Session 2

1. S.P. JAIN CENTER OF MANAGEMENT Session 2 Philosophies and Frameworks

2. Leaders in the Quality Revolution • W. Edwards Deming • Joseph M. Juran • Philip B. Crosby • Armand V. Feigenbaum • Kaoru Ishikawa • Genichi Taguchi

3. Who’s Who? Juran Deming Crosby

4. Deming Chain Reaction Improve quality Costs decrease Productivity improves Increase market share with better quality and lower prices Stay in business Provide jobs and more jobs

5. Deming’s System of Profound Knowledge • Appreciation for a system • Understanding variation • Theory of knowledge • Psychology

6. Systems • Most organizational processes are cross-functional • Parts of a system must work together • Every system must have a purpose • Management must optimize the system as a whole

7. Variation • Many sources of uncontrollable variation exist in any process • Excessive variation results in product failures, unhappy customers, and unnecessary costs • Statistical methods can be used to identify and quantify variation to help understand it and lead to improvements

8. Theory of Knowledge • Knowledge is not possible without theory • Experience alone does not establish a theory, it only describes • Theory shows cause-and-effect relationships that can be used for prediction

9. Psychology • People are motivated intrinsically and extrinsically • Fear is demotivating • Managers should develop pride and joy in work

10. Deming’s 14 Points (Abridged)(1 of 2) 1.Create and publish a company mission statement and commit to it. 2. Learn the new philosophy. 3. Understand the purpose of inspection. 4. End business practices driven by price alone. 5. Constantly improve system of production and service. 6. Institute training. 7. Teach and institute leadership. 8. Drive out fear and create trust.

11. Deming’s 14 Points (2 of 2) 9.Optimize team and individual efforts. 10. Eliminate exhortations for work force. 11. Eliminate numerical quotas and M.B.O. Focus on improvement. 12. Remove barriers that rob people of pride of workmanship. 13. Encourage education and self-improvement. 14. Take action to accomplish the transformation. www.deming.org

12. Juran’s Quality Trilogy • Quality planning • Quality control • Quality improvement www.juran.com

13. Juran’s NotionsQuality as product features. • What are external customers? • What are internal customers? • How do you know what your customers want?

14. Juran’s NotionsQuality as freedom from defects. • Is satisfaction created? • The importance of service recovery. • How good is good enough?

15. Is 99.99% Good Enough? • 12 newborns will be given to the wrong parents everyday • 114,500 mismatched pairs of shoes will be shipped each year • 18,322 pieces of mail will be mishandled each hour • 2,000,000 documents will be lost by the IRS this year • 2.5 million books will be shipped with the wrong covers this year • 315 entries in Webster’s Dictionary will be misspelled

16. …still good enough? • 20,000 incorrect drug prescriptions will be written this year • 5.5 million cases of soft drinks produced this year will be flat • 291 pacemaker operations will be performed incorrectly • 3056 copies of tomorrow’s Wall Street Journal will be missing one of the three sections • How many customers will walk out of your doors and never come back? • The “silent ones” don’t stay silent for long - on average they tell six other people about their experience!

17. High Performance Organizations • Training and continuous learning • Information sharing • New roles for employees • New organizational structures • New worker-management partnerships • Compensation linked to performance skills • Employment security • Supportive work environments • Putting it all together

18. Phillip B. Crosby Quality is free . . . : “Quality is free. It’s not a gift, but it is free. What costs money are the unquality things -- all the actions that involve not doing jobs right the first time.”

19. Philip B. Crosby Absolutes of Quality Management: • Quality means conformance to requirements • Problems are functional in nature • There is no optimum level of defects • Cost of quality is the only useful measurement • Zero defects is the only performance standard www.philipcrosby.com

20. A.V. Feigenbaum • Three Steps to Quality • Quality Leadership, with a strong focus on planning • Modern Quality Technology, involving the entire work force • Organizational Commitment, supported by continuous training and motivation

21. Kaoru Ishikawa • Instrumental in developing Japanese quality strategy • Influenced participative approaches involving all workers • Advocated the use of simple visual tools and statistical techniques

22. Loss No Loss Loss 0.480 0.500 0.520 Tolerance Genichi Taguchi • Pioneered a new perspective on quality based on the economic value of being on target and reducing variation and dispelling the traditional view of conformance to specifications:

23. Deming Prize • Instituted 1951 by Union of Japanese Scientists and Engineers (JUSE) • Several categories including prizes for individuals, factories, small companies, and Deming application prize • American company winners include: Florida Power & Light, and AT&T Power Systems Division

24. Malcolm Baldrige National Quality Award • Help improve quality in U.S. companies • Recognize achievements of excellent firms and provide examples to others • Establish criteria for evaluating quality efforts • Provide guidance for other U.S. companies Malcolm Baldrige, former U.S. Secretary of Commerce

25. Criteria for Performance Excellence • Leadership • Strategic Planning • Customer and Market Focus • Information and Analysis • Human Resource Focus • Process Management • Business Results Baldrige Award trophy

26. Organizational Profile: Environment, Relationships, and Challenges The Baldrige Framework –A Systems Perspective 2 Strategic Planning 5 Human Resource Focus 1 Leadership 7 Business Results 3 Customer & Market Focus 6 Process Management 4 Information and Analysis

27. Baldrige Award Evaluation Process Receive Applications Stage 1 Independent Review Judges Select for Consensus Review? No Feedback report to applicant Stage 2 Consensus Review Judges Select for Site Visit Review? No Feedback report to applicant Stage 3 Site Visit Review Stage 4 Judges Recommend Award Recipients to NIST Director/DOC Feedback report to applicant

28. The Baldrige Award Scoring System • Three evaluation dimensions - Approach, Deployment, and Results • Scoring is linked to the importance to the applicant’s business • Scoring guidelines (Table 3.5)

29. Feedback Report • Strengths- approaches or results that demonstrate effective response to the Criteria • Opportunities for improvement- how the applicant can better address the purposes of the Criteria, or issues that require clarification

30. ISO 9000:2000 • Quality system standards adopted by International Organization for Standardization in 1987; revised in 1994 and 2000 • Technical specifications and criteria to be used as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes, and services are fit for their purpose.

31. Objectives of ISO Standards (1 of 2) • Achieve, maintain, and continuously improve product quality • Improve quality of operations to continually meet customers’ and stakeholders’ needs • Provide confidence to internal management and other employees that quality requirements are being fulfilled

32. Objectives of ISO Standards (2 of 2) • Provide confidence to customers and other stakeholders that quality requirements are being achieved • Provide confidence that quality system requirements are fulfilled

33. Structure of ISO 9000 Standards • 21 elements organized into four major sections: • Management Responsibility • Resource Management • Product Realization • Measurement, Analysis, and Iimprovement

34. ISO 9000:2000 Quality Management Principles • Customer Focus • Leadership • Involvement of People • Process Approach • System Approach to Management • Continual Improvement • Factual Approach to Decision Making • Mutually Beneficial Supplier Relationships