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The ASQ Certified Quality Improvement Associate Handbook
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The ASQ Certified Quality Improvement Associate Handbook Fourth Edition
Grace L. Duffy and Sandra L. Furterer, Editors
Supports preparation for the ASQ Certified Quality Improvement Associate (CQIA) certification
ASQExcellence Milwaukee, Wisconsin
Published by ASQExcellence, Milwaukee, WI Produced and distributed by Quality Press, ASQ, Milwaukee, WI Publisher’s Cataloging-in-Publication Data Names: Duffy, Grace Landis, 1949– editor. | Furterer, Sandra L, 1960– editor. Title: The ASQ certified quality improvement associate handbook, fourth edition / Grace L. Duffy and Sandra L. Furterer, editors Description: Includes bibliographical references and index. | Milwaukee, WI: ASQ Excellence (produced and distributed by Quality Press), 2020 Identifiers: LCCN: 2020934312 | ISBN: 978-1-951058-12-8 (Quality Press Hardcover) | 978-1-951058-13-5 (Quality Press epub) | 978-1-951058-14-2 (Quality Press pdf) | 978-1-952236-03-7 (ASQExcellence Hardcover) | 978-1-952236-04-4 (ASQExcellence epub) | 978-1-952236-05-1 (ASQExcellence pdf) Subjects: LCSH Quality control—Handbooks, manuals, etc. | Quality assurance—Handbooks, manuals, etc. | BISAC TECHNOLOGY & ENGINEERING / Quality Control | STUDY AIDS / Professional | BUSINESS & ECONOMICS / Quality Control | BUSINESS & ECONOMICS / Organizational Behavior Classification: LCC TS156.Q3 A77 2020 | DDC 658.5/62—dc23 No part of this book may be reproduced in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Publisher: Seiche Sanders Managing Editor: Sharon Woodhouse Sr. Creative Services Specialist: Randall L. Benson ASQ and ASQExcellence advance individual, organizational, and community excellence worldwide through learning, quality improvement, and knowledge exchange. Attention bookstores, wholesalers, schools, and corporations: Quality Press and ASQExcellence books, are available at quantity discounts with bulk purchases for business, trade, or educational uses. For information, please contact Quality Press at 800-248-1946 or [email protected]. To place orders or browse the selection of ASQExcellence and Quality Press titles, visit our website at http://www.asq.org/quality-press. Printed on acid-free paper
Table of Contents
Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notes to the Reader. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Highlights in the Evolution of Quality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Structure of this Book. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diversity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Availability of Reference Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . About the Certified Quality Improvement Associate Exam. . . . . . . . . . . . . . . . . . . . . . . . Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Message from the ASQ QMD Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ix xi xi xii xii xiii xiii xv xvi xvii
Part I Quality Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Chapter 1 Terms, Concepts, and Principles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Quality Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Quality Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Quality Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Organizational Culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee Involvement and Empowerment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Systems and Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . System versus Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taking a Systems View of Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Variation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Standardization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 2 6 10 14 17 18 21 22 25 27
Chapter 2 Benefits of Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Organizations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Community. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interested Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Quality Benefits to Society as a Whole. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30 31 31 32 33 33 33 34
Chapter 3 Foundations of Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Walter A. Shewhart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . W. Edwards Deming. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Joseph M. Juran. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36 38 39 43
v
vi
Table of Contents Kaoru Ishikawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Philip B. Crosby. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Armand V. Feigenbaum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Genichi Taguchi. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46 47 49 50 52
Part II Team Basics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter 4 Team Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Team Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Types of Teams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Value of Teams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55
56 56 59 64
Chapter 5 Team Roles and Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Chapter 6 Team Formation and Group Dynamics. . . . . . . . . . . . . . . . . . . . . . . . . Initiating Teams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Selecting Team Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Team Stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Team Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Team Decision Making. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Potential Perils and Pitfalls of Teams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What Makes a Team Work? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73 73 82 87 90 94 101 102
Part III Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Chapter 7 Process Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What Is Process Improvement?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . How Does the Organization Benefit from Process Improvement? . . . . . . . . . . Six Sigma Concepts and Tools. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lean Concepts and Tools. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Examples of Visible Waste. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Examples of Invisible Waste. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benchmarking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incremental and Breakthrough Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . Incremental Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Breakthrough Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
106 106 106 107 115 124 124 127 128 129 146
Chapter 8 Improvement Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brainstorming. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan-Do-Check-Act (PDCA) or Plan-Do-Study-Act (PDSA) Cycle. . . . . . . . . . Affinity Diagram. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of Poor Quality or Cost of Quality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Internal Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
151 151 153 154 156 158
Chapter 9 Improvement Tools. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Flowchart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Histogram. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pareto Chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scatter Diagram. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
160 161 165 167 169
Table of Contents
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Check Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Control Chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Decision Tree (Tree Diagram). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional Quality Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary of Quality Improvement Tools and Techniques. . . . . . . . . . . . . . . . .
171 172 175 176 186
Chapter 10 Root Cause Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cause-and-Effect Diagram (Fishbone Diagram). . . . . . . . . . . . . . . . . . . . . . . . . . Five Whys. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary of Root Cause Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
188 188 190 192
Chapter 11 Risk Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Identify and Communicate Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Types of Risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Definition of Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ISO 31000 and the Risk Management Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . Identification within Operational Processes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Examples of Selected Risk Assessment Techniques. . . . . . . . . . . . . . . . . . . . . . . Failure Modes and Effects Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
193 193 194 194 195 196 198 201 204 206
Part IV Supplier Relationship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Chapter 12 Supplier Selection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Internal Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . External Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplier Selection Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certification and Supplier Rating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
210 210 210 211 212
Chapter 13 Supplier Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Cycle for Improving Customer-Supplier Relationships . . . . . . . . . . . . . . . . . . . 215 The Process of Supply Chains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Chapter 14 Supplier Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 Supplier Performance Measures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 Key SCM Metrics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Part V Customer Relationship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 Chapter 15 Customer Identification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 Internal Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 External Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232 Chapter 16 Voice of the Customer (VOC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Data Gathering and Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Complaint Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Customer Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
237 237 246 247
viii Table of Contents Appendix A Certified Quality Improvement Associate (CQIA) Body of Knowledge 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
251
Appendix B The ASQ Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 Appendix C Quality Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258 Appendix D Additional Reading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325 About the Editors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339
Preface
M
embers and leaders of the Quality Management Division (QMD) of the American Society for Quality (ASQ) acknowledge the continuing evolution of integration and use of organizational and process improvement throughout nearly e very type of industry, organization, and organization level. However, at the same time, numerous occurrences of loss of quality focus are highlighted in the news media, such as the following: • Continued reports of automotive failures and safety issues • CEO and top management career derailments through poor leadership behavior • Lack of employee engagement, despite the plethora of leadership training programs • Instability of investment markets caused by negative corporate performance • Inadequate controls in the importing of food products, allowing tainted product to be sold • Building collapses throughout the world, killing hundreds Clearly, much needs to be done to fully integrate quality into e very process and aspect of life. In 2000, ASQ introduced the Certified Quality Improvement Associate (CQIA) certification. It is designed to introduce the basics of quality to organizations and individuals not currently working within the field of quality. This book and the Body of Knowledge it supports are intended to form a foundation for further study and application of proven quality principles and practices worldwide. Additionally, preparing for the CQIA exam and becoming certified may be viewed as the first step toward ultimately qualifying for one or several of the ASQ certifications available to ASQ members. If you are not yet a member of ASQ, we encourage you to consider joining, e ither you as an individual member or your entire organization as a member. Among other things, an ASQ professional member is entitled to the following: ASQ Section Membership—Membership in one of ASQ’s local sections in the United States, Canada, and Mexico helps you meet and learn from people who work and live near you ASQ Technical Communities—Participation in any or all of ASQ’s 26 technical communities ix
x Preface A wide range of technical community choices are available. T hese communities, often called Divisions, range from those representing a holistic approach to quality management (QMD, the sponsor of the CQIA certification and this book) to those representing industries, quality functions, and quality standards. Contact information follows: ASQ—800-248-1946, http://www.asq.org—Visit the website for a membership application, to learn more about ASQ and all the benefits of membership, and to explore a plethora of information on quality principles and practices. ASQ Quality Management Division—https://my.asq.org/communities /home/28/ Coeditors’ e-mail addresses—grace683@outlook.com and sfurterer@att.net The ASQE Certification office has developed a certification pathway to help c areer quality professionals advance their skills within the discipline. The following graphic is intended to help quality practitioners choose the correct pathway for their career development. The certification section of the ASQ.org website provides detailed information on the content and qualifications for each of the career paths identified in the graphic.
Notes to the Reader
HIGHLIGHTS IN THE EVOLUTION OF QUALITY The history of quality reaches back into antiquity.1 This short overview starts with the current quality movement, which began in the 1920s. The quality profession, as it is called, started with Walter Shewhart of Bell Laboratories. He developed a system known as statistical process control (SPC) for measuring variance in production systems. SPC is still used to help monitor consistency and diagnose problems in work processes. Shewhart also created the Plan-Do-Check-Act (PDCA) cycle, which is a systematic approach to improving work processes. When the PDCA cycle is applied consistently, it can result in continuous process improvement. During World War II, the U.S. War Department hired W. Edwards Deming, a physicist and U.S. Census Bureau researcher, to teach SPC to the defense industry. Quality control and statistical methods were considered critical factors in a successful war effort. Unfortunately, many companies in the United States s topped using these statistical tools after the war. Following World War II, the U.S. occupation forces in Japan invited Deming to help Japan with its census. He was also invited to present lectures to business leaders on SPC and quality. The Japanese acceptance and use of Deming’s techniques had a profound, positive effect on Japan’s economic recovery. Two other American quality experts, Joseph M. Juran and Armand V. Feigenbaum, also worked with the Japanese. Both Deming and Juran (a former investigator at the Hawthorne Works experiments) drew on Shewhart’s work and recognized that satisfying the customer’s needs was important and that system problems could be addressed through three fundamental managerial processes: planning, control, and improvement. Feigenbaum stressed the need to involve all departments of a company in the pursuit of quality, a concept he called total quality control. The Japanese expanded Juran’s customer concept to include internal customers, those people within the organization who depend on the output of other workers. Kaoru Ishikawa, a Japanese engineer and manager, expanded Feigenbaum’s ideas to include all employees, not just department managers, in the total quality control concept. Ishikawa also helped create quality circles, which are small teams of managers, supervisors, and workers trained in SPC, the PDCA cycle, and group problem solving. Applying these techniques created a flow of new ideas for improvement from everyone in the organization and continual incremental improvements that led to better performance. The quality circles were the original model for our current process improvement teams. By the 1970s, most large xi
xii
Notes to the Reader Japanese companies had a dopted what Ishikawa called company-wide quality control (CWQC), resulting in a changed perception that Japan produced world- class quality products. The Japa nese success prompted American organ izations to embrace the teachings of Deming, Juran, Feigenbaum, and other quality gurus and to apply their successful quality management techniques in many types of businesses. In the mid-1980s, American organizations began to experience improved quality results and enhanced customer satisfaction. In 1987, the criteria for the first Malcolm Baldrige National Quality Award w ere published. Within the same time period, ISO 9001, Quality systems—Model for quality assurance in design, development, production, installation, and servicing was published. These initiatives resulted in profound changes in the way the quality profession applies its principles and practices. Millions of copies of the Malcolm Baldrige National Quality Award criteria have been distributed, and many state and local quality award programs have developed their own programs that are based on the national award criteria. Although relatively few organizations actually apply for the national award, they use the criteria to evaluate and improve their quality management systems. Healthcare, Business/Nonprofit, and Education versions of the award criteria are now available, further expanding the use and value of the criteria. In the 1980s, Motorola initiated a Six Sigma methodology. In the mid-1990s, companies such as General Electric and AlliedSignal launched their own Six Sigma initiatives. Since then, many companies have embraced the Six Sigma methodology. The term alludes to focusing on achieving a process that has no more than 3.4 defects per million opportunities. As a philosophy, Six Sigma is the belief that it is possible to produce totally defect-free products and services. This fourth edition of The Certified Quality Improvement Associate Handbook expands coverage of both Six Sigma and lean methods.
STRUCTURE OF THIS BOOK The book follows the CQIA Body of Knowledge (BoK) in both content and sequence. The intent is that this book will serve as a guide for preparing the reader to take the CQIA examination given by ASQE. Each chapter stands alone, and the chapters may be read in any order. Some material reaching beyond the content of the BoK has been added. Supplemental reading suggestions are provided.
DIVERSITY The use of the terms quality and continuous improvement is not considered solely applicable to manufacturing and the traditional engineering and production environment. Most professionals entering the workforce t oday are required to analyze situations, identify problems, and provide solutions for improved performance. Newer challenges have emerged, such as evolving technology, connectivity, and Quality 4.0. Improving the organization is considered everyone’s job. The service industry has embraced the value of quality strongly over the past 30 years. Teamwork is critical, requiring the participation of members of all cultures, educational levels, and career aspirations.
Notes to the Reader xiii An attempt has been made to balance the use of personal pronouns as well as provide examples from a variety of organizations. The use of the term organ ization means that the content is considered generic—applicable to any type of entity. Where the term company is used, the content is more applicable to a for- profit enterprise.
PRACTICE The 2020 CQIA BoK is presented in Appendix A and indicates the number of questions that will be asked about each major BoK segment and the maximum cognitive level to which the questions may be asked. Derived from Bloom’s taxonomy, the levels are as follows:2 1. Remember (Knowledge) 2. Understand (Comprehension) 3. Apply (Application) 4. Analyze (Analysis) 5. Evaluate (Evaluation) 6. Create (Synthesis) It is recommended that you use the CQIA BoK as a guide for preparing for the examination. Use the topics, subtext, and the cognitive levels of Bloom’s taxonomy to perform a self-assessment of the required knowledge. Study this Certified Quality Improvement Associate Handbook and other references from which examination questions are developed so that you may gain a strong knowledge of the topics identified in the BoK. Having performed this initial study, use the BoK to focus on your level of comfort with the detailed information included in the subtext of each topic. Pay special attention to the cognitive level of knowledge required for each topic. Remembering requires much less familiarity with a topic than does a requirement to Apply or Analyze. In addition to the content supporting the BoK, you are expected to be familiar with the ASQ Code of Ethics, found in Appendix B.
AVAILABILITY OF REFERENCE MATERIALS All of the texts referenced in this handbook should be readily available from normal book sources, many from ASQ’s Quality Press. A website search w ill add a wealth of additional information. The U.S. government is an excellent source of quality-related materials that are available for downloading. Appendix D provides additional reading suggestions to enhance information shared in the ASQ CQIA website listing. The list of references from which the certification exam test items are developed can be accessed at the following location: https://asq.org/cert/quality -improvement-associate/references.
xiv Notes to the Reader
NOTES 1. J. M. Juran, ed., A History of Managing for Quality (Milwaukee, WI: ASQC Quality Press, 1995). 2. B. S. Bloom, ed., Taxonomy of Educational Objectives: The Classification of Educational Goals, Handbook I, Cognitive Domain (New York: Longmans, Green, 1956). Additional information about Bloom’s taxonomy may be obtained from http://www.coun.uvic.ca /learning/exams/blooms-taxonomy.html.
About the Certified Quality Improvement Associate Exam
E
ach certification candidate is required to pass an examination that consists of multiple-choice questions that measure comprehension of the BoK:
Computer delivered—The CQIA examination is a one-part, 110-question, three-and-a-half-hour exam, and is offered in English only. One hundred questions are scored, and 10 are unscored. Paper and pencil—The CQIA examination is a one-part, 100-question, three-hour exam, and is offered in English and, in certain locations, Spanish. View available translated exams, dates, and locations at the following link: https://asq.org/cert/dates-translated.
All examinations are open book. Each participant must bring his or her own reference materials. Use of reference materials and calculators is explained in the Frequently Asked Questions section of the ASQE certification web pages at https://asq.org/cert/faq.
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Acknowledgments
M
uch gratitude is extended to those who contributed to the fourth edition:
John E. Bauer—coeditor, first and second editions Grace L. Duffy—coeditor, first through fourth editions Russ Westcott—coeditor, first through third editions Sandra L. Furterer—coeditor, fourth edition Sharon Woodhouse—managing editor, Quality Press ASQ Quality Management Division, original sponsor of the CQIA BoK and The Certified Quality Improvement Associate Handbook
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A Message from the ASQ QMD Chair
W
elcome to the fourth edition of The ASQ Certified Quality Improvement Associate Handbook. The QMD supports this book as part of our mission to convey lifelong quality-related knowledge through information methods and tools that add value to organizations, society, and individuals. The CQIA BoK was originally developed through a partnership between ASQE Certification and the QMD. We continue this partnership by sponsoring the editors of this text and The ASQ Certified Manager of Quality/Organizational Excellence Hand book. Our desire is that all who study this material will grow their personal abilities and the excellence of the organizations they serve. We applaud these editors who give tirelessly of their talents, expertise, and time to bring this resource to the quality community for the betterment of their fellow quality professionals and their organizations. —Peggy Milz Chair, ASQ Quality Management Division Niceville, Florida, 2020 —Denis Devos Chair Elect, ASQ Quality Management Division London, ON, Canada, 2020
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Part I Quality Basics Chapter 1 Chapter 2 Chapter 3
Terms, Concepts, and Principles Benefits of Quality Foundations of Quality
Look beneath the surface, let not the quality nor its worth escape thee. —Marcus Aurelius
We are what we repeatedly do. Excellence, then, is not an act, but habit. —Aristotle
Quality is about making products that don’t come back for customers that do. —Margaret Thatcher
Quality is free. It’s not a gift, but it’s free. What costs money are the unquality things—all the actions that involve not d oing jobs right the first time. —Philip B. Crosby
Defects are not free. Somebody makes them and gets paid for making them. —W. Edwards Deming
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Chapter 1 Terms, Concepts, and Principles
QUALITY DEFINITIONS Describe and distinguish between the common defi nitions of quality. (Apply) CQIA BoK 2020 I.A.1
There are many definitions of quality, such as the following: • Quality is a subjective term for which each person has his or her own definition. In technical usage, quality can have two meanings: (1) the characteristics of a product or service that bear on its ability to satisfy stated or implied needs, and (2) a product or service f ree of deficiencies.1 • Quality is the degree to which a set of inherent characteristics fulfills requirements.2 • Quality is conformance to requirements. • Quality is fitness for use. • Quality is meeting customer expectations. • Quality is exceeding customer expectations. • Quality is superiority to competitors. • Quality—“I know it when I see it.” In addition to these various meanings, quality may also be viewed from several dimensions: • Characteristics such as reliability, maintainability, and availability • Drivers of quality, such as standards • Quality of design versus quality of conformance to customers’ requirements • Quality planning, control, and improvement 2
Chapter 1 Terms, Concepts, and Principles
3
• Little q and Big Q quality (product or functional quality versus improvement of all organizational processes) • Quality as an organizational strategy Many other quality-related terms are defined in Appendix C, “Quality Glossary.” The two quality management system models most frequently used by quality professionals are (1) the Baldrige Performance Excellence Program Criteria3 and (2) the International Organization for Standardization (ISO) family of quality management system standards.4 These quality models provide an insight into the components of a quality management system and define quality as it is practiced today.
The Baldrige Framework and Performance Excellence Program (2019–2020): Criteria (Business Version) The business version of the criteria can be used for profit as well as nonprofit organizations. 1 Leadership 1.1
Senior Leadership
1.2
Governance and Societal Contributions
The Leadership category examines how the personal actions of your organization’s senior leaders guide and sustain your organization. Also examined are the organ ization’s governance system and how your organization fulfills its legal, ethical, and societal contributions and supports its key communities. 2 Strategy 2.1
Strategy Development
2.2
Strategy Implementation
The Strategy category examines how your organization develops strategic objectives and action plans. Also examined are how your chosen strategic objectives and action plans are implemented and changed if circumstances require, and how progress is measured. 3 Customers 3.1
Customer Expectations
3.2
Customer Engagement
The Customers category examines how your organization engages its customers for long-term marketplace success. This engagement strategy includes how your organization listens to the voice of its customers, builds customer relationships, and uses customer information to improve and identify opportunities for innovation.
4
Part I Quality Basics 4 Measurement, Analysis, and Knowledge Management 4.1
Measurement, Analysis, and Improvement of Organizational Performance
4.2
Information and Knowledge Management
The Measurement, Analysis, and Knowledge Management category is the main point within the criteria for all key information about effectively measuring, analyzing, and reviewing performance and managing organizational knowledge to drive improvement and organizational competitiveness. 5 Workforce 5.1
Workforce Environment
5.2
Workforce Engagement
The Workforce category examines your ability to assess workforce capability and capacity and build a workforce environment conducive to high performance. Also examined are how your organization engages, manages, and develops your workforce to utilize its full potential in alignment with your organization’s overall mission, strategy, and action plans. 6 Operations 6.1
Work Processes
6.2
Operational Effectiveness
The Operations category examines how your organization designs, manages, and improves its work systems and processes to deliver customer value and achieve organizational success and sustainability. Also examined is your readiness for emergencies. 7 Results 7.1
Product and Process Results
7.2
Customer Results
7.3
Workforce Results
7.4
Leadership and Governance Results
7.5
Financial, Market, and Strategy Results
The Results category examines your organization’s performance and improvement in all key areas—product and process results; customer results; workforce results; leadership and governance results; and financial, market, and strategy results. Performance levels are examined relative to those of competitors and other organ izations with similar product offerings. In recent years the Baldrige Performance Excellence Program has been expanded to include criteria covering healthcare and educational organizations. Figure 1.1 is an overview of the integrated processes which comprise the Baldrige Performance Excellence Framework. Information on the program is available at https://www
Chapter 1 Terms, Concepts, and Principles
5
Organizational Profile: Environment, Relationships, and Strategic Situation
2 Strategic Planning
5 Workforce Focus 7 Results
| Leadership 3 Customer Focus
6 Operations Focus
4 Measurement, Analysis, and Knowledge Management Figure 1.1 The systems approach provided by the Baldrige framework.
.nist.gov/baldrige. Other business excellence models/quality awards have also been developed internationally, such as The European Foundation for Quality Management (EFQM) and the Deming Award.
ASQ/ANSI/ISO/ Q9000 Quality Management Systems Principles A quality management principle is a comprehensive and fundamental rule or belief for leading and operating an organization; it is aimed at continually improving performance over the long term by focusing on customers while addressing the needs of all other stakeholders. There are seven quality management principles that form the basis of current international quality management requirements. These principles are paraphrased as follows: 1. Customer Focus—The primary focus of quality management is to meet customer requirements and to strive to exceed customer expectations 2. Leadership—Leaders at all levels establish unity of purpose and direction and create conditions in which people are engaged in achieving the organization’s quality objectives 3. Engagement of P eople—Competent, empowered, and engaged people at all levels throughout the organization are essential to enhance the organization’s capability to create and deliver value 4. Process Approach—Consistent and predictable results are achieved more effectively and efficiently when activities are understood and managed as interrelated processes that function as a coherent system
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Part I Quality Basics 5. Improvement—Successful organizations have an ongoing focus on improvement 6. Evidence-Based Decision Making—Decisions based on the analysis and evaluation of data and information are more likely to produce desired results 7. Relationship Management—For sustained success, organizations manage their relationships with interested parties, such as providers A side- by- side review of the Baldrige and ISO 9000:2015 quality models reveals many similarities. They both stress strong organizational leadership; a focus on customers; the development and involvement of the organ ization’s people; gathering, analyzing, and using information to make decisions; and pro cess management. Together these characteristics define quality as it is practiced in many successful organizations. The Baldrige Performance Excellence Award and ISO 9000 have distinctly different purposes and approaches; however, they can be mutually reinforcing when properly used. The Baldrige criteria encompass the whole organization and its stakeholders as a total system, and the Malcolm Baldrige Performance Excellence Program is a business model for achieving world-class excellence. ISO 9000 focuses on the minimum requirements for a quality system needed to produce products and services that meet customer requirements. Many organizations use both the Baldrige award criteria and the ISO 9000 series standards to achieve their business strategic plans and goals.
QUALITY PLAN Define a quality plan, describe its purpose and objec tives to achieve the quality mission or policy. Identify the various functional areas and p eople having responsibil ity for contributing to its development. (Understand) CQIA BoK 2020 I.A.2
A quality plan is defined as documented information that provides the activities or methods to be undertaken to achieve objectives and meet specified requirements. Another, more operational definition is the document, or documents, setting out the specific quality practices, resources, specifications, and sequence of activities relevant to a particular product, project, or contract. A quality plan helps you schedule all the tasks needed to make sure that the product or service meets the needs of your customer. It is composed of two parts: • The quality assurance plan lists the independent/external reviews needed • The quality control plan lists the internal reviews needed to meet your quality targets
Chapter 1 Terms, Concepts, and Principles
7
Quality assurance (QA) plans are planned, systematic, documented activities necessary to provide adequate confidence that the product or service will meet the given requirements. T hese plans may be voluntary, such as partnering with other like companies in the community to provide independent audits of processes, documentation, or service delivery. More often, QA plans include scheduled and required external audits, such as those carried out by ISO 9001:2015 auditors, the Joint Commission for Healthcare, or the Public Health Accreditation Board. Quality control (QC) plans provide techniques and perform activities that focus on controlling or regulating processes and materials to fulfill requirements for quality. The focus is on preventing defective products or services from being passed on. An example of a QC plan would be a checklist of features and criteria for incoming inspection of parts to be used for production of a manufactured device. Creating a quality plan is essential if you want to generate customer confidence that you w ill produce a solution that meets their needs. Quality planning is the process of developing a master plan linked to organizational strategy, goals, and objectives that pertain to the quality of products or services to be delivered to customers. The quality plan includes key requirements, performance indicators, and commitment of resources to ensure that customer needs are met. The quality plan often consists of several related documents. Although it is separate from the three phases of organizational planning (strategic, tactical, and operational), quality planning is dependent on the decisions made and processes established by management during these phases. Key quality requirements and performance indicators must be established in the design, development, and implementation of all products and services for final customer delivery. Quality initiatives must be understood in their relation to all three levels of the organization: strategic planning, tactical planning, and operational planning. Figure 1.2 provides an overview of the scope of planning activities for each of the three levels. Strategic planning deals with developing the long- range strategies of the organization: • The organization’s overall strategic mission, goals, policies, and objectives • External customers’ needs and expectations • The needs and expectations of internal stakeholders (employees, shareholders, and so on) • Risks that must be considered • Regulatory requirements • Competitors’ capabilities • Business systems, including quality, security, and safety systems needed to operate the organization effectively and efficiently Strategic planning is conducted by the senior executive leadership of the organization. Corporate strategic planning will include the chief executive officer, chief operating officer, chief financial officer, chief quality officer, and senior vice presidents of all core functions, as well as human resources, facilities, supply chain, and marketing within the corporate organization. In a publicly held
8
Part I Quality Basics organization, the senior members of the board of directors may also be included. Occasionally, senior executives from key client organizations may be asked to contribute to the long-range plans for product and service development. Tactical planning (sometimes called action or project planning) deals with translating strategic objectives into actionable activities that must occur, on a short-term basis, to support the achievement of the strategic plans. There are measurable steps and events that result from the downward deployment of the strategic plans: • The achievement of strategic mission, policies, and objectives • Measurable quality and safety indicators and targets • Product and service features • Process capability • Quality control points • Unique tools or equipment required • Typical short-term plans • Quality of “new products/process introduction” • Impact of digitization aspects • Impact of critical outsourcing on the process capability of the main supplier Operational planning deals with developing day-to-day operating procedures that ensure the quality of individual products and services. Operational plans address numerous areas: • Resources needed to develop and create the organization’s products and services • Materials and supplies required for creating and delivering the products and services • Knowledge and skills required of employees • Processes and procedures required to create the organization’s products and services as well as to run the business effectively in transactional areas such as finance, human resources, and legal • Unique tools or equipment required • Documentation (specifications, standards, drawings, visual aids, and so on) required • Examination, inspection, or testing requirements • Administrative support and follow-up for customer communication • Records required to document the creation of the organization’s products and services • Process improvement methods to continually improve the organ ization’s deliverables
Strategic Planning
Tactical Planning
Planning for long-range organizational strategies
Planning that translates strategic objectives into actionable quality activities
• •
• • • •
• • • • • • •
Supports achievement of strategic objectives Measurable quality indicators and targets Product & service features Process capability Quality control points Unique tools or equipment required Typically short-term plans
Figure 1.2 Compare/contrast strategic, tactical, and operational planning.
Planning focused on operational (day-to-day) procedures to ensure quality • Resources, materials needed • Knowledge and skills required of employees • Required processes, procedures, records • Documentation required • Examination, inspection, or testing requirements • Administrative support and follow-up for customer communication • Process improvement methods
Chapter 1 Terms, Concepts, and Principles
•
Long-term goals, objectives External customer needs and expectations Needs and expectations of internal stakeholders (e.g., employees, shareholders) Risks that must be taken into account Regulatory requirements Competitors’ capabilities Business systems needed to operate the organization effectively and efficiently
Operational Planning
9
10
Part I Quality Basics
Customer-Specific Quality Planning At the day-to-day level, meeting a specific customer’s requirements sometimes requires a quality plan for an individual contract or purchase order. To develop such a working plan means looking at the particular requirements of the order and determining the resources (time, materials, equipment, process steps, skills, and so on) that w ill be required to complete the individual transaction to the customer’s satisfaction and provide an adequate return on the resource investment. This type of quality plan is usually completed as part of an organization’s process for providing quotes on new or repeat work for its customers. Overall, a consistent planning, monitoring, and reviewing approach is required for organizations using established quality systems based on criteria such as the Baldrige Performance Excellence Program or the ISO 9001:2015 standard. The approach taken by an organization becomes the guiding policy in producing a valued product or service that remains competitive in the marketplace. The planning must include the following: • A comprehensive focus on customer needs and expectations • Support of quality goals and strategies by upper management • A balance of resources between short-term and long-term requirements, including capital expenditures, training, and continual improvement • The assessment of risk based on decisions concerning the balance of resources allocated within the organization • Ongoing interpretation of long-term goals and tactical and operating plans • Development and execution of processes for evaluation and process improvement • Integration of quality activities into the daily work of the front-line associates
QUALITY SYSTEMS Understand the difference and relationship between quality assurance, quality control, and continuous quality improvement. (Understand) CQIA BoK 2020 I.A.3
Continuous quality improvement (CQI) is beneficial no matter what stage of organizational maturity we are in. If we are just picking out the bad stuff as in inspection, we improve by reworking the product or by apologizing and providing the service again to the client. Quality control (QC) is improved by adding error-proofing, so that we catch the process degrading before we ruin too much
Chapter 1 Terms, Concepts, and Principles
11
product or harm too many clients. Quality assurance (QA) does more training to anticipate that the process may degrade or that we may have errors occurring in our processes. Quality planning (QP) is the best way to design the process right the first time and then put the other QA, QC, and QI safeguards in place once the quality plan has been tested and validated. We can improve what we do at any of the stages of inspection, control, assurance, or planning. The most cost-effective and best for customer satisfaction is to do it as early as possible so that we are not wasting resources or annoying stakeholders. Historically, quality authors have used the term QI for two conflicting activities. The preferred use of QI is to refer to continuous quality improvement. Modern quality approaches seek to reduce the use of quality inspection in deference to more preventive activities such as QA and QC. Note that this text uses QI to refer to both continuous quality improvement and quality inspection b ecause both approaches must be explained in this section. Differentiation is made by the reader based on context. Quality Improvement or Continuous Quality Improvement—(QI or CQI)— refers to a nalyzing capabilities and processes and improving them repeatedly to achieve customer satisfaction: • QI involves both prospective and retrospective reviews • QI is aimed at improvement—measuring where you are, and figuring out ways to make things better • QI specifically attempts to avoid attributing blame • QI pursues ways to prevent errors from happening • QI exists harmoniously with both QA and QC As we become less preventive and more reactive, the cost of making it right goes up immensely in e ither dollars or reputation. The worst is to make an error in front of the client or community. Less worse is to catch the error as it happens or pick out the bad product before anybody sees it. The best approach is to never make the mistake to begin with. The following statements contrast (continuous) quality improvement with quality inspection: • Quality improvement is by far the preferred function • Inspection catches only errors that have already been made • Improvement studies the process as it is designed to correct or redesign activities before an error is made or resources are wasted One definition of quality assurance is all the planned and systematic activities implemented within the quality system that can be demonstrated to provide confidence that a product or service will fulfill requirements for quality. Quality assurance (QA) is proactive, tactical, and preventive in nature: • QA activities are focused on the design of the process used to create the deliverable • QA must be performed to ensure that the deliverables meet your customer’s quality requirements before resources are expended to create the product or service
12
Part I Quality Basics The following are QA functions: • Identifying customer requirements • Gaining customer agreement with the targets set • Documentation planning • Measurement planning • Risk management planning • Problem resolution planning • Configuration management planning • Product/service development planning • Test planning • Subcontractor management planning • Audit/review of product and service plans to ensure they follow the defined process • Approval of deviations from defined standards • Process improvement assessments One definition of quality control is the operational techniques and activities used to fulfill requirements for quality. Quality control (QC)—sustains the quality of a product or service: • QC activities focus on appraising the process as it creates the deliverable • QC is an operational level activity to observe the creation of products or services to keep the process from degrading • QC verifies that deliverables are created using acceptable quality methods and meet design requirements • QC may not always occur in real time; error-proofing is part of QC when parts are manufactured to go together in a specific way • Verification and validation activities identify where action may be required The following are QC functions: • Develop sampling plans • Train inspectors • Develop checklists • Set quality acceptance levels • Identify and dispose of defective products Quality inspection is the activity of searching for errors or defects after the product or service has been created. Usually most or all of the resources required
Chapter 1 Terms, Concepts, and Principles
13
to produce the product or service have been expended, and e ither rework or waste is generated to correct the errors. Quality Inspection (QI)—assesses the finished product or service against specified requirements: • Measuring, examining, testing, and gauging one or more characteristics of a product or service and comparing the results with specified requirements to determine whether conformity is achieved for each characteristic • The recent ability to rapid prototype and print in 3D has broadened opportunities for inspection without incurring the traditional waste of resources experienced in the past The following are quality inspection functions: • Inspecting products and services, including gathering information for current state analysis • Removing defective product from inventory • Observing service errors experienced by the customer • Segregating bad product from good product • Disposing of wasted resources through recycling, discounting, or trash Sometimes quality assurance and quality control are used interchangeably, referring to the actions performed to ensure the quality of a product, service, or pro cess. This is not accurate, as quality assurance addresses the prevention of defects through designing quality into the product or service before resources are committed to making the product or providing the service, and quality control describes activities that are performed to maintain process requirements during the manufacture of product or delivery of service. Control is more operational than assurance. Continuous quality improvement (CQI) is a philosophy and attitude for analyzing capabilities and processes and improving them repeatedly to achieve customer satisfaction. CQI uses the concepts of QA and QC to analyze the potential for errors in a product or service. QA and QC are valuable components of corrective action and feedback into the improvement or redesign of a process, product, or service to ensure that a defect or error is never repeated. Figure 1.3 shows the relationship of quality planning, QA, QC, and quality inspection in relation to the effectiveness of CQI. • QA—the prevention of defects • QC—the detection of defect creation • Quality inspection (QI)—picking out existing defects • Quality improvement (QI)—the use of a systematic process to continuously achieve measurable improvements in the effectiveness, efficiency, and performance of processes
14
Part I Quality Basics
Plan Strategic Preventive
Assure Tactical Preventive
Control Operational Real time
Inspect Operational After the fact
Continuous quality improvement
Figure 1.3 The relationship among inspection, control, assurance, planning, and improvement in quality.
ORGAN IZATIONAL CULTURE Understand how culture influences the success of pro cess improvement efforts such as lean, Six Sigma, ISO 9001, Baldrige, and change management. (Understand) CQIA BoK 2020 I.A.4
We define an organization’s culture as the attitudes, beliefs, values, expectations, knowledge, language, opportunities, structure, and materials of a particular workplace that define how business is conducted on a daily basis. An organization’s culture is the cumulative result of the combination of these elements over time; it is dynamic, changing as the organization grows and transforms itself. An organ ization’s culture further sets the overall climate of the organization and becomes a major factor in employees’ desire to join, stay, and grow in the organization. The culture of the organization has a strong impact on employee engagement.5 Attitudes play a critical role in engagement b ecause they include emotional (how I feel), behavioral (what I do), and cognitive (how I think) components. These components are shared among employees through personal or online contact. Together, the expression of t hese elements, by employees as well as managers,
Chapter 1 Terms, Concepts, and Principles
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can have a powerful influence on the engagement of other employees who learn from each other and eventually may adopt similar attitudes. Beliefs are internal representations of what individuals think is true. Beliefs are individual representations of events. An example of a commonly held belief in the workplace is that working a fter regularly scheduled hours is a sign of loyalty. Acting on the basis of this belief, managers praise employees who tend to work a fter regularly scheduled hours and criticize those employees who do not. Informally, groups may show admiration for those employees whose actions are consistent with this belief and disparage those whose actions are not, with comments such as “He is always looking at the clock” or “She never stays a minute after 5:30.” Team interpersonal relations may become strained as a result of how employees act on this belief. It may eventually affect their level of engagement as employees w ill gravitate toward groups that share their beliefs about this issue among many others. Values represent the essence of what is important for the company and thus are often showcased prominently in corporate offices for everyone to read. Values embody what is not negotiable for the company. Values are typically included in employee onboarding documents to ensure that new employees become familiar with them and that new employees’ actions are consistent with them. Statements of values may include such things as passion, excellence, innovation, motivation, and teamwork among others. Having a values statement is a step in the right direction, but it is not enough to ensure congruence between company values and managers’ actions. Managers at all levels should demonstrate t hese values as they conduct business every day. Corporate culture reflects how work is done. Executives create corporate culture through actions visib le to employees. A values statement means nothing if senior leadership and all levels of management are not seen honoring those values in their daily actions. Likewise, smaller cultural habits can be created at the department or team level through repetition of expectations and tasks. It is important that actions at the operational level are consistent with the goals and objectives of the organization. Unless this alignment from operational to strategic is maintained, there will be discordance in the culture of the organization. This discordance is one of the most disruptive and wasteful environments that organ izations experience. Cultural dissonance severely hampers communication horizontally and vertically. A valuable segment of organizational culture is its approach to quality. Implementing a culture of quality takes a process-driven approach to decision making and problem solving. The same components that create organizational culture create a culture of quality. A true culture of quality exhibits an array of easily recognizable attributes. Consider examples from companies displaying world- class quality. These organizations can demonstrate that their leadership visibly supports quality objectives. They are also passionate in their drive to continually identify and address customer needs—often taking extraordinary steps to engage the voice of the customer. From there, the organization’s vision and values are compellingly stated as well as disseminated throughout the enterprise in every thing from formal training to informal conversations in hallways and break rooms. Quality- driven goals are translated into clear per for mance expectations, all of which are supported by regular organizational performance reviews and expressed in business performance reports. World-class organizations also work
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Part I Quality Basics hard to develop the right mix of incentives, including both recognition and awards, as well as, in the right circumstances, direct compensation and promotion. Ethical and collaborative behavior become second nature, as does the willingness to pursue innovation and continuous improvement. From top to bottom and bottom to top, the company becomes a quality-driven ecosystem—from the C-suite to senior leaders, from middle-level managers to all departments, from the supply chain to customers—that works in concert to achieve mutual objectives and improve operations. Many organizations state quality goals. But true effectiveness requires an accompanying commitment to various cultural elements such as leadership, a compelling vision, companywide shared values, pervasive behaviors, and complementary performance metrics and incentives. It is only when an organization exhibits these and related components that it can be said to exhibit a true culture of quality. A culture of quality features a handful of readily discernible components. These include but are by no means limited to: • Clearly visible, engaged, and unwavering senior management support for quality initiatives • A clearly articulated vision and values • Active and ongoing engagement with customers to continually identify and address current and evolving needs • Clearly stated quality goals • Performance expectations for all individuals throughout the company that clearly link to quality goals • Appropriate incentives, which can favor monetary or recognition-based awards, depending on individual circumstances World-class organizations are much more likely than others to exhibit the above components. They are also more likely to view their quality capabilities as a means of creating and sustaining competitive advantage, leading to stronger profitability. Process improvement approaches such as the systems view of lean and the reduction of variation as exhibited by Six Sigma disciplines provide the methodologies and tools that guide the drive toward excellence that personifies a culture of quality. System-level performance excellence models such as the Baldrige criteria or ISO 9000 standards provide the basic platform for driving organizational culture. Once the organizational structure is established through either a Baldrige-type performance excellence model or the ISO family of standards, ongoing process improvement and change management disciplines maintain a regiment of continuous quality improvement. And as a result of their significantly greater investment in and commitment to quality, companies using lean, Six Sigma, and other change management techniques are in a better position to: • Pursue continuous improvement and innovation • Embrace and benefit from enabling technologies • Optimize risk taking throughout the enterprise
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The overall state of a culture may be intangible. But the value of taking steps to shift the company or institution toward a more quality-driven culture can be substantial. Organizations should therefore incorporate the lessons outlined above to accelerate growth and performance in their enterprise.
EMPLOYEE INVOLVEMENT AND EMPOWERMENT Define and distinguish between employee involve ment and employee empowerment. Describe the benefits of both concepts. (Understand) CQIA BoK 2020 I.A.5
The two predominant quality models (Baldrige and ISO 9000) stress the importance of the participation of all employees in an organization’s quality efforts. Organizations work to motivate and enable their employees to develop and utilize their full potential in support of the organization’s overall goals and objectives. Organizations also work to build and maintain work environments that support their employees and create a climate conducive to performance excellence and personal and organizational growth. People at all levels are the essence of any organization, and empowering them to fully use their abilities and to be fully involved in the organization’s processes benefits the organization. Empowerment means that employees have the authority to make decisions and take actions in their work areas without prior approval, within established bound aries. Allowing employees to work as active members of a process improvement team is one way to empower them to fully use their collective wisdom and decision-making skills. But they must also be given the training, tools, materials, equipment, processes, and procedures to accomplish their individual tasks. Providing these critical resources shows employees that the organization truly values their minds, not just their bodies. Each employee must recognize that the outputs of his or her individual activities provide the inputs to the next person’s process. Employee involvement allows employees to participate in decision making at some level, provides the necessary skills to accomplish the required task, and carefully defines responsibilities and authority. Employee involvement also provides recognition and rewards for accomplishments and enables communication with all levels of the organization’s structure. Managers must do more than just tell employees that they have the authority to participate fully in processes. They must also relinquish some of their authority and show by their actions that they expect full employee involvement and that they support actions taken by employees and decisions made by them to further the organization’s goals and objectives. Giving employees the authority to act also gives them responsibility and accountability for what they do. To fully participate, employees must understand the organization’s mission, values, and systems.
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Part I Quality Basics It is also important to understand the difference between job enlargement and job enrichment. Enlarging a job means expanding the variety of tasks performed by an employee. Enriching a job means increasing the worker’s responsibilities and authority in work to be done. Two examples are as follows: In addition to staffing a customer-transaction window, a bank teller’s job is expanded to tidying up the tables used by customers to fill out forms and ensuring that all brochure displays are restocked (job enlargement). A waitperson’s job is increased in scope to include helping the cook determine the next day’s menu (job enrichment). Organizations sometimes have formal suggestion systems or institute quality circles (see section on Ishikawa, Chapter 3) that allow employees to provide input on problems and suggestions on how to improve existing processes. Many of t hese suggestion systems are tied to incentives or rewards for suggestions that are implemented.
SYSTEMS AND PROCESSES Define and distinguish between a system and a pro cess and describe the interrelationships between them. Describe the components of a system—supplier, input, process, output, customer (SIPOC)—and how these components impact the system as a whole. (Analyze) CQIA BoK 2020 I.A.6
A system can be defined as a set of interrelated or interacting processes. A process is a set of interrelated or interacting activities that transform inputs into outputs. For example: The quality audit process uses various inputs (trained auditors, procedures, employee interviews, checklists, and so on) to develop an output (the audit report) that is used to improve the organization’s overall quality management system. The quality management system is composed of many individual processes that interact with each other and contribute to improving the organization’s overall performance. Using a system of interrelated processes to manage an organization is called a process approach to management, or simply process management. The process management approach is based on the ability of an organization to identify all its pro cesses, recognize the inputs and outputs of each process, document the processes so that they can be easily implemented, identify the o wners of each process, implement the processes, measure the outcomes of the implementation, and continually improve the effectiveness and efficiency of the processes. An organization’s objectives are achieved more efficiently when related resources and activities are
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managed as processes and when the individual processes work together to form an integrated management system. Processes can be divided into various categories. Product/service development processes deal with how the organization: • Designs new and improved products and services • Changes old products and services to meet new customer requirements • Incorporates improvements in technology • Anticipates customers’ future needs Product/service production processes deal with how the organization: • Produces products and services in the most efficient and economical way • Ensures that the products and services meet all technical requirements • Delivers the products and services in the time frame required by the customer • Uses customer and employee feedback Business processes deal with how the organization: • Accounts for its resources • Develops and uses measures of performance • Continually improves its operations • Trains, evaluates, recognizes, and rewards its employees Process documentation might include these components: 1. A short, simple description of the process and its purpose 2. A description of the process’s starting and ending activities 3. A list of inputs required at the process starting points and who provides the inputs, or the process supplier 4. A list of outputs at the process ending point and who receives the outputs, or the process customer 5. A flowchart of the process—that is, a process map identifying the interfaces of the process with other functions of the organization 6. Identification of the process owner, establishing clear responsibility, authority, and accountability for managing the process 7. The measurements used to identify that the process has been completed successfully 8. A statement of the overall capability of the process Using the process approach to management leads to more predictable results, better use of resources, prevention of errors, shorter cycle times, and lower costs, as well as a better understanding of the capability of processes and more predictable outputs.
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Part I Quality Basics The Baldrige and ISO models encourage the use of a process and system approach to management. They also stress the importance of integrating different business processes, such as design, production, quality, packaging, and shipping, into one interlinked system. All processes have inputs and outputs. The inputs into a process being worked on usually come as outputs from another process, and the outputs of the process being worked on usually serve as the inputs to another process. For example: Parts manufactured and inspected to meet customer requirements are sent to the packaging department for preparation for shipment. The packaged parts are sent to the shipping department for transfer to a transportation company. The outputs of the manufacturing and inspection processes are inputs to the packaging process. The outputs of the packaging process are inputs to the shipping process. T hese interrelationships must be understood by managers in order to develop an efficient overall system. This business methodology, sometimes called a system of processes or a process approach, is critical to the effective (correct) and efficient (timely) operation of modern organizations. (Lean systems regularly deal with system efficiencies, and Six Sigma systems often deal with the effectiveness of t hose systems. Lean and Six Sigma processes have many activities that meld into the other.) Also critical to this methodology is the concept that all processes generate data (which are transformed into information) that must be “fed back” to other interrelated processes. Information about a deficient product found at inspection must be fed back to the manufacturing process, and possibly to the design process, so that corrective action can be taken to cure the process defect that created the deficient product.
The Organization as a System An organization’s system is a collection of parts, functions, and subsystems integrated to accomplish an overall organizational goal. The system has various inputs that are acted on by designated processes to produce outputs, which together achieve the desired goal for the system. A system typically consists of smaller subsystems. For example, consider an organization of many administrative and management functions: product and service departments, support staffs, work groups, and individuals. Changing one part of the system often changes the overall system. The goal of any organization is to build a high-performance system that continually exchanges operational feedback among its various parts. This constant exchange of information ensures that activities remain closely aligned and focused on achieving the organization’s goals. Should any of the system’s processes or activities become misaligned based on its performance monitoring process, the system must make necessary adjustments to achieve its goals more efficiently. Grace Duffy, in her book Modular Kaizen,6 emphasizes the interconnectedness of processes into a whole system and identifies the impact that improvement and change will have not only on an individual process but also on the fabric of the complete system. The focus is on initial planning to stress the criticality of taking a broad view of the organization and how its individual parts work together to meet the projected outcomes the customer should experience.
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A View of the Organization’s System The persons seeking to improve productivity were aware of the importance of a systems approach for a long time. At the turn of the twentieth c entury, Frederick Taylor stressed the scientific view of managing the organization by breaking the production process down into individual tasks and standardizing as much as pos sible to increase productivity. His approach was to keep the worker focused solely at the task level, while management had the responsibility to see that individual tasks were woven together into an efficient flow to meet customer needs. Later, during and directly after World War II, Joseph Juran described process improvement as a top-down approach, starting with the ability of the overall system to meet the declared need of the user. Juran recognized that processes were composed of many subprocesses and that all the individual components were managed through planning, control, and improvement. Each improvement proj ect was managed as one segment of the aggregated organizational processes. Beginning in the 1980s, Geary Rummler insisted that the place to begin work in an organization was with an organization model and a high-level process architecture. Paul Harmon produced a generic organization model (Figure 1.4), incorporating the concept and issues attributed to Rummler. This model enabled an improvement team to identify the high-level processes and connect them with flow arrows to various external stakeholders. This transparency of process involvement from top management to frontline worker emphasized workforce engagement and clear alignment of daily work to overall organizational performance. At a minimum, this transparency ensured that everyone in the organization knew exactly what was being discussed when the team focused on a process such as the “sell widgets” process in Figure 1.4. Note the generic labeling to identify inputs to the organization: people, capital, technology, and materials. The organization shown is a hypothetical diagram of operations for making widgets. Although many organizations are now in the service sector, the concepts are the same. For example, the value chain for a public health organization could be: 1. Assess population needs 2. Plan services to meet identified needs 3. Provide services 4. Validate effectiveness through feedback The organization model was very important to Rummler because he worked primarily with business executives, and this was the perfect way to get businesspeople talking about how their organizations worked.7
SYSTEM VERSUS PROCESS When applied to a complex organization such as a corporation or multinational company, systems thinking means focusing on the organization as a whole—and transforming it as a whole—rather than merely paying attention to its individual parts or departments. By focusing on the entire system, solutions can be identified that address as many problems as possible. The positive effect of those solutions leverages improvements throughout the system.
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Part I Quality Basics
General environmental influences Local and global economies/government regulations and social trends
Organization Labor markets
People
Manage and finance widget production
Information and dividends
Shareholders
Requests for new products
Capital markets
Capital
Produce and sell widgets value chain Design widgets
Make widgets
Sell widgets
Marketing contacts Sales contacts
Research Technology community
Vendors
Materials
Markets
Customers
Orders
Supply human resources
Supply IT services
Provide facilities
Products and services delivered
Competition
Support requests
Competitive products
Figure 1.4 A Rummler-type organization model.
In systems thinking it is vital to identify and examine the interrelationships of the organization’s various subsystems and processes. For one subsystem to be improved to the detriment of other subsystems or the overall system is referred to as suboptimization. Balance and alignment across the organization is crucial. Systems thinking is not about copying other p eople’s best practices. It requires studying the process, testing the process against customer requirements, reinventing it, or readapting it to meet the requirements of each new situation. The foundation of systems thinking is continuous improvement and cooperation, not competition among different parts of the organization. The systems outlook is long term rather than short term.
TAKING A SYSTEMS VIEW OF IMPROVEMENT Quality Improvement Associates should have basic knowledge in each of seven areas identified by t hese questions: 1. Is the need for alignment of all functions and processes with orga nizational strategic goals and plans ongoing?
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2. How effectively is the organization organized and managed? 3. How are the organization’s processes designed, integrated, and operated for optimum performance to meet customers’ expectations? 4. How are organizational changes planned and implemented, and the outcomes assessed? 5. How are organizational and individual performance measurements designed and implemented, and the results effectively utilized, over time? 6. How are process improvements planned, implemented, measured, and assessed for effectiveness? 7. Are the most feasible technologies and quality improvement tools effectively employed to facilitate improvements within the organ ization’s system? Juran’s concept of Big Q versus l ittle q is illustrated in T able 1.1 as “big QI” and “little qi,” where the “I” or “i” indicates “improvement.” This concept appeared in Juran’s Planning for Quality, 2nd ed. (1990). Table 1.1 shows how levels of a continuum of quality improvement relate to big QI, little qi, and individual qi. The meso level acts as an overlay or m iddle ground between the macro and micro levels as a deployment transition from organizational to unit-specific projects. Table 1.1 also suggests the use of basic and advanced tools of quality within the scope of the organization versus unit activities.
Table 1.1 Quality improvement at three levels.
Topic
Big “QI”— organization-wide
Little “qi”— program/unit
Individual “qi”
System level Quality tools
Macro Advanced
Improvement
System focus
Specific project focus
Daily work level focus
Quality improvement planning
Tied to the strategic plan
Program/unit level
Tied to yearly individual performance
Evaluation of quality processes
Responsiveness to a community need
Performance of a process over time
Performance of daily work
Analysis of processes
Cut across all programs and activities
Delivery of a service
Daily work
Quality improvement goals
Strategic plan
Individual program/ unit level plans
Individual performance plans
Meso QFD/Lean-Six Sigma
Micro
Individual
Source: R. Bialek, G. Duffy, and J. Moran, Modular Kaizen: Dealing with Disruptions (Washington, DC: Public Health Foundation, 2011), 33.
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Part I Quality Basics QI is a never-ending process that pervades the organization when fully implemented. Top organizational leaders address the quality of the system at a macro level (Big Q). In the m iddle, professional staff attack problems in programs or ser vice areas by improving specific processes (little q). At the individual level, staff seek ways of improving their own behaviors and environments (individual q).8 When starting a quality journey, organizations tend to embrace l ittle q, which means striving for quality in a limited or specific improvement project or area. Little q can be viewed as a tactical approach to implementing quality and beginning to generate a culture of QI within the organization. Exploring the CQIA BoK (see Appendix A) segment by segment is a typical method for beginning to grasp the individual elements. However, it has one drawback: the BoK in its entirety represents a basic system of knowledge about what constitutes quality and how quality improvement should be addressed. During or after the BoK is initially studied, the reader should begin to formulate hypotheti cal scenarios, or think of work situations where two or more of the BoK segments are interrelated. While the BoK was initially viewed in stand-alone segments, it should now be viewed as one integrated system. Every segment is related in some way to one or more other segments. For example: An organization is experiencing customer complaints about the quality of a product or service delivered. The primary concern is “customer satisfaction and retention” (CQIA BoK section V). In analyzing for the root cause of the problem (CQIA BoK section III.B), specific data must be collected, analyzed (transformed into information), and applied in an improvement action. A four-person team (CQIA BoK section II) is formed to design and implement an improved process. No team training is done. Because of the conflict developing with team members’ time allocation between their primary job and the team, the team is having difficulty coalescing into a focused, viable entity. However, two team members have pushed on to surface some critical information: Multiple suppliers of a key input are utilized, and one supplier has been found to be furnishing a poor-quality item (CQIA BoK section IV). Incoming inspection has failed to identify the defectives. Using special- cause analysis (CQIA BoK section I.A.7), certain employees in one of the subsystem processes have been observed “working around” the item when it is found to be substandard. Without g oing further, the scenario has taken the reader into e very segment of the BoK, and into details of several segments. This brief excursion should demonstrate the value of asking about the applicability of the BoK segments when approaching an improvement opportunity.
SIPOC Analysis Process improvement efforts are often focused on removing a situation that has developed in which a process is not operating at a stable and expected level. However, much of continual improvement involves analyzing a process that may be performing as expected, but where a higher level of performance is desired. A fundamental step in improving a process is to understand how it functions from a
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process management perspective. This can be understood through an analysis of the process to identify the supplier-input-process-output-customer (SIPOC) linkages (see Figure 1.5).
Suppliers • Part suppliers • Auto manufacturer
Inputs
Process • Auto repair shop
• Troubleshooting guides • Replacement parts
Outputs
Customers • Car owner • Family members
• Repaired auto • Bill
Figure 1.5 SIPOC diagram.
It begins with defining the process of interest and listing on the right side of the figure the outputs that the process creates that go to customers, who are also listed. Suppliers and what they provide to enable the process (the inputs) are similarly shown on the left side. Once this fundamental process diagram is developed, two additional items can be discussed: (1) measures that can be used to evaluate performance of the inputs and outputs, and (2) the information and methods necessary to control the process.
VARIATION Define and distinguish between common and spe cial cause variation in relation to quality measures. (Understand) CQIA BoK 2020 I.A.7
Variations are differences, usually minor, from the designed and expected outputs of a process. Some variation is found in all processes. (Even the Earth wobbles as it completes its daily orbit.) The key to controlling processes is to control variation as much as possible. All variation has some cause. Knowing the c auses of variation is important in order to determine the actions that must be taken to reduce the variation. It is most important to distinguish between special cause variation and common cause variation. Special cause variation results from unexpected or unusual occurrences that are not inherent in the process. As an example: A school bus driver is on her way to pick up her first student in the morning when the engine stalls because of a fuel-line leak. This occurrence was not inherent in the student pickup process. Special c auses of variation account for approximately 15% of the observed variation in processes.
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Part I Quality Basics They are usually very easy to detect and correct. No major modifications to the process are required. These special causes are sometimes called assignable causes, because the variation they result in can be investigated and assigned to a particu lar source. Special causes are usually corrected by the task performer or accountable team. Common cause variation results from how the process is designed to operate and is a natural part of the process. As an example: A school bus driver starts her route of assigned streets on time, makes her required stops, and arrives at the school nine minutes later than usual but within the overall time allowance of her schedule. She experienced a slowdown due to the timing of traffic lights (a cause inherent in the process). Common causes of variation account for approximately 85% of the observed variation in processes. When the process is in control, as it was in the school bus example, t here is no need to take action. A process is said to be in a state of statisti cal control when there are no special c auses acting on it—that is, all variation is due to common c auses alone. In this situation, the process should not be adjusted for purposes of eliminating special cause variation. Common causes are sometimes called system, random, or chance causes because the variations they result in are inherent in the system. Chance c auses must be addressed through changes to the process itself and usually are the responsibility of management. Making minor adjustments to a process b ecause of perceived common cause variation is called tampering. Tampering can drive a process into further variation due to unnecessary changes being made to a stable process because of a misunderstood special cause that is actually a common cause. Process owners should recognize that the special cause variations in production or quality within manufacturing or service processes can usually be detected and removed by the individuals operating the process and that the common cause variations usually require management action to change some inherent feature of the process. This is sometimes called the 85/15 rule, recognizing that management is responsible for providing the necessary inputs to correct the majority of variation problems, that is, common c auses. One of the first goals of successful organizations is to concentrate on developing reliable processes. A reliable process is one that produces the desired output each time with very little variation. Once reliable processes are established and the system becomes stable, the next goal is to continually improve the process (further reduce variation) to produce output that is even better able to meet customer requirements. Many processes, particularly long-term, high-quantity production processes, lend themselves to the use of statistical process control (SPC). SPC is a method of monitoring a process during its operation in order to control the quality of the products or services while they are being produced rather than relying on inspection of the products or services after completion. SPC involves gathering data about the product or service as it is being created, graphically charting the data on one of several types of control charts, and tracking this information on the pro gress of the process to detect unwanted variation. Once a process is under control and shows very little variation, process capability studies can be run to calculate the maximum capability of the process. Once
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a process is r unning near its maximum capability, making any additional changes to the process is usually not economical.
STANDARDIZATION Describe how quality systems provide consistency and standardization (e.g., ISO 9001). (Remember) CQIA BoK 2020 I.A.8
Standardization is used by many mature industries for the mutual benefit of customers and suppliers. It extends to language, products, processes, and so on. All organizations make use of short design actions for their products, such as code numbers, abbreviations, words, and phrases. Such standardized nomenclature makes it easy to communicate with internal customers.9 In recent decades, steps toward standardization have been taken by professional societies, by national standardization bodies, and by the ISO. ISO’s 9000 series of standards for quality control systems is now widely accepted among Euro pean organizations. T here is no legal requirement for compliance, but as a marketing m atter, organizations are reluctant to be in a position in which their competitors are certified as complying with ISO 9000 standards but they themselves are not.10 Quality systems, w hether registered by a third-party organization or internally maintained through self-developed policies and procedures, serve to maintain compliance with customer requirements, standards, and effective/efficient performance standards. Standardization of processes, policies, and procedures allows smoother flow of product and services across the whole range of suppliers and processes and finally to customer delivery. Standardization is one of the three foundations of the kaizen activities of the lean system and means the documentation of the best way to perform a job. Standardization is inherent in a quality system when policies and common procedures such as those identified through the ISO 9001:2015 standard are used to manage processes throughout the system. Documenting, and implementing, efforts that result in an improvement for the purpose of conformity to similar or applicable processes or systems provides the basis for maintaining standardization. Standardization is intended to: • Reduce the number of characteristics or features of a system • Reduce the number of ways characteristics or features of a system may vary or interact • Prevent defects due to variation when everyone using the standard can read and understand how to consistently perform the tasks(s) one way Standardization can also mean the system that results in the identification of a nonconformance and then applies that solution to other similar areas in the
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Part I Quality Basics company. It has been adopted as the English term for the Japanese work seiketsu, one of the 5S’s of lean.11 The factory system of the late nineteenth and early twentieth centuries required associated changes in the system of quality control. When craft tasks were divided among many workers, those workers lost a direct connection to the customers. The responsibility of workers was no longer to provide satisfaction to the buyer (also customer or user). Few factory workers had contact with buyers. Instead, the responsibility became one of “make it like the sample” (or specification). Mass production also brought new technological problems. Products involving assemblies of bits and pieces demanded interchangeability of those bits and pieces. Then with the growth of technology and of ever-wider commercial territories, the need for standardization emerged as well. All this required greater precision in machinery, tools, and measurement. (Under the craft system, the artisan fitted and adjusted the pieces as needed.) In theory, such quality problems could be avoided during the original planning of the manufacturing processes. Here the limitation rested with the planners—the “master mechanics” and shop supervisors. They had extensive practical experience, but their ways were empirical, being rooted in craft practices handed down through the generations. They had little understanding of the nature of process variation and the resulting product variation. They were unschooled in how to collect and analyze data to ensure that their processes had “process capability” to enable the production workers to meet the specifications. Use of such new concepts had to await the coming of the twentieth century.12 Standardization is not limited to manufacturing pro cesses. All pro cesses, whether service, product, or administrative, benefit from standardization. These benefits include consistency, ease of assessment, measurement, automation, and the ability to gather accurate data across systems for effective decision making. Associated with the concept of standardization is the creation and implementation of standardized work. Standardized work is maintained through documented and agreed-upon procedures and practices to be used by all persons d oing the same type of work. Standardized work consists of agreed-to work instructions that utilize the best-known methods and sequence for each manufacturing or assembly process. Establishing standardized work supports productivity improvements, high quality, and the safety of workers.13
NOTES 1. Donald L. Siebels, The Quality Improvement Glossary (Milwaukee, WI: Quality Press, 2004). 2. ASQ, ANSI/ISO/ASQ Q9000:2000, Quality Management Systems—Fundamentals and vocab ulary (Milwaukee, WI: Quality Press, 2000). 3. National Institute of Standards and Technology, Baldrige Performance Excellence Pro gram (Gaithersburg, MD: National Institute of Standards and Technology, Technology Administration, United States Department of Commerce. 2012). The criteria change periodically. The version cited in this book is the 2012 criteria. The criteria are available in three categories: business, healthcare, and education. One copy of the criteria, any category, is available free of charge. Contact NIST: telephone 301-975-2036, e-mail nqp@nist.gov, or website http://www.baldrige.nist.gov. Bulk copies are available from ASQ: telephone 800-248-1946, e-mail help@asq.org, or website http://www.asq.org. Call ASQ for pricing.
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4. ASQ, ANSI/ISO/ASQ Q9000:2005, Quality Management Systems— Fundamentals and Vocabulary (Milwaukee, WI: Quality Press 2000). ASQ, ANSI/ISO/ASQ Q9001:2008, Qual ity Management Standards—Requirements (Milwaukee, WI: Quality Press, 2008); and ASQ, ANSI/ISO/ASQ Q9004:2009, Quality Management Standards—Guidelines for Performance Improvements (Milwaukee, WI: Quality Press, 2000). Available from ASQ: telephone 800-248-1946, e-mail help@asq.org, or website http://www.asq.org. Available in print form, for downloading (PDF ), and in English and Spanish. Call ASQ for pricing. 5. Stephen Hacker, foreword to Culture of Quality, by ASQ, Forbes Insight, Forbes, Inc. (New York, 2014). 6. Grace L. Duffy, Modular Kaizen: Continuous and Breakthrough Improvement (Milwaukee, WI: Quality Press, 2014), 43. 7. Paul Harmon, “Architecture and Process Management,” BPTrends 10, no. 7 (April 2012). 8. Grace Duffy, John Moran, and William Riley, Quality Function Deployment and Lean-Six Sigma Applications in Public Health (Milwaukee, WI: Quality Press, 2010). 9. Joseph M. Juran and Joseph A. De Feo, Juran’s Quality Handbook, 6th ed. (New York: McGraw Hill, 2010), 106. 10. Ibid., 34. 11. Jim L. Smith, Jim Smith’s Glossary of Terms and Definitions self-published, (Metamora, IL: n.p., 2016), 276. 12. Juran and De Feo, Juran’s Quality Handbook, 32. 13. Russell T. Westcott, ed., The Certified Manager of Quality/Organizational Excellence Hand book, 3rd ed. (Milwaukee, WI: Quality Press, 2006), 402.
ADDITIONAL RESOURCES Duffy, Grace L., ed. The ASQ Quality Improvement Pocket Guide. Milwaukee, WI: Quality Press, 2013. Juran, J. M., and A. B. Godfrey, eds. Juran’s Quality Handbook. 5th ed. New York: McGraw- Hill, 1999. Naval Leader Training Unit. Introduction to Total Quality Leadership. Washington, DC: U.S. Department of the Navy, 1997. Navy Total Quality Leadership Office. Handbook for Basic Process Improvement. Washington, DC: U.S. Department of the Navy, 1996. Westcott, Russell T., ed. The Certified Manager of Quality/Organizational Excellence Handbook. 4th ed. Milwaukee, WI: Quality Press, 2014.
Chapter 2 Benefits of Quality
Quality is not the exclusive province of engineering, manufacturing, or, for that matter, services, marketing, or administration. Quality is truly everyone’s job. —John R. Opel (IBM) By far the largest costs that outstanding service saves are t hose of replacing lost customers. —William Davidow and Bro Uttal Quality is the absence of compromise. —Unknown Be a yardstick of quality. Some people aren’t used to an environment where excel lence is expected. —Steve Jobs
Describe how using quality tools, techniques, and concepts can improve pro cesses and deliverables (including products and services), and how each ben efit all parts of an organization. Describe what qual ity means to various stakeholders (e.g., employees, organizations, customers, suppliers, community, and interested parties) and how each can benefit from quality. (Understand) CQIA BoK 2020 I.B
High quality affects all of an organization’s stakeholders. Employees, the organ ization itself, customers, suppliers, the community, and other interested parties benefit from total quality performance. The use of quality at all levels of the organ ization strengthens the organization’s ability to deliver excellent products and services. The concepts of quality at the executive level greatly influence the mission, vision, and values of the organization. These concepts suggest process-and 30
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data-driven techniques at the tactical level to integrate quality techniques into the major functions of the organization. Finally, processes, standard operating procedures, and improvement methods such as PDCA, lean, Six Sigma, and Agile provide tools that facilitate the daily management of quality in the workplace.
EMPLOYEES Quality benefits the employees involved in producing high-quality products and services by enhancing their feeling of accomplishment in knowing they have done their jobs to the best of their ability. It also strengthens the security of their position by ensuring continued work to meet the demands of satisfied customers. High-quality products and services sometimes demand higher prices, which can result in higher wages. Well-documented quality systems and processes make the employee’s job easier and less frustrating, reduce errors, and allow employees to grow b ecause they are given ready access to the information they need to acquire the skills and knowledge to succeed. By participating in the development of the organization’s processes, employees can see their experience, skills, and ideas being used for the benefit of everyone in the organization. Accurate, complete documentation reduces errors. And with instant access to information by employees performing the work, documentation allows unforeseen problems to be dealt with quickly and safely. Well-informed employees have less risk of on-the-job injuries. Employees benefit from the positive organizational culture that exists in a high-quality organization. The reputation, prestige, and image of a high-quality organization make it easier to recruit new employees and play an important part in employee job satisfaction. Satisfied employees are less likely to want to move on to other organizations.
ORGANI ZATIONS Quality benefits the organization because it represents the productive and cost- effective use of the organization’s resources. Processes that generate high-quality products and services result in lower costs from repair, rework, and warranty actions. High quality can lead to repeat orders from current customers, and it often enables an organization to win an enhanced reputation and additional orders in the marketplace. When there is a lack of quality it can not only result in losing the current order but also damage the supplier’s reputation and result in loss of future orders. It’s widely believed that one dissatisfied customer will tell at least 9 to 15 other people how poor your organization’s product or service is, and the loss of future orders could be substantial. The lack of a quality system can create the need for extensive rework, repair, and warranty actions. These actions add extra costs and delays and reduce the productivity of the system. When components are scrapped or services have to be repeated, it is not only the time and material cost that is lost but also the cost of all the work done on the product or service (the added value) up to the point at which it is scrapped. Poor quality costs money. Good quality may cost money too, but in most cases the costs of poor quality exceed those of good quality. According to a survey sponsored by the Automotive Industry Action Group (AIAG) and the ASQ Automotive Division, “Companies certified to the automotive
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Part I Quality Basics industry version of ISO 9000 estimated their average certification cost at $118,100 per site, while they estimated their benefit was $304,300 per site.”1 Good quality can be a very powerful marketing tool. Recognition by third- party sources can enhance an organization’s ability to market its products and ser vices in ways that competitors can’t. Here’s an example from a recent automotive advertisement: Over the past few years, Buick has steadily and quietly been improving its vehicles to where last year it received the highest ranking among domestic manufacturers for quality from JD Power and Associates. Buick’s Regal, which comes in either the LS or more elaborate GS trim, has benefited from this move to quality, which begins with the versatile 3.8-liter V-6 fuel-injection workhorse engine that powers several models. A high-quality organization can focus on continuous improvement—assessing what’s happening in the organization and preventing bad product and service quality—rather than just reacting to problems and cases of customer dissatisfaction. This proactive style of management w ill result in a much more profitable organization than a style that only reacts to problems. It greatly increases the probability of the organization’s survival.
CUSTOMERS Customer satisfaction has been defined as meeting or exceeding the customer’s requirements for product and service features, price, timeliness, and performance. Quality benefits the customer by increasing customer satisfaction. Fewer defects could also add to a customer’s satisfaction. Higher service quality will also make the customer ’s experience much more pleasant. Customers dealing with an organization that has a strong quality program w ill have fewer complaints b ecause they are receiving a product or service from better- trained staff following clearer processes and thus making fewer errors. As the organization progressively reduces the time it must devote to correcting m istakes, it can turn to reengineering its processes to make them more customer-friendly and more cost-effective. Customers w ill increase their trust in the organization because they know that it takes quality seriously and offers a higher level of service. Every organization has customers. Quality organizations differentiate themselves from their competitors by providing their customers with high levels of personalized customer care. Evidence has shown it’s easier and much less costly to retain current satisfied customers than to replace lost customers. Although increased sales and growing profits are generally seen as an accurate measurement of success, customer retention may be the most inclusive measure ment. High-quality organizations build lasting long-term customer relationships. An increasing number of organizations, both public and private, continually measure customer satisfaction. A national, cross-industry measure of customer satisfaction is the American Customer Satisfaction Index (ACSI), an economic indicator of customer satisfaction with the quality of goods and services available to consumers in the United States. Results of the surveys are posted on the ACSI website (http://www.theacsi.org). See Chapter 13 for more information relating to customers.
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SUPPLIERS Quality organizations work closely with their suppliers and share information to ensure that the suppliers fully understand the organization’s requirements and that the organization knows the capabilities of its suppliers. Suppliers’ sales, marketing, and service personnel know what the organization needs and can communicate with the appropriate personnel at their customers’ facilities to resolve potential problems before they become serious concerns. Suppliers benefit from working with quality organizations b ecause of the close relationships that the organizations and the suppliers establish to accomplish their mutual goals. Good supplier-organization collaboration tends to have a common set of characteristics: • Reduced cost of inspections • Less frequent customer audits • Open sharing of organization and supplier quality information • Frequent visits to both the organization’s and the supplier’s facilities to ensure mutual understanding of each party’s relative responsibilities • Supplier shipments of materials directly to the organization’s production line for immediate use, such as actions to lower customers’ internal inventory • Decreased expenses from cost sharing • Reduced risk to the organization because of its ability to use the supplier ’s knowledge and skills to improve its product or service See Chapter 12 for more information relating to suppliers.
COMMUNITY The individual communities in which high-quality organizations operate share in the benefits just mentioned. Successful employees, organizations, and suppliers are taxpayers. They contribute to the community by stabilizing the economy. Think of the many communities and regions that have been devastated by the failure of organizations and industries. The quality, productivity, and competitiveness of high- quality organizations directly affect the viability of the communities they occupy. Communities are very aware of the benefits of having high-quality organ izations. Many state and local government jurisdictions provide incentives, including training and consulting, for organizations to fully develop their potential and to assist employees in gaining the necessary training and skills to work in the highly competitive environment of today’s economy.
INTERESTED PARTIES The benefits of quality and performance excellence are both tangible and intangible. This chapter has discussed the benefits to employees, organizations, customers, suppliers, and the community. The global marketplace is complex. There may
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Part I Quality Basics be a complex network of interested parties that benefit from high-quality products, services, and processes generated by the organization. Global value chains now influence multiple commercial or social interactions. Social media provides a front-seat view of the reputation of companies, nonprofits, and other government or agency entities. Some of t hese networks will produce new markets that generate tangible revenue. Other networks w ill encourage word-of-mouth interest in products and services, or simply an increase in support to a socially responsible cause. The strategic planning process should include a brainstorming session by the executives and senior leaders to answer the following questions: • What other entities are interested in what our organization is d oing? • How does what we do affect each of those entities? • What are the opportunities or barriers that this relationship creates for our organizational future? • Can we put a tangible value on these opportunities or barriers? • If not tangible, what is the potential risk or benefit of this relationship in general terms? • Can we prioritize the opportunities or barriers for further study during the strategic planning process?
QUALITY BENEFITS TO SOCIETY AS A WHOLE Everyone can help make communities better places in which to live and work. The process of improvement requires proactive participation by all members of the community: technical societies, neighborhood associations, government agencies, religious organizations, educational institutions, corporations, and businesses. In many locations, community quality councils provide a forum for improving the quality of life in communities and regions through the use of total quality management (TQM) principles. Embracing TQM principles is a major step forward for all types of organizations. The next step involves society itself. Applying improvement principles to a community is a leading-edge concept in the quality movement. Quality brings other factors into play, such as vision, leadership, and lifelong learning. It is important because it gives people the opportunity to cooperate and gives their enterprises the means to strive for excellence. The essential ingredient for community improvement is a network of civic and government entities focused on quality and improvement principles. The benefit of propagating quality and improvement principles and practices through a community quality council is that success helps preserve jobs—truly a win-win situation. Successful experiences in life are almost always the result of careful planning and thorough preparation. People are using quality principles in their communities, providing a pragmatic, holistic approach to making fundamental improvements in the way community problems are addressed. Their experiences are lessons that can be shared for the benefit of all. Many state and local governments also sponsor quality awards, usually based on the Baldrige Performance Excellence Program criteria, to encourage organizations to advance the level of the quality management processes in their respective
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communities. Following is an example of the involvement of stakeholders in a healthcare process: A northern V irginia hospital system recently initiated a process improvement effort to address the issue of patient sepsis. Sepsis is a potentially fatal whole-body inflammation (a systemic inflammatory response syndrome) caused by severe infection. Sepsis is a significant cause of mortality in hospital patients. Treatment of sepsis also results in an extended length of stay, a measure tracked by the regulating bodies and used as part of hospital reimbursement. The hospital director of pharmacy chartered a process improvement team to reduce the incidence of sepsis within the hospital. In establishing the charter, the team identified the following stakeholders: 1. Patients and patient families (considered the primary customers of healthcare) 2. Nurses, pharmacists, physicians, and hospital support staff (employees) 3. Hospital billing department, insurance providers, and Centers for Medicare and Medicaid (organization) 4. Rehabilitation centers, referring physicians, and other hospitals (suppliers) 5. Northern Virginia counties supported by the hospital system, professional societies, and other healthcare organizations addressing the sepsis issue, and The Joint Commission (community) The team recognized that the project affected more than the patient and internal hospital professionals. It included external stakeholders such as hospital rehabilitation partners that referred critical sepsis patients to the hospital for treatment. Although the team started the project tracking sepsis only in patients arriving through the emergency department, their success led them to broaden the scope of the project to train the rehabilitation center staff on the recognition and initial treatment of sepsis. As a result of an interim reduction in mortality, the project team was included in a nationwide pilot program run by The Joint Commission. Members of the process improvement team have published papers documenting their successes and lessons learned in professional journals, society newsletters, and conference proceedings. Contact the ASQ Knowledge Center for reference to books and publications incorporating quality improvement with the stakeholders discussed above.
NOTE 1. M. Economou, “Quality’s Not Costly,” Manufacturing Engineering 120, no. 3 (1998): 20.
Chapter 3 Foundations of Quality
Understand the key concepts and teachings of the foundational quality thought leaders including 1) Wal ter Shewhart, 2) W. Edwards Deming, 3) Joseph Juran, 4) Kaoru Ishikawa, 5) Philip Crosby, and 6) Armand Feigenbaum. (Understand) CQIA BoK 2020 I.C
The princi ples for modern quality management have evolved over the past 100 years based on the work of noteworthy experts who are sometimes referred to as quality gurus. These experts have developed a number of theories and princi ples that assist organizations in understanding the foundations of quality. It is critical to understand the history of quality and the contributors who s haped the foundations of quality through their quality management philosophies. Figure 3.1 shows the key quality gurus and their philosophies that had an impact on the principles of quality management and operational excellence. Their philosophies began having an impact in the 1920s and continue as the underlying principles of quality management and operational excellence to this day. Philosophy is defined in Webster’s Dictionary as “a system of fundamental or motivating principles that form a basis for action or belief.”1 A quality philosophy “emphasizes a customer focus, continuous improvement, employee empowerment, and data-driven decision making.”2 A quality philosophy should reflect how an organization acts in its day-to-day business operations. It should reflect the organization’s ideas, values, principles, attitudes, and beliefs. The organization’s quality philosophy sets the cultural background in which the organization operates. The philosophy should focus on improving the organization and helping it grow to meet its full potential. A quality philosophy will be the background for developing the organization’s mission, strategic goals, objectives, and plans and will assist the organization’s employees in understanding what is expected of them. Given these documents, employees can work in an environment with guidelines for understanding and responding to day-to-day variables in their work experiences. A philosophy with a strong focus on quality requires managers to develop well-defined management systems with an emphasis on process management. In developing a quality philosophy, managers need to focus on the following: 36
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• What their customers consider the most important quality characteristics of the organization’s products and services • What the needs and expectations of their customers, other stakeholders, and society are • What ethical principles should govern how the organization operates • How the quality philosophy affects the overall operation of the organ ization’s other management systems (financial, health and safety, environmental, and so on) • What statutory, regulatory, and technical specification requirements affect the organization’s operations • Which of the currently available quality tools should be used in developing and supporting the organization’s quality management system The following sections discuss the quality gurus and their quality management philosophies shown in Figure 3.1, along with Genichi Taguchi, who developed quality tools that are important to the quality improvement body of knowledge. Many other quality professionals have contributed to the quality philosophies, principles, tools, and methodologies since these early pioneers. T hese gurus provide the foundation for those who have followed in improving quality in our products and services.
Statistical process control
System of profound knowledge
Walter Shewhart
W. Edwards Deming
Total quality control
Quality trilogy
Foundations of quality
Armand Feigenbaum
Joseph Juran
Absolutes of quality management
Ishikawa diagram
Philip Crosby
Kaoru Ishikawa
Figure 3.1 Foundations of quality: quality gurus and philosophies. Source: Sandra L. Furterer.
