Chapter 8 Quality Management – Focus on 6 Sigma

1. Chapter 8Quality Management – Focus on 6 Sigma • Total Quality Management Defined • Malcolm Baldrige National Quality Award • Components of Quality • Costs of Quality • Continuous Improvement • Six Sigma • Quality Tools • Benchmarking • Fail-safe Design • ISO 9000

2. Total Quality Management (TQM)Defined • Total quality management: managing the entire organization so that it excels on all dimensions of products and services that are important to the customer.

3. Malcolm Baldrige National Quality AwardEstablished 1987, Revised in 1999 • Leadership • Strategic Planning • Customer and Market Focus • Information and Analysis • Human Resource Focus • Process Management • Business Results

4. Categories for the Baldrige Award • Manufacturing companies or subsidiaries that • Service companies or subsidiaries that sell service • Small businesses • Health care organizations • Educational institutions

5. Components of Quality • Design quality: Inherent value of the product in the marketplace • Conformance quality: Degree to which the product or service design specifications are met

6. Costs of Quality Costs of Quality

7. Continuous Improvement (CI) • Management's view of performance standards of the organization • The way management views the contribution and role of its workforce

8. CI Methodology: PDCA Cycle (Deming Wheel)

9. Six Sigma Quality • A philosophy and set of methods companies use to eliminate defects in their products and processes • Seeks to reduce variation in the processes that lead to product defects • The name, “six sigma” refers to the variation that exists within plus or minus six standard deviations of the process outputs

10. Six Sigma Quality (Continued) • Six Sigma allows managers to readily describe process performance using a common metric: Defects Per Million Opportunities (DPMO)

11. Six Sigma Quality (Continued) Example of Defects Per Million Opportunities (DPMO) calculation. Suppose we observe 200 letters delivered incorrectly to the wrong addresses in a small city during a single day when a total of 200,000 letters were delivered. What is the DPMO in this situation if 2 opportunities for error exist for each letter?

12. Six Sigma Quality: DMAIC Cycle • Define, Measure, Analyze, Improve, and Control (DMAIC) • Developed by General Electric as a means of focusing effort on quality using a methodological approach • Overall focus of the methodology is to understand and achieve what the customer wants • DMAIC consists of five steps….

13. Six Sigma Quality: DMAIC Cycle (Cont.) 1. Define (D) 2. Measure (M) 3. Analyze (A) 4. Improve (I) 5. Control (C)

14. Example to illustrate the DMAIC process… • Suppose we are a manufacturer of breakfast cereals. Consumer Reports has just published an article that shows that we frequently have less than 16 ounces of cereal in a box. • What should we do?

15. Step 1 - Define • Customers – • Project – our boxes of cereal are reported to contain less than 16 ounces of cereal. Determine how large the problem is and what should be done about it. • Critical-to-quality characteristic:

16. 2 - Measure • How and what should would we measure to evaluate the extent of the problem? • What are acceptable limits on this measure?

17. 2 – Measure (continued) • Let’s assume that the government says that we must be within ± 5 percent of the weight advertised on the box. • Upper Tolerance Limit = • Lower Tolerance Limit =

18. 2 – Measure (continued) • We go out and buy 1,000 boxes of cereal and find that they weigh an average of 15.875 ounces with a standard deviation of 0.529 ounces. • What percentage of boxes are outside the tolerance limits?

19. Process Mean = 15.875 oz. Std. Dev. = 0.529 oz. Upper Tolerance Limit = 16.8 oz. Lower Tolerance Limit = 15.2 oz. What percentage of boxes are defective (i.e. less than 15.2 oz)?

20. Process Mean = 15.875 oz. Std. Dev. = 0.529 oz. Upper Tolerance = 16.8 oz. Lower Tolerance = 15.2 oz.

21. Step 3 – Analyze - How can we improve the capability of our cereal box filling process? • Decrease Variation • Center Process • Increase Specifications

22. 3 2 1 0 1 2 3 Step 4 – Improve: How good is good enough? Six sigma philosophy: minimum of 6s from process center to nearest spec 12s 6s LS US

23. Six Sigma Impact • With 1.5s shift in either direction from center (process will move), 3.4 parts/million “bad”. • Implies 2 parts/billion “bad” with no process shift 6s 6s 3 2 1 0 1 2 3 LS US

24. Step 5 – Control • Statistical Process Control (SPC) • Use data from the actual process • Estimate distributions • Look at capability - is good quality possible? • Statistically monitor the process over time

25. Six Sigma Roles and Responsibilities • Executive leaders must champion the process of improvement • Corporation-wide training in Six Sigma concepts and tools • Setting stretch objectives for improvement • Continuous reinforcement and rewards

26. APPLICATIONS FOR PROBLEM SOLVING TOOLS/TECHNIQUESBrassard, Michael. The Memory Jogger, Goal/QPC: Methuen MA, 1988

27. Example: Process Flow Chart Material Received from Supplier No, Continue… Inspect Material for Defects Defects found? Yes Can be used to find quality problems. Return to Supplier for Credit

28. CHECK SHEETS (or tally sheets) • Simple tool to record frequency of an event: Use it to gather data to begin to detect patterns. Often this is the first step in most problem solving cycles. • HINTS FOR USE:

29. A Check Sheet Number of Customer Complaints.

30. PARETO CHARTS • A vertical bar graph that helps us prioritize problems • Portrays attribute data (frequency of each type of defect or problem) gathered from check sheets.

33. The results or effect. Possible causes: Machine Man Effect Environment Method Material Example: Cause & Effect Diagram

34. UCL CL LCL Example: Control Charts Can be used to detect unusual variations in ongoing production process quality and quality conformance to stated standards of quality. 1020 1010 1000 990 980 970 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

35. Example: Histogram Defects in lot Number of Lots 0 1 2 3 4 Data Ranges, i.e., temperature

36. SCATTER DIAGRAMS: These charts portray the relationship between two variables. Use them to explore hypotheses you generate about causes and effects. If a relationship shows some correlation check it out mathematically.

37. Other Six Sigma Tools • Failure Mode and Effect Analysis (DMEA) is a structured approach to identify, estimate, prioritize, and evaluate risk of possible failures at each stage in the process • Design of Experiments (DOE) a statistical test to determine cause-and-effect relationships between process variables and output

38. Benchmarking 1. 2. 3. 4.

39. The Shingo System: Fail-Safe Design • Shingo’s argument: • Poka-Yoke includes:

40. ISO 9000 • Series of standards agreed upon by the International Organization for Standardization (ISO) • Adopted in 1987 • More than 100 countries • A prerequisite for global competition? • ISO 9000 directs you to "document what you do and then do as you documented."