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Lecture 3 – Global Issues

Lecture 3 – Global Issues. Global Supply Chain Quality International Standards Awards & Prizes. Multinational Supply Chains. Licensing Partnering Globalization. Japanese Quality. Japanese Quality. Postwar (WW II) activity Deming Prize Lean operations and quality

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Lecture 3 – Global Issues

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  1. Lecture3 – Global Issues Global Supply Chain Quality International Standards Awards & Prizes SJSU Bus 142 - David Bentley

  2. Multinational Supply Chains • Licensing • Partnering • Globalization SJSU Bus 142 - David Bentley

  3. Japanese Quality SJSU Bus 142 - David Bentley

  4. Japanese Quality • Postwar (WW II) activity • Deming Prize • Lean operations and quality • Shigeo Shingo (7 wastes) • The 5 S’s SJSU Bus 142 - David Bentley

  5. Postwar Japan • Limited natural resources • Reduced production capacity • Strategy for developing international trade based on quality and efficient production • Assistance from U.S. occupation forces • Recognition of Deming’s contribution SJSU Bus 142 - David Bentley

  6. Deming Prize Background • Awarded by Japan: Union of Japanese Scientists and Engineers (JUSE) • First awarded in 1951 • Named after W. Edwards Deming • Categories • Deming Application Prize • Sub-categories abolished in 1995 • For divisions (until 1994) • For small businesses (until 1994) • Deming Prize for Individuals SJSU Bus 142 - David Bentley

  7. Deming Award Areas • Application Prize winners • Most winners before 2001 were Japanese • U.S. winners: Florida Power & Light (1989), AT&T Power Systems (1994),Sanden International (2006) • Most winners since 2001 Indian, Thai • Individual Prize winners • All Japanese SJSU Bus 142 - David Bentley

  8. Deming Categories – 1 • Policy • Organization and operations • Collecting and using information • Analysis • Planning for the future SJSU Bus 142 - David Bentley

  9. Deming Categories – 2 • Education and training • Quality assurance • Quality effects • Standardization • Control SJSU Bus 142 - David Bentley

  10. Lean Operations • Emphasis on value • Focus on elimination of waste • Development of tools and techniques over time • The Toyota Production System SJSU Bus 142 - David Bentley

  11. Toyota Production System • Taiichi Ohno (1912 - 1990) • “Father of the Toyota Production System” • System also known as “Lean Manufacturing” • Toyota executive and consultant to suppliers • Shigeo Shingo (1902 – 1990) • External consultant to Toyota • Poka-Yoke (mistake proofing) • Setup reduction (SMED) SJSU Bus 142 - David Bentley

  12. Shingo’s 7 Wastes • Waste of overproduction • Waste of waiting • Waste of transportation • Waste of processing itself • Waste of stocks • Waste of motion • Waste of making defective products SJSU Bus 142 - David Bentley

  13. The 5 S’s(Organizing / Eliminating Waste) • Seiri(“Separating”): get rid of unnecessary • Seiton(“Sorting”): orderly workplace • Seiso(“Cleaning”): eliminate hidden problems • Seiketsu(“Standardizing”): locations and processes • Shetsuke(“Sustaining”): discipline in maintaining the other 4 SJSU Bus 142 - David Bentley

  14. Other Japanese Characteristics • Involvement of all workers in the company • Quality Circles - Kaoru Ishikawa (1915-1989) (as implemented in the U.S.) • Limited authority • Focus within department • Often seen as added work • Ongoing • Preventive maintenance • Deming Individual Prize Winner (1952) SJSU Bus 142 - David Bentley

  15. American Quality SJSU Bus 142 - David Bentley

  16. American Quality • Preoccupation with quantity for years • Reliance on inspection (“Quality Control”) • Effect of oil embargos in the 1970s • Malcolm Baldrige Award • President’s Quality Award (PQA) (???) • Six Sigma SJSU Bus 142 - David Bentley

  17. Malcolm Baldrige Award • Awarded by US Department of Commerce (National Institute of Standards and Technology) • 1987 legislation • Named after Malcolm Baldrige (Howard Malcolm “Mac” Baldrige - American industrialist and former Secretary of Commerce) SJSU Bus 142 - David Bentley

  18. Baldrige Award Areas • Original award areas: Manufacturing, Service, Small Business • Education added in 2001 • Health care added in 2002 • Non-profit added in 2007 • Local winners • Granite Rock (1992) • Solectron Corp. (1991, 1997) SJSU Bus 142 - David Bentley