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Part I Quality Basics
WALTER A. SHEWHART Walter A. Shewhart was born in New Canton, Illinois, on March 18, 1891. He received his bachelor’s and master’s degrees from the University of Illinois and his PhD in physics from the University of California at Berkeley in 1917. He taught at the Universities of Illinois and California, and he briefly headed the Physics Department at the Wisconsin Normal School in La Crosse, Wisconsin. Shewhart spent most of his early professional career as an engineer at Western Electric (1918–1924) and later worked at Bell Telephone Laboratories, where he served as a member of the technical staff from 1925 until his retirement in 1956. He lectured on quality control and applied statistics at the University of London, at Stevens Institute of Technology, at the graduate school of the U.S. Department of Agriculture, and in India. Called on frequently as a consultant, Shewhart served the War Department, the United Nations, and the government of India, and he was active with the National Research Council and the International Statistical Institute. He served for more than 20 years as the first editor of the Mathematical Statistics series published by John Wiley and Sons. He is considered by many to be the father of statistical quality control. Shewhart died on March 11, 1967, in Troy Hills, New Jersey. Walter Shewhart introduced a scientific method for process improvement in 1939 that was originally described as a three-step process of specification, production, and inspection for mass production that “constitutes a dynamic scientific pro cess of acquiring knowledge.”3 These steps correspond to the scientific method of hypothesizing, carrying out an experiment, and testing the hypothesis. Shewhart depicted this process graphically as a circle to convey the importance of continual improvement. The Shewhart Cycle is more commonly known as the Plan-Do- Check-Act Cycle, or PDCA. Deming modified Shewhart’s idea and presented it during his seminars in Japan in 1950 as the PDSA or Deming Cycle (Chapter 8). Shewhart initially published the control chart concept in the December 1925 issue of the Journal of the American Statistical Association.4 He published his book Economic Control of Quality of Manufactured Product in 1931. He observed that variation exists in everything, and he introduced the concepts of chance or random causes and assignable causes. He discussed the concepts of statistical versus physical laws. He believed that everyone who is involved in manufacturing control needs to have knowledge of statistics and be able to apply statistics correctly to solve manufacturing control problems. Shewhart defined control: “a phenomenon will be said to be controlled when, through the use of past experience, we can predict, at least within limits, how the phenomenon may be expected to vary in the future. Here it is to understand that prediction within limits means that we can state, at least approximately, the probability that the observed phenomenon w ill fall within the given limits.”5 Shewhart’s book includes charts showing variation with respect to quality characteristics. The control chart provides control limits calculated on the basis of variation in the process. Using the control limits and patterns of random variation helps us understand when a process is stable or in control, or when there is sporadic variation where one should investigate assignable causes. The manufacture of products varies by the very nature of manufacturing processes; no two products w ill be exactly the same. This concept demonstrates the need to be able to control processes, to be able to predict how these processes
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ill behave in the f uture. It is not possible to predict the quality of a single prodw uct before it is made, but we can, with Shewhart’s principles and control charts, understand and predict how groups of products and processes w ill behave over time. Shewhart introduced many of the underlying principles that we still use in quality control today.
W. EDWARDS DEMING William Edwards Deming was born on October 14, 1900, in Sioux City, Iowa. His family then moved to several other locations, ending up in Powell, Wyoming. Deming attended the University of Wyoming, earning a bachelor’s degree in engineering in 1921. He went on to receive a master’s degree in mathematics and physics from the University of Colorado in 1925, and he earned a doctorate in physics from Yale University in 1928. During the summers of 1925 and 1926, he worked for the Western Electric Company’s Hawthorne plant in Chicago. It was at Hawthorne that he met Walter A. Shewhart and became interested in Shewhart’s work to standardize the production of telephone equipment. After receiving his PhD, Deming went to work for the U.S. government. He applied Shewhart’s concepts to his work at the National Bureau of the Census. Routine clerical operations w ere brought u nder statistical process control in preparation for the 1940 population census. This led to sixfold productivity improvements in some processes. As a result, Deming started to run statistical courses to explain his and Shewhart’s methods to engineers, designers, and others in the United States and Canada. In 1938, he published a technical book and taught courses on the use of his statistical methods.6 The beneficial effects of Deming’s programs, such as reductions in scrap and rework, were seen during World War II. However, his techniques were generally abandoned after the war as emphasis shifted to producing quantities of consumer goods to alleviate the shortages that had been experienced during wartime. After World War II, Deming was invited to Japan as an advisor to the Japanese census. He became involved with the Union of Japanese Scientists and Engineers (JUSE) after its formation in 1946. As a result, Deming’s name became known and JUSE invited him to lecture to the Japanese on statistical methods. In the early 1950s he lectured to engineers and senior managers, including in his lectures ideas now regarded as part of modern quality principles. In 1956, Deming was awarded the Shewhart medal by the American Society for Quality Control. Four years later, Deming’s teachings were widely known in Japan, and the emperor awarded him the Second Order of the Sacred Treasure. In the late 1970s, Deming started to work with major American organizations. But his work remained relatively unknown in the United States u ntil June 1980, when NBC aired a documentary entitled “If Japan Can, Why Can’t We?” Following this exposure, he became well known and highly regarded in the quality community. Deming’s first popular book, Out of the Crisis, was published in 1986. The following year, he was awarded the National Medal of Technology in Americ a. Deming died in 1993 at the age of 93.
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Part I Quality Basics
Deming’s Philosophies Deming’s teachings reflected his statistical background. He encouraged managers to focus on variability and to understand the difference between special c auses and common causes. Deming’s writings, teachings, and work also extended beyond statistical methods. He encouraged organizations to adopt a systematic approach to problem solving, which later became known as the Deming Cycle, or the Plan-Do-Study- Act (PDSA) cycle. He also pushed senior managers to become actively involved in their companies’ quality improvement programs. Work done by Deming and his followers in the United States and elsewhere has attempted to make major changes in the style of Western management. Deming taught that management should have a full understanding of his philosophies in order to achieve sustainable progress in an organization. He constantly improved and refined his ideas, and he also used the ideas of o thers. He is considered by many to be the father of the modern quality revolution. In his landmark 1986 book, Out of the Crisis, Deming delineates a “chain reaction” philosophy, shown in Figure 3.2: improve quality → decrease costs → improve productivity → increase market share with better quality, lower price → stay in business → provide more jobs. In the book, he discusses management’s failures in planning for the future and foreseeing problems. These shortcomings create a waste of resources, which in turn increases costs and ultimately affects the prices to customers. When customers do not accept paying for such waste, they go elsewhere, resulting in loss of market for the supplier. In the introduction to Out of the Crisis, Deming discusses the need for an entirely new structure, from the foundation upward, to achieve the needed transformation and replace the typical American reconstruction or revision approach. He proposed a new structure in his renowned 14 points of management. Following is a condensed listing of Deming’s 14 points from Deming’s Out of the Crisis:7 1. Create constancy of purpose toward improvement of product and ser vice, with aim to become competitive and to stay in business, and to provide jobs. 2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change. 3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place. 4. End the practice of awarding business on the basis of price tag. Instead minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust. 5. Improve constantly and forever the system of production and service. To improve quality and productivity, and thus constantly decrease costs. 6. Institute training on the job.
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Return on
investment
Provide jobs
and more jobs
Stay in
business
Increase market
Decrease prices
Improve
productivity
With each improvement,
processes and systems run better and better.
Productivity increases as waste goes down.
Decrease costs
Customers get better
products, which ultimately increases market share,
Improve quality
leading to better return on investment.
Figure 3.2 Deming’s chain reaction. Source: Adapted from W. Edwards Deming, Out of the Crisis (Cambridge, MA: MIT, Center for Advanced Engineering Study, 1986), 3.
7. Institute leadership. The aim of supervision should be to help people and machines to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers. 8. Drive out fear, so that everyone may work effectively for the company. 9. Break down barriers between departments. 10. Eliminate slogans, exhortations, and targets for the workforce asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality
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Part I Quality Basics and low productivity belong to the system and thus beyond the power of the workforce. 11. A. Eliminate work standards (quotas) on the factory floor. Substitute leadership. B. Eliminate management by objectives. Eliminate management by numbers, numerical goals. Substitute leadership. 12. A. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibilities of supervisors must be changed from sheer numbers to quality. B. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means abolishment of annual or merit rating and of management by objectives. 13. Institute a vigorous program of education and self-improvement. 14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job. In Out of the Crisis, Deming also discusses the seven “deadly diseases,” which include lack of constancy of purpose, focus on short-term profits, evaluation of performance with management by objectives, management that is too mobile, running a company only by the visible figures or mostly financials, and excessive medical and legal costs.
The Deming Chain Reaction Deming believed there was a relationship between quality and productivity. As quality increased, productivity also increased, and costs decreased due to reduced rework, defects, and mistakes. With improved quality and higher productivity, prices could be reduced, which could result in increased market share, resulting in the ability of the organization to stay in business and provide more jobs. Deming believed that it was the organization’s responsibility to society to provide jobs to the workforce. Deming’s Chain Reaction is shown in Figure 3.2.
Deming’s System of Profound Knowledge In 1993, Deming outlined his system of profound knowledge in his final book, The New Economics for Industry, Government, and Education. This is the knowledge needed for transformation from the present style of management to one of optimization. Deming’s system of profound knowledge includes management’s need (1) to understand and appreciate systems, (2) to have knowledge of statistical theory and variation, (3) to connect theory and practice, and (4) to have an understanding of psychology and how it impacts people in organizations. A system is a collection of processes that create work to achieve the purpose of the organization. A process is a collection of activities. Processes can be performed by people with or without technology or automation. Some processes can be completely automated, although those are still few and far between. It is important to understand how the processes within a system interact with each other. Systems typically cross organizational departmental boundaries, and viewing a system and the processes within the system helps eliminate problems with handoffs
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across departments and reduce silo thinking. It is critical to optimize the entire system rather than individual processes and components that are part of the system, which can cause suboptimization of processes and systems. As was discussed in the section on Shewhart, it is important to understand how variation and statistical theory impact our processes and help us understand how to manage and control t hese processes. Descriptive statistics can help us mea sure our system and collect statistics on our process, define the central tendency and the variability, and understand outliers in our data. Probability theory helps us assess how our processes behave and whether they “fit” into known probability distributions, such as normal, binomial, or Weibull distributions, which are some of the more common distributions observed in manufacturing processes. Inferential statistics include performing hypothesis testing that can help us assess w hether our processes are improving and w hether the data fit certain distributions. Statistical theory helps us apply appropriate sampling techniques to ensure statistically valid sample sizes and techniques. Deming believed that statistics should be the language of management in an organization, and that everyone should be familiar with statistics and statistical theory. The theory of knowledge helps us better understand our systems and pro cesses. Deming believed that one needs a theory of how our systems and pro cesses work, as well as experience with the systems and data to test and/or prove whether the theory is true or not. The theory helps us understand the causes and factors that contribute to variation and problems in our processes. The practice and experience help us understand the processes. Psychology helps us understand how people behave, what motivates them, and how leaders and employees interact and work together. This knowledge can help us manage change in the organization. Some people are motivated intrinsically, from within, while o thers are motivated by extrinsic factors such as pay or bonuses. Deming advocated that p eople are not motivated by pay, which was quite controversial at the time that he developed his theory of profound knowledge. Research has shown that pay may have only a short-term or temporary impact on motivation.8
The Deming Cycle (PDSA) Deming’s problem-solving method is referred to as the Deming Cycle, or Plan- Do-Study-Act (PDSA). Shewhart initially used the PDCA cycle. The Plan phase includes studying the current state and documenting the process, collecting data regarding the process and the customers’ expectations, and developing potential solutions. The Do phase includes piloting the improvement ideas and collecting data on the piloted improvements. The Study phase includes assessing w hether the improvements improved the situation and revising it if needed. In the Act phase, the final best-practice process is implemented and standardized.9
JOSEPH M. JURAN Joseph Moses Juran was born to a poor family in Braila, Romania, in December 1904. Five years later his father Jakob left Romania for Americ a. By 1912, he had earned enough money to have the rest of the family join him in Minnesota.
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Part I Quality Basics The younger Juran did well in school and showed a high level of proficiency in math and science; in fact, he did so well that he was able to skip the equivalent of four grade levels. In 1920, he enrolled at the University of Minnesota, the first member of his family to pursue higher education. He received a BS in electrical engineering in 1925 and began working at Western Electric in the inspection department of the famous Hawthorne Works in Chicago. The next year he was selected from a group of 20 trainees to become one of two engineers for the Inspection Statistical Department, one of the first such divisions created in American industry. In 1937, Juran was the chief of industrial engineering at Western Electric’s home office in New York. During World War II, Juran received a temporary leave of absence from Western Electric to assist the U.S. government with the war effort. During that time, he served in Washington, D.C., as an assistant administrator for the Office of Lend-Lease Administration. He and his team improved the efficiency of the process, eliminating excessive paperwork and thus hastening the arrival of supplies to the United States’ overseas friends. Juran did not return to Western Electric. Rather, he chose to devote the remainder of his life to the study of quality management. As early as 1928, Juran had written a pamphlet entitled “Statistical Methods Applied to Manufacturing Problems.” By the end of the war, he was a well-known and highly regarded statistician and industrial engineering theorist. After he left Western Electric, Juran became the chairman of the Department of Administrative Engineering at New York University, where he taught for many years. In 1951, the first Juran Quality Control Handbook was published and led him to international eminence. Still a classic standard reference work for quality man agers, it is now in its seventh edition. The Japanese Union of Scientists and Engineers invited Juran to come to Japan to teach them the principles of quality management as they rebuilt their economy a fter World War II. He arrived in 1954 and conducted seminars for top and middle-level executives. His lectures had a strong managerial flavor and focused on planning, organizational issues, management’s responsibility for quality, and the need to set goals and targets for improvement. He emphasized that quality control should be conducted as an integral part of management control. In 1979, Juran founded the Juran Institute to better facilitate broader exposure of his ideas. The Juran Institute is today one of the leading quality management consultancies in the world. In 1981, Juran received the Second Order of the Sacred Treasure award from Emperor Hirohito for “the development of quality control in Japan and the facilitation of U.S. and Japanese friendship.” His books have collectively been translated into 13 languages. He received more than 30 medals, honorary fellowships, and awards from 12 different countries. Dr. Juran, who continued working to promote quality management, died at 103, in 2008.
Juran’s Philosophies Juran taught a project- by- project, problem- solving, team method of quality improvement in which upper management must be involved. He believed that quality does not happen by accident; it must be planned. And he asserted that quality improvements come from a project-by-project approach. Juran’s book Planning for Quality is perhaps the definitive guide to Juran’s thoughts and his structured approach to company-wide quality planning. Juran
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taught that quality planning is the first step in a three-level approach to quality management within the organization. Along with planning comes quality control, which involves assessing quality performance, comparing performance with established goals, and closing the gap between actual performance and stated goals. Juran saw the third level—quality improvement—as a continual process that includes the establishment of the organizational infrastructure necessary to make cyclical quality improvements. He recommended using teams and project-by-project activities to maintain a continual effort toward both incremental and breakthrough improvement. Juran viewed quality planning as part of a quality trilogy of quality planning, quality control, and quality improvement. His key points in implementing organization-wide quality planning include identifying customers and their needs; establishing optimal quality goals; creating measurements of quality; planning processes capable of meeting quality goals under operating conditions; and producing continuing results in improved market share, premium prices, and reduction of error rates in an office or factory. Juran’s more recent work involved creating an awareness of the quality crisis, establishing a new approach to quality planning, training, assisting companies with replacing existing processes to avoid quality deficiencies, and establishing mastery within companies over the quality planning process, thus avoiding the creation of new chronic problems. In the fifth edition of Juran’s Quality Handbook, Juran contrasts the concepts of “Big Q” (transactional or business processes) and “little q” (operation or production processes).10 Juran believed that the majority of quality problems are the fault of poor management rather than poor workmanship on the shop floor. In general, he believed that management-controllable defects account for over 80% of all quality problems. He was one of the first to incorporate the h uman aspect of quality management, which is now embraced within the concept of total quality management. Juran’s process of developing his ideas was gradual. Top management involvement, the need for widespread training in quality, the definition of quality as fitness for use, the project-by-project approach to quality improvement, the distinction between the “vital few” and the “useful many,” and the quality trilogy (quality planning, quality control, and quality improvement)—these are the ideas for which Juran is best known.
Juran’s Breakthrough Sequence In Juran’s breakthrough sequence, all breakthroughs follow this approach: (1) proof of need or building the business case justifying the need for the project; (2) proj ect identification—taking a project approach, solving each problem project by proj ect; (3) organization for breakthrough—defining the organization of the people who will solve the problem and work on the project; (4) diagnostic journey— investigating the problem and process, collecting data, and analyzing the problems; (5) remedial journey—selecting a solution, implementing it, and dealing with resis tance to change; and (6) holding the gains—establishing new standards and procedures, and implementing training and controls to ensure that the process remains standardized.11
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KAORU ISHIKAWA Kaoru Ishikawa was born in 1915 and graduated in 1939 with a degree from the Engineering Department of Tokyo University, having majored in applied chemistry. In 1947, he was made an assistant professor at the university. He obtained his doctorate of engineering and was promoted to professor in 1960. He was awarded the Deming Prize and the Nihon Keizai Press Prize, the Industrial Standardization Prize for his writings on quality control, and the Grant Medal from the American Society for Quality Control in 1971 for his education program on quality control. He died in April 1989. Ishikawa is best known as a pioneer of the quality circle movement in Japan in the early 1960s. In a speech at a convention to mark the 1000th quality circle in Japan in 1981, he described how his work took him in this direction: “I first considered how best to get grassroots workers to understand and practice quality control. The idea was to educate all p eople working at factories throughout the country, but this was asking too much. Therefore, I thought of educating factory foremen or on-the-spot leaders in the first place.” In 1968, Ishikawa produced a nontechnical quality analysis textbook for quality circle members. The book, Guide to Quality Control, was subsequently translated into English in 1971, with a second edition published by the Asian Productivity Organization in 1982. He subsequently published What Is Total Quality Control? The Japanese Way, which was also translated into English (Prentice Hall, 1985).
Ishikawa’s Philosophies In his teachings, Ishikawa emphasized good data collection and presentation. He is best known for his promotion of the use of quality tools such as the Pareto chart to prioritize quality improvements and the cause-and-effect diagram (also known as the Ishikawa or fishbone diagram). Ishikawa saw the cause-and-effect diagram, like other tools, as a device to assist groups or quality circles in quality improvement. Therefore, he emphasized open group communication as critical to the construction of the diagrams. Ishikawa diagrams are useful as systematic tools for finding, sorting out, and documenting the causes of variation of quality in production and for organizing mutual relationships between them. Ishikawa is associated with the company-wide quality control movement that started in Japan in the years 1955–1960, following the visits of Deming and Juran. Under this system, quality control in Japan was characterized by company-wide participation, from top management to lower-ranking employees. Quality control concepts and methods were used for problem solving in the production pro cess, for incoming material control and new product design control, for analysis to help top management decide policy and verify that policy was being carried out, and for solving problems in sales, personnel, labor management, and clerical departments. Quality audits, internal as well as external, formed part of this activity.
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PHILIP B. CROSBY Philip B. Crosby was born in Wheeling, West Virginia, on June 18, 1926. He served two tours in the U.S. Navy, separated by attendance at Western Reserve University. He worked as a technician in the quality department for the Crosley Corporation from 1952 to 1955. He then moved to the Martin-Marietta facility in Mishawaka, Indiana, where he was a reliability engineer on a government missile program. L ater, Crosby moved to the Martin-Marietta facility in Orlando, Florida, where he worked as a quality manager. It was h ere that he created the “zero defects” concept. In 1965 he began working for ITT. During his 14 years as corporate vice president for ITT, he worked with many ITT subsidiary manufacturing and service divisions around the world, implementing his philosophy. In 1979, he founded Philip Crosby Associates (PCA). PCA taught management courses on how to establish a quality improvement culture. Large corporations such as GM, Chrysler, Motorola, Xerox, and many other organizations worldwide came to PCA to understand quality management. The courses w ere taught in many languages in locations around the world. Crosby’s first book, Quality Is F ree, sold over 2 million copies and was translated into 15 languages. Many organizations around the world began their quality improvement activities because of the popularity of Quality Is F ree and b ecause of Crosby’s reputation for clear and to-the-point advice. Much of Quality Is Free is devoted to the concept of zero defects, which is a way of explaining to employees the idea that everything should be done right the first time, that there should be no failures or defects in work outputs. He published his second best seller, Quality without Tears, in 1984, and he is also the author of The Art of Getting Your Own Sweet Way. More recently, he published a group of three management books: Running Things, The Eternally Success ful Organization, and Leading: The Art of Becoming an Executive. Philip B. Crosby died in August 2001.
Crosby’s Philosophies According to Crosby, quality is conformance to requirements, and it can only be measured by the price of nonconformance. This approach means that the only standard of performance is zero defects. Cost of quality refers to all costs involved in the prevention of defects, assessment of process performance, and measurement of financial consequences. Management can use cost of quality to document variations against expectations and to measure efficiency and productivity. Crosby believed that tracking cost of quality takes the business of quality out of the abstract and brings it sharply into focus as cold, hard cash. Crosby claimed that all nonconformances are caused—they don’t appear without reason. Anything that is caused can be prevented. Therefore, organizations should adopt a quality “vaccine” to prevent nonconformance and save money. The three ingredients of the vaccine are determination, education, and implementation.
The Points of, or Steps to, Quality Improvement The points that Crosby considered essential are the following:12
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Part I Quality Basics • Management commitment • Education and training • Measurements • Cost of quality • Quality awareness • Corrective action • Zero defects • Goal setting • Recognition Crosby’s points offer a way to implement the quality improvement process in an organization. They are management tools that evolved from a conviction that an organization’s quality improvement policy should be defined, understood, and communicated in a practical manner to every member of the organization. Crosby’s perception of a continuing successful organization embraces the ideas that everyone in the organization routinely performs his or her tasks right the first time and that the organization continues to grow and prosper, that new offerings to customers are created as needed, that change is viewed as an opportunity, and that the people in the organization enjoy working there. Crosby’s basic elements of improvement are (1) determination—top management being responsible and buying into quality improvement; (2) education—everyone understanding the four absolutes of quality management; and (3) implementation— everyone understanding the implementation process.13
The Four Absolutes of Quality Management Crosby articulated four absolutes of quality management as the basic concepts of a quality improvement process. The essence of these absolutes is contained in the following statements: 1. Conformance to requirements is the only definition of quality 2. What causes quality is prevention, not appraisal 3. Zero defects is the only acceptable performance standard 4. The price of nonconformance is how quality should be measured Crosby is best known for his concepts of do it right the first time and zero defects. He considered traditional quality control, acceptable quality limits, and waivers of substandard products to represent failure rather than assurance of success. He believed that b ecause many organizations have policies and systems that allow deviation from what is actually required, the organizations lose vast amounts of revenue by d oing things wrong and then doing them over again. He estimated the loss to be 20% of revenues for manufacturing companies and up to 35% of revenues for service organizations. The differences and similarities among the philosophies of Deming, Juran, and Crosby are shown in Figure 3.3.14
Chapter 3 Foundations of Quality
Quality Philosophy Element Main Philosophy
Quality Definition Culture Change Leadership’s Role Language of Management Improvement Methodology
W. Edwards Deming • Theory of Profound Knowledge: Appreciation for a system; Understanding variation; Theory of knowledge; Psychology • Deming’s 14 Points & Deadly Causes • Deming’s Chain Reaction • Variation is the culprit of poor quality Meeting customers’ needs and wants Leadership must transform the culture Top management must assume responsibility for quality Statistics Deming Cycle: Plan, Do, Study, Act
Quality Guru Joseph Juran • Quality Trilogy: quality planning, quality control, quality improvement • Management for Quality • Quality Control Handbook
Fitness for use No culture change is needed Management commitment to quality improvement Different languages at different levels of an organization Breakthrough sequence
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Philip Crosby • 4 Absolutes of Quality Management: conformance to requirements; quality system is prevention of defects; quality performance standard – zero defects; quality measurement – cost of quality • Cost of Quality • Quality Is Free Conformance to requirements Emphasis on behavioral change, calling for change within the current system Focuses on managerial thinking Cost of Quality Basic Elements of Improvement: Determination, education and implementation
Figure 3.3 Comparing the quality philosophies of Deming, Juran, and Crosby. Source: Sandra L. Furterer.
ARMAND V. FEIGENBAUM Armand V. Feigenbaum was born in New York City in 1920. He attended Union College and the Massachusetts Institute of Technology (MIT), graduating in 1951 with a PhD in engineering. The first edition of his book Total Quality Control was completed while he was still a doctoral student at MIT. Total Quality Control has been published in more than a score of languages, including French, Japanese, Chinese, Spanish, and Russian, and has been widely used throughout the world as a foundation for quality control practice. A 40th anniversary edition was published in 1991. Feigenbaum worked for the General Electric Company from 1942 u ntil 1968. He was worldwide director of manufacturing operations and quality control at General Electric from 1958 to 1968, when he left to found General Systems Com pany with his brother Donald. Feigenbaum was elected to the National Academy of Engineering of the United States in 1992. The citation presented at his election read, “For developing concepts of ‘total quality control,’ and for contributions to ‘cost of quality’ and quality systems engineering and practice.”
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Part I Quality Basics He was the founding chairman of the International Academy for Quality and is a past president of the American Society for Quality Control, which presented him with the Edwards Medal and the Lancaster Award for his international contribution to quality and productivity. In 1988, the U.S. secretary of commerce appointed Feigenbaum to the first Board of Overseers of the Malcolm Baldrige National Quality Award Program. Feigenbaum is considered by many to be the originator of total quality control. He argued for a systematic or total approach to quality, requiring the involvement of all functions, not just manufacturing, in the quality process. The idea was to build in quality at an early stage rather than inspecting and controlling for quality after the fact.
Feigenbaum’s Philosophies In his teachings, Feigenbaum strove to move away from the then primary concern with technical methods of quality control to quality control as a business method. He emphasized the administrative viewpoint and considered h uman relations to be a basic issue in quality control activities. Individual methods, such as statistics and preventive maintenance, are seen only as segments of a comprehensive quality control program. He defined quality control as “an effective system for coordinating the quality maintenance and quality improvement efforts of the various groups in an organization so as to enable production at the most economical levels which allow for full customer satisfaction.”15 He stated that quality does not mean “best” but “best for the customer use and selling price.” Control in the term quality control represents a management tool that includes setting quality standards, appraising conformance to the standards, acting when standards are violated, and planning for improvements in the standards. Feigenbaum emphasized in his work that total quality programs are the single most powerful tool for organizations and companies t oday. For quality programs to work, organizational management must assume the responsibility of making the leadership commitment and contributions that are essential to the growth of their respective organizations. Feigenbaum’s leadership and quality philosophy is summarized in his three steps to quality. In the first step, quality leadership, he espouses the need for management to lead the quality effort and maintain a constant focus on quality. The leadership emphasis is based on sound planning rather than reacting to failures. In the second step, modern quality technology, Feigenbaum advocates the need for multiple disciplines—not only the quality control department but also the shop-floor workers—to be engaged in solving quality problems. In the third step, organizational commitment, Feigenbaum encourages training and motivating the entire workforce, and integrating quality into every thing that the business does.16
GENICHI TAGUCHI Genichi Taguchi was born in 1924. After service in the Astronomical Department of the Navigation Institute of the Imperial Japanese Navy from 1942 to 1945, he worked in the Ministry of Public Health and Welfare and the Institute of Statistical Mathematics, Ministry of Education. He learned much about experimental design techniques from the prizewinning Japanese statistician Matosaburo Masuyama,
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whom he met while working at the Ministry of Public Health and Welfare. This also led to his early involvement as a consultant to Morinaga Pharmaceuticals and its parent company, Morinaga Seika. In 1950, Taguchi joined the newly founded Electrical Communications Laboratory of the Nippon Telephone and Telegraph Company. He stayed for more than 12 years, during which he began to develop his methods. While working at the Electrical Communications Laboratory, he consulted widely in Japanese industry. As a result, Japanese companies, including Toyota and its subsidiaries, began applying Taguchi’s methods extensively from the early 1950s. His first book, which introduced orthogonal arrays, was published in 1951. From 1954 to 1955, Taguchi was a visiting professor at the Indian Statistical Institute. During this time, he met the well-known statisticians R. A. Fisher and Walter A. Shewhart. In 1957–1958, he published his two-volume book, Design of Experiments. His first visit to the United States was in 1962 as a visiting research associate at Princeton University, during which time he visited the AT&T Bell Laboratories. That same year he was awarded his PhD by Kyushu University. Taguchi became a professor at Aoyama Gakuin University in Tokyo in 1964, a position he held until 1982. In 1966, he and several coauthors wrote Management by Total Results. At this stage, Taguchi’s methods w ere still essentially unknown in the West, although applications w ere taking place in Taiwan and India. In this period and throughout the 1970s, most applications of his methods were on production processes; the shift to product design occurred in the last decade. In the early 1970s, Taguchi developed the concept of the quality loss function. He also published two other books as well as the third (current) edition of Design of Experiments. He won the Deming Application Prize in 1960 and the Deming Award for Literature on Quality in 1951, 1953, and 1984. In 1982 Taguchi became an advisor at the Japanese Standards Association. He died June 2, 2012, in Japan.
Taguchi’s Philosophies Taguchi’s methods are concerned with the routine optimization of product and pro cess before manufacture rather than reliance on the achievement of quality through inspection. Concepts of quality and reliability are pushed back to the design stage, where they really belong. The method provides an efficient technique to design product tests before entering the manufacturing phase. However, it can also be used as a troubleshooting methodology to sort out pressing manufacturing problems. In contrast to Western definitions, Taguchi worked in terms of quality loss rather than quality. This is defined as “loss imparted by the product to society from the time the product is shipped.” This loss includes not only the loss to the company through costs of reworking or scrapping, maintenance costs, downtime due to equipment failure, and warranty claims, but also the costs to the customer through poor product performance and reliability, leading to further losses to the manufacturer as its market share falls. Taking a target value for the quality characteristic u nder consideration as the best possible value of this characteristic, Taguchi associated a s imple quadratic loss function with deviations from this target. The loss function showed that a reduction in variability about the target leads to a decrease in loss and a subsequent increase in quality. The Taguchi methodology is fundamentally a prototyping method that enables the engineer or designer to identify the optimal settings to produce a robust product
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Part I Quality Basics that can survive manufacturing time after time, piece after piece, in order to provide the functionality required by the customer. Two major features of the Taguchi methodology are that it was developed and is used by engineers rather than statisticians, thus removing most of the communication gap and the problems of language traditionally associated with many statistical methodologies, and that the methodology is also tailored directly to the engineering context.
SUMMARY Deming emphasized statistical process control and uniformity and dependability at low cost. “Work smarter, not harder,” he said. Juran stressed the h uman ele ments of communication, organization, planning, control, and coordination and said that problems should be scheduled for solution. Crosby introduced the concept of zero defects and argued that quality is conformance to requirements and that prevention is the best quality management technique. All three of t hese quality management experts agree that quality means meeting customer requirements and that increased productivity is the result of quality improvement. They all advocate management commitment and employee involvement to improve systems and avoid problems, identification of the most critical problems, use of statistics and other problem-solving tools, and the focus of all activities on the customer. It is important to understand that the philosophies of Deming, Juran, Crosby, Feigenbaum, and the many other quality and management gurus are starting points to the development of an organization’s quality philosophy. Each organ ization has unique products, services, cultures, and capabilities. The philosophies of the gurus can help an organization get started, but management, working with all the organization’s stakeholders, must develop a philosophy that fits the unique needs of the organization. No one philosophy is totally correct or incorrect. All must be studied and used in the context of how they apply to each individual organization.
NOTES 1. Online Merriam-Webster dictionary. https://www.merriam-webster.com/dictionary /philosophy. 2. G. Kenyon and K. Sen, The Perception of Quality: Mapping Product and Service Quality to Customer Perceptions (London: Springer-Verlag, 2014), 29. 3. H. Wadsworth, K. Stephens, and B. Godfrey, Modern Methods for Quality Control and Improvement (New York: John Wiley & Sons, Inc., 2002). 4. W. A. Shewhart, "The Application of Statistics as an Aid in Maintaining Quality of a Manufactured Product," Journal of the American Statistical Association 20, no. 152 (December 1925): 546–548. 5. W. A. Shewhart, Economic Control of Quality of Manufactured Product (New York: Van Nostrand, 1931), 6. 6. W. E. Deming, Statistical Adjustment of Data (New York: John Wiley and Sons, 1938, 1943; Dover, 1964). 7. W. E. Deming, Out of the Crisis (Cambridge, MA: Massachusetts Institute of Technology, 1982, 1986).
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8. J. Evans and W. Lindsay, Managing for Quality and Performance Excellence, 10th ed. (Boston: Cengage Learning, 2017). 9. Ibid. 10. J. M. Juran and A. B. Godfrey, eds., Juran’s Quality Handbook, 5th ed. (New York: McGraw Hill, 1999). 11. Ibid. 12. Derived from P. B. Crosby, Quality Is Free: The Art of Making Quality Certain (New York: McGraw-Hill, 1979); and Crosby, Quality without Tears: The Art of Hassle-Free Manage ment (New York: New American Library, 1984). 13. J. Evans and W. Lindsay, Managing for Quality and Performance Excellence, 10th ed. (Boston: Cengage Learning, 2017). 14. Ibid. 15. “Profile: the ASQC Honorary Members A. V. Feigenbaum and Kaoro Ishikawa,” ASQC Quality Progress 19, no. 9 (August 1986). 16. Ibid.
ADDITIONAL RESOURCES Crosby, P. B. Quality Is Free: The Art of Making Quality Certain. New York: McGraw-Hill, 1979. ———. Quality without Tears: The Art of Hassle-Free Management. New York: New American Library, 1984. Deming, W. E. The New Economics for Industry, Government, and Education. Cambridge, MA: MIT, 1993. ———. Out of the Crisis. Cambridge, MA: MIT Center for Advanced Engineering Study, 1986. Evans, James R., and William M. Lindsay. Managing for Quality and Performance Excellence. 9th ed. Cincinnati, OH: South-Western/Cengage Learning, 2014. Federal Quality Institute. Federal Total Quality Management Handbook. Washington, DC: U.S. Office of Personnel Management, 1990. Feigenbaum, A. V. Total Quality Control. 3rd ed., rev. New York: McGraw-Hill, 1991. Ishikawa, K. Guide to Quality Control. 2nd ed., rev. Tokyo: Asian Productivity Organization, 1986. ———. What Is Total Quality Control? The Japanese Way. New York: Prentice-Hall, 1985. Juran, J. M. Juran on Planning for Quality. New York: F ree Press, 1988. ———. Management of Quality. 4th ed. Wilton, CT: Juran Institute, 1986. Juran, J. M., and A. B. Godfrey, eds. Juran’s Quality Handbook. 5th ed. New York: McGraw- Hill, 1999. Latzko, W. J., and D. M. Saunders. Four Days with Dr. Deming: A Strategy for Modern Methods of Management. Reading, MA: Addison-Wesley, Longman, 1995. Naval Leader Training Unit. Introduction to Total Quality Leadership. Washington, DC: U.S. Department of the Navy, 1997. Nilsson Orsini, Joyce. The Essential Deming: Leadership Principles from the Father of Quality. Milwaukee, WI: Quality Press, 2013. Pyzdek, Thomas, and Paul Keller. The Handbook for Quality Management: A Complete Guide to Operational Excellence. 2nd ed. New York: McGraw-Hill, 2013. Westcott, R. T., ed. The Certified Manager of Quality/Organizational Excellence Handbook. 4th ed. Milwaukee, WI: Quality Press, 2014.
Part II Team Basics Team Organization Team Roles and Responsibilities Team Formation and Group Dynamics
Chapter 4 Chapter 5 Chapter 6
Teams outperform individuals acting alone or in larger organizational groupings, especially when performance requires multiple skills, judgments, and experiences. —John Katzenbach and Douglas Smith
Competition leads to loss. P eople pulling in opposite directions on a rope only exhaust themselves: they go nowhere. —W. Edwards Deming
A U.S. Government team a dopted “CHAMPIONS” as its definition of “team”: C ustomer oriented H ard working A mbitious M ake sure the job’s done right P roud of their work I nnovative O pen to new ideas N ever shirk assignments S old on quality —V. Daniel Hunt (Quality Management for Government)
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Chapter 4 Team Organization
TEAM PURPOSE Describe why teams are an effective way to iden tify and solve problems, and describe when, where, why, and how teams can be used effectively. (Apply) CQIA BoK 2020 II.A.1
The Definition of Team • A team is a group of individuals organized to work together to accomplish an objective • A team is a group of two or more people who are equally accountable for the accomplishment of a task and specific performance goals • A team is a small number of p eople with complementary skills who are committed to a common purpose • A team combines individuals’ knowledge, experience, skills, aptitude, and attitude to achieve a synergistic effect A team is not: • An organizational work unit that is not functioning as a team; however, a team may be composed of members of a work unit • An informal gathering of people, a crowd • Members of a club, association, or society that is not functioning as a team • Top management of an organization, even though they may be referred to as the “management team,” unless they truly function as a team • A staff meeting, conference, seminar, or educational course, unless functioning as a team Teams may be initiated for a variety of purposes: 56
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• To improve a process—for example, a cycle-time-reduction team • To complete a project—for example, a task force to relocate a manufacturing plant • To conduct a study of a best practice—for example, a benchmarking team • To solve a problem—for example, a hospital “tiger team” to hunt for the cause of fatalities • To produce a special event—for example, a team to plan, organize, and conduct an employee recognition evening • To investigate a discrepancy—for example, a team to determine the root cause of inventory shrinkage • To participate in a competitive sport—for example, an organization’s softball team A team is appropriate in the following instances: • Achieving an objective involves (or should involve) more than one orga nizational function. For example, a team to improve the procurement process might involve members from purchasing, materials management, finance, production, and key suppliers. • Some degree of isolation from the mainstream work is desirable in order to focus on a specific objective or problem—for example, a team to launch a yearlong project to implement a quality management system. • Specially trained and experienced people are “on call” when a specific need arises. Three examples are a “proposal response team” that is quickly assembled to address a request for proposal from a potential customer/client, a material review board that assembles when there is nonconforming product to review and determine disposition, and an in-plant volunteer fire brigade. How long a team remains active in a functioning mode depends on several factors: • The purpose of the team • An anticipated or predetermined time span • Available resources • The progress being made by the team • The value of the planned outcomes • The effectiveness of the team itself One fault that may occur with a team is when it remains in effect after its purpose and objectives have been met. Two examples are the following: 1. A company has a policy that states that process improvement teams should meet for 14 weeks for any given improvement effort.
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Part II Team Basics 2. A project team continues to find reasons to meet long after the original project has been completed. (Members like the comradeship. Some members may fear returning to their regular work a fter a long hiatus.) Teams are more powerful and can outperform individuals when the following conditions exist:1 • The task is complex and/or the task or process involved is cross-functional ——The problem or process consists of several f actors that may interact with each other ——The process or problem extends across multiple departments or work units ——It is difficult to collect data on the problem and process ——The process is ever-changing, due to external (political, technological, regulatory, environmental) or internal influencers (people, processes, technology, politics, culture) • Creativity is needed ——Innovative ideas are needed ——Creativity is critical to solve the problem ——Competition is fierce and a new and creative solution is required • The path forward is unclear ——The problem is vague or ill defined ——Data are not available or easily accessible ——A structured approach has not yet been applied to the problem or does not exist in the organization • Fast learning is necessary ——Understanding and solving the problem quickly is needed ——Learning across many people with differing skills, knowledge, and experience would be helpful • High commitment is desirable, and cooperation is essential to implementation ——Engagement and buy-in are needed to solve the problem and implement the solutions ——Cross-functional stakeholders are impacted by the problem • Stakeholders have an interest in the outcome ——The problem or process affects the people who perform the process ——The stakeholders care about the results and success of the implemented solutions
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• No individual has sufficient knowledge to solve the problem ——The problem is complex and includes elements that requires multiple disciplines to solve
TYPES OF TEAMS Define and distinguish between various types of teams: process teams, continuous improvement teams, work groups, self- managed teams, ad hoc proj ect teams, cross-functional teams, and virtual teams. (Apply) CQIA BoK 2020 II.A.2
Process Teams Process teams focus on creating or improving specific business processes. A process team may attempt to completely reengineer a process or may work on incremental improvements. If attempting a breakthrough, the team is usually cross-functional in composition, with representatives from a number of different functions and with a range of skills related to the process to be improved. A process team working on incremental improvements is often composed of persons having a functional interest in improving a portion of the overall process, such as representatives from a specific functional work unit. Two examples follow: BPC, which manufactures a flexible packaging product, periodically convenes a cycle-time-reduction team (CTRT) under the leadership of a pressroom supervisor, with four or five operators from the supervisor’s pressroom. A trained facilitator helps bring about the team’s formation and keep the meeting process on track during the weekly hour-long meetings. Each CTRT defines its objectives and the procedures and tools to be used to improve its process. The CTRT typically meets for 10 to 12 weeks, and it may disband e arlier if its objectives have been met. Pressrooms rotate so that only one CTRT is functioning at any one time. A technical trainer provides any necessary training, e ither for members new to improvement tools or for the w hole team when a new tool or technique is needed. The CTRT may call on anyone in the company to provide needed information. At BPC, it is considered a privilege to be invited to join a CTRT. At A&H, a provider of group accident and health insurance in the southwestern United States, originators of significant process improvement suggestions (with an estimated savings of $100,000 per year or more) are invited to participate in a process team to address their suggestions. A trained facilitator is assigned to help with team formation and team pro cess issues. A&H finds that this approach not only recognizes and rewards those with suggestions but also stimulates involvement in the suggestion
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Part II Team Basics system. The synergy of the process team often results in savings exceeding the original estimates. A variation used in many fast-paced organizations is the kaizen blitz or kai zen event. This accelerated work-team approach focuses intensely on achieving improvements in a time frame of three to five days. Reducing cycle time and waste and increasing productivity are examples in which improvements of as much as 70% have been reported.
Continuous Improvement Teams Becoming more prevalent are teams formed to improve processes using the techniques and tools of Lean-Six Sigma and consisting of employees who are qualified as Six Sigma Green Belts and Six Sigma Black Belts. Such teams serve three purposes. They nurture the philosophy of continuous improvement, they substantiate the continual investment in Lean-Six Sigma methodology, and they sustain the training and development of qualified Lean-Six Sigma personnel. This type of team is frequently cross-functional in composition and involved in breakthrough-type improvements. In some organizations, cross-functional teams carry out all or nearly all of the functions. In such cases, the organization resembles a matrix-or project-type organization. In attempting to eliminate internal competition among functional groups, organizations have a dopted cross-functional teams for many areas, such as product design. For example: Macho Motors, a leading manufacturer of off-road service vehicles, integrates its marketing, engineering, production, support services, shipping, and customer service functions into product families. Employing quality function deployment tools and concurrent engineering-production techniques, each family (cross-functional team) works together to meet customers’ needs. Representatives from each family meet quarterly to share process improvement information. The smaller the organization, the more likely employees are to work together, often d oing others’ designated jobs as the need arises. Each employee wears many hats. In recent times, larger organizations have come to recognize the value of smaller, cross-functional entities. In a fast-paced economy, these more flexible organizations can often move more swiftly than larger competitors to reconfigure themselves and their products and services to meet changing needs. For example: Williams Air Service’s employees own the regional air passenger service firm. Nearly everyone, from the airline’s president to the p eople staffing the check-in counter, is trained to rotate jobs in performing passenger check-in, baggage handling, fueling, flight attendant functions, and clerical functions. Only the pilots, mechanics, and the bookkeeper have specialized functions not delegated to other personnel. The entire airline is a cross-functional team.
Work Group A work group, also known as a work cell or natural team, is made up of persons who have responsibility for a specific process or function and who work together
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in a participative environment. Unlike the process or continuous improvement teams, the natural team is neither cross-functional nor temporary. The team leader is generally the person responsible for the function or process performed within the work area. The natural team is useful in involving all employees in a work group in striving for continual improvement. Starting with one or two functions, successful natural teams can become role models for expansion of natural teams throughout an organization. An example of a natural team follows: The information technology (IT) department serves all the functions within the 4000-person Mars Package Delivery’s countrywide operations. The IT department’s work units (technical system maintenance, application systems design and programming, data entry, computer operations, data output, customer service—internal, technology help desk, and administration) function as an internal team. Selected representatives from each work unit meet weekly to review the IT department’s perfor mance and to initiate corrective and preventive actions.
Self-Managed Teams Self-managed (or self-directed) teams are groups of employees authorized to make a wide range of decisions about issues regarding safety, quality, scheduling of work, work allocation, setting of goals, maintenance of work standards, equipment maintenance, and resolution of conflicts. Often called high-performance work teams, these teams offer employees a broader spectrum of responsibility and ownership of a process. Often the team members select the team leaders; sometimes leadership is rotated among members. Two examples of self-managed teams follow: Med Plastics has structured its new manufacturing operations for medical devices on the principles of cell manufacturing and self-managed teams. Each cell manufactures one complete category of products. Within a cell, each operator is fully trained to perform all operations. Self-led and making their own decisions, the members of the teams in each cell determine how and when to rotate tasks and are responsible for the quality of the products shipped. District 4 of Alabaster County’s K–12 educational system allows the editorial offices of each of the three high schools’ student newspapers to manage its own operations, within the rules and regulations of the district. Each school’s newspaper office is responsible for recruiting its own student staff, selecting its editor, arranging for team and technical training, allocating assignments, and producing a high-quality student newspaper. Each newspaper office has adopted some unique approaches to managing its operations. The achievements of the student newspaper offices are publicized in local community media. Awards for significant contributions are given annually, sponsored by the Alabaster Chronicle. Because of the level of empowerment afforded, careful planning and training are key to a successful self-managed team. The most success usually occurs when a new business or process is initiated. Transforming a traditional work culture to self-management is a lengthy process and can cause serious workforce turmoil.
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Ad Hoc Project Teams The ad hoc project team is formed to achieve a specific mission. The project team’s objective may be to create something new, such as a facility, product, or service, or to accomplish a complex task, such as to implement a quality management system certified to ISO 9001 requirements, or to upgrade all production equipment to be computer controlled. Typically, a project team employs full- time members, on loan, for the duration of the project. The project team operates in parallel with the primary organizational functions. The project team may or may not be cross-functional in member composition, depending on its objectives and competency needs. Often the project leader is the person to whom the ultimate responsibility for managing the resulting project outcome is assigned. An example follows: Abel Hospital, a community healthcare organization of 250 employees, has established a task force (project team) to select a site and design and build a new hospital to replace the existing 112-year-old facility. New governmental regulations make a new facility imperative. The Must Build It (MBI) project team includes representatives from each hospital department, an external consulting firm, an architectural design firm, and a legal firm. A full- time facilitator- consultant provides team training and facilitates meetings. The team leader is the former assistant director of Abel Hospital and w ill likely assume the role of director when the present director retires (coincidental with the planned occupation of the new facility). The MBI team has a three-year window in which to complete the facility and move the existing services and patients. Care is taken to conduct team building and provide training in the tools and techniques the team members will need, especially project planning and management. Team members have been replaced in their former positions until the project is completed. The MBI team is located in a rental site that is removed from the present premises of Abel Hospital. The MBI team leader provides weekly project status reports to senior management and quarterly project summary presenta tions to the board of directors.
Cross-Functional Teams Cross-functional teams are composed of members that cross organizational functions or units. Cross-functional teams can work together on special projects, such as ad hoc, process, or continuous improvement teams, or on day-to-day tasks that need the power of multiple functions to meet the needs of the process. T hese teams can even be virtual, extending beyond a single geographic location and across time zones. Cross-functional teams help connect processes that could be disconnected if they worked in or focused on only their departmental unit or expertise. They are especially valuable to bring a united front or one point of entry for the customer. When these are process or continuous improvement teams, they help optimize the entire process instead of suboptimizing specific departmental units or silos. These cross-functional teams help coordination across the process spanning the functions and help bring unique perspectives to better solve process problems. An example of a cross-functional team follows:
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The emergency department of a hospital is not meeting its patient length-of- stay (LOS) key performance indicator (KPI) goal. It forms a cross-functional continuous improvement team to improve the process. The team consists of members from the emergency department (nursing, physicians), radiology, laboratory, registration services, compliance, information technology, pharmacy, environmental services, and patient transport. They apply the Lean- Six Sigma methodology and tools to successfully improve the process and implement the improvements within the emergency department and their own departments and processes as the improvements apply to the separate departments. Some of the improvements also have a positive impact on other patients throughout the hospital, where the improved processes cross the multiple services and patient types, including inpatients, surgical patients, and outpatients.
Virtual Teams Virtual teams are groups of two or more persons who are usually affiliated with a common organization and have a common purpose. The nature of the virtual team is that its members conduct their work either partly or entirely via technology-supported communication. Virtual teams can cross boundaries such as time zones, geography, and functions. Virtual teams are a hybrid in that they may or may not be cross-functional in terms of competencies. These teams may or may not be partly or entirely self-managed. Typically, the virtual team is geo graphically dispersed, often with individual members working from their homes. It is helpful for the virtual team to meet in person occasionally, if at all possible, to enhance its synergy and communication. An example follows: A virtual team of two members of ASQ’s Quality Management Division— one member in Florida and one in Ohio—edited this book, augmented by two QMD content reviewers, one from Michigan and the other from Kansas. Although the teams discussed are defined as separate types, the different team types can take on multiple characteristics, as shown in Figure 4.1.
Team Type Process Team Continuous Improvement Team Work Group Ad-Hoc Team Cross-Functional Virtual Self-Managed
Cross-Functional √ √
√ √ √
Figure 4.1 Team types and characteristics. Source: Sandra L. Furterer.
Team Characteristics Virtual √ √ √ √ √ √ √
Self-Managed √ √ √ √ √ √
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VALUE OF TEAMS Explain how a team’s efforts can support an organ ization’s key strategies and effect positive change throughout the organization. (Understand) CQIA BoK 2020 II.A.3
A key principle is that no team should be formed u nless its purpose (mission) and objectives can be traced upward in supporting the organization’s strategies and plans. This alignment with organizational strategies, goals, and objectives should be shown through measurements directly related to the customer requirements of the company. Tools such as the balanced scorecard, voice of the customer (House of Quality), customer or employee surveys, and focus groups are all effective vehicles for documenting the ultimate value of the team’s work within the organization. Further, teams should be capable of demonstrating value. E very team, regardless of type, should plan to address one or more of the following purposes or missions: • Fulfilling a mandate (law, regulation, owners’ requirements) • Producing a favorable benefits-to-cost ratio • Providing a return on investment (ROI) for the organization equal to or greater than an alternative project • Improving customer satisfaction and retention • Increasing, meeting, or exceeding competitive pressures in the marketplace • Introducing new processes, products, or services • Improving a process (cycle-time reduction, cost saving/avoidance, reduce waste, improve satisfaction, improve quality) • Improving or expanding the organization’s core competencies • Building an effective and efficient workforce through training, education, and individual development • Involving key suppliers and customers in improvement initiatives • Continually innovating processes, products, and services • Supporting the communities in which the organization operates • Enhancing the organization’s reputation for delivering quality products/services Team members benefit by participating on teams. Participants can learn to work better together as a team, enhancing each team member’s professional and
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personal development. Team members learn how to deal with conflict, make decisions, and get along with people. Teamwork can provide a sense of accomplishment within the team. Teams can enhance diversity and group practices to achieve better results for the organization.2 Teams are valuable for an organization. Much work, especially the design and deployment of products and processes, is done with teams. Teams can support fulfillment of organizational strategies and initiatives. They can help the organization stay focused and achieve goals and objectives. Team results can be measured and quantified to ensure team success. Team performance typically exceeds performance of mere working groups.3 Teams can show value in many ways:4 • Provide ROI • Improve customer satisfaction • Meet and exceed management expectations • Launch new processes/products • Improve a key process • Increase core competency of the business • Reduce waste and excess variation
NOTES 1. Peter R. Scholtes, Brian L. Joiner, and Barbara J. Streibel, The Team Handbook, 3rd ed. (Madison, WI: Joiner Associates, 2003). 2. Certified Quality Improvement Certification Preparation Course, ASQ Learning Institute, 2019. 3. Ibid. 4. Ibid.
ADDITIONAL RESOURCES Bauer, Robert W., and Sandra S. Bauer. The Team Effectiveness Survey Workbook. Milwaukee, WI: Quality Press, 2005. Beecroft, G. Dennis, Grace L. Duffy, and John W. Moran, eds. The Executive Guide to Improve ment and Change. Milwaukee, WI: Quality Press, 2003. Bens, Ingrid M., ed. Facilitation at a Glance. 3rd ed. Salem, NH: GOAL/QPC, 2012. Dreo, Herb, Pat Kunkel, and Thomas Mitchell. The Virtual Teams Guidebook for Managers. Milwaukee, WI: Quality Press, 2003. Evans, J. R., and W. M. Lindsay. The Management and Control of Quality. 9th ed. Cincinnati: South-Western College Publishing, 2013. GOAL/QPC and Joiner Associates. The Team Memory Jogger. Salem, NH: GOAL/QPC, 1995. Hallbom, Tim, and Nick LeForce. Coaching in the Workplace. Salem, NH: GOAL/QPC, 2008.
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Part II Team Basics Hitchcock, D. The Work Redesign Team Handbook: A Step-by-Step Guide to Creating Self-Directed Teams. White Plains, NY: Quality Resources, 1994. Scholtes, Peter R., Brian L. Joiner, and Barbara J. Streibel. The Team Handbook. 3rd ed. Madison, WI: Joiner Associates, 2003. Westcott, Russell T., ed. The Certified Manager of Quality/Organizational Excellence Handbook. 4th ed. Milwaukee, WI: Quality Press, 2014. ———. Simplified Project Management for the Quality Professional. Milwaukee, WI: Quality Press, 2005.
Chapter 5 Team Roles and Responsibilities
The team concept conveys the message that PQI [= Productivity and Quality Improvement] is everybody’s business. —John Hradesky
Describe the roles and responsibilities of vari ous team stakeholders, such as 1) sponsor, 2) champion, 3) facilitator, 4) leader, 5) member, 6) scribe, and 7) timekeeper. (Understand) CQIA BoK 2020 II.B
The team members’ roles and responsibilities, as well as attributes of good role performance, are provided in Table 5.1.1 Of the seven roles described in Table 5.1, those of timekeeper and scribe are the only ones that are optional, depending on the mission of the team. Though the remaining five roles are essential, they may be combined in a variety of ways. However, the most crucial roles for the success of the team, once it is formed, are those of the team leader and the facilitator. The team leader is responsible for the content, the work done by the team. The facilitator is responsible for ensuring that the process affecting the work of the team is the best for the stage and situation the team is in. The need for a trained facilitator depends on the following: • Whether the team has been meeting for some time and is capable of resolving conflicting issues • Whether team members are already well versed on the use of quality tools and effective communication methods • Whether a new member has been added, thus upsetting established relationships • Whether a key contributor to the group has been lost • Whether there are other disturbing factors, such as lack of adequate resources, the threat of project cancellation, or a major change in requirements 67
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Role
Responsibility
Definition The person who supports a team’s plans, activities, and outcomes
Attributes of good role performance
Sponsor
Backer; risk taker; sponsors the project
Champion
Advocate; The person promoting the concept or idea for change/ removes barriers improvement to change
• Is dedicated to seeing it implemented • Holds absolute belief it is the right t hing to do • Has perseverance and stamina
Facilitator
Helper; trainer; advisor; coach
• Is trained in facilitating skills • Is respected by team members • Is tactful • Knows when and when not to intervene • Deals with the team’s process, not content • Respects the team leader and does not override his or her responsibility • Respects confidential information shared by individuals or the team as a whole • Will not accept facilitator role if expected to report to management any information that is proprietary to the team • Will abide by the organization’s Code of Ethics and principles
A person who: • Observes the team’s processes and team members’ interactions and suggests process changes to facilitate positive movement toward the team’s goals and objectives • Intervenes if discussion develops into multiple conversations • Intervenes to skillfully prevent an individual from dominating the discussion or to engage an overlooked individual in the discussion • Assists the team leader in bringing discussions to a close • May provide training in team building, conflict management, and so forth
• Believes in the concept/idea • Has sound business acumen • Is willing to take risks and responsibility for outcomes • Has authority to approve needed resources • Will be listened to by upper management
Part II Team Basics
Table 5.1 Team roles, responsibilities, and performance attributes.
Table 5.1 Team roles, responsibilities, and performance attributes (continued) Change agent; chair; head
A person who: • Staffs the team or provides input for staffing requirements • Strives to bring about change/improvement through the team’s outcomes • Is entrusted by followers to lead them • Has the authority for and directs the efforts of the team • Participates as a team member • Coaches team members in developing or enhancing necessary competencies • Communicates with management about the team’s progress and needs • Handles the logistics of team meetings • Takes responsibility for team records
• Is committed to the team’s mission and objectives • Has experience in planning, organizing, staffing, controlling, and directing team • Is capable of creating and maintaining communication channels that enable members to do their work • Is capable of gaining the respect of team members; serves as a role model • Is firm, fair, and factual in dealing with a team of diverse individuals • Facilitates discussion without dominating • Actively listens • Empowers team members to the extent possible within the organization’s culture • Supports all team members equally • Respects each team member ’s individuality
Team members
Participants; subject matter experts
The persons selected to work together to bring about a change/improvement, achieving this in a created environment of mutual respect, sharing of expertise, cooperation, and support
• Are willing to commit to the purpose of the team • Are able to express ideas, opinions, and suggestions in a nonthreatening manner • Are capable of listening attentively to other team members • Are receptive to new ideas and suggestions • Are even-tempered and able to handle stress and cope with problems openly • Are competent in one or more fields of expertise needed by the team • Have favorable performance records • Are willing to function as team members and forfeit “star” status
Chapter 5 Team Roles and Responsibilities
Team leader
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Role
Responsibility
Definition
Attributes of good role performance
Scribe
Recorder; note taker
A person designated by the team to record critical data • Is capable of capturing on paper, or electronically, from team meetings. Formal “minutes” of the meetings the main points and decisions made in a team meetmay be published and distributed to interested parties. ing and providing a complete, accurate, and legible document (or formal minutes) for the team’s records • Is sufficiently assertive to intervene in discussions to clarify a point or decision in order to record it accurately • Is capable of participating as a member while still serving as a scribe
Timekeeper
Gatekeeper; monitor
A person designated by the team to watch the use of allocated time and remind the team members when their time objective may be in jeopardy
• Is capable of assisting the team leader in keeping the team meeting within the predetermined time limitations • Is sufficiently assertive to intervene in discussions when the time allocation is in jeopardy • Is capable of participating as a member while still serving as a timekeeper
Part II Team Basics
Table 5.1 Team roles, responsibilities, and performance attributes (continued)
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Obviously, the team member role is also important, but it is somewhat less critical than those of team leader and facilitator. Supplementing the team with “on-call” experts can often compensate for a shortfall in either the number of members or members’ competencies. Selected members must willingly share their expertise, listen attentively, and support all team decisions. The selection of a team member to serve as a timekeeper may be helpful, at least u ntil the team has become more adept at self-monitoring its use of time. When a timekeeper is needed, the role is often rotated, depending on w hether the selected member has a full role to play in the deliberations at a particular meeting. In some team missions for which very formal documentation is required, a scribe or note taker may be needed. This role can be distracting for a member whose full attention is needed on the topics under discussion. For this reason, an assistant rather than a regular member of the team is assigned to take the minutes and publish them. Care should be taken not to select a team member for this role solely on the basis of that team member’s gender or position in the organization. Very frequently, a team must function in parallel with day-to-day assigned work and with the members not relieved of responsibility for their regularly assigned work. This places a burden on the team members. Both the day-to-day work and the work of the team must be conducted effectively. The inability to be in two places at one time calls for innovative time management, conflict resolution, negotiation, and delegation skills on the part of the team members. Several roles within a team may be combined, depending on the size of the team and its purpose. Following are some examples: • The team has begun to function smoothly, and the team leader has become more skilled under the guidance of a facilitator. It is decided that the facilitator is no longer needed. • A three-person team self-selects the person who sold the idea to management (the champion) as team leader. • A self-managed, cross-functional, performance improvement team of eight persons elects to rotate the team leader role at two-week intervals. • A departmental work group (natural team) rotates timekeeper and scribe roles at each meeting so as not to discriminate based on gender, job held, age, schooling, and so forth. • The backer of the project team serves as the team leader b ecause the project is confined to his or her area of responsibility. • Specialists, such as a material-handling systems designer or a cost accountant, are periodically requested to temporarily join a team as needed.
NOTE 1. Russell T. Westcott, Simplified Project Management for the Quality Professional (Milwaukee, WI: Quality Press, 2005), 79–81.
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ADDITIONAL RESOURCES Bauer, Robert W., and Sandra S. Bauer. The Team Effectiveness Survey Workbook. Milwaukee, WI: Quality Press, 2005. Beecroft, G. Dennis, Grace L. Duffy, and John W. Moran, eds. The Executive Guide to Improve ment and Change. Milwaukee, WI: Quality Press, 2003. Bens, Ingrid M., ed. Facilitation at a Glance. 3rd ed. Salem, NH: GOAL/QPC, 2012. Dreo, Herb, Pat Kunkel, and Thomas Mitchell. The Virtual Teams Guidebook for Managers. Milwaukee, WI: Quality Press, 2003. Evans, J. R., and W. M. Lindsay. The Management and Control of Quality. 9th ed. Cincinnati: South-Western College Publishing, 2013. GOAL/QPC and Joiner Associates. The Team Memory Jogger. Salem, NH: GOAL/QPC, 1995. Hallbom, Tim, and Nick LeForce. Coaching in the Workplace. Salem, NH: GOAL/QPC, 2008. Hitchcock, D. The Work Redesign Team Handbook: A Step-by-Step Guide to Creating Self-Directed Teams. White Plains, NY: Quality Resources, 1994. Scholtes, Peter R., Brian L. Joiner, and Barbara J. Streibel. The Team Handbook. 3rd ed. Madison, WI: Joiner Associates, 2003. Westcott, Russell T., ed. The Certified Manager of Quality/Organizational Excellence Handbook. 4th ed. Milwaukee, WI: Quality Press, 2014. ———. Simplified Project Management for the Quality Professional. Milwaukee, WI: Quality Press, 2005.
Chapter 6 Team Formation and Group Dynamics
Major gains in quality and productivity most often result from teams. —Peter R. Scholtes
INITIATING TEAMS Apply the elements of launching and sustaining a suc cessful team, including establishing a clear purpose and goals, developing ground rules and schedules, gaining support from management and obtaining commitment from the team members. (Apply) CQIA BoK 2020 II.C.1
The underlying principles pertaining to launching most any team are as follows: • There must be a clearly understood purpose for having the team. This purpose must be communicated to all individuals and organizations potentially impacted by the work of the team. • The team must be provided with or generate a mission statement and a clear goal—the expected outcome of the team’s efforts. The mission and the goal must support the organization’s strategic plans. This is defined within the team’s project charter. • The team must document objectives, with timelines and measurement criteria, for the achievement of the goal. • The team must have the support of management, including the needed resources to achieve the team’s objectives. • The team must be given or define for itself the ground rules and schedules under which it will operate. • The team must be empowered, to the extent allowed by the sponsor, to perform its scheduled activities. 73
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Part II Team Basics • The team must build into its plans a means for interim measurement of progress and the means for improving its performance. • The team must commit to achieving its mission, goals, and objectives. • The sponsor must provide a mechanism for recognizing both the efforts and the outcomes of the team’s activities. Though an ideal team size is five to seven members, team size will vary depending on the following: • Purpose of the team—its mission • Size and complexity of the task that the team is to perform • Size of the organization in which the team will be formed • Type of team • Duration of the team’s work and the frequency of its meetings • Degree of urgency for the outcomes of the team’s efforts • Resource constraints, such as funding, availability of appropriate personnel, facilities, and equipment • Team management constraints, such as minimum and maximum number of team members needed to achieve the team’s mission • Organizational culture—organizational policies and practices • Predominant managing style of the organization to which the team reports • Regulatory requirements • Customer mandates When a whole function or department works as a natural team, the team size is the number of persons in the department. If three persons band together to operate a charter air-taxi service and they work as a team, the team is the three persons. When a cross-functional project team is formed to design and build a new shopping center, the team could be very large and be subdivided into smaller teams. In a municipal public library, when a quality/process improvement team is formed to reduce retrieval and reshelving cycle times, it is likely to be cross- functional but limited to one representative from each function within the process cycle and constrained by the availability of staff. All team members must adhere to expected standards of quality, fiduciary responsibility, ethics, and confidentiality. It is imperative that the most competent individuals available be selected for each role.
Guidelines for Team Formation Once the process or project has been selected and the boundaries established, the next critical step is selecting the right team to work on it. The right team consists of a good representation of people who work inside the boundaries of the process and have an intimate knowledge of the way it works.
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Teams consisting of five to seven members seem to function most effectively. Though larger teams are not uncommon, studies have shown that teams with more than seven members may have trouble reaching consensus and achieving objectives. The team leader may be chosen in any of several ways. The department head or process owner may appoint a knowledgeable individual to lead the team, or the process owner may opt to fill the position personally. Also, the team members may elect the team leader from their own ranks during the first meeting. Any of these methods of selecting a leader is acceptable. The team leader has the following responsibilities: • Schedule and run the team’s meetings. • Come to an understanding with the supervisor or whomever formed or chartered the team on the following: ——The team’s decision-making authority. The team may only be able to make recommendations based on its data collection and analysis efforts, or it may be able to implement and test changes without prior approval. ——The time limit for the team to complete the improvement actions. • Determine how the team’s results and recommendations will be communicated up through the organization. • Arrange for the resources—money, material, equipment, training, additional people, and so on—that the team needs to do the job. • Decide how much time the team will devote to team activities. Sometimes, improving a process is important enough to require a full-time effort by team members for a short period. At other times, the improvement team’s work is best conducted at intervals of one-or two- hour segments. Team members are selected by the team leader or the individual who formed the team. Members may have various skills, pay levels, or supervisory status. Depending on the nature of the process, they may come from different departments, divisions, work centers, or offices. The key f actor is that the people selected for the team should be closely involved in the process that is being improved. The most highly skilled team members who are typically effective in their jobs should be selected as team members. Even though they will be missed from their normal job functions, they are exactly the people who are needed for the teams. Being a team member carries certain obligations. Members are responsible for carrying out all team-related work assignments, such as data collection, data analy sis, pre sen ta tion development, sharing of knowledge, and participation in team discussions and decisions. All team members must adhere to expected standards of quality, fiduciary responsibility, ethics, and confidentiality of information. Ideally, when a ctual process workers are on a team, they approach these responsibilities as an opportunity to improve the way their jobs are done rather than as extra work.
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Establishing a Clear Purpose and Goals A formal project charter can help clearly identify the team’s purpose and goals. The charter could include the following: • The purpose of the team and overall outcome anticipated • The problem to be solved along with the scope of the project • The sponsor • Approval to launch the team (including release of funding) • Criteria for team member selection • Methodology and technology to be used • Degree of autonomy granted and team member empowerment boundaries • Any constraints pertinent to the team’s work and conduct • Start and end times (as applicable), with appropriate milestones and dates • Techniques and tools of project planning and management to be used • Tracking, measuring, and reporting procedure to be implemented • Risk assessment criteria to be established, and contingency plans with periodic assessments conducted • The means that will be put in place to recognize, reinforce, and reward the team for work done well • List of team members, with their roles and responsibilities • Potential project benefits, including impact to financials, such as increased revenues and reduced costs; impact on customer satisfaction, productivity, and quality The project charter is a “living” document that should be revised and enhanced as the project progresses, as additional information is collected, and as the problem is better understood. A sample project charter is shown in Figure 6.1 for a cross- functional Lean-Six Sigma project to reduce the patient length of stay in the emergency department of an acute care hospital. The sample project charter includes the following fields that help define the project: Project overview: A summary of the project, with high-level information describing the purpose of the project. Problem statement: A description of the problem to be solved. This should be as descriptive as possible, with the information available when it is written. The problem statement can be further enhanced, once additional information is collected as the project progresses. Goals: The desired end state of the project to be achieved. The goal(s) should be SMART (Specific, Measurable, Attainable, Realistic, and Time-Based).
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Project overview, problem statement, and goals
Required Provides a description of the problem to be solved. Be as descriptive as possible. Include improvement goals that are SMART (Specific, Measurable, Attainable, Realistic, and Time-Based). Project overview: This project is focused on improving patient throughput in the ED. About 40% of the patients seen are admitted to the hospital, vs. 60% seen are discharged. Problem statement: The Emergency Department is experiencing delays in moving the patient through the ED in a timely manner. For January through April, it took an average of 5.8 hours for a patient to be seen, treated, tested and discharged; and it took an average of 8.7 hours for a patient to be seen, treated, tested and admitted. There are excessive delays, and an average 6.5% of the patients left without being seen. The total number of bypass hours for the past year was 341. Goal(s): Improve ED throughput time to 3 average hours for discharged patients and 5 average hours for admitted patients. Patient satisfaction and quality of care could be improved through a synergistic relationship among throughput, quality, and satisfaction.
Project scope
Required Identify what activities/functions will be included in your project. Include the beginning and ending steps of the process to be improved. What are the boundaries of the process you're improving for your project? The scope includes the ED processes starting from patient entrance, to triage, treat, transport, test/diagnose, disposition, and discharge/admit. What does the project include/exclude? This project will include identifying the major constraints to throughputs, the root causes, and improvement recommendations.
Figure 6.1 Project charter for the emergency department patient length of stay Lean-Six Sigma project. Source: Created by Sandra L. Furterer.
Project scope: The boundaries of the project, including the process to be improved, for process improvement projects. It is a description of what is in scope and out of scope of the project. Decision team members: A list of the members who will make decisions related to the project moving forward. They will approve the results of the project, and determine the path forward at tollgates or milestones. The roles of each decision team member on the project should also be defined. Working team members: A list of the members who will be responsible for completing activities and deliverables of the project. The project risk analysis is also part of the initial project charter. It describes the key risks that may potentially derail the project. A sample risk analysis for the emergency department Lean-Six Sigma project is shown in Figure 6.2. It includes the following fields: Potential risks: Factors that could impact a successful project.
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Part II Team Basics
Project risk analysis
Required Brainstorm the potential risk s to a successful project, identify the lik elihood that each will occur, determine the potential impact of the risk, and develop a mitigation strategy. Potential risk to successful project
Occurrence of r isk
Im pact of r isk
Resource availability
High
High
Conflict with other projects
Low
Moderate
Coordinate with other project leaders
Financial status of hospital
High
Very high
Monitor status, implement quickly
Weather potential of hurricanes
Low
Very high
Monitor weather, develop contingency plans to continue project after hurricane hits.
R isk mitigation strategy
Coordinate with leadership team
Figure 6.2 Project risk analysis for the emergency department Lean-Six Sigma project. Source: Created by Sandra L. Furterer.
Occurrence of risk: The probability that the risk would occur during the proj ect. It is typically rated as low, medium, or high but could have additional levels, such as very high, high, moderate, low, or very low. Impact of risk: The potential impact of the risk, should it occur during the project. It is typically rated as low, medium, or high but could have additional levels, such as very high, high, moderate, low, or very low. Risk mitigation strategy: The strategy that could help mitigate or reduce the occurrence or impact of the risk.
Developing Team Ground Rules and Schedules Teams should develop ground rules, or rules of engagement, for how they will work together as a team. Once the team is selected, the members should discuss how they will interact, treat each other, and behave within the team. Following are areas that can be used to guide the discussion of what is included in the team’s ground rules:1 • Team logistics, scheduling meetings, due dates • Treatment of each other • Roles and responsibilities • How to work together to complete tasks • How to ask for help • How to communicate with other team members, project sponsors, or others
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• How to delegate tasks • How to define quality communication • How to assess quality of work products • Other as needed The team leader and members should develop an initial proposed proj ect schedule, with high-level milestones, a more detailed work breakdown structure, and Gantt chart timeline.
Work Breakdown Structure A work breakdown structure (WBS) is a hierarchical decomposition of the project into subprojects, and subtasks, down to individual activities (work packages).2 Once a project has been initiated, WBSs are the primary tool used during proj ect planning. The goal is to break the project work into manageable elements that can be easily estimated, budgeted, scheduled, tracked, and controlled. The WBS provides the structure of the project and the basis for the effort, cost, and schedule estimates of the project. Just remember, “if an activity is not in our WBS, we will have to do it in zero time and for free.”3 In other words, any activity that is not specified in the WBS will not be allocated effort, budget, staff, or resources. One method used to represent a WBS is a tree diagram. The top level of the tree diagram always contains a single item, e ither the product being produced or the project being implemented. The second level contains the major components of that top-level item. The third level includes subcomponents of the second- level items. The fourth level includes subcomponents of the third-level items, and so on down the tree. An indented list or outline can also be used to represent a WBS. Most project management tools document the WBS in a written, outline form. There are two basic types of WBS, the product-type and the process-type. Figure 6.3 shows an example of a product-type WBS, which partitions the project by breaking down the project’s product, service, or result into smaller and smaller parts. At its lowest levels, the product is broken down into the activities that produce an individual component of the project’s work products. The second type, the process-type WBS, partitions the project into smaller and smaller processes. At its lowest levels, the process is broken down into individual activities. The two main WBS types can be combined into a hybrid WBS as appropriate.
Gantt Chart A commonly used project management tool is the Gantt chart.4 A Gantt chart is a bar diagram that shows the schedule of elements at various levels from the project’s WBS by graphing the schedule and duration for each activity or for a summarized set of work activities. A Gantt chart also highlights milestones, which are typically depicted as diamonds. A scheduling Gantt chart shows the planned schedule for each task or activity with a bar that starts when the task is scheduled to start and ends when the task is scheduled to end. Figure 6.4 shows an example of a scheduling Gantt chart.
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ISO 9001 quality management system
Quality system documentation
Training
Implementation
Quality policy and objectives
ISO 9001 briefing
Calibration system
Steering committee meetings
Quality manual
Procedures and instructions
Controls
Document control Manual, procedures, work instructions
Corrective/ preventive actions
Audits
Internal audits
Vendor evaluations
Management reviews
Quality procedures
Management rep training
Vendor qualification process
Forms
Pre-assessment
Work instructions
Internal auditor training
Document control system
External documents
Certification assessment
Audit behavior training
Audit schedule
Statistical process control
Surveillance audits
Customer info system
Corrective/ preventive action process
Figure 6.3
Product-type WBS.
Source: D. Wood and S. Furterer, The ASQ Certified Manager of Quality/Organizational Excellence Handbook, 5th ed. (Milwaukee, WI: Quality Press, 2020).
10 1 2 3 4 5 6 7 8
Task Name
Task 1.1 Task 1.2 Milestone 1 Task 1.3 Task 1.4 Milestone 2 Task 2.1 Task 2.2
9
Task 2.3
10
Milestone 3 Task 3.1
11 12 13
28 29 30 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 3
Task 3.2 Milestone 4
14 15 16 17 18
Figure 6.4 Scheduling Gantt chart.
4
5
6 7 8
31 9 10 11 12 13
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Gaining Support from Management via a Steering Committee Top management is ultimately responsible for organizational performance improvement. One of top management’s key roles, then, is to identify and prioritize opportunities, and initiate teams to address those of greatest value to the organization. Projects may be selected on the basis of new strategic initiatives (for example, developing a new service for a new market niche), customer satisfaction data, cost-of- quality reports, or other strategic or operational performance measures or initiatives (for example, capacity, throughput, and lean projects such as waste reduction). In order to carry out this process and to simultaneously provide opportunities for learning, a special group called a steering committee is often set up for guiding and tracking team efforts. The group usually includes key leaders in the organ ization (for example, president, operations manager, quality manager) as well as others who represent particular interests. In an organization working u nder a union contract, the u nion representative is also likely to be a member of the steering committee. The steering committee is often a diagonal slice representing all levels of the organization. One role of the steering committee is to initiate desired organizational improvement efforts. It is vital that each team have a clear understanding of its purpose and how that purpose is linked to and supports the organization’s strategic plans. This is done through a written charter that defines the mission and objectives of each project, as well as key personnel (for example, team leader, members, and facilitator) and project timing. The charter is a formal document agreed to by both the team and management. It legitimizes the team’s effort and documents a tacit agreement from management to provide whatever support is necessary to sustain the team. The charter should also include boundaries of the scope of work, authority and responsibility and related limitations, relationship of the team to other teams or projects, the team’s reporting relationships within the organization, and the expected deliverables. If a process improvement team is chartered without a clear mission or objective, the team either will do nothing or will go in the direction it believes best. One way to test understanding is to ask, What will you measure to determine whether the objective has been accomplished? The steering committee may also have the responsibility for approving the team’s recommendations, and certainly has the authority to enable implementation. This helps ensure that teams’ recommendations are acted on. Inaction will result in team members believing that management is not serious about the pro cess, and employees will be reluctant to get involved in future efforts. Another role of the steering committee is to ensure that managers and team members are trained in all aspects of the team concept. This should include team dynamics, project management, process design and improvement methodologies, empowerment, managing organizational change, attributes of leadership and the transformation process, and how to motivate and reward efforts.5 The stakeholder analysis discussed in the next section, Selecting Team Members, can help the team assess receptivity and obtain commitment from stakeholders and team members.
