4/18/2013

Total Quality Management - Tools

Total Quality Management - Tools

Benchmarking
Benchmarking is a systematic method by which organizations can
measure themselves against the best industry practices. It promotes
superior performance by providing an organized framework through
which organizations learn how the best in class do things,
understand how these best practices differ from their own, and
implement change to close the gap.
Benchmarking is the systematic search for best practices, innovative
ideas, and highly effective operating procedures. Benchmarking
considers the experience of others and uses it. Indeed, it is commonsense practice to learn from others what they do right and then
imitate it to avoid reinventing the wheel.

Benchmarking Concept
What are others
performance levels?
How did they get
there?

What is our
performance level?
How do we do it?

Creative
Adaptation

Breakthrough
Performance

Thursday, 18 April 2013

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By- Himanshu Gupta

Total Quality Management - Tools

LOVELY PROFESSIONAL UNIVERSITY

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By- Himanshu Gupta

Total Quality Management - Tools

Benchmarking
Types of benchmarking
1. Competitor comparing with leading organization with similar products or
services and adapting their approach.
2. Generic comparisons of business process functions that are very similar,
regardless of industry.
3. Internal a comparison of internal operations by different departments within the
same organization.
4. Functional comparisons to similar functions within the same broad industry, or
to industry leaders. The study is carried by focusing on one particular function of
an industry.
5. Customer the aim of the improvement program is meeting and exceeding
customer expectations.
6. Strategic - Where businesses need to improve overall performance by examining
the long-term strategies and general approaches that have enabled high-performers
to succeed. It involves considering high level aspects such as core competencies,
developing new products and services and improving capabilities for dealing with
changes in the external environment.
Thursday, 18 April 2013

Thursday, 18 April 2013

By- Himanshu Gupta

Benchmarking
Process:
Organizations that benchmark, adapt the process to best fit their own
needs and culture. Although the number of steps in the process may
vary from organization to organization, the following six steps contain
the core techniques:
1. Decide what to benchmark.
2. Understand current performance.
3. Plan.
4. Study others.
5. Learn from the data.
6. Use the findings.

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4/18/2013

Total Quality Management - Tools

Total Quality Management - Tools

Benchmarking
Deciding what to benchmark:
Benchmarking can be applied to virtually any business or production
process. Improvement to best-in-class levels in some areas will
contribute greatly to market and financial success, whearas
improvement in others will have no significant impact. Most
organzations have a visions and missions that defines their strategy
how firm wants to position itself. Some high impact areas to
benchmark are:
1. Which processes are causing the most trouble?
2. Which processes contribute most to customer satisfaction and which
are not performing upto expectations?
3. What are the competitive pressures impacting the organization the
most?
4. What processes or functions have the most potential for
differentiating our organization from the competition?
Thursday, 18 April 2013

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By- Himanshu Gupta

Total Quality Management - Tools

LOVELY PROFESSIONAL UNIVERSITY

Thursday, 18 April 2013

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By- Himanshu Gupta

Total Quality Management - Tools

Benchmarking
Planning:
Once internal processes are understood and documented, it is possible
to make decisions about how to conduct the study.
A benchmarking team should be chosen. The team should decide what
type of benchmarking to perform, what type of data are to be collected
and the method of collection.
Organizations that are candidates to serve as the benchmark need to be
identified. Finally, timetables should be agreed upon for each of the
marking tasks and the desired output from the study.

Thursday, 18 April 2013

Benchmarking
Understanding Current Performance:
To compare practices to outside benchmarks, it is first necessary to
thoroughly understand and document the current process. Several
techniques, such as flow diagrams and cause and effect diagrams
can be used.
Attention must be paid to inputs and outputs. Careful questioning is
necessary to identify circumstances that result in exceptions to the
normal routine. Exceptions commonly consume a good deal of the
process resources.

