Quality Management (Brun) by Cremaschi

QUALITY MANAGEMENT

1.0 Introduction and history .......................................................................................................................... 2

1.1 Definition of quality ............................................................................................................................. 4

2.0 Quality philosophies ................................................................................................................................ 4

2.1 Dr. W. Edwards Deming (1900-1993) .................................................................................................. 4

2.2 Joseph Juran (1904-2008) .................................................................................................................... 8

2.3 Philip B. Crosby (1926-2001) ............................................................................................................... 9

2.4 A.V. Feigenbaum (1922 – 2014) ........................................................................................................ 10

2.5 Kaoru Ishikawa (1915 – 1989) ........................................................................................................... 10

2.6 Genichi Taguchi (1924 – 2012) .......................................................................................................... 11

3.0 Statistical thinking ................................................................................................................................. 11

3.1 Hypothesis testing ............................................................................................................................. 13

3.2 Comparing processes ......................................................................................................................... 15

5.0 The application of 7 tools ...................................................................................................................... 20

6.0 Voice of the customer ........................................................................................................................... 24

6.1 The Process ........................................................................................................................................ 25

6.2 Quality Function Deployment ............................................................................................................ 39

7.0 Vendor rating ......................................................................................................................................... 44

7.1 Categorical Plan ................................................................................................................................. 45

7.2 Weighted-point Plan .......................................................................................................................... 45

7.3 Cost-ratio Plan ................................................................................................................................... 46

7.4 Conclusion ......................................................................................................................................... 46

8.0 FMEA – Failure Mode and Effect Analysis ............................................................................................. 46

8.1 Roadmap and tools ............................................................................................................................ 49

8.2 Failure modes and Effects ................................................................................................................. 54

9.0 Control Charts ........................................................................................................................................ 55

9.1 Range and Yield ................................................................................................................................. 55

9.2 Construction of a control chart ......................................................................................................... 57

10.0 Sampling .............................................................................................................................................. 60

10.1 Acceptance Sampling ....................................................................................................................... 61

10.2 The O.C. Curve ................................................................................................................................. 64

10.3 Defining a sampling plan ................................................................................................................. 66

10.4 AOQL: Average Outgoing Quality Limit ........................................................................................... 68

1

1.0 Introduction and history

“The first job we have is to turn out quality merchandise that consumers will buy and keep on buying. If we

produce it efficiently and economically, we will earn a profit, in which you will share”

William Cooper Procter, grandson of the founder of Procter & Gamble, October 1887

William gave weary workers a voice and pushed the partners hard for a shorter work week. It was an

experiment that would mark the first step toward a standard 40-hour work week across industries in the

coming generations. He formulated and persuaded the partners to try a plan that would divide profits

between the employees and the company. It was a formula, he was convinced, that would help improve

productivity and instil a deeper sense of ownership in the Company. As a matter of fact, there are reasons

to believe that more quality doesn’t always mean cost increase. For example, if we reduce error rates are

the additional cost less than the saved costs? Today the customer is paying for the inefficiencies of the

company. If a customer receives a defective unit the customer doesn't want to pay to send it back, but he is

indirectly. Also, a customer doesn’t want to pay for features he is not interested in, like instruction manuals

which can be easily found on-line. Cost of pure quality: 15% of turnover is thrown away due to

inefficiencies.

We need to take an external view of quality: increasing quality means increasing customer satisfaction

which brings customer retention. Satisfaction is felt by customers if the product:

• meets specifications

• meets expectations

• satisfies customer needs

There is a difference between what the customer wants, and he really needs. The company should focus on

satisfying the need and not the specification. If we manage this then the company will be able to create

more satisfaction, since we exceed expectation.

Pleased customers mean more profit:

• No need for discounts, customers pay a fair price

• No customer acquisition costs

• Positive work of mouth

• Risk reduction, stability and resilience, customer needs are known.

We also have to take an internal view of quality: more quality means less wastes, thus less costs. We need

both views together to have a full view. Quality is free, the money spent will be earned back with interests.

1450 BC – early representation of quality assurance activities on Egyptian wall paintings. In a broad sense,

quality assurance refers to any planned and systematic activity directed toward providing customers with

products (goods and services) of appropriate quality.