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SELECTING TEAM MEMBERS Describe how to select team members based on knowledge, skill sets, and team logistics, such as an adequate number of members in relation to the size or scope of the project, appropriate representation from affected departments or areas, and diversity. (Apply) CQIA BoK 2020 II.C.2
The basis for a strong, successful team is careful selection of its members (refer back to Table 5.1 for the attributes of good role performance). Team members are often selected b ecause of their knowledge and past achievements. Membership choices for smaller and shorter-duration teams are frequently based on informal referrals. Some instruments and formal methods may be employed in staffing larger and longer-duration teams, especially when candidates are unknown to the sponsor or team leader. In our fast-paced environment, most organizations seek team leaders who are both visionary and flexible—those who can inspire an eclectic, high-performance group of followers. Needed are team leaders who can coach as well as cajole, captain as well as crew, control as well as collaborate, criticize as well as commend, confess as well as confront, consummate as well as concede, and create as well as conform. These attributes and o thers are those of a flexible leader. Although they may help, neither charisma nor superiority (in terms of position, education, longevity, or political clout) should be the primary criterion for choosing an effective team leader. Following is an example that describes the importance of the team leader. A floundering project team formed to design and implement a substantive information technology project failed to reach any of its first-year goals, other than spending the $100,000 (1970 time period) allocated for the project. The small team of three, augmented by personnel from a software design firm, was led by a person who had in-depth knowledge of present systems, the organization, and the principal people in the organ ization. He had been with the company his entire working c areer and was within two years of retirement when first assigned. A systems analyst and an accomplished computer programmer were the other in-house team members. When the CEO became concerned that nothing visible was occurring, he ordered that a new project manager be assigned with the directive to find out what was g oing on and then recommend e ither continuance with restructuring or abandonment. The new project manager assessed the situation and confirmed that the three project incumbents had sufficient expertise, with help from the software house, to complete the project with a one-year extension and with additional funding. The recommendation was approved, and the now-four-person team proceeded under new direction. Formal project management practices
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ere instituted, and a tight timeline with interim milestones and clear w objectives for the work w ere established. Measurements and monitoring were instituted along with weekly progress reviews. Much of the earlier work had to be discarded. Assurances had to be obtained for the analyst and the programmer to ensure their reentry to their former work units when the project was completed. The contract with the software house had to be renegotiated, with penalty clauses for failure to meet the organ ization’s requirements. Working conditions for the team w ere improved. Means for recognizing their contribution were created. Relieved of his proj ect man ag er responsibility, the former leader poured newfound energy and his extensive knowledge into the detailed design of the system, e ager to retire with a success. Assured of their jobs after the project was completed, the analyst and the programmer committed to making the project successful. The key to the successful completion of the project, 10 months later, was the new team leader’s leadership and management attributes and approach. Ideally, a profile of what attributes are sought for each member of a team establishes the criteria for guiding selection. Résumés of candidates and records of past performance are reviewed, and interviews of potential members are conducted. The following instruments may augment member selection: • The Myers-Briggs Type Indicator (MBTI) is an instrument for assessing personality “type” based on Carl Jung’s theory of personality preferences. The test results, analyzed by a trained practitioner, can aid in structuring either the diversity or the similarity desired in a potential team. T here are four bipolar scales, as follows: (E) Extroverted or (I) Introverted (S) Sensing or (N) Intuitive (T) Thinking or (F) Feeling (J) Judging or (P) Perceiving These form 16 possible styles (for example, ENFP, INTJ, and ISFJ). • The DiSC profiling instrument, based on William Marston’s theories, measures characteristic ways of behaving in a particular environment. The DiSC dimensions are dominance, influence, steadiness, and conscientiousness. • A KESAA factors analysis is a method for capturing and analyzing the factors that are important for performing a specific job or task. The factors are Knowledge, Experience, Skills, Aptitude, and Attitude.6 • Knowledge. Formal education, degrees, educational certifications, professional certifications, and self-study achievements • Experience. Years spent applying knowledge and skills in pertinent types of organizations and industries, and in jobs and positions held
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Part II Team Basics • Skills. Skill certifications, training received, and demonstrated proficiency in use of pertinent tools and equipment • Aptitude. Natural talent, capability, capacity, innate qualities, deftness, knack, adaptability to change, natural ability to do things requiring hand–eye coordination, and fine motor skills • Attitude. Manner of showing one’s feelings or thoughts; one’s disposition, opinion, mood, ideas, beliefs, demeanor, state of feeling, reaction, bias, inclination, emotion, temperament, mental state, frame of mind, and ease in accepting and adopting new or changed plans and practices In addition to the composition of the team, another key consideration for its success is w hether the team w ill function as an autonomous parallel organization or as an adjunct to the daily operation of the organization. The stand-alone team is often located away from the parent organization and is also sometimes exempt from some of the restrictive rules of the parent organization. Members of such a team are typically on temporary assignment to the team and do not bring their former daily responsibilities with them to the new assignment. When the team must function with members retaining their day-to-day responsibilities, conflicts can arise over which activity takes precedence. If such conflicts are not carefully resolved, team effectiveness can be severely compromised. “Pills-are-us,” a cross-functional process improvement team in a small community hospital, was established to find ways to reduce the time it took to obtain medications from the hospital’s pharmacy. The nine-person team, consisting of nurses from each of the larger departments, was to meet for one hour once a week “until they found a way to substantially reduce the cycle time.” From the outset, the team was plagued with absences and late arrivals. Each absent or tardy nurse had legitimate reasons for his or her behavior. Regardless, team effectiveness suffered, and the team dragged on without an end in sight. Repeatedly, the team leader attempted to get department heads to help resolve the conflict, but their concerns were elsewhere. Finally, the team’s sponsor, a vice president, convened a meeting of department heads to reaffirm their commitment and reach agreement as to how their nurses’ participation would be handled. Priorities w ere established, resource-sharing agreements w ere reached, and supervisors were advised of the decisions. Project team participation now had its assigned priority and the appropriate management commitment to back it up. The team members—the nurses—were relieved of the decision as to which “master” to serve first and u nder what conditions. The stakeholder analysis is a tool that can be used to define the people and their roles that w ill be impacted by the project and identify who should be on the team. A sample stakeholder analysis for the emergency department Lean-Six Sigma project is shown in Figure 6.5.7 The stakeholder analysis includes a listing of the stakeholders or functions that have an interest in the project. The role of each stakeholder group with respect to the project is identified. If there are a large
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number of stakeholders, they can be identified as e ither primary (those who are directly impacted by the process being improved or the project once it is implemented) or secondary (those who are impacted but not as directly as the primary stakeholders). The project sponsor or the team lead should interview stakeholder representatives to understand their primary concerns regarding the project and how they will be impacted by the project. The project sponsor and the team lead should assess how receptive the stakeholders are to the project as it is kicked off. They should also assess how receptive the stakeholders need to be when they begin implementing the project changes. The receptivity is typically assessed based on a rating scale from strongly support to strongly against, with several levels in between. How do the project sponsor and the team leader assess the stakeholders’ receptivity to the project? Assessing receptivity can be done in several ways: (1) talk to the stakeholders to assess their receptivity, (2) monitor body language and conversations of the stakeholders within and outside of meetings, (3) talk with other employees who know the stakeholders. The following are examples of supportive and engaged stakeholders, team members, and leaders: • Attend meetings, are prompt and engaged • Have a positive outlook and willingness to improve and change • Push team for improvements with encouragement • Exude genuine interest in change • Share ideas in meetings and brainstorming sessions • Performs tasks outside of meetings without being prompted • Offer management perspective to help the team with improvement ideas The following are examples of nonsupportive and nonengaged stakeholders, team members, and leaders: • Complain within and outside of meetings • Use a confrontational tone in meetings • Discourage most ideas • Do not provide ideas in meetings and brainstorming sessions • Frown on thinking outside the box • Use defensive body language—arms crossed, roll eyes, always on phone, holding head in hands, putting hands out in front of body as if to stop someone from advancing The team should consist of at least one representative from each primary stakeholder group. The project sponsor should decide w hether a representative from each secondary stakeholder group should be included on the project team. If the team gets too large, more than 10 members or so, the project sponsor may consider reducing the team members to only the critical primary stakeholder team members.
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Stakeholder
ED Patients
Type
Primary
Patients that go through the Emergency Department. Includes patients who are seen and discharged, admitted, or who leave without being seen
● ● ●
●
ED Physicians
Primary
Physicians who provide care for ED patients.
● ● ●
Medical Staff
Primary
Administration
Primary
Nurses, Technicians, Transport, Lab, Radiology, Pharmacy, other inpatient areas, who provide care for ED patients
● ●
●
Secondary
EMS
Registration
Primary
Admitting Physicians and Consultant
Secondary
Regulatory Agencies
Secondary
Ancillary Support
Secondary
Administration of the Hospital
Emergency Medical Services who transport patients to the ED from outside the hospital
Register the patient
● ●
● ● ●
● ●
Physicians and Specialty Consultants who admit patients to the hospital, or provide care for the patients that go through the ED
Regulatory Agencies who define regulatory criteria Support Staff, Environmental Services, Central Supply, Dietary, insurance, payors
Initial Receptivity
Future Receptivity
Neutral
Neutral
Strongly support
Strongly support
Moderate support
Strongly support
Strongly support
Strongly support
Neutral
Neutral
Correct registration Accurate billing
Moderate support
Strongly support
Patient satisfaction Quality of care
Neutral
Strongly support
Neutral
Neutral
Moderate support
Strongly support
Potential Impacts/ Concerns
Primary Role
● ●
● ●
● ● ●
Quality of care Low waiting time Patient satisfaction Efficient processes Patient satisfaction Patient throughput Patient capacity
Efficient processes Patient satisfaction
Efficient use of resources Patient satisfaction Patient t hroughput Quality of care Low waiting time Patient satisfaction
Quality of care Revenue integrity Efficient processes Patient satisfaction Patient throughput
Figure 6.5 Stakeholder analysis for the emergency department Lean-Six Sigma project. Source: Created by Sandra L. Furterer.
Team Diversity Research has shown that having a diverse team can help boost creativity in thought and ideas.8 There are many benefits of diversity in a team: team members exert more cognitive effort, they attend to more aspects of a situation; they think in more divergent ways; they are more likely to identify novel solutions or make decisions to make change happen. It is critical to engage diverse members and encourage them to interact with and influence the team. The organization and team must create a culture and environment that is tolerant of differing opinions and encourage
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interdependence of team members to achieve the team goals. The team leader and/ or the team facilitator must ensure that the team members with minority opinions or of a diverse background are heard in meetings. This alliance with the team leader helps the minority members be respected and allows for their ideas to be heard. It is critical that the ground rules include openness to new ideas and learning among the team members.
TEAM STAGES Describe the classic stages of team development: form ing, storming, norming, performing, and adjourning. (Understand) CQIA BoK 2020 II.C.3
The Tuckman model identifies the stages that teams typically progress through during their life cycle. Teams move through four stages of growth as they develop maturity over time.9 Each stage may vary in intensity and duration.
Stage 1: Forming In the forming stage, the cultural background, values, and personal agenda of each team member come together in an environment of uncertainty. New members won der, What will be expected of me? How do I, or can I, fit in with these people? What are we really supposed to do? What are the rules of the game, and where do I find out about them? Fear is often present but frequently denied. Fear may be about personal acceptance, possible inadequacy for the task ahead, and the consequences if the team fails its mission. These fears and other concerns manifest themselves in numerous dysfunctional behaviors: • Maneuvering for a position of status on the team • Undercutting the ideas of others • Degrading another member • Trying to force one’s point of view on others • Bragging about one’s academic credentials • Vehemently objecting to any suggestion but one’s own • Abstaining from participation in discussions • Distracting the work by injecting unwanted comments or trying to take the team off track • Retreating to a position of complete silence
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Part II Team Basics Because of the diversity of some teams, t here may be a wide variety of disciplines, experience, academic levels, and cultural differences among the members. This can result in confusion, misunderstanding of terminology, and language difficulties. A technique for moving the team through this stage is to clearly state and understand the purpose of the team, and identify the roles of the members, as well as establish criteria for acceptable behavior (norms).
Stage 2: Storming In the storming stage, team members still tend to think and act mostly as individuals. They struggle to find ways to work together, and sometimes they belligerently resist. Each member’s perspective appears to be formed from his or her own personal experience rather than based on information from the w hole team. Uncertainty still exists, defenses are still up, and collaborating is not yet the accepted mode of operation. Members may be argumentative. They frequently test the leader’s authority and competence and often try to redefine the goal and direction of the team. To move the team out of the storming stage and into norming, it will be critical for the leader to clarify power and authority, give team members more responsibilities, and ensure that the ground rules are well established.
Stage 3: Norming In the norming stage, true teamwork begins. Members shift from dwelling on their personal agendas to addressing the objectives of the team. Competitiveness, personality clashes, and loyalty issues are sublimated, and the team moves toward willingness to cooperate and openly discussing differences of opinion. The leader, with aid from a facilitator, focuses on process, promoting participation and team decision making, encouraging peer support, and providing feedback. A potential danger at this stage is that team members may withhold their good ideas for fear of reintroducing conflict.
Stage 4: Performing Members in the performing stage, functioning as a mature and integrated team, now understand their own strengths and weaknesses as well as those of other members. The leader focuses on monitoring and feedback, letting the team take responsibility for solving problems and making decisions. The team has become satisfied with its processes and is comfortable with its working relationships and its resolution of team problems. The team is achieving its goals and objectives. However, reaching this stage does not guarantee smooth operating indefinitely. Typically, a team moves through these four stages in sequence. However, a team may regress to an earlier stage when something disturbs its growth. The addition of a new member may take a team back to stage 1 as the new member tries to become acclimated and the existing team members “test” the newcomer. Loss of a respected member may shift the apparent balance of power so that the team reverts to stage 2. A change in scope or the threat of cancellation of a team’s project may divert the team to an e arlier stage to redefine direction. Exposure of an individual
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team member’s manipulation of the team can cause anger, retrenchment to silence, or a push to reject the offending member, along with a revert to stage 1. Some teams find difficulty in sustaining stage 4 and oscillate between stages 3 and 4. This may be a matter of inept team leadership, unsupportive sponsorship, less-than-competent team members, external factors that threaten the life of the team’s project, or a host of other factors. An example of a team moving successfully through the team stages follows: Big Risk, an insurer of off-road construction and pleasure vehicles, has a strategic plan to reduce administrative expenses by 30% over the next three years. In support of this goal, the vice president of administration sponsors a project: a claim-processing team (CPT) to reduce the claim- processing cycle time (mission) from three weeks to four days within one year. A team leader is selected. She gathers data and estimates savings of $250,000 per year and an estimated project cost of $25,000. The CPT members are selected from functions affected by any potential change. A facilitator is retained to conduct team-building training and to guide the team through its formative stages u ntil it reaches a smooth-functioning level of maturity. The CPT prepares a project plan, including monthly measurement of progress, time usage, and costs. The president approves the plan. The CPT fine-tunes its objectives, determines ground rules, and allocates the tasks to be performed. The project is launched. The CPT reviews its progress weekly, making any necessary adjustments. The CPT presents a monthly summary review to the vice president of administration, giving the status of time usage, costs, and overall pro gress toward the goal. Any problems requiring the vice president’s intervention or approval are discussed (such as the need for more cooperation from the manager of field claims adjusters or the need to contract for the services of a computer systems consultant). The CPT completes the process reengineering and successfully implements the changes. A formal report and presentation are presented to the senior management. The outcomes of the CPT are publicized, and team member contributions are recognized and rewarded. Appropriate documentation is completed, and the CPT is disbanded.
Adjourning Other authors have added adjourning to Tuckman’s original model. This stage is the process of closure that occurs when a team has accomplished its mission. The action includes a review of lessons learned, an assessment of the achievement of the outputs and outcomes intended, complete documentation, recognition of the team’s efforts and celebration, and formal disbanding of the team. This stage is often skipped or inadequately addressed in the team’s haste to disband and move on.
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TEAM CONFLICT Identify the value of team conflict and recognize how to resolve it. Define and describe groupthink and how to overcome it. Determine how good logistics, an agenda, and effective training facilitate team success. (Analyze) CQIA BoK 2020 II.C.4
Conflict among team members can occur at any of the stages but is more likely to surface during the forming and storming stages. Conflict can, and does, occur in cooperative as well as competitive relationships. It is a part of human life. Conflict is inevitable—make it work for the team. Schmidt and Tannenbaum list five stages of the evolution of conflict:10 1. Anticipation 2. Conscious but unexpressed difference 3. Discussion 4. Open dispute 5. Open conflict The team leader, with guidance from a facilitator, if needed, can help transform a conflict into a problem-solving event by: • Welcoming differences among team members • Listening attentively with understanding rather than evaluation • Helping to clarify the nature of the conflict • Acknowledging and accepting the feelings of the individuals involved • Indicating who will make the final decision • Offering process and ground-rule suggestions for resolving the differences • Paying attention to sustaining relationships between the disputants • Creating appropriate means for communication between the persons involved in the conflict A commonly used instrument for assessing individual behavior in conflict situations is the Thomas-Kilmann Conflict Mode Instrument.11 This instrument assesses behavior on two dimensions: assertiveness and cooperativeness. These dimensions are then used to define three specific methods for dealing with conflicts: avoiding– accommodating, competing– collaborating, and compromising. The model is shown in Figure 6.6.
Concern for self-needs
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Compete
91
Collaborate
Win at a cost to relationships
Creatively problem solve so both parties win
Compromise Give and take
Moderate
Pick your battles; let it go
Let others take the lead, get out of the way
Low Avoid
Accommodate Moderate
Low
High
Concern for relationship Figure 6.6
Conflict-handling modes.
Source: D. Wood and S. Furterer, The ASQ Certified Manager of Quality/Organizational Excellence Handbook, 5th ed. (Milwaukee, WI: Quality Press, 2020).
“Conflict is common and useful. It is a sign of change and movement. Conflict is neither good nor bad. The effort should not be to eliminate conflict but to refocus it as a productive rather than destructive force. Conflict can be a vital, energizing force at work in any team.”12 Therefore, if conflict is approached as an opportunity to learn and move forward, it really isn’t a barrier; it’s more an enabler. Active listening is a key attribute for team leaders in managing conflict. Active listening is used to: • Reduce defensiveness • Help others feel understood • Defuse emotional situations • Build rapport and trust • Help focus energy on problem solving Active listening involves two steps: 1. Accept what the individual is saying (which does not imply agreement) and his or her right to say it 2. Offer an understanding of both the content of what was said and the feelings observed and heard, giving no unsolicited advice
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Groupthink In the team-selection process, as well as in the day-to-day functioning of the team, care must be taken to avoid groupthink. Groupthink occurs when most or all of the team members coalesce in support of an idea or a decision that h asn’t been fully explored, or one with which some members secretly disagree. The members are more concerned with maintaining friendly relations and avoiding conflict than in becoming engrossed in a controversial discussion. Several actions may help forestall groupthink: • Brainstorming alternatives before selecting an approach • Encouraging members to express their concerns • Ensuring that ample time is given to surface, examine, and comprehend all ideas and suggestions • Developing rules for examining each alternative • Appointing an “objector” to challenge proposed actions
Other Barriers Logistics is defined as a process involving planning, implementing, and controlling an efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.13 Breakdowns in the planning and implementing phases can substantially and negatively impact the work of a team. For example, consider some of the issues for team members regarding meetings: • Team members may often work in different buildings. What connectivity and communication problems arise? • The logistics of getting people together for kaizen events can be frustrating. Who carries on the work when the member is at the event? • Selecting conference rooms, technology, room setup, and so on can be logistic nightmares. Who coordinates these arrangements? • Agendas, notes, action items, etc. are also part of the logistics of team meetings. Who attends to these functions? Following is an example of poor planning and breakdowns in communication. HandiWare, a manufacturer of h ousehold tools designed especially for women, has assembled its first team to design, procure, and install an exhibit at an upcoming home show. The team completes the exhibit design on schedule, procures the needed materials to assemble the exhibit, and arranges for the shipping to and erection of the exhibit at the site—all on schedule. The HandiWare salespeople arrive at the site to set up, but the exhibit is not there. Phone calls, e-mails, and frantic texting finally confirm that the exhibit is on a truck four states away and heading even farther away.
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The sales team cobbles together a makeshift exhibit that fails to portray the quality products they wish the consumers to buy. A post-exhibition lessons-learned debriefing concluded the following: • No risk assessment had been done • No contingency plans were made based on potential scenarios • No exhibition-savvy person was involved in the planning • No attempt had been made to query other, more experienced exhibitors • No representative of the HandiWare exhibition team had been invited to sit in on the design team meeting • The exhibit design was beautifully and cost-effectively designed, and was never used Hidden agendas are another common barrier. If a team member is hiding a purpose for participating that conflicts with the mission and objectives of the team, it can result in a dysfunctional team. Such hidden agendas may be politi cally motivated or motivated by self-gain. Disruptive behavior is another potential barrier. A member who continually disrupts the work of the team with behavior that is offensive to other members can cause rebuffs, resentment, and/or retaliation. The member may have any of the following agendas: • Get personal attention • Gain control of the team • Disrespect the team leadership or a specific member • Take the team off track • Destroy the team environment It is vital that the team leader, perhaps with assistance from the facilitator, deal with these agendas as soon as detected. Best scenario: a brief, straight-to-the- point talk with the individual, away from the team, focusing on a positive behav ior change. Worst scenario: the person becomes belligerent, resists attempts to correct the disruptive behavior, and requires disciplinary action, even removal from the team. Lack of training is yet another common barrier. Lack of “soft” or interpersonal skills as well as lack of skills in the use of appropriate tools can impede a team’s progress. Unless team members have had previous experience on teams, it is wise to provide training on teamwork and team dynamics. A team should strive to move through the stages of team development as effectively as possible. It usually pays to spend the effort, time, and expense to carefully train the team members for the roles they will need to fulfill. With most adults, just-in-time training—in which skills training takes place immediately before the trainee will use the skill—works well.
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TEAM DECISION MAKING Describe and use different decision-making models, such as voting (majority rule, multivoting) and con sensus. Use follow-up techniques to clarify the issue to be decided, to confirm agreement on the decision, and to achieve closure. (Apply) CQIA BoK 2020 II.C.5
Definitions Decision making is a process for analyzing pertinent data to make the optimum choice. Decisiveness is the skill of selecting a decision and carrying it through. Some fans of the Star Trek television program may recall the decision-making process of the captain. He solicited input (information and recommendations) from his subordinate officers, thought about it, made a decision, and ordered “Make it so.”
The Decision-Making Process 1. Clearly state the decision purpose 2. Establish the criteria (basis for decision and results required) 3. Assess criteria for those characteristics that would be acceptable and measurable (identify the desirable criteria in order of priority) 4. Create a list of alternatives to consider, and collect data about each 5. Assess the alternatives (relate each alternative solution back to the criteria, eliminate those that are unacceptable, and weigh and prioritize remaining alternatives) 6. Conduct a risk analysis of the remaining alternatives (what could go wrong?) 7. Assess the risks (probability and seriousness of impact) 8. Make the decision (a decision with manageable and acceptable risk)
Decision-Making Styles • Top-down (The boss makes the decisions.) • Consultative (Top-level people solicit input from lower levels.) • Proactive consultative (Lower-level p eople propose ideas and potential decisions to the top level for final decision.)
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• Consensus (Ideas and alternatives are widely discussed in the team. When everyone agrees they can support a single decision, without opposition, it is considered final.) • Delegation ——Delegation with possible veto (Top levels retain right to reject decision made at a lower level.) ——Delegation with guidelines (Lower levels may make decisions within established constraints.) ——Total delegation (Lower levels are free to make decisions however they wish.) • Voting (Each team member has a vote. Each member stating his or her rationale for his or her vote may expand this method. Voting is acceptable for fairly unimportant decisions. It is fast but lacks the rigor necessary for critical and more complex decisions.)
Team Decision-Making Tools Consensus Consensus is a form of group decision making in which everyone agrees with—or can at least live with—the decision. If even one person says, “I’m sorry, but I c an’t support this decision,” then the team needs to keep working toward consensus. Consensus can be more time-consuming than deciding by simple majority, but organizations around the world have learned that the decisions that come from building consensus are generally in the long run much more effective. The most important rule in coming to consensus is honesty. A consensus decision is one that everyone on the team agrees to support. This means that no one can say later, “I never really liked that decision, so I’m not going to support it.” A consensus vote is “thumbs up” for everyone: • Thumbs-up means, “I like this option and I fully support it.” • Thumbs-sideways means, “I’m not thrilled with this option, but I can live with it and will support it fully.” • Thumbs-down means, “I cannot live with this option and cannot support it.” If there are many thumbs-sideways votes, it may be wise to try to find a more appealing option. If someone does not vote, take it as an automatic thumbs-down, because it is important that the entire team agrees to support the decision fully. Generally, teams should talk about consensus as a decision-making process, and people should agree that they would use it and abide by it. Multivoting Multivoting is a quick and easy way for a group to identify the items of the highest priority in a list. This technique helps a team:
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Part II Team Basics • Prioritize a large list without creating a win-lose situation in the group that generated the list • Separate the “vital few” items from the “useful many” on a large list The basic steps involved in multivoting are as follows: 1. Give each team member a number of votes equal to approximately half the number of items on the list (for example, 10 votes for a 20-item list). 2. Have the members vote individually for the items they believe have high priority. Voters can “spend” their votes as they wish, even giving all to one item. 3. Compile the votes given to each item and record the quantity of votes beside each item. 4. Select the four to six items receiving the highest number of votes. 5. Discuss and prioritize the selected items relative to each other. If t here is difficulty in reaching agreement, remove the items that received the fewest votes from the list and then conduct another vote. Multivoting is best suited for use with large groups and long lists. Its simplicity makes it very quick and easy to use.
Nominal Group Technique The nominal group technique (NGT) is a structured process that identifies and ranks major problems or issues that need addressing. It can be used to identify the major strengths of a department/unit/institution or to make decisions by consensus when selecting problem solutions in a business. This technique provides each participant with an equal voice. The basic steps involved in NGT are as follows: 1. Request that all participants (usually 5 to 10 persons) write or say which problem or issue they feel is most important. 2. Record all the problems or issues. 3. Develop a master list of the problems or issues by consolidating and eliminating duplicates. 4. Generate and distribute to each participant a form that numbers the problems or issues in no particular order. 5. Request that each participant select the top five problems or issues and rank these by importance, with “5” for highest and “1” for lowest. 6. Tally the rankings of all participants by aggregating the points for each problem or issue. 7. The problem or issue with the highest aggregated number is the most important one for the team as a whole.
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8. Discuss the results and generate a final ranked list for process improvement action planning. Figure 6.7 is an example of NGT. It provides the names of the individuals and their ranking of four restaurants. The team would select Stew & Brew, since it received the highest ranking (16). Individuals and rankings Restaurant
Tom
Joe
Mary
Sue
Terry
Total
Marlow’s
1
2
3
1
2
9
Grunge Café
3
1
1
2
3
10
Stew & Brew
2
4
2
4
4
16
Fancaé
4
3
4
3
1
15
Figure 6.7 NGT ranking table. Source: D. Wood and S. Furterer, The ASQ Certified Manager of Quality/Organizational Excellence Handbook, 5th ed. (Milwaukee, WI: Quality Press, 2020).
Attributes of a Good Decision • Represents the optimum in operational feasibility • Involves a minimum of undesirable side effects and trade-offs • Is technically free from flaws • Delineates specific action commitments • Is within the capacity of the affected people to comprehend and execute • Is acceptable to those involved • Is supportable with the resources that can be made available • Includes provision for alignment, audit, and measurement • Does not violate company values and ethics • Does not violate statutory and regulatory requirements
Considerations • Fact-finding is often confused with decision making. Technical questions can be answered with a yes or no or a go/no-go decision. There are no alternatives; the answer is right or wrong. • Decision making is selecting the most effective action from among less favorable actions. • Decisions can be no better than the intelligence supporting them.
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Part II Team Basics • Decisions can have dollar values associated with their worth. • Decision making is a process rather than a single act. • Good team leaders d on’t make decisions; they manage decision makers and decision making. • No team leader in today’s world knows enough to make major decisions without reliable help from others. • Good decision makers hold off decisions until they are needed, but they do think about decisions they will make, and they d on’t delay the gathering of intelligence. • A decision made today may be totally inappropriate in tomorrow’s changed environment.
Team Meetings The structure of team meetings depends on the team’s purpose, its size, its duration, its projected outcomes, and the degree of urgency of results required. Teams may range from having no formal meetings to having frequently scheduled meetings with extensive agendas and formal minutes. Certain rules and regulations as well as client requirements may specify the extent of meetings to be held. For example: A company whose quality management system is certified u nder the ISO/TS16949 Automotive QMS standard is expected to conduct periodic design reviews (meetings) as a product is being developed. Evidence that such reviews have been conducted and documented is examined. Failure to comply could place the certification in jeopardy. In a typical formal team meeting, the team leader arranges for an agenda to be prepared and sent to all team members. The agenda states the time, place, and intent of the meeting. Additional material may be attached in order for participants to prepare themselves for discussion. In some cases, the agenda states the role of each team member, why his or her input is needed, and decisions that must be made relative to the topics of the meeting. The logistics of obtaining the meeting venue and equipping the meeting room is the responsibility of the team leader, but the task is often delegated to an assistant. All team members have a responsibility to assist the team in reaching consensus when differences of opinion arise, yet also must challenge assumptions that could endanger the outcome of the team. Further, each member must respect and cooperate with others on the team. Inasmuch as a team should function as a process, a team meeting process self- assessment (Figure 6.8) can be a useful tool to critique the overall effectiveness of a team meeting. The value lies in having each team member and the facilitator complete the assessment and then having the group as a w hole discuss the results, reach consensus, and set one or more improvement objectives for the next meeting.
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Circle a number to represent your perception of the team’s process in this meeting. 10 = high, 1 = low We had no agenda or we did not follow the agenda we had.
TEAM ON TRACK 1 2 3 4 5 6 7 8 9 10
Members who were supposed to attend didn’t show. Others straggled in late. Some members tended to dominate and others did not participate.
ATTENDANCE AND PROMPTNESS 1 2 3 4 5 6 7 8 9 10 PARTICIPATION 1 2 3 4 5 6 7 8 9 10
More than one person talked at a time; disruptive remarks were made; side conversations occurred. Overall disrespect of person speaking was evident.
LISTENING 1 2 3 4 5 6 7 8 9 10
No attempt was made to redirect the team to the agenda or to encourage balanced participation.
SHARED LEADERSHIP 1 2 3 4 5 6 7 8 9 10
When conflicts arose, chaos resulted. Differences of opinion were allowed to escalate to inappropriate behavior and lack of adequate resolution.
CONFLICT MANAGEMENT 1 2 3 4 5 6 7 8 9 10
Team decisions were inferior to what individuals would have produced. There was no attempt to summarize main ideas/decisions or future actions/responsibilities. Team was totally ineffective in achieving its purpose for this meeting.
RESULTS 1 2 3 4 5 6 7 8 9 10
OVERALL RATING 1 2 3 4 5 6 7 8 9 10
An agenda was distributed in advance of the meeting and we followed it exactly.
All expected members attended and arrived on time. The meeting started at the scheduled time. Member participation was evenly balanced; everyone contributed to decisions and openly discussed ideas.
One person talked at a time; others helped clarify and build on ideas; all were attentive to person speaking. Respect for one another was evident.
Both the team leader and team members intervened to keep the team focused on the agenda and to stimulate participation when needed. The energies involved with differing opinions were directed toward understanding conflicting views and seeking consensus. Team expertise and decisions were superior to individual judgments. Main ideas/decisions were summarized, and action assignments were made at end of meeting. Team was totally effective in achieving its purpose for this meeting. All agenda items were addressed or properly tabled for the next meeting.
Figure 6.8 Team meeting process self-assessment.
Team Leader as Coach Leaders often complain about employees, saying they have poor work habits, have little respect for authority, require constant supervision, arrive late and leave early, lack drive and initiative, want more money for less work—the list goes on. “If only they were more motivated” is a common lament. The fact is that most people start a new job already motivated. Something makes them want to take the job in the first place. It’s what happens to employees a fter they are hired that demotivates them. To lead p eople better, a team leader needs to become an effective coach. A basic principle is that one person cannot motivate another. Motivation comes from within a person and is a consequence of one’s environment. This environment may consist of past experiences, the present situation, competency to do the job, knowledge of what’s expected by management, working conditions,
100 Part II Team Basics hether and how recognition is received, the degree to which decisions and sugw gestions are allowed and accepted, the degree to which one feels empowered to act on behalf of the business, perception of management’s actions (for example, punishing), opportunity to develop and make more money, conditions outside of work, and personal health. Each person has a unique set of needs that vary depending on circumstances and that, if fulfilled, will tend to make him or her feel motivated. An effective leader can provide an environment in which an employee feels motivated. To do this, consider the 6 Rs: 1. Reinforce. Identify, recognize, and positively reinforce work done well. 2. Request information. Discuss team members’ views. Is anything preventing expected performance? 3. Resources. Identify needed resources, the lack of which could impede quality performance. 4. Responsibility. Customers make paydays possible; all employees have a responsibility to the customers, both internal and external. 5. Role. Be a role model. Don’t just tell; demonstrate how to do it. Observe learners’ performances. Together, critique the approach and work out an improved method. 6. Repeat. Apply the previous principles regularly and repetitively. Coaching is an ongoing process. But it doesn’t have to be a burden. Following these action steps to shape behavior will help a team leader become an effective, quality-driven coach: • Catch team members doing something right and positively reinforce the good behavior in that specific situation. • Use mistakes as learning opportunities. • Recognize and reward team members who take risks in changing their behavior, even if they sometimes fail while learning new behavior. • When discussing situations, position yourself for relaxed conversation. Use responses such as “I see/I understand,” “What do you suggest we do?” “How can I help you make this happen?” • Acknowledge the team member ’s reason for action, but don’t agree to it if it’s inappropriate, and do explain your rationale for not agreeing. • When giving correctional performance feedback, state the expectation or requirement, state the employee’s behavior, describe any behavior change needed and why, mention consequences for not changing, and discuss how and when change must occur. • When giving complementary performance feedback, state what the employee did properly and the requirement or expectation met, why that was important (the results of the action) and compliment the employee for work done well. Discuss any further improvements that may be desirable. If for a significant achievement, arrange for wider- range recognition and perhaps a reward.
Chapter 6 Team Formation and Group Dynamics 101 • Encourage members to make suggestions for improving. Always give credit to the member making the suggestion. • Treat team members with even more care than other organization resources.
POTENTIAL PERILS AND PITFALLS OF TEAMS • The purpose of the team is not linked to the organization’s strategic direction and goals. • Management commitment and personal involvement are nonexistent or inadequate. • The team environment is hostile or indifferent. • Assigned members lack the needed competence (knowledge, skills, experience, aptitude, and attitude). • Training for team members is not made available or is inadequate for the tasks to be done. • Team leadership is inadequate to lead the team in meeting its objectives. • Team-building action is nonexistent or inadequate. • Team facilitation action is nonexistent or inadequate. • Team ground rules are nonexistent or inadequate. • Team process is ignored or improperly managed. • Members are not behaving as a team. • Team members are unsure of what’s expected of them. • Recognition and reward for work done well is nonexistent or inadequate. • Adequate resources are not provided (e.g., support personnel, facilities, tools, materials, information access, and funding). • Conflicts between day-to-day work and work on the team have not been resolved. • The team cannot seem to move beyond the storming stage. • Team members constantly need to be replaced. • Team members show l ittle respect for each other ’s competence. • The decision to form a team is not the best approach for the situation. • The team leader is reluctant to give up absolute control and unquestioned authority. • Day-to-day operations personnel perceive the team as a potential threat. • The union objects to the formation of a team.
102 Part II Team Basics • The team, if self-directed, lacks the training and knowledge to handle situations that may be off limits, such as hiring/firing and compensation. • Planning the process and managing the process by which the team will operate has been done poorly, if at all. • The team leader does not understand two primary concepts: how to lead a team and how to manage the team process. • The team is allowed to continue beyond the time when it should have been disbanded. • Team members have been selected involuntarily. • The basis for team member selection is not consistent with the goals and objectives and the expected outcomes of the team. • Team members’ roles and organizational levels in day-to-day operations are carried into team activities, upsetting the “all are equal” environment desired. • The team assumes an unauthorized life of its own. • The team fails to keep the rest of the organization apprised of what it’s doing and why. • Team members are cut off from their former day-to-day functions, losing opportunities for professional development, promotions, and pay raises. • The size of the team is inappropriate for the intended outcome—too limited or too large. • The team’s actions are in violation of its contract with the union or in violation of l abor laws and practices. Patrick M. Lencioni describes five dysfunctions of a team: 1. the absence of trust—where team members fear being vulnerable, which prevents building trust within the team; 2. there is a fear of conflict—the desire to preserve harmony stifles the occurrence of productive conflict; 3. lack of team commitment—the lack of clarity or buy-in prevents team members from making decisions; 4. avoidance of accountability—the need to avoid interpersonal discomfort prevents holding each other accountable; and 5. inattention to results—the pursuit of team members’ trying to achieve individual goals and personal status reduces the ability to focus on the collective goals.14
WHAT MAKES A TEAM WORK? • All team members agree on the expected outputs and outcomes of the team.
Chapter 6 Team Formation and Group Dynamics 103 • Each member is clearly committed to the goals and objectives of the team and understands why he or she is on the team. • Each member fully accepts the responsibilities assigned and makes an overall commitment to help with whatever needs to be done to ensure the team’s success. • Members agree to freely ask questions and openly share their opinions and feelings, with no hidden agendas and with respect for other team members. • Information is not hoarded or restricted. Each member has access to what is needed, and when it is needed, to accomplish the work. • Building and maintaining trust is of paramount importance to the team’s successful achievement of its purpose. • Every member feels he or she can make a difference with his or her contribution. • Management is committed to supporting the team’s decisions, as is each team member. • Conflict within the team, when properly managed, produces a win–win outcome. • The team maintains a dual focus: its process as a team and its anticipated outcomes. • Serving on the team can increase a member’s expertise and reputation but should never be a detriment to his or her personal development (such as promotional opportunities, compensation increases, and training to maintain job skills).
NOTES 1. S. L. Furterer, Lean Six Sigma Case Studies in the Healthcare Enterprise (Springer, 2014), accessed November 11, 2019. https://search.ebscohost.com/login.aspx?direct=true&d b=cat02016a&AN=day.b3734542&site=eds-live. 2. E. Rice and W. Smedick, Tools for Creating and Managing Student Teams, American Society for Engineering Education Conference Proceedings, 2018. 3. D. Wood and S. Furterer, The ASQ Certified Manager of Quality/Organizational Excellence Handbook, 5th ed. (Milwaukee, WI: Quality Press, 2020). 4. Ibid. 5. Ibid. 6. M. A. Ould, Strategies for Software Engineering: The Management of Risk and Quality (Chichester, West Sussex, UK: John Wiley & Sons, 1990). 7. Ibid. 8. E. Mannix and M. Neale, “What Differences Make a Difference? The Promise and Reality of Diverse Teams in Organizations,” Psychological Science in the Public Interest 6, no. 2 (October 2005), www.psychologicalscience.org. 31–55. 9. Defined by B. W. Tuckman, “Developmental Sequence in Small Groups,” Psychological Bulletin 63, no. 6 (November–December 1965): 384–99.
104 Part II Team Basics 10. W. Schmidt and R. Tannenbaum, “Management of Differences,” Harvard Business Review, November–December 1960. 11. Kenneth W. Thomas and Ralph H. Kilmann, Thomas-Kilmann Conflict Mode Instrument (Tuxedo, NY: XICOM). 12. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran, eds. The Executive Guide to Improvement and Change (Milwaukee, WI: Quality Press, 2003). 91. 13. Supply Chain Management Terms and Glossary, Council of Supply Chain Management Professionals (CSCMP), PDF document on CSCMP website, updated 2016. p 117. 14. P. Lencioni, The Five Dysfunctions of a Team (San Francisco: Jossey-Bass, 2002). 188, 189.
ADDITIONAL RESOURCES Bauer, Robert W., and Sandra S. Bauer. The Team Effectiveness Survey Workbook. Milwaukee, WI: Quality Press, 2005. Beecroft, G. Dennis, Grace L. Duffy, and John W. Moran, eds. The Executive Guide to Improve ment and Change. Milwaukee, WI: Quality Press, 2003. Bens, Ingrid M., ed. Facilitation at a Glance. 3rd ed. Salem, NH: GOAL/QPC, 2012. Dreo, Herb, Pat Kunkel, and Thomas Mitchell. The Virtual Teams Guidebook for Managers. Milwaukee, WI: Quality Press, 2003. Evans, J. R., and W. M. Lindsay. The Management and Control of Quality. 9th ed. Cincinnati: South-Western College Publishing, 2013. GOAL/QPC and Joiner Associates. The Team Memory Jogger. Salem, NH: GOAL/QPC, 1995. Hallbom, Tim, and Nick LeForce. Coaching in the Workplace. Salem, NH: GOAL/QPC, 2008. Hitchcock, D. The Work Redesign Team Handbook: A Step-by-Step Guide to Creating Self-Directed Teams. White Plains, NY: Quality Resources, 1994. Scholtes, Peter R., Brian L. Joiner, and Barbara J. Streibel. The Team Handbook. 3rd ed. Madison, WI: Joiner Associates, 2003. Westcott, Russell T., ed. The Certified Manager of Quality/Organizational Excellence Handbook. 4th ed. (Milwaukee, WI: Quality Press, 2014). ———. Simplified Project Management for the Quality Professional. Milwaukee, WI: Quality Press, 2005.
Part III Improvement Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11
Process Improvement Improvement Techniques Improvement Tools Root Cause Analysis Risk Management
The largest room in the world is room for improvement. —Anonymous
Continuous improvement is simply the way the company does business. —Mary Walton
Even if accurate data are available, they will be meaningless if they are not used correctly. The skill with which a company collects and uses data can make the difference between success and failure. —Masaaki Imai
Improvement means the organized creation of beneficial change; the attainment of unprecedented levels of performance. A synonym is breakthrough. —Joseph M. Juran
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Chapter 7 Process Improvement
WHAT IS PROCESS IMPROVEMENT? Process improvement means making t hings better, not just fighting fires or managing crises. It means setting aside the customary practice of blaming people for problems or failures. It is a way of looking at how work can be done in more efficient, higher-quality, and streamlined ways. Taking a problem-solving approach or simply trying to fix what’s broken may never identify the root cause of the difficulty. Trying to fix the problem frequently does not fix the underlying process that created the problem. Efforts to fix things may actually make them worse. However, employing a proven process improvement methodology means learning what causes things to happen in a process and using this knowledge to reduce variation, remove activities that contribute no value to the product or service, and improve customer satisfaction. As an ongoing practice, an organ ization supports a cycle of process improvement teams to continually examine all of the factors affecting processes: the materials used, the methods and machines used to transform materials into products or concepts into services, and the knowledge, experience, skills, aptitude, and attitude of the p eople performing the work.
HOW DOES THE ORGANIZATION BENEFIT FROM PROCESS IMPROVEMENT? A standardized process improvement methodology looks at how work is performed. When all of the affected participants are involved in process improvement, they can collectively focus on eliminating waste—of money, p eople, materials, time, and opportunities. The ideal result is that jobs can be done more cheaply, more quickly, more easily, and, most important, more safely. Using total quality tools and methods reinforces teamwork. Using team members’ collective knowledge, experience, and effort is a proven approach to improving processes; the whole becomes greater than the sum of its parts. Four techniques may be used to contribute to the improvement effort, each supported by tools: 1. Six Sigma concepts and tools 2. Lean concepts and tools 106
Chapter 7 Process Improvement 107 3. Benchmarking tool 4. Incremental and breakthrough improvement method
SIX SIGMA CONCEPTS AND TOOLS Compare key Six Sigma concepts, tools, and tech niques. Understand the DMAIC phases: define, mea sure, analyze, improve, and control. (Understand) CQIA BoK 2020 III.A.1
Six Sigma is a methodology that mainly focuses on identifying and reducing variation in a process. The primary metric of Six Sigma is the sigma level or defect per million opportunities (DPMO). In Six Sigma, the higher the sigma level, the better the process output—which translates into fewer errors, lower operating costs, lower risks, improved performance, and better use of resources. The concept of Six Sigma was developed in the early 1980s at Motorola Corporation. Six Sigma became popularized in the late 1990s by General Electric Corporation and its former CEO Jack Welch. Six Sigma is a continuous process improvement methodology that facilitates near perfection in the processes of an organization. It considers not only the average performance but also the variability of what a business presents to the customer. This variation is often the cause of what is considered the hidden factory, or the penalty for not getting it right the first time. For example, in public health activities, it consists of rework costs to reprocess forms before delivery to the client, scrap costs, recovery from a bad client experience, concessions for late service or paperwork deliveries, and write-offs to assuage offended clients or stakeholders. When realizing that Six Sigma methods address the impact from defects in a process, consider how a defect should be defined in work activities, particularly on the local level. In general, a defect may be described as anything that results in customer dissatisfaction. Another definition of a defect is a product’s or ser vice’s nonfulfillment of an intended requirement or reasonable expectation for use, including safety considerations. If deployed properly, Six Sigma w ill create a structure to validate the right resources working on activities that w ill meet or exceed clients’ or stakeholders’ needs, reduce direct expense costs, and provide a framework for measuring and monitoring those efforts. This is also the answer to the question, What should Six Sigma do for me? If used correctly, Six Sigma will: • Create an infrastructure for managing improvement efforts and focus resources on those efforts • Ensure improvement efforts are aligned with client and stakeholder needs • Develop a measurement system to monitor the impact of improvement efforts
108 Part III Improvement Because of the importance of these outcomes, department leadership must be heavily involved in validating the benefit to the client and the organization, ensuring strategic linkage to the mission and vision, and visibly demonstrating commitment to projects. Without this level of support, process change agents will not gain the traction that is expected, and the Six Sigma program w ill likely be unsuccessful.
The DMAIC Methodology The Six Sigma DMAIC (Define, Measure, Analyze, Improve, Control) problem- solving methodology is used to improve processes. The phases of the DMAIC are well defined and standardized, but the steps performed in each phase can vary based on the reference used. Improvement teams use the DMAIC methodology to root out and eliminate the causes of defects through the following planning and implementation phases: D: Define a problem or improvement opportunity M: Measure the existing process performance A: Analyze the process to determine the root c auses of poor performance; determine whether the process can be improved or should be redesigned I:
Improve the process by attacking root causes
C: Control the improved process to hold the gains Table 7.1 describes the main responsibilities of Master Black Belts, Black Belts, and other team positions in a Six Sigma and Lean-Six Sigma organization. Figure 7.1 gives an overview of the activities performed during each of the DMAIC steps in the continuous improvement Six Sigma cycle. Each of the DMAIC steps is defined below. 1. Define—In this phase the defect and the scope of the effort are determined. Project champions typically partner with a Master Black Belt (MBB) to develop the intended outcome and criteria u nder which the Black B elt will operate. The project champion, team leader, and Black B elt should work closely to define the defect, determine the client and organizational impact, assign target dates, assign resources, and set goals for the project. This information is documented in a project charter, which becomes the “contract” with the Black B elt. This contract must ensure alignment with organizational strategy to avoid any disconnects with the project goals and the overall organization. Once complete, a Black B elt begins using the tools to uncover the specifics of an issue and get to the root cause of the defects, such as a process map and a cause-and-effect diagram. The Black B elt begins to collect and understand the voice of the customer (VOC), as well as defines the critical-to-quality (CTQ) characteristics (also known as Critical to Satisfaction [CTS]). 2. Measure—In this phase, the Six Sigma practitioner determines the baseline performance of the process, validates that the measurement system in place is accurate, verifies the cost of quality (the cost of not d oing it right the first time), and makes an assessment of process capability. This is
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Table 7.1 Six Sigma and Lean-Six Sigma roles and responsibilities. Traditional title
Responsibilities
Project champion
• Is dedicated to seeing the project implemented • Has absolute belief it is the right t hing to do • Displays perseverance and stamina • Removes barriers to implementing improvements • Ensures that the projects align to organizational strategy • Ensures progress on projects is being made
Project sponsor
• Believes in the concept/idea • Has sound business acumen • Is willing to take risk and responsibility for outcomes • Has authority to approve needed resources • Has the ear of upper management
Process owner
• Is a team member • Takes ownership of the project when it is complete • Is responsible for maintaining the project’s gains • Removes barriers for Black B elts • Coordinates process improvement activities • Ensures implementation of process changes • Works with the team to improve processes • Should have Lean-Six Sigma training, especially in core statistical tools
Master Black Belt
• Is expert on Six Sigma tools and concepts • Trains Black B elts and ensures proper application of methodology and tools • Coaches/mentors Black B elts and Green Belts • Works on high-level projects and t hose which impact multiple divisions or business units • Assists champions and process owners with project selection, management, and Six Sigma administration • Typically, a full-time Lean-Six Sigma position • May organize the Lean-Six Sigma program and practice • Knowledgeable of advanced statistical improvement tools, including design of experiments
Black Belt
• Leads, executes, and completes DMAIC projects • Teaches team members the Six Sigma methodology and tools • Assists in identifying project opportunities and refining project details and scope • Reports progress to the project champions and process owners • Transfers knowledge to other Black Belts and the organization • Mentors Green Belts • Knowledgeable and experienced in implementation of best practices • Knowledgeable and experienced in application of Lean-Six Sigma DMAIC problem solving, statistics, and quality tools (continued)
110 Part III Improvement
Table 7.1 Six Sigma and Lean-Six Sigma roles and responsibilities (continued) Traditional title
Responsibilities
Green Belt
• Committed to the team’s mission and objectives • Capable of developing process maps, applying basic quality tools, creating charts, and engaging in basic statistical analysis • Experienced in planning, organizing, staffing, controlling, and directing • Capable of creating and maintaining channels that enable members to do their work • Capable of gaining the respect of team members; a role model • Is firm, fair, and factual in dealing with a team of diverse individuals • Facilitates discussion without dominating • Actively listens • Empowers team members to the extent possible within the organ ization’s culture • Supports all team members equally • Respects each team member’s individuality • Part-time on selected projects • Functional process experts • Responsible for doing the work of a process • Focused on specific process areas • Able to collect and analyze data, and perform specific tasks • Needs to be given time to work on the projects
Yellow Belt
• Willing to commit to the purpose of the team • Understands lean and Six Sigma tools and concepts • Able to express ideas, opinions, suggestions in a nonthreatening manner • Capable of listening attentively to other team members • Receptive to new ideas and suggestions • Able to engage in analysis of Lean-Six Sigma tools and concepts • Even-tempered, able to handle stress and cope with problems openly • Competent in one or more fields of expertise needed by the team • Favorable performance record • Willing to function as a team member and forfeit “star” status
Finance/ Accounting
• Validates financial metrics, baselines, and improvements • Have final sign off and approval of project closure • Should help identify how to track financials after the project ends to verify savings w ere achieved • Works on a consulting basis with project teams
Source: Modified from Table 16.4, Ron Bialek, Grace L. Duffy, and John W. Moran, The Public Health Quality Improvement Handbook (Milwaukee, WI: Quality Press, 2009), 232–233.
the performance level of the process against customer requirements or expectations. The practitioner may continue collection of the VOC data through surveys, interviews, focus groups, and other techniques. The question is, How capable is the process in meeting customers’ needs? Statistically speaking, sigma is a term indicating to what extent a process varies from perfection. The quantity of units (U) processed times the number of opportunities (O) for a defect to occur, divided into the
Chapter 7 Process Improvement 111
Next project
Define • Why must this project be done now ? • What is the business case for the project? • Who is the customer? • What is the current state? • What will be the future state? • What is the scope of this project? • What are the tangible deliverables? • What is the due date?
Control • During the project, how will we control risk, quality, cost, schedule, scope, and changes to the plan? • What types of progress reports should we send to sponsors? • How will we ensure that the business goals of the project were accomplished? • How will we maintain the gains made?
Measure • What are the key metrics for this business process? • Are metrics valid and reliable? • Do we have adequate data on this process? • How will we measure progress? • How will we measure ultimate success?
Improve • What is the work breakdown structure for this project? • What specific activities are necessary to meet the project’s goals? • How will we reintegrate the various subprojects? • Do the changes produce the desired effects? • Any there any unanticipated consequences?
Analyze • What is the current state? • Is the current state as good as the process can do? • Who will help make the changes? • What resources will we need? • What could cause this change effort to fail? • What major obstacles do we face in completing this project?
Figure 7.1 DMAIC cycle. Source: Copyright © 2003 by Thomas Pyzdek, all rights reserved. Reproduction permitted providing copyright notice remains intact. For more information visit http://www/pyzdek.com. Also see: DMAIC versus DMADV. Search this web site for more information on DMAIC and DMADV.
number of defects (D) actually occurring, and multiplied by one million results in defects per million opportunities ((D/(U×O))×106). Adding a 1.5 sigma shift in the mean (the process shifts over time by about 1.5 sigma) results in the following defects per million opportunities: 1 sigma = 691,462 defects per million opportunities 2 sigma = 308,770 defects per million opportunities 3 sigma = 66,810 defects per million opportunities 4 sigma = 6,210 defects per million opportunities
112 Part III Improvement 5 sigma = 233 defects per million opportunities 6 sigma = 3.4 defects per million opportunities Identifying whether the organization’s process is capable of meeting customer requirements is the first checkpoint, or stage gate, where the determination to continue the effort is made. Some of the tools to use are customer surveys, complaint data analysis, and Pareto and run or control charts (Chapter 9). Figure 7.2 is an example from a consolidated call center supporting a large county health department (HD). The HD leadership met with a broad base of community stakeholders, clients, and service partners to learn of their priority needs for using the call center; prompt response time was a major external customer requirement, identified in the statement “I consistently wait too long to speak with a call center representative.” Additionally, a significant internal customer comment is, “Why are the monthly administrative costs suddenly higher than the last three months?” These two statements, when associated with the major functions of the HD, prompted leadership to identify four measurement categories: response time, service, utilization rate, and cost per call. 3. Analyze—This phase is where a technical expert, the Black Belt, works with the team to scrub the data collected to uncover the root cause(s) of the defects and the poor performance. Process subject matter experts (SMEs) are also key to the analysis phase of the process. Once the potential factors have been isolated, the team uses statistical or hypothesis testing to prove conclusively that the factor is indeed causing or contributing to the problem. Expect completed graphical analysis before any statistical testing is undertaken, and question any analysis that lacks statistical analysis backing it up.
Internal customer: Why are the monthly administrative costs suddenly higher than the last three months?
Timeliness
Response time: Time it takes to answer a call
Responsiveness
Service: Customer satisfaction rating
Resources
Metrics
External customer: I consistently wait too long to speak with a call center representative
Customer requirements
Voice of the customer
Translation of VOC to customer requirements to metrics
Expense
Utilization rate: Total hours available/total work hours Cost per call: Total costs/total calls
Figure 7.2 Performance metrics developed from customer requirements. Source: Modified from Figure 16.6, Ron Bialek, Grace L. Duffy, and John W. Moran, The Public Health Quality Improvement Handbook (Milwaukee, WI: Quality Press, 2009), 227. Reproduced with permission.
Chapter 7 Process Improvement 113 4. Improve—When the team knows what is causing the problem, it can predict what the process performance would be if the identified issues were fixed. A number of different approaches for identifying possible solutions may be used. Setting performance expectations is crucial as it facilitates the evaluation of the multiple solution sets, which should be documented in a decision matrix or quality function deployment (QFD) House of Quality to allow side-by-side comparison of the proposed solutions and the expected performance. This is the final point at which to halt the project prior to further investment and irreversible and costly changes to the process. 5. Control—After implementation in the Improve phase, this final phase ensures the solution is integrated into daily operation and that it truly improved the process. Tools that may be employed are control charts, dashboards, or balanced scorecards. Statistical proof must demand that post-implementation performance is better than it was and that it is in statistical process control. This ensures that if the process ever fails again, the process owner knows when and how to react to the situation. Another important practice that should be promoted across other areas of the organization is standardization of the solution. For example, if a solution is found in one location and the organization has three similar processes, the others should gain the benefit of the improvement project as well. Six Sigma provides the framework to ask the right questions, depending on the process and desired outcome. Understanding the power of how a defect affects a process, operation, or practice is critical to success with any Six Sigma initiative. The DMAIC sequence is effective for processes that can benefit from corrective action or simple improvement. More complex redesign efforts, such as a total redesign of a process, are better addressed by a Six Sigma advanced approach called Design for Six Sigma (DFSS). DFSS is a data-driven strategy for designing products and processes. It is an integral part of a Six Sigma quality initiative. DFSS consists of a series of five interconnected phases: Define, Measure, Analyze, Design, and Verify. Six Sigma methods share similarities with other evidence-based (quantitative) projects: specifically, the measure and analysis functionality of DMAIC methodology. This systemized approach complements and also challenges current paradigms that relate to the development of system-wide operations and procedures. DMAIC may also be crucial when larger supply chain partnerships seek to synchronize common initiatives. Six Sigma is a very data-driven methodology. Implementing Six Sigma w ill cause significant demands for data collection and reporting. In addition, technology can provide significant cost savings by reducing variability through automation of repetitive work processes. Expanding data and information use and the associated technology growth may create friction between existing technology plans and the needs being created to support projects (low-level data needs), control plans (low-and mid-level mea sures), and scorecards (high-level measures). Plan a way to prioritize these data needs. It should be a balance between the more strategic or structural needs of the high-level scorecards supporting the management system and the low-to mid- level needs of the DMAIC methodology.1
114 Part III Improvement Figure 7.3 provides a description of the activities that can be performed within each phase of the DMAIC problem-solving methodology. There are many tools that are part of the Six Sigma tool kit, which are selected on the basis of the problem to be solved. Figure 7.4 shows the most common tools applied within each DMAIC phase. Phase
Step
Define
1. Create project charter, plan and stakeholder analysis 2. Perform initial VOC and identify CTQ 3. Select team and launch project
Measure
4. Define the current process and VOP (Voice of the Process) performance 5. Define detailed VOC (Voice of Customer) 6. Validate measurement system
Analyze
7. Develop cause and effect relationships 8. Determine and validate root causes 9. Determine process capability
Improve
10. Design future state with costs and benefits 11. Establish performance targets and project scorecard 12. Gain approval, train, and pilot
Control
13. Implement improvement recommendations and manage change 14. Incorporate process control plans and scorecard 15. Implement continuous improvement cycle: plan, do, check, act (PDCA)
Figure 7.3 DMAIC phases and activities. Source: Created by Sandra L. Furterer. Define
Measure
Analyze
Improve
• Project Charter • Stakeholder Analysis • SIPOC • Process Map (high level) • Communication Plan • Change Plan • Project Plan • Responsibilities Matrix • Items for Resolution (IFR) • Ground rules
• Process Map • Critical to Quality characteristics • Data collection plan with operational definitions • Pareto Chart • Measurement System Analysis • Metrics with baseline • Benchmarking • Check Sheets • Histograms • Surveys, interviews, focus groups, affinity diagrams • Descriptive statistics
• Cause and Effect Diagrams • Cause and Effect Matrix • Why-Why Diagram • Process Analysis, Histograms and Graphical analysis, Waste Analysis, Value Analysis, FMEA • Statistical Analysis • ANOVA • DPPM/DPMO, Process Capability
• Quality Function Deployment • Recommendations for Improvement • Action Plan • Cost/Benefit Analysis • Future State Process Map • Affinity diagram • Dashboards/ Scorecards • Training plan & materials • Procedures • Policies • Design of Experiments
Figure 7.4 Six Sigma tools by DMAIC phase. Source: Created by Sandra L. Furterer.
Control • • • • • • • • • • •
Hypothesis testing Dashboards Statistical analysis Graphical analysis Sampling Mistake Proofing FMEA Control plan Process capability DPPM/DPMO Statistical process control • Standard work • Prioritization matrices
Chapter 7 Process Improvement 115
LEAN CONCEPTS AND TOOLS Compare lean concepts, tools, and techniques. Under stand lean tools that are used to reduce waste, including set-up and cycle-time reduction, pull systems (kanban), continuous improvement (kaizen), just-in-time (JIT), 5S, value stream mapping, and error-proofing (poka-yoke). (Understand) CQIA BoK 2020 III.A.2
What Is Lean? Originally, lean was a manufacturing philosophy to shorten the lead time between a customer order and the shipment of the parts ordered by eliminating all forms of waste. Lean helps firms in the reduction of costs, cycle times, and non-value-added activities, thus resulting in a more competitive, agile, and market-responsive company. Lean concepts now are applicable beyond just the shop floor. All types of organizations have realized great benefits by implementing lean techniques in office functions, as well as in service firms such as banks, hospitals, and restaurants. In this context the practice is known as lean enterprise. Lean methods and tools were derived from the Toyota Production System, which was originally derived from the Ford Production System. A definition of lean, used by the Manufacturing Extension Partnership (of NIST/MEP, a part of the U.S. Department of Commerce), is “a systematic approach in identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.” Lean focuses on value-added expenditure of resources from the customers’ viewpoint. In summary, give the customers: • What they want • When they want it • Where they want it • In the quantities and varieties they want A planned, systematic implementation of lean leads to improved quality, better cash flow, increased sales, greater productivity and throughput, improved morale, and higher profits. Many of the concepts in total quality management (TQM) and team-based continuous improvement are also common to the implementation of lean strategies.2
The “Building Blocks” of Lean The tools and techniques used in the introduction, sustaining, and improvement of the lean system are sometimes referred to as the lean building blocks
116 Part III Improvement (see F igure 7.5). These building blocks make up the “House of Lean.” Many of these building blocks are interconnected and can be implemented in tandem; for example, 5S (workplace organization and standardization), visual controls, point- of-use storage, standardized work, streamlined layout, and autonomous maintenance (part of total productive maintenance) can all be constituents of a planned implementation effort. The building blocks include the following: 1. 5S—a system for workplace organization and standardization. This technique is composed of five steps that all start with the letter S in Japa nese (seiri, seiton, seiso, seiketsu, and shitsuke). These five terms are loosely translated in English as sort, set in order, shine, standardize, and sustain. 2. Visual controls—the placement in plain view of all tooling, parts, production activities, and indicators so that everyone involved can understand the status of the system at a glance. 3. Streamlined layout—plant layout designed according to optimum operational sequence. 4. Standardized work—consistent performance of a task, according to prescribed methods, without waste, and focused on human movement (ergonomics). 5. Batch size reduction—the best batch size is one-piece flow or make one and move one. If one-piece flow is not appropriate, reduce the batch to the smallest size possible. 6. Teams—in the lean environment, the emphasis is on working in teams, whether they are improvement teams or daily work teams.
Kaizen—continuous improvement Pull/Kanban
Point-of-use storage
Quality at source Standardized work 5S system
Total productive maintenance
Cellular/Flow
Quick changeover
Batch size reduction
Visual controls
Teams
Streamlined layout
Value stream mapping
Change management
Figure 7.5 “House of Lean” (based on an NIST/MEP model). Source: G. Dennis Beecroft, Grace L. Duffy, and John W. Moran, eds., The Executive Guide to Improvement and Change (Milwaukee, WI: Quality Press, 2003), 134.
Chapter 7 Process Improvement 117 7. Quality at the source—inspection and process control by the operators so that they are certain that the product they pass on to the next process is of acceptable quality. 8. Point-of-use storage—raw material, parts, information, tooling, work standards, and procedures are stored where needed. 9. Quick changeover—the ability to change tooling and fixtures rapidly (usually in minutes) so multiple products in smaller batches can be run on the same equipment. This concept is also referred to as SMED (single minute exchange of dies) or setup reduction. 10. Pull/Kanban—a system of sending delivery signals from downstream to upstream activities where the upstream supplier does not produce until the downstream customer signals the need. 11. Cellular/Flow—physically linking and arranging manual and machine process steps into the most efficient combination to maximize value- added content while minimizing waste; the aim is single-piece flow. 12. Total productive maintenance—a lean equipment maintenance strategy for maximizing overall equipment effectiveness. Besides these building blocks, t here are other concepts or techniques that are equally important in lean: value stream mapping, just-in-time, error-proofing (poka-yoke), autonomation (“jidohka”), continuous improvement (kaizen), kaizen blitz for breakthrough improvements, and change management. Lean is a never- ending journey, always leaving room to continuously improve.
Just-in-Time Just-in-time (JIT) is a practice whereby lean organizations seek to match the rate of customer demand to the rate of production; to operate all processes at a pace that mirrors customer requirements.
Cycle Time Reduction Cycle time is the average time for one part or service to be completed, from the beginning of a process to the end of a process.3 Reducing the time to provide a part or service to the customer serves to increase customer satisfaction as well as improve productivity or throughput, and achieve a more cost-effective production process.
Poka-Yoke or Mistake-Proofing Poka-yoke or mistake-proofing originated in Japan as an approach applied to factory processes.4 It was perfected by Shigeo Shingo as poka-yoke. It is also applicable to virtually any process in any context. For example, the use of a spelling checker in composing text on a computer is an attempt to prevent the writer from making spelling errors (although we have all realized it doesn’t catch every mistake). This analytical approach involves probing a process to determine where human errors could occur. Then each potential error is traced back to its source.
118 Part III Improvement From these data, consider ways to prevent the potential error. Eliminating the step is the preferred alternative. If a way to prevent the error cannot be identified, then look for ways to lessen the potential for error. Finally, choose the best approach possible, test it, make any needed modifications, and fully implement the approach. Mistakes may be classified into four categories: • Information errors – Information is ambiguous – Information is incorrect – Information is misread, misinterpreted, or mismeasured – Information is omitted – There is inadequate warning • Misalignment – Parts are misaligned – A part is misadjusted – A machine or process is mistimed or rushed • Omission or commission – Material or part is added – Prohibited and/or harmful action is performed – An operation is omitted – Parts are omitted, resulting in a counting error • Selection errors – A wrong part is used – There is a wrong destination or location – There is a wrong operation – There is a wrong orientation Mistake-proofing actions are intended to: • Eliminate the opportunity for error • Detect potential for error • Prevent an error Effective poka-yoke systems can combat t hese types of errors. P eople do not typically wish to make m istakes and often cannot help it when they happen. Reprimanding and retraining are not effective countermeasures. Management needs to respect the intelligence of operators by taking over repetitive tasks or actions that depend on vigilance or memory. Below are seven guidelines to poka-yoke attainment:5
Chapter 7 Process Improvement 119 1. Use quality processes: Design robust quality processes to achieve zero defects 2. Utilize a team environment: Leverage the team’s knowledge and SME expertise to enhance the improvement efforts 3. Eliminate errors: Utilize a robust problem-solving methodology to drive defects t oward zero 4. Eliminate the root cause of the errors: Use the 5 Whys and 2 Hows approach 5. Do it right the first time: Utilize resources to perform functions correctly the first time 6. Eliminate non-value-added decisions: D on’t make excuses—just do it! 7. Implement an incremental continual improvement approach: Implement improvement actions immediately and focus on incremental improvements; efforts do not have to result in a 100% improvement immediately Two poka-yoke system approaches that lead to successful zero-defect systems are commonly utilized in manufacturing: 1. Control approach: This takes the human element out of the equation and has a high capability of achieving zero defects: • It shuts down the process when an error occurs. • It keeps the “suspect” part in place when an operation is incomplete. 2. Warning approach: The operator is signaled via some form of alarm (light/sound) to stop the process and correct the problem. This may be used when an automatic shutoff is not an option. There are multiple types of poka-yoke devices available with today’s technology. New forms are being developed regularly. Poka-yoke devices generally consist of three primary methods that can be used via a control or warning approach: • Contact: Uses some form of sensing to detect for presence or lack of presence of a desired feature • Counting: Uses some form of sensing device to count a fixed number of operations required within a process and/or the number of times a part is used • Motion sequence: Uses sensors to verify whether a motion or step has occurred as desired When proactive poka-yoke systems (those that prevent the creation of the defect) are not yet in place, a reactive poka-yoke approach with informative inspection can be used. Here, the check occurs immediately after the process. While it does not eliminate the defect, it prevents the defect from being advanced and is more effective than statistical sampling.
120 Part III Improvement Let’s look at some examples. In the first situation, a patient is required to fill out forms at various stages of diagnosis and treatment (the ubiquitous “clipboard treatment”). The patient is prone to making errors due to the frustration and added anxiety of filling out multiple forms. After analyzing the situation, the solution is to enter initial patient data into a computer at the first point of the patient’s arrival, adding to the computer record as the patient passes through the different stages with different doctors and ser vices. When referrals are made to doctors outside the initial facility, an electronic copy of the patient’s record (e-mail) can be sent to the referred doctor. Except to correct a previous entry, the intent is to never require the patient to furnish the same data more than once. Considering the four categories of mistakes, we can see that information was omitted or incorrectly entered at subsequent steps. The solution eliminates resubmitting redundant data. In a second example, a low-cost but critical part is stored in an open bin for access by any operator in the work unit. While there is a minimum on-hand quantity posted, and a reorder card is kept in the bin, the bin frequently is empty before anyone takes notice. The m istake is that t here is inadequate warning in receiving vital information. The solution is to design and install a spring-loaded bin bottom that is calibrated to trigger an alarm buzzer and flashing light when the minimum stock level is reached. The alarm and light will correct the mistake. In a final example, there is a potential for operators of small tractor-mowers to incur injury from the rotating blades when dismounting from a running tractor. The solution is to install a spring-actuated tractor seat that shuts off the tractor motor as soon as weight is removed. Using this tractor seat will prevent a harmful action. Careful elimination, detection, and prevention actions can result in near 100% quality. Unintended use, ignorance, or willful misuse or neglect by humans may still circumvent safeguards, however. For example, u ntil operating a motor vehicle is prevented before all seatbelts are securely fastened, warning lights and strict law enforcement alone will not achieve 100% effectiveness. Continually improve processes and mistake-proofing efforts to strive for 100%.
Kaizen Kaizen is a Japanese word (kai means change or school, zen means good or wisdom) that has come to mean a continual and incremental improvement (as opposed to reengineering, which is a breakthrough, quantum-leap approach).6 A kaizen blitz, or kaizen event, is an intense process often lasting three to five consecutive days. It introduces rapid change into an organization by using the ideas and motivation of the p eople who do the work. It has also been called zero investment improve ment (ZII). In a kaizen event/blitz, a cross-functional team focuses on a target process, studies it, collects and analyzes data, discusses improvement alternatives, and implements changes. The emphasis is on making the process better, not necessarily perfect. Subprocesses that impact cycle time are a prime target on which to put the synergy of a kaizen team to work. The typical stages of a kaizen event are as follows:
Chapter 7 Process Improvement 121 • Week before blitz: — Wednesday. Train three or four facilitators in kaizen blitz techniques and tools and enhance their facilitation skill level. — Thursday. Target the process to be addressed. — Friday. Gather initial data on the present targeted process. • Blitz week: — Monday. Train the participants in kaizen blitz techniques and tools. — Tuesday. Train (a.m.), create process map of present state (p.m.). — Wednesday. Create process map of future state. Eliminate non-value- added steps and other waste. Eliminate bottlenecks. Design new pro cess flow. — Thursday. Test changes; modify as needed. — Friday. Implement the new workflow, tweak the process, document the changes, and be ready for full-scale production on Monday. Prepare follow-up plan. • Post blitz: — Conduct follow-up evaluation of change (at an appropriate interval). — Plan the next blitz. Lean will not work if it is viewed as merely a project, as a single instance solution, or as a means for downsizing. It works best if deployed as a never-ending philosophy of continuous improvement. Lean should be considered a growth strategy. When improvements have been sustained, the remaining resources can be redeployed toward new business. Many firms have appointed and empowered lean champions to successfully implement their lean transformations; t hese champions are d rivers of continuous improvements, acting as mentors, trainers, group facilitators, planners, evaluators, and cheerleaders. They also help in standardizing at the higher levels of performance as lean is implemented so as not to slip back to less effective practices.
How to Start the Lean Journey The starting point of lean initiatives could be any one of the following: 1. Value stream mapping (VSM): A VSM is used to chart a set of specific actions which are required to bring a product family from raw material to finished goods per customer demand. The VSM focuses on understanding information flow and the physical transformation of the product. Outputs of VSM are a firm understanding of takt time, a current state map, a future state map, and an implementation plan to get from the current to the future state. Using VSM can drastically reduce the lead time closer and closer to the actual value-added processing
122 Part III Improvement time, typically in a short duration such as 12 months, by attacking the identified bottlenecks and constraints. The implementation plan acts as the guide for d oing so. Bottlenecks addressed could be long setup times, unreliable equipment, unacceptable first-pass yield, and high work in process inventories. A typical current state map is shown in Figure 7.6, and a future state map is shown in Figure 7.7, drawn using different icons. In Figure 7.6, the requirements from the customer and the requirements to the supplier, plus internal scheduling communications, are drawn at the top: “the information flow.” In the center are the material flows from purchased product to finished goods. And at the bottom are data boxes with the lead time (40 days in this example) and the actual processing time (only 105 seconds). In the future state map, Figure 7.7, the plan is to reduce the lead time to seven days, and the processing time by a few seconds to 91 seconds. The road map (or implementation plan) to get to the future state is not shown, but it can be as simple as using a project management tool such as a Gantt chart that shows the duration of the project. The timely implementation of the kaizens (represented by starbursts) identified on the future state map is the key. 2. Lean baseline assessment: using interviews, informal flow-charting, process observations, and analysis of reliable data, an as-is situational report can be generated from which would flow the lean improvement plan based on the identified gaps.
PhlyeBiknight
Weekly 5,300 pcs/mo. 265 pcs/day
Weekly Schedule
Stamping Shared =1
Spot Weld I 5,425
C/T = 1 sec C/O = 4 hrs Rel. = 98% FPY = 95% 10 days
Monthly
MRP
Weekly
Weekly
I 2 Weeks
Prod Ctrl
30/60/90 Forecast
1 sec
=1
Deburr I 1,400
C/T = 39 sec C/O = 11 min Rel. = 99% FPY = 90% 20.5 days
Figure 7.6 Current state map.
39 sec
Daily
=1
17 sec
Daily
Assemble I 1,225
C/T = 17 sec C/O = 0 min Rel. = 80% FPY = 100% 5 days
Dewey, Cheatem & Howe
=2 C/T = 48 sec C/O = 5 min Rel. = 100% FPY = 98%
4.5 days
48 sec
40 days 105 sec
Chapter 7 Process Improvement 123
Prod Ctrl
30 Day Forecast
PhlyeBiknight
Monthly
MRP
Daily
5,300 pcs/mo. 265 pcs/day
Scheduling
Daily
Dewey, Cheatem & Howe
Daily
Daily
Daily Stamping Shared
3 days
=1 Stamping C/O = 4 hrs
3 days
1 sec
SW/Deburr/Assemble =4 2 days Deburr Rel. = 80% 2 days
2 days C/T = 104 sec 90 sec
SW FPY = 90% 2 days
7 days 91 sec
Figure 7.7 Future state map.
3. Massive training in lean to a critical mass of employees in “teach-do” cycles. Lean implementation should continue immediately a fter the training. 4. Begin by implementing the “basic” building blocks first: 5S, visual controls, streamlined layout, point-of-use storage, and standardized work. Then continue on with the higher-level tools and techniques, finally achieving flow production based on customer “pull.” 5. Pilot project: choose a bottleneck or constraint area in which to do a breakthrough lean improvement (use the kaizen blitz approach); then with the lessons learned, expand lean implementation to other areas. 6. Change management: align the company’s strategies and workforce goals, then change the culture from the traditional “push” production to lean “pull.” This should eventually result in a philosophical change in people’s daily work lives. 7. Start by analyzing the internal overall equipment effectiveness (OEE) and the OEE losses; a Pareto of these losses w ill identify the “biggest bang for the buck” to indicate where to start the lean journey.7 A principal reason for improving processes is the removal of waste. If an activity consumes resources, time, or capital but does not add value, it is wasteful and should be eliminated. The idea is to eliminate as many of these wastes as possi ble in daily work activities. Removing waste makes additional time and resources
124 Part III Improvement available for higher-priority objectives of the department. An explanation of the eight types of waste is shown in T able 7.2.8 Waste occurs in clearly visible forms as well as in hidden forms. Following are examples of visible and invisible waste.9
EXAMPLES OF VISIBLE WASTE • Out-of-spec incoming material: for example, invoice from supplier has incorrect pricing; aluminum sheets are wrong size • Scrap: for example, holes drilled in wrong place; shoe soles improperly attached • Downtime: for example, school bus not operating; process 4 cannot begin because of a backlog at process 3 • Product rework: for example, failed electrical continuity test; customer number not coded on invoice
EXAMPLES OF INVISIBLE WASTE • Inefficient setups: for example, jig requires frequent retightening; incoming orders not sorted correctly for data entry • Queue times of work-in-process: for example, assembly line not balanced to eliminate bottlenecks (constraints); inefficient loading-zone protocol slows school bus unloading, causing classes to start late • Unnecessary motion: for example, materials for assembly located out of easy reach; each completed order must be taken to the dispatch desk • Wait time of p eople and machines: for example, utility crew (three workers and a truck) waiting until parked auto can be removed from work area; planes late in arriving due to inadequate scheduling of available terminal gates • Inventory: for example, obsolete material returned from distributor’s annual clean-out is placed in inventory anticipating possibility of a future sale; to take advantage of quantity discounts, a yearly supply of paper bags is ordered and stored • Movement of material (work-in-process and finished goods): for example, in a function-oriented plant layout, work-in-process has to be moved from 15 to 950 feet to next operation; stacks of files must constantly be moved to gain access to filing cabinets and machines • Overproduction: for example, because customers usually order the same item again, overrun is produced to place in inventory “just in case”; “extras” are made at e arlier operations in case they are needed in subsequent operations • Processing: hospital is staffed to arbitrary productivity standards rather than actual patient demand
Chapter 7 Process Improvement 125
Table 7.2 Eight types of waste. Waste
Description
Example
Overprocessing
Spending more time than necessary to produce the product or service
• Combining client survey instruments into one form rather than developing specific instruments for each program
Transportation handling
Unnecessary movement of materi- • Department vehicles stored in central als or double handling facility, requiring constant movement of vehicles to and from other high- traffic locations • Moving patients long distances for imaging exams
Unnecessary motion
Extra steps taken by employees and equipment to accommodate inefficient process layouts
• Laboratory testing equipment stored in cabinets far from specialist work area • Linens stored in the hallway instead of within the patient’s room
Unnecessary inventory
Any excess inventory that is not directly required for the current client’s order
• Overestimating vaccination support materials, requiring additional locked storage cages, inventory counting, and reconciliation • Retained linens on shelves that are not used in the hospital • Unneeded computer files stored on a shared drive
Waiting
Periods of inactivity in a downstream process that occur because an upstream activity does not produce or deliver on time
• Paperwork waiting for management signature or review • Patients waiting for an inpatient room, due to lack of staffing • Patients waiting for a patient transport, due to inefficient processes
Defects
Errors produced during a service transaction or while developing a product; damage to equipment
• Ineffective scripts for initial intake applications; unclear directions for filling out required forms
Overproduction
Items being produced in excess • Too many dated client information quantity and products being made collection sheets prepared at beginbefore the customer needs them ning of shift • Unnecessary tests or orders performed in a hospital
People
Not fully using people’s abilities • Poor job design, ineffective process (mental, creative, skills, experidesign within business functions, ence, e tc.); under-or overutilizalack of empowerment, maintaining tion of resources; can also include a staffing complement not in balance waste created by safety issues with workload demand impacting the human involvement • Not leveraging people’s ideas within processes • People not trained properly to do their job
126 Part III Improvement • Processing: inpatient nurses being sent home early, due to lack of inpatients, while the Emergency Department is surging with patients, many of whom w ill need an inpatient bed • Engineering changes: for example, problems in production necessitate engineering changes; failure to clearly review customer requirements causes changes • Unneeded reports: for example, a report initiated five years ago is still produced each week even though the need was eliminated four years ago; a hard-copy report duplicates information available on a computer screen • Meetings that add no value: for example, a morning production meeting is held each day whether or not there is a need (coffee and Danish are served); 15 people attend a staff meeting each week at which one of the two hours is used to solve a problem usually involving less than one- fifth of the attendees • Management processes that take too long or have no value: for example, all requisitions (even for paper clips) must be signed by a manager; a “memo to file” must be prepared for every decision made between one department and another The following is an example of a huge waste: Years ago, a division of a well-recognized conglomerate reengineered its manufacturing processes. The division built a new plant and installed all new processes. Integral to the new process design was a sophisticated system for handling material to and from each workstation. In theory, the material conveyor system would allow a vast reduction in work space heretofore taken up with buffer inventories in the old plant. Improved cycle time, inventory cost reduction, and smaller plant space w ere the touted advantages. The responsibility for designing the h andling system was delegated to the equipment supplier’s engineers, with very little company oversight. Unfortunately, it wasn’t until after the expensive handling equipment was ordered and installed that the division realized that the system was poorly planned. Within less than two months of operation, the plant was hopelessly mired in piles of work-in-process and buffer stocks stacked under and between machines—so much so that trailer trucks were rented to store overflowing materials in the parking lot. After that short period of operation, the plant closed for a major reengineering with serious loss of business and financial impacts. Management was replaced. The lessons learned were the need to better understand the processes, especially the constraints involved; to avoid becoming enamored with state-of-the-art machinery and promises from suppliers; and to involve the people who will operate the system in the process design—and never delegate the whole project responsibility to a supplier.
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BENCHMARKING Define benchmarking and describe how it can be used to develop and support best practices. (Understand) CQIA 2020 III.A.3
Benchmarking is an evaluation technique in which an organization compares its performance for a specific process with the “best practice” performance of a recognized leader in a comparable process. The evaluation helps the initiating organ ization identify shortcomings and establishes a baseline or standard against which to measure its progress in the development and maintenance of a quality assurance program. There are several different approaches to benchmarking: • Competitive—comparing with direct competitors locally, nationally, or worldwide • Functional—comparing with companies that have similar processes in the same function but are outside one’s industry • Performance—comparing pricing, technical quality, features, and other quality or performance characteristics • Process—comparing work processes such as billing, order entry, or employee training • Strategic—comparing how companies compete and examining winning strategies that have led to competitive advantage and market success The basic steps involved in benchmarking are as follows: 1. Identify what is to be benchmarked. Be specific in deciding what the team wants to benchmark. 2. Decide which organizations/functions to benchmark. The comparison should be conducted not only against peers, if feasible, but also against recognized leading organizations with similar functions. 3. Determine the data collection method and collect data. Keep the data collection process simple. There is no one right way to benchmark. It is important to look outward, be innovative, and search for new and dif ferent ways to improve the process under study. 4. Contact a peer in the benchmark organization. Explain the purpose of the benchmarking study and what information is desired. Give assurance that confidential information will not be requested during the benchmarking process. 5. Mutually arrange the benchmarking event. During the benchmarking visit, inquire about the peer’s organization: what it does, why it does it,
128 Part III Improvement how it measures and/or evaluates the process u nder scrutiny and what its performance measures are, what has worked well, and what has not been successful. 6. After the visit, determine whether what the team learned from the benchmarking event can be applied to improve the organization’s pro cess. Are there new and different ways to solve the problem or improve the process? Are there other solutions to the problem that the team has overlooked? It’s important to keep an open mind about new and perhaps radically different ways of doing things. There are several caveats to consider. For example, has the initiating organization: • Established benchmarking as an ongoing process? • Made every attempt to bring a targeted process to be benchmarked to the highest level possible, before going outside? • Carefully selected and trained its benchmarking team before contacting a potential benchmarking organization? • Successfully located a willing benchmarking partner organization? • Customized its benchmarking objectives, plans, and process to conduct the benchmarking study, in accordance with mutually agreed-to protocols and terms? • Prepared the team to share appropriate aspects of its process during the on-site benchmarking study? • Clearly identified how the findings and lessons learned from conducting the benchmarking study will be shared after the study within the organization? • Prepared itself to institute the next benchmarking study for another internal process?
INCREMENTAL AND BREAKTHROUGH IMPROVEMENT Describe and distinguish between these two types of improvements, the steps required for each, and the type of situation in which either type would be expected. (Understand) CQIA BoK 2020 III.A.4
here are two fundamental philosophies relative to improvement. Improvement T may be achieved on a gradual basis, taking one small step at a time. A dramatically different concept is practiced by proponents of breakthrough improvement,
Chapter 7 Process Improvement 129 a “throw out the old and start anew” approach frequently referred to as process reengineering. Both approaches have proven to be effective depending on the circumstances, such as the size of the organization, the degree of urgency for change, the degree of acceptability within the organization’s culture, the receptivity to the relative risks involved, the ability to absorb implementation costs, and the availability of competent people to effect the change.