By- Himanshu Gupta

Benchmarking
Studying Others:
Benchmarking studies look for two types of information: a description
of how best-in-class processes are practiced and the measurable
results of these practices.
In seeking this information, bench markers can use internal sources,
data in the public domain, original research, or most likelycombination of sources. Considerations include the cost and time
involved in gathering data and the need for appropriate data quality
and accuracy.
When most people think of benchmarking, they generally think of
conducting original research through site visits and interviews.
Three techniques for conducting original research are questionnaires,
site visits and focus groups.
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4/18/2013

Total Quality Management - Tools

Total Quality Management - Tools

Benchmarking
Learning from the data:
Learning from the data collected in a benchmarking study involves
answering a series of questions:
Is there a gap between the organizations performance of the best in class
organization?
Why is the gap? How much is it?
Why there is a gap? What does the best-in-class do differently that is better?
If best-in-class practices were adopted, what would be the resulting improvement?

Benchmarking studies can reveal three different outcomes. External

processes may be significantly better than internal processes (a
negative gap). Process performance may be approximately equal
(parity). Or the internal process may be better than that found in
external organizations (positive gap).
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Total Quality Management - Tools

1.
2.
3.
4.
5.
6.
7.

Specify tasks
Sequence tasks
Determine resource needs
Establish task schedule
Assign responsibility for each task
Describe expected results
Specify
methods
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Six Sigma
Six sigma, as a quality improvement and business strategy, was first
initiated and developed by Motorola in the 1980s. The emphasis
was on reducing the defects to less than 4 per million.
Six Sigma is defined as:
A Tool: Six sigma is a statistical problem solving tool.
A Management Strategy and a Business Process: It allows
companies to design, operate, control and monitor everyday
processes.
A concept or an idea: This has to be first understood and then
merged into the organizations culture.
A Process: Business revolves around processes. A process is an
activity or a group of activities that takes an input, add values to it
and provides an output to the internal or external customer. Six
sigma provides its inputs in the form of measurements of the
companys existing set standards, working on them to get the desired
output, i.e. less number of defects and higher quality.

Benchmarking

Thursday, 18 April 2013

Benchmarking
Using the findings:
When a benchmarking study reveals a negative gap in performance,
the objective is to change the process to close the gap. Benchmarking
is a waste of time if change does not occur as a result. To effect
change, the findings must be communicated to the people, within the
organization who can enable improvement. The findings must
translate to goals and objectives, and action plans must be developed
to implement new processes.
The generic steps for the development and execution of action plan
are:

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4/18/2013

Six Sigma

Six Sigma

Six Sigma is defined as:

A Measurement: Six sigma is about attaining a total quality as well
as minimizing the defects that might have .
A Performance Target: That applies to Critical to Quality(CTQs)
parameters (parameters that play a pivotal role in determining the
quality of a product or service).
Six sigma is a quality improvement programme with a goal to reduce
the number of defects to as low as 3.4 parts per million. It relies on
the use of Normal distribution to predict defective rates.

Statistical Significance of Six Sigma:

Statistical Significance of Six Sigma:

Specification Limits: Specification limits are the tolerances or
performance ranges that the customer demands from the products or
services he is purchasing.
Figure on next page illustrates specification limits.
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Six Sigma

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Six Sigma

Statistical Significance of Six Sigma:

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Statistical Significance of Six Sigma:

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4/18/2013

Six Sigma

Six Sigma

Statistical Significance of Six Sigma:

Effect of 1.5 sigma shift

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Fundamental Areas Affected by Six Sigma:

Six Sigma qualities are structured around customer and its
perception. Customer is the starting point as well as the finishing
point for the design of the product. Customers set the expectation
levels of the product and controls the votes on the satisfaction levels.
Six Sigma has six layers as shown in figure (next slide) according to
the role played by them during their projects. Following are the six
fundamental areas that are affected by Six Sigma:
Process improvement
Product and service improvement
Investor relation
Supplier improvement
Design methodology
Training and improvement
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Six Sigma

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Six Sigma

Fundamental Areas Affected by Six Sigma:

Fundamental Areas Affected by Six Sigma:

The executive leadership or senior champions are the least in
number, but they have ability to prelocate the vision, as clearly as
possible, down to last layer of the ground and provide support to the
whole process.
They also keep a track of progress made and benefits in terms of
finance or otherwise.
Table on next slide consists of the comparison of roles of champions,
master black belts, black belts and green belts in terms of their
qualification, training needed by them and number of employees
trained in each category.

