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Total Quality Management

Subagyo

Iegmubetter
27.4.1998

ABB

(http://www.cartoonstudio.co.uk/Pages/kmeters1.html)

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Definition of Quality

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What is Quality?

What are measures of quality for this product?

Conformance to agreed requirements - Agreed between? Fitness for purpose/use

ISO 8402 states that TQM is a:

Management approach of an organisation, centered on quality, based on the participation of all its members and aiming at long term success through customer satisfaction, and benefits to all members of the organisation and to society
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Total Quality Management (TQM): Defined


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Total quality management is defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer

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TQM Wheel
Customer satisfaction

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Nature of Quality

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Dimensions of Quality Determinants of Quality Costs of Quality

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Best-In-Class and World-Class

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Customers expectations of quality are not the same for different classes of products or services. Best-in-class quality means being the best product or service in a particular class of products or services. Being a world-class company means that each of its products and services are considered best-in-class by its customers.
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Some Dimensions of Product Quality

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Performancerelative to customers intended use Featuresspecial characteristics Reliabilitylikelihood of breakdowns, malfunctions Serviceabilityspeed/cost/convenience of servicing Durabilityamount of time/use before repairs Appearanceeffects on human senses Customer servicetreatment before/during/after sale Safety user protection before/during/after use

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Determinants of Quality

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Quality of design products/service designed based on customers expectations and desires Quality capability of production processes processes must be capable of producing the products designed for the customers Quality of conformance capable processes can produce inferior product if not operated properly Quality of customer service a superior product does not mean success; must have quality service also Organization quality culture superior product and service requires organization-wide focus on quality
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Costs of Quality

Scrap and rework - rescheduling, repairing, retesting Defective products in the hands of the customer - recalls, warranty claims, law suits, lost business, Detecting defects - inspection, testing, . Preventing defects - training, charting performance, product/process redesign, supplier development, .
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Prevention Versus Detection


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This is a central theme of all Quality approaches Detection allows a mistake or error to become a DEFECT!

Passed on to next process undetected Much more difficult to identify Costs more to put right Difficult to identify the root cause

Can often pass through the system to the external customer! Preoccupied with the OUTPUT from the process
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Detection based Quality


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The Total Process


People Equipment Material Method Measurement Environment

Process Performance

Output From Process


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Action on the output

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Prevention Versus Detection


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Prevention - the basis of improvement!

Prevention stops a mistake or error from being passed on


Easy to identify the source of error Costs less to rectify Rapid solution

Provides a basis for improvement

Preoccupied with the Process itself rather than the output of the process
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Traditional View of How Much to Inspect


Annual Cost ($) Optimal Level of Inspection Total Quality Control Costs
Cost of Scrap, Rework, and Detecting Defects Cost of Defective Products to Customers
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% of Products Inspected
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Prevention based quality


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Design of Product & Process Action on the Process People Equipment Material Method Measurement Environment Process Performance

Output From Process


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Action on the output

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Impact on Business

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Quality has an impact at every level of the business


External customers

Delivery, communication, responsiveness, product/service price Process and information quality, cost Process and information quality, cost Raw materials and service quality, price

Internal customers

Internal suppliers

External suppliers

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Customer-Supplier model
Process A
Customer Supplier Goods & Services

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Process B
Customer Supplier

Goods & Services

Process C
Customer Supplier

Your Supplier

Feedback

Your Process

Feedback

Your Customer

Requirements

Requirements
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Customer - Supplier Relationship


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Supplier issues

Who are my suppliers? What are their requirements? How do I communicate my requirements? Does my supplier have the capability to meet my requirements? Do they continually meet my requirements? Do I inform they of changes to my requirements?

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Customer - Supplier relationship

Customer issues

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Who are my customers? What do they need? How do/can I find out what their requirements are? How can I measure my ability to meet those requirements? Do I have the capability to meet those requirements? Do I continually meet those requirements? How do they measure my performance? How do I monitor changes in my customers requirement?

