The ASQ Certified Quality Improvement Associate Handbook [4 ed.] 1951058127, 9781951058128

Citation preview

The ASQ Certified Quality Improvement Associate Handbook

More certification handbooks from Quality Press and ASQExcellence The ASQ Certified Man­ag­er of Quality/Or­gan­iz­ a­tional Excellence Handbook The ASQ Certified Quality Auditor Handbook The ASQ Certified Food Safety and Quality Auditor Handbook The ASQ Certified Quality Pro­cess Analyst Handbook The ASQ Certified Biomedical Auditor Handbook The ASQ Certified Supplier Quality Professional Handbook The ASQ Certified Six Sigma Black ­Belt Handbook The ASQ Certified Six Sigma Green ­Belt Handbook The ASQ Certified Six Sigma Yellow ­Belt Handbook Other titles from author Grace Duffy The ASQ Quality Improvement Pocket Guide Modular Kaizen: Continuous and Breakthrough Improvement New from Quality Press Connected, Intelligent, Automated: The Definitive Guide to Digital Transformation and Quality 4.0 N. M. Radziwill Culture Is Every­thing: How to Become a True Culture Warrior and Lead Your Organ­ization to Victory Jeff Veyera Data Quality: Dimensions, Mea­sure­ment, Strategy, Management, and Governance Rupa Mahanti Root Cause Analy­sis, Second Edition: The Core of Prob­lem Solving and Corrective Action Duke Okes For more information on Quality Press and a complete listing of our certification handbooks and other titles, please visit our website at: http://­www​.­asq​.­org​/­quality​-­press

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

vii

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.

xv

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

xvi

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

xvii

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

1

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

6

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

15

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

16

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



Chapter 1  Terms, Concepts, and Princi­ples

17

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.

18

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



Chapter 1  Terms, Concepts, and Princi­ples

19

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.

20

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.



Chapter 1  Terms, Concepts, and Princi­ples

21

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.

22

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?



Chapter 1  Terms, Concepts, and Princi­ples

23

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.

24

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



Chapter 1  Terms, Concepts, and Princi­ples

25

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.

26

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



Chapter 1  Terms, Concepts, and Princi­ples

27

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

28

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.



Chapter 1  Terms, Concepts, and Princi­ples

29

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



Chapter 2  Benefits of Quality

31

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

32

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.



Chapter 2  Benefits of Quality

33

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

34

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



Chapter 2  Benefits of Quality

35

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



Chapter 3  Foundations of Quality

37

• 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.

38

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



Chapter 3  Foundations of Quality

39

­ 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.

40

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.



Chapter 3  Foundations of Quality

41

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

42

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



Chapter 3  Foundations of Quality

43

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.

44

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



Chapter 3  Foundations of Quality

45

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

46

Part I  Quality Basics

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.



Chapter 3  Foundations of Quality

47

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

48

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

49

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.”

50

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,



Chapter 3  Foundations of Quality

51

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

52

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).



Chapter 3  Foundations of Quality

53

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)

55

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



Chapter 4  Team Organ­ization

57

• 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.

58

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



Chapter 4  Team Organ­ization

59

• 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

60

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



Chapter 4  Team Organ­ization

61

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.

62

Part II  Team Basics

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:



Chapter 4  Team Organ­ization

63

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 √ √ √ √ √ √

64

Part II  Team Basics

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



Chapter 4  Team Organ­ization

65

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.

66

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

68

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

69

70

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)



Chapter 5  Team Roles and Responsibilities

71

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.

72

Part II  Team Basics

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

74

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.



Chapter 6  Team Formation and Group Dynamics

75

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.

76

Part II  Team Basics

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).



Chapter 6  Team Formation and Group Dynamics

77

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.

78

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



Chapter 6  Team Formation and Group Dynamics

79

• 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.

80

Part II  Team Basics

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



Chapter 6  Team Formation and Group Dynamics

81

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.

82

Part II  Team Basics

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



Chapter 6  Team Formation and Group Dynamics

83

­ 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

84

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



Chapter 6  Team Formation and Group Dynamics

85

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.

86

Part II  Team Basics

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



Chapter 6  Team Formation and Group Dynamics

87

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

88

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



Chapter 6  Team Formation and Group Dynamics

89

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.

90

Part II  Team Basics

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



Chapter 6  Team Formation and Group Dynamics

High

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

92

Part II  Team Basics

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.



Chapter 6  Team Formation and Group Dynamics

93

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.

94

Part II  Team Basics

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.)



Chapter 6  Team Formation and Group Dynamics

95

• 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:

96

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.



Chapter 6  Team Formation and Group Dynamics

97

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.

98

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.



Chapter 6  Team Formation and Group Dynamics

99

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

105

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



Chapter 7  Pro­cess Improvement 109

­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.



Chapter 7  Pro­cess Improvement 127

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

Start

Need coffee?

No

Yes

Go to break room

Is coffee ready?

C

No

C = Go to make coffee flowchart

Yes

Pour coffee

Need cream/ sugar?

No

Yes

Add cream and/or sugar

Return to office

End

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

Indicates a point where a decision will be made

Input/ Output

Document

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

Frequency

50 40 30 20 10 0

0

4

8

12

16

20

24

Triage Time (in Minutes)

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

700

100

600

80

400

60

300

40

Percent

Count

500

200 20

100 Mode of Arrival

0

e

te

a riv

V

287 41.1 41.1

k al

W

220 31.5 72.5

ue

rs

Fi

t

sc

ire

P Count Percent Cumulative %

-In

cl

i eh

Re

nc

a ul

b

F

Am

92 13.2 85.7

52 7.4 93.1

e

er

O

th

ce

rs

Fi

t

an

l bu

re

Fi

Am

27 3.9 97.0

ue

0

c es

R

21 3.0 100.0

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

0.75

Centerline (X-bar)

0.60

LCL

0.45

1

2

Figure 9.8  Control chart (pro­cess in control).

