The Magnificent Seven

Steps Tools

Monitoring the process Control charts

Collecting data Check sheets

Identifying problems Pareto diagrams and histograms

Generating ideas Flowcharts, Cause-and-effect diagrams

Testing causality Scatter diagrams

 Flowchart for Parking Garage Operation

Customer System Cashier System

Customer pulls Receive ticket Accept payment and

time-stamped ticket from customer return change

Stamp exit time Raise gate arm

Customer parks car on ticket for customer to exit

Read indicator
Customer returns to car stamp for fee End of Day

Complete daily report

Customer drives to Observe exact time
cashier at exit for borderline rate

Deliver report to
accounting department
Place ticket in
Cashier system storage bin

Enter charge on
Customer exits
register
 Cause-and-Effect Diagrams

Also known as Fish Bone diagram or Ishikawa

diagram
Used to identify possible causes of a problem
Useful in problem solving brainstorming
sessions with groups of workers
Involves identifying complete lists of
potential causes of problem and then
generating hypotheses about causes and
effect relationships.
The exercise alone can be a valuable
educational process for those involved.
 General Structure of Cause-and-Effect Diagram

cause cause
contributor
to cause

Problem

cause
 Check Sheets
A checksheet is an easy way to collect data, analyze the data at a glance, and present the results.

Example: To collect data on parking garage rates, the cashier simply records the amount charged
to each customer on a data sheet shown below. If the rates are fixed at $0.50, $1.00, $1.30, $1.60,
$1.90, to a maximum of $2.00, a more useful form for collecting this data is a check sheet. If the
data are tallied in this way, the rates occurring most often are readily apparent.

Data collection sheet for parking charges Check sheet for garage parking rates

Customer Amount Amount Tally

1 1.00 0.50
2 0.50
3 1.30 1.00
4 1.30 1.30
5 2.00
6 1.60 1.60
2.00
 Scatter Diagrams
Scatter diagrams are the graphical component of regression analysis. While they do not provide rigorous statistical
analysis, they often point to important relationships between variables, such as the percent of an ingredient in an alloy
and the hardness of the alloy. Typically, the variables in question represent possible causes and effects obtained from
the Fish Bone diagrams. For example, if a manufacturer suspects that the percent of an ingredient in an alloy is
causing quality problems in meeting hardness specifications, an employee group might collect data from samples
on the amount of ingredient and hardness and plot the data on a scatter diagram as shown below.
hardness

hardness

hardness
% ingredient % ingredient % ingredient

No Positive Negative
correlation correlation correlation
 Pareto Diagrams

Purpose: Identify major quality problems by

separating the vital few from the trivial many.
Method:
Define the classification of defects to be monitored
Define the period of time over which the assessment is to
be made
Total the frequency of occurrence of each class of defects
over the period
Plot the histogram and cumulative distribution of the
classes in descending order of the frequency of
occurrence.
Identify the classes that constitute the majority of defect
occurrences
 An Example: Defects in Washing Machines

Cumulative % Cumulative
Defects Number Number Defective % Defective
Drum Bearing 510 510 34 34
Door Seal 350 860 23 57
Programmer Unit 300 1160 20 77
Internal Fuse 180 1340 12 89
Drive Belt 90 1430 6 95
General Corrosion 50 1480 3 99
Miscellaneous Effects 20 1500 1 100
 Cum ula tive % De fe ctive Fre que ncy
Dr Dr
um
0
100
200
300
400
500
600

um

20
40
60
80
100

0
Be Be
ar
ar in
in
g g
Do Do
or or
Pr S ea
Pr Se
al
og
og
ra l ra
m m
m m
er er
Un Un
it In it
In t
te er
rn na
a lF lF
us us
e e
Dr Dr
ive ive
G Be G Be
en en lt
er lt er
al al
M Co M Co
is rro is rro
ce si ce
lla s io
lla
ne
on ne n
ou ou
s s
Ef Ef
fe fe
c c ts
ts
 PDCA Cycle (Deming Wheel)

4. Institutionalize the 1. Plan a change

change or abandon aimed at
or do it again. improvement.

4. Act 1. Plan

3. Check 2. Do

3. Study the results; 2. Execute

did it work? the change.
 The Continuous Improvement Cycle

Control charts

Implement process
Monitor process
change
Yes

Is the process Generate and prioritize

Is process in
Yes capability No possible process
statistical control?
adequate? changes

No Check sheets Ishikawa diagrams

Pareto analysis Flow charts
Histograms Pareto analysis
Scatter plots

Search for special

cause

Special cause
No
identified?

Yes
Ishikawa diagrams
Flow charts
Pareto analysis

Generate and prioritize

possible solutions

Implement solution
 Continuous improvement and the learning curve

Strategic Benefits
Defects (cost)/unit lower costs/higher quality
faster time to market
sustainable first-mover advantage
faster cycles of innovation

Ad hoc improvement process

Rigorous continuous improvement process

Cumulative #units
produced
 The modern quality/productivity movement

It is an alphabet soup of acronyms:

