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The Impact of Quality Management Systems

The Impact of Quality Management Systems. Iowa State University of Science and Technology Chad Laux Agriculture and Biosystems Engineering Industrial and Agriculture Technology 9/27/05. Outline. Background Describe project (Charter) Review methodology selecting measures Q & A.

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The Impact of Quality Management Systems

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  1. The Impact of Quality Management Systems Iowa State University of Science and Technology Chad Laux Agriculture and Biosystems Engineering Industrial and Agriculture Technology 9/27/05

  2. Outline • Background • Describe project (Charter) • Review methodology selecting measures • Q & A

  3. Background • 2nd Year PhD student in Industrial & Ag Technology – Dept. of ABE • Spent 10+ years in Industry – Six Sigma BB, Quality/Training Mgr, Project Mgr, etc. • This project is part of my PhD dissertation at ISU (AG 9000 Development, Tech Transfer) • Have spent past year learning about FC and QMS systems + internal auditing

  4. What is being asked • Of Regional Operations Managers – at minimum, provide data & information upon request about FC processes and/or measures • Locations – may want to compare a process to multiple locations • Are the measures valid? Asking the question at non-QMS locations about the measure – Is it valid to check?

  5. Main Research Question • How has ISO/AIB impacted FC’s operations? • Implement a process of the fiscal impact of QMS impact through the collection of total costs vs. total benefits. • Calculate costs/benefits & report results • Create a set of application materials for use by Industry as output from project.

  6. Project Management (Charters) • Outlines project in one document: answers: • Business case – Purpose of project • Opportunity statement – Business impact • Goal statement – Success criteria • Project scope – Project boundaries • Project plan – Timeline of activities • Team selection – who and what

  7. In Scope of Project (Charter) • Study of ISO impact at FC locations with QMS (ISO and AIB): • Odebolt, Bayard?, Early?, Greene?, Rake? • Study same process across multiple locations – look for weak spots • Study of FC locations without a QMS: (Control) • Bradford, Farnhamville? Rockwell City? • Validity check of measures: no change from QMS/non-QMS location – not valid indicator

  8. Out of Scope (Charter) • Study of ‘Enabling’/supporting FC processes • Capital expenditures w/o prior approval • Hiring w/o prior approval

  9. Project Team (Charter) • Project Champion – Tom Miller • Overall control of process at FC (in conjunction w/ Charlie) • Sponsor – Tim Sullivan • Liaison btwn. ISU & FC; remove roadblocks • Coordinator – Chad Laux • Primary work done by C.L. • Primary resources • Butch Hemphill, Shawn Cogdill, Dr. Charles Hurburgh • Other resources • Reg. Op. Managers, IT, Accounting, operators

  10. Project Timeline (Charter) • Duration: 12 months • Est. Completion: 1/07 • Milestones: • Create methodology, Map processes, ID measures: 12/05 • Start data collection on measures: 1/06 • Finish data collection, finish improvements: 9/05 • Data analysis finished, deploy templates: 12/06

  11. Methodology • Started w/ review of literature of ‘expert’ opinion of other studies: • There were no similar projects • Focused on surveys, no case studies, no sufficient details • Questions unanswered from lit. review for case study: • Why where the particular measures chosen? What is the right number of measures? How comprehensive?

  12. Methodology • Utilize Business Process Management (BRM) in QMS study • Identify business’s high-level processes • ID core vs. enablers of FC business • Analyze process relationships • Ensure no gaps in the main processes • Look at the interfaces/links between processes • Analyze process performance • ID Input, process, output measures (used SIPOC) • Analyze cause-effect of measures w/ fiscal performance

  13. Why BRM • Needed to make scope manageable, practical, concentrated • Too many FC ISO/AIB procedures (approx. 60) upfront, BRM focuses on what is most important • Gives insight by answering: • Is your org. measuring the right things? • Does your org. need to develop a more comprehensive set of measures? • BRM ‘process approach’ is scaleable: can be replicated easily elsewhere

  14. All FC QMS Documents

  15. Defining Core Processes • A series of activities which cross functional boundaries & create the end product or service that is delivered to external customers • Core processes common to most businesses: Market and Sell Take Orders Manufacture Product Delivery Product/Service Maintain Customer

