CHAPTER 2:

Frameworks for Quality and Performance Excellence

Foundations of Performance Excellence

Prepared by: MS.MARY MAE YALONG

Foundations of Performance Excellence True Management Gurus

W. Edwards Deming Joseph M. Juran Philip B. Crosby

The Deming Philosophy

The Deming Chain Reaction A System of Profound Knowledge

William Edwards Deming was an American statistician, professor, author, lecturer, and consultant. He is perhaps best known for the "Plan-Do-CheckAct" cycle popularly named after him.

Joseph Moses Juran was a Romanian-born American management consultant and engineer. He is principally remembered as an evangelist for quality and quality management.

Crosby initiated the Zero Defects program at the Martin Company. As the quality control manager of the Pershing missile program, Crosby was credited with a 25 percent reduction in the overall rejection rate and a 30 percent reduction in scrap costs.

THE DEMING CHAIN REACTION

Improve Quality
Costs decrease because of less rework, fewer mistakes, fewer delays and snags, and better use of time and materials Productivity improves

Capture the market with better quality and lower price

Stay in business Provide jobs and more jobs

A SYSTEM OF PROFOUND KNOWLEDGE

Appreciation for a system Understanding process variation Theory of knowledge Psychology

A SYSTEM OF PROFOUND KNOWLEDGE Appreciation for a system

Systems is a set of functions or activities within an organization that work together to achieve organizational goals. Systems require cooperation

A SYSTEM OF PROFOUND KNOWLEDGE

Understanding process variation

Common causes of variation factors that are present as a natural part of a process Special causes of variation, often called assignable causes

A SYSTEM OF PROFOUND KNOWLEDGE

Theory of Knowledge a branch of philosophy concerned with the nature and scope of knowledge
Management decisions should be driven by facts, data, and justifiable theories, not solely by opinions.

A SYSTEM OF PROFOUND KNOWLEDGE

Psychology helps us to understand people, interactions between people and circumstances, interactions between leaders and employees, and the drivers of behavior.

14 POINTS FOR MANAGEMENT

1. 2. 3. 4. 5. 6. 7. Management Commitment Learn the New Philosophy Understand Inspection End Price Tag Decisions Improve Constantly Institute Training Institute Leadership

14 POINTS FOR MANAGEMENT

8. Drive Out Fear 9. Optimize Team Efforts 10. Eliminate Exhortations 11. Eliminate Quotas and MBO 12. Remove Barriers to Pride in Workmanship 13. Institute Education 14. Take Action

JURAN PHILOSOPHY

Joseph M. Juran wrote, edited, and published one of the most comprehensive books on quality, Quality Control Handbook He defines quality as fitness for use

JURAN PHILOSOPHY
Four Categories of Fitness for Use: 1. Quality of design 2. Quality of Conformance 3. Availability 4. Field Service

JURAN PHILOSOPHY
Quality Trilogy 1. Quality Planning the process for preparing to meet quality goals 2. Quality Control the process for meeting quality goals during operations 3. Quality Improvement the process for breaking through the unprecedented levels of performance

CROSBY PHILOSOPHY

His first book, Quality Is Free, is credited with bringing quality to the attention of top American executives The essence of Crosbys quality philosophy is embodied in what he calls the Absolutes of Quality Management and the Basic Elements of Improvement

CROSBY PHILOSOPHY
Absolutes Quality of Management Quality means conformance to requirements not elegance There is no such thing as a quality problem There is no such thing as the economics of quality: it is always cheaper to do the job right the first time The only performance measurement is the cost of quality The only performance standard is Zero Defects

CROSBY PHILOSOPHY
Basic Elements of Improvement 1. Determination 2. Education 3. Implementation He placed more emphasis on management and organizational processes for changing corporate culture and attitudes than on the use of statistical techniques

THE MALCOLM BALDRIDGE NATIONAL QUALITY AWARD (MBNQA)

Prepared by : MS.RYAN BEATRICE ROB

Malcolm Baldrige was nominated to be Secretary of Commerce by President Ronald Reagan on December 11, 1980, and confirmed by the United States Senate on January 22, 1981. During his tenure, Baldrige played a major role in developing and carrying out Administration trade policy.

