Chapter 8 part 3

Cause and Effect Diagrams

used to aid in brainstorming and isolating the causes of a problem

Check Sheets

used to determine frequencies for specific problems

What is Six Sigma?

A quality management process -focuses on improving the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes -The goal is to attain less than 3.4 Defects Per Million Opportunities (DPMO) -a structured and data-driven approach to drive a near-perfect quality goal, i.e., "Zero Defects"

14 Points to Guide Companies in Quality Improvement

1. Create constancy of purpose to improve product and service 2. Adopt the new philosophy 3. Cease dependence on inspection to improve quality 4. End the practice of awarding business on the basis of price 5. Constantly improve the production and service system 6. Institute training on the job 7. Institute leadership 8. Drive out fear 9. Break down barriers between departments 10. Eliminate slogans and exhortations 11. Eliminate quotas 12. Remove barriers to pride of workmanship 13. Institute program of self-improvement 14. Put everyone to work to accomplish the transform

Use of Technical Tools

-Statistical quality control. Six Sigma provides a statistical approach for solving any problem and thereby improves the quality level of the product as well as the company. -All employees should be trained to use the seven tools of quality. -Six Sigma is concerned with the permanent fix to quality problems and seeks to identify and correct the root cause of the problem

Cost of Good Quality

-Appraisal Costs -Prevention Costs

Six Sigma Methodology- Three Foundational Aspects

1. Quality is Defined by the Customer 2. Use of Technical Tools 3. People Involvement

Brown Belt

A Six Sigma Green Belt who has passed the Black Belt certification examination but has not yet completed their second Six Sigma project

Green Belt

A Six Sigma trained individual that can work as a team member on complex project and also lead small, carefully defined Six Sigma projects. On complex Six Sigma projects, green belts work closely with the Black Belt team leader to assist with data collection and analysis, and to keep the team functioning through all phases of the project.

Master Black Belt

Is a career path. A Master Black Belt has successfully led ten or more teams through complex Six Sigma projects. A proven change agent, leader, facilitator, and technical expert in Six Sigma. A seasoned individual with a proven mastery of process variability reduction, and waste reduction. Acts as an advisor to executives, and a coach and mentor on projects that are led by black belts and green belts. Functions as the keeper of the Six Sigma process, and can effectively provide Six Sigma training at all levels

Key Principles of TQM

Management Commitment Employee Empowerment Fact Based Decision Making Continuous Improvement Customer Focus

Classical versus Six Sigma Quality

The Classical View on Quality: 99% Good The Six Sigma View of Quality 99.99966% Good

Buyer's Risk

The buyer accepts a shipment of poor-quality units because the sample falsely provides a positive result against the acceptance standard (type II error)

Histogram

a graphical display where the data is grouped into ranges

Appraisal Costs

are associated with the evaluation of purchased materials, processes, products, and services to ensure that they conform to specifications Include costs for: -Testing, evaluating, and inspecting the quality of incoming materials, process setups, and products, against agreed upon specifications. -Quality assessment and approval of suppliers. -Performing audits to confirm that the quality system is operating properly.

Prevention Costs

are related to the design, implementation, and maintenance of the quality management system. They are planned, and experienced before actual products or materials are acquired or produced Include cots for: -Establishment of specifications for incoming materials, processes, products, and services -Creation of quality plans -Development, preparation, and maintenance of quality training -Creation and maintenance of the quality system

Quality Control

determine what to control -Establish standards of performance. -Measure performance, interpret the difference, take action

Six Sigma

focuses on preventing defects through problem solving

Pareto Analysis

for presenting data in an organized fashion, indicating process problems from most to least severe

Quality planning

identify internal / external customers and needs -Develop products satisfying those needs. -Mangers set goals, priorities, and compare results.

Flow Diagram

sequence of movements or actions of people or things involved in a complex system or activity

Quality Improvement

show the need for improvement -Identify projects for improvement. -Implement remedies -Provide control to maintain improvement.