  16. Core Parameters • Focused on ISO 2nd Tier Procedures: • All encompassing of the business (i.e. AIB) • Focused on External Customer oriented processes • Focused on processes that directly add value to the end product/service

  17. Farmer’s Coop Core Areas • At minimum: Receiving/grading Storage Shipping

  18. 7.2.1 Order Processing for Gain Shipments Shipping 7.4.3 Verification of Purchased Product Receiving 7.5.1 Control of Operations-Loading Order Shipping 7.5.1 Control of Operations-Release & Post Shipping Shipping 7.5.3 Identification and Tracking- Grain Identification and Tracking All 3 7.5.3 Identification and Tracking-Inspection and Grading Storage 7.5.5 Preservation of Grain-Handling and Preservation Storage 7.5.5 Preservation of Grain-Storage Areas Storage 7.5.5 Preservation of Grain-Bulk Grain Shipping Storage 8.2.4 In-process Inspections Storage 8.2.5 Final Inspection Storage 8.3.1 Control of Nonconforming Grain Shipping Core FC Processes

  19. Enabling Processes • A series of tasks & activities that are internal to business but contribute to the performance of core processes. The customers of enablers are the business processes. • Examples common to many businesses: Human Resources Training/Development Information Technology Compensation & Legal Administration

  20. Process Approach • Mapped Core FC Processes using a SIPOC diagram to learn about the system • Analyze Core level relationships – gaps? • Identify Measures from SIPOC’s

  21. Define Business as a Process • Process – a set of interrelated or interaction activities, which transforms inputs into outputs INPUT OUTPUT PROCESS

  22. SIPOC • Supplier, Input, Process, Output, Customer Diagram • SIPOC is a process view of how a company goes about satisfying the customer. Because many organizations still operate as functional 'silos' and because no one person owns the entire process, just steps in the process, it's likely that few if any people will know the process from start to finish.

  23. SIPOC Definitions • Supplier - person/process/company that provides whatever is worked on in the process. • Input - The material or information provided. • Process - The internal steps (both those that add value and those that do not. • Output - The product, service, or information being sent to the customer. • Customer - The customer of the outputs

  24. SIPOC particularly useful when: • Who supplies Inputs to the process? • What specifications are placed on the Inputs? • Who are the true Customers of the process? • What are the Requirements of the customers?

  25. SIPOC steps • Begin with the Process. Map it in four to five high level steps. • Identify the Outputs of this Process. • Identify the Customers that will receive the Outputs of this Process. • Identify the Inputs required for the Process to function properly. • Identify the Suppliers of the Inputs that are required by the Process. • Identify input/process/output indicators of effectiveness &/or efficiency • Validate the SIPOC accuracy with Subject Matter Experts.

  26. INPUT INPUT INPUT OUTPUT OUTPUT OUTPUT PROCESS PROCESS PROCESS Analyze Relationships • The systematic identification & management of various processes employed w/in an organization, especially, the interactions between processes. CUSTOMER ORDER CUSTOMER DELIVERY PROCESS OWNER #1 PROCESS OWNER #3 PROCESS OWNER #2 ISO 9000:2000 based on this premise

  27. Process Performance (Measures) • All processes can be measured by: • Efficiency: Productivity; resources per unit in terms of time & money (cycle time, etc.) • Effectiveness: The degree that the process output satisfies the customer’s requirements (% yield, Cp ratio, etc.) • Using SIPOCS, process experts, we’ll ID existing data that provides indicators of performance

  28. Process Indicators (10/31/05) Lead time= actual work in process average completion rate Process Efficiency = Processing time (value added) Throughput time Throughput time = Processing time + Inspection time + Movement time + Waiting/storage time

  29. Cause and Effects • Quantify relationships between financial and process indicators using statistical analysis Y = f(X1…Xn) Financial Process

  30. Creation of materials • Process dashboards: Real-time information summary on process performance • Often created manually w/ IT support using excellent process knowledge • Sustain knowledge gained As part of third objective to create materials to transfer research learning to industry use:

  31. Questions

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