Middle Age – the age of craftmanship: the skilled craftsperson served both as manufacturer and inspector,

quality assurance was informal.

XVIII century – standardization: Honorè Le Blanc, a French gunsmith, developed a system to manufacture

muskets with interchangeable parts. The need was to produce parts according to carefully designed

specifications. The value of the concept of interchangeable parts was recognised to the point that it

eventually led to the Industrial Revolution, making quality assurance a critical step in the production

process. 2

Quality problems arise when we have multiple pieces that assemble together since:

( + ) = () + ()

Early XX century – Taylorism: Frederick W. Taylor, “the father of scientific management” which was a new

philosophy of production which advanced the idea of a separation between planning and execution:

managers and engineers plan, supervisors and workers execute. Quality assurance fell in the hands of

inspectors, the implication was that if defects were present, they were removed by inspection.

Manufacturing companies created separate quality departments which created an artificial separation,

which in turn, led to indifference to quality among both workers and their managers.

The more inspections are placed on production the more defects increase on the market. To increase

quality, we need to understand psychology of operators. The workers will disregard quality errors since

there is a quality department which focuses on this. The first quality inspection will be superficial since

there will be a second one down the line, on the other hand the second inspection will be superficial too

since there has been a quality control beforehand.

1920’s – Statistical Quality Control: Employees of Western Electric’s inspection dep transferred to Bell

Telephone Laboratories. At Bell Labs, guys like Walter Shewhart, Harold Dodge, George Edwards, W.

Edwards Deming, worked on the development of new theories and methods for statistical control of

processes. They coined the term quality assurance and Shewhart developed Control Charts. They then

proceeded to spread the knowledge through seminars across the US.

WW2 – Statistical Sampling Procedures: In order to impose ever more stringent standards on suppliers,

the US Department of Defence began adopting statistical sampling procedures according to sampling tables

called MIL-STD which are still widely used today. In 1944 the first professional journal on quality, Industrial

Quality Control was published.

1940’s and 1950’s – the quality revolution started in Japan: Joseph Juran and W. Edwards Deming

introduced statistical quality control techniques to the Japanese to aid them in their rebuilding efforts. With

the support of top management, they developed the culture of continuous improvement. In 1951 Union of

Japanese Scientist and Engineers (JUSE) instituted the Deming Prize. Improvements in Japanese quality

were slow and steady – only in the 1970’s quality of Japanese product took over that of Western

manufacturers.

Continuous improvement means to achieve a long-term goal in a sequence of small little investments. So

that there is no need for huge investments or capital. 3

1.1 Definition of quality

2.0 Quality philosophies

2.1 Dr. W. Edwards Deming (1900-1993)

Deming worked for Western Electric during 20’s and 30’s, he recognised the importance of viewing

management processes statistically. During WW2 he attempted – with little success – to convey the

message of quality to US top managers. After WW2 he was invited to Japan to help the country, preach the

importance of top management leadership, customer/supplier partnerships and continuous improvement.

Japanese managers embraced these ideas, Deming’ influence on Japanese industry was so high that JUSE

established Deming Application Prize in 1951. Although he was living in Washington, D.C., he remained

virtually unknown in the US until 1980, when NBC telecast a program entitled “If Japan can… why can’t

we?”. He worked with passion until his dead, knowing he had a little time left to make a difference in his

home country.

Deming believed that variation is the paramount cause of poor quality. He advocated a never-ending cycle

of design, manufacturing, test and sales followed by feedback from the market, redesign and improvement,

to reduce variation. He never gave a precise definition of quality - in his last book he stated: “a product or a

service possesses quality if it helps somebody and enjoys a good and sustainable market”. He was criticised

because its philosophy lacks specific direction and prescriptive approaches. This is a very high-level

philosophy, which didn't stick in the US. Companies in the US preferred a cook-book approach, where all

problems are listed according to importance with rule of thumb solutions. His philosophy underwent many

changes, in his early works he preached 14 points, which over time changed. Lately, he boiled down the

principles into what he called “a system of profound knowledge”. 4

DEMING’S 14 POINTS

1. Create and publish a statement of the company’s aims and purposes

Businesses should not exist simply for profit – they are social entities which must take a long-term

view. They should invest in innovation, training and research, have responsibility for providing jobs and

in improving their competitive position. Even when managers know what they need to change, often

they do not effectively follow up on opportunities.

