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Learning objective
Deming propounded on ‘14 points for management’ to meet customer needs and for
continuous improvement which are given below in table 5.8.
TABLE 5.8: DEMING POINTS ON QUALITY MANAGEMENT
1. Benchmarking
2. ISO
3. Six Sigma
What is benchmarking?
Standard of comparison
Means of self-evaluation
Means of subsequent improvement
What to benchmark?
Functions
Processes
Performance measures
Any quality dimension
Examples
Why benchmarking?
Visiting firms which have earned reputation for being “best in class”.
Understand and learn best business practices.
Plan for what to benchmark and identify companies to be compared. Collect
data and analyze the data for the performance gap. Devise method to fill the
gaps and set functional goals. Develop action plans and monitor the
performance.
Example
Xerox sent a project team to learn from its Japanese joint venture partner, Fuji-xerox
to fill the performance gap with Japanese competitors. By learning and adopting good
practices Xerox was able to reduce costs, improve quality and reduce time to market.
ISO 9000 are the standards for building a management system to produce quality
products (goods and service). It act as evidence from customers perspective that a
management system is in place as per their satisfaction. ISO 9000:2000 standards
focus in developing, documenting and implementing procedures to ensure consistency
in the process. ISO 9000 defines quality system standards with following objectives.
ISO 9000 does not emphasize on results achieved but focus on the existence and
conformance to the elements of quality system. An organization needs to be certified
by an independent agency to adopt ISO 9000. As per certification of ISO standards,
organization documents its quality system and commonly follow “say what you do,
and do what you say”.
1. Customer focus
2. Leadership
3. Involvement of people
4. Process approach
5. System approach to management
6. Continual improvement
7. Factual approach to decision making
8. Mutually beneficial supplier relationship
The ISO standards were revised in 2008 as ISO 9000:2008 for various sub sections
like legal standards, out sourcing, internal audits, design and development process,
monitoring and measuring process, and controlling non confirming products.
1. Scope: It defines the scope of the quality management system (QMS), areas
covered and exclusions.
2. Normative reference: ISO 9000:2008 fundamentals and vocabulary must be
used in conjunction.
3. Terms and conditions: apply terms and conditions given in ISO 9000.
4. General requirements and documentation requirements.
5. Management responsibility: Responsibility of top management for effective
leadership with consideration of points presented in the sub-class in figure 5.28.
In the past, ISO standards were assured to be applied only to manufacturing sector, but
these standards are now adopted by all sectors of service industry.
Example
The service sector like educational institute can also be ISO certified. IIT Madras, one
of the institutes of national importance in higher technical education has various non-
academic sections, certified as per ISO 9001:2008 requirement. Various sections like
central library, central workshop, stores and purchase, engineering units and few
others are certified and are being audited regularly as per ISO standards.
5.11.3 Six-Sigma
Six-sigma is a quality improvement initiative of reducing variation in the process and
preventing deficiencies in the product or service. The six-sigma means there are six
standard deviations between the process mean or central line and either specification
limit (Upper specification limit, USL or lower specification limit, LSL) as shown in
figure 5.31. This can be described as if an organization is producing 1 million
products, only 0.002 products will be defective. For a more generalized case, six-
sigma is defined in the units of defectives per million opportunities (DPMO).
Achieving 0.002 DPMOs is as good as zero defects.
The other company, which has made significant improvements by implementing six-
sigma is General Electric (GE), driven by former CEO Jack Welch. Six-sigma has
been so imbibed in GE that Jack Welch in mid-1990’s changed its incentive
compensation plan. As per his incentive compensation 60% of the bonus was based on
financial and 40% on six sigma achievements.
Six sigma projects are implemented using DMAIC process which stands for Define,
Measure, Analyze, improve and Control described in table 5.11.
Define Identify the attributes considered most important by the customers, also
called Critical to Quality (CTQ) characteristics. Define these priorities
given by customers.
Measure Measure the performance of process and defects arising in the products
or services pertaining to CTQ.
Analyse Analyze the process to identify key reasons or cause of variation
defects in the process
Improve Improve the performance of the process by fixing specification limits
of key variables to remove the cause of the defects. Establish the
systems of measuring the defects to improve the process performance.
Control Design controls by measuring ached performance with standards,
validate the measurement system and monitor the process control to
hold the gains of improvement.
The DMAIC approach for six-sigma utilizes seven quality control tools, Quality
Function Development (QFD), Statistical Quality Control, Poka Yoke devices and
many other techniques to reduce the defects in the process. Six sigma approach, by
focusing on defects reduction or cost of poor quality reduction, helps to gain financial
returns for an organization.
Reduce the average number of days and corresponding variation in getting the
passport after application submission.
Reduce variation in cash flow.
Reduce errors in invoices generated at retail stores.
Improve the speed at cash counter of super market.
In six-sigma, Defects Per Million Opportunities (DPMO) are determined using
following equation.
Where,
Defect is defined as any part of a product or service that does not meet customer
specifications or requirements.
The opportunities are the total number of chances per unit to have a defect.
Example:
A customer calling to the call center of Washing Machine Company has two
complaints. First regarding long hold of telephone call and second is the executive
receiving the call is not technically sound to provide solution.
So, in such case, the unit is telephone call. The opportunities of defect per unit are 2
per call.