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Development of Quality (sampai sini)


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Four level model

Inspection

After then event screening - Detection based

Quality Control

Introduction of basic systems - still Detection Based


Development of complex systems - Prevention based Development of culture - People based
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Quality Assurance

Total Quality Management

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Inspection
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Inspection is defined as (ISO8402)

Activity such as measuring, examining, testing, or gauging one or more characteristics of an entity and comparing the results with specified requirements in order to establish whether conformity is achieved for each characteristic

Application points within the process Third party inspection or operator self inspection Decisions scrap, rework, modification, concession

After-the-event screening process


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Inspection

Lowest level of quality development

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Key product characteristics examined


Compared to known standard Lack of ownership After the event Lack of feedback to source

Inspection will not provide any basis for process improvement Debatable if it provides an effective screening against defects reaching the external customer
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Quality Control
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Defined as (ISO8402)

Operational techniques and activities that are used to fulfil requirements for quality
Developed from inspection of methods, systems and tools & techniques More emphasis on feedback Main mechanism still inspection based

Physical characteristics of product


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Quality Control

The second level of quality development

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Implied use of control systems

Raw materials, drawing issues, inspection reports


Calibration, limited quality audits Use of basic QM tools

Development of inspection procedures

Defect recording and analysis Quality costs still unknown

Limited use of operator self inspection Reliance on inspection to catch non-conforming work
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Still largely based on goods inwards inspection

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Quality Control
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QC is the systematic assessment of goods and services to check their conformance It will not improve quality, just highlight when it is not present In many cases QC does not identify the root cause of the non-conformance

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Quality Assurance
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Defined as (ISO8402)

All the planned and systematic activities

implemented within the quality system, and demonstrated as needed to provide adequate confidence that an entity will fulfil requirements for quality

Issues of progression from QC to QA

Change in emphasis from product to process

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Quality Assurance
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Third level of quality development


Represents a shift from detection to prevention Planned and systematic actions defined

Existence of mature quality system Greater use of QM tools eg. SPC, QFD Known levels of quality performance and costs ISO 9000 or major customer approval

Most mature manufacturers at at this level


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Quality Assurance

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QA systems aim to proceduralise organizational activities to increase uniformity and conformity Adoption and use of third party approval, such as a major customer

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Quality Assurance: Underlying Principles


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1. 2. 3. 4.

Define policies and objectives. Ensure they are understood and accepted. Specify roles, responsibilities, and authorities. Ensure they are understood and accepted. Specify and communicate expectations. Identify and allocate resources to achieve them. Strive to improve.

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Quality Assurance: Underlying Principles (continued)


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5.

6.
7.

8.

Ensure people are competent at the work they do. Ensure the right people have the right information at the right time. Seek and use relevant experience. Plan and control the work.

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Quality Assurance: Underlying Principles (continued)


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Use the right materials, tools, and processes. Control any changes to them. 10. Assess work to ensure it meets expectations. 11. Identify and remedy errors and deficiencies. 12. Periodically review management processes to improve effectiveness and efficiency.
9.

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Total Quality Management

Represents the most advanced stage of quality development A Management philosophy Application of QM to all aspects of business

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Focused on the requirements of the customer Recognizes the importance of suppliers Company wide approach

Continual improvement Integration of all quality systems and procedures Development of organizational culture
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Total Quality Inspection Quality Quality Control Assurance Management

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TQM Principles
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Internal customer supplier relationship Continuous Improvement Teamwork Employee participation/ development Training and education Suppliers and customers integrated into the process Honesty, sincerity & care
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Starting TQM is like pushing a boulder up a mountain. hard work!!

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Along the way its gets harder People get left behind Fall out and it feels like youre the only one trying!

But eventually it gets to a point when the process gathers speed and becomes unstoppable!!!
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Quality Improvement process


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Position before

Improvement

Introduction
of TQM

Renewal points and possible loss of gains

Time
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Quality Improvement process


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Continuous Improvement

Many small improvements

Position before Introduction of TQM

Improvement

Renewal points and possible loss of gains

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Time

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Levels of TQM adoption


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Permanency of TQM

6. World Class

5. Award Winners

4. Improvers 3. Tool-pushers 1. Uncommitted 2. Drifters

Level of TQM adoption


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Levels of TQM Adoption

Uncommitted

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Not yet started a formal process of quality improvement ISO9000 registered, but not utilised effectively Basic tools & techniques in use from customer pressure No long term plan for quality improvement Not aware of major benefits to be gained through quality

Uncommitted to any long term plan Dont really see any benefit to quality improvement

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Levels of TQM Adoption


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Drifters

Existing quality programme for up to 3 years Aware of Received Wisdom of quality gurus Initial programme probably fizzled out Ready for different approach but unsure which Quality improvement still perceived as a programme rather than a process

