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Business Question

Description

* The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

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* Submissions without this cover page will NOT be acceptedKeller, P. A., & Pyzdek, T. (2013). The Handbook for Quality Management, Second Edition: A Complete Guide to Operational Excellence. McGraw-Hill Education.add more sources to this.

Chapter 1
Business-Integrated Quality Systems

Business-Integrated Quality Systems

Organizational theory
According to the text:
• Organizations exist because they serve a useful
purpose.
• The transaction-cost theory of a firm (Coase, 1937)
postulates that there are costs associated with
market transactions, and organizations prosper
only when they provide a cost advantage.

Business-Integrated Quality Systems
Organizational theory
According to the text:
• Transaction-cost theory offers a framework for
understanding limits on the size of a firm.
• As firms grow, it becomes more costly to organize
additional transactions within the firm, called
“decreasing returns to management.”

Business-Integrated Quality Systems

General Theory of Organization Structure
• A system of relationships that direct and allocate
resources
• These relationships can be viewed in different
ways, the most common is:
 Reporting relationship view

Business-Integrated Quality Systems
Different Types of Organizational Structures
• The Functional/Hierarchical Structure
• Matrix Organizations
• Cross-Functional Organization Structure
• Process- or Product-Based (Horizontal)
Organization Structures

Business-Integrated Quality Systems
The Functional/Hierarchical Structure
• Traditional structure is a command/control structure
that derives its beginnings from the military.
• Work is delegated from the top to the bottom.

Business-Integrated Quality Systems
The Functional/Hierarchical Structure
• Limitations of the hierarchical structure

 Can produce a “silo mentality” among those who work in
a particular stratum: they tend to see the company from
the perspective of an “accountant” or an “engineer” rather
than from a companywide perspective
 Cooperation is discouraged.
 Employees tend to think of their superiors as customers.
 Can results in resource allocation that does not optimally
meet the needs of external customers, who are generally
served by processes that cut across several different
functions.

Business-Integrated Quality Systems
Matrix Organizations
• “In a matrix organization the functional hierarchy
remains intact but a horizontal cross-functional team
structure is superimposed on the functional hierarchy.”

Business-Integrated Quality Systems
Cross-Functional Organization Structure

Business-Integrated Quality Systems
According to the text:
• Differences between cross-functional structures and
matrix structures
 Scope. Cross-functional organizations deal with companywide issues, while matrix organizations focus on specific
tasks, goals, or projects.
 Duration. Matrix organizations are temporary, while crossfunctional organizations are often permanent.

Business-Integrated Quality Systems
According to the text:
• Differences between cross-functional structures and
matrix structures

 Focus. Cross-functional organizations often deal with
external groups such as customers, society at large, or
regulators. Matrix organizations are typically focused on
internal concerns.
 Membership. Membership in cross-functional organizations
typically consists of high-level functional executives.
Membership in matrix organizations usually consists of
personnel with technical skills needed to complete a specific
task.

Business-Integrated Quality Systems
Process- or Product-Based (Horizontal) Organization
Structures
• “The basis of this organizational structure is the goal
of the work being organized, that is, the product or
service being created.”

Business-Integrated Quality Systems
• According to the text, there are five forms of organization.
These forms include:
 The Machine Organization. Classic bureaucracy, highly
formalized, specialized, and centralized, and dependent largely
on the standardization of work processes for coordination.
Common in stable and mature industries with mostly rationalized,
repetitive operating work (as in airlines, automobile companies,
retail banks).
 The Entrepreneurial Organization. Nonelaborated, flexible
structure, closely and personally controlled by the chief
executive, who coordinates by direct supervision. Common in
start-up and turn-around situations as well as in small business.

Business-Integrated Quality Systems
• According to the text, there are five forms of organization.
These forms include:
 The Professional Organization. Organized to carry out the
expert work in relatively stable settings, hence emphasizing the
standardization of skills and the pigeonholing of services to be
carried out by rather autonomous and influential specialists, with
the administrators serving for support more than exercising
control; common in hospitals, universities, and other skilled and
craft services.

Business-Integrated Quality Systems
• According to the text, there are five forms of organization.
These forms include:
 The Adhocracy Organization. Organized to carry out expert work
in highly dynamic settings, where the experts must work
cooperatively in project teams, coordinating the activities by
mutual adjustment, in flexible, usually matrix forms of structure;
found in “high technology” industries such as aerospace and in
project work such as filmmaking, as well as in organizations that
have to truncate their more machinelike mature operations in
order to concentrate on product development.

