Duquesne University Donahoe Graduate School of Business Master of Business Administration Program

1. Duquesne University Donahoe Graduate School of Business Master of Business Administration Program http://www.bus.duq.edu/adjunct/sobah/ Managing Quality GRBUS611 Summer, 2006 - 3 Credits

2. Instructor: Hank Sobah Business Phone: 412.937.7687 Business Fax: 412.937.9309 Email: hsobah@innovativesystems.com Office hours: Prior to class, after class, or by appointment Schedule: Thursdays, 6:00 p.m. – 9:20 p.m. May 11, 2005 – July 27, 2006 Room 501 Rockwell Hall

3. GRBUS611 Managing Quality • This course is designed to provide a basic understanding of the philosophy, tools and framework involved in implementing a formal Quality Management system. • Theories, tools, practices and application • Students will be exposed to the evolution of Quality Practices and Principles, related quality and performance management systems, the teachings of W. Edwards Deming, Six Sigma and other organizational change strategies related to quality.

4. GRBUS611 • The Malcolm Baldrige National Quality Award (MBNQA) and various regional and state quality recognition criteria will be emphasized, studied and discussed. Case studies of organizations who have successfully implemented the techniques will be used to enhance the classroom discussions

5. GRBUS611 • Tools and techniques used in TQM settings will be introduced. • Class projects will be used to emphasize the Malcolm Baldrige National Award for Performance Excellence and various other processes involved in Quality Improvement.

6. Learning Objectives • Discuss characteristics of a High Quality organization • Identify the role of TQM with regard to an organization’s effectiveness • Identify Leadership’s role in designing and implementing quality initiatives • Discuss Deming’s 14 points, Shewharts Plan/Do/Check/Act cycle, Crosby’s concept that Quality Is Free • Describe how an organization’s mission, vision, values and Quality Management approach influence employees, customers, products, services, processes and organizational performance • Apply a framework for quality improvement in a practical setting • Apply the theory of variation to work processes • Build a measurement approach into the management of the organization • Apply common sense Quality tools in the work setting

7. Learning Methodologies • Use books, ISO9000 Standard and the MBNQA criteria to create a foundation • Read current articles to provide us with a “Today and Future” perspective • Read and discuss case studies to integrate the knowledge obtained • Participate in team assignments • Design a TQM project

8. Required Text • The Quality Improvement Handbook. ASQ Quality Management Division, John Bauer, Grace Duffy, et.al. • 2005 Criteria for Performance Excellence (for Business). National Institute of Standards and Technology, U.S. Department of Commerce - can be downloaded from: www.nist.gov (or directly at http://baldrige.nist.gov/Business_Criteria.htm ) • Who Moved my Cheese? Spencer Johnson, M.D., New York: G.P. Putnam’s Sons 1998 --- www.whomovedmycheese.com

9. Optional Reading • Quality is Free. Philip B. Crosby, New York: New American Library 1979 --- The Philip Crosby Institute • Juran on Leadership for Quality. Joseph Juran, New York: Free Press 1988 --- The Juran Institute • The Certified Quality Manager Body of Knowledge, American Society for Quality • The Quality Book CQM Review. Greg Hutchins, Portland OR: 1996 --- ASQ Quality Management Division --- ASQ Human Development and Leadership Division --- ASQ Pittsburgh Section • ISO 9000 Preparing for Registration. James Lamprecht, Milwaukee, WI: Quality Press 1992 --- ASQ on Standards --- ISO 9000 and Related Standards • Six Sigma, Harry, Mikel, Ph.D, and Shroeder, Richard, New York: Currency 2000 – 6 Sigma Academy

10. Course Perfomance/Evaluations • Mid-term and final exams = 45%. The exams will consist of true/false, multiple choice, completion and essay questions. NO MAKE UP EXAMS • Project = 35%. Specific details will be provided under a separate cover. • Participation and attendance = 20% : • In class, I will apply a variety of different approaches (study questions, debates, team assignments) to make the class a true learning experience - but you have to be there to benefit from the experience • Any student missing 1/3 or more of the classes will be asked to withdraw or given an F • Each class is work 1.6666 points. For each class missed, these points will be deducted from the participation and attendance category of your grade. • 12 classes attended and participated / 12 total classes = 1 x .20 = 20% (total points awarded) • 9 classes attended and participated / 12 total classes = .75 x .20 = 15% (total points awarded) • Points will also be deducted for students arriving for class late or leaving class before the class is over

11. A A- B+ B B- C+ C F 93 90 87 83 80 77 70 69 - 100 - 92 - 89 - 86 - 82 - 79 - 76 and below GRADING

12. ADDITIONAL NOTES • During the semester, additional readings and class work will be assigned at the instructor’s discretion. • Any students who have special needs, please see either instructor at the end of the second class to discuss arrangements - May 18th. • Any students who have circumstances that will impact their attendance and/or punctuality, please see either instructor at the end of the second class - May 18th.