Drift from one programme to another Change of approach sparked by new senior executive
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Levels of TQM Adoption

Tool-Pushers

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More experience of quality improvement; up to 5 years Will have experience of SPC, Quality Circles, and other Quality Planning tools such as QFD, FEMA, DPA Early success with one approach but has now fallen in to disuse Not all members of the management team are committed to quality; lack of supportive training

Looking for quick fixes and latest management fad Right kind of signal to customers, but under surface a fire-fighting culture still remains
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Levels of TQM Adoption

Improvers

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Extensive experience of ongoing quality improvement Understand that TQM is not a short sprint Adopted a continuous improvement approach Quality Champion culture starting to emerge Company wide education in place and ongoing Demonstrable progress made in critical business areas

Still perhaps reliant on a few key individuals Moving in the right direction, but realize they have a long way to go
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Levels of TQM Adoption

Award Winners

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Capable of competing for major quality awards

EFQM Quality Award, MBNQA, Deming Prize

Leadership culture ingrained throughout the organisation Several successful organizational changes taken place Fully participative organizational culture TQM view sincerely as a way of managing the business

This level marks the end of the TQM apprenticeship Fewer than 200 companies world-wide

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Levels of TQM Adoption

World Class

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Total integration of quality improvement and business strategy Demonstrates sustained award winning performance

Japan Quality Control medal award

All employees share pursuit of never ending customer satisfaction TQM not just a business strategy, but a way of life

Possibly fewer than 15 companies can be considered at this level world-wide


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2003 Categories and Items Point Values 1 Leadership 120


1.1 Organizational Leadership 70
1.2 Social Responsibility 50

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2 Strategic Planning 85
2.1 Strategy Development 40
2.2 Strategy Deployment 45

3 Customer and Market Focus 85


3.1 Customer and Market Knowledge 40
3.2 Customer Relationships and Satisfaction 45
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4 Measurement, Analysis, and Knowledge Management 90


4.2 Information and Knowledge Management 45

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4.1 Measurement and Analysis of Organizational Performance 45

5 Human Resource Focus 85


5.1 Work Systems 35
5.2 Employee Learning and Motivation 25 5.3 Employee Well-Being and Satisfaction 25

6 Process Management 85
6.1 Value Creation Processes 50 6.2 Support Processes 35 ______________________________
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7 Business Results 450


7.1 Customer-Focused Results 75 7.2 Product and Service Results 75 7.3 Financial and Market Results 75 7.4 Human Resource Results 75 7.5 Organizational Effectiveness Results 75 7.6 Governance and Social Responsibility Results 75

TOTAL POINTS 1000 For more information, go to: http://baldrige.nist.gov/


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Seven Key Areas Specific to Winning the Award


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1. 2.

3.
4. 5. 6. 7.

Leadership Strategic Planning Customer and Market Focus Information and Analysis Human Resources Development and Management Process Management Business Results

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Characteristics of a Baldrige Award Winner


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The companies formulated a vision of what they thought quality was and how they would achieve it.

Senior management was actively involved.


Companies carefully planned and organized their quality effort to be sure it would be effectively initiated.

They vigorously controlled the overall process.

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The Board of Examiners

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Independent board researches each competing organization, and follows the specific criteria previously mentioned Site visits consist of 4-6 examiners Examiners are all volunteers Appointment to the Board of Examiners is a very prestigious honor
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Exercise
1.

2. 3.

How many companies are given the MBNQA each year? a. 4 b. 8 c. 6 How much are the board of examiners paid for their position? How many key areas of each company are examined by the board during review? a. 10 b. 3 c. 9 d. 7
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Exercise Answers
C; 6 companies are given the award each year 2. Nothing; the board is a group of volunteers of experts from industry, education, government and non-profit organizations 3. 7; there are seven key areas each with a relative number of points adding to the total score
1.
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Quality Gurus
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W. Edwards Deming

Assisted Japan in improving productivity and quality after World War II In 1951 Japan established Deming Prize US was slow in recognizing his contributions Introduced Japanese companies to the Plan-DoCheck-Act (PDCA) cycle (developed by Shewart) Developed 14 Points for managers

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PDCA Cycle
4. ACT 1. PLAN Permanently Identify imimplement provements and improvements develop plan
3. CHECK Evaluate plan to see if it works 2. DO Try plan on a test basis