INCREMENTAL IMPROVEMENT The following is an example of incremental improvement: A team is formed in the order fulfillment department of a magazine publisher to find ways to reduce the processing time for new subscriptions. The team will likely be seeking small steps it can take to improve the pro cessing time. When a change is implemented and an improvement is confirmed, the team may meet again to see whether it can make further time reductions. The incremental improvement approach may be in use throughout an organization. Masaaki Imai made popu lar the practice of kaizen, a strategy for making improvements in quality in all business areas.10 Kaizen focuses on implementing small, gradual changes over a long time period. When the strategy is fully utilized, everyone in the organization participates. Kaizen is driven by a basic belief that when quality becomes ingrained in the organization’s culture and people, the quality of products and services will follow. Key factors are the initiation of operating practices that lead to the uncovering of waste and non-value-added steps, the total involvement of everyone in the organization, extensive training in the concepts and tools for improvement, and a management that is committed to and supportive of improvement as an integral part of the organization’s strategy. In a serious problem situation, an intensified approach, called kaizen blitz, may be used. For example: MedElec, a manufacturer of switches used in medical diagnostic equipment, was faced with the potential loss of its six largest customers. The threat, due to mounting numbers of missed delivery dates, caused significant delays in the entire supply chain. Employing a facilitator, MedElec initiated a five-day kaizen blitz, with representatives from e very department and management. The objective of the session was to find and implement ways to not only shorten the delivery cycle but also prevent any future late deliveries. Ultimately, the goal was to initiate an unconditional guarantee policy for on-time shipments to the company’s customers. After receiving training, the team members gathered and analyzed performance data, pinpointed the root c auses of delays, and prioritized the problem areas. Then they systematically addressed each problem in order of priority, first dealing with those problems for which solutions could be immediately implemented. For each solution, a careful review ensured that no additional problems would be created once the solution was initiated. The team then took the solutions and began implementing change in their work areas. The following steps, which follow a PDCA sequence, are typically taken in incremental improvement:
130 Part III Improvement 1. Select the process or subprocess to be process mapped 2. Define the process a. Inputs to the process, including suppliers b. Outputs from the process c. Users/customers to whom outputs are directed d. Requirements of users/customers e. Constraints (such as standards, regulations, and policies) 3. Map the main flow without exceptions 4. Add the decision points and alternative paths 5. Add the check/inspection points and alternative paths 6. Analyze the process flow to identify a. Non-value-added steps b. Redundancies c. Bottlenecks d. Inefficiencies e. Deficiencies 7. Prioritize problems a. Quantify the results of each problem b. Identify the impact each problem has on the overall process c. Subject the problems to Pareto analysis to identify the most impor tant problem 8. Redo the map to remove a primary problem 9. Do a desktop walk-through with persons who are involved with the process 10. Modify the process map as needed (and modifications will be needed!) 11. Review changes and obtain approvals 12. Institute changes 13. Review results of changes 14. Make needed changes to documented procedures 15. Repeat the process for the next-most-important problem area The individuals responsible for the process may make incremental improvements. However, depending on organizational policies and procedures, appropriate approvals may be required. Also, there should be concern for interactions with other processes that take place before and a fter the process being changed. More typically, a team from the work group involved initiates incremental changes. If the
Chapter 7 Process Improvement 131 organization has a suggestion system in place, care must be taken to ensure that conflict of interest does not result. A continuous process improvement cycle is an action or series of actions taken as the result of an organized and planned effort aimed to continually improve an organization’s processes. The organization commits to an ongoing cycle of continuous improvement, taking the principal processes in order of importance, ultimately revisiting each such process as it appears again in the rotation. An essential first step in getting started on process improvement is when senior management makes it a strategic organizational goal. The importance of process improvement must be communicated from the top. Leaders need to foster an organizational environment in which process improvement can thrive and people are regularly using techniques and tools related to quality improvement. Further, information has been developed to provide teams with a step-by-step approach for their process improvement efforts. The focus is on improving a pro cess over the long term, not just patching up procedures and work routines as problems occur. Managers need to start thinking about the following questions: • What processes should be selected for improvement, and when? • What resources will be required? • Who are the right people to work on improving a selected process? • What’s the best way to learn more about the selected process? • How should the task of improving a process be initiated? • Upon completion, how can the lessons learned help institutionalize the improved process and support upcoming process improvements in the cycle? Figure 7.8 is a basic process improvement model. The basic model has two parts: • Steps 1 through 7 represent the process simplification part, in which the team begins process improvement activities • Depending on the stability and capability of the process, the team may continue on to step 8 or go directly to step 14 The PDCA cycle (also known as the PDSA cycle), which consists of steps 8 through 14, flows from the process simplification segment. Using all 14 steps of the model w ill increase an organization’s process knowledge, broaden decision- making options, and enhance the likelihood of satisfactory long-term results. The following is an overview of what may be involved in each step in the model: Step 1: Select the process to be improved and establish a well-defined pro cess improvement objective. The objective may be established by the team or may come from other interested parties, such as customers or management. Step 2: Organize a team to improve the process. This involves selecting the right people to serve on the team; identifying the resources available for the improvement effort, such as people, time, money, and
132 Part III Improvement
Step 1 Select a process and establish the improvement objective
Step 2 Organize the right team
Step 3 Flowchart the current process
Step 4 Simplify the process and make changes
Step 5 Develop a data collection plan and collect baseline data
Step 6 Remove special cause(s)
No
Step 6 Is the process stable?
Yes
Step 7 Is the process capable?
Yes
Go to step 14
No Step 8 Identify root causes for lack of capability
Figure 7.8 Basic process improvement model.
A
Chapter 7 Process Improvement 133
A
Step 9 Plan to implement the process change
Step 10 Modify the data collection plan (if necessary)
Step 11 Test the change and collect data
Step 12 Is the modified process stable?
No
Step 12 Remove the change
No
Yes
Step 13 Keep the change?
No
Step 13 Did the process improve?
Yes Yes
Step 8 Identify root causes for lack of capability
Step 14 Is further improvement feasible?
No
Yes
A
Figure 7.8 Basic process improvement model (continued)
Step 14 Standardize the process and reduce the frequency of data collection
134 Part III Improvement materials; setting reporting requirements; and determining the team’s level of authority. These elements may be formalized in a written charter. Step 3: Define the current process using a flowchart. This tool is used to generate a step-by-step map of the activities, actions, and decisions that occur between the starting and stopping points of the process. Step 4: Simplify the process by removing redundant or unnecessary activities. People may have seen the process on paper in its entirety for the first time in step 3. This can be a real eye-opener that prepares them to take these first steps in improving the process. Step 5: Develop a plan for collecting data and then collect baseline data. Ensure that the data evaluation process is verified for accuracy. These data will be used as the yardstick for comparison later in the model. This begins the evaluation of the process against the process improvement objective established in step 1. The flowchart from step 3 helps the team determine who should collect data and where in the process data should be collected. Step 6: Assess w hether the process is stable. The team creates a control chart or run chart out of the data collected in step 5 to gain a better understanding of what is happening in the process. The follow-up actions of the team are dictated by whether special cause variation is found in the process. Step 7: Assess w hether the process is capable. The team plots a histogram to compare the data collected in step 5 against the process improvement objective established in step 1. Usually the process simplification actions in step 4 are not enough to make the process capable of meeting the objective, and the team will have to continue on to step 8 in search of root causes. Even if the data indicate that the process is meeting the objective, the team should consider whether it is feasible to improve the process further before going on to step 14. Step 8: Identify the root causes that prevent the process from meeting the objective. The team begins the PDCA cycle here, using the cause-and- effect diagram or brainstorming tools to generate possible reasons that the process fails to meet the desired objective. Step 9: Develop a plan for implementing a change based on the possi ble reasons for the process’s inability to meet the objective set for it. These root causes were identified in step 8. The planned improvement involves revising the steps in the simplified flowchart created after changes were made in step 4. Step 10: Modify the data collection plan developed in step 5, if necessary. Step 11: Test the changed process and collect data. Step 12: Assess w hether the changed process is stable. As in step 6, the team uses a control chart or run chart to determine process stability. If the
Chapter 7 Process Improvement 135 process is stable, the team can move on to step 13; if not, the team must return the process to its former state and plan another change. Step 13: Assess w hether the change improved the process. Using the data collected in step 11 and a histogram, the team determines whether the process is closer to meeting the process improvement objective established in step 1. If the objective is met, the team can progress to step 14; if not, the team must decide whether to keep or discard the change. Step 14: Determine whether additional process improvements are feasible. The team is faced with this decision following process simplification in step 7 and again a fter initiating an improvement in steps 8 through 13. In step 14, the team has the choice of embarking on continuous process improvement by reentering the model at step 9 or simply monitoring the performance of the process until further improvement is indicated. Following is a more detailed description of each step in the basic process improvement model.
Step 1: Select the Process When an organization initially undertakes process improvement efforts, senior management may identify problem areas and nominate the first processes to be investigated. Later, processes with potential for improvement may be identified at any organizational level by any employee, with the approval of his or her immediate supervisor. The following considerations are impor tant in selecting pro cesses for improvement: • Total quality is predicated on understanding what is important to the customer. Every work unit, whether large or small, has both internal and external customers. Hence, the starting point in selecting a process for improvement is to obtain information from customers about their satisfaction or dissatisfaction with the products or services produced by the organization. • It’s best to start on a small scale. Once p eople can h andle improving a simple process, they can work on more complicated ones. • The selected process should occur often enough to be observed and documented. The team should be able to complete at least one improvement cycle within 30 to 90 days, otherwise its members may lose interest. • The process boundaries must be determined. T hese are the starting and stopping points of the process that provide the framework within which the team will conduct its process improvement efforts. It is crucial that the steps involved in meeting the process improvement objective are located inside the boundaries. • A Pareto analysis can help the team identify one or more factors or problems that occur frequently and can be investigated by the team.
136 Part III Improvement This analysis would be based on some preliminary data collected by the team. After the organization members have some experience working with the basic process improvement model, processes can be selected that have been performing poorly or that offer a potentially high payback in improving organizational performance. The former category might include processes that are routinely accomplished in a less-than-satisfactory manner. The latter category includes critical pro cesses, such as internal auditing, corrective and preventive action, and cost reductions. In each case, it’s best to move from the simple to the complicated and from the better-performing to the worst-performing processes. • Because the process improvement initiative is ongoing, an effort should be made to not overuse team members by assigning them to consecutive improvement projects. It is essential that as many of the organization’s employees participate in the process improvement cycle as is feasible. A team member rotation practice will help avoid personnel burnout. Establish the Process Improvement Objective Once a process is selected, a well-defined process improvement objective needs to be established. The definition of the objective should answer the question, What improvement do we want to accomplish by using a process improvement methodology? The process improvement objective is frequently formulated by listening to internal and external customers. The team can use interviews or written surveys to identify target values to use as objectives for improving the product or service produced by the process. Identifying a problem associated with the process helps define the process improvement objective. The people working in the process can identify activities that take too long, involve too many work hours, include redundant or unnecessary steps, or are subject to frequent breakdowns or other delays. But this is not just a problem-solving exercise; this is process improvement. Problems are symptoms of process failure, and it is the root-cause deficiencies in the process that must be identified and corrected. For an improvement effort to be successful, the team must start with a clear definition of what the problem is and what is expected from the process improvement. For example: An organization’s internal audit activity has found only three deviations from process requirements in the last six audits. The team knows from experience that there are many day-to-day problems that should be detected by the internal audit process. The team defines the problem as “an internal audit process that is not functioning to its full potential.” In beginning to formulate a process improvement objective, the initial words could be “Improve the internal audit process so it will routinely find day-to-day pro cess deviations.” A time frame, measures, and so forth will then be added. A team formulating a process improvement objective may find it helpful to proceed by:
Chapter 7 Process Improvement 137 • Writing a description of the process that starts, “The process by which we . . .” • Specifying the objectives of the process improvement effort (see Table 7.3 for guidelines for setting objectives the S.M.A.R.T. W.A.Y.). If a team is achieving little improvement in its efforts, periodic review of clearly stated process improvement objectives will keep the team’s work focused.
Table 7.3 Setting objectives the S.M.A.R.T. W.A.Y. S
Focus on specific needs and opportunities
M
Establish a measurement for each objective
A
Be sure objectives are achievable as well as challenging
R
Set stretch objectives that are also realistic
T
Indicate a time frame for each objective
W
Ensure that every objective is worth doing
A
Assign responsibility for each objective
Y
Ensure that all objectives stated w ill yield desired return
Source: Reprinted with permission of R. T. Westcott & Associates. Russell T. Westcott, ed., The Certified Manager of Quality/Organizational Excellence, 4th ed. (Milwaukee, WI: Quality Press, 2014), 98.
Step 2: Organize the Team Once the process or project has been selected and the boundaries established, the next critical step is selecting the right team to work on it. The selection of the right team is discussed in Chapter 6. Team Charter A charter is a document that describes the boundaries, expected results, and resources to be used by a process improvement team. A charter is usually provided by the individual or group who formed the team. Sometimes the process owner or the team members develop a charter. A charter is always required for a team working on a process that crosses departmental lines. A charter may not be necessary for a team that is improving a process found solely within a single work unit. A charter should identify the following: • The process to be improved • Time constraints, when applicable • The process improvement objectives • The team’s decision-making authority
138 Part III Improvement • The team leader • The resources to be provided • The team members • Reporting requirements Other information pertinent to the improvement effort may also be included, such as the name of the process owner, the recommended frequency of meetings, or any other elements deemed necessary by those chartering the team. Additional information on developing a project charter is included in the section “Initiating Teams” in Chapter 6.
Step 3: Flowchart the Current Process Before a team can improve a process, the members must understand how it works. The most useful tool for studying the current process is a flowchart. To develop an accurate flowchart, the team assigns one or more members to observe the flow of work through the process. It may be necessary for the observers to follow the flow of activity through the process several times before they can completely see and chart (map) what actually occurs. This record of where actions are taken, decisions are made, inspections are performed, and approvals are required becomes the as-is flowchart. For some organizations, it may be the first accurate and complete picture of the process from beginning to end. As the team participants start work on this first flowchart, they need to be careful to depict what is really happening in the process. They d on’t want to fall into the trap of flowcharting how people think the process is working, how they would like it to work, or how an instruction or manual says it should work. Only an as-is flowchart that displays the process as it is actually working today can reveal the improvements that may be needed. When teams work on processes that cross departmental lines, they will have to talk to people at all levels across the organization who are involved in or affected by the process they are working on. It is even more important to get an accurate picture of t hese cross-functional pro cesses than of those where boundaries are inside a work unit or office. The goal of this step is for the team to fully understand the process before making any attempt to change it. Changing a process before it is fully understood can cause more prob lems than already exist. The team can further define the current situation by answering these questions: • Does the flowchart show exactly how things are done now? • If it shows something other than the actual process, what needs to be added or modified to make it an as-is picture of the process? • Have the workers involved in the process contributed their knowledge of the process steps and their sequence? • Are other members of the organization involved in the process, perhaps as customers? What do they have to say about how it really works? • After gathering this information, is it necessary to rewrite the process improvement objectives (step 1)?
Chapter 7 Process Improvement 139
Step 4: Simplify the Process and Make Improvements The team has described the current process by developing an as-is flowchart. Reviewing this depiction of how the process really works helps team members spot problems in the process flow. They may locate steps or decision points that are redundant. They may find that the process contains unnecessary inspections. They may discover procedures that were installed in the past in an attempt to mistake-proof the process after errors or failures w ere experienced. All of these consume scarce resources. Besides identifying areas where resources are being wasted, the team may find a weak link in the process that it can strengthen by adding one or more steps. But before stepping in to make changes in the process based on this preliminary review of the as-is flowchart, the team should answer the following questions for each process step: • Can this step be done in parallel with other steps rather than in its pre sent sequence? • Does this step have to be completed before another can be started, or can two or more steps be performed at the same time? • What would happen if this step were eliminated? Would the output of the process remain the same? • Would the output be unacceptable because it is incomplete or has too many defects? • Would eliminating this step achieve the process improvement objective? • Is the step being performed by the appropriate person or function? • Is the step a work-around because of poor training or a safety net inserted to prevent recurrence of a failure? • Is the step a single repeated action, or is it part of a rework loop that can be eliminated? • Does the step add value to the product or service produced by the process? If the answers to these questions indicate waste, the team should consider oing away with the step. If a step or decision block can be removed without d degrading the process, the team may be recovering resources that can be used elsewhere. Eliminating redundant or unnecessary steps decreases cycle time. Only part of the time it takes to complete most processes is productive time; the rest is delay. Delay consists of waiting for someone to take action, waiting for a part or document to be received, and similar unproductive activities. Consequently, removing a step that causes delay reduces cycle time by decreasing the total time it takes to complete the process. After making preliminary changes in the process, the team should create a tentative flowchart of the simplified process, then do a reality check: Can the simplified process produce products or services acceptable to customers and in compliance with applicable existing standards and regulations? If the answer is yes,
140 Part III Improvement and the team has the authority to make changes, it should institute the simplified flowchart as the new standard process. Should the team require permission to make the recommended changes, a comparison of the simplified flowchart with the original flowchart can become the centerpiece of a briefing to t hose in a position to grant approval. At this point, the p eople working in the process must be trained using the new flowchart of the simplified process. It is vital to ensure that they understand and adhere to the new way of d oing business. Otherwise, the process can rapidly revert to the way it was before the improvement team started work.
Step 5: Develop a Data Collection Plan and Collect Baseline Data The earlier steps (1–4) have taken the team through a process simplification phase of process improvement. In this phase, all decisions were based on experience, qualitative knowledge of the process, and perceptions of the best way to operate. For the remaining steps in the basic process improvement model, the team will be using a more scientific approach. From this point on the steps rely on statistical data that, when collected and analyzed, are used to make decisions about the process. In step 5, the team develops a data collection plan. The process improvement objective established in step 1 is based on customers’ expectations and needs regarding the product or service produced by the pro cess. When the team develops a data collection plan, it must first identify the characteristic of the product or service that must be changed in order to meet the objective. For example: A local coffeehouse prepares coffee and sells it to patrons. The coffee is brewed in a separate urn in the kitchen and then transferred to an urn in the front of the store. Lately, customers have been complaining that the coffee is cold when it’s received. A team formed to improve this situation developed a process improvement objective that the coffee would be delivered to customers at a temperature between 109 and 111 degrees Fahrenheit. The team members then looked at their simplified flowchart to identify individual steps where mea surements should be taken. Some members of the team thought that the w ater temperature should be measured as it boiled before the a ctual brewing of the coffee. Others thought that such a measurement might be easy to obtain, and even a potential change, but would not help them understand why cold coffee was given to customers. The key to this step of the model is to use process knowledge and common sense in determining where to take measurements. The team should ask, W ill the data collected at this point help us decide what to do to improve the process? The team in the example investigated the process further and opted to take temperature measurements of the coffee just after it was poured into the urn at the front of the shop. Once the team determined what data to collect—and why, how, where, and when to collect it—it had the rudiments of a data collection plan. To implement the data collection plan, the team developed a data collection guide. This guide
Chapter 7 Process Improvement 141 must include explicit directions on how and when to use it. The team should try to make it as user friendly as possible. The team can collect baseline data when, and only when, the data collection plan is in place, the data collection guide has been developed, and the data collectors have been trained in the procedure to use.
Step 6: Is the Process Stable? The team analyzes the baseline data collected in step 5. Two tools that are useful in this analysis are a control chart and a run chart. Both of these tools orga nize the data and allow the team to make sense of the data. They are explained in Chapter 9. Variables control charts are better than run charts at revealing w hether a pro cess is stable and whether its future performance is predictable. However, even if a team begins with the simpler run chart, it can convert the run chart to a control chart with a little extra work. A control chart is important because it helps the team identify special cause variations in the process. Whenever an individual or a team repeats a sequence of actions, there will be some variation in the process. Let’s look at an example: Think about the amount of time it took to get up in the morning, get dressed, and leave the house for work during the past four weeks. Although the average time was 28 minutes, no two days w ere exactly the same. On one occasion it took 48 minutes to get out of the house. This is where a control chart or a run chart can help analyze the data. Control charts, and to a lesser extent run charts, display variation and unusual patterns such as runs, trends, and cycles. Data that are outside the computed control limits, or unusual patterns in the graphic display of data on a run chart, may signal the presence of special cause variation that should be investigated. In the example: Investigation revealed that a delay was experienced because of an early morning phone call from a child who is in college. The data provided a signal of special cause variation in the getting-off-to-work process. But what if, over a period of 10 days, a series of times is recorded that averages 48 minutes? Inquiry reveals that the getting-off-to-work process now includes making breakfast for a son and daughter. This is not just a variation—the data indicate that the process has been changed. Though this example portrays an obvious change in the pro cess, subtle changes often occur without the knowledge of workers. T hese minor changes produce enough variation to be evident when the data are analyzed. If special cause variation is found in the process, the team is obligated to find the cause before moving on to the next step in the model. Depending on the nature of the special cause, the team may act to remove it, take note of it but take no action, or change something in the process: • When special cause variation reduces the effectiveness and efficiency of the process, the team must investigate the root cause and take action to remove it.
142 Part III Improvement • If it is determined that the special cause was temporary in nature, no action may be required beyond understanding the reason for it. In the current example, the early phone call caused a variation in the data that was easily explained and required no further action. • Occasionally, special cause variation signals a need for improvement in the process to bring it closer to the process improvement objective. When that happens, the team may want to incorporate the change permanently. If the team fails to investigate a signal of special cause variation and continues with its improvement activities, the process may be neither stable nor predictable when fully implemented, thus preventing the team from achieving the process improvement objective.
Step 7: Is the Process Capable? Once the process has been stabilized, the data collected in step 5 are used again. This time the team plots the individual data points to produce a type of bar graph called a histogram. This tool is explained in Chapter 9. To prepare the histogram, the team superimposes the target value for the pro cess on the bar graph. The target value was established in step 1 as the process improvement objective. If there are upper and/or lower specification limits for the process, the team should plot them as well. (Note: Specification limits are not the same as the upper and lower control limits used in control charts.) Once the data, the target value, and the specification limits (if applicable) are plotted, the team can determine w hether the process is capable. The following questions can be used to guide the team’s thinking: • Are there any unusual patterns in the plotted data? Does the histogram have multiple tall peaks and steep valleys? This may be an indication that other processes are influencing the process the team is investigating. • Do all of the data points fall inside the upper and lower specification limits (if applicable)? If not, the process is not capable. • If all of the data points fall within the specification limits, are the points grouped closely enough to the target value? This is a judgment call by the team. Even when the process is capable, the team may not be satisfied with the results it produces. If that’s the case, the team may elect to continue trying to improve the process by entering step 8 of the basic process improvement model. • If t here are no specification limits for the process, does the shape of the histogram approximate a bell curve? After examining the shape created by plotting the data on the histogram, the team must decide whether the shape is satisfactory and whether the data points are close enough to the target value. These are subjective decisions. If the team is satisfied with both the shape and the clustering of data points, it can choose to standardize the simplified process or to continue through the steps of the basic process improvement model.
Chapter 7 Process Improvement 143 From here to the end of the basic process improvement model, the team will use the scientific methodology of the PDCA cycle for conducting process improvement. The team will plan a change, conduct a test and collect data, evaluate the test results to find out whether the process improved, and decide whether to standardize or continue to improve the process. The PDCA cycle is just that—a cycle. There are no limitations on how many times the team can attempt to improve the process incrementally.
Step 8: Identify the Root C auses for Lack of Capability Steps 1 through 7 of the model were concerned with gaining an understanding of the process and documenting it. In step 8, the team begins the PDCA cycle by identifying the root causes for the lack of process capability. The data the team has looked at so far measure the output of the process. To improve the process, the team must find what causes the product or service to be unsatisfactory. The team uses a cause-and-effect diagram to begin to identify root causes. This tool is explained in Chapter 9. Once the team identifies possible root c auses, it is important to collect data to determine how much these causes actually affect the results. Team members are often surprised to find that the data do not substantiate their predictions or perceptions as to root causes. The team can use a Pareto chart to show the relative importance of the causes it has identified. This tool is also explained in Chapter 9.
Step 9: Plan to Implement the Process Change Step 9 begins the Plan phase of the PDCA cycle. Step 10 completes this phase. After considering the possible root causes identified in step 8, the team picks one to work on. The team then develops a plan to implement a change in the pro cess to reduce or eliminate the root cause. The major features of the plan include changing the simplified flowchart created in step 4 and making all the preparations required to implement the change. The team can use the following list of questions as a guide in developing the plan: • What steps in the process will be changed? • Are there any risks associated with the proposed change? • What will the change cost? (The cost includes not only money but time, number of people, materials used, customer perceptions, and other factors.) • Which workers or customers will be affected by the change? • Who is responsible for implementing the change? • What must be done to implement the change? • Where and when will the change be implemented? • How will the implementation be controlled?
144 Part III Improvement • At what steps in the process w ill measurements be taken? • How will data be collected? • Is a small-scale test necessary before full implementation of the change? • How long will the test last? • What risks are involved, and how will they be addressed? • What is the probability of success? • Is there a downside to the proposed change? Once the improvement plan is formulated, the team makes the planned changes in the process, if empowered by the team charter to do so. Otherwise, the team presents the improvement plan to the process owner, or other individual who formed the team, to obtain approval to implement the change.
Step 10: Review and Modify the Data Collection Plan The data collection plan was originally developed in step 5. B ecause the process is going to change when the planned improvement is instituted, the team must now review the original plan to ensure that it is still capable of providing the data the team needs to assess process performance. If it is determined that the data collection plan should be modified, the team considers the same thinking and methodologies as in step 5.
Step 11: Test the Change (Also Known as Verification) Step 11 is the Do phase of the PDCA cycle. If feasible, the change should be implemented on a limited basis before it is applied to the entire organization, sometimes referred to as a pilot test or trial run. For example, the changed process could be instituted in a single office or work center while the rest of the organization continues to use the old process. If the organization is working on a shift basis, the changed process could be tried on one shift while the other shifts continue as before. Whatever method the team applies, the goals are to prove the effectiveness of the change, avoid widespread failure, and maintain organization-wide support. In some situations, a small-scale test is not feasible. If that is the case, the team will have to inform everyone involved of the nature and expected effects of the change and conduct training adequate to support a full-scale test. The information that the team developed in step 9 provides the outline for the test plan. During the test, it is important to collect appropriate data so that the results of the change can be evaluated. The team w ill have to take the following actions in conducting the test to determine whether the change actually results in process improvement: • Finalize the test plan • Prepare the data collection sheets • Train everyone involved in the test • Distribute the data collection sheets
Chapter 7 Process Improvement 145 • Change the process and run it to test the improvement • Collect and collate the data
Step 12: Check: Is the Modified Process Stable? Steps 12 and 13 together constitute the Check phase of the PDCA cycle. The team has modified the process according to the improvement plan and conducted a test. During the test of the new procedure, the team collected data and will determine whether the expected results were achieved. The approach in this step is identical to that in step 6. The team uses the data it has collected and prepares a control chart or run chart to check the process for stability. Because the process has changed, it is appropriate to recompute the control limits for the control chart using the new data. If the data collected in step 11 show that process performance is worse, the team must return to step 8 and try to improve the process again. The process must be stable before the team goes on to the next step.
Step 13: Check: Did the Process Improve? Step 13 completes the Check phase of the PDCA cycle. The procedures are similar to those in step 7. This is a good place for the team members to identify any differences between the way they planned the process improvement and the way it was executed. The following questions will guide the team in checking the test results: • Did the change in the process eliminate the root cause of the problem? Whether the answer is yes or no, describe what occurred. • Are the data taken in step 11 closer to the process improvement objective than the baseline data collected in step 5? The answer indicates how much or how l ittle the process has improved. • Were the expected results achieved? If not, the team should analyze the data further to find out why process performance improved less than expected or even became worse. • Were t here any problems with the plan? The team needs to review the planned improvement as well as the execution of the data collection effort.
Step 14: Standardize the Process and Reduce the Frequency of Data Collection Step 14 is the Act phase of the PDCA cycle. In this step, the team makes some important decisions. First, the members of the team must decide whether to implement the change on a full-scale basis. In making this decision, they will need to ask and answer the following questions: • Is the process stable? • Is the process capable?
146 Part III Improvement • Do the results satisfy customers, internal and/or external? • Are the necessary resources available? • Does the team have authorization? If the answers are yes, the changed process can be installed as the new standard process. Second, they must decide what to do next. Now that everything is in place for implementing and standardizing the process, the team must choose between two courses of action: • Identifying possibilities for making further process changes. Assuming that resources are available, and approval given, the team may choose to continue trying to improve the process by reentering the PDCA cycle at step 9. • Standardizing the changed process without further efforts to improve it. If the team chooses this course of action, it will still be involved— documenting the changes, monitoring process performance, and institutionalizing the process improvement. To standardize the changed process, the team initiates changes in documentation involving procedures, instructions, manuals, and other related issues. Training will have to be developed and provided to make sure everyone is using the new standard process correctly. The team continues to use the data collection plan developed in step 11 but significantly reduces the frequency of data collection by process workers. T here are no hard-and-fast rules on how often to collect data at this stage, but, as a rule of thumb, the team can try reducing collection to a quarter of what is called for in the data collection plan. The team can then adjust the frequency of measurement as necessary. The point is that enough data are collected to enable the team to monitor the performance of the process. The team must periodically assess whether the process remains stable and capable. To do this, the data collected in step 14 should be entered into the control chart or run chart and histogram developed in steps 12 and 13, respectively. Whichever course of action the team pursues, it should complete one last task: documenting the lessons learned during the process improvement effort and making it available to others within the organization. This documentation should include satisfactory outputs from the improvement effort and, if applicable, plans for assessment of the long-term outcomes from the improvement project. The process improvement project is complete. The team’s work is recognized and rewarded. The team is disbanded.
BREAKTHROUGH IMPROVEMENT Taken to its extreme, breakthrough improvement may encompass totally reengineering an entire organization.11 This usually means literally ignoring how the organization is structured and how it currently produces and delivers its products and services. It’s a “start from a clean sheet of paper” approach. The subject of much criticism and a number of notable failures, this “whole organization” approach gained an unsavory reputation. Unfortunately, many organizations grabbed at this
Chapter 7 Process Improvement 147 approach as a way to drastically cut costs, most significantly by reducing the number of employees. In those organizations with a quest to cut back (on everything), the basic tenets of the reengineering approach w ere either ignored or sublimated. The most important factors to be considered include the need for the following: • Careful understanding of the organization’s culture and management’s commitment to change (especially when positions are threatened) • A well-communicated policy and plan for the disposition of people displaced by the changes • A well-communicated plan for the transition (for example, whether the changes just mean more work for the employees left behind) • Means for dealing with the psychological trauma inherent in downsizing (such as the guilt felt about being a survivor, the loss of friends, and the anger of terminated or transferred employees) • Means for addressing the potential for sabotage, intentional or unintentional (such as lethargy, loss of interest in the job, retaliation, a careless attitude, and so forth) Given the small number of real successes in totally reengineering an entire company all at once,12 a more limited approach has emerged, typically called pro cess reengineering. Using process reengineering, a team examines a given process, such as complaint handling. It may take a macro look at how complaints are now handled, just to gain a sense of the situation. Then, starting with a clean sheet of paper (and perhaps based on information gained from benchmarking), the members of the team devise a new (and hopefully better) process approach without just fixing how the present process operates. The resultant process design is a breakthrough. Achievement of the breakthrough presumes that the team participants are able to shed their biases and their ingrained notions of how things have always been done. For example: State University realizes that its student enrollment process is cumbersome to administer and frustrating for new students. A cross-functional process improvement team is formed with a charter to “completely overhaul” the enrollment process. The team members undergo training in the concepts of process reengineering and the tools they may need. Up front, they identify the primary subprocesses that must be considered: student applications (review, selection, and notification), payment processing, student loans, new student orientation, class assignments, dormitory assignments, special requirements (security issues, dietary needs, and disability accommodations), document completion, data entry, data processing, and report preparation. They then generate a macro-level process flowchart showing the interaction of these subprocesses. A brainstorming session, followed by a multivoting activity, uncovers a host of ideas on how some of the subprocesses can be improved. It also provides a priority for addressing the ideas. As the team progresses, it becomes apparent that almost all of the data required to initiate student enrollment can be captured on a single document prepared by the expectant enrollee in machine-readable format.
148 Part III Improvement From this document, students selected for enrollment can be sent a bar- coded identification card that can be used throughout the enrollment pro cess and subsequently for ongoing transactions throughout the academic year. Upon arrival on enrollment day, the student presents the bar-coded card to a computer terminal that generates a printout of the student’s class and dormitory assignments and any special requirements. The equipment needed to h andle the enrollment-day processing is “on loan” from other university processes, such as the cafeteria and the school store. This major breakthrough reduces the number of administrators needed to staff t ables on enrollment day. It also eliminates the long wait times in lines and the crowding for forms and places to fill out the forms. Essentially, the only table requiring staff, assuming a well-designed system, is one to h andle student requests for assignment changes. The team drafts both a process map of the new student enrollment process, in detail, and an implementation plan. The plans are submitted to the appropriate officials, modifications are made as needed, and approval is obtained. The major breakthrough results in reduced processing time, greater accuracy, and substantial reduction in student complaints. Certain generic steps are usually involved in initiating breakthrough improvements: 1. Ensure that a strong, committed leader is supporting the initiative 2. Form a high-level, cross-functional steering committee 3. Create a macro-level process map for the entire organization 4. Select one of the major processes to be reengineered 5. Form a cross-functional reengineering team 6. Examine customers’ requirements and wants in detail 7. Look at and understand the current process from the customer’s perspective (its function, its performance, and critical concerns), but not in infinite detail 8. Brainstorm ways to respond to customers’ needs—think outside the box 9. Create breakthrough process redesign (assuming that the process is still needed) a. Design to include as few people as possible in the performance of the process b. Identify and question all assumptions and eliminate as many as possible c. Eliminate non-value-added steps d. Integrate steps and simplify everything possible e. Incorporate the advantages of information technology wherever feasible f. Prepare a new vision statement
Chapter 7 Process Improvement 149 g. Plan how to communicate the new vision and news of the process redesign h. Determine how to achieve performers’ buy-in of new process design 1. Determine how to get management to see the wisdom of dismantling the old process design j. Determine how the inevitable displacement of people (new work procedures, job elimination, transfers, and downsizing) will be addressed 10. Test-drive the new process design with a portion of the business and with one or two customers who can be counted on for collaboration and feedback 11. Collect feedback from the selected customers, the involved employees, management, and other affected stakeholders (such as the union, suppliers, and stockholders) 12. Modify the process redesign as needed and communicate the changes 13. Plan a controlled rollout of the process redesign 14. Implement the rollout plan 15. Evaluate the effectiveness of the redesigned process continuously at every stage a. Assess assimilation of the changes by workforce and management • Individual acceptance of changes (technical and social) • Understanding of need for displacement of people (reassignments and terminations) • Changes to managerial and supervisory roles and status (redistribution of responsibilities and authority) • Changes to compensation, training, development, and other human support systems b. Assess the impact of the changes on customers (for example, did the redesign accomplish what the customers needed and wanted?) c. Assess the impact of the changes on other stakeholders (for example, did the redesign achieve its intended purpose with minimum negative consequences?)
NOTES 1. Ron Bialek, Grace L. Duffy, and John W. Moran, The Public Health Quality Improvement Handbook (Milwaukee, WI: Quality Press 2009). 2. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran, eds., The Executive Guide to Improvement and Change (Milwaukee, WI: Quality Press, 2003).
150 Part III Improvement 3. D. Wood and S. Furterer, The ASQ Certified Manager of Quality/Organizational Excellence Handbook, 5th ed. (Milwaukee, WI: Quality Press, 2020). 4. Ibid. 5. ASQ Statistics Division, Improving Performance through Statistical Thinking (Milwaukee, WI: Quality Press, 2000). 6. Wood and Furterer, Certified Manager of Quality. 7. Anthony Manos and Chad Vincent, eds., The Lean Handbook (Milwaukee, WI: Quality Press, 2012). 8. Beecroft, Duffy, Moran, Executive Guide to Improvement and Change. 9. Russell T. Westcott, ed., The Certified Manager of Quality/Organizational Excellence, 4th ed. (Milwaukee, WI: Quality Press, 2014). 10. M. Imai, Kaizen: The Key to Japan’s Competitive Success (New York: McGraw-Hill, 1986). 11. Popularized by M. Hammer and J. Champy in Reengineering the Corporation: A Mani festo for Business Revolution (New York: HarperBusiness, 1993). 12. M. Hammer and J. Champty, Reengineering the Corporation: A Manifesto for Business Rev olution (New York: HarperBusiness, 1993).
Chapter 8 Improvement Techniques
Select and utilize improvement opportunity tech niques and/or methodologies including 1) brainstorm ing, 2) plan-do-check-act (PDCA) cycle, 3) affinity diagrams, 4) cost of poor quality (COPQ), and 5) inter nal audits. (Apply) CQIA BoK 2020 III.B
Continuous quality improvement (CQI) is a management approach to improving and maintaining quality that emphasizes internally driven and relatively constant (as contrasted with intermittent) assessments of potential c auses of quality defects, followed by action aimed e ither at avoiding a decrease in quality or e lse correcting it in an early stage. CQI could use most, if not all, of the tools discussed in this chapter at some point in a quality improvement initiative.
BRAINSTORMING Brainstorming is a group process used to generate ideas in a nonjudgmental environment.1 Group members are presented with the issue and are asked, first, to be wide-ranging in their own thinking about the issue and, second, not to criticize the thinking of others. The purpose of the tool is to generate a large number of ideas about the issue. Team members interact to generate many ideas in a short time period. As the goal of brainstorming is to generate ideas, make sure everyone in the group understands the importance of postponing judgment until after the brainstorming session is completed. The basic steps involved in brainstorming are as follows: 1. Write the problem or topic on a whiteboard or flip chart where all participants can see it 2. Write all ideas on the board and do as little editing as possible 3. Number each idea for future reference 151
152 Part III Improvement 4. Choose one of several brainstorming techniques: structured brainstorming, unstructured (or free form) brainstorming, or silent brainstorming In structured brainstorming, choose one person at a time, also called the round- robin method: • One idea is solicited from each person in sequence • Participants who don’t have an idea may pass • A complete round of passes ends the brainstorming session The advantage of structured brainstorming is that each person has an equal chance to participate, regardless of rank or personality. The disadvantage of structured brainstorming is that it lacks spontaneity and can sometimes feel rigid and restrictive. The team leader should encourage participation and have team members build on the ideas of others. In unstructured (or free form) brainstorming, participants simply contribute ideas as they come to mind. The advantage of free form brainstorming is that participants can build on each other’s ideas. The atmosphere can be very informal and sometimes hectic. The disadvantage of free form brainstorming is that less assertive or lower-ranking participants may not contribute. An ideal approach is to combine these two methods. Begin the session with a few rounds of structured brainstorming and end with a period of unstructured brainstorming. In silent (or “write it down”) brainstorming, the participants write their ideas individually on sticky notes or small slips of paper, which are then collected and posted for all to see. The advantage of silent brainstorming is that it prevents individuals from making disruptive “analysis” comments during the brainstorming session and provides confidentiality. It can help prevent a group from being unduly influenced by a single participant or common flow of ideas. The disadvantage of silent brainstorming is that the group loses the synergy that comes from an open session. Silent brainstorming is best used in combination with other brainstorming techniques. After brainstorming: • Reduce your list to the most important items • Combine items that are similar • Discuss each item in turn—on its own merits • Eliminate items that may not apply to the original issue or topic • Give each person one final chance to add items There are several points to remember about brainstorming: • Never judge ideas as they are generated. The goal of brainstorming is to generate a lot of ideas in a short time. Analysis of these ideas is a separate process, to be done later. • Don’t quit at the first lull. All brainstorming sessions reach lulls, which are uncomfortable for the participants. Research indicates that most of the best ideas occur during the last part of a session. Try to encourage the group to push through at least two or three lulls.
Chapter 8 Improvement Techniques 153 • Try to write down all the ideas exactly as they are presented. When you condense an idea to one or two words for ease of recording, you are doing analysis. Analysis should be done l ater. • Encourage outrageous ideas. Although these ideas may not be practical, they may start a flow of creative ideas that can be used. This can help break through a lull. • Try to have a diverse group. Involve process o wners, customers, and suppliers to obtain a diverse set of ideas from several perspectives.
PLAN-D O-C HECK-ACT (PDCA) OR PLAN-D O-STUDY-ACT (PDSA) CYCLE The key steps involved in the implementation and evaluation of quality improvement efforts are symbolized by the PDCA/PDSA cycle. The goal is to engage in a continuous endeavor to learn about all aspects of a process and then use this knowledge to change the process to reduce variation and complexity and to improve the level of process performance. Process improvement begins by understanding how customers define quality, how processes work, and how understanding the variation in those processes can lead to wise management action. The PDCA cycle, also known as the PDSA cycle (Figure 8.1), flows from the process simplification segment. Using all 14 steps of the model will increase an organization’s process knowledge, broaden decision-making options, and enhance the likelihood of satisfactory long-term results. Possible actions for the PDCA:
Act Check (Study)
Plan
Do
Figure 8.1 PDCA cycle.
Plan • Select project • Define problem and aim or intent • Clarify/understand • Set targets/schedules • Inform and register the project • Solve/come up with most suitable recommendation
154 Part III Improvement
Do • Record/observe/collect data • Examine/prioritize/analyze • Justify/evaluate cost • Investigate/determine most likely solutions • Test and verify/determine cost and benefits • Develop/test most likely causes
Check (Study) • Consolidate ideas • Select next project • Seek approval from management
Act • Plan installation/implementation plan • Install/implement approved project/training • Maintain/standardize
AFFINITY DIAGRAM An affinity diagram is a tool to facilitate consideration and organization of a group of ideas about an issue by a team through a consensus decision. The team members take turns writing each of their ideas on separate slips of paper. The team then gathers all the ideas into natural (affinity) groups; in other words, it groups the ideas in a manner that allows t hose with a natural relationship or relevance to be placed together in the same group or category. An affinity diagram is used to organize verbal information into a visual pattern. An affinity diagram starts with specific ideas and helps work toward broad categories. Affinity diagrams can help: • Organize and give structure to a list of factors that contribute to a problem • Identify key areas where improvement is most needed The steps to generate an affinity diagram are as follows: 1. Identify the problem. Write the problem or issue on a whiteboard or flip chart. 2. Generate ideas. Use an idea-generation technique, such as brainstorming, to identify all facets of the problem. Record the ideas on index cards or sticky notes.
Chapter 8 Improvement Techniques 155 3. Cluster the ideas into related groups, placing them either on paper or on a wall. Ask, Which other ideas are similar? and Is this idea somehow connected to any others? to help group the ideas together. 4. Create an affinity card (header card) for each group with a short statement describing the entire group of ideas. 5. Attempt to group the initial affinity cards into even broader groups (clusters). Continue until the definition of an affinity cluster becomes too broad to have any meaning. 6. Complete the affinity diagram. Lay out all the ideas and affinity cards on a single medium. Draw borders around each of the affinity clusters. The resulting structure will provide valuable insights about the problem. Figure 8.2 shows a completed affinity diagram after the team has completed step 6.
Causes of typographical errors Environment Interruptions Unreasonable deadlines Time of day
Equipment Ergonomics
Noise Lighting Desk height Chair height Comfort
Original documentation Author skill Handwriting Grammar Punctuation Spelling
Requirements Draft copy Final copy Distribution Font
Technical jargon, slang
Figure 8.2 Affinity diagram.
Computers Printers Typewriters Training Typing skill Editing skill Computer skill Proofreading skill
No definition of quality No measurement No feedback
156 Part III Improvement
COST OF POOR QUALITY OR COST OF QUALITY Cost of quality is a methodology that allows an organization to determine the extent to which organizational resources are used for activities that prevent poor quality, that appraise the quality of the organization’s products or services, and that result from internal and external failures. Having such information allows an organ ization to determine the potential savings to be gained by implementing process improvements. This tool can be referred to as either cost of quality—providing a broader view of what helps to prevent or avoid quality problems, what helps to appraise quality levels, and how we identify and prevent external and internal failures—or cost of poor quality, which focuses more on the elements that cause poor quality, and the internal and external failures. It is a slight difference, but important to highlight. Quality-related activities that incur costs may be divided into prevention costs, appraisal costs, and internal and external failure costs: • Prevention costs are incurred to prevent or avoid quality problems. T hese costs are associated with the design, implementation, and maintenance of the quality management system. They are planned and incurred before actual operation, and they could include: — Product or service requirements—establishment of specifications for incoming materials, processes, finished products, and services — Quality planning—creation of plans for quality, reliability, operations, production, and inspection — Quality assurance—creation and maintenance of the quality system — Training—development, preparation, and maintenance of programs • Appraisal costs are associated with measuring and monitoring activities related to quality. T hese costs are associated with the suppliers’ and customers’ evaluation of purchased materials, processes, products, and services to ensure that they conform to specifications. They could include: — Verification—checking of incoming material, process setup, and products against agreed-to specifications — Quality audits—confirmation that the quality system is functioning correctly — Supplier rating—assessment and approval of suppliers of products and services • Internal failure costs are incurred to remedy defects discovered before the product or service is delivered to the customer. These costs occur when the results of work fail to reach design quality standards and are detected before they are transferred to the customer. They could include: — Waste—performance of unnecessary work or holding of stock as a result of errors, poor organization, or communication — Scrap—defective product or material that cannot be repaired, used, or sold
Chapter 8 Improvement Techniques 157 — Rework or rectification—correction of defective material or errors — Failure analysis—activity required to establish the causes of internal product or service failure • External failure costs are incurred to remedy defects discovered by customers. These costs occur when the products or services fail to reach design quality standards but are not detected until after transfer to the customer. They could include: — Repairs and servicing—both of returned products and of those in the field — Warranty claims—failed products that are replaced or services that are re-performed under a guarantee — Complaints—all work and costs associated with handling and servicing customers’ complaints — Returns—handling and investigation of rejected or recalled products, including transport costs The costs of d oing a quality job, conducting quality improvements, and achieving goals must be carefully managed so that the long-term effect of quality on the organization is a desirable one. These costs must be a true measure of the quality effort, and they are best determined from an analysis of the costs of quality. Such an analysis provides: • A method of assessing the effectiveness of the management of quality • A means of determining problem areas, opportunities, savings, and action priorities Cost of quality is also an important communication tool. Crosby demonstrated what a powerful tool it could be to raise awareness of the importance of quality. He referred to the measure as the “price of nonconformance” and argued that organizations choose to pay for poor quality. Many organizations w ill have true quality-related costs as high as 15%–20% of their sales revenue, and effective quality improvement programs can reduce this substantially, thus making a direct contribution to profits. Many businesses have started to compare the cost of quality with the cost of goods sold. This can better reflect the potential margin recovery that the organization is entitled to. To identify, understand, and reap the cost benefits of quality improvement activities, an organization should include the following fundamental steps in its approach: • Management commitment to finding the true costs of quality, both visi ble and hidden. • A quality costing system to identify, report, and analyze quality-related cost. In the development of the costing system, decisions need to be made as to how deep a review is needed. The first step is usually to construct a Pareto chart to address the largest cost impact areas. • A quality-related cost management team responsible for direction and coordination of the quality costing system.
158 Part III Improvement • The inclusion of quality-costing training to enable everyone to understand the financial implications of quality improvement. • The presentation of significant costs of quality to all personnel to promote the approach and identify areas for improvement. • The introduction of schemes to achieve the maximum participation of all employees. Some businesses are now evolving into a cost of poor execution (COPE) model. This incorporates losses from the organization’s products and services as well as the internal systems losses via the “hidden factory.” The quality cost system, once established, should become dynamic and have a positive impact on the achievement of the organization’s mission, goals, and objectives.
INTERNAL AUDITS A quality audit is defined as “a systematic and independent examination to determine whether quality activities and related results comply with planned arrangements and whether these arrangements are implemented effectively and are suitable to achieve objectives”2 An audit of a quality management system is carried out to ensure that actual practices conform to the documented procedures. There should be a schedule for carrying out audits, with different activities requiring different frequencies on the basis of their importance to the organ ization. An audit should not be conducted with the sole aim of revealing defects or irregularities—audits are for establishing the facts rather than finding faults. Audits do indicate necessary improvement and corrective actions, but they must also determine whether processes are effective and w hether responsibilities have been correctly assigned. The basic steps involved in conducting an audit are as follows: 1. Initiation and preparation, which includes defining the audit scope and objectives, assigning the resources (lead and support auditors), and developing an audit plan and checklists 2. Performance of the audit, which includes briefing concerned personnel and conducting the collection, evaluation, verification, and recording of information 3. Reporting, which includes developing an audit report and briefing concerned personnel on the audit results 4. Completion, which includes evaluating any corrective action taken as a result of the audit and closing out the audit process The assessment of a quality system against a standard or set of requirements by the organization’s own employees is known as a first-party assessment or inter nal audit.3 Beginning with a review of historical performance, management may identify activities, products, or projects that have resulted in high costs, customer complaints, performance concerns, chronic failure, unsatisfactory production levels, and
Chapter 8 Improvement Techniques 159 delivery issues. The areas having the greatest impact on achieving the operational goals and objectives are the highest priority for the audit function to evaluate.4 If an external customer makes an assessment of a supplier, against either its own or a national or international standard, a second-party audit has been conducted. An assessment by an independent organization that is not connected with any contract between the customer and the supplier but is acceptable to them both is an independent third-party assessment. The latter can result in some form of certification or registration, such as ISO 9001 certification, provided by the assessing organization. When an organization emphasizes process improvement and enhancing customer satisfaction, the audit process becomes one of the most important process improvement tools.
NOTES 1. Some of the information in this section is adapted from the U.S. Navy Handbook for Basic Process Improvement; and the U.S. Air Force Quality Institute Process Improvement Guide, 2nd ed. (1994). 2. ASQ/ANSI/ISO 19011–2011 Guidelines for auditing management systems, 2011. 3. The term audit is gradually being replaced by the term assessment in relation to management systems, where the emphasis is less on strict conformance to specifications and more on the effectiveness of the management process. Accredited ISO 9000 registrars “assess” quality management systems before granting a certificate. The Baldrige Performance Excellence Program uses volunteer “assessors” to conduct “assessments” of organizations applying for the award. 4. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran, eds., The Executive Guide to Improvement and Change (Milwaukee, WI: Quality Press, 2003), 163.
ADDITIONAL RESOURCES ABS Consulting— Lee N. Vanden, Donald K. Heuvel, Randal L. Montgomery, Walter E. Hanson, and James R. Rooney. Root Cause Analysis Handbook. Milwaukee, WI: Quality Press, 2008. Andersen, Bjørn, and Tom Natland Fagerhaug. The ASQ Pocket Guide to Root Cause Analysis. Milwaukee, WI: Quality Press, 2013. ———. Root Cause Analysis: Simplified Tools and Techniques. 2nd ed. Milwaukee, WI: Quality Press, 2006. Arter, Dennis R., Quality Audits for Improved Performance. 3rd ed. Milwaukee, WI: Quality Press, 2003. Duffy, Grace L., ed. The ASQ Quality Improvement Pocket Guide. Milwaukee, WI: Quality Press, 2013. Kempner, Charles H., and Benjamin B. Tregoe. New Rational Manager: An Updated Edition for a New World. Princeton, NJ: Kepner-Tregoe, 1997. Okes, Duke. Root Cause Analysis: The Core of Problem Solving and Corrective Action. Milwaukee, WI: Quality Press, 2009. Russell, J. P. The ASQ Auditing Handbook. 4th ed. Milwaukee, WI: Quality Press, 2013. Westcott, Russell T., ed. The Certified Manager of Quality/Organizational Excellence Handbook. 4th ed. Milwaukee, WI: Quality Press, 2014. Wood, Douglas C., ed. Principles of Quality Costs: Financial Measures for Strategic Implementation of Quality Management. 4th ed. Milwaukee, WI: Quality Press, 2013.
Chapter 9 Improvement Tools
Select, interpret, and apply basic improvement tools including: 1. Flowcharts 2. Histograms 3. Pareto charts 4. Scatter diagrams 5. Check sheets 6. Control charts 7. Decision trees (Apply) CQIA BoK 2020 III.C
A tool is a device used to organize, analyze, and understand data. Quality improvement tools are numeric and graphic devices used to help individuals and teams work with, understand, and improve processes.1 Walter Shewhart and W. Edwards Deming began developing the initial quality improvement tools in the 1930s and 1940s. This development resulted in better understanding of processes and led to the expansion of the use of t hese tools. In the 1950s, the Japanese began to learn and apply the statistical quality control tools and thinking taught by Kaoru Ishikawa, head of the Union of Japa nese Scientists and Engineers (JUSE). T hese tools w ere further expanded by the Japanese in the 1960s with the introduction of the following seven classic quality control tools:2 1. Flowchart 2. Histogram 3. Pareto chart 4. Scatter diagram 5. Check sheet 160
Chapter 9 Improvement Tools 161 6. Control chart (formerly run chart) 7. Cause-and-effect diagram (fishbone or Ishikawa diagram) We w ill cover the first six tools in this chapter, and the cause-and-effect diagram in Chapter 10. We w ill additionally cover decision trees, which can be used in quality planning and improvement, in this chapter. At the beginning of a process improvement project, it’s important to understand the current state or condition of the process. Check sheets, flowcharts, and histograms are useful for acquiring and displaying basic data for this purpose. Control charts can be used to determine whether the process is in control. If there is a possibility of interrelated factors, scatter diagrams may be used to test for correlations between two sets of variables. Once a prob lem has been defined using the methods described, vari ous approaches can be employed to find solutions. Of the seven basic tools, the fishbone diagram works very well for teams seeking the most likely root cause for a problem. Once the causes are identified, they can be prioritized and displayed in a Pareto chart to help determine which problem should be addressed first. The following information describes many of the basic quality improvement tools and how they are used.3
FLOWCHART A flowchart is a graphic representation of the flow of a process. It is a useful way to examine how the various steps in a process relate to each other, to define the boundaries of the process, to verify and identify customer–supplier relationships in a process, to create common understanding of the process flow, to determine the current “best method” of performing the process, and to identify redundancy and unnecessary complexity. A flowchart displays the order of activities. An oblong symbol indicates the beginning or end of the process. Boxes indicate action items, and diamonds indicate decision points. Flowcharts can be used to: • Identify and communicate the steps in a work process • Identify areas that may be the source of a problem or determine improvement opportunities A flowchart provides the visualization of a process using symbols that represent different types of actions, activities, or situations. Figure 9.1 displays a typical flowchart that describes the simple act of getting a cup of coffee. Arrows show the flow of information between the symbols used to represent the steps in the process. A flowchart may be used to document an existing process as it is presently performed, or it may be used to design a new or changed process. The basic steps for creating a flowchart are as follows: 1. Select the process to chart. 2. Determine whether to develop a high-level or detailed flowchart.
162 Part III Improvement
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Figure 9.1 Flowchart example.
3. Define the boundaries of the selected process. 4. Identify the start symbol and place it in the top left corner of the page. 5. Identify the finish symbol, or the end point, and place it in the bottom right corner of the page. 6. Try to identify the easiest and most efficient way to go from the “start block” to the “finish block.” Though this step isn’t absolutely necessary, it does make the next step easier.
Chapter 9 Improvement Tools 163 7. Document each step in sequence, starting with the first (or last) step. 8. Use the appropriate symbol for each step (see Figure 9.2). 9. At each decision point, choose one branch and continue flowcharting that section of the process. 10. If a segment of the process is unfamiliar to everyone, make a note and continue flowcharting. 11. Repeat steps 6, 7, and 8 until that section of the process is complete. Go back and flowchart the other branches from the decision symbols. Try to observe the process to validate the process map. 12. Identify all the areas that hinder your process or add little or no value. 13. After the flowchart is accurate and complete, analyze it. 14. Build a new flowchart that corrects the problems you identified in the previous chart.
Process
Represents any type of process
Decision
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Input/ Output
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Represents data or information that goes into or out of a process Represents an activity that must be documented Connector—links one point in a flowchart to another point without using a line
Terminator
Indicates the start or end of a process Line connector—links one point in a flowchart to another point with a line and arrow
Figure 9.2 Basic flowchart symbols.
Note: The steps of the process can be placed on index cards or sticky notes. This allows rearrangement of the diagram without erasing and redrawing and prevents ideas from being discarded simply b ecause it’s too much work to redraw the diagram. A completed flowchart shows several useful pieces of information: • How the process actually is or will be performed • It encourages communication between customers and suppliers
164 Part III Improvement • Illustrates the relationship of various steps in a process • Educates team members about all the steps within the process • Can be used to train new employees involved in the process • Identifies who is involved in the process • Helps set the boundaries of the process • Identifies team members needed • Identifies where the process can be improved Marketing
Engineering
Quality
Production
Identify market opportunity and volume estimate Develop product concept and review compatibility with current designs Compare design concept with current technical capabilities Estimate cost for additional equipment Rough estimate of profit potential
Worthwhile looking at further?
No
Stop Yes
Design details for major cost components
Detailed profitability estimates and recommendation to senior management for path forward
Figure 9.3 Deployment flowchart example. Source: D. Wood and S. Furterer, The ASQ Certified Manager of Quality/Organizational Excellence Handbook, 5th ed. (Milwaukee, WI: Quality Press, 2020).
Chapter 9 Improvement Tools 165 • Is useful for data collection • May identify immediate improvement opportunities For an existing process, failure to document the actual process is an impor tant pitfall that should be avoided. The failure to reflect reality may result from a variety of c auses: • The process is drawn as it was designed and not as it actually happens • Team members are reluctant to draw parts of the process that might expose weaknesses in their areas • Rework loops are seen as small and unimportant and are overlooked • Team members truly do not know how the process operates There are two types of flowcharts: • Process flowcharts use symbols to represent the input from suppliers, the sequential work activities, the decisions to be made, and the output to the stakeholder • Deployment flowcharts show the functions or people responsible for tasks as well as the flow of tasks in a process, sometimes called a swimlane chart (Figure 9.3) Flowcharting has been around for a very long time, and many organizations use it to gain vital process information. The reason for this is obvious. A flowchart can be customized to fit any need or purpose. For this reason, flowcharts are recognized as a very valuable quality improvement method. The term process map ping refers to flowcharting a process but adds several refinements.
HISTOGRAM A histogram is a graphic representation (bar chart) used to plot the frequency with which different values of a given variable occur. Histograms are used to examine existing patterns, identify the range of variables, and suggest a central tendency in variables. An example would be to line up, by height, a group of students in a class. Normally, one would be the tallest, one would be the shortest, and there would be a cluster of p eople around an average height. Hence the term normal distribution. This tool helps identify the cause of problems in a process by the shape of the distribution as well as the width of the distribution. The histogram evolved to meet the need to evaluate data that occur at a certain frequency. This is possible because it allows for a concise portrayal of information in a bar-graph format. This tool clearly portrays information on location, spread, and shape, which enables the user to perceive subtleties regarding the functioning of the physical process that is generating the data. It can also help suggest both the nature of and possible improvements for the physical mechanisms at work in the process. When combined with the concept of the normal curve and knowledge of a particular process, the histogram becomes an effective, practical working tool to
166 Part III Improvement use in the early stages of data analysis. A histogram may be interpreted by asking three questions: • Is the process performing within specification limits? • Does the process seem to exhibit wide variation? • If action needs to be taken on the process, what action is appropriate? The answers to these three questions lie in analyzing three characteristics of the histogram. How well is the histogram centered? The centering of the data provides information on the process aim about some mean or nominal value. How wide is the histogram? Looking at histogram width defines the variability of the process about the target value. What is the shape of the histogram? Remember that the data are expected to form a normal or bell-shaped curve. Any significant change or anomaly usually indicates that something is g oing on in the process that is causing the quality problem. Figure 9.4 shows a histogram with a non-normal distribution. The histogram represents the time it took to triage patients in an emergency department. Histograms are built to examine characteristics of variation and provide an excellent visualization tool for varying data. The utility of histograms is in gaining a rapid look at how the data collected from a process are distributed. The basic steps involved in developing a histogram are as follows: 1. Determine the type of data you want to collect. Be sure that the data are measurable (for example, time, length, and speed). 2. Collect as many measurable data points as possible. 3. Collect data on one parameter at a time. 4. Count the total number of points you have collected. 5. Determine the number of intervals required. 6. Determine the range. To do this, subtract the smallest value in the data set from the largest. This value is the range of your data set. 7. Determine the interval width. To do this, divide the range by the number of intervals. 8. Determine the starting point of each interval. 9. Draw horizontal (x) and vertical (y) axis lines. 10. Label the horizontal axis to indicate what is being displayed and mark the unit of measure (smallest to largest values). 11. Label the vertical axis to indicate what is being measured and mark the unit of measure (smallest to largest values). 12. Plot the data. Construct vertical bars for each of the values, with the height corresponding to the frequency of occurrence of each value.
Chapter 9 Improvement Tools 167
70 60
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50 40 30 20 10 0
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Figure 9.4 Histogram with a non-normal distribution. Source: Created by Sandra L. Furterer.
PARETO CHART A Pareto chart is a graphic representation of the frequency with which certain events occur. It is a rank-order chart that displays the relative importance of variables in a data set and may be used to assign priorities regarding opportunities for improvement. Pareto charts are bar charts, prioritized in descending order from left to right, used to identify the vital few opportunities for improvement. It shows where to put your initial effort to get the most gain. Figure 9.5 is an example of a Pareto chart of the mode of arrival of patients to an emergency department. The chart appears much the same as a histogram or bar chart. The bars are arranged in decreasing order of magnitude from left to right along the x-axis, excepting an “other” category. The fundamental use of the Pareto chart in quality improvement is the ordering of factors that contribute to a quality deficiency. The purpose of the chart is to identify which of the problems should be worked on first. The Pareto chart is useful in summarizing information and in predicting how much of a problem can be corrected by attacking any specific part of the problem. The tool is named after Vilfredo Pareto, an Italian sociologist and economist, who invented this method of information presentation toward the end of the nineteenth century. The Pareto chart was derived from Pareto’s 80/20 rule. Pareto noticed that 80% of the wealth in Italy was held by 20% of the p eople. Later, Joseph Juran, a leading quality expert, noticed that this rule could also be applied
168 Part III Improvement
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Figure 9.5 Pareto chart of mode of arrival. Source: Created by Sandra L. Furterer.
to the causes of defects: 80% of defects are due to only 20% of c auses. Therefore, by minimizing 20% of the c auses we can eliminate 80% of the problems. The 20% of the problems are the “vital few,” and the remaining problems are the “useful many.” A Pareto chart can help organizations to: • Separate the few major problems from the many possible problems in order to focus improvement efforts • Arrange data according to priority or importance • Use data, not perception, to determine which problems are the most important The basic steps involved in constructing a Pareto chart are as follows: 1. Define the measurement scale for the potential causes (this is usually the frequency of occurrence or cost) 2. Define the time period during which to collect data about the potential causes (days, weeks, or as much time as is required to observe a significant number of occurrences) 3. Collect and tally data for each potential cause 4. Label the horizontal (x) axis with all the possible root causes in descending order of value
Chapter 9 Improvement Tools 169 5. Label the measurement scale on the vertical (y) axis 6. Draw one bar for each possible cause to represent the value of the measurement 7. If desired, add a y-axis on the right side of the chart to represent cumulative percentage values 8. Draw a line to show the cumulative percentage from left to right as each cause is added to the chart Pareto charts are used to: • Identify the most important problems using different measurement scales • Point out that most frequent may not always mean most costly • Analyze different groups of data • Measure the impact of changes made in the process before and after • Break down broad causes into more specific parts
SCATTER DIAGRAM A scatter diagram is a chart in which one variable is plotted against another to determine whether there is a correlation between the two variables. T hese diagrams are used to plot the distribution of information in two dimensions. A scatter diagram shows the pattern of relationship between two variables that are thought to be related. For example, is there a relationship between outside temperature and cases of the common cold? As temperatures drop, do colds increase? The more closely the points hug a diagonal line, the more closely t here is a one-to-one relationship. The purpose of the scatter diagram is to display what happens to one variable when another variable is changed. The diagram is used to test a theory that the two variables are related. The slope of the diagram indicates the type of relationship that exists. Figure 9.6 shows a plot of two variables—in this example, curing temperature versus shearing strength. As the shear strength value increases, so does the curing temperature value. T hese variables are said to be positively correlated; that is, if one increases, so does the other. The line plotted is a regression line, which shows the average linear relationship between the variables. If the line in a scatter diagram has a negative slope, the variables are negatively correlated; that is, when one increases, the other decreases, and vice versa. When no regression line can be plotted and the scatter diagram appears to simply be a ball of diffused points, then the variables are said to be uncorrelated. The utility of the scatter diagram for quality assessment lies in its measure ment of variables in a process to see w hether any two or more variables are correlated or uncorrelated. The specific utility of finding correlations is to infer causal relationships among variables and ultimately to find the root causes of problems. However, just because correlation is found between two variables, it does not mean that one variable causes another.
Shear strength
170 Part III Improvement
Curing temperature
Figure 9.6 Scatter diagram example.
The basic steps involved in constructing a scatter diagram are as follows: 1. Define the x variable on a graph paper scatter diagram form. This variable is often thought of as the cause variable and is typically plotted on the horizontal axis. 2. Define the y variable on the diagram. This variable is often thought of as the effect variable and is typically plotted on the vertical axis. 3. Number the pairs of x and y variable measurements consecutively. 4. Record each pair of measures for x and y in the appropriate columns. Make sure that the x measures and the corresponding y measures remain paired so that the data are accurate. 5. Plot the x and y data pairs on the diagram. Locate the x value on the horizontal axis, and then locate the y value on the vertical axis. Place a point on the graph where these two intersect. 6. Study the shape that is formed by the series of data points plotted. In general, conclusions can be made about the association between two variables (referred to as x and y) based on the shape of the scatter diagram. • Scatter diagrams that display associations between two variables tend to look like elliptical spheres or even straight lines. • Scatter diagrams in which the plotted points appear in a circular fashion show l ittle or no correlation between x and y. • Scatter diagrams in which the points form a pattern of increasing values for both variables show a positive correlation: as values of x
Chapter 9 Improvement Tools 171 increase, so do values of y. The more tightly the points are clustered in a linear fashion, the stronger the positive correlation, or the association between the two variables. • Scatter diagrams in which one variable increases in value while the second variable decreases in value show a negative correlation between x and y. Again, the more tightly the points are clustered in a linear fashion, the stronger the association between the two variables. If there appears to be a relationship between two variables, they are said to be correlated. Both negative and positive correlations are useful for continuous process improvement. Scatter diagrams show only that a relationship exists, not that one variable causes the other. Further analysis using advanced statistical techniques can quantify how strong the relationship is between two variables.
CHECK SHEET A check sheet is a form used to record the frequency of specific events during a data collection period. It is a s imple form that can be used to collect data in an orga nized manner and easily convert them into readily useful information. The most straightforward way to use a check sheet is simply to make a list of items (actions, events, defects, behaviors, etc.) expected to appear in a process and make a tally beside each item when it does appear. This type of data collection can be used for almost anything, from checking off the occurrence of particular types of defects to counting expected items (for example, the number of times the telephone rings before it is answered). Check sheets can be directly related to histograms to provide a direct visualization of the information collected. Figure 9.7 shows the frequency of reasons. Various innovations in check sheets are possible. Consider, for example, using a map of the United States as a check sheet. The concept for this check sheet is for the user to simply mark on the map the location of each sale that is made. The map Switch Assembly Op 236 Plastic footer Operator_________ Chart began July 12, 2013
Totals
Week 1
Burns Misrun Bad finish Porosity Flash Color
lll llll llll llll l
llll lll
ll
l llll l
Figure 9.7 Check sheet example. Source: D. Wood and S. Furterer, The ASQ Certified Manager of Quality/Organizational Excellence Handbook, 5th ed. (Milwaukee, WI: Quality Press, 2020).
172 Part III Improvement becomes a very effective graphic presentation of where sales are the strongest. Another name for this type of check sheet is a measles chart. A check sheet may be used to: • Collect data with minimal effort • Convert raw data into useful information • Translate perceptions of what is happening into what is actually happening The basic steps involved in creating a check sheet are as follows: 1. Clarify the measurement objectives. Ask questions such as, What is the problem? Why should data be collected? Who w ill use the information being collected? and Who will collect the data? 2. Create a form for collecting data. Determine the specific t hings that will be measured and write them down the left side of the check sheet. Determine the time or place being measured and write this across the top of the columns. 3. Label the measure for which data will be collected (event, action defect, etc.). 4. Collect the data by placing a check mark for each occurrence directly on the check sheet as it happens. 5. Tally the data by totaling the number of occurrences for each category being observed and measured. 6. Summarize the data from the check sheet; this can be done in a number of ways, such as with a Pareto chart or a histogram. A check sheet is not the same as a checklist, the latter being what would be created before g oing to the grocery store or packing an auto for a trip.
CONTROL CHART A control chart is used to measure sequential or time-related process performance and variability. The control chart is probably the best known, most useful, and most difficult-to-understand quality tool. It is a sophisticated tool of quality improvement. A control chart is a line chart (run chart) with control limits. It is based on the work of Shewhart and Deming. Control charts are statistically based. The under lying concept is that processes have statistical variation. One must assess this variation to determine whether a process is operating between the expected boundaries or whether something has happened that has caused the process to go out of control. Control limits are mathematically constructed at three standard deviations above and below the average. Extensive research by Shewhart indicated that 99.73% of common cause variation falls within upper and lower limits established at three times the standard deviation of the process (plus and minus, respectively). Data are collected by repeated samples and are charted. From the graphic pre sentation of the data on the control chart, one can observe variation and investigate
Chapter 9 Improvement Tools 173 to determine whether the variation is due to normal and inherent (common causes) or is produced by unique events (special causes). A typical control chart contains a centerline that represents the average value (mean) of the quality characteristic corresponding to the in-control state. Two other horizontal lines, called the upper control limit (UCL) and the lower control limit (LCL), are also drawn. T hese control limits are chosen so that when the process is in control, nearly all the sample points w ill fall between them. As long as the points plot within the control limits, the process is assumed to be in control (stable), and no action is necessary. A point that plots outside the control limits is interpreted as evidence that the process may be out of control and investigation and corrective action could be required to find and eliminate the c auses responsible for this occurrence. The control points are connected with straight lines for easy visualization. Even if all the points plot inside the control limits, if over several consecutive time intervals they display in a repetitive upward or downward trend, or other nonrandom manner, this is an indication that the process may be out of control. Figure 9.8 shows points representing the variable measurement taken for each of 10 items. Note that upper and lower control limits are not specification limits. Specification limits are based on product or customer requirements. Control limits have a mathematical relationship to the process outputs. Compare the ongoing current process data with these three plotted lines and look for out-of-control signals: • If the data fluctuate within the limits, it is the result of common c auses within the process; the process is in control. • If one of the data points falls outside the control limits, it could be the result of special causes and could indicate that the process is out
UCL
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Figure 9.8 Control chart (process in control).
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174 Part III Improvement of control and that corrective action may be needed after a thorough investigation of the cause. • A run of eight points on one side of the centerline could indicate a shift in the process output and needs investigation. • Two of three consecutive points outside the two-sigma warning limits but still inside the control limits could indicate a process shift. • A trend of seven points in a row upward or downward could be the result of gradual deterioration in the process. This is not an inclusive list of out-of-control warning signals but just a few examples. Refer to a textbook on statistical process control for a full list of possible out- of-control signals.4 There are several types of control charts, but all have the same basic structure. The two main categories of control charts are those that display attribute data and those that display variables data.
Attribute Data Control charts of attribute data display data that result from counting the number of occurrences or items in a single category of similar items or occurrences. These “count” data may be expressed as pass/fail, yes/no, or presence/absence of a defect. Charting the proportion of failed items results in the ability to observe whether a process is in control or out of control.
Variables Data Control charts of variables data display values resulting from the measurement of a continuous variable. Examples of variables data are elapsed time, temperature, and radiation dose. (For more information and explanation of these chart types and their characteristics, refer to publications addressing statistics used in the quality profession.) Use control charts to: • Display and understand variation in a process • Determine when actual events fall outside specified limits of tolerance (control limits) and become outliers that are out of control • Determine whether quality improvement efforts have made a statistically significant difference to a key quality indicator • Monitor a process output (such as cost or a quality characteristic) to determine whether special causes of variation have occurred in the process • Determine how capable the current process is of meeting specifications, if specification limits exist, and of allowing for improvements in the process Control charts have several benefits:
Chapter 9 Improvement Tools 175 • They help organizations identify and understand variation and how to control it • They help identify special causes of variation and changes in performance • They keep organizations from trying to fix a process that is varying randomly within control limits (that is, no special causes are present) • They assist in the diagnosis of process problems • They determine whether process improvements are having the desired effects A control chart may indicate an out-of-control condition either when one or more points fall beyond the control limits or when the plotted points exhibit some nonrandom pattern.
DECISION TREE (TREE DIAGRAM) A tree diagram is a graphic representation of the separation of broad, general information into increasing levels of detail. The tool ensures that action plans remain visibly linked to overall goals, that actions flow logically from identified goals, and that the true level of a project’s complexity w ill be fully understood. The goal to establish objectives for improving operations is diagrammed in Figure 9.9. Tree diagrams are used in the quality planning process. The diagram begins with a generalized goal (the tree top) and then identifies progressively finer levels of actions (the branches) needed to accomplish the goal. As part of process improvement, it can be used to help identify root c auses of trouble. The tool is especially useful in designing new products or services and in creating an implementation plan to remedy identified process problems. In order for the diagram to accurately reflect the project, it is essential that the team using it have a detailed understanding of the tasks required. The steps involved in generating a tree diagram are as follows: 1. Identify the goal statement or primary objective. This should be a clear, action-oriented statement to which the entire team agrees. Such statements may come from the root cause/driver identified in an interrelationship digraph or from the headings of an affinity diagram. Write this goal on the extreme left or top of the chart (the diagram may be drawn from left to right or top to bottom). 2. Subdivide the goal statement into major secondary categories. These branches should represent goals, activities, or events that directly lead to the primary objective or that are required to achieve the overall goal. The team should continually ask, What is required to meet this condition? What happens next? and What needs to be addressed? Write the secondary categories to the right of the goal statement. Using sticky notes at this stage makes it easier to make changes later. 3. Break each major heading into greater detail. As you move from left to right in the tree, the tasks and activities should become more and more
176 Part III Improvement Long Term
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Figure 9.9 Decision tree (tree diagram).
specific. Stop the breakdown of each level once there are assignable tasks. If the team reaches a point where it does not have enough knowledge to continue, identify the individuals who can supply the information and continue the breakdown l ater with those individuals present. 4. Review the diagram for logic and completeness. Make sure that each subheading and path has a direct cause-and-effect relationship with the one before. Examine the paths to ensure that no obvious steps have been left out. Also ensure that the completion of listed actions will indeed lead to the anticipated results.
ADDITIONAL QUALITY TOOLS here are several other improvement tools that are helpful when improving qualT ity and processes: • Bar chart • Design of experiments
Chapter 9 Improvement Tools 177 • Focus group • Force-field analysis • Gantt chart • Matrix diagram • Matrix analysis • Poka-yoke • Process decision program chart • Relations diagram (interrelationship digraph) • Resource allocation matrix • Run chart • Stratification
Bar Chart A bar chart is a graphic display of data in the form of a bar showing the number of units (for example, frequency) in each category. Different types of bar charts (for example, histograms and Pareto charts) are described in this chapter.
Design of Experiments Design of experiments (DOE) provides a structured way to characterize processes. A multifunctional team analyzes a process and identifies key characteristics, or factors, that have the most impact on the quality of the end product. Using DOE, the team runs a l imited number of tests, in which data are collected and analyzed. The results will indicate which factors contribute the most to final quality and w ill also define the parameter settings for those factors. Now, rather than tweaking or tampering with the system, managers have the profound knowledge of their pro cesses that allows them to build quality in, starting at the earliest stages of design. This allows management to determine that equitable requirement trade-offs are made between the design and manufacturing processes during development.
Focus Group The focus group is a customer-oriented approach for collecting information from a group of participants (10–12) who are strangers to each other. They meet to discuss and share ideas about a certain issue. Focus groups are a useful qualitative analysis tool for helping to understand the beliefs and perceptions of the population represented by the group. It is often used to obtain basic pros and cons, and suggestions before preparing questions for a planned survey. A focus group may also be used internally with a group of employees to sound out likes and dislikes of a new process, product, or service design before scheduling an implementation. Likewise, a focus group could be used with supplier representatives or stockholders to collect data and information concerning a proposed change or issue.
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Force-Field Analysis Force-field analysis (FFA) is a tool that uses a creative process for encouraging agreement about all facets of a desired change. It is used for clarifying and strengthening the “driving forces” for change (for example, what things are “driving” us toward school improvement?). It can also be used to identify obstacles, or “restraining forces,” to change (for example, what is “restraining” us from achieving increased test scores?). Finally, it can be used for encouraging agreement on the relative priority of f actors on each side of the “plus/minus” sheet. The basic steps involved in FFA are the following: 1. Discuss the current situation and the goal with a group (usually five to seven people) and come to agreement 2. Write this situation on a flip chart 3. Brainstorm the “driving” and “restraining” forces: driving forces are things (actions, skills, equipment, procedures, culture, people, and so forth) that help move toward the goal; restraining forces are things that can inhibit reaching the goal 4. Prioritize the driving and restraining forces 5. Discuss action strategies to eliminate the restraining forces and to capitalize on the driving forces To create an FFA diagram, start by drawing a large letter T on a piece of paper. Write the issue to be addressed at the top of the paper (see Figure 9.10). As a group, describe the ideal situation, and afterward write the resolution in the upper right- hand corner of the paper.
Issue: School improvement
+ Driving forces Parental interest Government involvement
Ideal state: An effective learning environment
Restraining forces –
Lack of time to help children with studies Budget cuts
Faculty commitment Large classes Increased test scores Pressure for results Student desire
Figure 9.10 FFA diagram.
Too many distractions
Chapter 9 Improvement Tools 179 Have a facilitator work with the group to brainstorm forces leading to or preventing the ideal situation. These forces may be internal or external. List positive forces on the left side of the T (+) and, on the right side, the forces restraining movement (–) t oward the ideal state. As in any planning activity, the team should identify potential obstacles that could affect the successful completion of a task. It should identify both positive and negative forces affecting the task. Once all positive and negative forces are listed, prioritize the forces that need to be strengthened or identify the restraining forces that need to be minimized to accomplish the goal—for instance, increased test scores. This provides a positive structure and removes the negative force of increased pressure on students to perform. The facilitator keeps discussion g oing among the participants u ntil consensus is reached on each impediment to increasing student test scores. Arrow lines are used to indicate the relative priority of restraining and driving forces. Users of FFA often vary the length and/or thickness of the horizontal arrow lines to indicate the relative strength of each of the forces. FFA encourages team members to raise questions and concerns throughout the process. These concerns and questions shouldn’t be considered obstacles to successful planning that need to be rejected but should instead be valued. The process of openly considering individual ideas encourages diversity in the planning process. FFA is a powerful tool that encourages communication at all levels of management. By creating a structured environment for problem solving, it minimizes feelings of defensiveness. There is a feeling of openness about problem solving because all members of the group are focused on the issue rather than personal agendas. FFA inhibits hierarchical or traditional power structures that are likely to restrict the flow of creative ideas.