3

4

5 6 7 Sample number

8

9

10

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

Annual

Measure

Target

Faster

Reduce cycle time

Cycle time

50% reduction

Reduce repair time

Repair time

50% reduction

Reduce defects

% defective

50% reduction

Reduce rework

% rework

50% reduction

Reduce cost of failure

% waste

50% reduction

% rework

50% reduction

Reduce cost of inspection

% inspection

50% reduction

Optimize cost of prevention

% prevention

10% of costs

Vision Improved operations

Better

Cheaper

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.

178 Part III Improvement

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

Nov.

Design engineer

15.0

Run desk check of data Modify test data

Dec.

1.5

Systems analyst

Computer operator

Production planner

Total

Oct.–Nov.

5.5

Oct.

3.5

Oct.

6.25

30.25

Nov.

3.0

Nov.

2.0

Nov.

1.25

6.25

Dec.

1.0

Dec.

1.0

Dec.

2.0  

Dec.

8.0  

8.00

Run computer test

  

5.50

Analyze test results

Dec.–Jan.

15.0

Dec.–Jan.

15.0

Dec.–Jan.

5.0  

35.00

Make modifications

Jan.–Feb.

25.0

Jan.–Feb.

12.0

Jan.–Feb.

3.0

40.00

Prepare first month data

Mar.

6.0

Mar.

1.0

Mar.

3.0

10.00

Prepare second month data

Apr.

5.0

Apr.

.5

Apr.

1.0

6.50

Prepare third month data

May

5.0

May

.5

May

.5

6.00

May

1.5

Run full-scale production Analyze results

May 32.5

Figure 9.14  Resource allocation matrix.

May

.75

3.0 52.5

2.25 3.00

35.5

31.5

.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

5

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/

No surge policies/ procedures

Nurses may not log triage time promptly

Why?

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

Why?

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.

cle

e

cy

tim

-ca -to sh Ca

ce

an

on

cti

fun

Quality

rm

rfo

sh

pe

nd

cle

m

t, a

Cy

ste

, fi

Quality

Sy

rm

Fo

tim

e

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.

258



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.



Quality Glossary 263

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.



Quality Glossary 265

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.



Quality Glossary 267

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.



Quality Glossary 271

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.



Quality Glossary 273

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.



Quality Glossary 275

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.



Quality Glossary 277

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.



Quality Glossary 281

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.



Quality Glossary 283

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.



Quality Glossary 291

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.



Quality Glossary 293

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.



Quality Glossary 295

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.



Quality Glossary 297

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).



Quality Glossary 299

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.



Quality Glossary 301

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.



Quality Glossary 303

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.



Quality Glossary 305

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.



Quality Glossary 307

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.



Quality Glossary 309

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.



Quality Glossary 311

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.



Quality Glossary 313

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.

339

WHY ASQ? ASQ is a global community of people passionate about quality, who use the tools, their ideas and expertise to make our world work better. ASQ: The Global Voice of Quality.

FOR INDIVIDUALS Advance your career to the next level of excellence. ASQ offers you access to the tools, techniques and insights that can help distinguish an ordinary career from an extraordinary one.

FOR ORGANIZATIONS Your culture of quality begins here. ASQ organizational membership provides the invaluable resources you need to concentrate on product, service and experiential quality and continuous improvement for powerful top-line and bottom-line results.

www.asq.org/why-asq

BELONG TO THE QUALITY COMMUNITY JOINING THE ASQ GLOBAL QUALITY COMMUNITY GIVES YOU A STRONG COMPETITIVE ADVANTAGE. For people passionate about improvement, ASQ is the global knowledge network that links the best ideas, tools, and experts — because ASQ has the reputation and reach to bring together the diverse quality and continuous improvement champions who are transforming our world. • 75,000 individual and organizational members in 150 countries • 250 sections and local member communities • 25 forums and divisions covering industries and topics • 30,000+ Quality Resources items, including articles, case studies, research and more • 19 certifications • 200+ training courses

For more information, visit asq.org/communities-networking.

ASQ’S ONLINE QUALITY RESOURCES IS THE PLACE TO: • Stay on top of the latest in quality with Editor’s Pick and Most Popular • Browse topics in Learn About Quality • Find definitions in the Quality Glossary • Search ASQ’s collection of articles, books, tools, training, and more

QUALITY RESOURCES

www.asq.org/quality-resources Connect with ASQ staff for personalized help hunting down the knowledge you need, the networking opportunities that will keep your career and organization moving forward, and the publishing opportunities that offer the best fit for you. www.asq.org/quality-resources TRAINING

CERTIFICATION

CONFERENCES

MEMBERSHIP

PUBLICATIONS

ASK A LIBRARIAN Have questions? Looking for answers? In need of information? Ask a librarian! Customized research assistance from ASQ’s research librarian is one of the many benefits of membership. ASQ’s research librarian is available to answer your research requests using the everexpanding library of current and credible resources, including journals, conference proceedings, case studies, and Quality Press publications. You can also contact the librarian to request permission to reuse or reprint ASQ copyrighted material, such as ASQ journal articles and Quality Press book excerpts.

For more information or to submit a question, visit asq.org/quality-resources/ask-a-librarian. TRAINING

CERTIFICATION

CONFERENCES

MEMBERSHIP

PUBLICATIONS