Customers
Green Belts
Black Belts
Master Black
Belts
Champions
Executive
Leadership
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4/18/2013

Six Sigma

Six Sigma

Comparison:
Champion

MBB

Black Belt (BB)

Green Belt (GB)

Qualification

Senior Executives and

managers such as VP
or director. Familiarity
with
basic
and
advanced statistical
tools

Should
have
technical
degree.
May
be
chief
engineer. Mastery
of
basic
and
advanced statistical
tools

Technical degree.
Might
be an
engineer. Mastery
of basic statistical
tools.

Technical
and
sound
support
background.
Familiarity with
basic
statistical
tools is a must.

Training

One
week
of One-to-two-week
champion training
training session.

One-to-four-week
sessions
with
three
weeks
between sessions
to apply strategy
to the assigned
project

Two to three day

sessions
with
three
weeks
between sessions
to apply strategy.

Number of
employees
trained

One champion per One MBB per 30 One BB per 100 One GB per 20
business group
BBs
employees
employees

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Six Sigma

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Six Sigma

DMAIC Method:

Thursday, 18 April 2013

DMAIC Method:
DMAIC stands for the following:
Define: opportunities and project goals in relation to the customer
requirement.
Measure: current performance of the process.
Analyze: weakness of the process such as the sources of defects and
bottlenecks, and consider this process weakness into an opportunity
for improvement.
Improve: performance of the process by addressing its weakness.
Control: the performance of the improved process to sustain its
gains by making the project implementable.

DMAIC Method:
1. Define/Identify:
The primary aim is to identify, within each sub-process, the
possibilities for defects or quality problems which can be arrived at
through the use of different statistical tools, such as regression
analysis, design of experiments.
The quality problem which requires break-through solution, has to
be defined clearly in measurable terms. The problem selected should
consider the requirements of the customer and should have relevance
to the companys business.
Define critical customer requirements, establish project teams and
project charter.

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4/18/2013

Six Sigma

Six Sigma

DMAIC Method:
2. Measure:
The second most important step is the establishment of that metrics
that will be improved using six sigma. Manage measurement data
collection, develop and validate measurement system.
The output of the process, measured as multiples of its sigma under
existing quality level has to be recorded so that defect per unit is
estimated in ppm.
These will be used as the starting points for setting new targets, and
proceeding with the subsequent steps.

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Six Sigma

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Six Sigma

DMAIC Method:
4. Improvement:
The objective of this phase is:
To confirm the key process variables
Identify the maximum acceptable ranges of the specifications, and
then tackle the capability of the process.
If the existing quality level is 3 sigma, efforts must be directed to
improve the processes so as to achieve at least 3 sigma.
The transition from 3 sigma to 6 sigma is then done.

Thursday, 18 April 2013

DMAIC Method:
3. Analysis:
This is the stage at which new goals are set, and the route maps
created for closing the gap between current and target performance
levels.
It begins with benchmarking key product performance against the
best in class so that the sigma levels attained by comparable
processes can be ascertained as the basis for new targets.
Then, a GAP analysis is conducted to identify the factors that
distinguish best-in-class processes from those being analysed so that
the areas of change can be identified.
Statistical tools as well as conventional quality techniques like
brainstorming, root-cause analysis, fishbone diagram, pareto analysis
etc, may be used for carrying out the analysis.

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DMAIC Method:
5. Control:
The final stage of six sigma implementation is to hold the gains that
have been obtained from the improve stage. Unless there is a good
control we are likely to go back to the original state.
Hence, in this stage the new process conditions are documented, and
frozen into systems so that the gains are permanent.
Poka-yoke (mistake-proof) devices can be set up to eliminate errors.

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