Quality Philosophies and Standards

(Baldrige, Six Sigma and Lean Mgmt)

Britt Watwood
Center for Teaching Excellence
VCU
What is meant by the term?

“Quality”
 Quality’s
Foundatio
n

Quality

Philosophy &
Empowerment
Practice

Tools
 Quality
• 1930’s
Evolutio
– Shewart Cycle
• 1950’s
n
– Deming in Japan
• 1980
– Productivity / Quality Circles
• 1985
– Deming/Crosby/Juran
• Late 1980’s
– Total Quality Mgmt
• 1990’s
– Baldrige Criteria
• Current
– Six Sigma
– Lean Management
 Quality
Overview

QMS
Product Markets &
Support Customers

Lean Quality VOC

Product Strategy
Operation Formulation

6 σ
 Malcolm
Baldrige
National
Quality Award

www.quality.nist.gov
 Malcolm
Baldrige NQA
• Twenty years evolving
• A Framework and A Tool
• Self-Assessment
• Promotes Awareness of
Continuous Improvement and
Excellence
• Sharing of Best Practices
• Presented by the President
of the United States
 Baldrige
is a
“Process”

• A systems perspective

• Built around core values

• Linkages within the

framework
 Core
Values

• Visionary Leadership
• Customer Driven Excellence
• A Learning Organization
• Valued Employees and Partners
• Agility
• Focus on the Future
 Core
Values

• Managing for Innovation

• Management By Fact
• Social Responsibility
• Results and Value Driven
• Overall Systems Perspective
 Visionary
Leadership

• Senior leadership has vision

• Senior leadership
communicates that vision
• Values and expectations
align with vision
• Leaders are role models
 Customer
Driven
Excellence

• Quality and Performance are

Judged by the Customers
• Customer Satisfaction
tracked and used to improve
processes
• Customer Satisfaction of
Competitors Known and Used
to Improve Own Offerings
 Organizational
Learning

• Learning directed at
improved products…and
improved people
• Embedded in all
processes
• Continuous
• Results in Positive
Change
 Valuing
Employee
s&
Partners
• Committed to satisfaction,
development, and well-
being of employees
• Recognition Systems
• Risk-Taking Encouraged
• Strategic Alliances with
Suppliers
 Agility

• The ability to thrive

in the White-water
Rapids of Change
• Cycle Time
• Responsiveness
 Focus
on the
Future

• Long-Term Viewpoint
• Long-Term Commitment to
Key Stakeholders
• Strategic Focus on Resources,
Employee and Product
Development
 Managing
For
Innovation

• Innovation Part of the

Culture
• More than
Sustainability
• Meaningful Change to
Products and Services
 Management

By
• Measurement AND Fact
Analysis of Performance
• Key Processes Identified
• Outputs Known
– Yours and Competitors!
• Comparison with
Benchmarks
• Use of Trend Data
 Social
Responsibility

• Safe Work
Environment
• Legal Work
Environment
• Good Corporate Citizen
 Results
& Value
• Focus on Key Results
• Creating Value for
Stakeholders
• Customers
• Employees
• Stockholders
• Suppliers / Partners
• The Community

• Both Leading and

Lagging Indicators
 Systems
Perspective
• Linkage and Alignment between
the Baldrige Categories
– Leadership
– Strategic Planning
– Customer & Market Focus
– Measurement, Analysis, & KM
– Workforce Focus
– Process Management
– Business Results
 Baldrige
Criteria

Organizational Profile
Environment, Relationships, &
Challenges

2 5
Strategic Workforce
Planning Focus
7
1 Business
Leadership 3 6 Results
Customer & Process
Market Focus Mgmt

4 Measurement, Analysis & Knowledge Management

 ISO 9000

• Commitment to Customer
Requirements
• Documentation
Requirements
• Resource Allocation
• Measurement and Analysis
Standard
Deviation


Sigma is a
measure of
variation
 Sigma
Variation

• The sigma value is a metric

that indicates how well a
process is performing.
• The higher the sigma
value, the better.
• The higher the sigma
value, the more the
process is defect-free.
 Example of
Sigma
Value
Yield DPMO Sigma