Business-Integrated Quality Systems
• According to the text, there are five forms of organization.
These forms include:
 The Diversified Organization. Any organization split into semiautonomous divisions to serve a diversity of markets, with the
“headquarters” relying on financial control systems to
standardize the outputs of the divisions, which tend to take on
the machine form.

Chapter 2
The Quality Function

The Quality Function

Juran Trilogy
• “Juran and Gryna (1988, p. 2.6) define the quality
function as “the entire collection of activities through
which we achieve fitness for use, no matter where
these activities are performed.””
• “Quality is thus influenced by, if not the responsibility
of, many different departments.”

The Quality Function
• Quality planning involves several steps:
 Define the customers.
 Determine the customer needs.
 Develop product and service features to meet
customer needs.
 Develop processes to deliver the product and
service features.
 Transfer the resulting plans to operational
personnel.

The Quality Function
• Quality control is defined by the text as:
 The process used by operational personnel to
ensure that their processes meet the product and
service requirements (defined during the planning
stage).
• Quality control is based on a feedback loop which
includes the following steps:
 Evaluate actual operating performance.
 Compare actual performance with goals.
 Act on the difference.

The Quality Function
• Quality improvement is defined by the text as:
 Aims to attain levels of performance that are
unprecedented—levels that are significantly better
than any past level.
• Quality management is defined by the text as:
 Is the process of identifying and administering the
activities necessary to achieve the organization’s
quality objectives.

The Quality Function

The Quality Function
• Two basic ways for organizations to be competitive
 Achieve superior perceived quality by developing a
set of product specifications and service standards
that more closely meet customer needs than
competitors
 Achieve superior conformance quality by being
more effective than your competitors in con forming
to the appropriate product specifications and
service standards.

The Quality Function
• Related business functions:
 Safety

 Safety problems arise when a product can cause a hazard to
others through its use.
 Safety should be a primary focus

 Regulatory issues
 Product liability

 Three legal theories of liability
 breach of warranty
 strict liability in tort
 negligence
 Two areas of law deal with liability
 Contract law
 Tort law

The Quality Function
Environmental Issues Relating to the Quality Function
Safety
• Connection between environmental issues and quality
function is the ISO 14000 standard.
• This standard covers six areas:

 Environmental management systems
 Environmental auditing
 Environmental performance evaluation
 Environmental labeling
 Life-cycle assessment
 Environmental aspects in product standards

The Quality Function
Environmental Issues Relating to the Quality Function
Safety
According to the text:
• ISO 14001 is a systems-based standard that gives
companies a blueprint for managing their impact on
the environment.
• The requirements fall into five main areas:

 Senior management shall articulate the company’s
environmental policy. The policy will include commitments
toward pollution prevention and continuous improvement of
the EMS. The policy will be available to the public.

The Quality Function
Environmental Issues Relating to the Quality Function
Safety
 Consistent with the environmental policy, you shall establish
and maintain procedures to identify significant environmental
aspects and their associated impacts. Procedures should
include legal and other requirements. Objectives and targets
will also be documented, including continual improvement
and pollution prevention.
 Each employee’s role and position must be clearly defined,
and all employees must be aware of the impact of their work
on the environment. Employees shall be adequately trained.

The Quality Function
Environmental Issues Relating to the Quality Function
Safety
 The EMS should be set up to facilitate internal
communication. To that end, all relevant documentation
should be easily available and usable, in either print or
electronic form.
 Organizations must continually monitor and document their
environ mental effects and periodically review them to
ensure continual improvement and the effectiveness of the
EMS.
 Management is responsible for an internal review of the EMS
on a regular basis.

Chapter 3
Approaches to Quality

Approaches to Quality
• Market influences that challenged the quality process
in the 1970s
 The growth of consumerism
 The growth of litigation over quality
 The growth of government regulation of quality
 The Japanese quality revolution

Approaches to Quality
Demings Approach
• According to the text, 14 point plan to make work
more enjoyable
 Create constancy of purpose for the improvement of

product and service, with the aim to become competitive,
stay in business, and provide jobs.
 Adopt the new philosophy of cooperation (win-win) in
which everybody wins. Put it into practice and teach it to
employees, customers, and suppliers.
 Cease dependence on mass inspection to achieve
quality. Improve the process and build quality into the
product in the first place.