  19. Baldrige Award Categories • Leadership • Strategic planning • Customer and market focus • Information and analysis • Human resource focus • Process management • Business results SJSU Bus 142 - David Bentley

  20. Six Sigma Quality - 1 • Latest popular approach to Quality • Overall objective is to find and eliminate causes of defects in manufacturing and service processes • ± 6 standard deviations (6) from the process mean = 0.0003% defects • Represents a goal 6 ….. 6 ….. 6  SJSU Bus 142 - David Bentley

  21. Six Sigma Quality - 2 • Concept developed at Motorola by Bill Smith • Best in class = General Electric • Certification from ASQ on processes to support Six Sigma • Many consulting and training firms on how to implement Six Sigma SJSU Bus 142 - David Bentley

  22. Six Sigma at GE • “The central idea behind Six Sigma is that if you can measure how many ‘defects’ you have in a process, you can systematically figure out how to eliminate them and get as close to ‘zero defects’ as possible.” Making Customers Feel Six Sigma Quality SJSU Bus 142 - David Bentley

  23. Other Awards & Prizes • President’s Quality Award [PQA] (US) (???) • European Foundation for Quality Management (Europe) (see next slide) • National Quality Institute (Canada) • Business Excellence Award (Australia) • Etc., etc., etc. SJSU Bus 142 - David Bentley

  24. European Quality Award SJSU Bus 142 - David Bentley

  25. “Value” of Awards & Prizes • Shows effort • May largely be dependent on money spent • Used in advertising (e.g., Cadillac – 1990) • Might not reflect customer view SJSU Bus 142 - David Bentley

  26. Chinese Quality SJSU Bus 142 - David Bentley

  27. Chinese Quality • Historic high quality of porcelain, silk, etc. • Rapid change in manufacturing in last 15 years • Little infrastructure for appraising and certifying quality of subcontractors and suppliers • Recent recalls: pet food, toys, tires, toothpaste, etc. SJSU Bus 142 - David Bentley

  28. ISO Standards International Organization for Standardization (ISO) SJSU Bus 142 - David Bentley

  29. ISO Basics • Network of national standards bodies in 162 countries • Based in Geneva, Switzerland • Seeks consensus for international standards SJSU Bus 142 - David Bentley

  30. “Old” ISO 9000 Standards • ISO 9000 (series) • ISO 9001(design, develop, produce, install, service) • ISO 9002 (no design and development) • ISO 9003 (final inspection and testing) • ISO 9004 (QMS application guidelines) SJSU Bus 142 - David Bentley

  31. Current ISO Standards • ISO 9000 family – “Quality management” • ISO 9001:2008 (QMS - Requirements) • ISO 14000 family – “Environmental management” • ISO 14001:2004 (EMS - Requirements) • ISO 19011:2002 (Guidelines on Quality and/or Environmental Management Systems Auditing) SJSU Bus 142 - David Bentley

  32. Related ISO Standards • ISO 10005:2005 (Quality management – Guidelines for quality plans) • ISO 10006:2003 (Quality management – Guidelines to quality in project management) • ISO 10007:2003 (Quality management – Guidelines for configuration management) • ISO/DIS 10012:2003 (Quality assurance requirements for measuringequipment) • ISO 10014:2006 (Guidelines for managing the economics of quality) • ISO 10015:1999 (Guidelines for training) SJSU Bus 142 - David Bentley

  33. ISO 9000 Principles • Customer focus • Leadership • Involvement of people • The process approach • A systems approach to management • Continual improvement • Factual approach to decision making • Mutually beneficial supplier relationship SJSU Bus 142 - David Bentley

  34. ISO Registration Process SJSU Bus 142 - David Bentley

  35. Automotive Industry • QS-9000 (through 2006) • Common supplier quality standard • Used by Ford, GM, Chrysler • Based on ISO 9001:1994 • ISO/TS 16949:2009 • Quality systems – Automotive suppliers – Particular requirements for the application of ISO 9001:2008 SJSU Bus 142 - David Bentley

  36. ISO Registration (Certification) • What’s been good • Focus on quality • Demonstrates effort • What was bad (mostly fixed in ISO 9000:2000) • Became mechanical • Emphasized conformance to documentation, not meeting QUALITY • Didn’t include customer view SJSU Bus 142 - David Bentley

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