Gantt Chart A Gantt chart is a type of bar chart used by project managers and others in planning and control to display planned work and targets as well as work that has been completed. A Gantt chart/action plan is a graphic representation of a proj ect’s schedule, showing the sequence of critical tasks in relation to time. For a small project, the chart indicates which tasks can be performed simultaneously. A Gantt chart can be used for an entire project or for a key phase of a project. It allows a team to avoid unrealistic timetables and schedule expectations, to identify and shorten tasks that act as bottlenecks, and to focus attention on the most critical tasks. By adding milestones (interim checkpoints) and completion indicators, the Gantt chart becomes a tool for ongoing monitoring of progress. Gantt charts are most useful for planning and tracking entire projects or for scheduling and tracking the implementation phase of a planning or improvement effort. A Gantt chart is used to: • Identify critical tasks or project components • Identify the sequence of tasks that must be completed • Identify any tasks that can be started simultaneously with another task • Identify task durations • Monitor progress
180 Part III Improvement • Provide a concise view of the status of a project, especially in presenting to top management or others who may not be familiar with the project Readers should refer to a project management text for further information. Most commercially available project management software will generate a Gantt chart/ action plan, similar to the example shown in Figure 9.11. 18-month ISO 9001 quality management system implementation project Weeks 1–13
Task
Weeks 14–26 Weeks 27–39 Weeks 40–52 Weeks 53–65 Weeks 66–78
Select consultant Conduct briefing Gap analysis Form steering comm. Q. system procedures Q. policy, objectives Work instructions Employee kickoff Evaluate registrars Train internal auditors Implement QSPs Select registrar Conduct internal audits Q. system manual Audit prep meeting Preassessment Corrective actions Final assessment Pass and celebrate
Figure 9.11 Gantt chart.
Matrix Diagram The matrix diagram method clarifies problematic spots through multidimensional thinking. This method identifies corresponding elements involved in a problem situation or event. T hese elements are arranged in rows and columns on a chart that shows the presence or absence of relationships among collected pairs of elements. Matrix diagrams can be used to: • Establish ideas and concepts for the development and improvement of system products • Achieve quality deployment in product materials • Establish and strengthen the quality assurance system by linking certified levels of quality with various control functions • Reinforce and improve the efficiency of the quality evaluation system • Pursue the causes of nonconformities in the manufacturing process • Establish strategies for the mix of products to send to market by evaluating the relationships between the products and market conditions • Plan the allocation of resources
Chapter 9 Improvement Tools 181
Matrix Analysis The matrix analysis method quantifies and arranges matrix diagram data so that the information is easy to visualize and comprehend. The relationships between the elements shown in a matrix diagram are quantified by obtaining numerical data for intersecting cells. The matrix data analysis method can be used to: • Analyze production processes in which factors are complexly intertwined • Analyze causes of nonconformities that involve a large volume of data • Grasp the desired quality level indicated by the results of a market survey • Classify sensory characteristics systematically • Accomplish complex quality evaluations • Analyze curvilinear data
Poka-Yoke The term poka-yoke is a hybrid word created by Japanese manufacturing engineer Shigeo Shingo. It comes from the words yokeru (to avoid) and poka (inadvertent error). Hence, the combination word means avoiding inadvertent errors. The term can be further anglicized as mistake-proofing, or making it impossible to do a task incorrectly. It involves creating processes that prevent the making of m istakes. As an example, if a part must fit into an assembly in only one orientation, the part is designed so that it is physically impossible to place the part in any other orientation.
Process Decision Program Chart The process decision program chart (PDPC) method helps determine which processes to use to obtain the desired results by evaluating the progress of events and the variety of conceivable outcomes. Implementation plans do not always progress as anticipated. When problems, technical or otherwise, arise, solutions are often not apparent. The PDPC method, in response to these kinds of problems, anticipates possible outcomes and prepares countermeasures that will lead to the best possi ble solutions. Figure 9.12 charts the decisions needed to establish a cardiac treatment unit in a small, underfunded hospital. The PDPC method can be used to: • Establish an implementation plan for management by objectives • Establish an implementation plan for technology-development themes • Establish a policy of forecasting and responding in advance to major events predicted in the system • Implement countermeasures to minimize nonconformities in the manufacturing process • Set up and select measures for process improvements
182 Part III Improvement
Space available? Facility
Space not available?
Build addition? Displace a unit?
Funding? Discontinue? Consolidate?
Establish new cardiac treatment unit
Purchase new? Equipment
Staff
Acquire equipment?
Purchase reconditioned?
Staff not available?
Hire?
Staff available?
Reassign?
Funding?
Funding?
Funding?
Training?
Figure 9.12 PDPC.
The PDPC diagram is a simple graphic tool that can be used to mitigate risk in virtually any undertaking.
Relations Diagram (Interrelationship Digraph) The relations diagramming method is a technique developed to clarify intertwined causal relationships in a complex situation in order to find an appropriate solution. Relations diagrams can be used to: • Determine and develop quality assurance policies • Establish promotional plans for total quality control introduction • Design steps to counter market complaints • Improve quality in the manufacturing process (especially in planning to eliminate latent defects) • Promote quality control in purchased or ordered items • Provide measures against troubles related to payment and process control • Promote small group activities effectively • Reform administrative and business departments The digraph in Figure 9.13 shows some of the interrelating factors pertaining to ongoing and proposed projects.
Chapter 9 Improvement Tools 183
Facility expansion
Library upgrade proposal
Teacher search
High-speed internet access
Curriculum assessment
Add to music program Cap on school budget
Figure 9.13 Interrelationship digraph.
Resource Allocation Matrix A matrix chart is useful in planning the allocation of resources (such as personnel, equipment, facilities, and funds). It is frequently used in planning larger proj ects. The matrix enables planners to see where potential conflicts may arise in utilizing resources for a project that are already committed to ongoing operations. Figure 9.14 shows a matrix for allocation of five types of personnel required for a project.
Run Chart A run chart is a line graph that shows data points plotted in the order in which they occur. This type of chart is used to reveal trends and shifts in a process over time, to show variation within a time period, or to identify decline or improvement in a process. It can be used to examine variables or attribute data. The data must be collected in chronological or sequential order starting from any point. For best results, 25 or more samples must be taken to get an accurate run chart. The chart in Figure 9.15 plots the average rod diameter of each of 10 lots of rods. A lot is one day’s total run. Run charts can help an organization to: • Recognize patterns of performance in a process • Document changes over time A run chart shows the history and patterns of the data. Plot a point for each time a measurement is taken of variation. It is helpful to indicate on the chart whether up is good or down is good.
Data entry operator
Task Build test data file
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Run desk check of data Modify test data
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.5
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.5
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.5
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Figure 9.14 Resource allocation matrix.
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.75
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.75
152.75
184 Part III Improvement
Project Delta Team—personnel requirements—October through May (Days)
Chapter 9 Improvement Tools 185 Run charts can be used to: • Summarize occurrences of a particular situation • Display measurement results over time • Identify trends, fluctuations, or unusual events • Determine common cause versus special cause variation The basic steps involved in constructing a run chart are as follows: 1. Construct a horizontal (x) axis line and a vertical (y) axis line. The horizontal axis represents time, and the vertical axis represents the values of measurement or the frequency at which an event occurs. 2. Collect data for an appropriate number of time periods, in accordance with your data collection strategy. 3. Plot a point for each time a measurement is taken. 4. Connect the points with a line. 5. Identify questions that the data should answer about the process. Rec ord any questions or observations that can be made as a result of the data. 6. Compute the average for subsequent blocks of time, or after a significant change has occurred. Keeping in mind the process, interpret the chart. Possible signals that the process has significantly changed are the following:
Diameter run chart
0.753
Measured value
0.752 Avg. = 0.75075
0.751 0.75 0.749 0.748 0.747
1
2
Figure 9.15 Run Chart.
3
4
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6
Lot number
7
8
9
10
186 Part III Improvement • Six points in a row that steadily increase or decrease • Nine points in a row that are on the same side of the average • Other patterns such as significant shifts in levels, cyclical patterns, and bunching of data points Run charts provide information that helps to: • Identify trends in which more points are above or below the average. An equal number of points should be above and below the average. When a larger number of points lie either above or below the average, this indicates that there has been an unusual event and that the average has changed. Such changes should be investigated. • Identify trends in which several points steadily increase or decrease with no reversals. Neither pattern would be expected to happen on the basis of random chance. This would likely indicate an important change and the need to investigate. • Identify common and special cause variation within a process.
Stratification A technique called stratification is often very useful in analyzing data in order to find improvement opportunities. Stratification helps analyze cases in which data mask the real facts. This often happens when the recorded data are from many sources but are treated as one number. The basic idea in stratification is that data that are examined may be obtained from sources with different statistical characteristics. For example, consider that two different machines, such as a cutting machine and a polishing machine, may influence the measurement of the width of a particular part in a manufacturing assembly. Each machine will contribute to variations in the width of the final product, but with potentially different statistical variations. Data on complaints may be recorded as a single figure (either rising or falling). However, that number is actually the sum total of complaints (including those, for example, about office staff, field nurses, and home health aides). Stratification breaks down single numbers into meaningful categories or classifications in order to focus corrective action.
SUMMARY OF QUALITY IMPROVEMENT TOOLS AND TECHNIQUES The quality improvement tools and techniques described in this chapter provide a simple yet powerful set of methodologies for collecting, analyzing, and visualizing information from different perspectives. The problem is the lack of use of the methodologies by organizations. An organization cannot solve its problems without understanding the way these methodologies operate and how they can assist the organization in understanding and improving its processes. Many of the tools and techniques mentioned in this chapter are discussed in greater depth in the reference materials cited in Appendix D.
Chapter 9 Improvement Tools 187
NOTES 1. Some information in this section is adapted from the U.S. Navy Handbook for Basic Process Improvement and the U.S. Air Force Quality Institute Process Improvement Guide, 2nd ed. (1994). 2. More recently, the seven basic tools are cause-and-effect diagram, check sheet, control chart, flowchart, histogram, Pareto chart, and scatter diagram. 3. Additional information on quality tools may be gained from Grace L. Duffy, ed., The ASQ Quality Improvement Pocket Guide (Milwaukee, WI: Quality Press, 2013). 4. See, for example, ASQ Statistics Division, Improving Performance through Statistical Thinking (Milwaukee, WI: Quality Press, 2000).
ADDITIONAL RESOURCES Bauer, J. E., G. L. Duffy, and J. W. Moran. “Solve Problems with Open Communication.” Quality Progress, July 2001, 160. Beecroft, G. Dennis, Grace L. Duffy, and John W. Moran, eds. The Executive Guide to Improve ment and Change. Milwaukee, WI: Quality Press, 2003. Brassard, M., and D. Ritter. The Memory Jogger 2: Tools for Continuous Improvement and Effec tive Planning. 2nd ed. Salem, NH: GOAL/QPC, 2010. Duffy, Grace L., ed. The ASQ Quality Improvement Pocket Guide. Milwaukee, WI: Quality Press, 2013. Duffy, Grace L., John W. Moran, and William Riley. Quality Function Deployment and Lean- Six Sigma Applications in Public Health. Milwaukee, WI: Quality Press, 2010. Wood, Douglas C., ed. Principles of Quality Costs. 4th ed. Milwaukee, WI: Quality Press, 2013.
Chapter 10 Root Cause Analysis
Utilize root cause tools such as the 5 whys and fish bone diagram to implement correction and correc tive action. (Apply) CQIA BoK 2020 III.D
Root cause analysis is used to identify the root c auses and f actors that affect a pro cess or cause a problem. There are two main tools that are used to drill into a pro cess to understand the f actors and root c auses: the cause-and-effect diagram and the why-why diagram, or five whys.
CAUSE-AND-E FFECT DIAGRAM (FISHBONE DIAGRAM) The cause-and-effect diagram graphically illustrates the relationship between a given outcome and the factors that influence the outcome. It is sometimes called the Ishikawa diagram (after its creator, Kaoru Ishikawa) or the fishbone diagram (because of its shape). This type of diagram displays the factors that are thought to affect a particular output or outcome in a system. The f actors are often shown as groupings of related subfactors that act in concert to form the overall effect of the group. The diagram helps show the relationship of the parts (and subparts) to the w hole by: • Determining the factors that cause a positive or negative outcome (or effect) • Focusing on a specific issue without resorting to complaints and irrelevant discussion • Determining the root causes of a given effect • Identifying areas where there is a lack of data Although both individuals and teams can use the cause-and-effect diagram, it is probably most effectively used with a group of p eople. A typical approach is one in which the team leader draws the fishbone diagram on a whiteboard, states the main problem, and asks for assistance from the group to determine the main c auses, 188
Chapter 10 Root Cause Analysis 189 which are subsequently drawn on the board as the “main bones.” The team assists by making suggestions, and eventually the entire cause-and-effect diagram is filled out. Then the team discusses which are the most likely root c auses of the problem. Figure 10.1 shows the completed diagram resulting from a team’s cause-and-effect analysis for long patient length of stay in a hospital’s emergency department. The cause-and-effect diagram is used for identifying potential causes of a problem or issue in an orderly way. It can help answer questions such as, Why has membership in the organization decreased? Why i sn’t mail being answered on time? and Why is the shipping process suddenly producing so many defects? It is also used for summarizing major causes into categories. The basic steps involved in creating a cause-and-effect diagram are as follows: 1. Draw a long horizontal line with a box at the far right end of the line. 2. Indicate on the right what effect, output, or improvement goal is to be addressed. The effect can be positive (an objective) or negative (a prob lem). When possible, choose a positive effect instead of a negative one. Focusing on problems can produce finger-pointing, whereas focusing on desired outcomes fosters pride and ownership over productive areas. The resulting positive atmosphere w ill enhance the group’s creativity. 3. Draw four diagonal lines emanating from the horizontal line.
Figure 10.1 Cause-and-effect diagram for emergency department improvement. Source: Created by Sandra L. Furterer.
190 Part III Improvement 4. Label the diagonal lines to show four categories of potential major causes: Men/Women, Machines, Methods, and Materials (or, alternatively, Policies, Procedures, People, and Plant). Other categories may be used if desired. Figure 10.1 shows the expanded version of six diagonal lines with the addition of Measurement and Environment. 5. On each of the diagonal lines, draw smaller horizontal lines (“bones”) to represent subcategories and indicate on these lines information that is thought to be related to the cause. Draw as many lines as are needed, making sure that the information is legible. Encourage idea generating to identify the factors and subfactors within each major category. 6. Use the diagram as a discussion tool to better understand how to proceed with process improvement efforts. The diagram can also be used to communicate the many potential c auses of quality that impact the effect/output/improvement goal. Look for factors that appear repeatedly and list them. Also, list those factors that have a significant effect, based on the data available. Keep in mind that the location of a cause in your diagram is not an indicator of its importance. A subfactor may be the root cause of all the problems. It may be appropriate to collect more data on a factor that has not been previously identified. Cause-and-effect diagrams can be used at varying levels of specificity and can be applied at a number of different times in process improvement efforts. They are very effective in summarizing and describing a process and the factors impacting the output of that process. Use this tool when it fits with a particular process improvement effort. It is possible to have a number of cause-and-effect diagrams depicting various aspects of the team’s process improvement efforts related to the critical-to-quality or critical-to-satisfaction characteristics.
FIVE WHYS Five whys is a s imple technique for getting at the root cause of a problem by asking why after each successive response, up to five times. Asking why is a favorite technique of the Japanese for discovering the root cause (or causes) of a problem. By asking the question Why? a number of times (five is only a suggested number), layer a fter layer of “symptoms” is peeled away to get to the heart of an issue. T here is no real way to know exactly how many times the why question will be needed. The five whys technique helps to: • Identify the root cause(s) of a problem • Show how the different causes of a problem might be related The basic steps involved in using the five whys technique are as follows: 1. Describe the problem in very specific terms. 2. Ask why it happens. 3. If the answer doesn’t identify a root cause, ask why again. 4. Continue asking why until the root causes are identified. This may take more or fewer than five whys. You’ll know you’ve identified the root
Chapter 10 Root Cause Analysis 191 cause when asking why doesn’t yield any more useful information. Always focus on the process aspects of a problem rather than the personalities involved. Finding scapegoats does not solve problems! Multiple root causes may contribute to multiple symptoms. Figure 10.2 is an example of the use of the five whys technique. This diagram was generated during a Lean-Six Sigma process improvement effort in an emergency department within an acute care hospital. The question that initiated the why-why diagram
50% of patients arrive between 10 and 2 pm
Why is triage time long?
Why?
Need to escort patient to ED room
Only 1 triage nurse, even when volumes increase
Why/
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Too busy, and forget
Different charge nurse practices in assigning patients to empty beds
Not a priority Bedside triage (or no triage) protocols are not followed consistently
Medication reconciliation takes time
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Patients don’t log medications, or remember them
May have closed ED beds due to lack of staff
Why?
Staffing not based on potential ER admits from actual ED patient volume trends
Why?
No one “owns” patients in waiting room
Why?
No clinical visibility of patients in waiting room
Figure 10.2 Why-why diagram for emergency department improvement. Source: Created by Sandra L. Furterer.
Why?
No one assigned
192 Part III Improvement was, Why is triage time so long? This question was asked as a drill-down of the fishbone diagram in Figure 10.1 addressing the long length of stay in the emergency department. Notice in Figure 10.2 that not every branch goes to five whys.
SUMMARY OF ROOT CAUSE ANALYSIS As we demonstrated in the root cause analysis section, both a cause-and-effect diagram and a why-why diagram can effectively identify the root causes of pro cess problems.
ADDITIONAL RESOURCES Bauer, J. E., G. L. Duffy, and J. W. Moran. “Solve Problems with Open Communication.” Quality Progress, July 2001, 160. Beecroft, G. Dennis, Grace L. Duffy, and John W. Moran, eds. The Executive Guide to Improve ment and Change. Milwaukee, WI: Quality Press, 2003. Brassard, M., and D. Ritter. The Memory Jogger 2: Tools for Continuous Improvement and Effec tive Planning. 2nd ed. Salem, NH: GOAL/QPC, 2010. Duffy, Grace L., ed. The ASQ Quality Improvement Pocket Guide. Milwaukee, WI: Quality Press, 2013. Duffy, Grace L., John W. Moran, and William Riley. Quality Function Deployment and Lean- Six Sigma Applications in Public Health. Milwaukee, WI: Quality Press, 2010. Wood, Douglas C., ed. Principles of Quality Costs. 4th ed. Milwaukee, WI: Quality Press, 2013.
Chapter 11 Risk Management
Understand the tools and techniques used to identify and communicate risks, including failure modes and effects analy sis (FMEA) and strengths, weaknesses, opportunities, threats (SWOT). Understand prioritiza tion of activities and projects based on risk. (Understand) CQIA BoK 2020 III.E
IDENTIFY AND COMMUNICATE RISK Managing risk and making everyone aware of risk management are essential for an organization. Risk management goes beyond just preventing lawsuits. Risk assessment or management has been defined as follows: 1. The identification of events that could occur that would adversely affect the entity’s ability to achieve its objective 2. The process of determining what present or potential risks are possible in a situation and what action might be taken to eliminate or mitigate them 3. Risk assessments summarize activities including h azard identification, rating the hazard, and hazard control1 Webster’s New Collegiate Dictionary defines risk as the possibility of loss or injury— peril, a dangerous element or factor.2 Denise Robitaille, ASQ Fellow and recognized leader in ISO standards auditing describes risk management and the current thinking about risk as follows: “Risk-based thinking moves us away from the mindset that we need to prevent everything. We can’t—and we’ll go broke trying. Hence, top management's aversion to the concept. Risk-based thinking means we acknowledge risk and then, using the tools . . . (available) . . . , come up with schemes for determining appropriate actions. Among the many choices, there are: 1. Risks engendering negligible serious consequence and requiring no action 193
194 Part III Improvement 2. Risks that can never be eliminated 100%, but we can take action to mitigate either their frequency or the consequences when they do occur and 3. Things having such a high level of criticality that we must bring our best to make sure it never happens. And then there are all the shades of grey between. And, also, the inevitably of change.”3
TYPES OF RISKS Most everyone realizes that risk is present in our personal lives as well as in the organizations in which we work.4 Organizations face the following risks: • Events ranging from those causing minor disruption to those causing catastrophic disruption to the organization regardless of its location, financial stability, and so on • Events that can affect each organization differently; a minor disruption for one organization can be a major disaster for another A risk that becomes a negative event can seriously disrupt an organization’s processes and make it unable to meet customers’ requirements. Identifying and planning for potential risks is critical in the pursuit of customer satisfaction, orga nizational stability, and profitability, especially u nder adverse conditions such as market competition or economic recession. Table 11.1 lists examples of risks that could affect an organization. This is not an exhaustive list. The proactive organization, regardless of size, assesses the potential risks to which it is exposed and establishes feasible means to prevent or lessen their impacts. Most often, quality professionals are called on to identify and manage operational risks rather than enterprise-level risks.
THE DEFINITION OF RISK Among quality professionals, there are two related definitions of risk. ISO 9000:2015 Quality Management Systems—Fundamentals and Vocabulary defines risk as the “effect of uncertainty.”5 ISO 31000:2018 Risk Management—Principles and Guidelines defines risk similarly as the “effect of uncertainty on objectives.”6 The element of uncertainty is central to the w hole concept of risk and risk management. Risks are events or circumstances that may or may not occur. Uncertainty can result in both negative and positive outcomes. A positive risk outcome would be winning the lottery. The outcome is uncertain and would have a positive effect on your life. For the purposes of this treatment, though, and the practical application by quality professionals, we will consider only the negative consequences of risk. That is, risks yield negative results on your objectives. Since risks may or may not occur, analysis is required to determine which risks need mitigation and which can be accepted to manifest themselves naturally. The decision to accept a risk or to take mitigation actions involves two factors: the impact or severity of the event w ere it to occur, and the probability of the occurrence of the event. Intuitively, this makes sense: an event that will have very little
Chapter 11 Risk Management 195
Table 11.1 Types and forms of risks that could affect an organization. Enterprise-level risks
• Product safety risks, injury to users
• Legal action
• Poor quality, reliability
• Noncompliance with regulatory requirements
• Product/service obsolescence
• Environmental violations, such as oil spills
• High rates of returns
• Financial investments
• High warrantee claims
• Economic shift in organization’s market
Operational process risks
• Trade sanctions against foreign countries
• Order fulfillment errors
• New competitors
• Supplier errors
• Customer nonpayments
• Nondelivery of supplier products/services
• Civil unrest, terrorist attacks, political factors
• Poor planning
• Cyber attacks, computer hacking
• Lack of skilled employees
• Unexpected death or departure of key leaders
• Noncompliance with operational procedures
• Unauthorized release of corporate information
• Raw material defects
• Unsolicited takeover attempts
• Errors and omissions
• Events that may affect corporate image
• Vandalism
• Information systems changes, technology, and security • Accidents, employee injuries Product/service risks
• Inadequate operational controls
• Product/service is not suitable for intended market
• Inattention to warning signals from controls
• Product/service does not meet regulatory requirements
impact on you and is likely to never happen does not deserve a high priority. On the other hand, a highly impactful negative event that is almost certain to occur deserves a high level of consideration and the implementation of actions to either avoid the event or minimize its impact.
ISO 31000 AND THE RISK MANAGEMENT PROCESS It is important to consider those events that may occur and think of them in terms of how bad they would be if they happened (impact) and how likely they are to occur (likelihood). The impact of events may be very well understood, but determining likelihood is probabilistic and could involve statistical models. According to ISO 31000, “All activities of an organization involve risk. Organ izations manage risk by identifying it, analyzing it and then evaluating whether
196 Part III Improvement the risk should be modified by risk treatment in order to satisfy their risk criteria. Throughout this process, they communicate and consult with stakeholders and monitor and review the risk and the controls that are modifying the risk in order to ensure that no further risk treatment is required.” ISO 31000 is a standard to govern risk management, which it defines as “coordinated activities to direct and control an organization with regards to risk.”7 When undertaking risk management, the first step is to understand and consider the context of the organization. That context includes the following: • The business(es) of the organization • The nature of products/services provided • The market climate, including domestic regulations and politics • Social attitudes and norms of your society and foreign markets • Demographic makeup of the workforce • Ownership structure (e.g., a small family business or multinational corporation) • Company culture • Relationships with suppliers and partners • The level of technology and speed of change in your marketplace Managing risk within the proper context is the most important consideration for deciding an appropriate course of action. The risk of g oing to work tired is much different for someone working in a coffee shop than for an airline pilot or a heart surgeon.
IDENTIFICATION WITHIN OPERATIONAL PROCESSES ISO 9001:2015 introduces the concept of risk-based thinking.8 Risk-based thinking does not require the discipline or rigor of risk management as described in ISO 31000 but rather provides an approach to considering risks as the basis for the implementation of appropriate levels of management control. Risk-based thinking is considered a preventive tool and, as such, requires that one think about risks during the design of business processes within a quality management system. Risk-based thinking is anticipatory: think about those things that could go wrong, how bad they would be, and how likely they are to happen. Thinking of these things ahead of time and then deciding on the appropriate level of control that needs to be put in place to deal with these risk events if they occur is suggested. These controls are imposed proactively, before a problem occurs. Note that the appropriate level of control may be zero—many risks are of such low importance that no controls need to be imposed and we w ill simply live with the risks and deal with their consequences if they occur.9 When a business process is designed, the design team must consider the risks characteristic in that process and w hether controls are required to be built into the process. When considering risk, the team is always interpreting adverse events and outcomes through the lens of the context of the organization. Risks are
Chapter 11 Risk Management 197 weighed according to two factors: how bad would it be if it happened (impact/ severity/criticality/consequences) and how likely it is to happen (likelihood/ probability). Many risk-assessment techniques, such as failure modes and effects analysis (FMEA), use numerical rankings to quantify the level of severity and probability in order to create a prioritized listing for control and mitigation. The first step is to generate a comprehensive list of risks for the process being assessed. The list can be derived from historical data such as incident reports, customer complaints, and past corrective actions or can be brainstormed by a team of people who are highly familiar with the process. For example, there are certain characteristics in the process of hiring new employees:10 • The requirements for the job may be poorly defined • The method of outreach and recruitment may not find the best candidates • The job market may be highly competitive, and candidates cannot be found • Candidates may not be truthful on their résumé • Candidates may not be truthful during their interview • HR may not be able to competently interview candidates for highly specialized positions • Candidates may not be a good “fit” for the organization • New hires may leave for a better job soon after hire The next step is to determine the impact and likelihood of each risk. For example, how bad would it be if a candidate misrepresented himself or herself on his or her résumé, and how likely is that to happen? How bad would it be if a new hire left a fter a short time to take another job, and how likely is that to happen? The final step is to assess the level of risk and the need for control or mitigation. If there is a risk that new hires will leave for another job, and that would be damaging to the organization, it might be necessary to pay above-average salaries and provide work schedule flexibility and a variety of attractive fringe benefits. ISO 9001 requires that risks be identified and managed for each business pro cess within an organization’s quality management system. The above risk assessment should be done for each process.11 From the point of view of PDCA, one would plan the risk assessment process, then do the assessment for each process and implement the selected risk management controls, check on the effectiveness of risk mitigation strategies by reviewing operational data, and finally act on t hose lessons learned to continuously improve the appropriateness and effectiveness of risk management controls. Internal audits of a quality management system should also be employed to assess the effectiveness of risk-based thinking. Since risks should be used as the basis for designing process controls, an auditor should also review the appropriateness of process controls through the lens of risk, in order to assess the effectiveness of the processes and management systems u nder audit.12
198 Part III Improvement
EXAMPLES OF SELECTED RISK ASSESSMENT TECHNIQUES ISO 31000 has a companion document, ISO 31010 Risk Assessment Techniques,13 which includes 31 risk assessment techniques. Following is a brief description of seven selected techniques. Brainstorming—Brainstorming is a very simple and effective technique for leveraging the knowledge and experience of a group of people who are familiar with a product or process. In a brainstorming session, a facilitator guides a group discussion around a particular topic. Participants are encouraged to think creatively in order to uncover ideas that likely would not have been considered before. The facilitator guides the discussion, keeps t hings on track, and uses techniques to solicit responses from everyone in the group. One way to do this is to proceed around the room in a clockwise fashion and get responses from every single individual. This prevents the problem of participants talking over each other and reduces the risk that good ideas from shy people w ill be overlooked. Brainstorming can be used to identify risks and then be combined with other risk analysis tools to complete the assessment. For example, a list of risks can then be brought into an FMEA for a more in-depth treatment of how severe the consequence would be, how likely it is to happen, the suitability of current management controls, and the need for further process controls. Hazard Analysis and Critical Control Points (HACCP)—Those who work in the food industry will already be familiar with HACCP. This technique can also be applied to risk-based thinking in the context of the wider quality management system. An HACCP study identifies those factors and issues that can impact product quality and determines what process parameters at what points in the process influence those f actors, in order to put monitoring and control in place to prevent adverse events. Similar to the risk assessment techniques described in this chapter, HACCP begins with a flowchart of the process and identifies h azards or risks to the process at each step along the way. In the automotive industry, a control plan is very similar to an HACCP plan. The HACCP analysis determines risks, understands at what point(s) in the process they can be controlled, establishes process parameters and limits for t hose process variables, and then monitors and controls t hose parameters. Furthermore, the HACCP analysis defines reaction plans to be taken when parameters fall outside of their prescribed limits, and initiates product containment and corrective actions when required. An HACCP plan follows each step of the process and defines which hazards or risks could be introduced or need to be controlled at that step. The plan quantifies the level of the hazard or risk and specifies process controls if applicable. The plan also includes the reaction plan for an out-of-control condition, which describes what steps are taken and by whom, based on the nature of the abnormality. Since HACCP is used in the food industry, there are often very rigorous record-keeping requirements associated with ongoing measurement, monitoring, and reaction to out-of-control conditions. Structured What-If Technique (SWIFT)—This technique is similar to brainstorming, where a learned group of individuals work together u nder the guidance of a facilitator. SWIFT uses a set of prompt words to solicit responses to a variety of what-if scenarios. The purpose of this technique is to determine all the ways that a system could fail, along with their associated outcomes.
Chapter 11 Risk Management 199 The process must be mature, or at least well defined, for SWIFT to be effective. The facilitator becomes familiar with the system under study, in order to create an appropriate set of prompt words. Once the preparatory work has been done, the team convenes to perform the analysis. As in brainstorming, it is essential that participants in the group have a high level of knowledge and experience with the process under review. Often, the group includes members of upstream (supplier) processes and downstream (customer) processes, in order to fully investigate the impacts of a failure upstream and downstream of the process. Once the list of prompt words is created (these could follow the Ishikawa diagram’s major categories, see p. 189), the facilitator asks a series of questions: • What if our machine breaks down for two hours? • What if we run out of raw materials? • What if the surgical nurse is absent for his shift? • What if our restaurant customer isn’t happy with her meal? • What if our bank customer slips and falls on a wet floor in the lobby? The answers to these questions are summarized, and then the team considers what controls are in place or need to be put in place to respond to these events or reduce the risk of occurrence. Often, these lists are scored quantitatively according to severity and likelihood, in order to prioritize actions. The resultant plan can be a risk register with a listing of action items for risk reduction. Scenario Analysis—Since ISO 9001 wants organizations to examine the context of their organization, and risks and opportunities associated with achieving their strategic direction, scenario analysis can be a useful tool for assisting with this level of thinking. This technique considers a set of scenarios about the future and what risks and opportunities those future states could hold. Best-case and worst- case scenarios could be contrived, and then impacts of those scenarios would be explored. Typical applications for scenario analysis include emerging customer preferences, emerging technologies such as the internet of things, demographics such as aging, and political movements. The organization could add “disruptive” scenarios to its list of future scenarios. This deliberate consideration of disruption is very compatible with risk-based thinking. People within the organization (or consultants) with a knowledge of emerging trends can develop these scenarios and then work with senior leadership to assess what risks and opportunities might arise. After this step, the leadership team can determine what changes to strategic direction, processes, and controls might be appropriate to take advantage of those opportunities and mitigate those risks. Because the analysis is of a future state, the organization should have enough time to react to these anticipated issues and put proactive measures in place to deal with them. The planning horizon w ill be different for each organization, but three to five years is common. Organizations should consider potential changes in the regulatory environment, changing stakeholder needs, technological and social factors, etc. It is even appropriate to assess the variety of outcomes that could occur based on a very recent strategic decision. After this exercise, the organization should have a set of risks and opportunities (perhaps from a SWOT diagram) that can then
200 Part III Improvement be used as the basis for an action plan to capitalize on opportunities and mitigate risks. Naturally, there are pros and cons to this approach: Cause-and-Effect (Fishbone) Analysis—No list of risk assessment tools would be complete without reference to one of the “seven tools of quality,” the cause- and- effect diagram. This diagram is also called the fishbone diagram or the Ishikawa diagram, after its creator. Although the cause-and-effect diagram is a common root cause analysis tool, it can also be used proactively to anticipate risks and decide on appropriate actions to mitigate risk. The cause-and-effects analysis tool is used in conjunction with brainstorming. When a group conducts a brainstorming session, the possible causal f actors can be sorted by an affinity diagram into broad categories to assist analysis. Each group can create its own categories, but typical ones include Man (people), Machine, Method, Materials, and Measurement (5Ms). If one w ere examining the potential causes of losing a baseball game, for example, the categories might include Hitting, Pitching, Injured/Absent Players, and Opposing Team. The issues brought forth by the group are shown on a large display so that relationships and the relative number of potential risks in each category are apparent. After the brainstorming is complete, and the picture of the risks has been established, the group can review which risks are most likely to cause an adverse event and determine what countermeasures should be put in place to mitigate those risks. The cause-and-effect analysis is qualitative. B ecause the identified risks are usually contributory and not singular c auses of a failure, it is not appropriate to try to assign a probability around each cause. It is up to the group to decide the importance of each and the magnitude of risk and put a few appropriate actions in place to mitigate the most important risks. Naturally, there are pros and cons to this approach. Human Reliability Assessment (HRA)—This technique, associated with the impact of people on processes and systems, can be especially useful in service industries, where customer satisfaction is often very dependent on individuals and their behaviors. It is well understood that many processes can fail because of h uman error, especially when people become distracted or must complete tasks very quickly. Human error has been shown many times to be the cause of, or a significant contributor to, such disasters as industrial accidents or airplane crashes. Despite our best efforts to mitigate risks in mechanical and electrical systems, accidents still happen from time to time as a result of human error. The Japanese have been working to identify and prevent human error for many years. Poka-yoke is the Japanese term for error-proofing systems to make them more robust to human error. In fact, ISO 9001:2015 at clause 8.5.1(g) requires that (as applicable) actions be implemented to prevent h uman error. Needless to say, the identification of h uman factors that contribute to errors can be a very significant part of any risk-based-thinking approach. This approach begins with descriptions of the tasks within a process that people w ill perform, followed by an assessment by those with experience and expertise as to what can go wrong and how serious that error would be. After the review of how a person can make a mistake, two things happen. The process designers create a way of detecting the failure and recovering from it, and they look at ways of implementing controls to reduce the likelihood of the person’s
Chapter 11 Risk Management 201 istake. These human errors and their mitigation can then become part of other m risk assessment tools such as an FMEA or an HACCP plan. Naturally, there are pros and cons to this approach. Bow Tie Analysis—This technique is another graphical way to assess risk. The bow tie diagram maps the pathways from the cause of a failure event through to its consequences. One of the benefits of this tool is that it considers the barriers (actual and proposed) that exist between the c auses of a failure and the failure event, and the barriers between the failure event and its consequences. A bow tie can be created a fter fault trees or event trees have been developed, or it can result from a brainstorming session with process experts. The bow tie diagram (Figure 11.1) depicts a single failure event with its plurality of causes and consequences. The diagram also emphasizes identifying barriers (mitigating controls) along each pathway to block the cause(s) from triggering the event, or to block the failure event from resulting in serious consequences. Two major tools referenced in the above descriptions are FMEA and SWOT analysis. These tools are described in relation to risk management below.
Sources of risk
Escalation controls Consequence 1 Cause 1 Escalation factor
Consequence 1
Event
Cause 2
Consequence 1
Cause 3
Consequence 1
Prevention controls
Mitigation and recovery controls
Figure 11.1 Bow tie analysis. Source: ISO 31000:2009, Risk Management—Principles and Guidelines (Geneva: International Organization for Standardization (ISO), 2015).
FAILURE MODES AND EFFECTS ANALYSIS FMEA has been in use for many years. FMEA is a systematic tool used for analyzing systems, designs, or processes to identify potential failure and its c auses. Its aim is to identify and reduce risk of failure by focusing actions on areas of greatest risk. There are two types in general use: design FMEA (DFMEA) for analyzing potential design failures, and process FMEA (PFMEA) for analyzing potential process failures.
202 Part III Improvement FMEA is for potential failures and is less useful for current problems. Should a situation be occurring, the root case analysis tool is preferred. For example, a small organization engaged in bidding on military contracts for high-tech devices successfully used a DFMEA to identify and assess risks for a product never made before. The DFMEA aided in evaluating design inputs, ensured that potential failure modes w ere identified and addressed, provided for the identification of the failure modes’ root cause(s), determined the actions necessary to eliminate or reduce the potential failure mode, and added a high degree of objectivity to the design review process. The DFMEA also directed attention to design features that required additional testing or development, documented risk reduction efforts, provided lessons-learned documentation to aid future FMEAs, and ensured that the design was performed with a customer focus. The basic FMEA methodology is as follows: 1. Define the device design inputs or process functions and requirements. 2. Identify a failure mode (what could go wrong) and the potential effects of the failure. 3. Rank the severity of the effects using a 1–10 scale, where 1 is minor and 10 is major (and without warning). 4. Establish what the root cause(s) could be. 5. Rate the likelihood of occurrence for the failure using a 1–10 scale. 6. Document the present design or present process controls regarding prevention and detection. 7. Rate the likelihood of t hese controls detecting the failure using a 1–10 scale. 8. Compute the risk priority number (RPN = Severity × Occurrence × Detection). Using the RPN, rank-order items, the worst at the top. 9. Recommend preventive/corrective action (what action, who w ill do it, when). Note that preventive action is listed first when dealing with the design stage, and corrective action is listed first if analyzing potential process failures. 10. Return to number 2 if other potential failures exist. 11. Build and test a prototype. 12. Redo the FMEA after test results are obtained and any necessary or desired changes are made. 13. Retest and, if acceptable, place in production. 14. Document the FMEA process for the knowledge base. The collaboration of employees who have been involved in design, development, production, and customer ser vice activities is critical because their knowledge, ideas, and questions about a new product design will be based on their experience at different stages of product realization. Furthermore, if your
Chapter 11 Risk Management 203 employees are also some of your customers (end users), obtaining and documenting the employees’ experience is most useful. This experiential input, along with examinations of similar designs (and their FMEAs, nonconforming product and corrective action rec ords, and customer feedback reports), is often the best source for analysis input. Figure 11.2 shows a sample PFMEA.
Figure 11.2 PFMEA example. Source: Used with permission of APLOMET.
There has been recent activity to enhance the FMEA process. In 2019, the Automotive Industry Action Group (AIAG) and Verband der automobilindustrie (VDA) updated the AIAG FMEA document that had been used in industry since the 1960s. The AIAG FMEA document is one of the five core tools (Advanced Product Quality Planning (APQP), FMEA, SPC, Measurement Systems Analy sis (MSA), and Production Part Approval Process (PPAP) that have been popu lar in many industries, including automotive, aerospace, and medical devices. The FMEA and core tools standards for the automotive industry are commonly called the blue books (because of the color of their cover) and have been widely used in industry. There are two popular formats of FMEA: the one used by AIAG and, in Germany, the one used by VDA. To standardize the two different FMEA methods, a team recently worked on harmonizing both methods into a single handbook. The result is the newly released AIAG-VDA FMEA. The editors have chosen to present the traditional format of the FMEA, as this version is the most prevalent one used in business, healthcare, and government at this time. The new AIAG 2019 format may become more frequently used over time.
204 Part III Improvement
SWOT ANALYS IS A common component of the strategic planning process involves looking at current internal strengths and weaknesses of the organization’s operations as well as future opportunities and threats in the external marketplace. A SWOT analysis is a systematic assessment of an organization’s internal and external environment and identifies attributes that affect its ability to achieve its vision and to improve and protect its competitive position. A SWOT (strengths, weaknesses, opportunities, threats) analysis looks at how the organization fits with the current reality. Following are some of the factors that are looked at in a SWOT analysis. Questions to assess strengths and weaknesses (focused on the internal environment) may include the following: • How strong is the organization’s image and name/brand in the marketplace? • How strong (stable, effective, flexible) is the organization’s leadership? • How effective is the organization structure? • How stable is the current and future financial strength of the organization? • How do features and costs of products/services compare with competitors, and where are products/services in their probable life cycle? • Is the organization well focused on the clearly defined vital few issues, or are efforts widely dispersed? • How innovative is the organization? What is the track record of new products/services? Is t here a strong research and development effort ongoing? • How effective are the organization’s efforts toward continual improvement? • What is the condition (for example, age, flexibility, capacity) of major assets (for example, key employees, technology, facilities), and how does that impact the organization’s capacity and capability to sustain the organization? • What additional resources does the organization have available (for example, employees, stakeholders, capital) to enable change? Depending on the answers to questions like these, the action might be to build on the strengths and address the weaknesses. In addressing the deficiencies, t here are several options: • Remove the deficiency by changing the goal or objective to make fulfillment achievable. • Invest more in the people, technology, physical assets, and improvement efforts to be able to turn the deficiency into a strength.
Chapter 11 Risk Management 205
Strengths
Opportunities
• We are trend leaders in both cities in which the stores are located. • Both locations are ideal for their market niche (high-traffic, multi-store malls). • Customer retention indicates extreme loyalty and a high referral rate. • Both stores show a 10% to 12% increase in business in last three years. • Store A does a higher volume of cash business than store B. • Layout, displays, and inventory carried are identical for both stores. • Customer surveys and media coverage acknowledge the superb personalized customer service provided by personnel of both stores.
• Find ways to improve profitability of store B. • Rethink inventory management practices and improve. • Assess the products (costs, quantity, style, life, and pricing) carried to determine which products are most profitable and which should be dropped. • Assess the effectiveness of present advertising efforts and look for more lucrative media and approaches. • Examine the potential of new approaches to marketing: Offer home service (selection, fitting, delivery)? Explore alliance opportunities with other mall-store owners? Explore alliance opportunities with caterers, wedding planners, and so on? Consider presenting a fashion show? Consider opening an outlet store for previously owned bridal wear?
Weaknesses
Threats
• Connie is the only person who understands the billing system. • Because of taking advantage of a manufacturer’s close-out, the business currently shows a negative cash flow. • Connie is stretched thin by her heavy work schedule and the growing pains of her business (hiring and retaining competent help, rising benefits costs, slowing economy, other stores closing in the malls, and so on). • Inventory obsolescence tends to be higher than for others in the industry. • An increasing number of crimes committed in the malls is affecting the attraction of potential buyers. • Store B is a cash drain (sales dollars low due to clientele tending to purchase lower-price items, and number of bad debts increasing).
• Malls have both been bought from original owners, and a rent increase is rumored. • Connie could get sick. • Refurbishing of downtown areas is attracting customers away from the malls. • Malls are becoming hangouts for unruly teenagers and could be a distraction for brides-to-be. • Mall owners’ extension of the mall’s business hours impacts personnel costs (often, we staff a store at hours when no potential customers appear yet must comply with mall rules to be open).
Figure 11.3 SWOT analysis example.
206 Part III Improvement • Outsource parts or all of the process to another organization that can fulfill the process requirements more effectively. • Sell the part of the business that causes the present deficiency. Questions to assess opportunities and threats (focused on the external environment) may include the following: • What new competitors or products may enter the marketplace? • What viable markets are not currently being served? • How saturated is the marketplace? • How are demographics or values changing in the marketplace? • What new accreditation, legal, or regulatory issues might arise? • Are customer/supplier partnerships or alliances effective for the organization? • Does the likely future economic situation pose risks or potential rewards? Figure 11.3 is an example of a SWOT analysis. Connie is the owner of Brides on a Budget Boutique, which has two store locations. She met with her two store managers to commence their first strategic planning process. After an intense three-hour meeting, the items in Figure 11.3 were identified. Other issues w ere discussed, but the document represents the major items. Following the SWOT effort, Connie and her managers met again to begin to formulate a strategic vision. They prepared for this meeting by discussing answers to the question, What will this business be like five years from now? SWOT analysis should be based on objective data that review critical events from the past, the present, and the probable future in making comparisons with the marketplace, competitors, products and services, and company performance. Analysis of the information w ill typically be reviewed for items that provide significant advantages or risks that should be addressed by strategy, as well as the relative ratio of advantages to risks, which may impact the aggressiveness of the strategy. Items affecting the firm’s critical success factors must be reviewed in detail.
SUMMARY This review of some of the elements of risk management is intended to build awareness of the need for assessing and managing the risks that can impact the organization. Note that not every organization that has won the coveted Baldrige Award or other quality awards has survived. Failure has had little to do with their success in meeting the Baldrige criteria and more to do with how these organ izations managed their businesses to withstand the risks encountered. As quality management system standards such as ISO 9001 become less prescriptive, the responsibility for deciding what management controls need to be imposed on business processes rests more firmly on the shoulders of each pro cess owner within the organization. Risk-based thinking requires that everyone
Chapter 11 Risk Management 207 consider risks and then decide on appropriate levels of control to mitigate those risks. Furthermore, in this litigious society, organizations must carefully assess their potential liability from legal actions: actions arising from alleged product failures, end users’ misuse of products, inappropriate actions of employees, alleged health, safety, and security violations, or negligence. L egal actions often result in huge payouts to the litigant if the company is found guilty or is forced to reach an out-of-court settlement regardless of alleged responsibility. Not being able to sustain a viable organization that fulfills customer requirements and supports your workforce is a quality failure—that is, a quality of management failure.14
NOTES 1. Jim L. Smith, Jim Smith’s Glossary of Terms and Definitions (Metamora, IL: Quality Institute, 2016), version 59. 252. 2. Websters’ New Collegiate Dictionary (1977), 5th ed. s.v. “risk.” 3. Unpublished description by Denise Robitaille, ASQ CQA, ASQ Fellow, Lead Auditor, August 21, 2019. 4. Significant portions of this section are extracted from The ASQ Certified Manager of Qual ity/Organizational Excellence Handbook, 5th ed. (Milwaukee, WI: Quality Press, 2020). 5. ISO 9000:2015 Quality management systems—Fundamentals and vocabulary (Geneva: International Organization for Standardization (ISO) 2015). 6. ISO 31000:2009 Risk Management— Princi ples and Guidelines (Geneva: International Organization for Standardization (ISO), 2015). 7. Ibid. 8. ISO 31000:2009 Risk Management—Principles and Guidelines. 9. Ibid. 10. Denis J. Devos, “ISO 9001: Implementing Risk Based Thinking,” Proceedings of the ASQ World Conference on Quality and Improvement, American Society for Quality, Milwaukee, WI, May 15–18, 2016. 11. Ibid. 12. ISO 9001:2015 Quality Management Systems— Requirements (Geneva: International Organization for Standardization (ISO), 2015). 13. ISO 31000–2009 Risk Management—Principles and Guidelines (Geneva: International Organization for Standardization (ISO), 2015). 14. Denis J. Devos, “Risk Is the Compass -A New Approach to Auditing Using Risks and Controls,” Proceedings of the ASQ World Conference on Quality and Improvement, American Society for Quality., Milwaukee, WI, May 15–18, 2016.
Part IV Supplier Relationship Chapter 12 Chapter 13 Chapter 14
Supplier Selection Supplier Relationship Supplier Performance
When a customer complains, consider getting down on your knees to offer pro fuse gratitude because that person has just provided you with priceless advice— free of charge. —Owen Harari, Management Review
The third-generation supply chain is based on customer intimacy and is fully synchronized. —Feller, Shunk, and Callarman, “Value Chains Versus Supply Chains,” BPTrends
209
Chapter 12 Supplier Selection
Identify the supplier selection criteria and approval process. (Remember) CQIA BoK 2020 IV.A
INTERNAL SUPPLIERS Internal suppliers are the “providers” discussed in the section on SIPOC in BoK section I.A.6. Internal suppliers include not only t hose providers directly involved in producing the products and services but also t hose in support functions, such as tariff checking in a trucking company, materials management and cost accounting functions in manufacturing, facility maintenance in a school, the pharmacy in a hospital, the motor pool in a government agency, and market research. The concept of “internal” encompasses those who provide products and services to others upstream or downstream in a process performed within the organization. Some processes are complex enough to have process steps that are performed by nonorganizational personnel, in which case they would be called external suppliers. In many organ izations, internal suppliers establish service-level agreements (SLAs) with their internal customers. T hese agreements, usually for primary pro cesses or subprocesses, provide the requirements that must be met by the supplier and allow for quantitative measurement of results. Internal data processing and information technology groups have used SLAs for many years to mutually establish customer requirements and measure performance to requirements.1 Standard operating procedures (SOPs) are often used to establish expectations of performance between internal suppliers and their internal customers. The development of effective systems and processes is discussed in Chapter 1.
EXTERNAL SUPPLIERS External suppliers are providers whose goods and services may be used at any stage in the design, development, delivery, and use of another company’s products and ser vices. The effective establishment of stated expectations and requirements 210
Chapter 12 Supplier Selection 211 between customer and supplier is frequently a problem. Because of the pressures to get and keep business, suppliers often accept poorly communicated requirements. A commonly used international standard for quality management systems (ISO 9001) requires reviewing contracts and clarifying customers’ requirements before accepting an order. Larger organizations may establish and manage certain purchasing processes through long-term agreements.
SUPPLIER SELECTION PROC ESS The process for selecting new suppliers should be based on the type of product or service being purchased, uniqueness of the product or service, and total cost. For example, if the item is a standard product (available off the shelf ) and does not have a critical impact on the purchaser’s performance, then purchase price and availability may be all that needs to be considered. Selection may be as easy as finding companies listed in the yellow pages or an industrial directory and requesting a quote. An example of such a product might be standard office supplies; for a service organization it might be a lawn care service. This simple view, however, does not suffice for the many purchased products and services that will have a significant performance impact. Aluminum billets for an extruder of automotive brake parts, a new university online research database, or equipment maintenance for an airline—these are examples where the qualification and selection process must be carefully thought through and carried out. In some cases, customers may dictate that a particular supplier be used (as is typical for steel used to make automotive components). But in most cases the purchaser must define what criteria will be applied, then make a final decision to determine ways that prospective suppliers will be evaluated against the criteria. Supplier selection criteria for a particular product or service category should be defined by a cross-functional team. In a manufacturing company, team members would typically be from purchasing, quality, engineering, production, or materials management. Team membership could consist of personnel with technical/applications knowledge of the product or service to be purchased, as well as members of the department that will use the purchased item. The elements to be used to create the selection criteria w ill typically include the following: • Previous experience and past performance with the product/service to be purchased • Relative level of sophistication of the quality system, including meeting regulatory requirements or customer-mandated quality system registration (for example, ISO 9001, IATF 16949) • Capability to meet current and potential future capacity requirements and at the desired delivery frequency • Financial stability of the supplier • Technical support available and willingness to participate as a partner in developing and optimizing design and a long-term relationship
212 Part IV Supplier Relationship • Total cost of dealing with the supplier (material cost, communications methods, inventory requirements, incoming verification required) • Supplier’s past track record for business performance improvement • Supplier’s code of conduct and ability to be socially and ethically responsible Methods for determining how well a potential supplier fits the criteria include the following: • Obtaining Dun & Bradstreet or other available financial reports • Requesting a formal quote, which includes providing the supplier with specifications and other requirements (for example, testing) • Visits to the supplier by management and/or the selection team • Confirmation of quality system status either by on-site assessment, a written survey, or request for a certificate of quality system registration • Discussions with other customers served by the supplier • Review of databases or industry sources for the product line and supplier • Evaluation of samples obtained from the supplier (for example, prototyping, lab tests, validation testing)2
CERTIFICATION AND SUPPLIER RATING Some customers have programs for certifying qualified suppliers. Typically, certified suppliers have demonstrated their ability to consistently meet the customer’s requirements over a period of time. Suppliers are rated on a predetermined scale that may include most of the measurements already noted, as well as others. As the supplier fulfills the time and rating requirements, the supplier moves up through a two-or three-phase plan to full recognition as a certified supplier. The customer usually provides concessions to the certified supplier, such as no incoming inspection requirement, arrangements to ship directly to stock, a long-term purchasing contract, and “preferred supplier” status.
NOTES 1. Peter J. Metz, “Demystifying Supply Chain Management,” Supply Chain Management Review (Winter 1998): 2. 2. Russell T. Westcott, ed., The Certified Manager of Quality/Organizational Excellence Hand book, 3rd ed. (Milwaukee, WI: Quality Press, 2006), 511–14.
ADDITIONAL RESOURCES Metz, Peter J. “Demystifying Supply Chain Management.” Supply Chain Management Review, Winter 1998, http://www.manufacturing.net/scl/scmr/archives/1998/myst.htm.
Chapter 13 Supplier Relationship
Understand supplier relationships, associated chal lenges, and effects of a diverse supply base. (Understand) CQIA BoK 2020 IV. B
Supply chain managers work hard to optimize their supply chains. Their main focus is on getting products and services to market faster and better. The challenges are growing, however, as customers use new technologies to put even greater demands on suppliers. Chief supply chain officers are responsible for the mechanics of planning, procurement, production, logistics, and customer service—and, in many cases, for the receivables and payables of order-to-cash and procure-to-pay processes as well. They must manage hundreds of employees and thousands of partners in their supply chain ecosystems. They are accountable for controlling costs and increasing efficiencies and productivity, while raising customer satisfaction to an all-time high by delivering the absolute perfect order. And they must do all this in an environment that is changing rapidly and dramatically. Given these heavy responsibilities, supply chain managers now urgently need to collaborate with an extensive network of suppliers, logistics providers, manufacturers, and other business partners. They must tap into analytical insights at almost every decision point and, ultimately, create customer-activated supply chains.1 A supply chain is complex, made up of many suppliers located around the world, each of which has its own supply chain. The purpose of a supply chain is to place products and services timely and correctly in stores or at customer locations. The supply chain must be designed, directed, and managed as a process, not as a series of order and shipping transactions. Pushing bad logistics processes and practices up or down the supply chain disrupts the smooth flow of products and services. The following activities have shown to be highly effective in reducing disruption in the supply chain: • Managing vendor performance is a critical requirement for reducing supply chain cycle time. Suppliers, at the supply chain source, have incredible impact on the supply chain as to time, inventory, and costs— impact that goes far beyond pricing and placing purchase orders. 213
214 Part IV Supplier Relationship Visibility of purchase orders—at suppliers, in-transit, and at each step in the chain, from vendor’s plant to delivery at the warehouse, store, or customer—is vital. • Integration up and down the supply chain, both external and internal, is mandatory. Nonintegration adds to supply chain time and the lack of responsiveness and dead spots in the cycle time. Demand forecasting or other inventory planning is critical to provide customer requirements to suppliers for their build plans. Everyone should be working from the same data, information, and system or platform. Suppliers and customers must work together to integrate through the entire production process. • Collaborating with key suppliers and service providers is important. Work together as partners and be open to mutual exchange. Sending procedures and demanding compliance with requirements is not collaboration. Work to align the process between both parties so that it flows smoothly and within minimal time. It is easy to become complacent with a supplier relationship and misuse the agreements between the two parties. Consider the ramifications of the following phone call: “This is Acme. Joe, send me 150 more of those parts you sold me last week. Goodbye.” Exaggerated? Maybe, but it frequently happens like this. Look at the potential for error. The supplier may have more than one customer called Acme. The caller’s company received two shipments over the past seven working days, which were for different products. Each shipment had a different delivery method: one was delivered by UPS, and the customer picked up the other. One order was for parts costing Joe’s company $5 each to make. The other order was for parts costing $50 each to make. Though the parts looked similar, the more expensive part was made to a more stringent government specification. Does Joe’s company take a guess as to what to make and ship for this telephone order? Unfortunately, the guess prevails all too often. Joe’s past experience with the customer causes him to guess that the customer needs the more expensive part (which turns out not to be so). The consequences can be that the customer is satisfied to get what was expected or that the customer is frantic about receiving the wrong parts and having to wait for the correct parts to be made and shipped. Joe’s company has lost $7,500 in material and manufacturing costs for the wrong parts, the cost of shipping, and the cost of upsetting scheduling in order to get the replacement parts produced and shipped on an emergency basis. Who’s to blame? Joe’s company assumes the burden of clarifying the customer’s requirements, up front, and the consequences of not doing so. Given the ambiguous call Joe received, Joe should have confirmed the order in writing (for example, by e-mail) to request customer approval before accepting the order. Short of that, Joe should have called back with what he understood to be the requirement and to get an oral confirmation. Often, a smaller organization fears losing business by antagonizing a large customer, and perhaps major customer, with more extensive probing as to what the customer really needs. In some situations, this may mean asking the customer more about how and where the supplier ’s product w ill be used (usually imperative in medical device manufacturing).
Chapter 13 Supplier Relationship 215 Many organizations are changing their approach to their external suppliers from the traditional adversarial relationship to a collaborative relationship. In past times, a supplier (more often called a vendor) was considered an entity beneath the status of the buying organization. The customer’s “purchasing agent” of old would seek to pressure vendors until the lowest price was obtained. Often the buying organization was significantly larger than the vendor’s organization and wielded the power of offering potentially large orders. Price and delivery were the primary drivers in the vendor selection process. If quality became a problem, an order was canceled and another vendor selected. Increasingly, buying and selling organizations are forming quasi-partnerships and alliances to collaborate on improving the buyer–seller relationship as well as the quality of the products or services being purchased. Buying organizations have been able to substantially reduce the number of suppliers for any given product or service and cut costs through improved quality. It is not uncommon now for the buying organization to assist a supplier with training to use quality tools, material handling, stocking practices, and so forth. In this collaboration, the buying organization expects that the established quality and service levels w ill be consistent with its needs, that the supplier’s practices will be continuously improved, and that lower prices w ill result. The supplier often receives assurance of longer-term contracts, assistance in making improvements, and sometimes certification as a preferred supplier.
CYCLE FOR IMPROVING CUSTOMER–SUPPLIER RELATIONSHIPS Plan
A strategic plan addressing customer focus, a customer satisfaction feedback process design, and customer satisfaction improvement objectives constitute the plan
Do
Administration of the plan and collection of the data are the do
Check Analysis of customer satisfaction data and supplier data, mea surement against objectives, and identification of areas for improvement constitute the check Act
Development of improvement action plans, implementation of the improvements, and assimilation of the improvements into daily operations are the act
The emergence of the supply chain management (SCM) focus across the globe has created not only new challenges but also greater opportunities for the use of existing quality techniques and tools.
THE PROCESS OF SUPPLY CHAINS While many managers may view supply chain management and logistics as interchangeable, this is not the case. Following are the current definitions as stated by noted experts:2 Logistics—The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the
216 Part IV Supplier Relationship point of consumption for the purpose of conforming to customer requirements. This definition includes inbound, outbound, internal, and external movements.3 Supply Chain Management (SCM) is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide costs while satisfying service level requirements.4 Though the concept of SCM can be traced back to the early 1960s, it wasn’t until some 35 years later that it became a serious topic of study and discussion outside of academic and research circles. The initial supply chains, as they w ere identified by the National Council on Physical Distribution Management (NCPDM), w ere a two-factor endeavor: warehousing and transportation.5 The meteoric rise of Wal-Mart as the dominant player in the consumer retail marketplace can be tied to a strategy built on superior logistics on an integrated network of information—some of it organic, but most of it shared by an increasingly broad collection of partners. The migration from mainframe computers to networked servers, riding a worldwide web of communications infrastructure (phone lines at first, and then the broader reach of the internet), has resulted in a modern-day approach to SCM that leverages information technologies that operate on several levels. While this more robust approach is referred to as the “integrated SCM stage,” others are advocating that the optimal phrase should be “super-supply chain management.”6 What is occurring with more frequency is a series of processes, regardless of location or functional responsibility, operating in concert, driven by electronic rather than physical cues. As a result, organizations need to pay more attention to the effectiveness and efficiency of the process steps and the intermediate and final outputs that do not necessarily have the man-in-the-loop oversight.7 These newer and more complex “process webs” cut across functional areas, making accountability, responsibility, and authority much more difficult to assign, track, and evaluate. As seen in Figure 13.1, there are many stakeholders (customers, suppliers, operators, strategic partners, e tc.) in this contact-to-cash supply chain model. Referring back to the SCM definition presented e arlier, this figure attempts to show the path to achieving a “perfect order.”8 As demonstrated in Figure 13.1, what the customer expects from a supply chain and what businesses are attempting to achieve create a natural friction. These competing interests can become a positive or a negative, depending on how they are addressed. The past 30 years’ efforts in continuous quality improvement have effectively run their course within traditional silo functions. Most of the cycle times have been reduced within processes owing to the application of qualitative and quantitative techniques, such as lean, Agile, “zero defects,” TQM, or Six Sigma. So now it is imperative that companies find the next set of challenges to pursue: using quality-based applications. The complex nature of multilevel and multiple player integrated supply chains is a prime target. The differences in sophistication between traditional quality systems and t hose in the emerging supplier management environment are presented in Figure 13.2. The SCM-based processes have a series of inherent conflicts built in. This is primarily due to the constant interaction of internal and external customers, many
Chapter 13 Supplier Relationship 217 Customer focus: Quality, cycle time, cost Manufacturing/ service system entry
Customer “need”
Input supplies
Credit approved
Order received and entered
Shipping/ delivery
Manufacturing/ service completed
Accounts receivable
Customer received
Payment received
Business function $ = profit Mktg, Eng, MIS, HRM, Ops, Procurement, Finance
Figure 13.1 Supply chain contact-to-cash process management (PM) capable.
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Quality
rm
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Quality
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Source: Adapted from “Supply Chain Management,” chapter 4, The Executive Guide to Improvement and Change, ed. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran (Milwaukee, WI: Quality Press, 2003). Reproduced by permission: Quality Press.
Profit
Value
Organizational process quality system
Supply chain management quality system
Figure 13.2 Traditional quality versus supply chain quality. Source: “Supply Chain Management,” chapter 4, The Executive Guide to Improvement and Change, ed. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran (Milwaukee, WI: Quality Press, 2003). Reproduced by permission: Quality Press.
with competing interests and performance measures. Following is a representative sample of t hese conflicts, which can be referred to as supply chain tensions: • Lot size versus inventory • Inventory versus transportation • Product lead time versus transportation • Product variety versus inventory • Cost versus service level hese opposites w T ill likely never be fully optimized, but the use of proven and systematic improvement techniques can reduce the amount of negative impact. A pragmatic executive w ill realize that the goal is not perfection but reduction in
218 Part IV Supplier Relationship suboptimization of the entire contact-to-cash supply chain system. Effective supply chain system managers spend their time addressing these results. They use the same amount of time wasted on responding to conflict reining in variability through process-management-based quality techniques. Figure 13.3 illustrates where p eople focus their efforts in relation to leading SCM activities. While the quadrants are presented in a symmetric manner for purposes of discussion, this is rarely the case in evaluating supply chains in action.
Urgency to handle
High
• Rework
II
• High-value “to-dos”
IV
• Crises/firefights
• Solutions to recurrent problems
• Others’ priorities
• Closing deals
• False alarms • Distractions
I
• Junk • Dead ends • Noise
Low Low
• Process planning and review
III
• Developing people • Strategy and tactics
Importance to accomplishing business unit overall goals
High
Figure 13.3 What people spend their time on in supply chain processes. Source: “Supply Chain Management,” chapter 4, The Executive Guide to Improvement and Change, ed. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran (Milwaukee, WI: Quality Press, 2003). Reproduced by permission: Quality Press.
Lean methodologies do indeed help to optimize these “opposites” by reviewing the total systems impact and then effecting the best-balanced solution. Kanbans (Chapter 7) balance lot size and inventory; JIT (Chapter 7) manages inventory and transportation. The utilization of lean processes is becoming ever more prevalent in both manufacturing and services to manage the optimization of these system conflicts. When managers find the majority of their time, energy, and resources g oing to Quadrants I and II, supply chain system performance suffers and incidences of suboptimization increase. Symptoms of this reality can be found in the following areas: • Stock-outs and/or higher inventories • Increases in cash-to-cash cycle times • Higher return rates • Unpredictable operating costs • Poor service levels—customer dissatisfaction • Ineffective communication with suppliers at all stages of the supply chain While these same symptoms are evident in traditional out-of-control business pro cesses, the impacts are even more glaring in integrated supply chains (refer to Figure 13.2). The goal, then, is for managers to focus on activities in Quadrants III and IV. As managers, we want to be proactive, designing, operating, and improving
Chapter 13 Supplier Relationship 219 high-performing supply chain systems. However, day-to-day malfunctions drain us of the energy to work on the optimization issues presented in the model. Figure 13.3 looks appealing, but the reality is that models don’t appear magically in practical application. The first step in integrating the proactive supply chain is to identify the root c auses of system nonperformance. The lack of a true supplier management approach can be categorized in three distinct areas: (1) information management, (2) design and strategy, and (3) operational control. In evaluating information systems, not just computers, servers, and internet connections, we see some very glaring weaknesses in dysfunctional supply chain processes. For instance, the metrics are scattered at best, and measure the wrong indicators at worst. Typically, cycle time is measured within sub-processes, and managed at functional levels. However, the idle time between processes is rarely tracked. Traditionally in organizations, managers are evaluated on the activities that occur within their functional span of control. For example, it takes the average automobile 15 days to travel from the factory to the dealer, but the a ctual time-in-motion is only one-third of this elapsed duration.9 In sum, all applicable functional manag ers are focusing on their areas of responsibility. But who is watching the handoffs? Another deficiency in evaluating the performance metrics is found by inadequate definitions of supply chain service level. Since the breadth of the typical chain is so extensive, what qualifies as the standard in one stage rarely applies throughout. Again, this lack of standard operational definitions can be traced back to an overall lack of singular accountability from the beginning to the end of the process—from the contact of the need through to the point where the cash changes hands. As to design and strategy, the overwhelming weakness in any supply chain relates to inventories. The advent of JIT, kanban, and the notion of the “lot size of one” have made inventory a chronic waste in many businesses. While t here is l ittle debate that increasing inventory turns ultimately reduces carrying costs, capturing true ordering costs has never been easy. While the advent of information technology is assisting development of more accurate supply chain cost structures, it remains a challenge, especially given the large number of variables from the raw materials stage through to final delivery. Idle time of work-in-process inventory is one example of the difficulty in capturing total inventory costs. Another weakness results from a contention by many managers that supply chains are primarily outgrowths of logistics and distribution networks. While transportation, handling, and other movement-related costs are significant, the back end of the process is where the real focus should be. Cash collection to complete the process typically takes 30–45 days, down from the nearly 90 days as recently as the early 1990s. T here is ample room for reducing this cash-to-cash cycle even further. Recent advances in transparency and common access to supply chain databases between customers and suppliers are helping to reduce turnaround time, but there is a long way to go. Finally, we come to issues of operational control. The biggest hurdle is quantifying the impact of uncertainty and risk across the entire spectrum. From a lean perspective, a tool called an enterprise value stream map (E-VSM) (Chapter 7) lays out the entire process flow from the incoming supply chain components, through on-site production, through product distribution across its various customer types. This analysis identifies where the business losses are being incurred. Given the complexity and numerous variables in play, the ability to perform effective analysis is difficult at best. The many handoffs, numerous internal players, and physical and cultural distances at work make monitoring and controlling an
220 Part IV Supplier Relationship inexact science. Poor coordination between functional areas further exacerbates the problem. The lack of effective control results in bigger gaps between the ideal state and the level of suboptimization in the system. Difficult problems require strong structures. In order to properly address the three root cause areas presented above, the concept of process management becomes a driving force. The ultimate goal of an effective supply chain is customer loyalty. The systematic nature of a process management (PM) system works well to address the potential weak links in the chain—strategy and design, information flow, and operational control. As we w ill see in the following section, there are tools that can assist senior leaders. T hese combine strategy and tactics, with a focus on organ izing efforts around key operational objectives. At the decision-making level, the key to success lies in identifying important process variables and comparing them discretely in sets of two. For example, Figure 13.4 creates a discussion for evaluating various potential distribution strategies with the factors that impact key supply chain performance criteria. For certain strategy-attribute combinations, there are potential benefits to be gained if included in the process design. Specifically, in the case of leveraging the distribution component of this particular chain, cross docking (the movement of in-transit goods between containers at distribution points) can result in the elimination of holding costs. If the inventories in question come with significant holding costs (e.g., cold storage), keeping them in motion through to the final point of delivery may realize considerable savings. This may be desirable in some, but not all, applications. The results of evaluating process variables tied to perfor mance outcomes better define the scope of the supply chain. Once performance variables are defined, evaluated, and selected at the macro process level, it becomes easier to carry the “message” down to the execution stages. When the manager in charge of supplier qualification works with the supplier to develop the sequence of activities to achieve the particular process objectives, the potential supplier w ill have to demonstrate ability to cross-dock when it comes to For example: Distribution processes Strategy attribute
Direct shipment
Cross docking
Risk pooling
Take advantage
Transportation costs Holding costs Demand variability
Inventory at warehouses
Reduced inbound costs No warehouse costs
Reduced inbound costs
No holding costs Delayed allocation
Delayed allocation
Note: A blank box denotes there is insufficient “value” to pursuing a particular strategy-attribute combination.
Figure 13.4 Evaluating cross-functional SCM processes. Source: “Supply Chain Management,” chapter 4, The Executive Guide to Improvement and Change, ed. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran (Milwaukee, WI: Quality Press, 2003). Reproduced by permission: Quality Press.
Chapter 13 Supplier Relationship 221 cold storage items. The resulting information flow and control points (process metrics) w ill be easier to establish and stay tied to the higher-level core process. At the micro process level, the technicians who carry out their duties and responsibilities should have no doubt as to the outcome if the system of processes is in alignment. Focusing on the inventory management core process, consider the example of a contract with a supplier that provides refrigerated goods. In this case, one of the key measures of performance becomes the use of cross docking to ensure that no carrying costs are incurred during the life cycle of goods from this supplier. The fulfillment of this metric, along with any other pertinent mea sures, is reported back up through the next higher-level processes. Taken in the aggregate, all micro processes, if planned from the top down and executed from the bottom up, w ill ultimately perform with more consistency and be in alignment with the overarching goals and objectives of the systems, creating a “value chain.” The reason is fairly simple. Design of processes is tied to strategy, and the operational and tactical execution occurs as a natural outcome of the planning. Feedback focuses on the key performance measures at each process level, with operational control in the hands of the appropriate experts. For t hose organ izations that have undertaken process management approaches to supply chain design, measurement, and control, the gains are impressive. In recent years, the number one reason for the increased focus on SCM as a strategic competitive advantage is the enhancement of information technologies (IT) as an underlying enabler. Simply stated, the ability to turn data into information and leverage it as knowledge in complex environments is the engine of the “new economy.” If the premise is accepted that SCM is a key to future business success, it is important to understand how IT fits. One of the largest problems in the IT-SCM merger is misalignment. Enterprise Resource Planning (ERP) software is the standard by which SCM is measured. Business literature is overflowing with case studies of ERP implementations at companies of all sizes. Some tout the value of these centralized databases as the driver of success. On the other side there are an equal number of negative incidences where companies were literally brought to their knees, ultimately scrapping IT investments running into the hundreds of millions of dollars. Why the disparity? How can one company achieve breakthrough success with its ERP systems, and yet others suffer devastating economic and market loss through implementation of the same software? The answer lies in preparation and a full understanding of the needs of the process flow. Before an organization begins the investment in ERP-driven IT, its senior leadership must understand the nature of its supply chain. Figure 13.5 provides a way of analyzing supply chain complexity with IT capability. In his article “Demystifying Supply Chain Management,” Peter Metz identifies five key success factors that enable continuing supply chain management accomplishments: 1. an overriding customer focus; 2. use of cross-functional teams; 3. attention to human factors and organizational dynamics; 4. quantitatively based performance management; and 5. advanced use of IT10
222 Part IV Supplier Relationship
Technology environment
High
• Two-way redundant
II
• Multipath—robust
• “Paperless”
• ERP-based
• IT exchange
• “Less paper”
• Virtual marketplace
• IT-driven
• “Monitor and forget”
• “Monitor, fire, monitor”
• One-way sporadic
I
• Two-way—susceptible
• “Paperful”
• “Paper-based”
• Physical
• Hands-on
• “Fire and forget”
• “Fire, fire, fire”
Low Low
Supply chain complexity
IV
III
High
Figure 13.5 Supply chain communication from management. Source: “Supply Chain Management,” chapter 4, The Executive Guide to Improvement and Change, ed. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran (Milwaukee, WI: Quality Press, 2003). Reproduced by permission: Quality Press.
The ability to master the fifth f actor drives the first four f actors. Take, for instance, the cross-functional nature of supply chain operations, with both physical and virtual teams working together on the design, operation, and control of supply chain activities. From the 1960s to well into the 1990s, individual members of supplier management teams were limited by the many legacy (multiple functional database) IT systems. In many cases, similar data w ere in conflict or difficult to reconcile, making the data unusable. With the advent of ERP and internet technologies, team members can focus on using their functional expertise to share and evaluate common information from various perspectives. As a result, the design, operation, and control activities become better defined and managed. Similarly, customer relationship management (CRM) and orga nizational dynamics can gain by the use of IT systems. The breaking down, itemizing, and correlating of data are invaluable in deriving root cause. Computer power allows marketing and HR analysts the freedom to play multiple what-if scenarios, making assumptions, rearranging variables, comparing results, assigning risk, and, ultimately, customizing supply chain activities to better maximize returns to both internal and external customers. Finally, IT can assist in the “management by fact” focus of SCM. Previously, metrics were managed and reported at the functional level. Manufacturing, distribution, and transportation managers drove operational data, with a focus on evaluating the operations function. Likewise, marketing and sales leaders maintained their vigilance over market share and customer satisfaction indices. At the other end of the spectrum, accounting and finance professionals kept busy determining the flows of the accounts receivable and payable. All of these are critical performance measures, but they are truly enhanced when the discrete measures are integrated into a systematic decision-making process. The real key to successful supplier management is to establish an effective system of planning, communication, and measurement. The tools are only as useful as
Chapter 13 Supplier Relationship 223 the understanding of the issues. A global supply chain in the automotive industry is no more valuable or better than a local chain that gets the wheat to the local grinding mill and the flour to the local baker and the piping hot bagels to the morning’s customers. As long as the tools and rules fit the situation, SCM is appropriate. SCM rises or falls on three components: design, operations, and control—all ideally suited for the application of proven “soft” and “hard” quality tools.
NOTES 1. Orchestrating a Customer-Activated Supply Chain: CSCO Insights from the IBM C-suite Study (Somers, NY: IBM Global Business Services, 2014). 2. Supply Chain Management Terms and Glossary, Council of Supply Chain Management Professionals (CSCMP), PDF document on CSCMP website, updated 2016. p 117. 3. Significant material in this section is derived from Mike Ensby, “Supply Chain Management,” chapter 4 in The Executive Guide to Improvement and Change, ed. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran (Milwaukee, WI: Quality Press, 2003). 4. Metz, “Demystifying Supply Chain Management,” 1. 5. Ibid., 2. 6. Ibid., 3. 7. Ibid. 8. Donald J. Bowersox, David J. Closs, and M. Bixby Cooper, Supply Chain Logistics Man agement (Boston: Irwin McGraw-Hill, 2002), 3. 9. David Simchi-Levi, Philip Kaminsky, and Edith Simchi-Levi, Designing and Manag ing the Supply Chain: Concepts, Strategies, and Case Studies (Boston: Irwin McGraw-Hill, 2000), 5. 10. Metz, “Demystifying Supply Chain Management,” 4.
ADDITIONAL RESOURCES Bossert, J. L., ed. The Supplier Management Handbook. 6th ed. Milwaukee, WI: Quality Press, 2004. Bowersox, Donald J., David J. Closs, and M. Bixby Cooper. Supply Chain Logistics Manage ment. Boston: Irwin McGraw-Hill, 2002. Brassard, Michael, and Diane Ritter. Sailing through Six Sigma: How the Power of People Can Perfect Processes and Drive Down Costs. Marietta, GA: Brassard & Ritter, 2001. Lawrence, F. Barry, Ramesh Krishnamurthi, and Norm Clark. “Performance Metric for a Connected Supply Chain.” Review of the Electronic and Industrial Distribution Industries 1, no. 1 (2002): 139–61. Metz, Peter J. “Demystifying Supply Chain Management.” Supply Chain Management Review, Winter 1998, http://www.manufacturing.net/scl/scmr/archives/1998/myst .htm. Russell, J. P., ed. The ASQ Supply Chain Management Primer. Milwaukee, WI: Quality Press, 2013. Simchi-Levi, David, Philip Kaminsky, and Edith Simchi-Levi. Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. Boston: Irwin McGraw-Hill, 2000.
Chapter 14 Supplier Performance
Identify supplier performance measures, including quality performance, on-time delivery, and level of service. (Apply) CQIA BoK 2020 IV.C
SUPPLIER PERF ORM ANCE MEASURES Suppliers need to know how they are performing. This means that for suppliers providing products or services vital to quality, the customer must have a formal process for collecting, analyzing, and reporting supplier performance. Following are some common assessment and measurement tools for supplier performance.
Questionnaires/Assessments Suppliers may be asked to complete a survey about how their quality systems are designed and what plans for improvement have been developed. The customer may also conduct on-site assessments. Surveys are usually mailed or e-mailed. Survey questionnaires may be used to assess prospective or new suppliers or to reassess existing suppliers on a periodic basis. Use of questionnaires is one of the ways suppliers are screened for the customer’s qualified supplier list. The same design comments and cautions that apply to customer surveys pertain here as well. The difference between supplier questionnaires and customer questionnaires is that the customer expects a 100% response from suppliers. Many suppliers begrudgingly fill out the questionnaires because not to do so would mean loss of business. Large customers sometimes require lengthy questionnaires of even their smallest suppliers, without considering the burden placed on the suppliers.
Product Data Suppliers may be requested to provide product quality data from the pertinent production run with each delivery, which is used in place of formal verification by the customer. The customer may then analyze the data for compliance to specification as well as process stability and capability. 224
Chapter 14 Supplier Performance 225
Delivery Performance—On-Time Delivery Supplier performance against delivery requirements (for example, total number of days early and total late) is typically tracked and compared against order requirements. On-time delivery is one of the three key lean metrics of price, quality, and schedule.
Complaints Tracking and reporting complaints about supplier performance is necessary in order to maintain suppliers’ status on the qualified supplier list. An unacceptable number of complaints may result in a supplier’s being suspended from the list, placed on probation, or totally removed. Usually a hierarchy of categories (types of reasons) is devised for use in coding complaints. The acceptance tolerance for numbers of complaints may vary depending on the category.
Corrective Actions When a problem is reported to a supplier with a formal request for corrective action, this requires a tracking process for ensuring that the supplier responds. These records should be analyzed to determine whether the supplier has been timely in its responses as well as effective with its corrective actions. Customers typically track defect rates by individual supplier.
Level of Service Service-level agreements may be established with critical suppliers to set limits for percentage of defective parts, products, or service delivery. Without good follow-up by the customer, some suppliers w ill tend to ignore corrective action requests. Making supplier action mandatory through contracts is a way to resolve this situation.
Product Price and Total Cost Organizations continually try to reduce the cost of raw materials and services, or at least to minimize increases. The ability of suppliers to continually show progress in this arena is encouraged and tracked. Supplier management includes sharing of customer requirements among producers and suppliers for the purpose of achieving the highest value to the customer at the lowest cost across the supply chain. The price of a service or product is influenced not only by the cost of components used to create the final deliverable but also by intangibles such as administrative costs, quality assurance, and profit margin required to sustain operations for both the producer and the supplier.
Reporting of Supplier Performance Reporting of supplier performance is usually done on a regular basis (such as quarterly). Typical indexes used in tracking supplier performance are the following:
226 Part IV Supplier Relationship • Past performance index (PPI) • Supplier performance index (SPI) • Commodity performance index (CPI) • On-time delivery performance index (OTDPI)
Value in Using Supplier Performance Data in Driving Continuous Improvement Material and services from suppliers, when they are direct inputs to the product realization process, can substantially impact the quality of the product, customers’ satisfaction, and profitability. Efforts to improve incoming material and services from suppliers (including their correctness, capability, completeness, accuracy, timeliness, and appearance) are often given less attention by the customer than the customer’s own internal processes. It should be noted, though, that defective material and inadequate ser vices just received have not yet incurred the added costs of the production process. When a product is rejected at any stage up to and including its use by an end user, costs have been added at each stage in the cycle. At any stage, including the failure of a product u nder warranty, the quality of the incoming material or services could be the real root cause of failure. The tendency of some customers to work around supplier deficiencies is no longer acceptable. Initiatives to continually improve suppliers’ per for mance are critical to build and sustain customers’ confidence. As mentioned earlier, the emerging trend of greater collaboration between customers and their suppliers is opening new opportunities for improvement, often developing into partnerships and alliances.