History and Purpose

President Reagan signed legislation mandating a national study/conference on productivity in October 1982.

Baldridge Award was signed into law on August 20, 1987.

 The purpose of the award are to:

Help stimulate American companies to improve quality and productivity Recognize the achievements of those companies that improve the quality of their goods and services Establish guidelines and criteria Provide specific guidance for other American enterprises that wish to learn how to manage for high quality

 Baldridge Award recognizes US companies that excel in quality management practice and performance. The award has evolved into a comprehensive National Quality program of which Baldridge Award is only one part.

The Criteria for Performance Excellence Designed to encourage companies to enhance their competitiveness through an aligned approach to organizational performance management that results in:
Delivery of ever-improving value to customers, contributing to marketplace success. Improvement of overall company performance and capabilities. Organizational and personal learning.

7categories of the Criteria:

1.Leadership 2.Strategic Planning 3.Customer focus 4. Measurement, Analysis, and Knowledge Management 5. Workforce Focus 6. Process Management 7. Results

INTERNATIONAL QUALITY AWARD PROGRAMS

Prepared by: MS.SANDRA LIBUNAO

1.The DEMING PRIZE

Instituted in 1951 by the Union of Japanese Scientists and Engineers (JUSE) in recognition and appreciation of W. Edwards Demings achievements in statistical quality control and his friendship with the Japanese people.
.

 Annual award presented to a company or a division of company that has achieved distinctive performance improvements through the application of Companywide Quality Control defined by JUSE as a system of activities to assure that quality products and services required by customers are economically designed,produced and supplied while respecting the principle of customer orientation and the overall public well-being.

10 CATEGORIES AS JUDGING CRITERIA: Policies The organizations and its operations Education and dissemination Information gathering Communication and its utilization Analysis Standardization Control/management Quality assurance Effects

 Objectives are to ensure that that a company has so thoroughly deployed a quality process that it will continue to improve long after a prize is awarded.

2.EUROPEAN EXCELLENCE AWARD(European Quality Award )

In October 1991,it was created by the European Foundation for Quality Management (EFQM) in partnership with the European commission and the European Organization for quality. Designed to increase awareness throughout the European Community and business in particular, of the growing importance of quality to their competitiveness in the increasingly global market and to their standards of life.

 Base on this premise: Excellent results with respect to performance , customers, people, and society are achieved through leadership driving policy and strategy , that is, delivered through people partnerships and resources, and processes.

THREE RECOGNITION LEVELS OF EFQM

A. EFQM excellence award B. Recognized for excellence C. Committed to excellence

3.CANADIAN AWARD FOR BUSINESS EXCELLENCE

Canadas National Quality Institute (NQI)recognizes Canadas foremost achievers of excellence through this award. Quality criteria are similar in structure to the Baldrige Award Criteria, with some key differences.

MAJOR CATEGORIES AND ITEMS IN THIS CATEGORY:

A .Leadership B. Customer Focus C. Planning for improvement D. People Focus E. Process Optimization F. Supplier Focus

4. AUSTRALIAN BUSINESS AWARD( Australian Quality Awards)

Developed independently from Baldrige Award in 1998. Administered by Australian Quality Awards Foundation ,subsidiary of Australian Quality control Prominent award available for business in Australia

FOUR LEVELS OF AWARDS:

The Foundation In Business Excellence award Bronze Award Level The Silver Award Level The Gold Award Level

 Assessment criteria are leadership, strategy and planning ,information and knowledge, people, customer focus, processes, products and services and business results Criteria are benchmarked with the Baldrige criteria and European Business Excellence Model.

5.QUALITY AWARDS IN CHINA

In 2001,National Quality award was introduced by China Association for Quality (CAQ). Criteria are based on components of the Baldrige National Quality Award In 2004,Shenzen became the first city to launch a Local quality award called Mayors Cup Quality Award Encouraged many organization to participate and share best practices.

