

SS

DDCC

AA PP

DDCC

AA


The Next Process Is the Customer.

• The Customer-Supplier Chain

• Three Rules:

Your Your SupplierSupplier

Your Your ProcessProcess

Your Your CustomerCustomer

inputsinputs outputsoutputs

Do not Do not accept accept defects.defects.

Do not Do not make make defects.defects.

Do not Do not pass on pass on defects.defects.


Quality First

• The quality of the process must receive first priority, ahead of Cost or Delivery.

• A high quality process produces high quality products at least cost and with the shortest cycle time (enabling on-time delivery).


Market-in• A philosophy that seeks to find out factually

what customers want, and then designs the product or service, and the processes that create and deliver them, to suit customer requirements.

• Product-out: We know better than the customers; we tell them what to do. We do what is convenient for us, not for them.


Upstream Management

• Manufacturing

ProductConcept

ProcessEng’g.

Design &Develpmt. Prototype

Full-scaleProduction

Distribution SalesAfter-salesService


Upstream Management

• Service

ServiceConcept

ServiceStrategy

ServiceSystems

ServiceStaff

Trial Run

Full-scaleOperations

Follow-upService


Speak with Data

• Data mean facts.

• Identify problems with data, analyze causes with data, evaluate solution alternatives with data, verify success with data.

• Gut-feel and past experience are useful but not enough. They must be validated with data.


Variability Control and Recurrence Prevention

• Problems are caused by failures occurring in man, machines, materials, methods, measurements, or environment.

• It is necessary to identify the root causes of a problem and to adopt countermeasures that eliminate them, to prevent recurrence.

• Ask “Why?” 5 times to trace root causes.

69

Exercise in Self-Diagnosis

Inconsistent Practices

Consequent Problems

Future Implications

Ideas for Improvement

1.

2.

3.

Principle or Concept: ____________


10 Basic Rules for Practicing Kaizen (1)

• Discard conventional fixed idea for operations.

• Think of how to do it, and not why it cannot be done.

• Do not make excuses. Start by questioning current practices.



• Do not seek perfection. Do it right away even if for only 50% of target.

• Correct mistakes at once.

• Do not spend money for KAIZEN.

• Wisdom is brought out when faced with hardship.



• Ask “Why?” five times and seek root causes.

• Seek the wisdom of ten people rather than the knowledge of one.

• KAIZEN ideas are infinite.


Hoshin Kanri (Policy Deployment or Management by

Policy)

CEO

Sr/Mid Mgrs

SuprvsrsR&F

Results

Means

Results

Means

Results

Means

Results

Means


Service Quality (1)

• Service means the provision of intangible products, or work done for someone else.

• It is also the work performed to help internal customers achieve their objectives.

• Where products are similar or equivalent, service is the competitive edge.


Service Quality (2)• Characteristics of service operations:

– The product, or the greater part of the “product package”, is intangible.

– Measurement is more difficult.– Production and consumption are simultaneous;

there is little chance of pre-delivery inspection.– There are frequent person-to-person contacts

(“moments of truth”) between customers and front-line personnel.


The Service Triangle

Service Strategy

Service System

Service Staff

CUSTOMER


Service Gaps (1)

• Gap 1 - The inability to discern correctly what customers really need and expect

• Gap 2 - The inability to translate knowledge of the customers’ needs and wants into service process standards

• Gap 3 - The inability of operating forces to comply consistently with service process standards


Service Gaps (2)

• Gap 4 - The inability to communicate effectively with customers what the supplier is doing to meet expectations; also, the raising of these expectations through a propensity to overpromise.

• Gap 5 - The inability to effectively and efficiently satisfy customer needs and wants, as judged by the customer.


Service Quality Dimensions (1)

• RELIABILITY - Consistent ability to satisfy the customer’s needs and wants

• RESPONSIVENESS - Fast action on customer orders, requests, inquiries, or complaints

• ASSURANCE - The ability to demonstrate competence and to give the customer peace of mind before the transaction takes place


Service Quality Dimensions (2)

• EMPATHY - The ability to place oneself in the customer’s shoes and treat him/her as one wishes to be treated

• TANGIBLES - The physical appearance of the service supplier’s staff, facilities, equipment, forms, vehicles, and other resources.


Benchmarking (1)

• Benchmarking is the search for and adoption of ideas for improvement and best practices from other organizations.

• It provides an identification of opportunities for improvement even if current processes are “good enough.”

• It avoids “reinventing the wheel.”


Benchmarking (2)

• Three levels of benchmarking:– Internal – the best practices of a particular

branch, plant, or facility of the same organization become models for the others to follow (e.g., best practices of a particular plant are communicated to the others to have them adopt these also)


Benchmarking (3)

– Competitive – the best practices of another organization engaged in the same business are identified, analyzed, and copied (e.g., the best practices of other manufacturers of similar products around the world can be identified and adopted).

• Do reverse engineering.

• Ask common customers what the competitors’ practices are.


Benchmarking (4)

– Functional – the practices of another organization, not necessarily from the same business, that have been identified as “best in class” are analyzed and copied or adapted into one’s own organizational processes.


CULTURAL CHANGE (1)

• HANDICAPS– Size (number of personnel)– Age of the enterprise– Past success– Weak pressures from the market


CULTURAL CHANGE (2)

• TWO ROUTES TO THE QUALITY JOURNEY:– CLSQ (Crisis Leadership makes you Sweat for

Quality)– VLSQ (Visionary Leadership makes you Sweat

for Quality)


SUCCESSFUL TQM IMPLEMENTATION (1)

ELEVEN PRE-CONDITIONS:

• Management involvement and leadership

• Organization for Quality

• Communication

• Participative management

• Training and education

• Measurements and standards


SUCCESSFUL TQM IMPLEMENTATION (2)

• Plans, programs, and strategies

• Regular reviews

• Rewards and recognition

• Supplier quality

• Process management


START-UP DILEMMA

OUTPUT

TIME

quit point?

results curve

cost/effort curve


End

tqm briefing by enrico c. mina1 total quality management presented by: enrico c. mina

Documents

tqm briefing

customer communicator

definition of customer

mina slide

customer requirements

mina7 customers bill

mina8 customers bill

mina9 customers bill