1 TQM 15.760 TOTAL QUALITY MANAGEMENT THEMES FOUR LEVELS OF QUALITY FOUR THOUGHT REVOLUTIONS Customers first Continuous Improvement Total Participation Societal Learning ORGANIZATIONAL MANAGEMENT Information & Measurement Systems Education Incentive Systems Organizational Change2 Four Levels of Quality 1. FITNESS FOR STANDARD -inspection oriented -no consciousness to customer/mkt 2. FITNESS FOR USE -Must satisfy customer need for use -Hotel shampoo & body oil 3. FITNESS FOR MARKET -Must achieve low cost as well as 1 & 2 high cost low cost 4. FITNESS FOR LATENT REQ'TS -Listening to the voice of the customer -V-8 engine, Swatch -Uncovering latent req't adds value3 ==> need continuous innovation4 TQM: Four Thought Revolutions 1. Customer-First Revolution (From "Product-out to "Market-in") market-in work specs job descrip. satisfy customers (internal & external) means purpose satisfy? yes noimprove Develop Product product-out output5 2. Continuous Improvement Revolution Fundamental Concept: PDCA (Observe, Assess, Design, Intervene) Quality Control: Manage known sources of variation -process control charts -management by exception -ROI control Reactive Quality Management: Problem solving -application of SQC tools (Pareto anlysis, proeess flow chart, fishbone diagrams, histograms) Proactive Quality Management: Finding hidden opportunities MANAGEMENT BY FACT: "IN GOD WE TRUST;6 ALL OTHERS BRING DATA" 3. Total Participation Revolution -Total Involvement of CEO (Leadership) -Quality Specialist ----> All Employees -Build Infrastructure: goals, training, promotion, feedback, diagnosis, etc.7 4. Societal Learning Revolution Success stories need wide diffusion (Baldridge, Deming Awards) In Japan: progression through -Process industries -Mass Production -Small Volume Manufacturing -Construction -Services Role of outside change agents -Deming, Juran, Shiba Role of University/Industry Consortia -MIT: Center for Quality Management Leaders for Manufacturing8 PRINCIPLES OF LEADERSHIP 1. LEADERS LEAD BY EXAMPLE -LEADERS MUST BE ROLE MODELS -LIVE YOUR LIFE AS A LEADER 2. LEADERS LEAD BY THEIR COMMITMENT -STATE CLEARLY YOUR COMMITMENTS -DEMONSTRATE YOUR COMMITMENT -HONOR YOUR COMMITMENTS 3. SET STANDARDS FOR -DISCIPLINE -ETHICS -ENTHUSIASM 4. MAKE EACH EMPLOYEE FEEL THAT HE/SHE MATTERS 5. CELEBRATE/RECOGNIZE ACHIEVEMENTS 6. BE A GOOD LISTENER 7. BE CONSISTENT AND PREDICTABLE9 TQM GOAL: HABITUAL, CONTINUOUS IMPROVEMENT IN PURSUIT OF PERFECT PRODUCTION -Zero Defects -Zero Inventories -Zero Lead Times & Cycle Times -Zero Injuries -Zero Machine Downtime -Zero Customer Returns -Zero Warranty Costs -Zero Absenteeism -Process Capability > 2 and incr. -Rapid Product Introduction -Rapid Learning -Teamwork -High Morale10 -Pride11 QUALITY INFORMATION SYSTEMS OBJECTIVE: RAPID FEEDBACK From Customers: -Field personnel reports -Customer interviews & surveys From Competitors/External Studies: -Benchmarking In the Production/Delivery System: Rapid Feedback Systems: Detailed, Comprehensive, Fast -Who are customers/suppliers? -Faster flow times==>less tracking -Tight Feedback Loops -CIM oriented--much integration Provide Data on: -Defects, Downtime, Warranties, Returns -Inventories, Lead