Approaches to Quality
Demings Approach

 End the practice of awarding business on the basis of price
tag alone. Instead, minimize total cost in the long run. Move
toward a single supplier for any one item, on a long-term
relationship of loyalty and trust.
 Improve constantly and forever the system of production,
service, planning, or any activity. This will improve quality and
productivity and thus constantly decrease costs.
 Institute training for skills.
 Adopt and institute leadership for the management of people,
recognizing their different abilities, capabilities, and
aspirations. The aim of leadership should be to help people,
machines, and gadgets do a better job. Leadership of
management is in need of overhaul as well as leadership of
production workers.

Approaches to Quality
Demings Approach

 Eliminate fear and build trust so that everyone can work
effectively.
 Break down barriers between departments. Abolish competition
and build a win-win system of cooperation within the
organization. People in research, design, sales, and production
must work as a team to foresee problems of production and use
that might be encountered with the product or service.
 Eliminate slogans, exhortations, and targets asking for zero
defects or new levels of productivity. Such exhortations only
create adversarial relationships, as the bulk of the causes of low
quality and low productivity belong to the system and thus lie
beyond the power of the workforce.

Approaches to Quality
Demings Approach
 Eliminate numerical goals, numerical quotas, and management
by objectives. Substitute leadership.
 Remove barriers that rob people of joy in their work. This will
mean abolishing the annual rating or merit system that ranks
people and creates competition and conflict.
 Institute a vigorous program of education and self-improvement.
 Put everybody in the company to work to accomplish the
transformation. The transformation is everybody’s job.

Approaches to Quality
Total Quality Control in Japan
• Japanese quality control management the following six
areas:
 Quality first
 Consumer orientation
 Break down the barrier of sectionalism
 Facts and data
 Respect for humanity as a management philosophy
 Cross-functional management

Approaches to Quality
ISO 9000 Series
• ISO 9000 series is the best known system of quality
standards.
• This series is published by the International
Organization for Standardization or ISO.
• Initially based on the U.S. Department of Defense MilQ-9858, released in 1959.
• ISO 9000 is a minimum quality standard.

Approaches to Quality
ISO 9000 Series
• ISO 9000:2000 includes eight quality principles
 Customer focus
 Leadership
 Involvement of people
 Process approach
 System approach to management
 Continual improvement
 Factual approach to decision-making
 Mutually beneficial supplier relationships

Approaches to Quality
Quality Awards
• Awards are given for outstanding quality. These
awards include:
 Malcolm Baldrige National Quality Award
 Deming Prize
 European Quality Award

Approaches to Quality
Six Sigma
• Six Sigma addresses total quality management
issues
 Focus
 Organizational support and infrastructure
 Methodology
 Training
• “The ultimate goal is data-driven decision making at
all levels of the organization, focused on benefits to
their three stakeholder groups: customers,
shareholders, and employees.”

Chapter 4
Customer-Focuses Organizations

Customer-Focused Organization
• Importance of quality has been constantly changing in
organizations.
• Customer-driven organizations have the following
similar traits:
 Flattened hierarchies
 Adaptable processes
 Effective communications
 Measuring results
 Rewarding employees

Customer-Focused Organization
• Flattened hierarchies
 “When customers are the focus, a larger
percentage of the resources are directly or
indirectly involved with customers (see Figure 4.2),
reducing the number of bureaucratic layers in the
organization structure.”
 “Employees will be empowered to make decisions
that immediately address customer issues,
reducing the need for structured oversight.”
 “Departments focus on single functions.”

Customer-Focused Organization
• Adaptable processes
 “Customers’ demands are at times unpredictable,
requiring adaptability and potential risk.”
 “Customer-driven organizations create adaptable
systems that remove bureaucratic impediments
such as formal approval mechanisms or excessive
dependence on written procedures.”
 “Employees are encouraged to act on their own
best judgments.”
 “If the organization’s employees are unionized, the
changing roles will require union partnering in the
transformation process. “

Customer-Focused Organization
• Effective communications
 The leadership of the organization must market
their ideas for the organization.
 Senior leaders must be on their best behavior.
 These leaders must be committed to their vision
and represent that vision in their behavior.

Customer-Focused Organization
• Measuring results
 Must verify that the company is delivering on the
promises the company made to customers,
shareholders, and employees.
 These results become the basis for improvements,
process changes, etc.
 This data must be made available to those people
who need it fast.

Customer-Focused Organization
• Rewarding employees
 Employees should be treated equally.
 “Recognizing exceptional performance or effort
should be done in a way that encourages
cooperation and team spirit, such as parties and
public expressions of appreciation.”