INTERNATIONAL ORGANIZATION for STANDARDIZATION (ISO) Prepared by:

MS.SANDRA C. LIBUNAO MR.KEN GUIAL

 The organization's name would have different acronyms in different languages e.g. IOS is English, OIN in French so it adopted the short name ISO, based on the Greek word isos (, meaning equal)

International Organization for Standardization Organisation internationale de normalisation [1]

Logo of the ISO

Formation Type

23 February 1947 Non-governmental organization

Purpose/focus
Headquarters Membership Official languages Website

International standardization
Geneva, Switzerland 163 members
[2] [3]

English, French and Russian iso.org

History
The organization today known as ISO began in 1926 as the International Federation of the National Standardizing Associations (ISA), whose focus was mainly mechanical engineering. disbanded in 1942 during World War II but was reorganized under its current name, ISO, in 1946, when delegates from 25 countries met at the Institute of Civil Engineers in London the new organization officially began operations in February 1947.

INTERNATIONAL STANDARD ORGANIZATION(ISO) ISO 9000:2000

Founded in 1946 and composed of representatives from the national standards bodies of 91 nations. Most recent version Defines quality system standards

FIVE OBJECTIVES
1.Achieve, maintain and seek to continuously improve product quality in relationship to requirements. 2.Improve the quality of operations to continually meet customers and stakeholders stated and implied needs. 3.Provide confidence to internal management and other employees that quality requirements are being fulfilled and that improvement is taking place.

4.Provide confidence to customers and other stakeholders that quality requirements are being achieved in the delivered product. 5.Provide confidence that quality system requirements are fulfilled.

FACTORS LEADING TO ISO:

Dissatisfaction Deficiencies in the old ISO 9000 on quality process

IMPLEMENTATION AND REGISTRATION

Registration Process:
Document review Preassessment Assessment by a team of two or three auditors Surveillance or periodic reaudit Recertification is required every three years. Individual sites must achieve registration individually

Benefits of ISO 9000:2000

Set good basic practices for initiating a quality system Provide detailed guidance on process and product control It helped improve quality and service customers It improves productivity, decrease cost, and increase customer satisfaction.

SIX SIGMA

Prepared by: MS.KCLYN BULAONG

Sigma is the eighteenth letter of the Greek alphabet ; standard deviation. The term "six sigma process" comes from the notion that if one has six standard deviations between the process mean and the nearest specification limit, as shown in the graph, practically no items will fail to meet specifications.

Graph of the normal distribution

Hence the widely accepted definition of a six sigma process is a process that produces 3.4 defective parts per million opportunities (DPMO). This is based on the fact that a process that is normally distributed will have 3.4 parts per million beyond a point that is 4.5 standard deviations above or below the mean.

Sigma level 1 2 3

Sigma (with 1.5 shift) -0.5 0.5 1.5

DPMO

Percent defectiv e 69% 6.7%

Percent age yield 31% 69% 93.3%

ShortLongterm Cpk term Cpk 0.33 0.67 1.00 0.17 0.17 0.5

691,462 66,807

308,538 31%

4
5 6

2.5
3.5 4.5

6,210
233 3.4

0.62%
0.023%

99.38%

1.33

0.83
1.17 1.5

99.977% 1.67 2.00

0.0003 99.999 4% 66%

5.5

0.019

0.0000 019%

99.9999 2.33 981%

1.83

SIX SIGMA
can be best described as a BUSINESS INPROVEMENT approach that seeks to find and eliminate causes of defects and errors in manufacturing and services processes by focusing on outputs that are critical to customers and a clear financial return for the organization.

Six Sigma projects follow two project methodologies inspired by Deming's Plan-Do-Check-Act Cycle. DMAIC is used for projects aimed at improving an existing business process. DMAIC is pronounced as "duh-may-ick". DMADV is used for projects aimed at creating new product or process designs. DMADV is pronounced as "duh-mad-vee.

DMAIC Define the system, the voice of the customer and their requirements, and the project goals, specifically. Measure key aspects of the current process and collect relevant data. Analyze the data to investigate and verify cause-and-effect relationships. Improve or optimize the current process based upon data analysis using techniques . Control the future state process to ensure that any deviations from target are corrected before they result in defects.

