ISQA 572

1. ISQA 572/ 449Models for Quality Control/ Process Control and Improvement Dr. David Raffo Tel: 725-8508, Fax: 725-5850 Email: davidr@sba.pdx.edu

2. Intro to TQM TQM originates from a desire to improve and a necessity to compete. Product Designed-> Process Designed -> Product is Manufactured Typically, management and engineers design the production system.

3. Intro to TQM How does TQM fit in? Have those who are in the best position to know how the system is working. Use basic tools to use basic data and gain feed back on the process?

4. What is Quality? Quality of Conformance Suitable for use by form, fit , function Conformance to standard or specification Reliability and Consistency Quality of Design Meets customer needs Kinds of materials used Tightness of tolerances

5. What is Quality? Customer Satisfaction Providing features and functions to satisfy customer Total Quality Management Customer focus Obsession with quality Recognizing the structure in work Freedom through control Unity of purpose/teamwork Continuous improvement

6. What is Quality? Customer Value Customer focus What do customers want? How much are they willing to pay? Why do they purchase one product or service over another? Drive organization to provide products and services to meet or exceed customer expectations

7. Evolution of the Quality Movement

8. Quality Leaders Demming 14 Points Plan-Do-Check-Act Loop Focus on management involvement and quality improvement

9. Deming’s 14 Points 1. Create constancy of purpose for improvement of product and service. 2. Adopt the new philosophy. 3. Cease dependence on mass inspection. 4. End the practice of awarding business on price tag alone. 5. Constantly and forever improve the system of production and service. 6. Institute modern methods of training on the job. 7. Institute modern methods of supervising.

10. Deming’s 14 Points 8. Drive out fear. 9. Break down barriers between departments. 10. Eliminate numerical goals for the work force. 11. Eliminate work standards and numerical quotas. 12. Remove barriers that hinder the hourly workers. 13. Institute a vigorous program of education and training. 14. Create a structure in top management that will push every day on the above 13 points.

11. Quality Leaders Juran 80% of quality defects are management controllable and it is management which needs to change most. 7 Points

12. Juran’s 7 Points 1. Breakthrough in attitudes. 2. Identify the vital few projects. 3. Organize for breakthrough in knowledge. 4. Conduct the analysis. 5. Determine how to overcome resistance to change. 6. Institute the change. 7. Institute controls.

13. Quality Leaders Crosby Zero Defects is the Quality Goal “Slogan” Acceptable Quality Level (AQL) “Automobile” 14 Step program

14. Crosby’s 14 Step Program 1. Management commitment 2. Quality improvement team 3. Quality measurement 4. Cost of quality evaluation 5. Quality awareness 6. Corrective action 7. Zero-defects planning

15. Crosby’s 14 Step Program 8. Supervisory training 9. Zero-defects day 10. Goal setting 11. Error cause removal 12. Recognition 13. Quality councils 14. Do it all over again

16. Comparative Assessment Matrix: Quality Management Tasks

17. Quality Leaders Taguchi Must Design in Quality Design of Experiments to reduce variation (Orthogonal Array 15/16) Quality Loss Function Feigenbaum The “Hidden Plant” is the proportion of plant capacity that exists in order to rework unsatisfactory parts. Generally 15%-40%

18. Quality Leaders Shewhart Formulas used for X-bar and R charts Ishikawa 7 Quality tools - histogram, check sheet, scatter diagram, flow chart, control chart, Pareto diagram, cause &effect diagram Quality Circles

19. Continuous Process Improvement Action is the bottom- line; PDCA cycle and TQM tools. Involves integrating people, processes, and technology Benchmarking Business Process Re-engineering Benchmarking Steps Identify processes needing improvement Identify world leader Visit world leader Analyze data How to implement processes observed in one organization at another?

20. Steps in Quality Improvement Recognize Problem/ Est. Priorities (BS, PA) Form Quality Improvement Teams Define problem (Why-Why, Fishbone) Analyzing problem/ process (Flowchart)

21. Steps in Quality Improvement Define possible causes Fishbone diagram Check sheets, histograms Scatter diagrams Control charts and run charts Identify potential solutions Implement solution Evaluate Make permanent, CPI

22. TQM Observations TQM approaches essentially: Emphasize customer service Seek to eliminate defects in production Seek to empower employees as key actors and agents of change. Management must support the improvement process or it will go nowhere Improving the process is the central focus

23. Quality Certifications Examples of quality certifications and awards ISO-9000 Capability Maturity Model Malcolm Baldridge, Demming Prize, etc.

24. A Commonly Used Standard ISO 9000

25. ISO 9000 Series of standards Promoted strongly by the European Community Intentionally vague (covers wide variety of businesses) “Do what you say and say what you do” Important for competitive purposes Important spirit of law is followed Get certified by external auditor

26. ISO 9000 Series ISO 9000 Quality Management & Quality Assurance Standards Guidelines for selection & use ISO 9001 Quality Systems Model for quality assurance in design & development, production, installation & servicing ISO 9002 Quality Systems Model for quality assurance in production & installation ISO 9003 Quality Systems Model for quality assurance in final insp. & test

27. ISO 9000 Series ISO 9004 Quality Management & Quality System Guidelines Marketing & marketing research Design/specification engineering Purchasing Production Inspection, test & examination Handling, packaging & storage Sales & distribution Installation & operation Technical assistance & maintenance Disposal after use

28. Application to Software Capability Maturity Model

29. Motivation for Process Improvement Competition at home and abroad is driving the need to reduce costs, reduce cycle time and improve quality. At the same time, systems are getting increasingly complex and the integration of hardware and software is more challenging. Companies need to improve performance. Key question is HOW?