Customer-Focused Organization
• According to the text
 The common thread in the evolution of quality
management is that attention to quality has moved
progressively further up in the organizational
hierarchy.
 Quality was first considered a matter for the line
worker, then the inspector, then the supervisor, the
engineer, the middle manager and, today, for upper
management.

Customer-Focused Organization
• According to the text
 Quality will continue to increase in importance, in
tandem with customer relations. Ultimately, it is the
customer’s concern with quality that has been the
driving force behind quality’s increasing role in the
organization.

Chapter 5
Strategic Planning

Strategic Planning
Organizational Vision
According to the text:
• Organizational leaders are responsible for defining
the organization’s vision.
• Defining the vision requires developing a mental
image of the organization at a future time.
• The future organization will more closely
approximate the ideal organization, where “ideal” is
defined as that organization which completely
achieves the organization’s values.

Strategic Planning
Organizational Vision
Converting abstract visions into concrete ideas
includes:
• Living the vision
 Leaders lead by example
• Tell stories

Strategic Planning
Strategy Development
• The traditional strategy development analysis is the
comparison
 Strengths and Weaknesses to external Opportunities and
Threats (SWOT).

• “Outside opportunities are exploited by inside
strengths, while threats are avoided (or addressed)
and weaknesses circumvented (or addressed).”
• “Opportunities and threats are identified by
understanding customers and their markets. Internal
strengths and weaknesses are evaluated through
rigorous organizational assessments.”

Strategic Planning
Strategy Development

Strategic Planning
Strategy Styles
• Four categories of strategy style
 Classical
 Traditional approach to long-term planning
 Adaptive
 Flexible approach that allows experimentation
 Shaping
 Shape future markets
 Visionary
 Can both shape and predict future markets

Strategic Planning
Possibilities-Based Strategic Decisions
• Seven steps to strategy making
 Frame a choice
 Generate possibilities
 Specify conditions
 Identify barriers
 Design tests
 Conduct the tests
 Make the choice

Strategic Planning
Strategic Development Using Constraint Theory
• “Constraint management acknowledges that quality
is but one important element in the business
equation.”
• “Constraint management seeks to help managers at
all levels of an organization maintain proper focus on
the factors that are most critical to overall success:
system constraints.”
• “In some systems, these might be quality related.”

Strategic Planning
Strategic Development Using Constraint Theory*
• Different system constraints
 Systems approach
 Systems thinking
 System optimization versus Process
Improvement
 Systems as chains

Strategic Planning
Basic Constraint Management Principles and Concepts
• Theories are either descriptive or prescriptive.
 Descriptive theories tells things the way they are.
 Prescriptive theories describe and guides through
prescribed actions.
• Constraints are defined by the text as
 anything that limits a system (company or
agency) in reaching its goal (Goldratt, 1990, pp.
56–57)

Strategic Planning
Basic Constraint Management Principles and Concepts
• Types of constraints
 Market
 Resource
 Material
 Supplier/vendor
 Financial
 Knowledge/competence
 Policy

Strategic Planning
Basic Constraint Management Principles and Concepts
• According to the text, there are four underlying
assumptions:

 Every system has a goal and a finite set of necessary
conditions that must be satisfied to achieve that goal.
Effective effort to improve system performance is not
possible without a clear understanding and consensus
about what the goal and necessary conditions are.
 The sum of a system’s local optima does not equal the
global system optimum. In other words, the most effective
system does not come from maximizing the efficiency of
each system component individually, without regard to its
interaction with other components.

Strategic Planning
Goal and Necessary Conditions

Strategic Planning
Goal and Necessary Conditions
• Logical Thinking Process
 Components of this process include:
 The Current Reality Tree (CRT)
 The “Evaporating Cloud”
 The Future Reality Tree (FRT)
 The Negative Branch (NB)
 The Prerequisite Tree (PRT)
 The Transition Tree (TT)

Chapter 6
Understanding Customer Expectations
and Needs

Understanding Customer Expectations and
Needs
According to the text:
• Competitive pressure will constantly raise customer
expectations.
• Today’s exciting quality is tomorrow’s basic quality.
• Firms that seek to lead the market must innovate
constantly.
• Conversely, firms that seek to offer standard quality
must constantly research

Understanding Customer Expectations and
Needs
Customer Classifications
• Customers are classified in different categories
• The determining factor is if the relationship involves
information transfer across the organization.
• These categories are:

 External
 Exchange of products or services that the organization
does not already possess.
 Internal
 Resource being exchanged does not transfer out of the
organization.