30.9% 690,000 1
69.2% 308,000 2
93.3% 66,800 3
99.94% 6,210 4
99.98% 320 5
99.9997% 3.4 6
 Example of
Sigma Value
Most companies
operate at around 4
sigma – the quality Yield DPMO Sigma
standard set by the
US Government in
WW II 30.9% 690,000 1
69.2% 308,000 2
93.3% 66,800 3
99.94% 6,210 4
99.98% 320 5
99.9997% 3.4 6
What Does 99% Defect-Free Mean?
What Does 99% Defect-Free Mean?
• 200,000 wrong
drug prescriptions
each year
What Does 99% Defect-Free Mean?
• Two short or
long landings at
major airports
each day
What Does 99% Defect-Free Mean?
• 5,000 incorrect
surgical
procedures every
week
What Does 99% Defect-Free Mean?
• 20,000 lost
articles of
mail every
hour
What Does 99% Defect-Free Mean?
• Unsafe Drinking
Water for 15
minutes each
day
What Does 99% Defect-Free Mean?
• No electricity
for 7 hours
each month
What Does 99% Defect-Free Mean?
• 50 dropped
newborns at
the hospital
each day
 Defects
Effect
• The Cost of Quality Costs
– 4 Sigma: 99.4%
• 6,210 defects
• Industry Average
• Lose 15-20% of sales
– 5 Sigma: 99.98%
• 233 defects
• Lose 5-10% of sales
– 6 Sigma: 99.9997%
• 3.4 defects
• Lose Less than 1% of sales
 DMAI
C
Design

Measure
Analyze
Improve
Control
 As a nation,
we seem to be obsessed
with LEAN…
 Effectiveness vs Efficiency
Six Sigma = Effectiveness

6σ 6σ 6σ
VOC
Selection Control Improvement

Process Lean Lean Lean

Metrics Metrics Workload Process

Lean Mgmt = Efficiency

 Definition

• The term “lean” is used because

lean manufacturing uses “less”…

Labor in the factory

Manufacturing space
Capital investment
Materials
Time between the customer order
and the product shipment
 Lean Mgmt Comparison

Traditional Lean

Production Based on forecast Based on orders

Based on function /
Layout Based on product flow
department

Batch size Large Small

Processing Batch & queue Continuous flow

Assured during
Quality Lot sampling
processing
Key Elements:

• Stability
• Quality
• Continuous Flow
• Kaizen
• Pull System
• Workload Balancing
 Waste

“Anything
“Anything that
that adds
adds Cost
Cost
to
to the
the product
product
without
without adding
adding Value”
Value”
 Waste

Value Added: 5%
• Overproduction
• Excess Inventory
• Product Defects
• Non-value added
processing
• Wait time
• Underutilized
labor
• Excess motion
Non - Value Added: 95%
• Unnecessary
Transportation
 7 Types
of Muda
CORRECTION

Repair or MOTION
WAITING
Rework Any wasted motion
Any non-work time to pick up parts or
waiting for tools, stack parts. Also
supplies, parts, etc.. wasted walking

Types
PROCESSING of OVERPRODUCTION
Producing more
Doing more work than Waste than is needed
is necessary
before it is needed

INVENTORY
Maintaining excess CONVEYANCE
inventory of raw mat’ls, Wasted effort to transport
parts in process, or materials, parts, or
finished goods. finished goods into or
out of storage, or
between
processes.
 Workplace
Organization

Maintain through Get rid of clutter

empowerment,
commitment, and Sort
discipline Organize the work area

Sustain Set In Order

5S
Standardize Shine
Use standard methods to Keep machines and work
keep Sort, Set In Order, areas clean
and Shine to a condition
 KAI ZEN
To modify / + To make good /
Change better

= KAIZEN
Gradual and orderly, continuous improvement.
 Differences in

• Six Sigma Emphasis

– Process Improvement
– Reduced Defect Rate

• Lean
– Efficiency Improvement
– Reduce Waste

• Baldrige Criteria
– Performance Excellence
across Entire System
– Results Oriented
What Makes
Sense For
YOUR
Company ???
Questions???