Part 1: Chapter 1 Organization-Wide Considerations

Question 1

Walter A. Shewhart
(1931)

Answer 1

• Father of Statistical Quality Control (SQC)
• Developed Control Charts
• Worked at Western Electric
• Brought Together statistics, engineering, and economics
• Book = Economic Control of Quality of Manufactured Product (1931)
• 1st Honorary member of the American Society of Quality (ASQ)

Question 2

W. Edwards Deming
(1980s)

Answer 2

• Predicted Japan could be capture the world market in 5 years post WW2
• Book – Out of Crisis

Question 3

W. Edward Deming’s
14 Points for Management
Out of the Crisis (1986)

Answer 3

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; instead, minimize total cost by working with a single supplier.
5. Improve constantly and forever every process for planning, production and service.
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 of workmanship and eliminate the annual rating or merit system.
13. Institute a vigorous program of education and self-improvement for everyone.
14. Put everybody in the company to work accomplishing the transformation.

Question 4

Joseph M. Juran
(1924)

Answer 4

• Engineer at the Bell System
• First text on statistical quality control
• Developed Quality Control Handbook
• Developed Juran Trilogy, three management processes – Quality planning, Quality Control and Quality Improvement
• 12 Books including Juran’s Quality Control Handbook (1999), Juran’s Quality Planning & Analysis for Enterprise Quality, Juran on Leadership for Quality

Question 5

Juran’s Points on Quality

Answer 5

Juran’s Points on Quality Improvement
• Create Awareness of the need and opportunity for improvement
• Mandate quality improvement, make it part of every job description
• Create the infrastructure: Establish a quality council, select projects for improvement, appoint teams, provide facilitators
• Provide training in how to improve quality
• Review progress regularly
• Propagandize the results
• Review the reward systems to enforce the rate of improvement
• Maintain momentum by enlarging the business plan to include goals for quality improvement

Question 6

Phillip B. Crosby
(1980s-90s)

Answer 6

• Originate the Zero Defects Concept
• Played a big role initiating the quality movement in the US
• Books include Quality is Free, Quality without Tears, Let’s Talk Quality, Lead: The Art of Becoming an Executive

Question 7

Crosby’s 14 Steps to Quality Improvement

Answer 7

Crosby’s 14 Steps
• Make it clear that management is committed to quality
• Form quality improvement teams with representatives from each department
• Determine how to measure where current and potential quality problems lie
• Evaluate the cost of quality and explain its use as a management tool
• Raise the quality awareness and personal concern of all employees
• Take formal actions to correct problems identified through previous steps
• Establish a committee for the zero defects program
• Train all employees to actively carry out their part of the quality improvement program
• Hold a “zero defect day” to let all employees realize that there has been a change
• Encourage individuals to establish improvement goals for themselves and their groups
• Encourage employees to communicate to management the obstacles they face in attaining their improvement goals
• Recognize and apricate those who participate
• Establish quality councils to communicate on a regular basis
• Do it all over again to emphasize that the quality improvement program never ends

Question 8

Armand V. Feigenbaum
(1950s)

Answer 8

President & CEO of General Systems Co, Pittsfield MA

Originated the concept of Total Quality Control in his Book Total Quality Control

First to characterize quality costs as the costs of prevention, appraisal and internal & external failure

Three Steps to Quality
1. Quality Leadership
2. Modern quality technology
3. Organizational Commitment

Question 9

Kaoru Ishikawa
(1985)

Answer 9

• Developed the cause and effect diagram
• Worked with deming through the Union of Japanese Scientists and Engineers

His points:
1. Quality first – not short-term profit first.
2. Consumer orientation – not producer orientation. Think from the standpoint of the other party.
3. The next process is your customer – breaking down the barrier of sectionalism
4. Using facts and data to make presentation – utilization of statistical methods.
5. Respect for humanity as a management philosophy – full participatory management.
6. Cross-function management

Question 10

ISO 9000
(1987 – present)

Answer 10

A set of international standards on quality management and quality assurance developed to help companies establish efficient quality systems.
• International Organization for Standardization
• 91 Countries
• Not specific to any industry, product or service
• Underwent major revisions in 2000 and now include ISO 9000:2005 (definitions), ISO 9000:2008 (requirements) and ISO 900:2000 (continuous improvement)

Question 11

Baldridge Award Criteria

Answer 11

• An award established by the US Congress in 1987 to raise awareness about quality management & recognize companies that successfully implemented quality management systems.
• Two awards may be given annually in each of the following categories: manufacturing, service, small business, education, healthcare & non-profit

Question 12

Reengineering

Answer 12

• 1996 – 1997 A breakthrough approach involving the restructuring of an entire organization and its processes.