13. Planned Course Outline

14. Planned Course Outline

15. Managing Quality What is Quality Anyway? Instructor: Hank Sobah

16. What Is Quality? Quality is …past …present …future

17. Quality • Quality in Fact • Quality in Perception

18. History of Quality • Guilds of Medieval Europe From the end of the 13th century to the early 19th century, craftsmen across medieval Europe organized into unions called guilds. • Product Orientation quality practices in the 1800s were shaped by several different production methods: • Craftsmanship • The factory system • The Taylor system

19. History of Quality • Craftsmanship In the early 19th century, the approach to manufacturing in the United States tended to follow the craftsmanship model used in the European countries. In this model, young boys learned a skilled trade from a master while serving as his apprentice

20. History of Quality • The factory system 19th Century Created by the Industrial Revolution in Europe, subdivided craftsmen’s trades into multiple specialized tasks. Forced craftsmen to become factory workers and shop owners to become production supervisors. Marked an initial decline in employees’ sense of power and autonomy in the workplace. Quality in the factory system was ensured through skilled laborers and supplemented by audits and/or inspections.

21. History of Quality • The Taylor system Late 19th century, US broke from European tradition and adopted a new management approach developed by Frederick W. Taylor. Goal was to increase productivity without increasing the number of skilled craftsmen. Achieved by assigning factory planning to specialized engineers and using displaced workers and supervisors to execute the engineers’ plans.

22. History of Quality • Process Orientation began in the 20th century marked the inclusion of processes in quality practices. • Dr. Walter Shewhart, began to focus on controlling processes in the mid-1920s. • Shewhart recognized that industrial processes yield data. For example; • A process in which metal is cut into sheets yields certain measurements: the sheet’s length, height, weight, etc. • Invented Statistical Process Control

23. History of Quality • Birth of total quality in the US was a direct response to the quality revolution in Japan following World War II.

24. History of Quality The Japanese quality revolution • After the war, major Japanese manufacturers converted from producing military goods for internal use to civilian goods for trade. • Japan’s reputation for shoddy exports preceded the products, and they were subsequently shunned by international markets. • Japanese organizations explored new ways of thinking about quality. • They welcomed input from foreign companies and lecturers, including American quality experts W. Edwards Deming and Joseph M. Juran • The adopted unprecedented strategies for creating a revolution in quality.

25. History of Quality • Japan’s strategies represented the new “total quality” approach. • Their total quality approach focused on improving all organizational processes instead of inspection • Japan was able to produce higher-quality exports at a lower price. • Consumers throughout the world benefited from this quality breakthrough.

26. History of Quality • In June 1966, American quality expert Joseph M. Juran predicted: “The Japanese are headed for world quality leadership and will attain it in the next two decades because no one else is moving there at the same pace.”

27. History of Quality • Japanese manufacturers began increasing their share in American markets, causing widespread effects in the United States: • Manufacturers began losing market share, • Organizations began shipping jobs overseas, • The U.S. economy suffered unfavorable trade balances as a result. • Overall, the impact on American business jolted the United States into action.

28. History of Quality The American responseAt first, the U.S. clung to its assumption that Japanese success was price-related and responded with strategies aimed at reducing domestic production costs and restricting imports. This, of course, did nothing to improve American competitiveness in quality.

29. History of Quality: As time went by; • Price competition declined while quality competition continued to increase. • By the end of the 1970s, the American quality crisis reached major proportions. • It attracted attention from national legislators, administrators, and the media. An NBC News white paper entitled “If Japan Can . . . Why Can’t We?” highlighted how Japan had captured the world auto and electronics markets by following Deming’s advice of revolutionary improvements. • Finally, American organizations began to listen. Several initiatives followed as the United States got up to speed on quality.

30. 1980’s Malcolm Baldrige National Quality Award MBNQA TQM 2000 Six-Sigma 1940’s W.Edwards Deming TQM 1950’s Joseph Juran, TQM 1970’s Emphasis on Quality Assurance 1930’s Walter Shewhart SPC 1970’s Philip Crosby Quality is Free COPQ 1990’s Re-engineering ISO, CMM, Value Creation Future ???

31. - Traditional QA - Progressive TQM • Leadership may not have been invested • Problem solving by Authority • Aimed at meeting imposed standards • Isolated • Leadership actively leading • Problem solving by staff at all levels • Aimed at meeting and exceeding customer needs and expectations • Continuous Comparison of QA and TQM

32. - Traditional QA - Progressive TQM • Inspection oriented (detection based) • Reactive • Correction of individual causes / symptoms • Responsibility of few • “Quick Fix” mentality • Planning oriented (preventative) • Proactive • Correction of Common Causes / Root Cause • Responsibility of many • Process Oriented and Systematic Comparison of QA and TQM

33. Weaknesses of Traditional QA • Largely driven by external requirements • Department Focused rather than Process Focused • Focus on individuals, not processes • Emphasis is on thresholds – Acceptable Quality Levels (AQL), Average Outgoing Quality Levels (AOQL), etc.