KEY SCM METRICS Figure 14.1 establishes the key metrics for an integrated SCM. The Supply Chain Operations Reference (SCOR) model offers three key result areas, each with specific system metrics and their corresponding units of measure. With a balance between effectiveness and efficiency, the SCOR model brings together two of Metz’s five factors directly, with the other three receiving indirect benefits. Additionally, the SCM definition of quality becomes possible with this merger of mea surement and technology. Going back to process management, upstream and downstream design, operation, and control is tied to one evaluation platform, via centralized IT and integrated performance measures. At this point we refer to Figure 14.2, a two-by-two matrix that is ideally suited to determine two aspects of SCM performance. First, senior leaders can evaluate current conditions and get a sense of whether the chain is properly aligned (e.g., are the measures appropriate for the level of supply chain sophistication?). The second and more important benefit is validating what attributes are best suited for supply chain performance management as the chain moves forward. Figure 14.2 provides general guidelines for these two evaluations.
Chapter 14 Supplier Performance 227
Key result areas Supply chain reliability
Metrics
Unit of measure
• On-time delivery
• Percentage
• Order fulfillment lead time
• Days
• Fill rate
• Percentage
• Perfect order fulfillment
• Percentage
Flexibility and responsiveness
• Supply chain response time
• Days
• Production flexibility
• Percentage
Assets/utilization
• Total inventory days of supply
• Days
• Cash-to-cash cycle time
• Days
• Net asset turns
• Turns
Figure 14.1 SCOR model. Source: “Supply Chain Management,” chapter 4, The Executive Guide to Improvement and Change, ed. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran (Milwaukee, WI: Quality Press, 2003). Reproduced by permission: Quality Press.
Supply chain complexity
High
• Qualitative
II
• 4-D: Balanced scorecard
• Flowcharts
• Financials
• Pareto analysis
• Satisfaction indices
• Quantitative
• Cycle time
• SPC
• Organizational learning I
• 2-D measurements
• 3-D: Cause-and-effect
• Ad hoc
• Value-add analysis
• Run charts
• Process over technology
• Conformance to specs
• Continuous improvement
Low Low
IV
Metrics sophistication
III
High
Figure 14.2 Supply chain performance management. Source: “Supply Chain Management,” chapter 4, The Executive Guide to Improvement and Change, ed. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran (Milwaukee, WI: Quality Press, 2003). Reproduced by permission: Quality Press.
For example, a firm that is low in its use of quality tools and techniques in its SCM but is fortunate to be in a low complexity environment would be well served to focus on moving from Quadrant I to Quadrant II instead of trying to stretch into III or IV. Eventually, the chain may increase in breadth and depth, necessitating the addition of more robust quality methodologies. In contrast, those organ izations with increasing supply chain complexity but relatively unsophisticated in their ability to measure, control, and improve will face increasing risk of suboptimization and ultimately supply chain failure.
228 Part IV Supplier Relationship A properly aligned supply chain has incredible value to t hose firms engaged in its operations. The model presented in Figure 14.3 is the essence of Deming’s 1986 exhortation to senior leaders—constancy of purpose, profound knowledge, and continuous improvement. Metz admits that it’s not a matter of “rocket science” but rather science and the art of due diligence. Information technology infrastructure Supplier network
Integrated ops
Sales
Subassemblies Components
Material handling HR Manufacture Warehouse
Raw materials
Receipt and payment
Engineering materials
Customer requirement
Procurement
Finance and accounting Transportation
Special orders
Capacity, knowledge, core competencies, market position, strategic partners
Figure 14.3 Integrated supply chain model. Source: “Supply Chain Management,” chapter 4, The Executive Guide to Improvement and Change, ed. G. Dennis Beecroft, Grace L. Duffy, and John W. Moran (Milwaukee, WI: Quality Press, 2003). Reproduced by permission: Quality Press.
Part V Customer Relationship Chapter 15 Chapter 16
Customer Identification Voice of the Customer (VOC)
I do not consider a sale complete u ntil the goods are worn out and the customer is still satisfied. —Leon Leonwood Bean, founder of L. L. Bean
here is only one boss—the customer. And he can fire everybody in the company T from the chairman on down simply by spending his money somewhere else. —Sam Walton, founder of Wal-Mart
Anyone who thinks customers a ren’t important should try d oing without them for 90 days. —Anonymous
It’s not enough anymore to merely satisfy the customer, customers must be “delighted”—surprised by having their needs not just met but exceeded. —A. Blanton Godfrey
All of management’s efforts for Kaizen boil down to two words: customer satisfaction. —Masaaki Imai
It’s not enough just to give good service; the customer must perceive the fact that he or she is getting good service. —Karl Albrecht and Ron Zemke
229
Chapter 15 Customer Identification
Distinguish between internal and external customers. Describe their influence on products, services, and processes. (Understand) CQIA BoK 2020 V.A
INTERNAL CUSTOMERS Internal customers are those customers within the organization. The term next oper ation as customer (NOAC) is often used to describe the relationship of internal provider to internal receiver.1 Every function and work group in an organization is both a receiver of services and/or products from internal and/or external sources and a provider of services and/or products to internal and/or external customers. These interfaces between provider and receiver may be one to one, one to many, many to one, or many to many. Each receiver has needs and requirements. Whether or not the delivered service or product meets the needs and requirements of the receiver, it impacts the effectiveness and quality of services and/or products to their customers. Following are some examples of internal customer situations: • If A delivers part X to B one hour late, B may have to apply extra effort and cost to make up the time or else perpetuate the delay by delivering late to the next customer. • Engineering designs a product based on a salesperson’s understanding of the external customer’s need. Production produces the product, expending resources. The external customer rejects the product because it fails to meet the customer’s needs. The provider reengineers the product and production makes a new one, which the customer accepts beyond the original required delivery date. The result is waste and possibly no further orders from this customer. • Information technology (IT) delivers copies of a production cost report (which averages 50 pages of fine print per week) to six internal customers. IT has established elaborate quality control of the accuracy, timeliness, and physical quality of the report. However, of the six report 230
Chapter 15 Customer Identification 231 receivers, only two still need information of this type. Both of t hese customers find that the report is not directly usable for their current needs. Both have assigned clerical p eople to manually extract pertinent data for their specific use. All six admit that they diligently store the reports for the prescribed retention period. This is wasteful. Redesign the report. • Production tickets, computer-printed on light card stock, are attached by removable tape to modules. When each module reaches the paint shop, it is given an acid bath, a rinse, high-temperature drying, painting, and high-temperature baking. Very few tickets survive intact and readable. The operation after the paint shop requires attaching other parts to the painted modules, using the information contained on the tickets to do so. Operators depend on their experience to guess which parts go with what module. About 95% of the modules emerge from this pro cess correctly, except when a product variation is ordered or when an experienced operator is absent. Change the process. The steps to improve a process and services are as follows: 1. Identify internal customer interfaces (providers of services/products and receivers of their services/products) 2. Establish internal customers’ service/product needs and requirements 3. Ensure that the internal customer requirements are consistent with and supportive of external customer requirements 4. Document service-level agreements between providers and receivers 5. Establish improvement goals and measurements 6. Implement systems for tracking and reporting performance and for supporting the continuous improvement of the process2
Treatment of Internal Customers and the Effect on External Customers “Care-less” behavior of management (and management’s systems) toward internal customers (poor tools and equipment, defective or late material from a previous operation, incorrect/incomplete instructions, illegible work orders or prints, circumvention of worker safety procedures and practices, unhealthy work environment, lack of interest in internal complaints, disregard for external customer feedback, and so forth) may engender careless or indifferent treatment of external customers. Continued, this indifference can generate a downward spiral that could adversely affect an organization’s business. Ignoring the needs of internal customers makes it very difficult to instill a desire to care for the needs of external customers. In providing products or services to intercompany buyers, such as delivering from one location to another, usually from a vertical integration perspective, there can be disregard and shoddy treatment. In these relationships and transactions with their intercompany s ister sites, aside from delivery and quality issues, there are often complex financial transaction processes established for which no
232 Part V Customer Relationship customer pays. However, the w hole business painfully absorbs the cost of these often-large internal expenses. So many organizations fail to learn, or ignore, the internal customers’ needs and wonder why their management’s exhortations fail to stimulate internal customers to care about what they do for external customers and how they do it. The surly and uncooperative sales representative, waitperson, house keeping employee, healthcare provider, delivery person, and customer service representative often reflect a lack of caring for internal customers. Organ izations must work constantly to address the internal customers’ lament: How do you expect me to care about the next operator, or external customer, when no one cares whether I get what I need to do my job right?
EXTERNAL CUSTOMERS External customers are those customers who are served by or who receive products from the supplier organization. There are many types of external customers: 1. Consumers/end users • Retail buyer of products. The retail buyer influences the design and usability of product features and accessories based on the volume purchased. Consumer product “watch” organizations warn purchasers of potential problems. For example: In the late 1990s, a fake fat substance was introduced in a number of food products as a boon to weight-conscious people. These products didn’t taste good and w ere found to have harmful side effects. Many consumers stopped buying the products. The factors important to this type of buyer, depending on the type of product, are the following: • Reasonable price • Ease of use • Performance • Safety • Aesthetics • Durability Other influences on product offerings include the following: • Easy purchase process • Installation • Instructions for use • Post-purchase service • Warranty period
Chapter 15 Customer Identification 233 • Packaging • Friendliness of seller ’s personnel • Brand name • Discount buyer. The discount buyer shops primarily for price, is more willing to accept less-well-known brands, and is willing to buy quantities in excess of immediate needs. T hese buyers have relatively little influence on the products—except for, perhaps, creating a market for off-brands, production surpluses, and discontinued items. • Employee buyer. The employee buyer purchases the employer’s products, usually at a deep discount. Often being familiar with or even a contributor to the products bought, this buyer can provide valuable feedback to the employer (both directly, through surveys, and indirectly, through volume and items purchased). • Service buyer. Buyers of services (such as TV repair, dental work, and tax preparation) often buy by word of mouth. Word of good or poor service spreads rapidly and influences the continuance of the service provider’s business. • Service user. The captive service user (such as the user of electricity, gas, water, municipal services, and schools) generally has little choice in which supplier they receive services from. Until competition is introduced, there is little incentive for providers to vary their services. Recent deregulation has resulted in a more competitive marketplace for some utilities. • Organization buyer. Sometimes referred to as Business to Business (B2B). Buyers for organizations that use a product or service in the course of their business or activity can have a significant influence on the types of products offered them as well as on the organization from which they buy. Raw materials or devices that become part of a manufactured product are especially critical in sustaining quality and competitiveness for the buyer’s organization (including per formance, serviceability, price, ease of use, durability, simplicity of design, safety, and ease of disposal). Other factors include flexibility in delivery, discounts, allowances for returned material, and extraordinary guarantees. There are several factors that particularly pertain to purchased services: • Reputation and credibility of the provider • Range of services offered • Degree of customization offered • Timeliness • Fee structure
234 Part V Customer Relationship 2. Intermediate customers • Wholesale buyer. Wholesalers buy what they expect they can sell. They typically buy in large quantities. They may have little direct influence on product design and manufacture, but they do influence the providers’ production schedules, pricing policies, warehousing and delivery arrangements, return policies for unsold merchandise, and so forth. • Distributor. Distributors are like wholesalers in some ways but differ in the fact that they may stock a wider variety of products from a wide range of producers. What they stock is directly influenced by their customers’ demands and needs. Their customers’ orders are often small and may consist of a mix of products. The distributors’ forte is stocking thousands of catalog items that can be “picked” and shipped on short notice, at an attractive price. Customers seeking an industry level of quality, at a good price, and immediately available mainly influence distributors stocking commodity-type items, such as sheet metal, construction materials, mineral products, and stationery items. “Blanket orders” for a yearly quantity delivered at specified intervals are prevalent for some materials. • Retail chain buyer. Buyers for large retail chains, because of the size of their orders, place major demands on their providers, such as pricing concessions, very flexible deliveries, special packaging requirements, no-cost return policy, and requirements that the providers be able to accept electronically sent orders and that they assume warehousing costs for already-purchased products. • Other volume buyers. Government entities, educational institutions, healthcare organizations, transportation companies, public utilities, cruise lines, hotel chains, and restaurant chains all represent large- volume buyers that provide services to customers. Such organ izations have regulations governing their services. Each requires a wide range of products, materials, and external services in delivering its services, much of which is transparent to the consumer. Each requires high quality and has tight limitations on what it can pay (for example, based on appropriations, cost-control mandates, tariffs, or heavy competition). Each such buyer demands much for its money but may offer long-term contracts for fixed quantities. The buying organizations’ internal customers frequently influence the products required. • Service providers. The diversity of service providers buying products and services from other providers is mind-boggling. These buyers include plumbers, public accountants, dentists, doctors, building contractors, cleaning services, computer programmers, website designers, consultants, manufacturer’s representatives, actors, and taxi drivers, among many o thers. This type of buyer, often self-employed, buys very small quantities, shops for value, buys only when the product or service is needed
Chapter 15 Customer Identification 235 (when the buyer has a job, patient, or client), and relies on high quality of purchases to maintain customers’ satisfaction. Influences on products or services for this type of buyer include having the provider be able to furnish service and/or replacement parts for old or obsolete equipment, be able to supply extremely small quantities of an extremely large number of products (such as t hose supplied by a hardware store, construction materials depot, or medical products supply house), and be knowledgeable about how the product will be used. An example of a simplified hypothetic al product/service flow through several types of customers for a consumer product sold via an internet web page follows: a. A consumer (external customer) accesses the Web through an external internet service provider (ISP). b. The consumer searches for a particular book at the lowest price available, accessing various product sellers (the ISP is an external service provider to the various sellers). c. The consumer selects a seller and places an order via the seller’s web page. d. The seller forwards the order to a selected publisher’s order service (the seller is an external customer of the publisher). e. The order service department of the publisher notifies the seller, which notifies the consumer that the book order has been placed. f. The publisher’s order service department forwards a “pick” order to the warehouse, which picks the book from inventory and sends the book to shipping (the warehouse is an internal customer of the order service department, and shipping is an internal customer of the warehouse). g. Shipping packages and sends the book via Package Delivery Service (PDS) directly to the consumer, notifying the publisher’s order ser vice and billing departments and the seller that shipment has taken place (PDS is a service provider to the publisher, and the billing department is an internal customer of shipping). h. The publisher’s billing department adds the shipment to the amount to be billed to the seller at month end. i. PDS delivers the book to the consumer. j. The seller bills the consumer (the consumer is an external customer of the seller’s billing department). With some exceptions (such as very small organizations), most organizations segment their customer base in order to better serve the needs of different types of customers. Providing one product or service to e very type of customer is no longer feasible.
236 Part V Customer Relationship Henry Ford is reported to have said, “People can have the Model T in any color—so long as it’s black.” (Black was the only color of paint available that dried fast enough to allow Ford’s assembly-line approach to work.) Customers sharing particular wants or needs may be segmented by: • Purchase volume • Profitability (to the selling organization) • Industry classification • Geographic factors (such as municipalities, regions, states, countries, and continents) • Demographic factors (such as age, income, marital status, education, and gender) • Psychographic factors (such as values, beliefs, and attitudes) An organization must decide w hether it is interested in simply pursuing more customers (or contributors, in the case of a nonprofit fundraiser) or in targeting the right customers. It is not unusual for an organization, after segmenting its customer base, to find that it is not economically feasible to continue to serve a partic ular segment. Conversely, an organization may find that it is uniquely capable of further penetrating a particular market segment or may even discover a niche not presently served by other organizations.
NOTES 1. Concept initiated by Kaoru Ishikawa. 2. R. T. Westcott, “Quality Level Agreements for Clarity of Expectations,” appendix C in Stepping Up to ISO 9004:2000 (Chico, CA: Paton Press, 2003).
Chapter 16 Voice of the Customer (VOC)
DATA GATHERING AND USE Describe vari ous methods for collecting customer satisfaction feedback, including formal surveys, infor mal feedback, warranty claims, and focus groups. Understand the importance of using customer satis faction feedback to drive continuous improvement. (Understand) CQIA BoK 2020 V.B.1
From a customer contact perspective there are three aspects to address: (1) analy sis of how the customers feel about and react to the products and services an organization delivers and whether those products and services meet their expectations, (2) whether customer relationships are enhancing customer retention, and (3) what the customers foresee as their future wants and needs.1 Customer relationship management (CRM), also referred to as relationship market ing or one-to-one marketing (serving the unique needs of each customer), is receiving emphasis in the fast-paced, ever-changing environment in which organizations must survive and prosper. CRM relates less to the product or service provided and more to the way business is conducted. In a customer-focused organization, the thrust is usually more t oward nurturing the existing customers than trying to attract new customers. A key principle of good customer relations is determining and ensuring customer satisfaction and increasing customer loyalty. Perceptions of customer satisfaction need to be corroborated or rejected through sound means for collecting, analyzing, and acting on customer feedback. Effective systems for utilizing customer feedback involve the following: • Formal processes for collecting, measuring, and analyzing customer data and for communicating results to the appropriate business functions for action • Feedback mechanisms, formal or informal, to determine how well an organization is meeting customers’ requirements and expectations 237
238 Part V Customer Relationship • Choice of and combining of several methods to get a more complete understanding of the customers’ needs and wants • Proven techniques to analyze the feedback data and target areas for improvement • Information derived from the analyzed data is stored appropriately and made available to those who need it. Figure 16.1 illustrates a system by which customer feedback can be used for continuous improvement. W hether using formal or informal data, the process flow in figure 16.1 allows for both corrective action and innovative adjustment to customer interactions. The solid line flow in figure 16.1 shows short term corrective or innovative action. The dotted line flow indicates the combination of several methods of data collection into the strategic planning process.
Customer Feedback Methodologies Data about customers’ satisfaction are found within and outside the organization. Data from within may include the following: • Customer complaints • Past records of claim resolutions • Product warranty registration cards and guarantee usage • Customer satisfaction surveys • Product service records (failure and maintenance) • Input from internal customer-contact personnel
1. Take action
4. Plan corrective or innovative adjustment
Local manager and employees
2. Measure customers’ opinions
3. Analyze and interpret the information
Adjust plans, policies, products, or services
Combine measures from all sources
Analyze and interpret the information
Figure 16.1 System for utilizing customer feedback.
Chapter 16 Voice of the Customer (VOC) 239 • Transaction data • Listening post input • Lost-customer analysis • Internal market research Data from outside the organization may include the following: • Focus group data • Warranty claims • Data about competitors’ customers • Media research (internet searches, websites, TV, radio, magazines, newspapers, trade journals) • Public information (customers’ and competitors’ annual reports, customers’ brochures and advertising) • Industry market research
Analyzing Customer Data Product Warranty Registration (Return Cards and Online Registration) Organizations may include registration cards in the packages of new products. When the consumer completes the card and sends it in, these cards provide some basic customer data that help the seller better understand buyers’ needs. Initially, the value is in analyzing the customer’s purchasing decision (by the types of questions asked on the cards); and later, if the customer files a claim, this information helps the seller understand the cause of the dissatisfaction. Many organizations now offer online product warranty registration. When the consumer completes the online registration for a new product, the supplier receives information on the user as well as the user’s e-mail address. Some producers also provide f ree information, via the internet, to suppliers (or distributors) on how the device is used and when there are issues. Customer Surveys Many organizations solicit customer feedback with formal customer surveys. The aims of a survey are to get as high a response rate as possible in order to obtain the most representative sampling of the customer population surveyed and as much useful data as possible. Designing effective surveys and analyzing the data received are processes involving specialized expertise and knowledge. Administering the survey process can be expensive. Misinterpretation and inappropriate use of the data can be even more expensive. Surveys may be administered by several methods: • Mail • Electronic delivery (e-mail or through a website) • Telephone
240 Part V Customer Relationship • In person, one-to-one • In person, group • In person, panel Each method has advantages and disadvantages. The relative effectiveness of one method over another also depends on the purpose of the survey, the population to be surveyed, and the benefit-to-cost ratio of conducting the survey. For example, one-to-one interviews can generally reach only a small number of persons and are expensive to conduct, but the personal contact involved often yields great insights. The mailed survey has its costs but can reach unlimited numbers of potential respondents. The response rate can be low and the types of customers responding may not represent a reasonable sample, but this method is far less expensive than one-to-one surveys. Electronic surveys are relatively inexpensive when integrated with other website material, but they can yield very low response rates and may produce responses from only the wildly delighted customers, the highly dissatisfied customers, and any “loyal” customers willing to help. Following are some of the mistakes organizations make in using surveys: • Using an annoying methodology, a poor survey design, an overall unappealing presentation, or questions that seem silly, without reason, or not pertinent. Any of these will give the customer a reason not to respond. • Formulating questions solely on the basis of what the organization thinks the customer would want to answer. Good survey design calls for the customers to be asked what is most important to them and what they would want to see addressed in a survey. • Selecting customers that are neither random nor representative, resulting in responses that are not statistically valid. This can also happen when a low quantity of responses is analyzed. The analy sis ignores the fact that customers at the extremes of satisfaction and dissatisfaction tend to respond to surveys more frequently than those who are neutral. • Asking inept or misdirected questions that then cause the organization to focus on the wrong or least important improvement effort. • Designing questions that force an answer where none of the choices are applicable to the customer. • Failing to write questions at a level that the customer can understand. Survey validity may be compromised. • Conducting surveys but then failing to use the results in strategic planning and continuous improvement efforts. • Experimenting to determine whether a survey accompanied by an incentive (money, savings coupon, free xyz) increases the volume of response—using a strategy literally to “buy” the response, perhaps even influencing the level of satisfaction reported (Some fundraising entities
Chapter 16 Voice of the Customer (VOC) 241 often include a penny, nickel, dime, or quarter in their literature to lure, or shame, the receiver into making a donation.)
Transaction Data Organizations frequently collect a wealth of data about their customers through direct one-to-one transactions. Examples include data collected on consumer buying habits through the use of store-issued identification cards (the use of these cards is supported by discount incentives). Analyzing “hits” and “buys” from users of websites is another source of data. Electronic data interchange (EDI) is the paperless, electronic transmission of a customer’s order data (requirements) to the supplier’s internal order fulfillment system. In some fully automated systems, the EDI data transmitted may trigger the order entry, production of the product, shipping, delivery, and billing—with no or minimum human intervention. EDI is often a contractual requirement from many customers. Another way to gather transaction data is to engage external “mystery shoppers” to make purchases of the seller’s product and provide feedback to the seller organization about the experience. (The same approach is also used to “shop” the competitors and check out their approaches.) Data from Established “Listening Posts” Organizations have many employee categories that periodically or occasionally interact with counterparts in the customers’ organizations: engineer to engineer, salesperson to salesperson, CEO to CEO, and delivery person to customer’s receiving person, among others. In a majority of these interactions (face-to-face, telephone, e-mail, e tc.), the customers’ people may express opinions, suggestions, complaints, or compliments about the supplier’s organization, the quality of its products/services, delivery, price—even the personal attention they receive (or don’t receive). Excepting severe negative input, these comments, casually and informally made, are seldom captured. By not having a formal process for collecting and analyzing these data (for example, trending), an organization is unable to spot the early stages of an eventual customer problem. It also misses compliments that should be passed along to the responsible people as positive feedback.2 Jan Carlzon, president of Scandinavian Airlines, in his book Moments of Truth, discusses the often-unrecognized opportunities all employees have for gathering customer data. A “moment of truth” is any contact a customer has with another organization.
Understanding Customer Satisfaction Categories One model used to analyze customer satisfaction data is the Kano model (Figure 16.2). Noriaki Kano developed this model to show the relationship among three types of product/service characteristics, or qualities: those that must be present, t hose that are one-dimensional, and those that are delighters. The presence or absence of must-be characteristics is shown by a curved line in the lower-right quadrant. When a must-be characteristic is not present or is not
242 Part V Customer Relationship Satisfaction
+
Onedimensional
Delighters
Service fully functional
Service dysfunctional
Must be
–
Dissatisfaction
Figure 16.2 The Kano model.
present in sufficient quantity, dissatisfaction exists. As the characteristic becomes more available or of a higher quality, customer satisfaction increases, but only to a neutral state, represented by the horizontal line. (The characteristic can only serve to not dissatisfy the customer. Its presence will neither satisfy nor delight the customer.) A one-dimensional characteristic drives satisfaction in direct correlation to its presence and is represented by a straight line. For example, as the interest rate on a savings account rises, so does satisfaction. The curved line in the upper left to center area represents delighters. If absent, there is no effect on satisfaction. But when present, these features delight the customer. As an example, in the early days of the automobile, there were no cup holders. Gradually auto manufacturers saw the need, and a series of slide-on, clamp-on, and other less than satisfactory devices evolved. Eventually, built-in cup holders appeared, and for a time became delighters, resulting in great customer satisfaction. Over time, cup holders became a must-have. Finding cup holders in the new car just purchased is no longer a big deal; not finding cup holders, or not finding enough of them, creates customer dissatisfaction.
Customer Satisfaction and Loyalty Customer feedback data, especially complaints, are gifts. Without this feedback, the organization would not know how its customers feel about and react to the products and services delivered. And, the organization would not have the opportunity to improve its processes to increase its number of loyal customers.
Chapter 16 Voice of the Customer (VOC) 243 There are five basic levels of satisfaction that may be gained from the information derived from customer data collected: 1. May be satisfied 2. May be dissatisfied 3. Met their priorities 4. Just barely met their need 5. Truly excited or delighted Table 16.1 lists some common measures of satisfaction and the impact on customer loyalty. Thought must be given to whether what is delivered only marginally satisfies the customers or if it has the potential for generating real excitement and delight. The analysis would depend on the types of customers being served as well as the type of product/service and any critical-to-quality factors. Table 16.2 lists five levels of customer satisfaction, from dissatisfied to committed advocate.
Table 16.1 Commonly used measures of loyalty. Overall satisfaction with the brand or company Overall quality of the product/service Advocacy (stated likelihood of telling other people about the product) Intent to repurchase/maintain current level of purchases Willingness to continue using/ purchasing in the event of problems with service or product Willingness to expend effort/ overcome obstacles in order to purchase
Sensitivity to price Willingness to consider purchasing competitors’ products Attractiveness of competing products/ services Willingness to switch to competing products/services Importance of the product/service category to the respondent Emotional attachment to the brand
Table 16.2 Levels of customer satisfaction. Level
Is Your Customer:
Then Your Customer:
1
has probably departed forever.
2
is casual (any supplier will do).
3
is borderline, uncommitted.
4
delighted?
is a return customer (retained).
5
a committed advocate?
is loyal, appreciates what you do, and tells others.
Source: Reprinted with permission of R. T. Westcott & Associates.
244 Part V Customer Relationship Utilizing Customer Satisfaction and Loyalty Analysis A critical factor for the organization is the economic impact of a lost customer. Producing tabulations of customer satisfaction data, trend charts, and so forth is of minimal value unless there is an established objective against which to compare. To make sense of the time and energy involved in collecting the data, t here must be a target. To justify the preventive action that may be indicated by the analyzed data, there needs to be a basis for estimating the anticipated gain to be achieved by the action, a means for tracking progress toward achieving the objective, and a basis for evaluating the effectiveness of the action taken. Knowing what it costs to lose a customer is a good place to start. Improvement in customer retention has the potential for a substantive dollar payoff. The figures have a direct impact on the profit or cost-containment goals of the organization, as well as the qualitative perceptions of the organization within its community. Tracking, measuring, and reporting on a real-dollar basis is usually more meaningful than doing so on the basis of percentages or quantities alone. Simplified steps for determining what it is worth to retain customers are the following: 1. Segment the customer base by types of products or services sold to each segment. 2. Select an appropriate time period—for example, for customers buying consumer products, perhaps two years; for homeowner insurance buyers, maybe 30 years. 3. Compute the average annual profit each customer segment produces: As an example, for the home computer buyer segment, the average initial purchase price (including a three-year service contract) plus the average price of add-ons purchased within the three years, divided by three, times the number of customers in this segment equals the annual value of this segment. 4. Compute the worth to retain the customer: To the value of an individual customer in this segment, add the dollar value of upgrading the customer to a new computer at the end of the three-year period. Determine how many customers’ upgrades represent a challenging but possible goal. Multiply the individual customer’s figure by this number of upgrades. This is what it is worth to retain your customers through their first upgrade. 5. Use your customer satisfaction data to determine what actions are needed in order to retain your present customers, and estimate the cost of t hese actions. 6. Compute the estimated net gain from customer retention efforts: worth of customers minus cost to retain the customers. 7. Do this for each segment. Note that not all segments may be worth the added retention effort. You may also discover a segment of customers for which even initial efforts to sell to them may not be economically wise.
Chapter 16 Voice of the Customer (VOC) 245 A supermarket, the only large chain present in a small town, estimates that its customers spend an average of $80 a week at the store ($4,160 a year) and that the average customer stays with the store for seven years (total average customer worth equals $29,120). Data analysis shows that customer satisfaction, in addition to the number of retained buyers, is at or above the industry norm for this type of location and store. G reat! But the store does lose customers. At an average value of $29,120, it’s worth exploring why the lost customers are occurring and what it would be worth to add efforts to retain more of these lost customers. And, as the town grows, the area is attracting other interested store chains. Action now to improve and sustain retention may be wise. To gain a perspective of the scope and impact of lost customers: • Create a rating scale for the reasons an organization loses its customers • Apply the rating to a random sample quantity of customers lost • Develop a Pareto chart for quantity lost in each rating category • Create a trend chart showing the losses by category over time • Initiate preventive action to decrease losses Customer satisfaction data are analyzed to improve customer satisfaction and retain customers. Retaining customers costs money but is usually much less expensive than seeking new customers.
Organizational Value in Assessing Customer Satisfaction and Loyalty It should be obvious that the more valid and useful information an organization derives from its customers, the more opportunities are surfaced for process, product, and service improvement. Obvious, yes. Acted on, maybe. A myriad of questions can arise: • Have enough data been collected, or have too much been collected? • Is there enough time and money to make improvements? • Is management willing to commit and support change? • Are there enough potential advantages in investing in the changes that customers’ feedback indicates are needed? • Do the organization’s vision, mission, strategies, practices, principles, and values support the improvements that the customer information indicates or implies? • Would all segments of the customer base be affected by indicated changes from customer feedback? • Does the customer feedback information that would drive orga nizational improvement suggest that organization culture change would, or should, result from the improvements, and if so, what impact on the organization’s stakeholders may result (beneficial or nonbeneficial)?
246 Part V Customer Relationship The organization should realize the following benefits from assessing customer satisfaction and loyalty, and acting on indicated areas for improvement: • Reduction or elimination of conflicting encounters between employees and customers • Increased profitability or cost containment resulting from elimination of waste • Enhanced reputation for care of customers • Growth in customer base • Improved processes leading to improved quality and employee morale • More word-of-mouth recommendations from present to potential new customers • Widespread approval gained by the organization and recognition for its customers’ satisfaction and loyalty • Possible unconditional guarantee policy for the organization’s products and services, further enhancing its reputation for quality • Improvement actions that lead to recognition as the top choice for bestto-work-for organization, a feeling and image that supports attracting top talent and employee retention (loyalty)
COMPLAINT PROCESS Define and identify a customer complaint and com plaint handling pro cess including documentation, action taken, and providing resolve to the customer. (Apply) CQIA BoK 2020 V.B.2
Customers should be given the opportunity to express disappointment or displea sure stemming from a purchase. Complaint data, when appropriately captured and analyzed, provide a wealth of information about customers’ satisfaction. It’s important to recognize that a complaint is not a nuisance; it’s a gift. However, it must be realized that the data do not constitute a valid statistical sample: many customers find it a burden to complain unless there is a very serious problem, and the majority of customers appear to have no complaint to register. Many organizations openly solicit complaints—think of the restaurant server who inquires about your satisfaction with your food, the organization that serves mail-order customers and includes a self-addressed, stamped reply card, and the hotel that seeks feedback on your satisfaction with your stay at its facility. It has been proved that a buyer’s satisfaction is often greatly improved when a complaint is quickly and effectively resolved.
Chapter 16 Voice of the Customer (VOC) 247 Research by the U.S. Office of Consumer Affairs/Technical Assistance Research Programs (TARP) shows that the speed of complaint resolution affects repurchase intent, which is significantly higher when resolution is achieved quickly. Customer relationship management systems generally include processes to: • Document all received customer complaints • Track problem-solving efforts surrounding the complaint • Record resolution actions and final communication with the complainant
CUSTOMER NEEDS Understand the key ele ments of quality function deployment (QFD) and how it identifies and priori tizes customer expectations and needs. (Understand) CQIA BoK 2020 V.B.3
In becoming a customer-focused organization, it is important that the requirements and expectations of the customer permeate every function within the organization. One tool for deploying (cascading) the voice of the customer (VOC) downward throughout the organization is quality function deployment (QFD). QFD consists of a series of interlocking matrices, outlined in Figure 16.3. In this example, to produce a product that meets the customer’s requirements and expectations, customer requirements are aligned with internal design requirements,
Customer requirements
Figure 16.3 VOC deployed.
Parts requirements
Process requirements
Production requirements Process requirements
Parts requirements
Design requirements
Customer requirements
Design requirements
Customer satisfaction
248 Part V Customer Relationship design requirements are aligned with parts requirements, parts requirements with process requirements, and process requirements with production requirements. A focus group is a means for capturing insightful information about customers’ expectations before a product or service is designed and launched as well as a means for gathering customers’ satisfaction with products or services purchased.
Introduction to QFD QFD is a system for translating customer requirements into appropriate features at each stage of the development of a concept—from the definition of the function to produce it, to designing the delivery process, and finally to defining the marketing campaign to inform the potential customer of its availability and readiness for use. ISO 16355 provides standards for the use of QFD in the following areas: • ISO 16355-1:2015 general framework • ISO 16355-2:2017 qualitative voice of customer • ISO 16355-3:2019 quantitative voice of customer • ISO 16355-4:2017 VoC analysis • ISO 16355-5:2017 transform VoC into design • ISO 16355-6:2019 optimization • ISO 16355-7:2022 digitalized products • ISO/TR 16355-8:2017 commercialization The initials QFD can be further defined as follows: • Q—quality of your output—how well it meets and satisfies your customer’s requirements • F—the function is what defines the size, shape, or form of your output— what you do or produce • D—how you do it, the deployment—how well the process is aligned with customer needs and wants The main purpose of QFD is to ensure that the VOC is captured, analyzed, prioritized, reviewed, and deployed throughout the design or redesign and development process of a product or service. QFD also helps an organization understand how well it is satisfying its current customers and what future customer needs and wants will be for new products or services. The QFD process is a team-based, structured, and disciplined approach to product and service design, redesign, and development. The QFD team must include product or service providers, suppliers, delivery channel representatives, and the customer. The customer includes both the direct recipient, who receives benefit from the organization providing the product or service, and the final recipient, who delivers the service and cashes in the direct recipient’s benefit. (Public health electronic benefit transfer recipients receive food benefits that they cash in at the grocery store, which is the final recipient.) Figure 16.4 illustrates the traditional House of Quality used to capture QFD data. QFD uses a series of these matrices to drill down from the customer requirements “house” to the production requirements “house” shown in Figure 16.3.
Chapter 16 Voice of the Customer (VOC) 249
Correlations
Relationships and strength of items
Customers’ perceptions relative to your competitors
Importance weighting
Customer wants and needs— “Voice of the Customer”
Critical characteristics of our process that meet customers’ needs—“Voice of the Company”
Importance rating—summary Targets—ranking by technical importance
Figure 16.4 House of Quality.
QFD supports an organization’s quality improvement initiatives by: • Developing an objective definition of product and service quality to be achieved • Teaching the organization about the value of capturing and deploying the VOC throughout the organization • Providing products and services that satisfy your internal and external customers • Training participants in a tool and technique that can be used in other teaming activities • Strengthening the teaming process • Helping to develop a deployment process throughout the organization based on the VOC The foundation of an effective QFD activity is the perfect springboard into product and service delivery, including measures and targets to monitor ongoing performance.
250 Part V Customer Relationship QFD is a highly systematic and disciplined process that requires management’s active involvement and support. QFD is not a spectator sport, nor is it a process that can be delegated by the decision makers. Each matrix interaction that is decided builds on the next one. Decision makers need to be making t hese decisions and not second guessing them at a later date. The decision makers must be actively involved in all aspects of a QFD study and its review for maximum results.3
NOTES 1. Some content for this chapter has been excerpted from Russell T. Westcott, chapter 17 in The Certified Manager of Quality/Organizational Excellence Handbook, 4th ed. (Milwaukee, WI: Quality Press, 2014). 2. R. T. Westcott, “Quality Level Agreements for Clarity of Expectations,” appendix C in Stepping Up to ISO 9004:2000 (Chico, CA: Paton Press, 2003). 3. Grace L. Duffy, John W. Moran, and William J. Riley, Quality Function Deployment and Lean-Six Sigma Applications in Public Health (Milwaukee, WI: Quality Press, 2010), 19–21.
ADDITIONAL RESOURCES Beecroft, G. Dennis, Grace L. Duffy, and John W. Moran, eds. Chapter 12 in The Executive Guide to Improvement and Change. Milwaukee, WI: Quality Press, 2003. Brown, Stanley A. Customer Relationship Management. Toronto, Canada: John Wiley & Sons, 2000. Carbone, L. P. Clued In: How to Keep Customers Coming Back Again and Again. Upper Saddle River, NJ: Financial Times Prentice Hall, 2004. Chaplin, Ed, and John Terninko. Customer Driven Healthcare: QFD for Process Improvement and Cost Reduction. Milwaukee, WI: Quality Press, 2000. Evans, James R., and William M. Lindsay. Chapter 4 in The Management and Control of Qual ity, 5th ed. Cincinnati: South-Western College Publishing, 2002. Goldstein, Sheldon D., Superior Customer Satisfaction and Loyalty: Engaging Customers to Drive Performance. Milwaukee, WI: Quality Press, 2010. Juran, Joseph M., and A. Blanton Godfrey, eds. Section 18 in Juran’s Quality Handbook. 5th ed. New York: McGraw-Hill, 1999. Insight Publishing. Real World Customer Ser vice Strategies That Work (a compendium). Sevierville, TN: Insight Publishing, 2004. Newell, Frederick. Loyalty.com: Customer Relationship Management in the New Era of Internet Marketing. New York: McGraw-Hill, 2000. Norausky, Patrick H. The Customer and Supplier Innovation Team Guidebook. Milwaukee, WI: Quality Press, 2000. Pyzdek, Thomas, and Paul Keller. Chapter 6 in The Handbook for Quality Management: A Complete Guide to Operational Excellence. New York: McGraw-Hill, 2013. Schultz, Garry. The Customer Care & Contact Center Handbook. Milwaukee, WI: Quality Press, 2003. Ulwick, Anthony. What Customers Want: Using Outcome-Driven Innovation to Create Break through Product and Services. New York: McGraw-Hill, 2005. Westcott, Russell T., ed. Chapter 17 in The Certified Manager of Quality/Organizational Excel lence Handbook. 4th ed. Milwaukee, WI: Quality Press, 2014. Wilburn, Morris. Managing the Customer Experience: A Measurement-Based Approach. Milwaukee, WI: Quality Press, 2007.
Appendix A Certified Quality Improvement Associate (CQIA) Body of Knowledge 2020
The topics in this Body of Knowledge include subtext explanations and the cognitive level at which the questions w ill be written. This information w ill provide useful guidance for both the Exam Development Committee and the candidate preparing to take the exam. The subtext is not intended to limit the subject m atter or be all-inclusive of material that w ill be covered in the exam. It is meant to clarify the type of content that will be included on the exam. The descriptor in parentheses at the end of each entry refers to the maximum cognitive level at which the topic will be tested. A complete description of cognitive levels is provided at the end of this document. I.
Quality Basics (30 Questions) A. Terms, concepts, and principles 1. Quality definitions Describe and distinguish between the common definitions of quality. (Apply) 2. Quality plan Define a quality plan, describe its purpose and objectives to achieve the quality mission or policy. Identify the various functional areas and people having responsibility for contributing to its development. (Understand) 3. Quality systems Understand the difference and relationship between quality assurance, quality control, and continuous quality improvement. (Understand) 4. Organizational culture Understand how culture influences the success of process improvement efforts such as lean, Six Sigma, ISO 9001, Baldrige, and change management. (Understand) 5. Employee involvement and empowerment Define and distinguish between employee involvement and employee empowerment. Describe the benefits of both concepts. (Understand)
251
252 Appendix A 6. Systems and processes Define and distinguish between a system and a process and describe the interrelationships between them. Describe the components of a system—supplier, input, process, output, customer (SIPOC)—and how these components impact the system as a whole. (Analyze) 7. Variation Define and distinguish between common and special cause variation in relation to quality measures. (Understand) 8. Standardization Describe how quality systems provide consistency and standardization (e.g., ISO 9001). (Remember) B. Benefits of quality Describe how using quality tools, techniques, and concepts can improve processes and deliverables (including products and services), and how each benefit all parts of an organization. Describe what quality means to various stakeholders (e.g., employees, organizations, customers, suppliers, community, and interested parties) and how each can benefit from quality. (Understand) C. Foundations of quality Understand the key concepts and teachings of the foundational quality thought leaders including 1) Walter Shewhart, 2) W. Edwards Deming, 3) Joseph Juran, 4) Kaoru Ishikawa, 5) Philip Crosby, and 6) Armand Feigenbaum. (Understand) II.
Team Basics (16 Questions) A. Team organization 1. Team purpose Describe why teams are an effective way to identify and solve problems, and describe when, where, why, and how teams can be used effectively. (Apply) 2. Types of teams Define and distinguish between various types of teams: process teams, continuous improvement teams, workgroups, self- managed teams, ad hoc project teams, cross-functional teams, and virtual teams. (Apply) 3. Value of teams Explain how a team’s efforts can support an organization’s key strategies and effect positive change throughout the organ ization. (Understand)
Certified Quality Improvement Associate Body of Knowledge 2020 253 B. Roles and responsibilities Describe the roles and responsibilities of various team stake holders, such as 1) sponsor, 2) champion, 3) facilitator, 4) leader, 5) member, 6) scribe, and 7) timekeeper. (Understand) C. Team formation and group dynamics 1. Initiating teams Apply the elements of launching and sustaining a successful team, including establishing a clear purpose and goals, developing ground rules and schedules, gaining support from management, and obtaining commitment from team members. (Apply) 2. Selecting team members Describe how to select team members based on knowledge, skill sets, and team logistics, such as an adequate number of members in relation to the size or scope of the project, appropriate representation from affected departments or areas, and diversity. (Apply) 3. Team stages Describe the classic stages of team development: forming, storming, norming, performing, and adjourning. (Understand) 4. Team conflict Identify the value of team conflict and recognize how to resolve it. Define and describe groupthink and how to overcome it. Determine how good logistics, an agenda, and effective training facilitate team success. (Analyze) 5. Team decision-making Describe and use different decision-making models, such as voting (majority rule, multivoting) and consensus. Use follow-up techniques to clarify the issue to be decided, to confirm agreement on the decision, and to achieve closure. (Apply) III. Improvement (40 Questions) A. Process improvement 1. Six Sigma concepts and tools Compare Six Sigma concepts, tools, and techniques. Understand the DMAIC phases: define, measure, analyze, improve, and control. (Understand) 2. Lean concepts and tools Compare lean concepts, tools, and techniques. Understand lean tools used to reduce waste, including set-up and cycle-time reduction, pull systems (kanban), continuous improvement (kaizen), just-in-time (JIT), 5S, value stream mapping, and error-proofing (poka-yoke). (Understand)
254 Appendix A 3. Benchmarking Define benchmarking and describe how it can be used to develop and support best practices. (Understand) 4. Incremental and breakthrough improvement Describe and distinguish between these two types of improvements, the steps required for each, and the type of situation in which either type would be expected. (Understand) B. Improvement techniques Select and utilize improvement opportunity techniques and/ or methodologies including 1) brainstorming, 2) plan-do-check- act (PDCA) cycle, 3) affinity diagrams, 4) cost of poor quality (COPQ), and 5) internal audits. (Apply) C. Improvement tools Select, interpret, and apply the basic improvement tools including 1) flowcharts, 2) histograms, 3) Pareto charts, 4) scatter diagrams, 5) check sheets, 6) control charts, and 7) decision trees. (Apply) D. Root cause analysis Utilize root cause tools such as the 5 whys and fishbone diagram to implement correction and corrective action. (Apply) E. Risk management Understand the tools and techniques used to identify and communicate risks, including failure modes and effects analy sis (FMEA) and strengths, weaknesses, opportunities, threats (SWOT). Understand prioritization of activities and projects based on risk. (Understand) IV. Supplier Relationship (7 Questions) A. Supplier selection Identify the supplier selection criteria and approval process. (Remember) B. Supplier relationship Understand supplier relationships, associated challenges, and effects of a diverse supply base. (Understand) C. Supplier performance Identify supplier performance measures, including quality per formance, on-time delivery, and level of service. (Apply) V.
Customer Relationship (7 Questions) A. Customer identification Distinguish between internal and external customers. Describe their influence on products, services, and processes. (Understand)
Certified Quality Improvement Associate Body of Knowledge 2020 255 B. Voice of the customer (VOC) 1. Data gathering and use Describe various methods for collecting customer satisfaction feedback, including formal surveys, informal feedback, warranty claims, and focus groups. Understand the importance of using customer satisfaction feedback to drive continuous improvement. (Understand) 2. Complaint process Define and identify a customer complaint. Understand and apply the complaint handling process including documentation, action taken, and providing resolve to the customer. (Apply) 3. Customer needs Understand the key elements of quality function deployment (QFD) and how it identifies and prioritizes customer expectations and needs. (Understand)
LEVELS OF COGNITION BASED ON BLOOM’S TAXONOMY—R EVISED (2001) In addition to content specifics, the subtext for each topic in this BoK also indicates the intended complexity level of the test questions for that topic. T hese levels are based on “Levels of Cognition” (from Bloom’s Taxonomy—Revised, 2001) and are presented below in rank order, from least complex to most complex. Remember: Recall or recognize terms, definitions, facts, ideas, materials, patterns, sequences, methods, principles, etc. Understand: Read and understand descriptions, communications, reports, tables, diagrams, directions, regulations, etc. Apply: Know when and how to use ideas, procedures, methods, formulas, principles, theories, etc. Analyze: Break down information into its constituent parts and recognize their relationship to one another and how they are organized; identify sublevel f actors or salient data from a complex scenario. Evaluate: Make judgments about the value of proposed ideas, solutions, etc., by comparing the proposal to specific criteria or standards. Create: Put parts or elements together in such a way as to reveal a pattern or structure not clearly t here before; identify which data or information from a complex set is appropriate to examine further or from which supported conclusions can be drawn.
Appendix B The ASQ Code of Ethics
INTRODUCTION The purpose of the American Society for Quality (ASQ) Code of Ethics is to establish global standards of conduct and behavior for its members, certification holders, and anyone e lse who may represent or be perceived to represent ASQ. In addition to the code, all applicable ASQ policies and procedures should be followed. Violations of the Code of Ethics should be reported. Differences in work style or personalities should be first addressed directly with o thers before escalating to an ethics issue. The ASQ Professional Ethics and Qualifications Committee, appointed annually by the ASQ Board of Directors, is responsible for interpreting this code and applying it to specific situations, which may or may not be specifically called out in the text. Disciplinary actions w ill be commensurate with the seriousness of the offense and may include permanent revocation of certifications and/or expulsion from the Society.
FUNDAMENTAL PRINCIPLES ASQ requires its representatives to be honest and transparent. Avoid conflicts of interest and plagiarism. Do not harm o thers. Treat them with respect, dignity, and fairness. Be professional and socially responsible. Advance the role and perception of the Quality professional.
EXPECTATIONS OF A QUALITY PROFESSIONAL 1. Act with Integrity and Honesty 1. Strive to uphold and advance the integrity, honor, and dignity of the Quality profession. 2. Be truthful and transparent in all professional interactions and activities. 3. Execute professional responsibilities and make decisions in an objective, factual, and fully informed manner. 4. Accurately represent and do not mislead others regarding professional qualifications, including education, titles, affiliations, and certifications. 256
The ASQ Code of Ethics 257 5. Offer services, provide advice, and undertake assignments only in your areas of competence, expertise, and training. 2. Demonstrate Responsibility, Respect, and Fairness 1. Hold paramount the safety, health, and welfare of individuals, the public, and the environment. 2. Avoid conduct that unjustly harms or threatens the reputation of the Society, its members, or the Quality profession. 3. Do not intentionally cause harm to others through words or deeds. Treat others fairly, courteously, with dignity, and without prejudice or discrimination. 4. Act and conduct business in a professional and socially responsible manner. 5. Allow diversity in the opinions and personal lives of others. 3. Safeguard Proprietary Information and Avoid Conflicts of Interest 1. Ensure the protection and integrity of confidential information. 2. Do not use confidential information for personal gain. 3. Fully disclose and avoid any real or perceived conflicts of interest that could reasonably impair objectivity or independence in the ser vice of clients, customers, employers, or the Society. 4. Give credit where it is due. 5. Do not plagiarize. Do not use the intellectual property of others without permission. Document the permission as it is obtained.
Appendix C Quality Glossary
Note: Some items appear in the glossary that are not discussed in the book.
A A-B-C analysis—A systematic collection and analysis of the observation of an individual’s behavior or that of a work group for the purpose of determining the cause of specific behaviors; A = antecedent (the trigger), B = behavior, and C = consequences. Academic Quality Improvement Project (AQIP)—A forum for higher education institutions to review one another’s action projects. acceptable quality level (AQL)—The quality level that is the worst tolerable process average when a continuing series of lots is submitted for acceptance sampling. acceptance number—The maximum number of defects or defectives allowable in a sampling lot for the lot to be acceptable. acceptance sampling—Inspection of a sample from a lot to decide w hether to accept or not accept that lot. T here are two types: attributes sampling and variables sampling. In attributes sampling, the presence or absence of a characteristic is noted in each of the units inspected. In variables sampling, the numerical magnitude of a characteristic is measured and recorded for each inspected unit; this involves reference to a continuous scale of some kind. acceptance sampling plan—A specific plan that indicates the sampling sizes and associated acceptance or nonacceptance criteria to be used. In attributes sampling, for example, there are single, double, multiple, sequential, chain, and skip-lot sampling plans. In variables sampling, there are single, double, and sequential sampling plans. For detailed descriptions of these plans, see the standard ANSI/ISO/ASQ A3534-21993: Statistics—Vocabulary and Symbols—Statistical Quality Control. accreditation—Certification by a recognized body of the facilities, capability, objectivity, competence, and integrity of an agency, service, or operational group or individual to provide the specific service or operation needed. The term has multiple meanings depending on the sector. Laboratory accreditation assesses the capability of a laboratory to conduct testing, generally using standard test methods. Accreditation for healthcare organizations involves an authoritative body surveying and verifying compliance with recognized criteria, similar to certification in other sectors. The glossary includes terms from the article “Speaking Your Language” reprinted with permission from Quality Pro gress © 2018 ASQ, www.asq.org. All rights reserved. No further distribution allowed without permission.
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Quality Glossary 259
accreditation body—An organization with authority to accredit other organizations to perform services such as quality system certification. accuracy—A characteristic of measurement that addresses how close an observed value is to the true value. It answers the question, “Is it right?” ACLASS Accreditation Services—An ANSI-ASQ National Accreditation Board com pany that provides accreditation services for: testing and calibration labs in accordance with ISO/IEC 17025; reference material producers in accordance with ISO Guide 34; and inspection bodies in accordance with ISO/IEC 17020. ACSI—See American Customer Satisfaction Index (ACSI). action plan—The detailed plan to implement the actions needed to achieve strategic goals and objectives (similar to, but not as comprehensive as, a project plan). activity-based costing—An accounting system that assigns costs to a product based on the amount of resources used to design, order, or make it. activity network diagram (AND)—See arrow diagram. ad hoc team—See temporary/ad hoc team. Advanced Product Quality Planning (APQP)—A high-level automotive process for product realization, from design through production part approval. adverse event—A healthcare term for any event that is not consistent with the desired, normal, or usual operation of the organization; also known as a sentinel event. affinity diagram—A management and planning tool used to organize ideas into natu ral groupings in a way that stimulates new, creative ideas. Agile—Shorthand for agile project management. This is a type of software project management that focuses on early delivery of business value, continuous improvement of a project’s product and processes, scope flexibility, team input, and delivering well-tested products that reflect customer needs. agility—The ability for organizations to respond rapidly to changes in internal and external environments without losing momentum or vision. Adaptability, flexibility, and balance are three qualities essential to long-term business agility. alignment— The actions taken to ensure that a pro cess or activity allows traceability from an action level upward to support the organization’s strategy, goals, and objectives. alliance—See partnership/alliance. alpha risk—See producer’s risk. American Association for Laboratory Accreditation (A2LA)—An organization that formally recognizes another organization’s competency to perform specific tests, types of tests, or calibrations. American Customer Satisfaction Index (ACSI)—Released for the first time in October 1994, an economic indicator and cross-industry measure of the satisfaction of U.S. household customers with the quality of the goods and services available to them. This includes goods and services produced in the United States and imports from foreign firms that have substantial market shares or dollar sales. ASQ is a founding sponsor of the ACSI, along with the University of Michigan Business School and the CFI Group.
260 Appendix C American National Standards Institute (ANSI)—A private, nonprofit organization that administers and coordinates the U.S. voluntary standardization and conformity assessment system. It is the U.S. member body in the International Organization for Standardization, known as ISO. American National Standards Institute- American Society for Quality (ANSI- ASQ)—An organization that accredits certification bodies for ISO 9001 quality mana gement systems, ISO 14001 environmental management systems, and other industry specific requirements. American Society for Nondestructive Testing (ASNT)—A technical society for nondestructive testing (NDT) professionals. American Society for Quality (ASQ)—A professional, nonprofit association that develops, promotes, and applies quality-related information and technology for the private sector, government, and academia. ASQ serves individual and organizational members in more than 140 countries. American Society for Quality Control (ASQC)—Name of ASQ from 1946 through the middle of 1997, when the name was changed to ASQ. American Society for Testing and Materials (ASTM)—Nonprofit organization that provides a forum for the development and publication of voluntary consensus standards for materials, products, systems, and services. American Society for Testing and Materials (ASTM) International—Nonprofit organ ization that provides a forum for the development and publication of voluntary consensus standards for materials, products, systems, and services. American standard code for information interchange (ASCII)—The basic computer characters accepted by all American machines and many foreign ones. analogies—A technique used to generate new ideas by translating concepts from one application to another. analysis of means (ANOM)—A statistical procedure for troubleshooting industrial pro cesses and analyzing the results of experimental designs with factors at fixed levels. It provides a graphical display of data. Ellis R. Ott developed the procedure in 1967 because he observed that nonstatisticians had difficulty understanding analysis of variance. Analysis of means is easier for quality practitioners to use because it is an extension of the control chart. In 1973, Edward G. Schilling further extended the concept, enabling analysis of means to be used with non-normal distributions and attributes data in which the normal approximation to the binomial distribution does not apply. This is referred to as analysis of means for treatment effects. analysis of variance (ANOVA)—A basic statistical technique for analyzing experimental data. It subdivides the total variation of a data set into meaningful component parts associated with specific sources of variation in order to test a hypothesis on the parameters of the model or to estimate variance components. There are three models: fixed, random, and mixed. Andon board—A visual device (usually lights) displaying status alerts that can be easily seen by those who should respond. ANSI ACS X12—Transaction standards for electronic communication and shipping notification.
Quality Glossary 261
AOQ—Average outgoing quality. appraisal costs—The costs associated with measuring, evaluating, or auditing products or services to assure conformance to quality standards and performance requirements. AQL—Acceptable quality level. arrow diagram—A management and planning tool used to develop the best possi ble schedule and appropriate controls to accomplish the schedule; the critical path method (CPM) and the program evaluation review technique (PERT) expand the use of arrow diagrams. AS9100—An international quality management standard for the aerospace industry published by the Society of Automotive Engineers and other organizations worldwide. It is known as EN9100 in Europe and JIS Q 9100 in Japan. The standard is controlled by the International Aerospace Quality Group (see listing). Asia Pacific Laboratory Accreditation Cooperation (APLAC)—A cooperative of laboratory accreditation bodies. ASQExcellence (ASQE)—A 501(c)(6) non-profit organization created by ASQ in 2019 to respond to a legal IRS requirement as ASQ’s revenue generating segments reached the maximum allowable revenue threshold allowed for a 501(c)(3) organization. While ASQ and ASQE are officially two separate entities, their combined purpose is still the same: to deliver the best possible experiences to members and to the quality profession as a whole. ASQE has its own founding leadership team made up of members, hard at work on laying the foundations of what a future member-led ASQE board will look like and how their work will complement ASQ’s own strategy for future growth. assessment—An estimate or determination of the significance, importance, or value of an event, organization, process, practice, metric, product, etc. assignable cause—A name for the source of variation in a process that is not due to chance and therefore can be identified and eliminated. Also called special cause. Association for Quality and Participation (AQP)—Was an independent organization until 2004, when it became an affiliate organization of ASQ. Continues today as ASQ’s Team and Workplace Excellence Forum. Association for Talent Development (ATD)—A membership organization that provides materials, education, and support related to workplace learning and performance. Formerly known as the American Society for Talent Development. attribute data—Does or does-not-exist data (data that can be counted). The control charts based on attribute data include fraction defective chart, number of affected units chart, count chart, count-per-unit chart, quality score chart, and demerit chart. attributes, method of—A method of measuring quality that consists of noting the presence (or absence) of some characteristic (attribute) in each of the units u nder consideration and counting how many units do (or do not) possess it. Example: go/no-go gauging of a dimension. audit—A planned, independent, and documented assessment to determine whether agreed-upon requirements are being met. auditee—The individual or organization being audited. auditor—An individual or organization carrying out an audit.
262 Appendix C audit program—The organized structure, commitment, and documented methods used to plan and perform audits. audit team—The group of trained individuals conducting an audit u nder the direction of a lead auditor, relevant to a particular product, process, service, contract, or project. Automotive Industry Action Group (AIAG)—A global automotive trade association with about 2,600-plus member companies that focuses on common business pro cesses, implementation guidelines, education, and training. autonomation—A form of automation in which machinery automatically inspects each item a fter producing it and ceases production and notifies humans if a defect is detected. T oyota expanded the meaning of jidohka to include the responsibility of all workers to function similarly—to check every item produced and, if a defect is detected, make no more u ntil the cause of the defect has been identified and corrected. See also jidohka. availability—The ability of a product to be in a state to perform its designated function under stated conditions at a given time. average—See mean. average chart—A control chart in which the subgroup average, X-bar, is used to evaluate the stability of the process level. average outgoing quality (AOQ)—The expected average quality level of outgoing product or service for a given value of incoming product or service quality. average run lengths (ARL)—On a control chart, the number of subgroups expected to be inspected before a shift in magnitude takes place. average sample number (ASN)—The average number of sample units inspected per lot when reaching decisions to accept or reject. average total inspection (ATI)—The average number of units inspected per lot, including all units in rejected lots (applicable when the procedure calls for 100% inspection of rejected lots).
B Baka-yoke—A Japanese term for a manufacturing technique for preventing m istakes by designing the manufacturing process, equipment, and tools so an operation literally cannot be performed incorrectly. In addition to preventing incorrect operation, the technique usually provides a warning signal of some sort for incorrect perfor mance. See also poka-yoke. balanced plant—A plant in which the capacity of all resources is balanced exactly with market demand. balanced scorecard—Translates an organization’s mission and strategy into a comprehensive set of performance measures to provide a basis for strategic measurement and management, typically using four balanced views: financial, customers, internal business processes, and learning and growth. balance sheet—A financial statement showing the assets, liabilities, and owner’s equity of a business entity.
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balancing the line—The process of evenly distributing the quantity and variety of work across available work time, avoiding overburden and underuse of resources. This eliminates bottlenecks and downtime, which translates into shorter flow time. Baldrige Performance Excellence Program (BPEP)—An award established by Congress in 1987 to raise awareness of quality management and to recognize U.S. companies that have implemented successful quality management systems. The accompanying Criteria for Performance Excellence is updated frequently. Three awards may be given annually in each of five categories: manufacturing businesses, service businesses, small businesses, education institutions, and healthcare organizations. The award is named after the late Secretary of Commerce Malcolm Baldrige, a proponent of quality management. The U.S. Commerce Department’s National Institute of Standards and Technology manages the award, and ASQ administers it. The major emphasis in determining success is achieving results. baseline measurement— The beginning point, based on an evaluation of the output over a period of time, used to determine the process parameters prior to any improvement effort; the basis against which change is measured. basic quality concepts—Fundamental ideas and tools that define the quality of a product or service. These include fitness for use, histograms, process capability indexes, cause and effect diagrams, failure mode and effects analysis, and control charts. batch and queue—Producing more than one piece and then moving the pieces to the next operation before they are needed. Bayes’ theorem—A formula to calculate conditional probabilities by relating the conditional and marginal probability distributions of random variables. benchmarking—An improvement process in which a company measures its perfor mance against that of best-in-class companies (or others who are good performers), determines how those companies achieved their performance levels, and uses the information to improve its own performance. The areas that can be benchmarked include strategies, operations, processes, and procedures. benefit-cost analysis—Collection of the dollar value of benefits derived from an initiative and the associated costs incurred and computing the ratio of benefits to cost. best practice— A superior method or innovative practice that contributes to the improved performance of an organization, usually recognized as best by other peer organizations. beta risk—Type 2 error; the possibility that a bad product w ill be accepted by a consumer. See consumer’s risk. bias—Generally, an effect that c auses a statistical result to be distorted; that is, t here is a difference between the true value and the observed value. Big Q, l ittle q—Terms used to contrast the difference between managing for quality in all business processes and products (Big Q) and managing for quality in a limited capacity (little q). Black Belt—Full-time leader responsible for implementing Six Sigma process improvement projects using pertinent methodologies, such as DMAIC, DOE, and others. Usually a Black Belt trains Green Belts, and often serves for a two-year assignment overseeing eight to ten Six Sigma projects.
264 Appendix C blemish—An imperfection severe enough to be noticed but that should not cause any real impairment with respect to intended normal or reasonably foreseeable use. See also defect, imperfection, and nonconformity. blockchain—A digital database containing information (such as records of financial transactions) that can be simultaneously used and shared within a large decentralized, publicly accessible network; also, the technology used to create such a database. The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. block diagram—A diagram that shows the operation, interrelationships, and interdependencies of components in a system. Boxes, or blocks (hence the name), represent the components; connecting lines between the blocks represent interfaces. T here are two types of block diagrams: a functional block diagram, which shows a system’s subsystems and lower level products and their interrelationships and which interfaces with other systems; and a reliability block diagram, which is similar to the functional block diagram but is modified to emphasize t hose aspects influencing reliability. Bloom’s Taxonomy (levels of cognition)—A hierarchy of terms categorizing levels of cognition. The levels are: • Remember: Recall or recognize terms, definitions, facts, ideas, materials, patterns, sequences, methods, principles, etc. • Understand: Read and understand descriptions, communications, reports, tables, diagrams, directions, regulations, etc. • Apply: Know when and how to use ideas, procedures, methods, formulas, princi ples, theories, etc. • Analyze: Break down information into its constituent parts and recognize their relationship to one another and how they are organized; identify sublevel f actors or salient data from a complex scenario. • Evaluate: Make judgments about the value of proposed ideas, solutions, etc., by comparing the proposal to specific criteria or standards. • Create: Put parts or elements together in such a way as to reveal a pattern or structure not clearly there before; identify which data or information from a complex set is appropriate to examine further or from which supported conclusions can be drawn. See also Appendix A. Board of Standards Review (BSR)—An American National Standards Institute board responsible for the approval and withdrawal of American National Standards. Body of knowledge (BoK)—The prescribed aggregation of knowledge in a particular area an individual is expected to have mastered to be considered or certified as a practitioner. bottom line—The essential or salient point; the primary or most important consideration. Also, the line at the bottom of a financial report that shows the net profit or loss. box and whisker plot—A plot used in exploratory data analysis to picture the centering and variation of the data based on quartiles. After the data are ordered, the 25th, 50th, and 75th percentiles are identified. The box contains the data between the 25th and 75th percentiles.
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brainstorming—A problem-solving tool that teams use to generate as many ideas as possible related to a particular subject. Team members begin by offering all their ideas; the ideas are not discussed or reviewed u ntil after the brainstorming session. breakthrough improvement—A method of solving chronic problems that results from the effective execution of a strategy designed to reach the next level of quality. Contrasted with incremental improvement, a breakthrough improvement is a one-time major reengineering of change that may cross many interorganizational boundaries. Such change often requires a culture transformation within the organization. BS 7799—A standard written by British commerce, government, and industry stakeholders to address information security management issues, including fraud, industrial espionage, and physical disaster. Today, there are three parts to the standard. Part 1 became ISO/IEC 17799, Information technology—Code of practice for information security management. BS 7799 Part 2 focuses on information security management systems. BS 7799 Part 3 covers risk analysis and management. business partnering—The creation of cooperative business alliances between constituencies within an organization or between an organization and its customers or suppliers. Partnering occurs through a pooling of resources in a trusting atmosphere focused on continuous, mutual improvement. See also customer–supplier partnership. business processes—Processes that focus on what the organization does as a business and how it goes about doing it. A business has functional processes (generating output within a single department) and cross-functional processes (generating output across several functions or departments). business process reengineering (BPR)—The concentration on improving business pro cesses to deliver outputs that will achieve results meeting the firm’s objectives, priorities, and mission.
C calibration—The comparison of a measurement instrument or system of unverified accuracy to a measurement instrument or system of a known accuracy to detect any variation from the true value. capability—The natural tolerance of a machine or process generally defined to include 99.7% of all population values. capability maturity model (CMM)—A framework that describes the key elements of an effective software process. It’s an evolutionary improvement path from an immature process to a mature, disciplined process. The CMM covers practices for planning, engineering, and managing software development and maintenance to improve the ability of organizations to meet goals for cost, schedule, functionality, and product quality. capable process—A process is said to be capable if the product or output of the process always conforms to the specifications of the customer—that is, 100% conformance to the customer requirements. capacity constraint resources—A series of non-bottlenecks (based on the sequence in which jobs are performed) that can act as a constraint.
266 Appendix C cascading—The continuing flow of the quality message down to, not through, the next level of supervision until it reaches all workers. See also deployment. cascading training—Training implemented in an organization from the top down, where each level acts as trainers to those below. CASCO—An International Organization for Standardization policy development committee for conformity assessment. cash flow statement—A critical financial statement showing the flow of cash in and out of an enterprise within a given time period. cause—An identified reason for the presence of a defect or problem. cause analysis—Another term referring to root cause analysis. (see listing). cause-and-effect diagram—A tool for analyzing process variables. It is also referred to as the Ishikawa diagram, because Kaoru Ishikawa developed it, as well as the fishbone diagram, because the complete diagram resembles a fish skeleton. The diagram illustrates the main c auses and sub c auses leading to an effect (symptom). The cause- and-effect diagram is one of the seven tools of quality, and a preliminary approach to identifying root cause. C-chart—See count chart. cell—A layout of workstations and/or various machines for different operations (often in a U shape) in which multitasking operators proceed with a part from machine to machine to perform a series of sequential steps to produce a w hole product or major subassembly. cellular manufacturing—Arranging machines in the correct process sequence, with operators remaining within the cell and materials presented to them from outside. cellular team—The cross-trained individuals who work within a cell. CE marking—Formerly known as the CE Mark, the Conformité Européenne (CE) Mark is a mandatory conformity marking for certain products sold within the European Economic Area (EEA) since 1985. The CE marking is also found on products sold outside the EEA that are manufactured in or designed to be sold in the EEA. This makes the CE marking recognizable worldwide even to t hose unfamiliar with the EEA. centerline—A line on a graph that represents the overall average (mean) operating level of the process charted. central tendency—The propensity of data collected on a process to concentrate around a value situated somewhere midway between the lowest and highest value. certification—The receipt of a document from an authorized source stating that a device, process, or operator has been certified to a known standard. Certified Biomedical Auditor (CBA)—An ASQ certification. Certified Calibration Technician (CCT)—An ASQ certification. Certified Food Safety and Quality Auditor (CFSQA)—An ASQ certification. Certified Manager of Quality/Organizational Excellence (CMQ/OE)—An ASQ certification; formerly certified quality manager (CQM). Certified Pharmaceutical Good Manufacturing Practices (GMP) Professional—An ASQ certification.
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Certified Quality Auditor (CQA)—An ASQ certification. Certified Quality Engineer (CQE)—An ASQ certification. Certified Quality Improvement Associate (CQIA)—An ASQ certification. Certified Quality Inspector (CQI)—An ASQ certification; formerly certified mechanical inspector (CMI). Certified Quality Process Analyst (CQPA)—An ASQ certification. Certified Quality Technician (CQT)—An ASQ certification. Certified Reliability Engineer (CRE)—An ASQ certification. Certified Six Sigma Black B elt (CSSBB)—An ASQ certification. Certified Six Sigma Green Belt (CSSGB)—An ASQ certification. Certified Six Sigma Master Black Belt (CSSMBB)—An ASQ certification. Certified Six Sigma Yellow Belt (CSSYB)—An ASQ certification. Certified Software Quality Engineer (CSQE)—An ASQ certification. Certified Supplier Quality Professional (CSQP)—An ASQ certification. chain reaction—A series of interacting events described by W. Edwards Deming: improve quality → decrease costs → improve productivity → increase market share with better quality and lower price → stay in business, provide jobs, and provide more jobs. chain sampling plan—In acceptance sampling, a plan in which the criteria for accep tance and rejection apply to the cumulative sampling results for the current lot and one or more immediately preceding lots. champion—An individual who has accountability and responsibility for many pro cesses or who is involved in making strategic-level decisions for the organization. The champion promotes the concept for change/improvement; is dedicated to seeing it implemented. chance cause—Same as common cause. A random and uncontrollable cause of variation inherent in the process. change agent—The person, from inside or from outside the organization, who facilitates change within the organization. May or may not be the initiator of the change effort. change management—The process, tools, and techniques used to manage change, including planning, validating and implementing change, and verifying effectiveness of change. changeover—A process in which a production device is assigned to perform a different operation, or a machine is set up to make a different part—for example, a new plastic resin and new mold in an injection molding machine. changeover time—The time required to modify a system or workstation, usually including teardown time for the existing condition and setup time for the new condition. characteristic—A property that helps to identify or to differentiate between entities and that can be described or measured to determine conformance or nonconformance to requirements. chart—A tool for organizing, summarizing, and depicting data in graphic form.
268 Appendix C charter—A documented statement officially initiating the formation of a committee, team, project, or other effort in which a clearly stated purpose and approval is conferred. checklist—A tool for organizing and ensuring that all important steps or actions in an operation have been taken. Checklists contain items that are important or relevant to an issue or situation. Checklists should not be confused with check sheets. check sheet—A simple data-recording device. The check sheet is custom designed for the particular use, allowing ease in interpreting the results. The check sheet is one of the seven tools of quality (formerly referred to as a tally sheet). Check sheets should not be confused with checklists. classification of defects—The listing of possible defects of a unit, classified according to their seriousness. Note: Commonly used classifications: class A, class B, class C, class D; or critical, major, minor, and incidental; or critical, major, and minor. Definitions of these classifications require careful preparation and tailoring to the product(s) being sampled to ensure accurate assignment of a defect to the proper classification. A separate acceptance sampling plan is generally applied to each class of defects. closed-loop corrective action (CLCA)—A sophisticated engineering system to document, verify, and diagnose failures; recommend and initiate corrective action; provide follow-up; and maintain comprehensive statistical records. coaching—A continual improvement technique by which people receive one-to-one learning through demonstration and practice and that is characterized by immediate feedback and correction. code of conduct—The expected behavior that has been mutually developed and agreed upon by an organization or a team. common causes of variation—Causes that are inherent in any process all the time. A process that has only common causes of variation is said to be stable, predictable, or in control. Also called chance causes. company culture—A system of values, beliefs, and behaviors inherent in a company. To optimize business performance, top management must define and create the necessary culture. competence—A person’s ability to learn and perform a particular activity. Competence consists of knowledge, experience, skills, aptitude, and attitude components (KESAA factors). complaint handling—The process and practices involved in receiving and resolving complaints from customers. complaint tracking—Collecting data, disseminating them to appropriate persons for resolution, monitoring complaint resolution progress, and communicating results. compliance—An affirmative indication or judgment that the supplier of a product or service has met the requirements of the relevant specifications, contract, or regulation; also, the state of meeting the requirements. computer aided design (CAD)—A type of software used by architects, engineers, draf ters, and artists to create precision drawings or technical illustrations. CAD software can be used to create 2-D drawings or 3-D models. computer aided engineering (CAE)— A broad term used by the electronic design automation industry for the use of computers to design, analyze, and manufacture
Quality Glossary 269 products and processes. CAE includes CAD (see listing) and computer aided manufac turing (CAM), which is the use of computers for managing manufacturing processes.
concurrent engineering (CE)—A way to reduce cost, improve quality, and shrink cycle time by simplifying a product’s system of life cycle tasks during the early concept stages. conflict resolution—A process for resolving disagreements in a manner acceptable to all parties involved. conflict, team—(1) Team conflict can be positive or negative. (2) Conflict can occur at any stage of the team growth but more likely in the forming and storming stages. (3) One way to combat conflict is to use fact-based data to facilitate the appropriate win-win scenario. (4) Facilitators or team leaders should adapt an approach based on the situation to resolve conflict. conformance—An affirmative indication or judgment that a product or service has met the requirements of a relevant specification, contract, or regulation. Conformité Européenne Mark (CE Mark)—A European Union (EU) conformity mark for regulating the goods sold within its borders. The mark represents a manufacturer’s declaration that products comply with EU New Approach Directives. T hese directives apply to any country that sells products within the EU. conformity assessment—All activities concerned with determining that relevant requirements in standards or regulations are fulfilled, including sampling, testing, inspection, certification, management system assessment and registration, accreditation of the competence of those activities, and recognition of an accreditation program’s capability. consensus—Finding a proposal acceptable enough that all team members can support the decision and no member will oppose it. constancy of purpose—Occurs when goals and objectives are properly aligned to the organization’s vision and mission (first of Deming’s 14 steps). constraint— Anything that limits a system from achieving higher per for mance or throughput; also, the bottleneck that most severely limits the organization’s ability to achieve higher performance relative to its purpose or goal. constraints management—See theory of constraints. consultant—An individual who has experience and expertise in applying tools and techniques to resolve process problems and who can advise and facilitate an organ ization’s improvement efforts. consumer—The external customer to whom a product or service is ultimately delivered; also called end user. consumer market customers—End users of a product or service. consumer’s risk—For a sampling plan, the probability of acceptance of a lot, the quality of which has a designated numerical value representing a level that is seldom desirable. Usually the designated value will be the lot tolerance percent defective (LTPD). Also called beta risk or type 2 error. continual process improvement—Includes the actions taken throughout an organ ization to increase the effectiveness and efficiency of activities and processes in order to provide added benefits to the customer and organization. It is considered
270 Appendix C a subset of total quality management and operates according to the premise that organizations can always make improvements. Continual improvement can also be equated with reducing process variation. continuous flow production—A method in which items are produced and moved from one processing step to the next, one piece at a time. Each process makes only the one piece that the next process needs, and the transfer batch size is one. Also referred to as one-piece flow and single-piece flow. continuous improvement (CI)—Sometimes called continual improvement. The ongoing improvement of products, services, or processes through incremental and breakthrough improvements. continuous process improvement—Often used interchangeably with continual. The debate is with the precise definition of continuous versus continual. continuous quality improvement (CQI)—A philosophy and attitude for analyzing capabilities and processes and improving them repeatedly to achieve customer satisfaction. continuous sampling plan—In acceptance sampling, a plan, intended for application to a continuous flow of individual units of product, that involves acceptance and rejection on a unit-by-unit basis and employs alternate periods of 100% inspection and sampling. The relative amount of 100% inspection depends on the quality of submitted product. Continuous sampling plans usually require that each t period of 100% inspection be continued until a specified number, i, of consecutively inspected units are found clear of defects. Note: For single level continuous sampling plans, a single d sampling rate (e.g., inspect one unit in five or one unit in 10) is used during sampling. For multilevel continuous sampling plans, two or more sampling rates can be used. The rate at any time depends on the quality of submitted product. control chart—A basic tool that consists of a chart with upper and lower control limits on which values of some statistical measure for a series of samples or subgroups are plotted. It frequently shows a central line to help detect a trend of plotted values toward either control limit. It is used to monitor and analyze variation from a pro cess to see w hether the process is in statistical control. control limits—The natural boundaries of a process within specified confidence levels, expressed as the upper control limit (UCL) and the lower control limit (LCL). control plan—A document, or documents, that may include the characteristics for quality of a product or service, measurements, and methods of control. coordinate measuring machine (CMM)—A device that dimensionally measures 3-D products, tools, and components with an accuracy approaching 0.0001 inches. core competency—Pertains to the unique features and characteristics of an organ ization’s overall capability. corporate governance—The system of rules, practices, and processes that directs and controls an organization. In essence, corporate governance involves balancing the interests of an organization’s many stakeholders, such as shareholders, management, customers, suppliers, financiers, government, and the community. corrective action—(1) The implementation of solutions resulting in the reduction or elimination of an identified problem. (2) An action taken to eliminate the root cause(s) and symptom(s) of an existing deviation or nonconformity to prevent recurrence.
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corrective action recommendation (CAR)—The full cycle corrective action tool that offers ease and simplicity for employee involvement in the corrective action/pro cess improvement cycle. correlation—The measure of the relationship between two sets of numbers or variables. cost-benefit analysis—See benefit-cost analysis. cost of poor quality (COPQ)—The costs associated with providing poor quality products or services. There are three categories: internal failure costs (costs associated with defects found before the customer receives the product or service), external failure costs (costs associated with defects found after the customer receives the product or service), and appraisal costs (costs incurred to determine the degree of conformance to quality requirements). cost of quality (COQ)—The total costs incurred relating to the quality of a product or service. T here are four categories of quality costs: internal failure costs; external failure costs; appraisal costs; and prevention costs (see individual listings). It is considered by some to be synonymous with COPQ but is considered by o thers to be unique. While the two concepts emphasize the same ideas, some disagree as to which concept came first and which categories are included in each. count chart—A control chart for evaluating the stability of a process in terms of the count of events of a given classification occurring in a sample. count per unit chart—A control chart for evaluating the stability of a process in terms of the average count of events of a given classification per unit occurring in a sample, known as a u-chart. Cp—The ratio of tolerance to 6 sigma, or the upper specification limit (USL) minus the lower specification limit (LSL) divided by 6 sigma. It is sometimes referred to as the engineering tolerance divided by the natural tolerance and is only a measure of dispersion. Cpk index—Equals the lesser of the USL minus the mean divided by 3 sigma (or the mean) minus the LSL divided by 3 sigma. The greater the Cpk value, the better. criteria—Plural of criterion. Stated objectives, guidelines, principles, procedures, and/or standards used for measuring a project, process, product, or performance. criterion—A standard, rule, or test upon which a decision can be based. critical processes— Processes that pre sent serious potential dangers to h uman life, health, and the environment, or that risk the loss of significant sums of money or customers. critical-to-quality (CTQ)—Characteristics that, from a customer’s perception of quality, are critical to the achievement of quality goals, objectives, standards, and/or specifications. cross-functional—A term used to describe a process or an activity that crosses the boundary between functions. A cross-functional team consists of individuals from more than one organizational unit or function. cross-functional team—A group consisting of members from more than one department or work unit that is organized to accomplish a project. cross plot—See scatter diagram.
272 Appendix C cultural resistance—A form of resistance based on opposition to the possible social and organizational consequences associated with change. culture change—A major shift in the attitudes, norms, sentiments, beliefs, values, operating principles, and behavior of an organization. culture, organizational—A common set of values, beliefs, attitudes, perceptions, and accepted behaviors shared by individuals within an organization. cumulative sum control chart—A control chart on which the plotted value is the cumulative sum of deviations of successive samples from a target value. The ordinate of each plotted point represents the algebraic sum of the previous ordinate and the most recent deviations from the target. current good manufacturing practices (CGMP)—Regulations enforced by the U.S. Food and Drug Administration for food and chemical manufacturers and packagers. current state map—Flowchart of a process as it is currently performed. See also future state map. customer—Recipient of a product or service provided by a supplier. See also external customer and internal customer. customer council— A group usually composed of representatives from an organ ization’s largest customers who meet to discuss common issues. customer delight—The result achieved when customer requirements are exceeded in unexpected ways the customer finds valuable. customer expectations—Customers’ perceptions of the value they w ill receive from the purchase of a product or experience with a service. Customers form expectations by analyzing available information, which may include experience, word-of-mouth, and advertising and sales promises. customer experiment—Using a given customer type to test whether a proposed new product w ill be accepted by customers. Also referred to as a pilot study. customer loyalty/retention—The result of an organization’s plans, processes, practices, and efforts designed to deliver its services or products in ways that create retained and committed customers. customer-oriented organization— An organ ization whose mission, purpose, and actions are dedicated to serving and satisfying customers. customer relationship management (CRM)— An organ ization’s knowledge of its customers’ unique requirements and expectations and use of that information to develop a closer and more profitable link to business processes and strategies. customer requirements—Specific characteristics of products and services determined by customers’ needs or wants. customer satisfaction—The result of delivering a product or service that meets customer requirements, needs, and expectations. customer segmentation—The process of differentiating customers based on one or more dimensions for the purpose of developing a marketing strategy to address specific segments. customer service—The activities of dealing with customer questions; also, sometimes the department that takes customer orders or provides post delivery services.