In Taylorism philosophy the education investments and quality investments were very low, there is no

space for human dignity and growth and respect to the environment etc. The salary is only based on

the contribution of the individual to the company. Workers become the enemy who have to be

controlled and fought. Inspection was used to check the worker, because managers knew that

operators were against the company and were dumb. This is very wrong; there was no space in the

past to prevention, Deming realized that if managers acknowledged that there was a problem and fixed

it before it happened the results were far better than fixing them after the fact. The only thing asked to

workers was speed making them forget about quality. Also, if there is a quality control after then

people are encouraged to keep going because "there is a quality control and it's not my job".

2. Learn the new philosophy

Forget historical methods of management, which won’t work in today’s global business environment

• Quota-driven production

• Work measurement

• Adversarial work relationships

Rather, companies must take a customer-driven approach, based on mutual cooperation between

labour and management and on continuous improvement

3. Understand the purpose of inspection

Inspection was the principal mean for quality control, it acknowledges that defects are present, yet

does not add value to the product. It also encourages the production of defective products, by letting

someone else catch and fix the problem.

Few managers truly understand the concept of variation and how it affects their processes and

inspection practices. Managers have to encourage workers to take responsibility for their work, use

simple statistical tools to help control processes and eliminate mass inspection. Finally, inspection has

to be an information-gathering tool for improvement, not a means of “assuring” quality or blaming

workers.

4. Do not award business on the basis of price tag alone

Shewhart noticed that price has no meaning without quality. The direct costs associated with poor

quality materials during production or warranty period can far exceed the cost “savings” perceived by

the purchasing department. Management relied on multiple suppliers to ensure continuity of supplies,

ignoring “hidden” costs due to travel to visit suppliers, (loss of) volume discounts, set-up charges,

inventories and administrative expenses. Also changing suppliers solely on the basis of price increases

the variation in raw materials and components. Businesses have to establish a long-term relationships

with fewer suppliers which allows them to exploit economies of scale and improves communication.

5. Improve constantly the production system

Reduce causes and impacts of variation, engage all employees to innovate and seek ways to do their

job more efficiently and effectively.

6. Institute training

Training adds to worker morale, demonstrates to workers that the company is helping them and

investing in their future. Training should include tools for diagnosing, analysing and solving quality

problems and identifying improvement opportunities. Companies which are failing often cut here, but

this is wrong. The only future is investing in workers. It might be negative short term, but it is very

valuable on the long term. 5

7. Institute leadership

Lack of leadership is one of the main impediments to improvement. The job of management is

leadership, not supervision, good supervisors are not watchdogs or paper-pushers, but rather coaches,

helping workers to do a better job and develop their skills.

8. Drive out fear – create trust

Fears might manifest in many ways: fear of reprisal, of failure, of the unknown, of change, of

relinquishing control, etc. Workers are often afraid to report quality problems because they might not

meet their quotas, their incentive might be reduced, or they might be blamed for problems in the

system. Fear encourages short-term thinking: for example, a foreman did not stop production to repair

a worn-out piece of machinery. Stopping production would have meant missing his daily quota. He said

nothing and the machine failed, causing the line to shut down for four days!

9. Optimize the efforts of teams

Used to break down barriers between depts and individuals. One of the biggest barriers being that

between unions and management. On one hand managers enacted poor management practices, had a

lack of sensitivity to worker needs, and exploited workers. On the other labour leaders resisted many

management efforts to reduce rigid, rule-based tasks, preferring to adhere to the structured Tayloristic

approach. Both these forces are negative to the company.

10. Eliminate exhortations

Posters, slogans and motivational programs calling for “Zero Defects”, “Doing it Right the First Time”,

“Improve Productivity and Quality” are directed at the wrong people. They assume that all quality

problems are due to human behaviour and that workers can improve simply through motivational

methods. Motivational approaches overlook the major source of many problems – system dynamics.

Workers end up becoming frustrated when they cannot improve and are penalized for defects. Thus,

statistical thinking and training, not slogans, are the best routes for improving quality.

11. Eliminate numerical quotas and MBO

Measurement creates fear, it is born from a short-term perspective. It is normally used punitively and

doesn’t encou