Question 13

Six Sigma Philosophy (4 Points)
(1995 – present)

Answer 13

Six Sigma Philosophy
• Use of teams that are assigned well-defined projects that have direct impact on the organization’s bottom line
• Training in statistical thinking al all levels and providing key people with extensive training in advanced statistics and project management (black belts)
• Emphasis on the DMAIC approach to problem-solving
• A management environment that supports these initiatives as business strategy

Question 14

Six Sigma Formal Definition

Answer 14

fact-based, data-driven philosophy of improvement that values defect prevention over defect detection. It drives customer satisfaction and bottom-line results by reducing variation and waste, thereby promoting a competitive advantage. It applies anywhere variation and waste exists, and every employee should be involved.

Question 15

Lean Formal Definition (NIST - National Institute Standards & Technology):

Answer 15

A systematic approach to 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 manufacturing seeks to eliminate waste through:

• Team work with well-informed, cross trained employees who participate in the decisions that impact their functions
• clean, organized, and well marked spaces
• Flow Systems instead of batch and queue
• Pull systems instead of push systems (replenish as the customer consumes)
• Reduced Lead Time - efficient processing, set-ups and scheduling

Question 16

Non-Value Added (ASQ)

Answer 16

A process step or function that is not required for the direct achievement of process output. This step or function is identified and examined for potential elimination.

Question 17

DMAIC

Answer 17

• Define
• Measure
• Analyze
• Improve
• Control

Question 18

Six Sigma Blackbelts

Answer 18

Black Belts are often required to manage 4 projects per year for a total of $500,000 -$5,000,000 in contributions to the company’s bottom line.

Question 19

Six Sigma Quality Performance

Answer 19

3.4 defects per million opportunities (accounting for 1.5-sigma shift in the mean).

Question 20

Founders of Lean Thinking

Answer 20

• Eli Whitney – interchangeable parts
• Henry Ford – reducing cycle times
• Toyota Production System

Question 21

Lean & Six Sigma
Similar Purpose

Answer 21

• Providing the customer with the best possible quality, cost, delivery, and nimbleness.

Question 22

Lean-Six Sigma

Answer 22

A fact based, data driven philosophy of improvement that values defect prevention over defect detection. It drives customer satisfaction and bottom-line results by reducing variation, waste, and cycle time, while promoting the use of work standardization and flow, thereby creating a competitive advantage. It applies anywhere variation and waste exists and every employee should be involved.

Question 23

Dorian Shainin

Answer 23

Dorian Shainin

• Shanin Techniques
• Developed a discipline called statistical engineering
• Specialized in creating strategies for engineers to “talk to the parts” and solve “unsolvable” problems
• NASA
• Books: Managing Man Power in the Industrial Environment, Tool Engineers Handbook, Quality Control Handbook, New Decision-Making tools for Managers

Question 24

Process Design Conflicting Forces by Process Stakeholders ( (Customer, Producer, Marketplace, Suppliers)

Answer 24

• Customers: Need a process that provides a quality output in an acceptable time frame and at an acceptable cost.
• Producer: Needs a process that uses reasonably priced inputs that reliably generates output that meets or exceeds customer expectations.
• Marketplace: requires a quality product at a competitive price as an output from a process that is agile enough to meet changing customer requirements
• Suppliers need a dependable market for their products that are the inputs to the process.

Question 25

Process

Answer 25

A series of steps designed to produce products and/or services. Often depicted through a flow chart.