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customer–supplier model (CSM)—A model depicting inputs flowing into a work pro cess that, in turn, add value and produce outputs delivered to a customer. Also called customer–supplier methodology. customer–supplier partnership—A long-term relationship between a buyer and supplier characterized by teamwork and mutual confidence. The supplier is considered an extension of the buyer’s organization. The partnership is based on several commitments. The buyer provides long-term contracts and uses fewer suppliers. The supplier implements quality assurance processes so that incoming inspection can be minimized. The supplier also helps the buyer reduce costs and improve product and process designs. cycle—A sequence of operations repeated regularly. cycle time—The elapsed time that it takes to complete a process from beginning to end. cycle-time reduction—The action(s) taken to reduce the overall process time from start to finish.
D data—Quantitative or qualitative facts presented in descriptive, numeric, or graphic form. There are two kinds of numerical data: measured or variable data, such as “16 ounces,” “4 miles,” and “.075 inches”; and counted or attribute data, such as “162 defects.” Data may also be nonnumeric, expressed as words or symbols. data collection and analysis—The process to determine what data are to be collected, how the data are collected, and how the data are to be analyzed. data collection and analysis tools—A set of tools that help with data collection and analysis. These tools include check sheets, spreadsheets, histograms, trend charts, and control charts. D chart—See demerit chart. decision making—The thought process of selecting a choice from the available options. decision matrix—A matrix used by teams to evaluate problems or possible solutions. After a matrix is drawn to evaluate possible solutions, for example, the team lists them in the far-left vertical column. Next, the team selects criteria to rate the possi ble solutions, writing them across the top row. Third, each possible solution is rated on a scale of 1 to 5 for each criterion and the rating recorded in the corresponding grid. Finally, the ratings of all the criteria for each possible solution are added to determine its total score. The total score is then used to help decide which solution deserves the most attention. defect—A product or service’s nonfulfillment of an intended requirement or reasonable expectation for use, including safety considerations. They are often classified, such as: • Class 1, Critical, leads directly to severe injury or catastrophic economic loss • Class 2, Serious, leads directly to significant injury or significant economic loss • Class 3, Major, is related to major problems with respect to intended normal or reasonably foreseeable use • Class 4, Minor, is related to minor problems with respect to intended normal or reasonably foreseeable use. See also blemish, imperfection, and nonconformity.
274 Appendix C defective—A product that contains one or more defects relative to the quality characteristics being measured. deficiencies—Units of product are considered to have defects. Errors or flaws in a pro cess are described in a hospital setting as deficiencies. Medical procedures, job tasks, or documented processes, for example, may have deficiencies that reduce their ability to satisfy the patient, physician, or other stakeholder in the organization. delighter—Feature of a delivered product or service that unexpectedly pleases a customer. demerit chart—A control chart for evaluating a process in terms of a demerit (or quality score); in other words, a weighted sum of counts of various classified nonconformities. Deming Cycle—Another term for the plan-do-study-act cycle. Walter Shewhart created it (calling it the plan-do-check-act cycle), but W. Edwards Deming popularized it, calling it plan-do-study-act. See Plan-Do-Check-Act cycle. dependability—The degree to which a product or service is operable and capable of performing its required function at any randomly chosen time during its specified operating time, provided that the product or service is available at the start of that period. (Nonoperation-related influences are not included.) Dependability can be expressed by the ratio: time available divided by (time available + time required). deployment—A spreading out; used in strategic planning to describe the process of cascading goals, objectives, and plans throughout an organization. Design for Six Sigma (DFSS)—See DMADV. design of experiments (DOE)—A branch of applied statistics dealing with planning, conducting, analyzing, and interpreting controlled tests to evaluate the factors that control the value of a parameter or group of parameters. deviation—A nonconformance or departure of a characteristic from specified product, process, or system requirements. diagnosis—The activity of discovering the cause(s) of quality deficiencies; the process of investigating symptoms, collecting and analyzing data, and conducting experiments to test theories to determine the root cause(s) of deficiencies. diagnostic journey and remedial journey—A two-phase investigation used by teams to solve chronic quality problems. In the first phase, the diagnostic journey, the team moves from the symptom of a problem to its cause. In the second phase, the remedial journey, the team moves from the cause to a remedy. DiSC—A profiling instrument that measures characteristic ways in which a person behaves in a particul ar environment. The four dimensions measured are dominance, influence, steadiness, and conscientiousness. discrete data—Data where all possible outcomes can be distinctly identified as integers (fractional values are not possible). Examples: family size, good/bad, SAT scores, etc. Also known as attributes data. discrimination—The ability of a measuring instrument to respond to small changes in the value of the materials measured. dissatisfiers—Those features or functions that the customer or employee has come to expect and that, if they were no longer present, would result in dissatisfaction.
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distribution—The amount of potential variation in outputs of a pro cess; usually described in terms of its shape, average, and standard deviation. DMADV—A data driven quality strategy for designing products and processes, it is an integral part of a Six Sigma quality initiative. It consists of five interconnected phases: Define, Measure, Analyze, Design, and Verify. DMAIC—A methodology used in the Six Sigma approach: Define, Measure, Analyze, Improve, and Control. Dodge-Romig sampling plans—Plans for acceptance sampling developed by Harold F. Dodge and Harry G. Romig. Four sets of tables were published in 1940: single sampling lot tolerance tables, double sampling lot tolerance t ables, single sampling average outgoing quality limit tables, and double sampling average outgoing quality limit tables. drivers of quality—Include customers, products/services, employee satisfaction, pro cesses, and total organizational focus on providing quality products/services. driving forces—Forces that tend to change a situation in desirable ways.
E effect—That which results after an action has been taken. The expected or predicted impact when an action is to be taken or is proposed. effectiveness—The state of having produced a decided-upon or desired effect. Increased customer satisfaction, increased employee satisfaction, improved supplier relations, cost reduction, increased efficiency, improved timeliness, greater accuracy, completeness, and profitability are all contributors to effectiveness. efficiency—The ratio of the output to the total input in a process, with an objective to use fewer resources, such as time and cost. efficient—A term describing a process that operates effectively while consuming the minimum amount of resources, such as labor and time. eight disciplines (8D) model—A problem-solving approach to identify, correct, and eliminate recurring problems. eight wastes—Taiichi Ohno originally enumerated seven wastes (muda) and l ater added underutilized people as the eighth waste commonly found in physical production. The eight are: (1) overproduction ahead of demand; (2) waiting for the next pro cess, worker, material, or equipment; (3) unnecessary transport of materials (e.g., between functional areas of facilities, or to or from a stockroom or warehouse); (4) over-processing of parts due to poor tool and product design; (5) inventories more than the absolute minimum; (6) unnecessary movement by employees during the course of their work (such as to look for parts, tools, prints, or help); (7) production of defective parts; (8) underutilization of employees’ brainpower, skills, experience, and talents. eighty/twenty (80/20) rule—A term referring to the Pareto principle, which suggests that most effects come from relatively few c auses; that is, 80 percent of the effects come from 20 percent of the possible causes. electronic data interchange (EDI)—The electronic exchange of data between customers and suppliers and vice versa; for example, using a dedicated high-speed line, a
276 Appendix C customer places an order directly with a supplier, and the supplier acknowledges receipt of the order with confirmation of price and shipping date. Some large customers specify that their suppliers must have this capability in order to qualify as approved suppliers. employee involvement—The practice of involving employees in decisions pertaining to processes, usually within their work units. Such decisions may include suggestions for improving the process, planning, setting objectives, and tracking performance. Natural (work unit) teams, process improvement teams, cross-functional teams, task forces, quality circles, and other vehicles for involvement may be used. Usually participation in decisions related to legal and/or personnel m atters is excluded. empowerment—A condition whereby employees have the authority to make decisions and take action in their work areas, within stated bounds, without prior approval. For example, an operator can stop a production process upon detecting a problem, or a customer service representative can send out a replacement product if a customer calls with a problem. EN 46000—A European quality management system standard for the medical device industry. Technically equivalent to ISO 13485:1996, an international medical device standard. EN 9100—A European quality management standard for the aerospace industry. Considered the technical equivalent of AS9100. end users—External customers who purchase products/services for their own use. Enterprise Resource Planning (ERP)—Business management software that a company uses to collect, store, manage, and interpret data from an integrated suite of applications, e.g., product planning cost and development, manufacturing or service delivery, marketing and sales, inventory management, shipping, and payment. environmental management system— A set of pro cesses and practices that enable an organization to reduce its environmental impacts and promote environmental sustainability. equipment or system availability—The percentage of time during which a process (or equipment) is available to run. This can sometimes be called uptime. To calculate operational availability, divide the machine’s operating time during the process by the net available time (production time/potential production time) × 100. error—The degree of variability between estimates of the same characteristic over repeated samples taken u nder similar conditions. error detection—A hybrid form of error-proofing. It means a bad part can be made but will be caught immediately, and corrective action will be taken to prevent another bad part from being produced. A device is used to detect and stop the process when a bad part is made. This is used when error-proofing is too expensive or not easily implemented. error-proofing—Error prevention. Also called mistake-proofing and poka-yoke. ethics—An individual or an organization’s adherence to a belief or documented code of conduct that is based on moral principles, and that tries to balance what is fair for individuals with what is right for society. European Cooperation for Accreditation (EA)—A cooperative organization of accreditation bodies.
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event—An occurrence, incident, or experience, usually of some significance. An outcome or final result, usually of some action. What takes place between the starting and ending point for a task or group of tasks. excited quality—The additional benefit a customer receives when a product or service goes beyond basic expectations. Excited quality “wows” the customer and distinguishes the provider from the competition. If missing, the customer will still be satisfied. exciter—See delighter. Exemplar Global—A U.S. certification body for personnel certification or training course certification. expectations—The act or state of expecting. To wait in expectation of or looking forward or anticipating. Also, customers’ perceptions about how an organization’s products and services w ill meet their specific needs and requirements. expected quality—Also known as basic quality, the minimum benefit or value a customer expects to receive from a product or service. experimental design—In quality management, a plan for conducting an experiment that includes considerations such as which conditions, f actors, responses, tools, and treatments are to be included or used. explicit knowledge—Captured and recorded data, information, or knowledge. See also tacit knowledge. external customer—A person or organization who receives a product, a service, or information but is not part of the organization supplying it. See also internal customer. external failure—A nonconformance identified by a source outside of the producing organization. Discovered after a product or service has been passed downstream, for example, to users or customers. external failure costs—Costs occurring after delivery or shipment of the product, or during or after furnishing of a service, to the customer. external setup—Setup procedures that can be performed safely while machines or equipment are in motion. Also known as outer exchange of die. See also internal setup.
F facilitator—An individual who is responsible for creating favorable conditions that will enable a team to reach its purpose or achieve its goals by bringing together the necessary tools, information, and resources to get the job done. A facilitator addresses the processes a team uses to achieve its purpose. Specially trained, the facilitator may function as a teacher, coach, and moderator. failure—The inability of an item, product, or service to perform required functions on demand due to one or more defects. failure cost—The costs resulting from products or services not conforming to requirements or customer/user needs—the costs resulting from poor quality. failure modes analysis (FMA)—A procedure to determine which malfunction symptoms appear immediately before or after a failure of a critical paramet er in a system. After all the possible causes are listed for each symptom, the product or procedure is designed to eliminate the problems.
278 Appendix C failure modes and effects analysis (FMEA)—A procedure in which each potential failure mode in every sub item of an item or process is analyzed to determine its effect on other sub items and on the required function of the item or process. failure modes effects and criticality analysis (FMECA)—A procedure that is performed after a failure modes and effects analysis to classify each potential failure effect according to its severity and probability of occurrence. fault tree analysis—A top-down technique for determining the set of components that could cause a failure in a process; specifically accounts for both single and multiple causes. feedback— The response to information received in interpersonal communication (written or oral); it may be based on fact or feeling and helps the party who is receiving the information judge how well the other party is understanding him or her. More generally, feedback is information about a process or performance and is used to make decisions that are directed toward improving or adjusting the process or performance as necessary. feeder lines—A series of special assembly lines that allow assemblers to perform preassembly tasks off the main production line. Performing certain processes off the main production line means fewer parts in the main assembly area, the availability of service ready components and assemblies in the main production area, improved quality, and less lead time to build a product. first in, first out (FIFO)—An inventory management method in which the oldest materials put into storage are the next materials taken out of storage for use. first pass yield (FPY)—Also referred to as the quality rate, the percentage of units that completes a process and meets quality guidelines without being scrapped, rerun, retested, returned, or diverted into an offline repair area. FPY is calculated by dividing the units entering the process minus the defective units by the total number of units entering the process. first time quality (FTQ)—Calculation of the percentage of good parts at the beginning of a production run. fishbone diagram—See cause-and-effect diagram. fitness for use—A term used to indicate that a product or service fits the customer’s defined purpose for that product or service. five-phase lean approach—A systematic method for implementing lean manufacturing that helps improve the production process and sustains gains made in the production cycle in an area or plant. The five phases are: (1) stability—provides an environment with controlled process variables, decreased waste, and increased business impact; (2) continuous flow—characterized by reduced work in process inventory, time loss and defects, and increased process flexibility and repeatable pro cesses between workstations; (3) synchronous production—characterized by disciplined process repeatability and synchronization between operations and customer requirements; (4) pull system—creates an environment in which material replenishment links operations with customer demand; and (5) level production— reduces response time or changes in demand and upstream schedule variability. five Ss—The Americanized version of the Japanese 5S’s is: Sort, Set in order, Shine, Stan dardize, and Sustain. The 5S approach organizes the workplace, keeps it neat and
Quality Glossary 279 clean, establishes standardized conditions, and maintains discipline to sustain the effort.
five whys—A repetitive questioning technique to probe deeper in order to surface the root cause of a problem. The number of times “why” is asked depends upon when the true root cause is reached. flow—The progressive achievement of tasks along the value stream so a product proceeds from design to launch, order to delivery, and raw to finished materials in the hands of the customer with no stoppages, scrap, or backflows. flowchart—A graphical representation of the steps in a process. Flowcharts are drawn to better understand processes. The flowchart is one of the seven basic tools of quality. focus group—A qualitative discussion group consisting of 8 to 10 participants, invited from a segment of the customer base to discuss an existing or planned product or service, and led by a facilitator working from predetermined questions. (Focus groups may also be used to gather information in a context other than customers.) A focus group may be formed to surface the confusion or displeasure users feel as a step toward developing the questions to be included in a survey of customer satisfaction. force-field analysis—A technique for surfacing, discussing, and analyzing the forces that aid or hinder an organization in reaching an objective. An arrow pointing to an objective is drawn down the middle of a piece of paper. The factors that will aid the objective’s achievement, called the driving forces, are listed on the left side of the arrow. The factors that will hinder its achievement, called the restraining forces, are listed on the right side of the arrow. fourteen points—W. Edwards Deming’s 14 management practices to help companies increase their quality and productivity: (1) create constancy of purpose for improving products and services; (2) adopt the new philosophy; (3) cease dependence on inspection to achieve quality; (4) end the practice of awarding business on price alone, and instead minimize total cost by working with a single supplier; (5) improve constantly and forever every process for planning, production, and ser vice; (6) institute training on the job; (7) adopt and institute leadership; (8) drive out fear; (9) break down barriers between staff areas; (10) eliminate slogans, exhortations, and targets for the workforce; (11) eliminate numerical quotas for the workforce and numerical goals for management; (12) remove barriers that rob people of pride in workmanship and eliminate the annual rating or merit system; (13) institute a vigorous program of education and self-improvement for everyone; and (14) put everybody in the company to work to accomplish the transformation. frequency distribution (statistical)—A table that graphically presents a large volume of data so that the central tendency (such as the average or mean) and distribution are clearly displayed. front-line personnel—The workforce and their supervisors who produce the product or service provided by the organization, as distinguished from personnel who serve in a staff or support role or represent higher management. function—A group of related actions contributing to a larger action. functional layout—The practice of grouping machines (such as grinding machines) or activities (such as order entry) by type of operation performed.
280 Appendix C functional organization—An organization organized by discrete functions, for example, marketing/sales, engineering, production, finance, human resources. functional verification—Testing to ensure a part conforms to all engineering perfor mance and material requirements. funnel experiment—An experiment that demonstrates the effects of tampering. Marbles are dropped through a funnel in an attempt to hit a flat-surfaced target below. The experiment shows that adjusting a stable process to compensate for an undesirable result or an extraordinarily good result will produce output that is worse than if the process had been left alone. future state map—Flowchart depicting the changed process process. See also current state map.
G gage—An instrument or system for testing. gage repeatability and reproducibility (GR&R)—The evaluation of a gaging instrument’s accuracy by determining whether the measurements taken with it are repeatable (i.e., there is close agreement among a number of consecutive measurements of the output for the same value of the input under the same operating conditions) and reproducible (i.e., t here is close agreement among repeated measurements of the output for the same value of input made u nder the same operating conditions over a period of time). gainsharing—A type of program that rewards individuals financially on the basis of organizational performance. Gantt chart—A matrix-type of horizontal bar chart used in process/project planning and control to display planned work and finished work in relation to time. Also called a milestone chart when interim checkpoints are added. gap analysis—A technique that compares a company’s existing state to its desired state (as expressed by its long-term plans) to help determine what needs to be done to remove or minimize the gap. gatekeeper—A timekeeper; in team meetings, a designated individual who helps monitor the team’s use of allocated time. gatekeeping—The role of an individual (often a facilitator) in a group meeting in helping ensure effective interpersonal interactions (e.g., someone’s ideas are not ignored due to the team moving on to the next topic too quickly). geometric dimensioning and tolerancing (GD&T)—A set of rules and standard symbols to define part features and relationships on an engineering drawing depicting the geometric relationship of part features and allowing the maximum tolerance that permits full function of the product. George M. Low Trophy—An award presented by NASA to NASA aerospace industry contractors, subcontractors, and suppliers that consistently maintain and improve the quality of their products and services. George M. Low was the NASA administrator for nearly three decades. global quality—The systematic design and implementation of quality processes across the world, based on information-sharing and best practices.
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goal—A statement of general intent, aim, or desire; it is the point toward which management directs its efforts and resources; goals are usually nonquantitative and are measured by supporting objectives. Go/no-go—State of a unit or product. Two parameters are possible: go (conforms to specifications) and no-go (does not conform to specifications). good laboratory practices (GLP)—A quality system (e.g., 21 CFR, part 58) for labs and organizations to use to ensure the uniformity, consistency, reliability, reproducibility, quality, and integrity of testing performed. Promoted by the Organization for Economic Co-operation and Development (OECD) and some regulatory agencies in the world. good manufacturing practices (GMP)—A minimum set of practices recommended or required by some regulatory agencies (e.g., 21 CFR, parts 808, 812, and 820) for manufacturers to meet to ensure their products consistently meet requirements for their intended use. Green Belt (GB)—An employee who has been trained in the Six Sigma improvement method and can lead a process improvement or quality improvement team as part of his or her full-time job. ground rules—Norms or agreed to behaviors concerning how meetings will be run, how team members w ill interact, and what kind of behavior is acceptable. Each member is expected to respect these rules, which usually prevent misunderstanding and disagreements. Examples may be attendance, promptness, participation, interruptions, and confidentiality. group dynamics—The interaction and behavior of individuals within a team or work group meeting. groupthink—Occurs when most or all team members coalesce in supporting an idea or decision that h asn’t been fully explored, or when some members secretly disagree but go along with the other members in apparent support.
H Hawthorne effect—The concept that e very change results (initially, at least) in increased productivity. (Based on studies by Elton Mayo at the Hawthorne Plant of Western Electric Company, in Chicago in 1924.) hazard analysis and critical control point (HACCP)—A quality management system for effectively and efficiently ensuring farm-to-table food safety in the United States. HACCP regulations for various sectors are established by the Department of Agriculture and the Food and Drug Administration. Heijunka—A method of leveling production, usually at the final assembly line, that makes just- in- time production pos si ble. It involves averaging the volume and sequence of different model types on a mixed model production line. Using this method avoids excessive batching of different types of product and volume fluctuations in the same product. See also production smoothing. highly accelerated life test (HALT)—A process for uncovering design defects and weaknesses in electronic and mechanical assemblies using a vibration system combined with rapid high and low temperature changes. The purpose of HALT is to
282 Appendix C optimize product reliability by identifying the functional and destructive limits of a product at an early stage in product development. highly accelerated stress audits (HASA)—A technique in which a sample of parts (as opposed to 100% of the production, as in HASS) is subjected to stresses similar to the levels and duration for HALT. In monitoring the production process, the intent of HASA is to detect slight shifts in the attributes of the product so corrective actions can be taken and implemented before the performance of outgoing product approaches the specifications. highly accelerated stress screening (HASS)—A technique for production screening that rapidly exposes process or production flaws in products. Its purpose is to expose a product to optimized production screens without affecting product reliability. Unlike HALT, HASS uses nondestructive stresses of extreme temperatures and temperature change rates with vibration. histogram—A graphic summary of variation in a set of data. The pictorial nature of the histogram lets people see patterns that are difficult to see in a simple t able of numbers. The histogram is one of the seven tools of quality. honorary member, ASQ—ASQ’s highest grade of membership. As specified in ASQ’s constitution, “An honorary member shall have rendered acknowledged eminent service to the quality profession or the allied arts and sciences.” To attain this level, an individual must be nominated by at least 10 regular members and must be approved unanimously by the board of directors. Hoshin Kanri—The selection of goals, projects to achieve the goals, designation of people and resources for project completion, and establishment of project metrics. hoshin planning—Breakthrough planning; a Japa nese strategic planning pro cess in which an organization develops up to four vision statements that indicate where the organization should be in the next five years. Organizational goals and work plans are developed based on the vision statements. Periodic submitted audits are then conducted to monitor progress. See also value stream. Hotelling’s T2 model—A multivariate profile for detecting differential expressions in microarrays. house of quality—A diagram named for its house-shaped appearance that clarifies the relationship between customer needs and product features. It helps correlate market or customer requirements—voice of the customer (VOC)—and analysis of competitive products with higher-level technical and product characteristics and makes it possible to bring several f actors into a single figure. Also known as quality function deployment (QFD).
I IATF 16949—A harmonized set of supplier quality management system requirements for automotive suppliers released in October 2016 by the International Automotive Task Force (IATF). IATF 16949 replaced ISO/TS 16949. idea creation tools—Tools that encourage thinking and organization of new ideas around issues or opportunities, either individually or with other people. Examples are brainstorming, the Delphi method, role-playing, TRIZ, and visioning. imagineering—Developing in the mind’s eye a process without waste.
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imperfection—A quality characteristic’s departure from its intended level or state without any association to conformance to specification, requirements, or to the usability of a product or service. See also blemish, defect, and nonconformity. improvement—The positive effect of a process change effort. Improvement may result from incremental changes or from a major breakthrough. in-control process—A situation in which the variations within a process occur only between the computed upper and lower control limits. The process is considered to be stable and therefore predictable. A process in which the statistical measure being evaluated is in a state of statistical control; that is, the variations among the observed sampling results can be attributed to a constant system of chance/common causes. See also out-of-control process. incremental improvement—A technique also known as kaisen; frequent improvements that are implemented on a continual basis. T hese improvements are typically small steps within an overall process contained within a given work unit. indicators—Predetermined measures used to measure how well an organization is meeting its customers’ needs and its operational and financial performance objectives. Such indicators can be either leading or lagging indicators. Indicators are also devices used to measure physical objects. indirect customers—Customers who do not receive process output directly but are affected if the process output is incorrect or late. information— Data transformed into an ordered format that makes it usable and enables a person to draw conclusions. information flow—The dissemination of information for taking a specific product from order entry through detailed scheduling to delivery. See also value stream. information system—Technology-based systems used to support operations, aid day- to-day decision making, and support strategic analysis; other names often used include management information system, decision system, information technology [IT], data processing. informative inspection—A form of inspection for determining nonconforming product. See also judgment inspection. innovation—New value created at an optimal cost—not at any cost—through the development of new products, services, or processes. input—Material, product, service, or information that is obtained from an upstream internal provider or an external supplier and is used to produce an output. inspection—Measuring, examining, testing, and gaging one or more characteristics of a product or service and comparing the results with specified requirements to determine whether conformity is achieved for each characteristic. inspection, 100%—Inspection of all the units in the lot or batch. inspection cost—The cost associated with inspecting a product to ensure it meets the internal or external customer’s needs and requirements; an appraisal cost. inspection, curtailed— Sampling inspection in which inspection of the sample is stopped as soon as a decision is certain. Thus, as soon as the rejection number for defectives is reached, the decision is certain, and no further inspection is necessary. In single sampling, however, the whole sample is usually inspected in order to have
284 Appendix C an unbiased record of quality history. This same practice is usually followed for the first sample in double or multiple sampling. inspection lot—A collection of similar units or a specific quantity of similar material offered for inspection and acceptance at one time. inspection, normal—Inspection used in accordance with a sampling plan under ordinary circumstances. inspection, reduced—Inspection in accordance with a sampling plan requiring smaller sample sizes than those used in normal inspection. Reduced inspection is used in some inspection systems as an economy measure when the level of submitted quality is sufficiently good and other stated conditions apply. Note: The criteria for determining when quality is “sufficiently good” must be defined in objective terms for any given inspection system. inspection, tightened—Inspection in accordance with a sampling plan that has stricter acceptance criteria than those used in normal inspection. Tightened inspection is used in some inspection systems as a protective measure when the level of submitted quality is sufficiently poor. The higher rate of rejections is expected to lead suppliers to improve the quality of submitted product. Note: The criteria for determining when quality is “sufficiently poor” must be defined in objective terms for any given inspection system. instant pudding—A term used to illustrate an obstacle to achieving quality, or the supposition that quality and productivity improvement are achieved quickly through an affirmation of faith rather than through sufficient effort and education. Inter-American Accreditation Cooperation (IAAC)—A cooperative organization of accreditation bodies. intermediate customers—Distributors, dealers, or brokers who make products and ser vices available to the end user by repairing, repackaging, reselling, or creating finished goods from components or subassemblies. internal audit—An audit conducted within an organization by members of the organ ization to assess the audited organization’s strengths or weaknesses against its own procedures and/or external standards; a first-party audit. internal customer—The recipient, person, or department who receives the output of another person or department (product, service, or information) within an organ ization; also called NOAC (next operation as customer). internal failure—A product failure that occurs before the product is passed downstream— for example, delivered to external customers. internal failure costs—Costs of failures occurring prior to delivery or shipment of the product, or the furnishing of a service, to the customer. internal setup—Setup procedures that must be performed while a machine or piece of equipment is s topped; also known as inner exchange of die. See also external setup. International Accreditation Registry (IAR)—A nonprofit organization that accredits training and certification program results to international standards and guidelines. International Aerospace Quality Group (IAQG)—An international nonprofit aerospace and defense industry legal entity (registered in Brussels) to continuously improve the processes used by the industry's supply chain to consistently deliver
Quality Glossary 285 high-quality products or services and to make significant improvements in quality performance and reductions in cost.
International Automotive Task Force (IATF)—An ad hoc group of automotive manufacturers (e.g., General Motors, Ford, Fiat Chrysler Automobiles, BMW, Volkswagen, and Renault) and their respective trade associations (e.g., Automotive Industry Action Group, the German Association of the Automotive Industry, and the Society of Motor Manufacturers & Traders) formed to provide improved quality products to automotive customers worldwide. International Laboratory Accreditation Cooperation (ILAC)—A cooperative organ ization of laboratory accreditation bodies. International Organization for Standardization (ISO)—An independent, nongovernmental international organization with a membership of 164 national standards bodies that unites experts to share knowledge and develop voluntary, consensus-based, market-relevant international standards, guidelines, and other types of documents. interrelationship digraph—A management and planning tool that displays the relationship between factors in a complex situation. It identifies meaningful categories from a mass of ideas and is useful when relationships are difficult to determine. Typically, it depicts the origin of data, information, material, or product and the single or multiple functions or processes affected. intervention—An action taken by a leader or a facilitator to support the effective functioning of a team or work group. inventory—A term for assets (e.g., materials, supplies, work in process, and finished goods) held by an organization. Ishikawa diagram—See cause-and-effect diagram. ISO—Also meaning “equal” in Greek, a prefix for a series of standards published by the International Organization for Standardization. (Note: ISO is not the abbreviation of the standards provider.) ISO 9000 series standards—A set of individual but related international standards and guidelines on quality management and quality assurance developed to help companies effectively document the quality system elements to be implemented to maintain an efficient quality system. The standards have been updated frequently since first published in 1987. The standards are not specific to any particular industry, product, or service. The standards w ere developed by the International Organ ization for Standardization, a specialized international agency for standardization composed of the national standards bodies of 164 countries. ISO 9001—A voluntary quality management system standard developed by the International Organization for Standardization (ISO). First released in 1987 and one of several documents in the ISO 9000 family. ISO 14000—A series of international, voluntary environmental management standards, guides, and technical reports developed by the International Organization for Standardization (ISO). ISO 14001—A voluntary environmental management standard developed by the International Organization for Standardization (ISO). ISO 19011—A guideline for the auditing of management system standards developed by the International Organization for Standardization (ISO).
286 Appendix C ISO 26000—An international standard developed by the International Organization for Standardization (ISO) to help organizations effectively assess and address those social responsibilities that are relevant and significant to their mission and vision; operations and processes; customers, employees, communities, and other stakeholders; and environmental impact. ISO standards, other—There are many ISO standards; including for industries (i.e., automotive, aerospace, telecommunications, etc.); for environmental management; for functions (i.e., laboratories); for products; for materials, etc.
J jidohka—Stopping a line automatically when a defective part is detected. Any necessary improvements can then be made by directing attention to the s topped equipment and the worker who stopped the operation. The jidohka system puts faith in the worker as a thinker and allows all workers the right to stop the line on which they are working. See also autonomation. JISQ 9100—An international quality management standard for the aerospace industry. See also AS9100. job enlargement and job enrichment—Job enlargement expands the variety or quantity of task assigned to a worker. Job enrichment adds responsibility and authority to a worker’s assignment. job instruction—Quality system documentation that describes work conducted in one function in an organization, such as setup, inspection, rework, or operator. job specification—A listing of important functional and quality attributes a worker needs to succeed in an assigned job, i.e., knowledge, experience, skills, aptitude, attitude, and other personal characteristics. The Joint Commission—A U.S. healthcare accreditation body; formerly known as Joint Commission for the Accreditation of Healthcare Organizations. judgment inspection—A form of inspection to determine nonconforming product. See also informative inspection. Juran’s trilogy—Three managerial processes identified by Joseph M. Juran for use in managing for quality: quality planning, quality control, and quality improvement. See quality trilogy. just-in-time manufacturing (JIT)—An optimal material requirement planning system for a manufacturing process in which there is little or no manufacturing material inventory on hand at the manufacturing site and l ittle or no incoming inspection. just-in-time training—Providing job training coincidental with, or immediately prior to, an employee’s assignment to a new or expanded job. This action is intended to reduce fade-out, the loss of knowledge and skill that occurs with the lengthening of time between the training and application on the job.
K kaizen—Incremental improvement; a Japa nese term that means gradual unending improvement by d oing little things better and setting and achieving increasingly
Quality Glossary 287 higher standards. Masaaki Imai made the term famous in his book Kaizen: The Key to Japan’s Competitive Success.
kaizen blitz/event—An intense, short-timeframe (typically 3–5 consecutive days) team approach to apply the concepts and techniques of continual improvement (e.g., to reduce cycle time, increase throughput, reduce waste). kanban—A method for providing material/product to a succeeding operation by signaling the preceding operation when more material/product is needed. Originally, this “pull” type of process control employs a kanban, a card, or signboard, attached to a lot of material/product in a production line, signifying the delivery of a given quantity. When all of the material/product has been processed, the card/sign is returned to its source, where it becomes an order to replenish. Presently, some type of electronic notification might replace the card. The key advantages of this method are that unnecessary buildup of work-in-process inventory is eliminated, space is saved, and the risk of loss due to defective material/product is decreased (less work-in-process inventory is produced before a defect is detected). Kano model—Three classes of customer requirements as described by Dr. Noriaki Kano: satisfiers—what customers say they want; dissatisfiers—what customers expect and what results in dissatisfaction when not present; delighters/exciters—new or unexpected features that customers do not expect. It is observed that what a customer originally perceives as a delighter will become a dissatisfier if no longer available. A delighter ultimately becomes a “must have.” KESAA factors—See competence. key performance indicator (KPI)—A statistical measure of how well an organization is doing in a particular area. A KPI could measure an organization’s financial perfor mance or how it is holding up against customer requirements. key process—A major system-level process that supports the mission and satisfies major customer requirements. The identification of key processes allows the organ ization to focus its resources on what is important to the customer. key process characteristic—A process parameter that can affect safety or compliance with regulations, fit, function, performance, or subsequent processing of product. key product characteristic—A product characteristic that can affect safety or compliance with regulations, fit, function, performance, or subsequent processing of product. key result area (KRA)—A major category of customer requirements that is critical for the organization’s success. key success f actors (KSF)—Those factors that point toward answers to key questions, such as “How w ill we know if w e’re successful?” “How w ill we know when w e’re heading for trouble?” and “If we are moving away from our organizational strategy and targets, what corrections should we make?” KSFs are selected to measure what is truly important to an organization: customer satisfaction, employee satisfaction, financial stability, and important operational factors. kitting—A process in which assemblers are supplied with kits—a box of parts, fittings, and tools—for each task they perform. This eliminates time-consuming trips from one parts bin, tool crib, or supply center to another to get necessary materials. KJ method—Another name for an affinity chart (see listing), which was created by Jiro Kawakita in the 1960s.
288 Appendix C knowledge management—Transforming data into information; the acquisition or creation of knowledge, as well as the processes and technology employed in identifying, categorizing, storing, retrieving, disseminating, and using information and knowledge for the purposes of improving decisions and plans. Kruskal-Wallis test—A nonparametric test to compare three or more samples. It tests the null hypothesis that all populations have identical distribution functions against the alternative hypothesis that at least one of the samples differs only with respect to location (median), if at all. It is the analogue to the F-test used in analysis of variance. While analysis of variance tests depend on the assumption that all populations under comparison are normally distributed, the Kruskal-Wallis test places no such restriction on the comparison. It is a logical extension of the Wilcoxon Mann- Whitney test (see listing).
L laboratory/lab—A facility that can perform calibration services, test validation, and testing (e.g., chemical, metallurgical, dimensional, physical, electrical, and reliability testing). laboratory scope—A record containing the specific tests, evaluations, and calibrations a laboratory has the ability and competency to perform, the list of equipment it uses, and a list of the methods and standards to which it adheres to each of these. last off part comparison—A comparison of the last part off a production run with a part off the next production run to verify that the quality level is equivalent. lateral thinking—A process that includes recognizing patterns, becoming unencumbered with old ideas, and creating new ones. layout inspection—The complete measurement of all dimensions shown on a design record. LCALI—A process for operating a listening-post system for capturing and using formerly unavailable customer data: Listen, Capture, Analyze, Learn, Improve. leader—An individual, recognized by o thers, as the person to lead an effort. One cannot be a leader without one or more followers. The term is often used interchangeably with manager. A leader may or may not hold an officially designated management- type position. See also manager. leadership—An essential part of a quality improvement effort. Organization leaders must establish a vision, communicate that vision to those in the organization, and provide the tools, knowledge, and motivation necessary to accomplish the vision. lead time—The total time a customer must wait to receive a product after placing an order. lean—Producing the maximum sellable products or services at the lowest operational cost while optimizing inventory levels. Lean focuses on reducing cycle time and waste. Lean and Agile are terms often used interchangeably. lean enterprise—An organization that has eliminated or minimized waste (muda). lean manufacturing/production—An initiative focused on eliminating all waste in manufacturing processes. Principles of lean manufacturing include zero waiting time, zero inventory, scheduling (internal customer pull instead of push system), batch to
Quality Glossary 289 flow (cut batch sizes), line balancing, and cutting a ctual process times. The production systems are characterized by optimum automation, just-in-time supplier delivery disciplines, quick changeover times, high levels of quality, and continuous improvement.
lean migration—The journey from traditional manufacturing methods to one in which all forms of waste are systematically eliminated. level loading—A technique for balancing production throughput over time. life cycle—A product life cycle is the total time frame from product concept to the end of its intended use; a project life cycle is typically divided into five stages: concept, planning, design, implementation, and evaluation. life cycle stages—Design, manufacturing, assembly, installation, operation, and shutdown periods of product development. listening post—An individual who, by virtue of her or his potential for having contact with customers, is designated to collect, document, and transmit pertinent feedback to a central collection authority within the organization. Such feedback is analyzed for emerging trends or recurring problems, which are reported to management. Preventive actions are taken when the information indicates the need. Positive feedback is passed on to the organizational function or person responsible for a customer’s expression of satisfaction. listening-post data—Customer data and information gathered from designated listen ing posts. little q, Big Q—The difference between managing for quality in a limited capacity (q) to managing for quality across all business processes and products (Q); attributed to J. M. Juran. load-load—A method of conducting single-piece flow in which the operator proceeds from machine to machine, taking the part from one machine and loading it into the next. The lines allow different parts of a production process to be completed by one operator, eliminating the need to move around large batches of work-in-progress inventory. logistics—Management of the flow of goods between the point of origin and the point of consumption in order to meet stated requirements, for example, of customers or corporations. The resources managed in logistics can include physical items, such as food, materials, animals, equipment, and liquids, as well as abstract items, such as time, information, particles, and energy. lost customer analysis—Analysis to determine why a customer or segment of customers was lost or defected to a competitor. lot—A defined quantity of product accumulated u nder conditions that are considered uniform for sampling purposes. lot, batch—A definite quantity of some product manufactured u nder conditions of production that are considered uniform. lot quality—The value of percentage defective or of defects per hundred units in a lot. lot size—The number of units in a lot; also referred to as N. lot tolerance percentage defective (LTPD)—Expressed in percentage defective, the poorest quality in an individual lot that should be accepted. Note: LTPD is used as
290 Appendix C a basis for some inspection systems and is commonly associated with a small consumer risk. lower control limit (LCL)—Control limit for points below the central line in a control chart.
M maintainability—The probability that a given maintenance action for an item under given usage conditions can be performed within a stated time interval when the maintenance is performed under stated conditions using stated procedures and resources. Maintainability has two categories: serviceability, the ease of conducting scheduled inspections and servicing, and repairability, the ease of restoring service after a failure. Malcolm Baldrige National Quality Award (MBNQA)—An award established by the U.S. Congress in 1987 to raise awareness of quality management and recognize U.S. organizations that have implemented successful quality management systems. The award is managed by the U.S. Commerce Department National Institute of Standards and Technology and administered by ASQ. management by fact—A business philosophy that decisions should be based on data. management by walking around (MBWA)—A manager’s planned, but usually unannounced, walk-through of the organization to gather information from employees and make observations; may be viewed in a positive light by virtue of giving employees the opportunity to interact with top management; has the potential of being viewed negatively if punitive action is taken as a result of information gathered. management levels—A typical hierarchy of management levels is: top management (executive level, upper management, top team, C-suite); middle management (directors, general managers, plant managers, department managers); and first-level super vision (persons directly supervising workers). management review—An internal, scheduled review and evaluation by management of the status and adequacy of the quality/environmental management system(s) in relation to the organization’s strategic objectives, policy, and any certification requirements. management styles—Managing styles used include authoritarian, autocratic, combative, conciliatory, consensual, consultative, democratic, disruptive, ethical, facilitating, intimidating, judicial, laissez-faire, participative, promotional, secretive, shared, and shareholder management. manager—An individual who manages and is responsible for resources (people, material, money, time). A person officially designated with a management-type position title. A manager is granted authority from above, whereas a leader’s role is derived by virtue of having followers. However, the terms manager and leader are often used interchangeably. manufacturing resource planning (MRP II)—When material requirements planning and capacity planning and finance interface to translate operational planning into financial terms and into a simulation tool to assess alternative production plans. mapping symbols or icons—An easy, effective way to visually communicate the flow of materials and information.
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Master Black Belt (MBB)—A problem-solving subject matter expert responsible for strategic implementations in an organization. This person is typically qualified to teach other facilitators the statistical and problem-solving methods, tools, and applications to use in such implementations. material handling—Methods, equipment, and systems for conveying materials to vari ous machines and processing areas, and for transferring finished parts to assembly, packaging, and shipping areas. material requirements planning (MRP)—A computerized system typically used to determine the quantity and timing requirements for production and delivery of items to customers and suppliers. Using MRP to schedule production at various processes will result in push production because any predetermined schedule is an estimate only of what the next process will actually need. matrix—A document for displaying the relationships among various data sets. matrix chart/diagram—A management and planning tool that shows the relationships among various groups of data; it yields information about the relationships and the importance of task/method elements of the subjects. mean—A measure of central tendency; the arithmetic average of all measurements in a data set. mean time between failures (MTBF)—The average time interval between failures for repairable product or service for a defined unit of measure, for example, operating hours, cycles, miles. measure—The criteria, metric, or means to which a comparison is made with output. measurement—The reference standard or sample used for the comparison of properties. measurement system—All operations, procedures, devices, and other equipment, personnel, and environment used to assign a value to the characteristic being measured. measurement uncertainty—In metrology, a nonnegative parameter characterizing the dispersion of the values attributed to a measured quantity. median—The middle number or center value of a set of data when all the data are arranged in an increasing sequence. metric—A standard of measurement or evaluation. metrology—The science and practice of measurements. micromanaging—Managing every little detail (e.g., an executive approving the purchase of paper clips). milestone chart—A Gantt chart onto which the starting time, interim check points, and end time is indicated for each event or task displayed. MIL-Q-9858A—A military standard that describes quality program requirements. MIL-STD-105E— A military standard that describes the sampling procedures and tables for inspection by attributes. MIL-STD-45662A—A military standard that describes the requirements for creating and maintaining a calibration system for measurement and test equipment. mission—An organization’s purpose.
292 Appendix C mission statement—An explanation of purpose or reasons for existing as an organ ization; it provides the focus for the organ ization and defines its scope of business. mistake-proofing—Improving processes to prevent mistakes from being made or passed downstream. This term can be contrasted with error proofing, which means improving designs to prevent m istakes from being made. Some, however, consider these two terms synonymous and applicable to products and processes. See also poka-yoke. mode—The value that occurs most frequently in a data set. moment-of-truth (MOT)—A MOT was described by Jan Carlzon, former CEO of Scandinavian Air Services, in the 1980s as: “Any episode where a customer comes into contact with any aspect of your company, no matter how distant, and by this contact, has an opportunity to form an opinion about your company.” monument—Any design, scheduling, or production technology with scale requirements that call for designs, o rders, and products to be brought to the machine to wait in line for processing. The opposite of a right size (see listing) machine. motivation—Two types of motivation are extrinsic, influence from outside the person, and intrinsic, feelings from inside the person. One person cannot directly motivate another person, but instead must create an environment in which the person feels motivated. muda—Japanese term for waste. multivariate control chart—A control chart for evaluating the stability of a process in terms of the levels of two or more variables or characteristics. multivoting—A decision-making tool that enables a group to work through a long list of ideas to identify priorities. mutual recognition agreement (MRA)—A formal agreement providing reciprocal recognition of the validity of other organizations’ deliverables, typically found in voluntary standards and conformity assessment groups. Myers-Briggs Type Indicator/MBTI—A method and instrument for identifying a person’s “personality type” based on Carl Jung’s theory of personality preferences.
N n—Sample size; the number of units in a sample. N—The number of units in a population National Institute of Standards and Technology (NIST)— An agency of the U.S. Department of Commerce that develops and promotes measurements, standards, and technology, and manages the Malcolm Baldrige National Quality Award. natural team—A team of individuals drawn from a single work group; similar to a pro cess improvement team except that it is not cross-functional in composition and it is not usually temporary. new management planning tools—Method(s) for achieving expected outcomes that previously have not been used. next operation as customer (NOAC)—Concept that the organization is comprised of service/product providers and service/product receivers or internal customers.
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nine windows—A tool used to investigate a past or potential problem at the super- system and subsystem levels, in addition to considering the problem only in the present and at the system level. NIST—National Institute of Standards and Technology (U.S.). nominal data—Data used for classifying information without an implied order or use of numbers for identification purposes. nominal group technique (NGT)—A technique, similar to brainstorming, used by teams to generate ideas on a particular subject. Team members are asked to silently come up with as many ideas as possible, writing them down. Each member is then asked to share one idea, which is recorded. After all the ideas are recorded, they are discussed and prioritized by the group. nonconforming record (NCR)—A permanent record for accounting and preserving the knowledge of a nonconforming condition. nonconformity—The result of nonfulfillment of a specified requirement. nondestructive testing and evaluation (NDT, NDE)—Testing and evaluation methods that do not damage or destroy the product being tested. nonlinear parameter estimation—A method whereby the arduous and labor-intensive task of multiparameter model calibration can be carried out automatically u nder the control of a computer. nonparametric tests—All tests involving ranked data; data that can be put in order. Nonparametric tests are often used in place of their parametric counterparts when certain assumptions about the underlying population are questionable. non-value-added—Describes tasks or activities that can be eliminated with no deterioration in product or service functionality, performance, or quality in the eyes of the customer. norm—A behavioral term relating to how a person or group w ill behave in a given situation based on established protocols, rules of conduct, or accepted social practices. normal distribution—A bell-shaped distribution for continuous data where most of the data are concentrated around the average, and it is equally likely that an observation will occur above or below the average. number of affected units chart—A control chart for evaluating the stability of a process in terms of the total number of units in a sample in which an event of a given classification occurs.
O objective—A statement of future expectations and an indication of when the expectations should be achieved; it flows from and supports goals and clarifies what people must accomplish. An objective includes measurable end results to be accomplished by specific teams or individuals within time limits. It is the “how, when, and who” for achieving a goal. See also S.M.A.R.T. W.A.Y. objective evidence—Verifiable qualitative or quantitative observations, data, information, records, or statements of fact pertaining to the quality of an item or service or to the existence and implementation of a quality system element. (Auditing is seeking and assessing objective evidence.)
294 Appendix C one-piece flow—The opposite of batch and queue; instead of building many products and then holding them in line for the next step in the process, products go through each step in the process one at a time, without interruption. one-touch exchange of dies—The reduction of die setup to a single step. See also single minute exchange of die, internal setup, and external setup. on-the-job training (OJT)—Training conducted usually at the workstation, typically done one-on-one. operating characteristic curve (OC curve)—A graph to determine the probability of accepting lots as a function of the lots’ or processes’ quality level when using vari ous sampling plans. T here are three types: type A curves, which give the probability of acceptance for an individual lot coming from finite production (will not continue in the future); type B curves, which give the probability of acceptance for lots coming from a continuous process; and type C curves, which, for a continuous sampling plan, give the long-run percentage of product accepted during the sampling phase. operating expenses— The money required for a system to convert inventory into throughput. operations—Work or steps to transform raw materials to finished product. ordinal data—Quantitative data used to put data into order but where the size of the numbers is not important. organizational excellence— Achievement by an organ ization of consistent superior performance—for example, outputs that exceed meeting objectives, needs, or expectations. organization culture— The collective beliefs, values, attitudes, manners, customs, behaviors, and artifacts unique to an organization. original equipment manufacturer (OEM)—An organization that uses product components from one or more other organizations to build a product that it sells under its own organization name and brand. outcome—The measurable result of a project, a quality initiative, an improvement, and so on. Usually, some time passes between the completion of the action and the realization of the outcome. outlier—An observation extremely different in some respect from the other observations in a set of data; more loosely, any extremely different or unusual event. out-of-control process—A process in which the statistical measure being evaluated is not in a state of statistical control, that is, the variations among the observed sampling results cannot all be attributed to a constant system of chance c auses; special or assignable causes exist. See also in-control process. out of spec— A term that indicates a unit does not meet a given requirement or specification. output—The deliverables resulting from a project, a quality initiative, an improvement, and so on. Outputs include data, information, documents, decisions, and tangible products. Outputs are generated both from the planning and management of the activity and the delivered product, service, program, and so on. Output is the item, document, or material delivered by an internal provider/supplier to an internal receiver/customer.
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overall equipment effectiveness (OEE)—A measure of effectiveness and efficiency of a process. OEE combines the measurement of availability, performance, and quality.
P painted floor—A lean manufacturing technique to provide visual control (e.g., to indicate a nonconforming material area or to determine stock levels). parallel operation—A technique to create economy of scale by having two operators work together to perform tasks on either side of a machine. Using this technique reduces the time it takes a single operator to move from one side to the other, making the overall process more efficient. An example of parallel operation is having two people work on a changeover, supplementing each other’s work effort. Pareto chart—A basic tool used to graphically rank c auses from most significant to least significant. It utilizes a vertical bar graph in which the bar height reflects the frequency or impact of causes. partnership/alliance—A strategy leading to a relationship with suppliers or customers aimed at reducing costs of ownership, maintenance of minimum stocks, just-in-time deliveries, joint participation in design, exchange of information on materials and technologies, new production methods, quality improvement strategies, and the exploitation of market synergy. parts per million (PPM)—A metric reporting the number of defects normalized to a population of one million for ease of comparison. payback period—The number of years it will take for the results of a project or capital investment to recover the investment monies. P chart—See percent chart. percent chart—A control chart for evaluating the stability of a process in terms of the percentage of the total number of units in a sample in which an event of a given classification occurs. Also referred to as a proportion chart. performance standard—The metric against which a complete action is compared. physical transformation task—A step taking a specific product from raw materials to a finished product delivered to the customer. See also value stream and information flow. pitch—The pace and flow of a product. Plan-Do-Check-Act (PDCA) cycle—A four-step process for quality improvement. In the first step (plan), a plan to effect improvement is developed. In the second step (do), the plan is carried out, preferably on a small scale. In the third step (check), the effects of the plan are observed. In the last step (act), the results are studied to determine what was learned and what can be predicted. The PDCA cycle is sometimes referred to as the Shewhart Cycle because Walter A. Shewhart discussed the concept in his book Statistical Method from the Viewpoint of Quality Control, and as the Deming Cycle because W. Edwards Deming introduced the concept in Japan. The Japanese subsequently called it the Deming Cycle. Sometimes referred to as Plan-Do-Study-Act (PDSA). point kaizen—See process kaizen. point of use—The place where or the time when a product or service is used.
296 Appendix C Poisson distribution—A discrete probability distribution that expresses the probability of a number of events occurring in a fixed time period if these events occur with a known average rate and are independent of the time since the last event. poka-yoke—(Japanese) A term that means to mistake-proof a process by building safeguards into the system that avoid or immediately find errors. It comes from poka, which means “inadvertent error,” and yokeru, which means “to avoid.” policy—An overarching plan or direction for achieving an organization’s goals. population—A collection or set of individuals, objects, or measurements whose properties or characteristics are to be analyzed. ppm—Parts per million; the number of times an occurrence happens in one million chances. precision—A characteristic of measurement that addresses the consistency or repeatability of a measurement system when the identical item is measured a number of times. prevention costs— Costs incurred to keep internal and external failure costs and appraisal costs to a minimum. prevention vs. detection—A term used to contrast two types of quality activities. Pre vention refers to those activities designed to prevent nonconformances in products and services. Detection refers to t hose activities designed to detect nonconformances already in products and services. Another phrase used to look at this distinction is designing in quality vs. inspecting in quality. preventive action—Action taken to eliminate the potential c auses of a nonconformity, defect, or other undesirable situation in order to prevent further occurrences. probability—The likelihood of occurrence. probability of rejection—The probability that a product or lot will be rejected. problem solving—A rational process for identifying, describing, analyzing, and resolving situations in which something has gone wrong without explanation. procedure—The steps to be taken in a process. A document that answers the questions: What has to be done? Where is it to be done? When is it to be done? Who is to do it? Why do it? (contrasted with a work instruction, which answers: How is it to be done? With what materials and tools is it to be done?). In the absence of a work instruction, the instructions may be embedded in the procedure. process—An activity or group of activities that takes an input, adds value to it, and provides an output to an internal or external customer; a planned and repetitive sequence of steps by which a defined product or service is delivered. process analysis—A study of the inputs, steps, and outputs of a process; generally used to improve the understanding of the process to determine methods to correct, control, or improve the process’s effectiveness and efficiency. process average quality—Expected or average value of process quality. process capability—A statistical measure of the inherent process variability for a given characteristic. process capability index—The value of the tolerance specified for the characteristic divided by the process capability. The several types of process capability indexes include the widely used Cpk and Cp.
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process control—The methodology for keeping a process within boundaries; minimizing the variation of a process. process decision program chart (PDPC)—A management and planning tool that identifies events that can go wrong and the appropriate countermeasures for these events. It graphically represents all sequences that lead to a desirable effect. process flow diagram—A visual depiction, generally using symbols, of the flow of materials or information through a process. Also called a process flowchart. process improvement—The act of changing a process to reduce variability and cycle time and make the process more effective, efficient, and productive. process improvement team (PIT)—A natural work group or cross-functional team whose responsibility is to achieve needed improvements in existing processes. The duration of the team is based on the completion of the team purpose and specific goals. process kaizen—Improvements made at an individual process or in a specific area. Sometimes called point kaizen. process management—The collection of practices used to implement and improve process effectiveness. It focuses on holding the gains achieved through process improvement and assuring process integrity. process mapping— The flowcharting of a work pro cess in detail, including key measurements. process owner—The person who coordinates the various functions and work activities at all levels of a process, has the authority or ability to make changes in the pro cess as required, and manages the entire process cycle so as to ensure performance effectiveness. process performance management (PPM)—The overseeing of process instances to ensure their quality and timeliness; can also include proactive and reactive actions to ensure a good result. process quality—The degree to which process results meet specified requirements. process reengineering— A strategy of rethinking and redesigning a pro cess; often referred to as the “clean sheet of paper” approach. See reengineering. process view of work—The understanding that work can be viewed as a process that has inputs, steps, and output(s)—and that a process has interfaces with other processes. producer’s risk—For a sampling plan, the probability of not accepting a lot, the quality of which has a designated numerical value representing a level that is generally desirable. Usually the designated value will be the acceptable quality level. Also called alpha risk and type 1 error. product audit—A systematic and independent examination of a product to gather objective evidence to determine the degree of conformance to specified requirements. production (analysis) board—A job site board on which production results are compared with targets or where other related production information is posted. An example of visual management. production part approval process (PPAP)—A customer part qualification process for purchased parts or materials that are to be used in the customer’s final product.
298 Appendix C Customer PPAP approval, or a deviation, is required before shipping the purchased parts or materials to the customer for use in their production process. Its purpose is to determine whether all customer engineering design record requirements are properly understood by the supplier and that the process has the potential to produce product consistently meeting these requirements. production smoothing—Keeping total manufacturing volume as constant as possible. See also Heijunka. productivity—A measurement of output for a given amount of input. product or service liability—The obligation of a company to make restitution for loss related to personal injury, property damage, or other harm caused by its product or service. product warranty—The organization’s stated policy that it will replace, repair, or reimburse a customer for a defective product providing the product defect occurs under certain conditions and within a stated period of time. profound knowledge, system of—As defined by W. Edwards Deming, the system of profound knowledge states that learning cannot be based on experience only; it requires comparisons of results to a prediction, plan, or an expression of theory. Predicting why something happens is essential to understand results and to continually improve. The four components of the system of profound knowledge are: appreciation for a system, knowledge of variation, theory of knowledge, and understanding of psychology. project life cycle—The five sequential phases of project management: concept, planning, design, implementation, and evaluation. project management—The management of activities and events involved throughout a project’s life cycle. project planning tools—Methods for the systematic arranging, sequencing, and scheduling of project’s tasks. project team—A designated group of people working together to produce a planned project’s outputs and outcome. proportion chart—See percent chart. pull system— An inventory management system based on replenishing inventory based on use rather than a schedule or forecast. See kanban.
Q QEDS Standards Group—The U.S. Standards Group on Quality, Environment, Dependability, and Statistics consists of the members and leadership of organizations concerned with the development and effective use of generic and sector-specific standards on quality control, assurance, and management; environmental management systems; and auditing, dependability, and the application of statistical methods. Q9000 series—The ANSI/ISO/ASQ Q9000 series of standards, which is the verbatim American adoption of the 2000 edition of the ISO 9000 series of standards. qualitative variables—Nonnumerical variables that describe more abstract things or data that fits into categories (e.g., man, woman, child; red, green, blue; Democrat, Republican, Independent, Conservative, Liberal).
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qualitician—Someone who functions as a quality practitioner and a quality technician. quality—A subjective term for which each person has his or her own definition. In technical usage, quality can have two meanings: (1) the characteristics of a product or service that bear on its ability to satisfy stated or implied needs, and (2) a product or service free of deficiencies. • Crosby defined quality as “conformance to requirements.” • Deming stated, “Quality should be aimed at the needs of the consumer, present and future. Quality begins with intent, which is fixed by management . . . translated . . . into plans, specifications, tests, production.” • Juran defined quality as “fitness for use.” • Garvin expands the definition to include eight dimensions: performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality.2 • Customers define quality as “what I expect” and “I’ll know it when I see it.” quality assessment—The process of identifying business practices, attitudes, and activities that are enhancing or inhibiting the achievement of quality improvement in an organization. quality assurance/quality control (QA/QC)—Two terms that have many interpretations because of the multiple definitions for the words assurance and control. For example, assurance can mean the act of giving confidence, the state of being certain, or the act of making certain; control can mean an evaluation to indicate needed corrective responses, the act of guiding, or the state of a process in which the variability is attributable to a constant system of chance c auses. One definition of quality assurance is all the planned and systematic activities implemented within the quality system that can be demonstrated to provide confidence that a product or service will fulfill requirements for quality. One definition for quality control is the operational techniques and activities used to fulfill requirements for quality. Often, however, quality assurance and quality control are used interchangeably, referring to the actions performed to ensure the quality of a product, service, or process. quality audit/assessment— A systematic, in de pen dent examination and review to determine w hether quality activities and related results comply with planned arrangements and w hether these arrangements are implemented effectively and are suitable to achieve the objectives. quality characteristics—The unique characteristics of products and services by which customers evaluate their perception of quality (e.g., performance, price, durability, safety, maintainability, ease of disposal for products, and responsiveness, competence, accuracy, courtesy, security, timeliness, safety, completeness for services). quality circles—Quality improvement or self-improvement study groups composed of a small number of employees (10 or fewer) a nd their supervisor, who meet regularly with an aim to improve a process. quality control—See quality assurance/quality control. quality costs—See cost of quality (COQ). quality engineering—The analysis of a manufacturing system at all stages to maximize the quality of the process itself and the products it produces.
300 Appendix C Quality Excellence for Suppliers of Telecommunications (QuEST) Forum—A partnership of telecommunications suppliers and service providers. The QuEST Forum developed TL 9000 (see listing). Quality 4.0—The title given to the digitalization of quality management in response to technology gains achieved through the evolution of Industry 4.0. More importantly, it is the impact of that digitalization on quality technology, processes, and people. Quality 4.0 is the quality management system response to the “fourth industrial revolution,” which emphasizes the increasing intelligence and interconnectedness in “smart” manufacturing systems and reflects on the newest technological innovations in historical context. quality function—The entire spectrum of activities through which an organization achieves its quality goals and objectives, no matter where these activities are performed. quality function deployment (QFD)— A multifaceted matrix in which customer requirements are translated into appropriate technical requirements for each stage of product development and production. The QFD process is often referred to as listening to the voice of the customer (VOC). Also called house of quality. quality management—All activities of the overall management function that determine the quality policy, objectives, and responsibilities, and the implementation of these by means such as quality planning, quality control, quality assurance, and quality improvement within the quality system. quality management system (QMS)—The organizational structure, processes, procedures, and resources needed to implement, maintain, and continually improve quality management. quality manual—The document stating the organization’s quality policy and describing the organization’s quality management system. quality plan—The document, or documents, setting out the specific quality practices, resources, specifications, and sequence of activities relevant to a particular product, project, or contract. quality planning—The activity of establishing quality objectives and quality requirements. quality policy—An organization’s formally stated beliefs about quality, how it w ill occur, and the expected result. quality principles—Rules, guidelines, or concepts that an organization believes in collectively. The principles are formulated by senior management with input from others and are communicated and understood at every level of the organization. quality rate—See first pass yield. quality score chart—A chart for evaluating the stability of a process. The quality score is the weighted sum of the count of events of various classifications in which each classification is assigned a weight. quality tool—An instrument or technique that is used to support, sustain, and/or improve the activities of process quality management and improvement. quality trilogy—A three-stage approach to managing for quality. The three stages are quality planning, developing the products and processes required to meet customer needs; quality control, meeting product and process goals; and quality improvement, achieving unprecedented levels of performance.
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quantitative variables—Variables whose values are numbers. queue time—The time a product spends in a line awaiting the next design, order pro cessing, or fabrication step. quick changeover—The ability to change tooling and fixtures rapidly (usually within minutes) so multiple products can be run on the same machine. quincunx—A teaching tool that creates frequency distributions. Beads tumble over numerous horizontal rows of pins, which force the beads to the right or left. After a random journey, the beads are dropped into vertical slots. After many beads are dropped, a frequency distribution results. In the classroom, quincunxes are often used to simulate a manufacturing process. English scientist Francis Galton invented the quincunx in the 1890s.
R RAM—See reliability, availability, and maintainability. random cause—A cause of variation due to chance and not assignable to any factor. See common causes of variation. random sampling—A commonly used sampling technique in which sample units are selected in such a manner that all combinations of n units under consideration have an equal chance of being selected as the sample. range—The measure of dispersion in a data set; the highest value minus the lowest value. range chart (R chart)—A control chart in which the subgroup range, R, evaluates the stability of the variability within a process. recall—The act of officially summoning someone or something back to its place of origin. red bead experiment—An experiment developed by W. Edwards Deming to illustrate that it is impossible to put employees in rank order of performance for the coming year based on their performance during the past year b ecause performance differences must be attributed to the system, not to employees. Four thousand red and white beads in a jar (20% red) and six people are needed for the experiment. The participants’ goal is to produce white beads b ecause the customer will not accept red beads. One person begins by stirring the beads and then, blindfolded, selects a sample of 50 beads. That person hands the jar to the next person, who repeats the process, and so on. When everyone has his or her sample, the number of red beads for each is counted. The limits of variation between employees that can be attributed to the system are calculated. Everyone will fall within the calculated limits of variation that could arise from the system. The calculations will show that t here is no evidence one person will be a better performer than another in the future. The experiment shows that it would be a waste of management’s time to try to find out why, say, John produced 4 red beads and Jane produced 15; instead, management should improve the system, making it possible for everyone to produce more white beads. reengineering— Completely redesigning or restructuring a whole organ ization, an organizational component, or a complete process. It’s a “start all over again from the beginning” approach, sometimes called a breakthrough. In terms of improvement approaches, reengineering is contrasted with incremental improvement (kaizen).
302 Appendix C reference material—Material or substance one or more of whose property values are sufficiently homogeneous and well established to be used for the calibration of an apparatus, the assessment of a measurement method, or for assigning values to materials. registrar—Generally accepted equivalent term for certification body. registration—The act of including an organization, product, service, or process in a compilation of those having the same or similar attributes. Sometimes incorrectly used interchangeably with the term certification. A quality management system for an organization may be “certified” and the organization “registered” in a listing of organizations having achieved ISO 9001 certification. The respective terms for the documents involved are certificate and register. registration to standards—A process in which an accredited, independent third-party organization conducts an on-site audit of an organization’s operations against the requirements of the standard to which the organization wants to be registered. Upon successful completion of the audit, the organization receives a certificate indicating it has met the standard requirements. In countries outside the United States, this generally is known as certification. regression analysis—A statistical technique for determining the best mathematical expression describing the functional relationship between one response and one or more independent variables. reinforcement of behavior—The practice of providing positive consequences when an individual is applying the correct knowledge and skills in performing the assigned job. Often described as catching people doing something right and recognizing their behavior. (Caution: less than desirable behavior can be unintentionally reinforced.) rejection number—The smallest number of defectives/defects in the sample or samples under consideration that will require rejection of the lot. relations diagram—See interrelationship digraph. reliability—In measurement system analysis, the ability of an instrument to produce the same results over repeated administration—to measure consistently. In reliability engineering, it is the probability of a product performing its intended function under stated conditions for a given period of time. See also mean time between failures. repeatability—Precision under repeatability conditions, that is, conditions where inde pendent test results are obtained with the same method on identical test items by the same operator using the same equipment within short intervals of time. representative sample—A sample that contains the characteristics of the corresponding population. reproducibility—Precision under reproducibility conditions, that is, conditions where test results are obtained with the same method on identical test items with different technicians using the same equipment or procedure. requirements—A need or expectation, generally mandatory or compulsory. resource requirements matrix—A tool to relate the resources required to the project tasks requiring those resources; used to indicate types of individuals needed, material needed, subcontractors, funds, e tc. resource utilization—Using a resource in a way that increases throughput.
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results—Outcomes that can be qualitative or quantitative. return-on-investment—ROI is an umbrella term for a variety of ratios used to measure an organization’s business performance. It is calculated by dividing some measure of return by a measure of the investment to produce the return and multiplying by 100 to give a percentage. In its most basic form, ROI indicates what remains from all money taken in after all expenses are paid. rework—Action taken on a nonconforming product or service to return it to meet specified requirements. right size—Matching tooling and equipment to the job and space requirements of lean production. Right sizing is a process that challenges the complexity of equipment by examining how equipment fits into an overall vision for workflow through a factory. When possible, right sizing favors smaller, dedicated machines rather than large, multipurpose batch processing ones. right the first time—A term used to convey the concept that it is beneficial and more cost-effective to take the necessary steps up front to ensure a product or service meets its requirements than to provide a product or service that w ill need rework or not meet customers’ needs. In other words, an organization should focus more on defect prevention than defect detection. risk assessment/management—The process of determining what present or future potential risks are possible in a situation (a project plan for example) and what actions might be taken to eliminate or mitigate the risks. robustness—The condition of a product or process design that remains relatively stable with a minimum of variation even though factors that influence operations or usage, such as environment and wear, are constantly changing. root cause—A factor that caused a nonconformance and should be addressed with corrective action. root cause analysis—Use of a variety of quality tools to find the source of defects or problems. It is a structured approach that focuses on the decisive or original cause of a problem or condition. The technique probes well below the obvious “symptom” level to uncover the true cause or causes. run chart—A line graph showing data collected during a run or an uninterrupted sequence of events. A trend is indicated when the series of collected data points head up or down. runner—A person on the production floor who paces the entire value stream through the pickup and delivery of materials through kanban (see listing) usage.
S SAE International—Professional organization of individual engineers and related disciplines; formerly Society for Automotive Engineers. safety—The state of being free from harm or danger. sample—A finite number of items of a similar type taken from a population for the purpose of examination to determine whether all members of the population would conform to quality requirements or specifications.
304 Appendix C sample size—The number of units in a sample chosen from the population. sample standard deviation chart (S chart)—A control chart in which the subgroup standard deviation, s, is used to evaluate the stability of the variability within a process. sampling—The process of drawing conclusions about the population based on a part of the population. sampling at random—As commonly used in acceptance sampling theory, the process of selecting sample units so all units u nder consideration have the same probability of being selected. Note: Equal probabilities are not necessary for random sampling; what is necessary is that the probability of selection be ascertainable. However, the stated properties of published sampling t ables are based on the assumption of random sampling with equal probabilities. An acceptable method of random selection with equal probabilities is the use of a t able of random numbers in a standard manner. sampling, double—Sampling inspection in which the inspection of the first sample leads to a decision to accept a lot, reject it, or take a second sample; the inspection of a second sample, when required, then leads to a decision to accept or reject the lot. sampling, multiple—Sampling inspection in which, after each sample is inspected, the decision is made to accept a lot, reject it, or take another sample. But there is a prescribed maximum number of samples, after which a decision to accept or reject the lot must be reached. Note: Multiple sampling as defined here has sometimes been called sequential n sampling or truncated sequential e sampling. The term multiple sam pling is recommended. sampling, single—Sampling inspection in which the decision to accept or reject a lot is based on the inspection of one sample. sampling, unit—Sequential sampling inspection in which, a fter each unit is inspected, the decision is made to accept a lot, reject it, or inspect another unit. sanitizing—English translation of seiso, one of the Japanese five S’s used for workplace organization. Sanitizing (also referred to as shining or sweeping) is the act of cleaning the work area. Dirt is often the root cause of premature equipment wear, safety problems, and defects. satisfier—The term used to describe the quality level received by a customer when a product or service meets expectations. scatter diagram—A graphical technique to analyze the relationship between two variables. Two sets of data are plotted on a graph, with the y-axis being used for the variable to be predicted and the x-axis being used for the variable to make the prediction. The graph will show possible relationships (although two variables might appear to be related, they might not be; those who know most about the variables must make that evaluation). The scatter diagram is one of the seven tools of quality. schedule—A plan showing when each activity in a project should begin and end. scientific management—Aimed at finding the one best way to perform a task so as to increase productivity and efficiency. scope—The total number of products, services, processes, p eople, operations, that w ill be affected by an initiative, project, or other action. Scope creep is when the initial scope is enlarged without due consideration of the effect of the increase.
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SCOR (Supply Chain Operations Reference) model—A process that enables users to address, improve, and communicate supply chain management practices within and between all interested parties in the supply chain. scorecard—An evaluation device, usually in the form of a questionnaire, that specifies the criteria customers w ill use to rate your business’s performance in satisfying customer requirements. secondary customer—Individuals or groups from outside the process boundaries who receive process output but who are not the reason for the process. Seiban—The name of a Japanese management practice taken from the words sei, which means manufacturing, and ban, which means number. A seiban number is assigned to all parts, materials, and purchase orders associated with a particul ar customer job, project, or anything else. This enables a manufacturer to track everything related to a particular product, project, or customer, and facilitates setting aside inventory for specific projects or priorities. That makes it an effective practice for project and build-to-order manufacturing. selective listening—When a person hears only what they are predisposed to hear. self-control—Three elements comprise workers’ self-control: knowing what they are supposed to do, knowing what they are actually d oing and how well, and being able to control the process. self-directed work team (SDWT)—A type of team structure in which much of the decision making regarding how to handle the team’s activities is controlled by the team members themselves. self-inspection—Employees inspect their own work according to specified rules. self-managed team—A team that requires little supervision and manages itself and the day-to-day work it does; self-directed teams are responsible for whole work pro cesses, with each individual performing multiple tasks. sentinel event—A healthcare term for any event not consistent with the desired, normal, or usual operation of the organization; also known as an adverse event. service—Work performed for others. Services may be internal, such as support services like payroll, engineering, maintenance, hiring, and training, or external, such as legal services, repair services, and training. setup time—The elapsed time taken to change over a process to run a different product or service. seven basic tools of quality—Tools that help organizations understand their processes in order to improve them. The tools are the cause-and-effect diagram, check sheet, control chart, flowchart, histogram, Pareto chart, and scatter diagram (see individual listings). seven management tools of quality—The tools used primarily for quality planning and managing are activity network diagram (AND)/arrow diagram, affinity diagram/ KJ method, interrelationship digraph, matrix diagram, priorities matrix, process decision program chart (PDPC), and tree diagram. seven wastes—See eight wastes. shadow board—A visual management tool painted to indicate where tools belong, and which tools are missing.
306 Appendix C Shainin System—Named after its developer, Dorian Shainin, this problem-solving system focuses on identifying the dominant cause of process variation called the Red X. Also called statistical engineering. Shewhart Cycle—See Plan-Do-Check-Act cycle. shift—An abrupt change in an important variable in a process. Examples of causes of shifts: broken tools, dropped gages, parts slipping, flow of oil stops, ingredients omitted in a mix. ship-to-stock—An approved or certified supplier ships material for a process directly to the buying organization without incoming inspection. sifting—English translation of Japanese seiri, one of the five S’s used for workplace organization. Sifting is separating the essential from the nonessential. It involves screening through unnecessary materials and simplifying the work environment. sigma—Greek letter (σ) that stands for the standard deviation of a process. signal to noise ratio (S/N ratio)—An equation that indicates the magnitude of an experimental effect above the effect of experimental error due to chance fluctuations. silo—An organizational segment identified by a function or set of functions working autonomously on their own objectives with little or no regard for the impact of their actions on other internal functions or on the overall organizational system. simulation—A 3-D technique to balance a line. It involves using cardboard, wood, and plastic foam to create full-sized equipment mock-ups that can be easily moved to obtain an optimum layout. single minute exchange of die (SMED)—A goal for reducing setup time required to change over to a new process; the methodologies used in devising and implementing ways to reduce setup time. single-piece flow—A process in which products proceed, one complete product at a time, through various operations in design, order taking, and production without interruptions, backflows, or scrap. SIPOC diagram—A macro-level analysis of the suppliers, inputs, processes, outputs, and customers. situational leadership—A leadership theory and style that maintains that leadership decisions should be based on the situational conditions present and supported by varying degrees of leader behavior. “It depends . . .” becomes a common expression. Six Sigma approach—A quality philosophy; a collection of techniques and tools for use in reducing variation; a process of improvement. Six Sigma quality—A term used generally to indicate that a process is well controlled, that is, process limits ±3σ from the centerline in a control chart, and requirements/ tolerance limits ±6σ from the centerline. A statistical term that indicates a very low defect level. Processes at Six Sigma quality is 99.9999975 percent perfect or only 3.4 defects per million. The term was initiated by Motorola. Six Sigma tools—The problem-solving tools used to support Six Sigma and other pro cess improvement efforts. This includes voice of the customer, value stream mapping, process mapping, capability analysis, Pareto charts, root cause analysis, failure mode and effects analysis, control plans, statistical process control, 5S, m istake proofing, and design of experiments.
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small business—Privately owned corporations, partnerships, or sole proprietorships that have fewer employees and less annual revenue than a regular-sized business or corporation. The definition of “small”—in terms of being able to apply for government support and qualify for preferential tax policy—varies by country and industry. S.M.A.R.T. W.A.Y.—A guide for setting objectives. Each objective should be Specific, Mea sured, Achievable, Realistic, Time- based, Worth doing, and Assigned—and Yields results.3 social responsibility—The concept that business entities should balance profit-making activities with activities that benefit society. software quality assurance (SQA)—A systematic approach to evaluating the quality of and adherence to software product standards, processes, and procedures. SQA includes ensuring standards and procedures are established and followed throughout the software acquisition life cycle. sorting—English translation of the Japanese word seiri, one of the five S’s used for workplace organization. Sorting (also referred to as structuring or sifting) involves organizing essential materials. It helps the operator find materials when needed. spaghetti diagram—A visual representation using a continuous flow line tracing the path of an item or activity through a process. The continuous flow line enables pro cess teams to identify redundancies in workflow and opportunities to expedite pro cess flow. span of control—The number of subordinates a manager can effectively and efficiently manage. special causes—Causes of variation that arise because of special circumstances. They are not an inherent part of a process. Special causes are also referred to as assignable causes. See also common causes of variations. special characteristic—An automotive ISO/TS 16949 term for key product or process characteristics. specification—The engineering requirement used for judging the acceptability of a par ticular product/service based on product characteristics, such as appearance, per formance, and size. In statistical analysis, specifications refer to the document that prescribes the requirements to which the product or service has to perform. sponsor—The person who supports a team’s plans, activities, and outcomes; the team’s “backer.” The sponsor provides resources and helps define the mission and scope to set limits. The sponsor may be the same individual as the champion. stages of team growth—Teams typically move through five stages as they develop maturity over time: forming, storming, norming, performing, and adjourning. stakeholder— The aggregate of people, departments, organ izations, and communities that have an investment or interest in the success or actions taken by the organization. standard—A statement, action, specification, or quantity of material against which measured outputs from a process may be judged as acceptable or unacceptable. standard deviation—A calculated measure of variability that shows how much the data are spread around the mean.
308 Appendix C standard in-process stock—One of the three elements that make up standard work. It is the minimum quantity of parts always on hand for processing during and between subprocesses. It allows workers to do their jobs continuously in a set sequence, repeating the same operation over and over in the same order. See also standard work. standardization—When policies and common procedures are used to manage pro cesses throughout the system. Also, English translation of the Japanese word seik etsu, one of the Japanese five S’s (see listing) used for workplace organization. standardized work—Documented and agreed upon procedures and practices to be used by all persons doing the same type of work. standard work—A precise description of each work activity, specifying cycle time, takt time, the work sequence of specific tasks, and the minimum inventory of parts on hand needed to conduct the activity. All jobs are organized around h uman motion to create an efficient sequence without waste. Work organized in such a way is called standard(ized) work. The three elements that make up standard work are takt time, working sequence, and standard in-process stock (see individual listings). standard work instructions— A lean manufacturing tool that enables operators to observe a production process with an understanding of how assembly tasks are to be performed. It ensures the quality level is understood and serves as an excellent training aid, enabling replacement or temporary individuals to easily adapt and perform the assembly operation. statistical process control (SPC)—The application of statistical techniques to control a process. statistical quality control (SQC)—The application of statistical techniques to control quality. Often the term statistical process control is used interchangeably with statistical quality control, although statistical quality control includes acceptance sampling as well as statistical process control. statistical thinking— A philosophy of learning and action based on fundamental principles: • All work occurs in a system of interconnected processes. • Variation exists in all processes. • Understanding and reducing variation are vital to improvement. statistics—A field that involves the tabulating, depicting, and describing of data sets (descriptive statistics). A formalized body of techniques characteristically involving attempts to infer the properties of a large collection of data from inspection of a sample of the collection (inferential statistics). steering committee—A special group established to guide and track initiatives or projects. stop the line authority—Power given to workers to stop the process when abnormalities occur, allowing them to prevent the defect or variation from being passed along. storyboarding—A technique that visually displays thoughts and ideas and groups them into categories, making all aspects of a process visible at once. Often used to communicate to o thers the activities performed by a team as they improved a process. strategic planning—A process to set an organization’s long-range goals and identify the objectives and actions needed to reach the goals.