Understanding Customer Expectations and
Needs
Customer Classifications
 End user
 Internal or external customer that actually uses the
service.
 Transfer agents
 Intermediary between the end user and the producer of
the product or service.
 Maintenance customers
 Repair or replace products that do not operate. Also,
perform routine maintenance on existing products.

Understanding Customer Expectations and
Needs
Customer Identification and Segmentation
• Customer identification and segmentation are
important parts of marketing strategy.
• “The basis of customer identification and segmentation
is that the firm cannot be all things to all people.”
 “There are many possible reasons this might be so:
 The customers’ buying requirements vary
 Customers are geographically dispersed
 The competition can serve some market needs better
than you, etc.”

Understanding Customer Expectations and
Needs
Customer Identification and Segmentation
• According to the text, there is a three-step strategy
which can be used. It is:
•

Identify homogenous market segments. Identify segmentation
variables and segment the market. Develop profiles of the
resulting segments.
• Decide which market segments you wish to enter. Evaluate
the attractiveness of each segment. Select the target
segment(s).
• Develop a product or service positioned to appeal to the
special requirements of the selected market segments.
Identify possible positioning concepts for each target
segment. Select, develop, and communicate the chosen
positioning concept.

Understanding Customer Expectations and
Needs
Customer Identification and Segmentation
• Organizations seek to identify customers similar likes
and dislikes.
• Three patterns of preferences
 Homogenous preferences
 Diffused preferences
 Clustered preferences

Understanding Customer Expectations and
Needs
Collecting Data on Customer Expectations and Needs
• “The primary objective of this data collection is the
evaluation of the customers’ perception of the firm’s
product and service quality and its impact on customer
satisfaction.”
• Strategies for obtaining customer information

 Customer service and support
 “A key source of customer information is your sales, service,
and support staff who communicate with customers on a daily
basis, sometimes referred to as a customer contact workers
(CCW).”
 “The nature of the contact can be face-to-face encounters,
telephone communication, or written correspondence such as
emails or online chats.”

Understanding Customer Expectations and
Needs
Collecting Data on Customer Expectations and Needs
 Surveys
 Initial planning of the questionnaire
 Developing the measures
 Designing the sample
 Developing and testing the questionnaire
 Producing the questionnaire
 Preparing and distributing mailing materials
 Collecting data
 Reducing the data to forms that can be analyzed
 Analyzing the data
 Case studies

Understanding Customer Expectations and
Needs
Collecting Data on Customer Expectations and Needs
According to the text:
 Field experiments
 In quality management, focus groups are useful
to:
 Gather insight useful in the strategic planning
process.
 Generate ideas for survey questionnaires.
 Develop needs assessment, e.g., training needs.
 Test new program ideas.
 Determine customer decision criteria.
 Recruit new customers.

Chapter 7
Benchmarking

Benchmarking
According to the text:
• Benchmarking is a method for developing requirements
and setting goals.
• Benchmarking can be defined as measuring your
performance against that of best-in-class companies,
determining how the best-in-class achieve those
performance levels, and using the information as the basis
for your own company’s targets, strategies, and
implementation.
• Benchmarking involves research into the best practices at
the industry, firm, or process level.

Benchmarking
According to the text:
• The benefits of competitive benchmarking include:

 Creating a culture that values continuous improvement to achieve
excellence
 Enhancing creativity by devaluing the not-invented-here syndrome
 Increasing sensitivity to changes in the external environment
 Shifting the corporate mind-set from relative complacency to a
strong sense of urgency for ongoing improvement
 Focusing resources through performance targets set with
employee input
 Prioritizing the areas that need improvement
 Sharing the best practices between benchmarking partners

Benchmarking
• The benchmarking process requires learning from others.
• Benchmarking cannot give organizations a sustained
competitive advantage.
• Benchmarking should never be the primary strategy for
improvement in the organization.

Benchmarking
• Competitive analysis is a form of benchmarking that is
confined to one industry.
• Camp (1989) lists the following steps for the benchmarking
process:
 1. Planning
 1.1. Identify what is to be benchmarked
 1.2. Identify comparative companies
 1.3. Determine data collection method and collect data
 2. Analysis
 2.1. Determine current performance “gap”
 2.2. Project future performance levels
 3. Integration
 3.1. Communicate benchmark findings and gain acceptance
 3.2. Establish functional goals

Benchmarking

 4. Action
 4.1. Develop action plans
 4.2. Implement specific actions and monitor progress
 4.3. Recalibrate benchmarks
 5. Maturity
 5.1. Leadership position attained
 5.2. Practices fully integrated into process

• The first step in benchmarking is deciding what to
benchmark.