TQM SPC JIT

DOE QC BPR

TPM QFD 6
 Seminal Contributors
Individuals whose ideas made a difference
Fredrick W. Taylor: Scientific Management (1881, 1919)
Henry Ford: Assembly Line Production, vertical integration,
etc: The Ford System. (1913)
Walter Shewhart: Statistical Quality Control (1931)
Armand Feigenbaum: Total Quality Control (1951)
Taiichi Ohno: The Toyota Production System (1960s)
Kaoro Ishikawa: Japanese Style Quality Management
(1960s)
W. Edwards Deming and Joseph Juran: A collection of ideas
comprising Total Quality Management - - American style.
(1950 through 1980)
 Significant Events and Enterprises
The creation in the US of the AT&T national telephone
system in the 1920s and 30s:
the inspection function institutionalized
research on statistical quality control: W. Shewhart and H.
Dodge at Bells Labs.
World War II and after
The US implemented the AT&T methods in war production
(Deming)
Post-war extension into manufacturing, the founding of the
ASQC.
Creation of reliability as an engineering and statistical discipline
Creation of the MIL-STD system of statistical screening
inspection
The books of Grant on SQC, Juran on Quality Control and
Feigenbaum on Total Quality control
 Significant Events and Enterprises (contd)

Japan extends the scope and intensity of quality

uses quality as a national strategy for competing globally
Deming brings SQC in 1950 and Juran brings Quality Management in
1954
The Deming Prize established (1951)
Creation of Quality Circles in the 1960s
Systematic managerial approaches

America reacts in the 1980s

Industries under siege: Ford, Xerox, Motorola ,etc. fight for their
lives.
NBC-TV shows: If Japan Can Why Cant We? Deming and Juran
re-emerge as gurus at home.
NUMMI: Toyota does TQ in California
The Baldrige Award and learning from the early winners: Motorola,
Xerox, Globe Metallurgical (1987)
 Significant Events and Enterprises (contd)
Diffusion of the Strategy and Methods in
the 90s
Other industries become involved: P&G, Alcoa,
FedEX, Ritz Carlton
The Conference Boards Quality Councils
National and local quality awards
ISO 9000 enters from Europe
A crystallization of what constitutes
Performance Management
Six Sigma & General Electric
The integration of TQM and Lean methods
Deming Cup First award in October 2010
 Total Quality Management

TQM may be defined as managing the entire

organization so that it excels on all dimensions of

products and services that are important to the

external and internal customer

Bernhard.rm
 The core quality improvement
strategies
Create new and innovative products

Install new and innovative processes

Improve existing products

Improve exiting processes

Everything we do in the name of quality
must concretely support one or more
of these agendas, or it is pointless!!
 Implementing Change
Preparatory steps for implementation
Establish a climate suitable for action
Drive out fear
Provide resources needed
Understand process
Cause and effect relationships
Potential problems
Know how and what to measure
What to measure
Where along the process
What equipment should be used to measure
Eliminate major sources of variation
 Some illustrations of
Jurans philosophy
Over 80% of problems are management
controllable and 20% are employee
controllable
Breakthrough is achieved project by
project
Continually concentrate on the vital few
instead of the trivial many
Emphasizes habit of annual improvement
 Some illustrations of Jurans
philosophy (continued)
Knowledge of how to make improvements
must be given to all members of
management team
Quest for quality is shared responsibility for
all managers
Emphasizes management teams to attack and
solve problems
Annual cost of quality for most companies
ranges from 5% to 15% of net sales
 Juran Steps in The
Breakthrough Sequence
Proof of the need
Project identification
Organizing for improvement
Organization for diagnosis
Diagnosis - breakthrough in knowledge
Remedial action on the findings
Breakthrough in cultural resistance to
change
Control at the new level
http://www.youtube.com/watch?v=GHvnIm9UEoQ

A fault in the interpretation of observations, seen

everywhere, is to suppose that every event
(defect, mistake, accident) is attributable to
someone (usually the one nearest at hand), or is
related to some special event.

The fact is that most troubles with service and

production lie in the system.

W. Edwards Deming
Out of the Crisis (1986)
 Some illustrations of
Demings philosophy
Why is it that productivity increases
as quality increases?
Quality is improved by improvement of
the process
Quality control does not mean
achieving perfection.
There is much talk about how to get
employees involved with quality...the
big problem is how to get management
involved
Deming_Questions.asf
 Demings 14 Points
Create constancy of purpose
Adopt the new philosophy
Cease dependence on mass inspection
End practice of awarding business on basis
of price only
Constantly improve system of production
and service
Institute modern methods of training
Institute modern methods of supervision
 Demings 14 Points (continued)
Drive out fear
Break down barriers
Eliminate asking for new levels of productivity
without providing methods
Eliminate work standards that prescribe numerical
quotas
Remove barriers that stand between employee and
his right to pride of workmanship
Institute a vigorous program of education and
retraining
Create structure in top management that will push
every day on the above 13 points

Lessons learned from the Deming Cup winners SUBESP.mp4

 Alcoa
Benchmark vs. theoretical limit
Pursuit of excellence is a habit like breathing
and these ideas are not limited by geography
or capital availability
Cost, Safety, Quality and Time
ABS Alcoa Business Systems consists of
Process Management, Infrastructure, People
and Customer
 Summary
Operational excellence is a management process
The focus of efforts is in the process, not the individual
Firms should be committed over the long term to continually improve
Note: Deming visited Japan in the 50s and it took over 20 years for Japan
to be truly accepted as world class quality producer.
The SPC approach to quality control focuses on understanding and
controlling the process.
The idea: a healthy, in-control process produces predictable outputs.
Control charts define and measure the concept of statistical control;
predictability is necessary (but not sufficient) to produce consistent
levels of quality.
Other steps are problem solving and the continuous improvement cycle.