Scatter Diagrams

the values of two variables plotted along two axes, to reveal any correlation present

2 key methodologies of Six Sigma

-DMADV Methodology -DMAIC Methodology

Acceptance Sampling

-When a shipment is received from a supplier, a statistically significant representative sample is taken and measured against the quality acceptance standard. -The entire shipment is assumed to have the same quality as the representative sample that was taken. -Sampling is less time-consuming than testing every unit but can result in errors:

Six Sigma Training and Certification Levels

-based on training, knowledge, and experience -yellow, green, brown, black, master black belt

Black Belt

A full-time quality professional who has a thorough knowledge of Six Sigma philosophies and principles, and possesses technical and managerial process improvement / innovation skills. Leads the Six Sigma project team and problem-solving efforts. Identifies projects and selects project team members. Trains and coaches project teams. A Black Belt is typically mentored by a master black belt

Yellow Belt

Has a basic understanding of Six Sigma Methodology and the tools in the DMAIC problem solving process. A team member that reviews processes and process improvements in support of a Six Sigma process improvement project. A person who has passed the Green Belt certification exam but has not yet completed a Six Sigma project

Cost of Quality

-An approach that supports a company's efforts to determine the level of resources necessary to prevent poor quality, and to evaluate the quality of the company's products and services. -Any cost that would not have occurred if quality was perfect, contributes to the cost of quality. -Helps a company determine the benefits and savings generated by potential process improvements.

Quality is Defined by the Customer

-Customers expect performance, reliability, competitive prices, on-time delivery, good service, clear and correct transaction processing and more. -It is vital to provide what the customers need to achieve customer satisfaction.

Cost of Poor Quality

-Internal Failure Costs -External Failure Costs

People Involvement

-Six Sigma follows a structured methodology. -It is important that all Six Sigma team members are assigned specific well-defined Six Sigma roles with measurable objectives. -A company must involve all its employees in the Six Sigma program, and provide opportunities and incentives for employees to focus their talents and ability to satisfy customers. -All employees are responsible to identify quality problems

Cause and Effect Diagram tool

-With this tool, the user can see all possible causes of a problem to help find the root cause.

The 5 How's Technique

-a questioning technique for drilling down into the details of a potential solution to a known problem -It is designed to bring clarity and refinement to a solution and arrive the root solutions (best solution). -a useful method of brainstorming resolutions to the root causes and developing action items to resolve the problem -Think of this activity as being halfway up a ladder, with 5 steps above it and 5 below. You go up the ladder by asking "why" and down it by asking "how." -The 5 Whys and 5 How's are typically used in conjunction with the Cause and Effect Diagram

Philip Crosby

-coined the phrase "quality is free" (which is also the title of his book) as defects are costly. He introduced the concepts of zero defects, and focus on prevention and not inspection. -He introduced the concepts of zero defects, and the focus on prevention not inspection. -Demonstrated what a powerful tool the cost of quality could be to raise awareness of the importance of quality. -Referred to the cost of quality as the "price of nonconformance" and argued that organizations choose to pay for poor quality. -He introduced the four absolutes of quality

Joseph Juran

-defined quality as "fitness for use". He developed the concept of the cost of quality -quality planning, quality control, quality improvement

Kaoru Ishikawa

-developed one the first tools in the quality management process, the cause and effect diagram, which is also called the "Ishikawa" or "fishbone" diagram -He is also known as the father of quality circles and helped bring this concept into the mainstream. -Further, he was a proponent of continuous customer service, meaning that a customer should continue receiving service even after receiving the product.

Total Quality Management (TQM)

-is a management philosophy based on the principle that every employee must be committed to maintaining high standards of work in every aspect of a company's operations. -a combination of quality and management tools which are designed to increase business and reduce losses resulting from wasteful practices. -There is no single academic formalization of total quality, but noted quality gurus, i.e., experts, all contributed to the basic framework

The 5 Why's Technique

-is a questioning technique for identifying the root cause of the problem -By repeatedly asking the question "Why" (five is a good rule of thumb), you can peel away the layers of symptoms which can lead to the root cause of a problem (i.e., the underlying factors or causes of an event). -At this point you understand the root cause, and can see where a change is needed. -used in the "Analyze" phase of the Six Sigma DMAIC (Define, Measure, Analyze, Improve, Control) methodology

W. Edwards Deming

-is widely considered the father of TQM. He is the creator of the Plan-Do-Check-Act model. -Stressed management's responsibility for quality. He developed 14 points to guide companies in quality improvement.