DMADV or DFSS ("Design For Six Sigma") Define design goals that are consistent with customer demands and the enterprise strategy. Measure and identify CTQs (characteristics that are Critical To Quality), product capabilities, production process capability, and risks. Analyze to develop and design alternatives Design an improved alternative, best suited per analysis in the previous step Verify the design, set up pilot runs, implement the production process and hand it over to the process owner(s).

EVOLUTION OF SIX SIGMA

Mid-1980
Motorola pioneered the concept of six sigma as an approach to measuring product and service quality.

1989-1991
Motorola Improve product service ten times by 1989 and at least one hundred fold by 1991.

1992
Achieve six-sigma capability by 1992.

The core philosophy of Six Sigma is based on some key concepts:

Think in terms of key business processes and customer requirements with a clear focus on overall strategic objectives. Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtain resources. Emphasize such quantifiable measures as defects for million opportunities (dfmo) that can be applied to all parts of an organization.

The core philosophy of Six Sigma is based on some key concepts:

Ensure that appropriate metrics are identified early in the process and that they focus on business results, thereby providing incentives and accountability. Provide extensive training followed by project team deployment to improve profitability, reduce non- value added activities, and achieve cycle time reduction Create highly qualified process improvement experts who can apply improvement tools and lead teams Set stretch objectives for improvement

 The recognized benchmark for Six Sigma implementation is General Electric which efforts are driven by former CEO, Jack Welch.

Jack Welch brought significant media attention to the concept and made Six Sigma a popular approach to quality improvement. One of the key learnings GE discovered was that Six Sigma is not only for engineers.

 Mid-1990s
Quality emerged as a concern of many employees at General Electric.

1996-1997
GE increase the number of six sigma projects from 3,000 to 6,000 and achieve 320 million dollars in productivity gains and profits.

1998
GE generated 750 million dollars in six sigma savings over and above their investment.

Welch observed that it can also be used by: Plant managers Human Resource managers Regional sales managers plumbers, car mechanics, and gardeners

SIX SIGMA AS A QUALITY FRAMEWORK In many ways, Six Sigma is the realization of many fundamental concepts of "total quality management". However it is more than simply a repackaging of older quality approaches and traditional concepts of "total quality".

Total Quality
Based largely on working empowerment and teams Activities generally occur within a function, process or individual workplace

Six Sigma
Owned by business leader champions Projects are truly cross-functional

Training is generally limited to simple improvement tools and concepts

Focuses on more rigorous and advanced set of statistical methods and a structured problem-solving methodology

Focused on improvement with little Requires a variable return on financial accountability investment and focus on the bottom line

SIX SIGMA IN SERVICE ORGANIZATIONS

All Six Sigma projects have three key characteristics: A problem to be solved A process in which the problem exists One or more measures that quantify the gap to be closed and can be used to monitor progress.

Applying Six Sigma to services require examination of four key measures of the performance: Accuracy Cycle time Cost Customer Satisfaction

Some examples of financial applications of Six Sigma include the following: Reduce the average and variation of days outstanding of accounts receivable Close the books faster Improve the accuracy and speed of the audit process Reduce variation in cash flow Improve the accuracy of journal entries Improve accuracy and cycle time of standard financial reports

COMPARING BALDRIGE, ISO 9000, AND SIX SIGMA

Prepared by; MR.KEN GUIAL

COMPARING BALDRIGE, ISO 9000, AND SIX SIGMA

Baldrige focuses on performance excellence for the entire organization in an overall management framework. ISO focuses on product and service conformity for guaranteeing equity in the marketplace and concentrates on quality system problems and product and service nonconformities ISO provides a set of good basic practices for initiating a quality system. In fact it provides more detailed guidance on process and product control than baldrige, and provides systematic approaches to many of the baldrige criteria requirement in the process management category. Six Sigma concentrates on measuring product quality and driving process improvement and cost savings throughout the organization. Implementing Six Sigma fulfills in many part of the elements of ISO 9000:2000

THANK YOU FOR LISTENING