Times, Cycle Times -Injuries, Absenteeism, Turnover -Process Capability, Learning Rates -Vendor Quality12 -Quality Costs13 QUALITY DECISION TOOLS AND DATA ANALYSIS DEMING: SIX SQC TOOLS THAT EVERYONE SHOULD KNOW AND USE 1. Pareto Analysis 2. Process Flow Chart 3. Fishbone (Cause & Effect) Diagrams 4. Histograms 5. Control Charts 6. Scatter Plots14 WE HAVE TOOLS FOR TWO TYPES OF DATA: 1. NUMERICAL DATA -HISTOGRAMS -PARETO DIAGRAMS -CONTROL CHARTS -SCATTER PLOTS -PROCESS CAPABILITY 2. LANGUAGE DATA -CAUSE & EFFECT DIAGRAMS -KJ (or “LP” PROCESS (AFFINITY DIAGRAMS) MANY OF THE LANGUAGE DATA TOOLS ARE NOT WIDELY TAUGHT IN THE WEST.15 Quality Economics -Macro: International Competitiveness -Micro: Quality/Productivity Relation (Economics of DIRTFT) -Cost of Quality: Careful Analysis and Accounting -Failure Costs -Appraisal Costs -Prevention Investments -Revenue effects of quality Contributions of Taguchi -Quality Loss Function -Two-step process for parameter optimization (control variance and mean)16 -Orthogonal Arrays for experimental design PRODUCT DEVELOPMENT LEVERAGE APPROXIMATELY 75% OF LIFE CYCLE (DESIGN AND MANUFACTURING) COSTS ARE DETERMINED DURING THE PRODUCT DEVELOPMENT PROCESS Concurrent Design of Products and Processes Whitney & Nevins, et al McGraw-Hill 1989 PRODUCT DEVELOPMENT IN THE JAPANESE AUTOMOBILE INDUSTRY (COMPARED WITH U.S.): --25% FASTER --50% FEWER ENGINEERING HOURS (EUROPEANS ARE FARTHER BEHIND) Product Development Performance Clark & Fujimoto HBS Press 199117 ACTIVE PARTICIPATION OF ALL PLAYERS IS CRITICAL Customer-driven Requirements Suppliers (Vendor Management) Company-wide Involvement -Manufacturing -Marketing -Engineering (Design of Products, Processes, Systems) -Purchasing -Quality Assurance -Workforce Participation -Distribution and Field Service18 -Personnel19 CONTINUOUS TRAINING AND EDUCATION -General Quality Concepts -Statistical Quality Control -Cost of Quality -Problem Solving -Decision Making -Teamwork -Experimental Design -Parameter Optimization -Customer/Supplier Analysis -Design for Manufacturability WHO GETS WHAT TRAINING? WHO DOES THE TRAINING? WHO DESIGNS THE CURRICULUM? MOTIVATION FOR LEARNING20 SUPPLY CHAIN MANAGEMENT Schonberger on Supplier Development -RELY ON FEWER, BETTER SUPPLIERS -"TREAT THEM LIKE FAMILY" -EMPHASIZE PARTNERSHIP WITH ORGANIZATIONAL INTERACTION ON ALL LEVELS SINGLE SOURCE MULTIPLE SOURCES ______________ ________________ Get to know each supplier better QC is easier DFM is easier Short supply lines less risk to supplier strikes/shutdowns lower spot prices less scrutiny of each21 SUPPLY CHAIN MANAGEMENT: DEMONSTRATE TO CUSTOMERS: Quality at the Source Process Capability Declining Nonconformities Declining WIP, LT, Space, Flow Dists Operators -cross-trained, doing Prev Maint -presenting on SPC, Setup Reduction -charting probs, processes/methods -trained in JIT/TQC Concurrent Design Competitive Analysis Flexibility of labor and equipment Dedicated Capacity Exact counts in standard containers COMMITMENT TO World Class STATUS22 EMPLOYEE INVOLVEMENT "IF A FIRM THAT UTILIZES THE MINDS OF ONLY 50% OF ITS EMPLOYEES COMPETES WITH A FIRM THAT UTILIZES THE MINDS OF 100% OF ITS EMPLOYEES, WHICH