34. How good is good enough?99% Acceptable Quality Levels • For every 300,000 letters delivered.3,000 misdeliveries • Out of every 500,000 computer restarts 5,000 crashed systems • For 500 years of month-end closings 60 months would not balance • For every week of TV broadcasting (per channel1.68 hours of dead air 1.8 seconds of dead air

35. How good is good enough?99% Acceptable Quality Levels • At least 200,000 wrong drug prescriptions each year. • Two short or long landings at major airports each day. • 5,000 incorrect surgical procedures every week. • 20,000 lost articles of mail per hour. • No electricity for almost seven hours each month. • 50 dropped newborn babies each day.

36. How good is good enough?How about 99.9% Acceptable Quality Levels • Your heart would not beat for 8.8 hours per year • 15,000 newborn babies would be dropped on their heads each year in hospitals • 500 Incorrect surgeries would be performed each week • 13,699 unsafe cans of soda would be consumed every day • A manufacturing process with 500 people would produce the correct product 61% of the time

37. How good is good enough?OK then, isn’t 3 sigma better - Is 3 Sigma good enough? • US Postal service: • 3 Sigma: 20,000 lost articles of mail/hour • Airplane Landings: • 3 Sigma: 2 short/long landings every day • Drug prescriptions: • 3 Sigma: 200,000 wrong drug prescriptions/year. • Unsafe drinking water almost 15 minutes each day. • No electricity for almost seven hours each month. • 5,000 incorrect surgical operations/week

38. How good is good enough?Hmm, then what is good? • One Sigma = 170 misspelled words per page in a book • Two Sigma = 25 misspelled words per page in a book • Three Sigma = 1.5 misspelled words per page in a book • Four Sigma = 1 misspelled word in 300 pages • Five Sigma = 1 misspelled word in the Encyclopedia Britannica • Six Sigma = 1 misspelled word in all the books in a city library

39. What is TQM? • Plain and simple: - Doing the right things right the first time

40. TQM Defined • A science that accomplishes quality goals with an organization wide commitment and dedication to continuous improvement in customer satisfaction through the effective utilization of human resources, a focus on process and outcome, management by fact, and a senior management that is highly visible and engaged.

41. Benefits of TQM • Satisfies customers • Enthuses employees • Teams suppliers • Comforts investors • Pleases the public

42. Barriers to TQM • Complacency • Resistance to change • Rigid or Outdated Standards (AQL, EOQ) • Time • NOTE – TQM is not an assignable task. It must be rooted and institutionalized within every step of the business process – it is everyone’s responsibility!

43. Analytical Based on Continuous Improvement Data and Fact based Involves Everyone Customer/Supplier Relationship Leadership Driven Proactive, Preventative Process Focused Team Oriented Addresses Vital Processes Seeks out Root Causes The TQM Approach

44. Quality Management Theorists in Industry • Walter Shewhart • Father of Statistical Process Control • W. Edwards Deming • Management and Leadership Oriented • Customer Focused • Dr. Joseph P. Juran • Focus on Effective Process Control • Philip Crosby • Quality is Free • Cost of Poor Quality

45. W. Edwards Deming“The consumer is the most important part of the production line.” • Probably the most significant quality leader of the 20th century • Focus on Leadership • Focus on the Customer’s Needs and Expectations • 14 Points • 7 Deadly Diseases

46. Cycle for ImprovementAKA Shewhart Cycle • Plan • Determine how an issue or potential improvement will be studied (what data to collect to answer a defined question) • Do • Implement plan on a small scale • Check • Check the data and analyze results – evaluate the effect of an action • Act • Implement action or improvement and continue process for further improvement

47. At Toyota – ask why 5 times! An example of getting to the root cause: - Why did the fuse blow? Because the bearing was overloaded. - Why was the bearing overloaded? Because it was not lubricated. - Why was the bearing not lubricated? Because the lubrication pump was not working properly. - Why was the pump not working properly? Because the shaft was worn. - Why was the shaft worn? Because there was no strainer and scraps of metal got in.

48. In D.C. – ask why 5 times! Another example of getting to the root cause: - Why was the marble sugaring on the Lincoln and Jefferson Memorials? Because they were washed so frequently - Why were they washed so often? Because the birds left so many droppings - Why are there so many birds at the memorials? Because the sparrows and swallows gather there to eat all of the spiders - Why are there so many spiders? Because the spiders like to eat the midges - Why are there so many midges? Because the lights, when turned on at dusk, attract swarming midges SOLUTION – Turn the lights on an hour earlier

49. Quality Management’s“Common Language”

50. Quality Process Customer Teams Continuous Improvement Requirements Process Improvement Leadership Training Root Cause Fixes Voice of the Customer Words