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Demings 14 Points for Managers


1. Create constancy of purpose toward product
2.
3. 4. 5.

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quality to achieve organizational goals Refuse to allow commonly accepted levels of poor quality Stop depending on inspection to achieve quality Use fewer suppliers, selected based on quality and dependability instead of price Instill programs for continuous improvement of costs, quality, service, and productivity

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Demings 14 Points for Managers


6. Train all employees on quality concepts

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7. Focus supervision on helping people do a better job 8. Eliminate fear, create trust, and encourage two-way communications between workers and management 9. Eliminate barriers between departments and encourage joint problem-solving 10. Eliminate the use of numerical goals and slogans to make workers work harder
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Demings 14 Points for Managers

11. Use statistical methods for continuous improvement of quality and productivity instead of numerical quotas 12. Remove barriers to pride of workmanship 13. Encourage education and self-improvement 14. Clearly define managements permanent commitment to quality and productivity

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Quality Gurus

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Philip B. Crosby

Wrote Quality Is Free in 1979 Company should have the goal of zero defects Cost of poor quality is greatly underestimated Traditional trade-off between costs of improving quality and costs of poor quality is erroneous

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Quality Gurus

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Armand V. Feigenbaum

Developed concept of total quality control (TQC) Responsibility for quality must rest with the persons who do the work (quality at the source)

Kaoru Ishikawa

Wrote Guide to Quality Control in 1972 Credited with the concept of quality circles Suggested the use of fishbone diagrams

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Quality Gurus
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Joseph M. Juran

Like Deming, discovered late by US companies Played early role in teaching Japan about quality Wrote Quality Control Handbook Contends that constant adjustment of processes to achieve product quality is not effective Instead, products should be designed to be robust enough to handle process and field variation

Genichi Taguchi

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Vilfredo Pareto
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Vilfredo Pareto (1848-1923) was an Italian economist and a political sociologist. He devised the law of the trivial many and the critical few, known as the 80:20 rule. Paretos Law states that in many business activities 80% of the potential value can be achieved from just 20% of the effort. The remaining 80% of effort shows relatively little return.
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Six Sigma?

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Contributions of Various Disciplines


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Finance: Measuring the cost of poor quality Industrial Engineering: Design of integrated systems, measurement, problem solving, work analysis Information Technology: Measurement, analysis, and reporting on quality Marketing Research: Competitive standing on quality, understanding customer desires Operations Management: Management of integrated systems

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Contributions of Various Disciplines (Contd)


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Operations research: Analyzing product design alternatives for optimization Organizational Behavior: Understanding quality culture, making teams effective. Organizational Effectiveness: Satisfying the needs of both internal and external customers.
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Contributions of Various Disciplines (Contd)

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Strategic Planning: Quality as a means of achieving a unique competitive advantage. Systems Engineering: Translating customer needs into product features and process features Value Engineering: Analysis of essential functions needed by customer to find the lowest cost way of providing these functions that meet quality, reliability, and performance requirements.
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Why Transformations to Total Quality Do Not Persist?


Managers are not accountable to their people for the quality of their leadership/management
Michael Beer Harvard Business School & Center for Organizational Fitness

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27.4.1998

Programs Often Arise From A Tacit Collusion Among Senior Executives, Staff Groups, and Consultants
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Short term Benefits

Long Term Costs

For executives: The appearance of quick, painless, measurable results For Internal Staff: Increased responsibility & visibility For Consultants: A steady income stream
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Lost time, energy & dollars


Increased cynicism Change inoculation

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The Silent Killers


Undiscussible Barriers to Strategy Implementation
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Unclear strategy and conflicting priorities Leadership style - tops down or laissez faire An Ineffective top team Poor coordination Closed vertical communication/low trust Inadequate leadership/management skills and development in organization

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The Dynamics of Ineffective (Low Quality) Management

Ineffective Top Team

Quality of Direction

Top Down or Laissez-faire Senior Management Style

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Unclear Strategy, Values & Priorities

Quality of
Poor Coordination Across Functions & Businesses

Poor Vertical Communication

Learning

Quality of Implementation
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Inadequate Down the Line Leadership Skills & Development

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Quality of Management In Each Unit is the Key

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A quality culture occurs when leaders have the will and skill to engage their organization in an inquiry process about how well their organization and leadership fits their espoused strategy and values.

An Honest Conversation is Needed!

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