Managing for Quality

Dr. Ron Tibben-Lembke

The Big Man
W. Edwards Deming
 Ph.D. in Physics
 Western Electric in 1920’s, 30’s.
 WWII taught Quality Control for war effort
 Ignored after the war
 Japan wanted to learn from the US
 Deming went to help with census
 Started teaching them quality control
 1951 Deming Prize for high level of achievement in quality
practices
 1980 NBC “If Japan Can…Why Can’t We?” US discovers
Quality Philosophy
 “A product or service possesses quality if it helps
somebody and enjoys a good and sustainable market.”
 Variation is the cause of poor quality
 The Process
 Product/service design
 Manufacture/service delivery
 Test
 Sales
 Market surveys
 Redesign and improvement
 Improve Quality

Chain Reaction Costs decrease because of less

rework, fewer mistakes, delays,
better use of time & materials

Productivity
Improves

Capture market with better

quality and price

Stay in business

Provide jobs and

more jobs
System of Profound Knowledge
1. Systems
1. Buying at lowest cost ignores everything else
2. Don’t suboptimize performance of one part at the expense
of total performance
2. Understanding variation
1. Variability is inherent in everything
2. Variation from human behavior hurts quality
3. Theory of Knowledge
1. Experience is not enough. You need a theory
4. Psychology
1. Fear and pay are not motivators
If you don’t get it…
 Systems:
 See symptoms, not causes
 Don’t see effects of one part on the others
 Variability
 See trends where there are none, miss others
 Psychology
 Create cynicism, demoralization, guilt, resentment,
burnout, craziness, and turnover
 Theory of Knowledge
 Problems remain unsolved, despite best efforts
Deming’s 14 Points
1. Create a vision and demonstrate commitment
1. Long-term vision
2. Companies purpose is to serve their customers and
employees, not simply for profit
3. Invest in innovation, training, research
4. Improve competitive position
5. Top management is responsible for this
6. Effective leadership begins with commitment
14 Points
2. Learn the New Philosophy
1. Quota-driven, adversarial management won’t work
2. That ignores importance of quality improvement
3. Labor and management have to cooperate to improve
the customers’ satisfaction
4. Keep training people – turnover does exist
3. Understand Inspection
1. Routine inspection – let someone else fix it
2. Increases costs in the end (no rework in services)
3. Inspect your own work and fix it
4. Don’t Buy on the Cost per Part
Basis
 Don’t buy from several for competition
 Increases variability
 Work with suppliers in long-term relationships
 Improve quality with your suppliers
 Also get volume discounts, fewer setups
 Supplier-customer bond
5. Improve Constantly and Forever
 Reduce causes of variation
 Engage all employees
 How to do jobs more efficiently
 More effectivelye
 Continuous Process Improvement now is mandatory
6. Institute Training
 People are a valuable resource and want to do a good
job
 They need training to know how to do a good job
 Invest in their future
 Training should include tools for
 Diagnosing
 Analyzing
 Solving quality problems
 Identify improvement opportunities
7. Institute Leadership
 The job of management is leadership, not supervision.
 If supervisors don’t know the job, they can’t lead
 Focus on getting product “out the door”
 Good supervisors are coaches, not prison guards
8. Drive Out Fear
 Managers and workers must have mutual respect
 Pointing out quality problems will miss quotas
 Deming story about not fixing a machine
 Auto plant: workers knew more than the “experts”
9. Optimize the Efforts of Teams
 People have to understand what customers want
 Union vs. Management
 Management trying to exploit workers
 Unions keeping to piece-rate known systems
 Hillerich & Bradsby
10. Eliminate Exhortations
 Do you work better with a poster on the wall?
 Slogans assume quality problems caused by people
 Deming thinks the system is responsible for problems
 Workers demoralized when they cannot fix defects,
and yet are held accountable
 Workers’ attempts to fix problems only cause more
variation
11. Eliminate Numeric Quotas
 They do not encourage improvement
 If you do improve it, they’ll just raise the quota
 Risk of missing quotas
 Once you meet the standard, why try harder?
 Arbitrary goals are demoralizing without a plan of how
you can reach those goals
 Variability in system year-to-year
12. Remove Barriers to Pride in
Workmanship
 People are treated like a commodity
 Work nights to make up for cut positions
 Don’t make your people compete against each other
 Behavior driven by what boss wants, not Quality
13 Education & Self-Improvement
 Not job-specific
 Many benefits, some specific to job, others broader
14. Take Action
 Accomplish the Transformation
 Start the cultural change with top management
 People will be skeptical until they start to see change
Joseph Juran
 Joined Western Electric in 1920s.
 1951 – Quality contol handbook
 Taught quality principles to Japanese in 1950s
 Quality directed by senior management
 Train whole mgt hierarchy in quality
 Strive for evolutionary changes in Quality
 Report progress to executive levels
 Involve the workforce in quality
 Quality part of reward/recognition structure
Difference in Juran
 Not a major cultural shift
 Top management understands money
 Workers understand parts
 Middle management has to translate
 Eliminate defects through statistical study
Views of Quality “Fitness for Use”
 Quality is related to:
 Product performance that results in customer
satisfaction
 Freedom from product deficiencies, which avoids
customer dissatisfaction
 The mission of the firm is to:
 Achieve high design quality
 The mission of each department is to:
 Achieve high conformance quality
Quality Trilogy
 Quality Planning
 Preparing to meet quality goals
 Quality control
 Meeting quality goals during operations
 Quality improvement
 Breaking through to unprecedented levels of
performance
Juran’s Detailed Program
 Prove the need for improvement
 Identify projects for improvement
 Organize support for the projects
 Diagnose the causes
 Provide remedies for the causes
 Prove remedies are effective under operating
conditions
 Provide control to maintain improvements
Philip Crosby
 Corporate VP for Quality at International Telephone
and Telegraph, ITT for 14 years.
 Quality is Free – 1 million copies sold
Philip Crosby
 Quality means conformance to requirements, not
elegance
 Either you meet the requirements or not
 Determine requirements up front, and very carefully
 There is no such thing as a “quality” problem
 There are accounting, mfg, design problems
 Quality originates in those depts., not in QC
 There is no “economics of quality”
Crosby Philosophy
 Only quality cost is non-conformance
 15-20% of sales on quality costs
 Well-run, it can be 2.5%
 Measure & publicize cost of poor quality
 Provides visible signs of improvement
 Zero Defects
 Do it right the first time, prevent defects, don’t fix them
 Human errors from lack of attention, because we
assume errors are inevitable
 Deming: what are you talking about?
Basic Elements of Improvement
 Determination – top management must take Q
seriously
 Education – everyone knows the absolutes
 Implementation – everyone in management has to
understand the implementation process
Similarities & Differences
 Quality is imperative for competitiveness
 Top management must lead the way
 Quality efforts save, not cost, money
 Continuous, never-ending improvement
 Importance of understanding the customer’s needs
 Worker / management partnership