Four Absolutes of Quality

1. Quality is conformance to requirements 2. The system of quality is prevention 3. Performance standards is zero defects 4. The measure of quality is the price of nonconformance

DMADV Methodology

Define --> Measure --> Analyze --> Design -->Verify: which is a data-driven quality strategy for designing products & processes. This methodology is used when the company wants to create a new product design or process that is more predictable and defect free.

DMAIC Methodology

Define --> Measure --> Analyze --> Improve --> Control: which is a date-driven quality strategy for improving products & processes -This methodology is used when the company wants to improve an existing product or business process -the most widely adopted and recognized Six Sigma methodology in use -defines the steps a Six Sigma practitioner typically follows during a project

Implementing LEAN and Six Sigma

LEAN and Six Sigma are complementary principles with significant overlap. They are frequently implemented together, but the two initiatives approach their common purpose from somewhat different angles: The goal of LEAN is the elimination of waste and the minimization of the amount of all resources (including time) used in the operation of a company LEAN achieves its goals by using less technical tools such as value stream mapping, LEAN Layouts, Continuous Improvement, and Respect for People. Six Sigma focuses on the elimination of defects and the reduction of variations Six Sigma uses technical tools such as Root Cause Analysis, Statistical Process Control, and DMAIC. The most successful implementations begin with LEAN, followed by the more technical Six Sigma statistical tools used to resolve process problems.

Malcolm Baldrige National Quality Award

Objectives: -Stimulate firms to improve -Recognize firms for quality achievements -Establish guidelines so that organizations can evaluate their improvement and provide guidance to others Categories Measured: 1. Leadership 2. Strategic Planning 3. Customer and Market Focus 4. Information and Analysis 5. Human Resource Focus 6. Process Management 7. Business Results

Voice of the Customer (VOC)

Term used in business to describe the in-depth process of capturing internal and external customer's expectations, preferences, likes, and dislikes. Can be captured in a variety of ways: Customer Interviews Market Surveys Focus Groups Customer Specifications Observation Warranty Data Field Reports Complaint Logs

Supplier's Risk

The buyer rejects a shipment of good-quality units because the sample quality level did not meet the acceptance standard (type I error)

Six Sigma History

The concept of Six Sigma was originated by Motorola -Motorola developed the concept in the 1980's, created the methodology, and copyrighted it as well. -Motorola has documented > $16 Billion in savings as a result of Six Sigma. -Thousands of companies globally have adopted Six Sigma. This is a direct result of many of America's leaders openly praising the benefits of Six Sigma. Six Sigma became famous when Jack Welch made it central to his successful business strategy at General Electric in 1995 -Reported $200MM in savings in the first year of implementation (1996) alone

Control Charts

graph to study how a process changes over time Firms: Gather process performance data Create control charts to monitor process variability Then collect sample measurements of the process over time and plot on charts. Allows Firms to: Visually monitor process performance Compare the performance to desired levels or standards Take corrective action as necessary

Internal Failure Costs

occur when the product or service does not meet the designed quality standards, and are identified before the product or service is delivered to the customer Includes costs for: -Defective product or material that cannot be used, sold, or repaired, and the costs associated with correction of these defects. -Unnecessary work or inventory resulting from errors. -Activities required to establish the root causes of product or service failures.

External Failure Costs

occur when the product or service does not meet the designed quality standards, but is not detected until after the product or service is delivered to the customer Include costs for: -Handling and responding to customer complaints. -Failed products that must be replaced or services that are repeated. -Repair of returned products and products still in the field. -Handling and investigation of rejected or recalled products, including return transportation costs.

Quality Tools- Seven Tools of Quality Control

used by workers to identify and correct quality problems. 1. Check Sheets 2. Histograms 3. Pareto Analysis 4. Cause & Effect Diagrams 5. Flow Diagram 6. Control Charts 7. Scatter Diagrams