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stratification—The act of sorting data, people, and objects into distinct groups or layers. stratified sampling—A type of random sampling. The technique can be used when the population is not homogeneous. The approach is to divide the population into strata or subgroups, each of which is more or less homogeneous, and then take a representative sample from each group. strengths, weaknesses, opportunities, threats (SWOT) analysis—See SWOT analysis. stretch goals—A set of goals designed to position an organization to meet future requirements. structural variation—Variation caused by regular, systematic changes in output, such as seasonal patterns and long-term trends. Occurrences of structural variation w ill, on a control chart, often look like special c auses, but are not, inasmuch as structural variation is inherent in the process. suboptimization—A condition in which gains made in one activity are offset by losses in another activity or activities that are caused by the same actions that created gains in the first activity. supermarket—The storage locations of parts before they go on to the next operation. Supermarkets are managed by predetermined maximum and minimum inventory levels. Each item in the plant is at a designated location. supplier—Any provider whose information, materials, products, and services may be used at any stage in the production, design, delivery, and use of another company’s products and services. Suppliers include businesses, such as distributors, dealers, warranty repair services, transportation contractors, and franchises, and service suppliers, such as healthcare, training, and education. Internal suppliers provide materials or services to internal customers. supplier audit— Audits conducted by a buying organ ization, or a buyer’s sub- contractor, of a supplier’s organization, to verify contractual compliance or conformance to a standard or requirement. supplier quality—A supplier’s ability to deliver goods or services that w ill satisfy customers’ needs. supplier quality assurance—Confidence that a supplier’s product or service w ill fulfill its customers’ needs. This confidence is achieved by creating a relationship between the customer and supplier that ensures the product or service w ill be fit for use with minimal corrective action and inspection. According to J. M. Juran, there are nine primary activities needed: (1) define product and program quality requirements, (2) evaluate alternative suppliers, (3) select suppliers, (4) conduct joint quality planning, (5) cooperate with the supplier during the execution of the contract, (6) obtain proof of conformance to requirements, (7) certify qualified suppliers, (8) conduct quality improvement programs as required, and (9) create and use supplier quality ratings. supplier quality management—A system in which supplier quality is managed by using a proactive and collaborative approach. This management approach begins early in the product design and supplier selection process. It continues through the entire life cycle of a product and for the duration of the relationship with that par ticular supplier. supply chain—The series of processes and/or organizations that are involved in producing and delivering a product to the final user. For example, in the automotive
310 Appendix C industry the supply chain may extend from the extraction of iron ore through to the delivery of the completed automobile to the dealer (intermediate customer), and on to the end-user. supply chain management (SCM)—The process of effectively integrating and managing components of the supply chain. support systems—Starting with top-management commitment and visible involvement, support systems are a cascading series of interrelated practices or actions aimed at building and sustaining support for continuous quality improvement. Such practices/actions may include: mission statement, transformation of company culture, policies, employment practices, compensation, recognition and rewards, employee involvement, rules and procedures, quality-level agreements, training, empowerment, methods and tools for improving quality, tracking- measuring- evaluating-reporting systems, and so on. surveillance—Continual monitoring of a process. survey—An examination for some specific purpose; to inspect or consider carefully; to review in detail (survey implies the inclusion of matters not covered by agreed-upon criteria). Also, a structured series of questions designed to elicit a predetermined range of responses covering a preselected area of interest. May be administered orally by a survey-taker, by paper and pencil, or by computer. Responses are tabulated and analyzed to surface significant areas for improvement. sustain—The English translation of shitsuke, one of the five S’s (see listing) used for workplace organization. Sustaining (also referred to as self-disciplining) is the continuation of sorting, setting in order, and sanitizing. It addresses the need to perform 5S on an ongoing and systematic basis. SWOT analysis—An assessment of an organization’s key strengths, weaknesses, opportu nities, and threats. It considers factors such as the organization’s industry, the competitive position, functional areas, and management. symptom—An indication of a problem or opportunity. system—A network of connecting processes and people that together strive to achieve a common mission. system kaizen—Improvement aimed at an entire value stream. system of profound knowledge (SoPK)—See profound knowledge. systems approach to management—A management theory that views the organization as a unified, purposeful combination of interrelated parts; managers must look at the organization as a whole and understand that activity in one part of the organ ization affects all parts of the organization. Also known as systems thinking.
T tacit knowledge—Unarticulated, undocumented knowledge “stored” within individuals. The knowledge and wisdom that has developed, within a person, over time, and is not captured for use by others; the knowledge that is no longer available when a person leaves an organization. tactical plans—Short-term plans, usually of one to two years’ duration, that describe actions the organization will take to meet its strategic business plan.
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Taguchi method—A prototyping method that enables the engineer or designer to identify the optimal settings to produce a robust product that can survive manufacturing time after time, piece a fter piece, in order to provide the functionality required by the customer. takt time—The available production time divided by the rate of customer demand. Operating to takt time sets the production pace to customer demand. tampering—Action taken to compensate for variation within the control limits of a stable system. Tampering increases rather than decreases variation. task—A specific, definable activity to perform an assigned function, usually within a specified time frame. team—A group of two or more people who are equally accountable for the accomplishment of a purpose and specific performance goals; a small number of people with complementary skills who are committed to a common purpose. team building/development—The process of and techniques for transforming a group of p eople into a team and developing the team to achieve its purpose. team dynamics—The interactions that occur among team members u nder different conditions. team facilitation—The creation of a favorable condition that will enable a team to reach its purpose or achieve its goals by bringing together the necessary tools, information, and resources to achieve its purpose. A facilitator’s primary role is to focus on the team's process and their function as a team. team leader—A person designated to be responsible for the ongoing success of the team; keeps the team focused on the task assigned. team maturity and stages of growth—Team growth progresses through four development stages: forming, storming, norming, and performing. Adjourning is added to cover closing-down a team’s work. team member—A participant in the project planning and control processes. A team member may also be a manager of one or more activities, or a source of technical information. A key attribute for team members is that they value teamwork in the problem-solving process. Effective team members are expected to help, encourage, and support other team members. team performance evaluation—Special metrics needed to evaluate the work of a team (to avoid focus on any individual on the team) and to serve as basis for recognition and rewards for team achievements. technical report (TR)—A type of document in the International Organization for Standardization portfolio of deliverables. technical specification (TS)—A type of document in the International Organization for Standardization portfolio of deliverables. temporary/ad hoc team—A team, usually small, formed to address a short-term mission or emergency situation. theory of constraints (TOC)—A lean management philosophy that stresses removal of constraints to increase throughput while decreasing inventory and operating expenses. TOC’s set of tools examines the entire system for continuous improvement. The current reality tree, conflict resolution diagram, future reality tree, prerequisite
312 Appendix C tree, and transition tree are the five tools used in TOC’s ongoing improvement pro cess. Also called constraints management. theory X and theory Y—A theory developed by Douglas McGregor that maintains there are two contrasting assumptions about p eople, each based on the manager’s view of human nature. Theory X, the negative view, assumes most employees don’t like work and try to avoid it. Theory Y, the positive assumption, is that employees want to work, will seek and accept responsibility, and can offer creative solutions to organizational problems. third-party audit—External audits conducted by personnel who are neither employees of the organization, nor a supplier, but are usually employees of certification bodies or of registrars. 3P—The production preparation process is a tool for designing lean manufacturing environments. It is a highly disciplined, standardized model that results in the development of an improved production process in which low waste levels are achieved at low capital cost. throughput—The rate the system generates money through sales, or the conversion rate of inventory into shipped product. TJC— The Joint Commission, formerly the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). TL 9000—A quality management standard for the telecommunications industry based on ISO 9000. Its purpose is to define the requirements for the design, development, production, delivery, installation, and maintenance of products and services. Included are cost and performance-based measurements that measure reliability and quality performance of the products and services. tolerance—The maximum and minimum limit values a product can have and still meet customer requirements. top management commitment—Participation of the highest-level officials in their organization’s quality improvement efforts. Their participation includes establishing and serving on a quality committee, establishing quality policies and goals, deploying those goals to lower levels of the organization, providing the resources and training that the lower levels need to achieve the goals, participating in quality improvement teams, reviewing progress organization-wide, recognizing those who have performed well, and revising the current reward system to reflect the importance of achieving the quality goals. Commitment is top management’s visible, personal involvement as supportive and as seen by o thers in the organization. total productive maintenance (TPM)—Methodologies for reducing and eliminating equipment failure; preventive maintenance. total quality—A strategic integrated system for achieving customer satisfaction that involves all managers and employees and uses quantitative methods to continuously improve an organization’s processes. total quality control (TQC)—A system that integrates quality development, maintenance, and improvement of the parts of an organization. It helps an organization economically manufacture its product and deliver its services.
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total quality management (TQM)—A term initially coined by the Naval Air Systems Command to describe its management approach to quality improvement. Total quality management (TQM) has taken on many meanings. Simply put, TQM is a management approach to long-term success through customer satisfaction. TQM is based on the participation of all members of an organization in improving pro cesses, products, services, and the culture they work in. TQM benefits all organ ization members and society. The methods for implementing this approach are found in the teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa, J. M. Juran, and others. Toyota production system (TPS)—The production system developed by T oyota Motor Corp. to provide best quality, lowest cost, and shortest lead time through eliminating waste. TPS is based on two pillars: just-in-time and jidohka (see listings). TPS is maintained and improved through iterations of standardized work and kaizen (see listings). traceability—The ability to track the history, application, or location of an item or activity, and like items or activities, by means of recorded identification. training—Identifying the needed skills that employees require to perform to established standards, specification, and work practices pertaining to their present assigned tasks, and the process of providing those skills. training evaluation— Techniques and tools for evaluating the effectiveness of training. transaction data—The finite data pertaining to a given event occurring in a process. Examples are the data obtained when an individual checks out groceries (the grocery shopping process) and the data obtained from testing a machined component (the final product inspection step of the production process). tree diagram—A management and planning tool that shows the complete range of subtasks required to achieve an objective; used as a problem-solving method, a tree diagram can break down a broad goal graphically into increasing levels of detailed actions to isolate errors or barriers to achieving the goal. trend—Consecutive data points plotted in relation to a time period that shows a pattern of performance and helps identify any unexpected occurrences. See run chart. trend analysis—The charting of data over time to identify a tendency or direction. trend control chart—A control chart in which the deviation of the subgroup average, X-bar, from an expected trend in the process level is used to evaluate the stability of a process. trilogy—See quality trilogy. TRIZ—A Russian acronym for a theory of innovative problem solving. t-test—A method to assess whether the means of two groups are statistically different from each other. type 1 error—A supplier-organization’s incorrect decision to reject something (such as a statistical hypothesis or a lot of products) when it is acceptable. Also known as producer’s risk and alpha risk. type 2 error—A customer’s incorrect decision to accept something when it is unacceptable. Also known as consumer’s risk and beta risk.
314 Appendix C
U U chart—Count-per-unit chart. A unit is an object for which a measurement or observation can be made; commonly used in the sense of a “unit of product,” the entity of product inspected to determine whether it is defective or nondefective. unconditional guarantee—An organizational policy of providing customers unquestioned remedy for any product or service deficiency. upper control limit (UCL)—Control limit for points above the central line in a control chart. uptime—See equipment or system availability.
V validation—Confirmation by examination of objective evidence that specific requirements and/or a specified intended use are met. validity— The ability of a feedback instrument to mea sure what it is intended to measure. value-added—Describes tasks or activities that convert resources into products or ser vices consistent with internal or external customer requirements. Also describes parts of the process that add worth from the external customers’ perspective. value analysis—Analyzing the value stream to identify value-added and non-value- added activities. value engineering—Analyzing the components and process that create a product, with an emphasis on minimizing costs while maintaining standards required by the customer. values—Statements that clarify the behaviors that the organization expects in order to move toward its vision and mission. Values reflect an organization’s personality and culture. value stream—The primary actions required to bring a product from concept to placing the product in the hands of the end-user. All activities, value-added and non-value- added, required to bring a product from raw material state into the hands of the customer, bring a customer requirement from order to delivery, and bring a design from concept to launch. See also information flow and hoshin planning. value stream loops—Segments of a value stream with boundaries broken into loops to divide f uture state implementation into manageable pieces. value stream manager—A person responsible for creating a future state map and leading door-to-door implementation of the future state for a particular product family; a person who makes change happen across departmental and functional boundaries. value stream mapping (VSM)—A detailed, two-stage graphical flowcharting technique that shows material and informational flow. In the first stage, a very detailed visual “as is” representation of every process in the material and information flows is mapped. During the second stage, a future map of the “to be” process is created. variable data—Data resulting from the measurement of a paramet er or a variable. Contrast with attribute data.
Quality Glossary 315
variance—The difference between a planned amount (usually money or time) and the actual amount. variation—A change in data, a characteristic, or a function that is caused by one of four factors: special causes, common causes, tampering, or structural variation (see individual listings). verification—The act of reviewing, inspecting, testing, checking, auditing, or otherwise establishing and documenting whether items, processes, services, or documents conform to specified requirements. virtual team—A boundaryless team functioning without a commonly shared physical structure or physical contact, using technology to link the team members. vision—A statement that explains what the company wants to become and what it hopes to achieve. visual control—The technique of positioning all tools, parts, production activities, and performance indicators so that the status of a process can be understood at a glance by everyone; it also provides visual cues to aid the performer in correctly processing a step or series of steps in order to reduce cycle time, cut costs, smooth the flow of work, and improve quality. vital few, useful many—A term used by J. M. Juran to describe his use of the Pareto principle, which he first defined in 1950. (The principle was used much earlier in economics and inventory control methodologies.) The principle suggests that most effects come from relatively few c auses; that is, 80 percent of the effects come from 20 percent of the possible causes. The 20 percent of the possible causes are referred to as the “vital few”; the remaining c auses are referred to as the “useful many.” voice of the customer (VOC)—An organization’s efforts to understand the customers’ needs and expectations (“voice”) and to provide products and services that truly meet such needs and expectations. voluntary standard—A standard that imposes no inherent obligation regarding its use.
W walk the talk—Not only talking about what one believes in but also being observed acting out t hose beliefs. Employees’ buy-in of the TQM concept is more likely when management is seen involved in the process—walking the talk—every day. warranty—A manufacturer’s published statement that a defective or deficient product or service experienced by the customer, within a specified period of time, and perhaps additional constraints, will be remedied by the manufacturer. waste—Activities that consume resources but add no value; includes visible waste (e.g., scrap, rework, downtime) and invisible waste (e.g., inefficient setups, wait times of people and machines, inventory). weighed voting—A way to prioritize a list of issues, ideas, or attributes by assigning points to each item based on its relative importance. what-is/what-is-not chart—A tool for analyzing the presence or absence of a step, activity, item, event, behavior, etc.
316 Appendix C Wilcoxon Mann-Whitney test—A way to test the null hypothesis that two populations have identical distribution functions against the alternative hypothesis that the two distribution functions differ only with respect to location (median), if at all. It does not require the assumption that the differences between the two samples are normally distributed. In many applications, it is used in place of the two-sample t-test when the normality assumption is questionable. This test can also be applied when the observations in a sample of data are ranks, that is, ordinal data rather than direct measurements. win-win—Outcome of a negotiation that results in both parties being better off. wisdom—The culmination of a continuum of understanding—from data to information to knowledge to wisdom. work analysis—The analysis, classification, and study of the way work is done. Work may be categorized as value-added (essential), or non-value-added (waste). Collected data may be summarized on a Pareto chart showing how people within the studied population work. The need for and value of all the work is then questioned, and opportunities for improvement identified. work breakdown structure (WBS)—A project management planning tool by which a project is decomposed into tasks, subtasks, and units of work to be performed, and displayed as a tree-type chart. work group—A group composed of people from one functional area who work together on a daily basis and whose goal is to improve the processes of their function. working sequence—One of three elements of standard work; the sequence of operations in a single process that leads a floor worker to most efficiently produce quality goods. work in process—Items between machines or equipment waiting to be processed. work instruction—A document that answers the question “How is the work to be done?” See procedure. work team—See natural team. world-class quality—A term to indicate a standard of excellence; the best of the best.
X, Y, Z X-bar chart—Average chart. Yellow Belt—A team member who supports and contributes to Six Sigma projects, often helping to collect data, brainstorm ideas, and review process improvements. yield—Ratio between salable goods produced and the quantity of raw materials and/ or components input at the beginning of the process. zero defects—A performance standard popularized by Philip B. Crosby to address a dual attitude in the workplace: P eople are willing to accept imperfection in some areas, whereas in other areas, they expect the number of defects to be zero. This dual attitude developed b ecause p eople are human, and h umans make m istakes. However, the zero-defects methodology states that if p eople commit themselves to watching details and avoiding errors, they can move closer to the goal of zero defects.
Quality Glossary 317
Z1.4 and Z1.9—ANSI/ASQ Z1.4-2003 (R2013): Sampling Procedures and Tables for Inspec tion by Attributes is an acceptance sampling system to be used with switching rules on a continuing stream of lots for the acceptance quality limit (AQL) specified. ANSI/ASQ Z1.9-2003 (R2013): Sampling Procedures and Tables for Inspection by Vari ables for Percent Nonconforming is an acceptance sampling system to be used on a continuing stream of lots for the AQL specified.
NOTES 1. Russell T. Westcott, The Certified Manager of Quality/Organizational Excellence Handbook, 4th Ed. (Milwaukee, WI: Quality Press, 2014). 2. D. A. Garvin, associate professor of business administration, Harvard Business School, in a paper published in the Harvard Business Review in 1987. 3. Russell T. Westcott, The Certified Manager of Quality/Organizational Excellence Handbook, 4th Ed. (Milwaukee, WI: Quality Press, 2014).
Appendix D Additional Reading
T
he following pages list additional resources for readers wishing to acquire more knowledge about the topics covered in this handbook. The books have been selected from the hundreds of books available. In no way is it implied that any of the books on this list are required reading. Note: Many of the cited texts are available through ASQ. Visit ASQ’s Quality Press bookstore online at: www.asq.org/quality-press.
POCKET GUIDES Publisher: GOAL/QPC, Salem, NH Advanced Project Management Memory Jogger, 2006. Black Belt Memory Jogger, 2002. Coaching in the Workplace: Strategies and Tools for Powerful Change, 2008. Creativity Tools Memory Jogger: A Pocket Guide for Creative Thinking, 1998. Facilitation at a Glance, 2nd ed., 2008. Hoshin Kanri Memory Jogger, 2013. Lean Enterprise Memory Jogger, 2002. Memory Jogger 2: Tools for Continuous Improvement and Effective Planning, 2nd ed., 2010. Problem Solving Memory Jogger: Seven Steps to Improved Processes, 2000. Process Management Memory Jogger: Building Cross-Functional Excellence, 2008. Project Management Memory Jogger, 1997. Six Sigma Memory Jogger II: Tools for Six Sigma Teams, 2002. Team Memory Jogger, 1995. Time Management Memory Jogger: Create Time for the Life You Want, 2008. Value Methodology: Reduce Cost and Improve Value through Function Analysis, 2008.
Publisher: Quality Press, Milwaukee, WI ASQ Quality Improvement Pocket Guide, 2013. Continual Improvement Assessment Guide: Promoting and Sustaining Business Results, 2004. Effective Writing for the Quality Professional: Creating Letters, Reports, and Procedures, 2005. Internal Auditing Pocket Guide: Preparing, Performing, and Reporting, 2003. Process Auditing Techniques Guide, 2nd ed., 2010. Six Sigma Project Management, 2002. Virtual Teams Guidebook for Managers, 2003.
318
Additional Reading 319
BASIC QUALITY PRINCIPLES AND PRACTICES ASQ. Certified Quality Improvement Associate (brochure). Milwaukee, WI: Quality Press, 2020. Beecroft, G. Dennis, Grace L. Duffy, and John W. Moran, eds. The Executive Guide to Improve ment and Change. Milwaukee, WI: Quality Press, 2003. Deming, W. Edwards. Out of the Crisis. Cambridge, MA: MIT Center for Advanced Engineering Study, 1986. Duffy, Grace L., ed. The ASQ Quality Improvement Pocket Guide. Milwaukee, WI: Quality Press, 2013. Evans, James R., and William M. Lindsay. Managing for Quality and Performance Excellence. 9th ed. Cincinnati, OH: South-Western College Publishing, 2014. Juran, Joseph M., and A. Blanton Godfrey, eds. Juran’s Quality Handbook. 5th ed. New York: McGraw-Hill, 1999. Pyzdek, Thomas and Paul Keller. The Handbook for Quality Management: A Complete Guide to Operational Excellence. 2nd ed. New York: McGraw-Hill, 2013. Wood, D., and Sandra Furterer, ed. The ASQ Certified Manager of Quality/Organizational Excellence Handbook. 5th ed. 2020.
ASSESSMENTS AND AUDITS Arter, Dennis R. Quality Audits for Improved Performance. 3rd ed. Milwaukee, WI: Quality Press, 2003. Fisher, Donald C. Homeland Security Assessment Manual: A Comprehensive Organizational Assessment Based on Baldrige Criteria. Milwaukee, WI: Quality Press, 2005. Russell, J. P., ed. The ASQ Auditing Handbook. 4th ed. Milwaukee, WI: Quality Press, 2013. ———. Continual Improvement Assessment Guide: Promoting and Sustaining Business Results. Milwaukee, WI: Quality Press, 2004. Stimson, William A. Internal Quality Auditing: Meeting the Challenge of ISO 9001. 2nd ed. Chico, CA: Paton Professional, 2010.
BALDRIGE AWARD Blazey, Mark L. Insights to Performance Excellence 2013–2014: Understanding the Integrated Management System and the Baldrige Criteria. Milwaukee, WI: Quality Press, 2006. Evans, James R., and William M. Lindsay. Managing for Quality and Performance Excellence. 9th ed. Cincinnati, OH: South-Western College Publishing, 2014. Leonard, Denis, and Mac McGuire. The Executive Guide to Understanding and Implementing the Baldrige Criteria. Milwaukee, WI: Quality Press, 2007. National Institute of Standards and Technology. Baldrige Performance Excellence Program: Criteria for Performance Excellence (Criteria for Business, Healthcare, or Education). Gaithersburg, MD: Baldrige National Quality Program, National Institute of Standards and Technology, Technology Administration, United States Department of Commerce. One copy of the criteria appropriate to your organization is available at no charge. Contact NIST: Administration Building, Room A600, 100 Bureau Drive, Stop 1020, Gaithersburg, MD 20899-1020. Telephone: 301-975-2036, fax: 301-948-3716, e-mail: nqp@nist.gov, website: http://www.baldrige.nist.gov.
320 Appendix D
CERTIFICATION PREPARATION—ASQ Publisher: Quality Press, Milwaukee, WI Benbow, Donald W., and Hugh W. Broome. The Certified Reliability Engineer Handbook. 2nd ed. 2013. Borror, Connie M., ed. The Certified Quality Engineer Handbook. 3rd ed. 2009. Bucher, Jay L., ed. The Metrology Handbook. 2012. Christensen, Chris, Kathleen M. Betz, and Marilyn S. Stein. The Certified Quality Process Ana lyst Handbook. 2nd ed. 2014. Daugherty, Taz, ed. Fundamental Concepts for the Software Quality Engineer. 2002. Duffy, G., and E. Farmer. The Six Sigma Yellow B elt Study Guide. 2017. Kubiak, T. M. The Certified Six Sigma Master Black B elt Handbook. 2012. Kubiak, T. M., and Donald W. Benbow. The Certified Six Sigma Black B elt Handbook. 2nd ed. 2009. Munro, Roderick A., Matthew J. Maio, Mohamed B. Nawaz, Govindarajan Ramu, and Daniel J. Zrymiak. The Certified Six Sigma Green Belt Handbook. 2008. Russell, J. P., ed. The ASQ Auditing Handbook. 4th ed. 2013. Walker, H. Fred, Ahmad K. Elshennawy, Bhisham C. Gupta, and Mary McShabe-Vaughn. The Certified Quality Inspector Handbook. 2nd ed. 2013. Walker, H. Fred, Donald W. Benbow, and Ahmad K. Elshennawy. The Certified Quality Tech nician Handbook., 2nd ed. 2013. Westfall, Linda. The Certified Software Quality Engineer Handbook. 2010. Wood, D., and Sandra Furterer, ed. The ASQ Certified Manager of Quality/Organizational Excel lence Handbook. 5th ed. 2020.
CONTINUOUS AND BREAKTHROUGH IMPROVEMENT, LEAN AND SIX SIGMA Andersen, Bjørn. Business Process Improvement Toolbox. 2nd ed. Milwaukee, WI: Quality Press, 2008. Andersen, Bjørn, and Tom Fagerhaug. Root Cause Analysis: Simplified Tools and Techniques. 2nd ed. Milwaukee, WI: Quality Press, 2006. Andersen, Bjørn, Tom Fagerhaug, Bjørnar Henriksen, and Lars E. Onsøyen. Mapping Work Processes. Milwaukee, WI: Quality Press, 2008. ASQ Statistics Division. Improving Performance through Statistical Thinking. Milwaukee, WI: Quality Press, 2000. Duffy, Grace L. Modular Kaizen: Continuous and Breakthrough Improvement. Milwaukee, WI: Quality Press, 2014. Escoe, Adrienne. The Practical Guide to People-Friendly Documentation. Milwaukee, WI: Quality Press, 2001. Furterer, Sandra L., ed. Lean Six Sigma in Service: Applications and Case Studies. Boca Raton, FL: CRC Press, 2009. Hutton, David W. From Baldrige to the Bottom Line: A Road Map for Organizational Change and Improvement. Milwaukee, WI: Quality Press, 2000. Jones, Russ. Proving Continuous Improvement with Profit Ability. Milwaukee, WI: Quality Press, 2008. Okes, Duke. Root Cause Analysis: The Core of Problem Solving and Corrective Action. Milwaukee, WI: Quality Press, 2009. Plenert, Gerhard J. Strategic Continuous Process Improvement: Which Quality Tools to Use, and When to Use Them. New York: McGraw-Hill, 2012.
Additional Reading 321 Pyzdek, Thomas, and Paul Keller. The Six Sigma Handbook. 5th ed. New York: McGraw Hill, 2018. ReVelle, Jack B., ed. Manufacturing Handbook of Best Practices: An Innovation, Productivity, and Quality Focus. Boca Raton, FL: St. Lucie Press, 2002. ———. Quality Essentials: A Reference Guide from A to Z. Milwaukee, WI: Quality Press, 2004. Siebels, Don. The Quality Improvement Glossary. Milwaukee, WI: Quality Press, 2004. Tague, Nancy R. The Quality Toolbox. 2nd ed. Milwaukee, WI: Quality Press, 2005.
CUSTOMERS Brown, Stanley A. Customer Relationship Management: A Strategic Imperative in the World of e-Business. New York: John Wiley & Sons, 2000. Fornell, Claes. The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. New York: Palgrave MacMillan, 2007. Goldstein, Sheldon D. Superior Customer Satisfaction and Loyalty: Engaging Customers to Drive Performance. Milwaukee, WI: Quality Press, 2010. Hayes, Bob E. Beyond the Ultimate Question: A Systematic Approach to Improve Customer Loy alty. Milwaukee, WI: Quality Press, 2010. ———. Measuring Customer Satisfaction and Loyalty: Survey Design, Use, and Statistical Analy sis Methods. 3rd ed. Milwaukee, WI: Quality Press, 2008. Naumann, Earl, and Steven H. Hoisington. Customer-Centered Six Sigma: Linking Customers, Process Improvement, and Financial Results. Milwaukee, WI: Quality Press, 2001. Schultz, Garry. The Customer Care & Contact Center Handbook. Milwaukee, WI: Quality Press, 2003. Wilburn, Morris. Managing the Customer Experience: A Measurement-based Approach, Quality Press, 2007.
EDUCATION ASQ. Successful Applications of Quality Systems in K–12 Schools. Milwaukee, WI: Quality Education Forum/Division, 2003. Jenkins, Lee. Improving Student Learning: Applying Deming’s Quality Principles in the Class room. 2nd ed. Milwaukee, WI: Quality Press, 2003.
HEALTHCARE—M EDICAL American College of Medical Quality. Core Curriculum for Medical Quality Management. Sudbury, MA: Jones and Bartlett Publishers, 2005. Duffy, Grace L., John W. Moran, and William J. Riley. Quality Function Deployment and Lean- Six Sigma Applications in Public Health. Milwaukee, WI: Quality Press, 2010. Furterer, Sandra. Lean Six Sigma Case Studies in the Healthcare Enterprise. London: Springer, 2013. Harnack, Gordon. Mastering and Managing the FDA Maze: Medical Device Overview. Milwaukee, WI: Quality Press, 1999. Pauley, Judith Ann and Joseph F. Pauley. Establishing a Culture of Patient Safety. Milwaukee, WI: Quality Press, 2011. Ransom, Scott B., Maulik Joshi, and David Nash. The Healthcare Quality Book: Vision, Strat egy, and Tools. Chicago, IL: Health Administration Press, 2005.
322 Appendix D Sperl, Todd, Rob Ptacek, and Jayant Trewn. Practical Lean Six Sigma for Healthcare. Milwaukee, WI: Quality Press, 2013.
ISO 9000 Myhrberg, Erik Valdemar. A Practical Field Guide for ISO 9001:2008. Milwaukee, WI: Quality Press, 2009. West, John E., and Charles A. Cianfrani. Unlocking the Power of Your QMS: Keys to Business Performance improvement. Milwaukee, WI: Quality Press, 2004.
LEADERSHIP AND MANAGEMENT—G ENERAL Andersen, BjØrn. Bringing Business Ethics to Life: Achieving Corporate Social Responsibility. Milwaukee, WI: Quality Press, 2004. Barker, Tom. Leadership for Results: Removing Barriers to Success for P eople, Projects, and Pro cesses. Milwaukee, WI: Quality Press, 2006. Bellman, Geoffrey. Getting Things Done When You Are Not in Charge. San Francisco: Berrett- Koehler, 2001. Ducoff, Neil., No-Compromise Leadership: A Higher Standard of Leadership Thinking and Behav ior. Sanford, FL: DC Press, 2009. Evans, G. Edward, Patricia Layzell Ward, and Bendik Rugas. Management Basics for Informa tion Professionals. New York: Neal-Schuman Publishers, Inc., 2000. Hofstede, G., G. J. Hofstede, and M. Mikov. Cultures and Organizations. 4th ed. New York: McGraw-Hill, 2010. Kouzes, James M., and Barry Z. Posner. The Leadership Challenge. 4th ed. San Francisco, CA: Jossey-Bass (Wiley), 2008.
PROJE CT MANAGEMENT Kerzner, Harold. Project Management: A Systems Approach to Planning, Scheduling and Con trolling. 8th ed. New York: John Wiley & Sons, 2003. McGhee, Pamela, and Peter McAliney. Painless Project Management: A Step-by-Step Guide for Planning, Executing, and Managing Projects. New York: John Wiley & Sons, 2007. Phillips, Ph.D., Jack J., Timothy W. Bothell, Ph.D., and G. Lynne Snead. The Project Man agement Scorecard: Measuring the Success of Project Management Solutions. New York: Butterworth-Heinemann, 2002. Westcott, Russell T. Simplified Project Management for the Quality Professional. Milwaukee, WI: Quality Press, 2005.
QUALITY COSTS AND METRICS Okes, Duke. Performance Metrics: The Levers for Process Management. Milwaukee, WI: Quality Press, 2013. Wood, Douglas C. The Executive Guide to Understanding and Implementing Quality Cost Pro grams: Reduce Operating Expenses and Increase Revenue. ASQ Quality Management Division Economics of Quality Series. Milwaukee, WI: Quality Press, 2007. ———. Principles of Quality Costs: Financial Measures for Strategic Implementation of Quality Management. Milwaukee, WI: Quality Press, 2013.
Additional Reading 323
RISK MANAGEMENT Frame, J. D. Managing Risk in Organizations: A Guide for Managers. New York: John Wiley & Sons, 2003. Stamatis, D. H. Failure Mode Effect Analysis: FMEA from Theory to Execution. 2nd ed. Milwaukee, WI: Quality Press, 2003. Westcott, Russell T. Chapter 4 in Stepping Up to ISO 9004. Chico, CA: Paton Press, 2005.
SOFTWARE QUALITY Daugherty, Taz, ed. Fundamental Concepts for the Software Engineer. Milwaukee, WI: Quality Press, 2002. Faris, Thomas H. Safe and Sound Software: Creating an Efficient and Effective Quality System for Software Medical Device Organizations. Milwaukee, WI: Quality Press, 2006.
STATISTICS ASQ Statistics Division. Improving Performance through Statistical Thinking. Milwaukee, WI: Quality Press, 2000. Crossley, Mark L. The Desk Reference of Statistical Quality Methods. Milwaukee, WI: Quality Press, 2000.
SUPPLIER QUALITY Ayers, James B. Supply Chain Project Management. 2nd ed. Boca Raton, FL: CRC Press, 2010. Bolstorff, Peter, and Robert Rosenbaum. Supply Chain Excellence: A Handbook for Dramatic Improvement Using the SCOR Model. 2nd ed. New York: AMACOM, 2007. Bossert, James L., ed. The Supplier Management Handbook. 6th ed. Milwaukee, WI: Quality Press, 2004. Dittmann, P. J. Supply Chain Transformation: Building and Executing an Integrated Supply Chain. Milwaukee, WI: Quality Press, 2013. Hoover, Bill, Eero Eloranta, Kati Huttunen, and Jan Holmstrom. Managing the Demand Chain: Value Innovations for Supplier Excellence. New York: John Wiley & Sons, 2001. Russell, J. P., ed. The ASQ Supply Chain Management Primer. Milwaukee, WI: Quality Press, 2013.
TEAMS Scholtes, Peter R., Brian L. Joiner, and Barbara J. Streibel. The Team Handbook. 3rd ed. Madison, WI: Joiner Associates, 2003.
TOTAL QUALITY MANAGEMENT Beecroft, G. Dennis, Grace L. Duffy, and John W. Moran, eds. The Executive Guide to Improve ment and Change. Milwaukee, WI: Quality Press, 2003. Berk, Joseph, and Susan Berk. Quality Management for the Technology Sector. New York: Butterworth-Heinemann, 2000. Gryna, Frank, Richard C. H. Chua, and Joseph A. DeFeo. Quality Planning and Analysis for Enterprise Quality. 5th ed. New York: McGraw-Hill, 2007. Shearer, Clive. Everyday Excellence: Creating a Better Workplace through Attitude, Action, and Appreciation. Milwaukee, WI: Quality Press, 2006.
Index
Note: Page numbers followed by f or t refer to figures or tables, respectively. End note information is identified by n and note number following the page number.
A
Human Reliability Assessment, 200–201 improvement, for incremental improvement, 133f, 135, 145 process stability, 132f, 133f, 134–135, 141–142, 145 quality audit terminology vs., 159n3 risk (See project risk analysis; risk assessment techniques) self-assessments, team, 98, 99f supplier, 224–228 surveys as (See surveys) attitudes, 14, 84 audits. See quality audits Aurelius, Marcus, 1 Automotive Industry Action Group (AIAG), 31–32, 203
A&H, 59–60 Abel Hospital, 62 ACSI (American Customer Satisfaction Index), 32 active listening, 91 ad hoc project teams, 62, 63f advertising and marketing benefits of quality for, 31–32, 34 word-of-mouth, 34 affinity diagrams, 154–155, 155f AIAG (Automotive Industry Action Group), 31–32, 203 Alabaster County school newspapers, 61 AlliedSignal, xii American Customer Satisfaction Index (ACSI), 32 American Society for Quality (ASQ) Automotive Division, 31–32 certifications, ix–x, xf (See also Certified Quality Improvement Associate) Code of Ethics, 256–257 Knowledge Center, 325 Quality Information Center, 326 Quality Management Division, 63 American Society for Quality Control Edwards Medal, 50 Feigenbaum’s involvement with, 50 Grant Medal, 46 Lancaster Award, 50 Shewhart medal, 39 Analyze (Analysis), xiii, 255 Apply (Application), xiii, 255 appraisal costs, 156 aptitudes, KESAA factors analysis of, 84 Aristotle, 1 The Art of Getting Your Own Sweet Way (Crosby), 47 ASQ. See American Society for Quality assessments audits as (See quality audits) Baldrige Performance Excellence Program Criteria for, 159n3 baseline, for lean methodology implementation, 123 cost of quality, 157–158 customer satisfaction and loyalty, 245–246
B Baldrige Performance Excellence Program Criteria ISO 9000:2015 comparison to, 6 organizational culture driven by, 16 overview of, 3–5, 5f publication of, xii quality audits or assessments under, 159n3 quality awards based on, 34 quality plans consistent with, 10 systems and processes approach in, 20 bar charts, 177. See also Gantt charts; histograms; Pareto charts baseline assessments, for lean methodology implementation, 123 batch size reduction, in lean methodology, 116f, 117 Bean, Leon Leonwood, 229 beliefs, 15, 36 Bell Telephone Laboratories, xi, 38 benchmarking, 106, 127–128 benefits of quality, 30–35 for community, 33 for customers, 32 for employees, 31 for interested parties, 33–34 for organizations, 31–32 overview of, 30–31 for society, 34–35 for suppliers, 33
325
326 Index
Big Risk, 89 Black Belt, Six Sigma, 109t, 112 Bloom’s taxonomy, xiii, 255 Body of Knowledge 2020, 251–255 benefits of quality, 30 book based on, xii–xiii complaint process, 246 customer identification, 230 customer needs, 247 data gathering and use, 237 employee involvement and empowerment, 17 foundations of quality, 36 improvement techniques, 151 improvement tools, 160 incremental and breakthrough improvement, 128 lean methodology, 114 levels of cognition, 255 organizational culture, 14 overview of, 251–255 quality definitions, 2 quality plans, 6 quality systems, 10 risk management, 193 root cause analysis, 188 Six Sigma, 107 standardization, 27 supplier performance, 224 supplier relationship, 213 supplier selection, 210 systems and processes, 18 systems view of, 24 team conflict, 90 team decision making, 94 team formation and dynamics, 73 team member selection, 82 team purpose, 56 team roles and responsibilities, 67 team stages, 87 team types, 59 value of teams, 64 variation, 25 bow tie analysis, 201, 201f BPC, 59 brainstorming breakthrough improvement process using, 147, 148 cause-and-effect diagrams with, 200 definition of, 151 factors for successful, 152–153 in field-force analysis, 178, 179 groupthink forestalled by, 92 as improvement technique, 151–153 incremental improvement process using, 134 for risk analysis, 78f as risk assessment technique, 198, 200 silent or write-it-down, 152 stakeholder participation in, 85 steps following, 152 steps in, 151–152
in strategic planning, 34 structured, 152 unstructured, 152 breakthrough improvement factors for consideration in, 147 process improvement with, 106, 128–129, 146–149 process reengineering as, 129, 147–149 steps in, 148–149 businesses. See organizations
C Callarman, Tom, 209 cause-and-effect diagrams brainstorming with, 200 as improvement tools, 161, 187n2 incremental improvement process using, 134, 143 Ishikawa’s development of, 46, 188 purpose and uses of, 188–189, 190 as risk assessment techniques, 200 in root cause analysis, 188–190, 189f Six Sigma use of, 108 steps in creating, 189–190 cellular/flow, in lean methodology, 116f, 117 Certified Quality Improvement Associate (CQIA) Body of Knowledge 2020 (See Body of Knowledge 2020) certification, ix examination, xiii, xv chain reactions, 40, 41f, 42 champions lean, 121 project, in Six Sigma, 108, 109t team, 68t change management for incremental improvement, 133f, 134, 143–144 in lean methodology, 123 checklists, 7, 172 check sheets, 171–172, 171f coaches, team leaders as, 99–101 Code of Ethics, 256–257 cognition, levels of, 255 commission of errors, mistake-proofing, 118 community, benefits of quality for, 33. See also society, benefits of quality for companies. See organizations company-wide quality control (CWQC), xii, 46 complaints data analysis of, in Six Sigma, 112 management of, as cost of quality, 157 process of resolving, 246–247 on supplier performance, 225 voice of the customer reflected in, 246–247 concepts, quality. See quality terms, concepts, and principles conflicts supplier relationship, 217–219 team, 90–93, 91f
consensus affinity diagrams for, 154 field-force analysis reaching, 179 in teams, 95 consumers, 232–233. See also customers continuous improvement teams, 60, 62–63, 63f, 116 continuous process improvement cycle, 131 continuous quality improvement (CQI) definition of, 13, 151 diversity of applications, xiii quality management principles on, 6 quality systems including, 10, 11, 13, 14f supplier performance data for, 226 techniques for (See continuous quality improvement techniques) continuous quality improvement techniques improvement techniques, 151–159 improvement tools, 160–187 Plan-Do-Check-Act cycle, xi (See also Plan-DoCheck-Act (PDCA) cycle) process improvement, 106–150 risk management, 193–207 root cause analysis, 188–192 control charts attribute data, 174 benefits of, 174–175 centerline or mean on, 173, 173f definition of, 172 as improvement tools, 172–175, 173f incremental improvement process using, 134, 141 lower control limit on, 173, 173f purpose and uses of, 174 Six Sigma use of, 112 standard deviation and, 172 upper control limit on, 173, 173f variables data, 174 COPE (cost of poor execution) model, 158 corrective actions, supplier’s, 225 correlation, in scatter diagrams, 169, 170–171 cost of poor execution (COPE) model, 158 cost of quality appraisal costs as, 156 Crosby on, 1, 47, 157 external failure costs as, 157 as improvement techniques, 156–158 internal failure costs as, 156–157 prevention costs as, 156 steps to assessing and addressing, 157–158 CQI. See continuous quality improvement CQIA. See Certified Quality Improvement Associate Create (Synthesis), xiii, 255 critical-to-quality (CTQ) characteristics, 108 CRM (customer relationship management), 237. See also voice of the customer Crosby, Philip The Art of Getting Your Own Sweet Way, 47 biographical information, 47 on cost of quality, 1, 47, 157
Index 327
The Eternally Successful Organization, 47 foundations of quality based on, 37f, 47–48, 49f Leading: The Art of Becoming an Executive, 47 philosophies of, 47, 49f quality improvement guidelines, 47–48 Quality Is Free, 47 quality management principles of, 48 Quality without Tears, 47 Running Things, 47 zero defects concept of, 47–48 cross-functional teams, 59–60, 62–63, 63f, 74 CTQ (critical-to-quality) characteristics, 108 culture organizational, 14–17, 31 of quality, 15–17, 31, 129 team, 86–88 customer identification, 230–236 consumers/end users, 232–233 external customers, 232–236 improving processes and services after, 231 intermediate customers, 233–236 internal customers, 230–232 internal relationships affecting external customers, 231–232 segmentation and, 235–236 customer relationship management (CRM), 237. See also voice of the customer customers Baldrige Framework criteria for, 3 benefits of quality for, 32 breakthrough improvements and, 148, 149 customer-specific quality plans, 10 focus groups of, 177, 248 identification of, 230–236 incremental improvement to address needs of, 135 lean methodology addressing, 114 quality management principles focus on, 5 satisfaction and loyalty of, 32, 220, 237, 241–246, 242f, 243t SIPOC analysis, 24–25, 25f supplier selection mandated by, 211, 212 voice of, 108, 110, 112f, 237–250 (See also voice of the customer for details) CWQC (company-wide quality control), xii, 46 cycle time reduction, in lean methodology, 117
D data attribute data, 174 Body of Knowledge on gathering and use of, 237 complaint data analysis, 112, 225 customer satisfaction and loyalty, 32, 237, 241–246, 242f, 243t electronic data interchange, 241 incremental improvement, collection and evaluation for, 132f, 133f, 134, 140–141, 144, 146
328 Index
product, suppliers providing, 224 supplier performance, for continuous improvement, 226 variables data, 174 voice of the customer, 237–246, 238f, 242f, 243t Davidow, William, 29 decision making attributes of good decisions, 97 consensus, 95, 154, 179 considerations for, 97–98 definitions, 94 evidence-based, 6 fact-finding vs., 97 nominal group technique for, 96–97, 97f process for, 94 styles of, 94–95 team, 94–98, 97f, 99f tools for, 95–97, 97f voting/multivoting for, 95–96 decision matrix, 113 decision trees, 79, 175–176, 176f defects. See also errors; variation corrective actions for, 225 Deming on cost of, 1 80/20 rule for, 168 external failure costs to remedy, 157 internal failure costs to remedy, 156–157 quality audits to identify (See quality audits) Six Sigma identifying and rectifying, 107, 108, 111–113 as waste, 125t zero, 47–48, 119 Define, Measure, Analyze, Improve, Control. See DMAIC delegation, in teams, 95 delivery performance, supplier’s, 225 Deming, W. Edwards biographical information, 39 chain reaction philosophy of, 40, 41f, 42 on competition, 55 control charts based on work of, 172 on cost of defects, 1 evolution of quality under, xi–xii foundations of quality based on, 37f, 39–43, 41f, 49f 14 points of management by, 40–42 improvement tools developed by, 160, 172 The New Economics for Industry, Government, and Education, 42–43 Out of the Crisis, 39, 40–42 PDSA cycle development by, 38, 40, 43 philosophies of, 40–42, 41f, 49f Shewhart and, 38, 39 supply chain model reflecting work of, 228, 228f system of profound knowledge by, 42–43 Deming Awards, 5, 46, 51 Design for Six Sigma (DFSS), 113 design of experiments (DOE), 177 Design of Experiments (Taguchi), 51
DFSS (Design for Six Sigma), 113 discount buyers, 233 DiSC profiling instrument, 83 disruptive behavior in teams, 93 distributors, 234 DMAIC (Define, Measure, Analyze, Improve, Control) problem-solving methodology Analyze step of, 108, 111f, 112, 115f Control step of, 108, 111f, 113, 115f Define step of, 108, 111f, 115f Improve step of, 108, 111f, 113, 115f Measure step of, 108, 110–112, 111f, 115f phases and activities, 115f roles and responsibilities in, 109t–110t in Six Sigma, 108–114, 109t–110t, 111f, 115f tools for, 115f documentation benefits of quality, 31 operational planning including, 8 process, 19 project charters, 76–78, 77f–78f, 81, 137–138 quality assurance, 7, 12 standardization and, 27, 146 waste as unneeded, 126 DOE (design of experiments), 177 downtime, as waste, 124, 125t Duffy, Grace, 20
E Economic Control of Quality of Manufactured Product (Shewhart), 38 EDI (electronic data interchange), 241 Edwards Medal, 50 EFQM (European Foundation for Quality Management), 5 80/20 rule, 167–168 85/15 rule, 26 electronic data interchange (EDI), 241 employee buyers, 233 employees. See workforce empowerment employee, 17–18 team, 61, 73 end users, 232–233. See also customers Enterprise Resource Planning (ERP) software, 221–222 errors. See also defects information, 118 misalignment, 118 omission or commission, 118 poka-yoke or mistake-proofing, 118–120, 181, 200 quality audits to identify (See quality audits) root cause of, 119 (See also root cause analysis) selection, 118 The Eternally Successful Organization (Crosby), 47 European Foundation for Quality Management (EFQM), 5 Evaluate (Evaluation), xiii, 255
evidence-based decision making, 6 executives. See leadership experience, KESAA factors analysis of, 83 experts on quality (See foundations of quality) teams supplemented by, 71 external customers, 232–236. See also customers external failure costs, 157 external suppliers, 210–211. See also suppliers
F facilitators field-force analysis use of, 179 risk assessment, 198, 199 team, 67, 68t, 71, 87 fact-finding, vs. decision making, 97 failure modes and effects analysis (FMEA) AIAG-VDA, 203 design (DFMEA), 201–202 methodology for conducting, 202 process (PFMEA), 201, 203f risk management using, 197, 198, 201–203, 203f Feigenbaum, Armand V. biographical information, 49–50 evolution of quality under, xi–xii foundations of quality based on, 37f, 49–50 philosophies of, 50 Total Quality Control, 49 total quality control development by, xi, 50 Feller, Andrew, 209 FFA. See field-force analysis field-force analysis (FFA), 178–179, 178f financial issues benefits of quality for, 31–32, 33 cost of customer loss vs. retention, 244–245 cost of quality, 1, 47, 156–158 Six Sigma team member managing, 110t supplier relationship tensions over, 219 supplier selection reflecting, 211–212 supplier’s product prices and total cost, 225 fishbone diagrams. See cause-and-effect diagrams Fisher, R. A., 51 5S, in lean methodology, 116, 116f Five whys, 190–192, 191f flowcharts definition of, 161 deployment or swimlane, 164, 165f failures of accuracy in, 164 as improvement tools, 161–164, 162f, 163f, 165f incremental improvement process using, 132f, 134, 138, 139–140 process, 164 purpose or uses of, 161 risk assessment techniques using, 198 steps for creating, 161–163 symbols in, 163f useful results from, 163–164 FMEA. See failure modes and effects analysis focus groups, 177, 248
Index 329
Ford, Henry, 235 foundations of quality, 36–53 Crosby as, 37f, 47–48, 49f Deming as, 37f, 39–43, 41f, 49f Feigenbaum as, 37f, 49–50 Ishikawa as, 37f, 46 Juran as, 37f, 43–45, 49f overview of, 36–37, 37f, 52 quality philosophy in, 36–37 Shewhart as, 37f, 38–39 Taguchi as, 37, 50–52
G Gantt charts, 79, 80f, 179–180, 180f General Electric Corporation, xii, 107 global value chains, benefits of quality in, 33–34 glossary, 258–317 Godfrey, A. Blanton, 229 Grant Medal, 46 Green Belt, Six Sigma, 110t group dynamics. See team formation and dynamics groupthink, 92 Guide to Quality Control (Ishikawa), 46
H HACCP (Hazard Analysis and Critical Control Points), 198 Handiware, 92–93 Harari, Owen, 209 Harmon, Paul, 21 Hazard Analysis and Critical Control Points (HACCP), 198 health and safety, 31, 120 hidden agendas, 93 histograms definition of, 164 as improvement tools, 164–167, 167f incremental improvement process using, 134, 135, 142 interpretation of, 166 non-normal distribution, 166, 167f normal distribution, 164, 166 purpose or uses of, 165–166 steps to developing, 166 HRA (Human Reliability Assessment), 200–201 Hradesky, John, 67 Human Reliability Assessment (HRA), 200–201 Hunt, V. Daniel, 55
I Imai, Masaaki, 105, 129, 229 improvement techniques, 151–159. See also continuous quality improvement techniques; quality improvement affinity diagrams as, 154–155, 155f brainstorming as, 151–153
330 Index
cost of quality as, 156–158 PDCA or PDSA cycle as, 153–154, 153f quality audits as, 158–159 quality management principles on, 6 quality systems including, 11 improvement tools, 160–187 bar charts as, 177 cause-and-effect diagrams as, 161, 187n2 check sheets as, 171–172, 171f control charts as, 172–175, 173f design of experiments as, 177 field-force analysis as, 178–179, 178f flowcharts as, 161–164, 162f, 163f, 165f focus groups as, 177 Gantt charts as, 179–180, 180f histograms as, 164–167, 167f matrix analysis as, 181 matrix diagrams as, 180 overview of, 160–161, 186 Pareto charts as, 167–169, 168f poka-yoke as, 181 process decision program charts as, 181–182, 182f relations diagrams or interrelationship diagraphs as, 182, 183f resource allocation matrix as, 183, 184f run charts as, 183, 185–186, 185f scatter diagrams as, 169–171, 170f seven basic, 160–161, 187n2 stratification as, 186 tree diagrams or decision trees as, 175–176, 176f incremental improvement additional improvement feasibility decisions in, 133f, 135, 146 basic process improvement model for, 131–135, 132f–133f change implementation plan for, 133f, 134, 143–144 continuous process improvement cycle for, 131 data collection and evaluation for, 132f, 133f, 134, 140–141, 144, 146 flowchart the current process for, 132f, 134, 138 flowchart the simplified process for, 139–140 improvement assessment in, 133f, 135, 145 kaizen as, 129 leadership support for, 131 PDCA cycle for, 129–130, 131, 134, 143–146 process capability studies for, 132f, 134, 142–145 process improvement with, 106, 119, 128–146, 132f–133f, 137t process stability assessment for, 132f, 133f, 134–135, 141–142, 145 root cause analysis in, 132f, 134, 143 select process and establish objectives for, 131, 132f, 135–137, 137t simplifying process for, 132f, 134, 139–140 standardization of modified process after, 145–146 steps in, 129–146 team organization for, 131, 132f, 134, 136, 137–138
testing changes in, 133f, 134, 144–145 training for, 129, 140, 146 Industrial Standardization Prize, 46 information errors, mistake-proofing, 118 information technology, 221–222, 222f interested parties, benefits of quality for, 33–34 intermediate customers, 233–236 internal customers, 230–232 internal failure costs, 156–157 internal suppliers, 210 International Academy for Quality, 50 interrelationship diagraphs, 182, 183f inventory supplier relationship issues over, 217–221 waste in, 124, 125t, 219 Ishikawa, Kaoru biographical information, 46 cause-and-effect diagrams, 46, 188 company-wide quality control associated with, xii, 46 evolution of quality under, xi–xii foundations of quality based on, 37f, 46 Guide to Quality Control, 46 improvement tools developed by, 160 Pareto chart, 46 philosophies of, 46 quality circles of, xi, 46 What Is Total Quality Control? The Japanese Way, 46 Ishikawa diagrams. See cause-and-effect diagrams ISO 9000:2015, 6, 16, 27, 194 ISO 9001:2015 human error prevention standards in, 200 publication of, xii quality audits under, 7 quality plans consistent with, 10 risk management under, 196, 197, 199, 200, 205 standardization under, 27 supplier selection standards in, 211 ISO 16355, 248 ISO 31000:2018, 194, 195–196, 198 ISO 31010, 198
J Japan Deming in, xi–xii, 39 improvement tools used in, 160–161 Ishikawa in (See Ishikawa, Kaoru) Juran in, xi–xii, 44 poka-yoke originating in, 118, 181, 200 quality control in, xi–xii Second Order of the Sacred Treasure awards, 39, 44 Taguchi in (See Taguchi, Genichi) JIT (just-in-time), in lean methodology, 117, 218 job enlargement vs. enrichment, 18 Jobs, Steve, 29 Joint Commission for Healthcare, 7 Jung, Carl, 83
Juran, Joseph M. biographical information, 43–44 breakthrough sequence of, 45 80/20 rule applied by, 167–168 evolution of quality under, xi–xii foundations of quality based on, 37f, 43–45, 49f on improvement, 45, 105 Juran Institute, 44 Juran Quality Control Handbook, 44, 45 levels of quality by, 23, 23t, 45 philosophies of, 44–45, 49f Planning for Quality, 44–45 on systems and processes, 21 JUSE (Union of Japanese Scientists and Engineers), 39, 44, 160 just-in-time (JIT), in lean methodology, 117, 218
K kaizen incremental improvement with, 129 kaizen blitz or event, 60, 120–121, 129 in lean methodology, 120–121 stages of event, 121 Kano, Noriaki, 241 Kano model, 241–242, 242f KESAA (Knowledge, Experience, Skills, Aptitude, Attitude) factors analysis, 83–84 knowledge ASQ Knowledge Center, 325 Baldrige Framework criteria for management of, 4 KESAA factors analysis of, 83 Remember (Knowledge), xiii, 255 system of profound knowledge, 42–43
L Lancaster Award, 50 Latzenbach, John, 55 leadership Baldrige Framework criteria for, 3 breakthrough improvements supported by, 148 as coach, 99–101 Deming’s 14 points of management for, 40–42 employee empowerment by, 17 incremental improvements supported by, 131 macro level quality improvement by, 23t, 24 organizational culture modeled by, 15–16 quality function deployment engagement by, 250 quality management principles on, 5, 40–42 6 Rs of, 100 Six Sigma support from, 108 steering committees including, 81 strategic planning by, 7–8, 9f, 34, 204, 215 team, 67, 69t, 71, 75, 82–83, 85, 87, 99–101 wasteful use of, 126 Leading: The Art of Becoming an Executive (Crosby), 47
Index 331
lean methodology baseline assessments for, 123 batch size reduction in, 116f, 117 building blocks of, 116–117, 116f, 123 cellular/flow in, 116f, 117 champions of, 121 change management in, 123 continuous improvement teams applying, 60, 63 cycle time reduction in, 117 definition of, 114 5S in, 116, 116f just-in-time in, 117, 218 kaizen in, 120–121 organizational culture in, 16 overall equipment effectiveness analysis in, 123 pilot project for, 123 point-of-use storage in, 116f, 117 poka-yoke or mistake-proofing in, 118–120 process improvement with, 106, 114, 116–126, 116f, 122f–123f, 125t pull/kanban in, 116f, 117, 218 quality at the source in, 116f, 117 quick changeover in, 116f, 117 standardization and standardized work in, 27–28, 116f, 117 starting implementation of, 121–124, 122f–123f streamlined layout in, 116, 116f supplier relationship optimization in, 218 systems and processes in, 20 teams in, 60, 63, 116f, 117, 119 total productive maintenance in, 116f, 117 training in, 123 value stream mapping in, 121–122, 122f–123f, 219 visual controls in, 116, 116f waste removal in, 114, 124–126, 125t Lencioni, Patrick M., 102 levels of cognition, 255 listening, active, 91 listening posts, customer data via, 241 logistics supply chain, 213, 216–217 team, 92, 98 waste associated with, 125t
M Macho Motors, 60 Malcolm Baldrige National Quality Award Program, xii, 50, 205. See also Baldrige Performance Excellence Program Criteria management. See leadership Management by Total Results (Taguchi et al.), 51 marketing. See advertising and marketing Mars Package Delivery, 61 Marston, William, 83 Master Black Belt, Six Sigma, 108, 109t Masuyama, Matosaburo, 50–51 material handling, waste associated with, 124, 125t matrix analysis, 181
332 Index
matrix diagrams, 180 MBTI (Myers-Briggs Type Indicator), 83 measurement, analysis, and knowledge management. See also assessments; knowledge Baldrige Framework criteria for, 4 DFSS, 113 DMAIC, 108–114, 109t–110t, 111f, 115f supplier performance, 224–228 Med Plastics, 61 meetings, waste as unneeded, 126 Metz, Peter, 221, 226, 228 misalignment, mistake-proofing, 118 mistake-proofing, 118–120, 181, 200 Motorola Corporation, xii, 107 multivoting, in teams, 95–96 Myers-Briggs Type Indicator (MBTI), 83 mystery shoppers, 241
N National Council on Physical Distribution Management (NCPDM), 216 The New Economics for Industry, Government, and Education (Deming), 42–43 next operation as customer (NOAC), 230 Nihon Keizai Press Prize, 46 nominal group technique (NGT), 96–97, 97f
O OEE (overall equipment effectiveness) analysis, 123 omission, mistake-proofing, 118 Opel, John R., 29 operational planning, 8, 9f operations, Baldrige Framework criteria for, 4 organizational culture benefits of quality for, 31 culture of quality in, 15–17, 31, 129 definition of, 14 overview of, 14–17 organization buyers, 233 organizations benefits of process improvement for, 106–107 benefits of quality for, 31–32 buyers for, 233 context of, 196 leadership of (See leadership) organizational culture of, 14–17, 31, 129 as systems, 20–21, 22f value of customer satisfaction and loyalty assessment for, 245–246 value of teams for, 65 (See also teams) workforce of (See workforce) outlines, work breakdown structure as, 79 Out of the Crisis (Deming), 39, 40–42 overall equipment effectiveness (OEE) analysis, 123 overprocessing, as waste, 125t overproduction, as waste, 124, 125t
P Pareto, Vilfredo, 167 Pareto charts definition of, 167 as improvement tools, 167–169, 168f incremental improvement process using, 135–136, 143 Ishikawa’s use of, 46 purpose and uses of, 167, 168, 169 Six Sigma use of, 112 steps to constructing, 168–169 PDCA cycle. See Plan-Do-Check-Act (PDCA) cycle PDPC (process decision program charts), 181–182, 182f PDSA cycle. See Plan-Do-Study-Act (PDSA) cycle philosophy, quality. See quality philosophy pilot projects, 123, 144 Plan-Do-Check-Act (PDCA) cycle Act stage of, 154 Check stage of, 154 Deming’s modification to PDSA, 38, 43 Do stage of, 154 as improvement technique, 153–154, 153f incremental improvement steps following, 129–130, 131, 134, 143–146 Plan stage of, 153 risk management using, 197 Shewhart’s development of, xi, 38 supplier relationship improvement using, 215 Plan-Do-Study-Act (PDSA) cycle Act stage of, 154 Deming’s development of, 38, 40, 43 Do stage of, 154 as improvement technique, 153–154, 153f Plan stage of, 153 Study stage of, 154 Planning for Quality (Juran), 44–45 point-of-use storage, 116f, 117 poka-yoke, 118–120, 181, 200 prevention costs, 156 principles, quality. See quality terms, concepts, and principles process approach business processes in, 19, 20 definition of, 18, 42 process capability studies in, 26–27, 132f, 134, 142–145 process documentation in, 19 process improvement in (See process improvement) product/service development processes in, 19 product/service production processes in, 19 quality management principles on, 5 reliable process development in, 26 SIPOC analysis, 24–25, 25f statistical process control in, xi, 26, 37f, 38–39 systems and, 18–21, 42–43 systems vs., 21–22 variation in, 25–27
process capability studies, 26–27, 132f, 134, 142–145 process control in lean methodology, 116f, 117 statistical, xi, 26, 37f, 38–39 process decision program charts (PDPC), 181–182, 182f process improvement, 106–150 benchmarking for, 106, 127–128 benefits for organization, 106–107 definition of, 106 incremental and breakthrough improvement for, 106, 119, 128–149, 132f–133f, 137t lean methodology for, 106, 114, 116–126, 116f, 122f–123f, 125t Six Sigma methodology for, 106, 107–114, 109t–110t, 111f, 112f process maps, 108, 148 process owner, in Six Sigma, 109t process reengineering, 129, 147–149. See also breakthrough improvement process stability assessments, 132f, 133f, 134–135, 141–142, 145 process teams, 59–60, 62, 63f product data, supplier’s, 224 product prices, supplier’s, 225 product warranty registration, 239 project charters, 76–78, 77f–78f, 81, 137–138 project risk analysis, 77–78, 78f, 182 prototyping method, 51–52 Public Health Accreditation Board, 7 pull/kanban, in lean methodology, 116f, 117, 218
Q QA. See quality assurance QC. See quality control QFD (quality function deployment), 113, 247–250, 247f, 249f QI. See quality improvement; quality inspections quality benefits of, 30–35 cost of, 1, 47, 156–158 culture of, 15–17, 31, 129 definitions of, 2–3 diversity of applications, xiii evolution of, xi–xii foundations of, 36–53 improvement of (See continuous quality improvement; quality improvement) philosophy of (See quality philosophy) terms, concepts, and principles, xii, xiii, 2–29 (See also glossary) quality assurance (QA) as cost of quality, 156 CQI including, 13, 14f definition of, 11 functions of, 12 quality assurance plans, 6–7 quality control vs., 13 quality systems including, 11–12, 13, 14f
Index 333
quality audits assessment terminology vs., 159n3 in company-wide quality control, 46 as cost of quality, 156 definition of, 158 as improvement techniques, 158–159 internal or first-party, 158–159, 197 quality plans including, 7 risk management using, 197 second-party, 159 steps to conducting, 158 third-party, 159 quality circles, xi, 18, 46 quality control (QC) company-wide, xii, 46 CQI including, 13, 14f definition of, 12, 50 Feigenbaum’s views of, xi, 45, 50 functions of, 12 Juran’s advocacy for, 45 quality assurance vs., 13 quality control plans, 6–7 quality systems including, 10–11, 12, 13, 14f total quality control, xi, 50 quality function deployment (QFD), 113, 247–250, 247f, 249f quality improvement (QI) CQI including, 13, 14f (See also continuous quality improvement) Crosby’s points/steps to, 47–48 Juran’s advocacy for, 45 levels of, 23–24, 23t quality systems including, 11, 13, 14f systems view of, 22–25, 23t, 25f techniques for (See continuous quality improvement techniques; improvement techniques) quality inspections (QI) CQI including, 13, 14f definition of, 12–13 functions of, 12 in lean methodology, 116f, 117 quality systems including, 11, 12–13, 14f Quality Is Free (Crosby), 47 quality loss function, 51 quality management principles, 5–6, 40–42, 48. See also quality terms, concepts, and principles quality philosophy Crosby’s, 47, 49f definition of, 36 Deming’s, 40–42, 41f, 49f Feigenbaum’s, 50 foundations of quality based on, 36–37 Ishikawa’s, 46 Juran’s, 44–45, 49f Taguchi’s, 51–52 quality plans, 6–10, 9f as cost of quality, 156 customer-specific, 10
334 Index
definition of, 6 Juran’s advocacy for, 44–45 operational planning and, 8, 9f quality assurance plans, 6–7 quality control plans, 6–7 quality systems including, 11 strategic planning and, 7–8, 9f tactical planning and, 8, 9f tree diagrams in, 175 quality systems, 10–13, 14f, 217, 217f quality terms, concepts, and principles, 2–29. See also glossary Baldrige Performance Excellence Program Criteria, xii, 3–5, 5f, 6, 10, 16, 20 diversity of applications, xiii employee involvement and empowerment, 17–18 ISO 9000:2015, 6, 16, 27 ISO 9001:2015, xii, 7, 10, 27 organizational culture, 14–17 organization as system, 20–21, 22f quality definitions, 2–3 quality management principles, 5–6 quality plans, 6–10, 9f quality systems, 10–13, 14f standardization, 27–28 systems and processes, 18–21 systems view of improvement, 22–25, 23t, 25f systems vs. processes, 21–22 variation, 25–27 Quality without Tears (Crosby), 47 questionnaires, supplier, 224 quick changeover, in lean methodology, 116f, 117
R reference materials, xiv, 318–323 relations diagrams, 182, 183f relationship management customer, 237 (See also voice of the customer) quality management principles on, 6 supplier (See supplier relationship) Remember (Knowledge), xiii, 255 repairs, as cost of quality, 157 reporting of supplier performance, 225–226 reputation, benefits of quality for, 31, 34 resource allocation matrix, 183, 184f results, Baldrige Framework criteria for, 4 retail buyers, 232 retail chain buyers, 234 returns, as cost of quality, 157 rework, 124, 156–157 risk analysis, project impact of risk, 78, 78f occurrence of risk, 78, 78f process decision program charts for, 182 risk mitigation strategy, 78, 78f in team project charters, 77–78, 78f risk assessment techniques bow tie analysis as, 201, 201f
brainstorming as, 198, 200 cause-and-effect diagrams as, 200 FMEA as, 201–203, 203f Hazard Analysis and Critical Control Points as, 198 Human Reliability Assessment as, 200–201 risk management using, 198–206, 201f, 203f, 206f scenario analysis as, 199–200 Structured What-if Technique as, 198–199 SWOT analysis as, 204–205, 206f risk management, 193–207 context for, 196 definition of, 193, 196 definition of risk for, 193, 194–195 FMEA in, 197, 198, 201–203, 203f ISO 31000 standards for, 194, 195–196, 198 legal actions necessitating, 207 In operational processes, 196–197 overview of, 205, 207 PDCA cycle application for, 197 quality audits in, 197 risk assessment techniques for, 198–206, 201f, 203f, 206f risk-based thinking and, 193–194, 196–197, 198, 200, 207 risk identification and communication in, 193–194, 196–197 SWOT analysis in, 204–205, 206f types of risk, 194, 195t Robitaille, Denise, 193 root cause analysis, 188–192 cause-and-effect diagrams in, 188–190, 189f Five whys or why-why diagrams in, 190–192, 191f incremental improvement using, 132f, 134, 143 overview of, 188, 192 Rs of leadership (reinforce, request information, resources, responsibility, role, repeat), 100 Rummler, Geary, 21, 22f run charts as improvement tools, 183, 185–186, 185f incremental improvement process using, 134, 141 interpretation of, 185–186 purpose and uses of, 183, 185, 186 Six Sigma use of, 112 steps in constructing, 185 Running Things (Crosby), 47
S safety and health, 31, 120 scatter diagrams, 169–171, 170f scenario analysis, 199–200 schedules Gantt charts showing, 79, 80f, 179–180, 180f team, 78–79, 80f Scholtes, Peter R., 73 SCM. See supply chain management
SCOR (Supply Chain Operations Reference) model, 226, 227f scrap, 124, 156–157 scribe, team, 67, 70t, 71 Second Order of the Sacred Treasure awards, 39, 44 segmentation, customer, 235–236 selection errors, mistake-proofing, 118 self-assessments, team meeting, 98, 99f self-managed teams, 61, 63f service buyers, 233 service-level agreements (SLAs), 210, 225 service providers, 234–235 service users, 233 servicing, as cost of quality, 157 Shewhart, Walter biographical information, 38 control charts based on work of, 172 Deming and, 38, 39 Economic Control of Quality of Manufactured Product, 38 evolution of quality under, xi foundations of quality based on, 37f, 38–39 improvement tools developed by, 160, 172 PDCA development by, xi, 38 statistical process control developed by, xi, 37f, 38–39 Taguchi and, 51 Shewhart medal, 39 Shingo, Shigeo, 118, 181 Shunk, Dan, 209 single minute exchange of dies (SMED), 117 SIPOC (supplier-input-process-output-customer) analysis, 24–25, 25f 6 Rs of leadership (reinforce, request information, resources, responsibility, role, repeat), 100 Six Sigma methodology continuous improvement teams applying, 60, 63 definition of, 107 DFSS strategy in, 113 DMAIC problem-solving methodology in, 108–114, 109t–110t, 111f, 115f evolution of, xii goals and outcomes of, 107 organizational culture in, 16 process improvement with, 106, 107–114, 109t–110t, 111f, 112f roles and responsibilities in, 109t–110t systems and processes in, 20 skills, KESAA factors analysis of, 84 SLAs (service-level agreements), 210, 225 SMED (single minute exchange of dies), 117 Smith, Douglas, 55 social media, benefits of quality for reputation on, 34 society, benefits of quality for, 34–35. See also community, benefits of quality for SOPs (standard operating procedures), 210 SPC (statistical process control), xi, 26, 37f, 38–39
Index 335
sponsors project, in Six Sigma, 109t team, 68t, 85 stakeholder analysis, 81, 84–85, 86f standardization incremental improvement leading to, 145–146 overview of, 27–28 purpose of, 27 standardized work, 28, 116f, 117 standard operating procedures (SOPs), 210 statistical process control (SPC), xi, 26, 37f, 38–39 steering committees, 81, 148 strategic planning customer-supplier relationships in, 215 interested parties identified in, 34 quality plans and, 7–8, 9f SWOT analysis in, 204 strategy Baldrige Framework criteria for, 3 DFSS, 113 risk mitigation, 78, 78f weakness of, in supplier relationship, 219 stratification, 186 streamlined layout, in lean methodology, 116, 116f strengths, weaknesses, opportunities, threats (SWOT) analysis, 204–205, 206f Structured What-if Technique (SWIFT), 198–199 suboptimization, 22, 43, 218 suggestion systems, 18, 131 supplier-input-process-output-customer (SIPOC) analysis, 24–25, 25f supplier performance, 224–228 complaint data analysis on, 225 continuous improvement using data on, 226 corrective actions and, 225 delivery performance in, 225 measures of, 224–228 product data and, 224 product prices and total cost in, 225 questionnaires/assessments on, 224 rating or certification of, 156, 212, 215 reducing supply chain disruption by managing, 213–214 reporting of, 225–226 SCM metrics on, 226–228, 227f–228f service-level agreements on, 225 supplier relationship, 213–223 collaboration in, 214, 215 communication clarity in, 214 conflicts or tensions in, 217–219 contact-to-cash process management in, 216f, 217–218, 219 customer loyalty goals in, 220 design and strategy weaknesses in, 219 factors for successful, 221–222 information management lack in, 219 information technology effects on, 221–222, 222f integration in, 214, 219 logistics in, 213, 216–217
336 Index
operational control weaknesses in, 219–220 PDCA cycle for improving, 215 process management in, 220–221, 220f process of supply chains in, 215–223, 216f–218f, 220f, 222f quality system in, 217, 217f reducing supply chain disruptions by managing, 213–214 suboptimization in, 218 supply chain management in, 215, 216–223, 218f, 220f in supply chains, 213–223 suppliers benefits of quality for, 33 external, 210–211 internal, 210 performance of, 156, 212, 213–214, 215, 224–228 relationship with, 213–223 selection of, 210–212 SIPOC analysis, 24–25, 25f supplier selection certification and rating requirements in, 212 criteria for, 211–212 external suppliers, 210–211 internal suppliers, 210 process of, 211–212 supply chain management (SCM) supplier performance metrics, 226–228, 227f–228f supplier relationship and, 215, 216–223, 218f, 220f Supply Chain Operations Reference (SCOR) model, 226, 227f surveys customer, 239–241 Six Sigma use of, 112 supplier, 224 SWIFT (Structured What-if Technique), 198–199 SWOT (strengths, weaknesses, opportunities, threats) analysis, 204–205, 206f system of profound knowledge, 42–43 systems definition of, 18, 42 optimization of, 43 organization as, 20–21, 22f processes and, 18–21, 42–43 processes vs., 21–22 quality, 10–13, 14f, 217, 217f quality improvement viewed in terms of, 22–25, 23t, 25f suboptimization of, 22, 43 system causes of variation, 26, 172–173 system of profound knowledge, 42–43
T tactical planning, 8, 9f Taguchi, Genichi biographical information, 50–51 Design of Experiments, 51
foundations of quality based on, 37, 50–52 Management by Total Results, 51 philosophies of, 51–52 prototyping method of, 51–52 quality loss function development by, 51 tampering, 26 Taylor, Frederick, 21 team formation and dynamics, 73–104 adjourning stage of, 89 attributes of successful, 102–103 coach role in, 99–101 conflict in, 90–93, 91f culture and environment in, 86–88 decision making in, 94–98, 97f, 99f disruptive behavior in, 93 diversity of participants in, 86–87, 88 dysfunctions in, 102 forming stage of, 87–88 Gantt charts in, 79, 80f ground rules for, 78–79, 87, 88 groupthink in, 92 guidelines for, 74–75 hidden agendas in, 93 initiating team in, 73–74 lack of training hampering, 93 leadership in, 75, 82–83, 85, 87, 99–101 logistics in, 92, 98 meetings and, 98, 99f norming stage of, 88 performing stage of, 88–89 perils and pitfalls in, 101–102 project charter for, 76–78, 77f–78f, 81, 137–138 project risk analysis and, 77–78, 78f purpose and goals for, 73, 76–78, 77f responsibilities and obligations in, 75, 84 schedules in, 78–79, 80f selection of team members in, 82–85, 86f self-assessments in, 98, 99f size of team in, 74, 75, 85 stages of, 87–89 stakeholder analysis for, 81, 84–85, 86f steering committee for, 81 storming stage of, 88 team members in, 75, 77, 82–87, 86f work breakdown structure in, 79, 80f team organization, 56–65 conditions for successful teams, 58–59 definition of team, 56 duration of team existence, 57–58 for incremental improvement, 131, 132f, 134, 136, 137–138 purpose of team, 56–59, 64 team member benefits, 64–65 types of teams, 59–63, 63f value of teams, 64–65 team roles and responsibilities, 66–71 champion, 68t combining, 71 facilitator, 67, 68t, 71, 87 leader, 67, 69t, 71, 75, 82–83, 85, 87, 99–101
scribe, 67, 70t, 71 Six Sigma, 109t–110t specialists or experts supplementing, 71 sponsor, 68t, 85 team members, 69t, 71, 75, 77, 82–87, 86f timekeeper, 67, 70t, 71 teams ad hoc project, 62, 63f conditions for successful, 58–59 continuous improvement, 60, 62–63, 63f, 116 cross-functional, 59–60, 62–63, 63f, 74 definition of, 56 duration of existence, 57–58 formation and dynamics of, 73–104, 137–138 in lean methodology, 60, 63, 116f, 117, 119 organization of, 56–65, 131, 132f, 134, 136, 137–138 process, 59–60, 62, 63f purpose of, 56–59, 64, 73, 76–78, 77f responsibilities and obligations in, 75, 84 roles and responsibilities in, 66–71, 68t–70t, 75, 77, 82–87, 86f, 99–101, 109t–110t self-managed, 61, 63f size of, 74, 75, 85 value of, 64–65 virtual, 63, 63f work groups, 60–61, 63f terms. See glossary; quality terms, concepts, and principles Thatcher, Margaret, 1 Thomas-Kilmann Conflict Mode Instrument, 90, 91f timekeeper, team, 67, 70t, 71 total productive maintenance, in lean methodology, 116f, 117 total quality control, xi, 50 Total Quality Control (Feigenbaum), 49 total quality management (TQM), 34, 45, 116 Toyota, 51 TQM (total quality management), 34, 45, 116 training as cost of quality, 156, 158 Crosby’s advocacy for, 48 Deming’s advocacy for, 40 empowerment via, 17 Feigenbaum’s advocacy for, 50 government-sponsored, 33 incremental improvements with, 129, 140, 146 Juran’s advocacy for, 45 lack of, as team barrier, 93 in lean methodology, 123 organizational culture reflected in, 15 in process reengineering, 147 quality assurance, 11 quality inspectors, 12 supplier, 215 team, 59, 60, 61, 62, 80f, 81, 93, 101 transaction data, 241 transportation, waste associated with, 125t tree diagrams, 79, 175–176, 176f
Index 337
U Understand (Comprehension), xiii, 255 Union of Japanese Scientists and Engineers (JUSE), 39, 44, 160 Uttal, Bro, 29
V value of customer satisfaction and loyalty assessment, 245–246 value of teams, 64–65 values, in organizational culture, 15 value stream mapping (VSM), 121–122, 122f–123f, 219 variation. See also defects common or system causes of, 26, 172–173 control charts observing, 172–173 (See also control charts) definition of, 25 Deming on, 40 overview of, 25–27 process improvement reducing, 106, 107 (See also Six Sigma methodology) Shewhart on, 38 special causes of, 25–26, 132f, 134, 141–142, 173 VDA (Verband der automobilindustrie), 203 vendors. See suppliers Verband der automobilindustrie (VDA), 203 virtual teams, 63, 63f visual controls, in lean methodology, 116, 116f voice of the customer (VOC), 237–250 analysis of customer data for, 239–241 complaint process for, 246–247 customer feedback methodologies for, 238–239, 238f customer needs reflected in, 247–250, 247f, 249f customer relationship management and, 237 customer satisfaction and loyalty as, 237, 241–246, 242f, 243t customer surveys as, 239–241 data gathering and use on, 237–246, 238f, 242f, 243t listening posts capturing, 241 product warranty registration and, 239 quality function deployment and, 247–250, 247f, 249f Six Sigma focus on, 108, 110, 112f transaction data and, 241 volume buyers, 234 voting, in teams, 95–96 VSM (value stream mapping), 121–122, 122f–123f, 219
W Wal-Mart, 216 Walton, Mary, 105 Walton, Sam, 229 warranties, 157, 239
338 Index
waste incremental improvement and uncovering of, 129, 139 internal failure costs of, 156–157 inventory-based, 124, 125t, 219 invisible, 124, 126 lean methodology eliminating, 114, 124–126, 125t types of, 125t visible, 124 WBS (work breakdown structure), 79, 80f Welch, Jack, 107 Western Electric Company, 38, 39, 44 What Is Total Quality Control? The Japanese Way (Ishikawa), 46 wholesale buyers, 233–234 why-why diagrams, 190–192, 191f Williams Air Service, 60 work breakdown structure (WBS), 79, 80f workforce Baldrige Framework criteria for, 4 benefits of quality for, 31 breakthrough improvement effects on, 147, 149 employee buyers among, 233 FMEA participation by, 202–203 focus groups in, 177 health and safety of, 31, 120 Human Reliability Assessment of, 200–201 individual quality improvement by, 23t, 24
as internal customers, 230–232 internal quality audits by, 158–159 involvement and empowerment of, 17–18 job enlargement vs. enrichment for, 18 leadership of (See leadership) listening posts in, customer feedback to, 241 organizational culture for, 14–17, 31, 129 quality circles in, 18, 46 quality management principles on engagement of, 5 standardized work for, 28, 116f, 117 team formation and dynamics in, 73–104, 137–138 team organization in, 56–65, 131, 132f, 134, 136, 137–138 team roles and responsibilities in, 66–71, 68t–70t, 75, 77, 82–87, 86f, 99–101, 109t–110t training for (See training) wasteful use of, 125t, 126 work groups, 60–61, 63f
Y Yellow Belt, Six Sigma, 110t
Z zero defects, 47–48, 119 zero investment improvement (ZII), 120
About the Editors
Grace L. Duffy provides services in organizational and process improvement, leadership, quality, customer service, and teamwork. Her clients include government, healthcare, public health, education, manufacturing, services, and nonprofit organizations. Grace is the author or coauthor of 15 texts, additional text chapters, and over 260 published papers and articles. She holds an MBA in management and I/S from Georgia State University and a bachelor’s degree in archaeology and anthropology from Brigham Young University. She is an ASQ Certified Manager of Quality/Organizational Excellence, Quality Improvement Associate, and Quality Auditor. Grace is a certified Lean-Six Sigma Master Black Belt and Manager of Process Improvement. Duffy is a member of ATD, ISPI, and ASQ. She is an ASQ Fellow and Past ASQ Vice President, ASQ Distinguished Service Medalist, Quality Magazine’s 2014 Quality Person of the Year, and the 2016 Milflora M. Gatchalian Asia Pacific Quality Organization International Woman of Quality. Sandra L. Furterer is an Associate Professor and Associate Chair at the University of Dayton in the Department of Engineering Management, Systems, and Technology. Dr. Furterer has over 25 years of experience in business process and quality improvements in multiple service industries, including healthcare, retail, consulting, information systems, and financial services. She previously was a VP of Process Improvement for two financial services firms in Columbus, Ohio. She also was the Enterprise Performance Excellence leader that deployed Lean Six Sigma in a hospital system in south Florida. She holds a PhD in Industrial Engineering from the University of Central Florida, an MBA from Xavier University, and a Bachelor’s and Master’s in Industrial and Systems Engineering from Ohio State. She is an ASQ Certified Manager of Quality/Organizational Excellence, an ASQ Certified Six Sigma Black Belt, an ASQ Certified Quality Engineer, an ASQ fellow, and a certified Six Sigma Master Black Belt. Dr. Furterer is an author or co-author of several textbooks and journal articles. She has refereed conference proceedings publications on systems engineering, Lean Six Sigma, process improvement, operational excellence, and engineering education. Her research interests include Lean Six Sigma, quality management, and systems engineering applied to service industries.
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