Question 26

Business Systems

Answer 26

Designed to implement a process, or more commonly, a set of processes. Must consider the goals and objectives of the enterprise as it provides resources and guidance. Make sure process inputs are in the right place at the right time so that each step of the process has what is needed.

Most importantly responsible for continuously improving processes, products and services.

Imposes performance expectations on the process and its designers in terms of safety, cost, quality and delivery.

Systems > Processes > Sub processes > Steps

Question 27

Strategic Planning Processes Must Do Three Things

Answer 27

1. Study the Current State (that is, the business environment in which we operate)
2. Envision the ideal Future State (Where were like to be in 3-5 years)
3. Plan the path to get there

• Must create a line of sight from strategic, to tactical, to operational activities

Question 28

Porter’s Five Forces
(1979, Michael Porter, 5 Forces that affect Success)

Forces close to a company that affect its ability to serve its customers and make a profit
Porter developed his five forces framework in reaction to the then-popular SWOT analysis, which he found both lacking in rigor and ad hoc

Answer 28

1. Bargaining Power of Customers: ability and buying power of your customers to drive prices down
2. Bargaining Power of Suppliers: the ability and power of your suppliers to drive up prices of their products
3. Threat of New Entrants: ease at with witch new competitors can enter the market and drive prices down.
4. Threat of Substitute Products: extent to which different products or services can be substituted for your own.
5. Intensity of Competitive Rivalry: strength of the competition in your industry.

Question 29

Portfolio Analysis: process of determining which products to produce. As a strategic planning tool, it can be used to add to a current product line or to develop an entirely new family of products.

Steps in Portfolio Analysis include:

Answer 29

1. Study the Basic Physical/Chemical/Biological principles involved
2. Use the Basic Principles studied in step 1 to outline a family of products
3. List the modules required for each product
4. Form a matrix with products composing the rows and function modules composing the columns.
5. Study the matric to determine which products to build.

Question 30

Hoshin Kanri
(Shining Arrow, Management)

Tools for stating objectives for the organization and managing their implementation.
Also called a policy deployment matrix

Answer 30

Process Steps:
1. Statement of the organizations goals/objectives
2. Formulation of strategies that support achievement of the goals
3. Development of time-based tactics that support achievement of each strategy.
4. Development of metrics that measure the progress toward achieving each strategy.
5. Assignment of accountability for strategies and tactics
6. Regular reviews to assess the actual performance of the plan
7. Establishment of recovery plans, or the adjustment of strategies and tactics as necessary.

A key advantage of an effectively implemented hoshin planning process is that strategies are deployed and aligned both horizontally and vertically through an organization.

Question 31

Feasibility Study

Answer 31

Preliminary investigation to determine the viability of a project, business venture, or the like. Study make look at feasibility from the perspective of : Cost, technology, culture, legality, and so forth

Question 32

Risk Analysis

Answer 32

When assessing risk, we often deal with expected profit

Expected profit = sum (profit x Probability) (from i = 1, to n)

n = number of outcomes

Question 33

SWOT Analysis

Answer 33

Strengths and Weaknesses are identified with respect to internal capabilities of an organization.

Opportunities and treats look outside the organization

When analyzing the question is ask i

“How can the organization leverage its strengths to improve it weaknesses to take advantage of the opportunities or to eliminate the threats” ?

Question 34

PEST Analysis

Brings together four environmental scanning perspectives that serve as useful inputs into an organization’s strategic planning process.

Answer 34

1. Political: perspective looks at political stability, threats of wars, regulatory issues, tax considerations, labor problems, laws, and so forth.
2. Economic: looks at exchange rates, markets conditions, unemployment rates, inflation factors, interest rates
3. Social: education considerations, demographic, health factors, cultural implications, and so forth
4. Technological: new technology developments, rates of technological change, cost impact of technology, and so forth.

Question 35

Sub optimization

Answer 35

Operating a system at less than its best mode. When improvements are proposed, it is important to take a systems approach. Consideration should be given to the effect the proposed changes will have on other processes within the system, and therefore the enterprise.

Changes in a system may optimize individual processes but sub optimize the system as a whole. Its important to put processes in place to measure unintended consequences of proposed actions.