30. Introduction

31. Capability Maturity Model Provides a framework for process improvement Processes are assessed to determine their current level of process maturity Five levels of maturity 17 Key Process Areas (KPAs) related to essential core software development processes Actions to be taken based on current state of the process

32. The Five Levels of Software Process Maturity

33. Implications Of Advancing Through CMM Levels

34. Visibility Into The Software Process At Each Maturity Level

35. Key Practice Areas Level 2 - Repeatable Software requirements management Software configuration management Project planning Project monitoring and control Level 3 - Defined Organization process definition Training program Peer Reviews Integrated software management

36. Key Process Areas Level 4 - Managed Software quality management Quantitative process management Level 5 - Optimizing Process change management Technology change management Defect prevention

37. The CMM Structure

38. Process Improvement Benefits

39. Malcolm Baldrige Award Criteria Leadership Information & Analysis Strategic Quality Planning Human Resource Utilization Quality Assurance of Products & Services Quality Results Customer Satisfaction

40. Malcolm Baldrige National Quality Award Criteria 1.0 Leadership 1) Senior Executive Leadership 2) Quality Values 3) Management for Quality 4) Public Responsibility 2.0 Information & Analysis 1) Scope & management of quality data & information 2) Competitive comparisons & benchmarks 3) Analysis of quality data & information 3.0 Strategic Quality Planning 1) Strategic quality planning process 2) Quality goals & plans 4.0 Human Resource Utilization 1) Human resource management 2) Employee involvement 3) Quality education & training 4) Employee recognition & performance measurement 5) Employee well-being & morale 5.0 Quality Assurance of Products & Services 1) Design & introduction of quality products & services 2) Process quality control 3) Continuous improvement of processes 4) Quality assessment 5) Documentation 6) Business process &support service quality 7) Supplier quality

41. Malcolm Baldrige National Quality Award Criteria 6.0 Quality Results 1) Product & service quality results 2) Business process, operational & support service quality results 3) Supplier quality results 7.0 Customer Satisfaction 1) Determining customer requirements & expectations 2) Customer relationship management 3) Customer service standards 4) Commitment to customers 5) Complaint resolution for quality improvement 6) Determining customer satisfaction 7) Customer satisfaction results 8) Customer satisfaction comparison

42. MBNQA Results - Employee Relations Average improvement of 1.4% in overall employee job satisfaction. Above average industry attendance rates in 9 of 11 reporting companies. Lower employee turnover than industry averages report in 7 of 11 participating companies. Safety and health rates were better than industry averages in 12 of 14 companies. Increase in the total number of quality improvement suggestions submitted in 5 of 7 companies.

43. MBNQA Results - Employee Relations Milliken’s suggestion system yielded 262,000 suggestions during 1989 with an 87% completion rate. In 1990 it rose to 472,884. At Commercial Nuclear Fuel Division at Westinghouse, employee suggestions increased from 425 in 1985 to 2,000 in 1988. Cadillac’s employee turnover rate has been cut in half. They also experienced a 33% improvement in injury and illness rates. IBM Rochester’s safety record was 57% better, absenteeism rate was 48% less and turnover rate was 88% less.

44. MBNQA Results - Operating Procedures Average improvement in reliability was 11.3%. On-time delivery improved 4.7% on an average annual basis. Overall average annual order processing time improved 12%. Overall reduction in errors was 10.3% on an annual basis. Overall product lead time was reduced 5.8%. Average annual inventory turnover increased 7.2%. Quality costs improved 9% on an annual basis. The range in annual average cost savings was $1.3 million to $116 million.

45. MBNQA Results - Operating Procedures Milliken improved from 75% on-time deliveries in 1984 to 99% in 1988; 60% reduction in cost of nonconformance; productivity increased 43% since 1983. Since 1989, Motorola’s quality improvements have reduced by $250 million the cost incurred through internal and external failures. In the cellular telephone operation there was a 30 to 1 reduction in factory cycle time and a 90% reduction in defects/unit. At Commercial Nuclear Fuel Division of Westinghouse, first time yields on fuel rods increased to 87% in 1987 from 50% in 1984.

46. MBNQA Results - Customer Satisfaction Customer satisfaction increased an annual average rate of 2.5%. Complaints declined at an average annual rate of 11.6%. Customer retention at Cadillac improved 24% between 1987 and 1990. Customer satisfaction with service has increased 17% since 1989. Globe’s customer complaints went from 41 in 1985 to 4 in 1987. At Federal Express, overall customer satisfaction for domestic service has averaged better than 95% since 1987; 94% for international service.

47. MBNQA Results - Financial Performance Market share increased 13.7% annually. Sales per employee increased 8.6% annually. Return in assets increased 1.3% annually. Return on sales increased an average of 0.4%.

48. Quality Certifications Many good ideas Process improvement and change are not easy. Takes effort and perseverance Management commitment Mixed results for standard processes; Need application of the Spirit over the Formality