Benchmarking

Getting Started with Benchmarking
• “The essence of benchmarking is the acquisition of
information.”
• “The process begins with the identification of the
process that is to be benchmarked.”
• “The process chosen should be one that will have a
major impact on the success of the business.”

Benchmarking

Getting Started with Benchmarking
• “Once the process has been identified, contact a
business library and request a search for the
information relating to your area of interest.”
• “The search is, of course, not random.”
• “The organization is looking for the best of the best, not
the average firm.

Benchmarking
Why Benchmarking Efforts Fails
• Benchmarking fails because of some of the following
reasons:
 Lack of sponsorship
 Wrong people on team
 Teams don’t understand their work completely
 Teams take on too much
 Lack of long-term management commitment
 Focusing on metrics rather than processes

Benchmarking
Why Benchmarking Efforts Fails
• Benchmarking fails because of some of the following
reasons (continued):
 Not positioning benchmarking within a larger strategy
 Misunderstanding the organization’s mission, goals, and
objectives
 Assuming every project requires a site visit
 Failure to monitor progress

Chapter 8
Organizational Assessment

Organizational Assessment
Assessing Quality Culture
• Two of the most common ways to assess quality are:
 Focus groups
 Questionnaires

 The areas addressed generally cover attitudes,
perceptions, and activities within the organization that
impact quality.
 Because of the sensitive nature of cultural assessment,
anonymity is usually necessary.
 The organization should develop its own set of questions,
as the generation of questions is an education in itself.
 The critical incident technique is a common method for
developing questions that produce favorable results.

Organizational Assessment
Organizational Metrics
• Organizational metrics are often referred to as Key
Performance Indicators (KPI).
 These metrics are developed to understand the
overall health of an organization.
• Organizations should choose metrics that guide
behavior or establish strategy.
• Poorly chosen metrics can lead the organization away
from the goals established.

Organizational Assessment
Organizational Metrics
According to the text:
• Rose (1995) lists the following attributes of good
metrics:

 They are customer centered and focused on indicators that
provide value to customers, such as product quality, service
dependability, and timeliness of delivery, or are associated with
internal work processes that address system cost reduction,
waste reduction, coordination and teamwork, innovation, and
customer satisfaction.
 They measure performance across time, which shows trends
rather than snapshots.

Organizational Assessment
Organizational Metrics
According to the text:
 They provide direct information at the level at which they are
applied. No further processing or analysis is required to
determine meaning.
 They are linked with the organization’s mission, strategies, and
actions. They contribute to organizational direction and control.
 They are collaboratively developed by teams of people who
provide, collect, process, and use the data.

Organizational Assessment
Organizational Metrics
According to the text:
• Traditional KPI are established within four broad
categories (Kaplan and Norton, 1992):
 Customer based
 Internal process
 Learning and growth
 Financial

Organizational Assessment
Cost of Quality
• “Today, quality cost accounting systems are part of
every modern organization’s quality improvement
strategy.”
• “The fundamental principle of the cost of quality is that
any cost that would not have been expended if quality
were perfect is a cost of quality.

 This includes such obvious costs as scrap and rework, but it
also includes many costs that are far less obvious, such as the
cost of reordering to replace defective material.”

Organizational Assessment
Cost of Quality
According to the text
• Analyzing quality costs requires a suitable base, so that
the quality cost is analyzed as a percent of an
appropriate base:
 Generally, a suitable base is related to quality costs
in a meaningful way.

Organizational Assessment

Organizational Assessment
Cost of Quality
According to the text
• Several bases are often necessary to get a complete
picture of the relative magnitude of quality costs. Some
commonly used bases are (Campanella, 1990, p. 26):

 A labor base (such as total labor, direct labor, or applied labor)
 A cost base (such as shop cost, operating cost, or total
material and labor)
 A sales base (such as net sales billed, or sales value of
finished goods)
 A unit base (such as the number of units produced, or the
volume of output)

Chapter 9
Quantifying Process Variation

Quantifying Process Variation
Descriptive Statistics
• “Descriptive statistics are computed to describe
properties of empirical distributions, that is, distributions
of data from samples.”
• “There are three areas of interest:
 The distribution’s location or central tendency
 Its dispersion
 Its shape”

Quantifying Process Variation
Enumerative and Analytic Studies
According to the text
• Deming (1975) defines enumerative and analytic
studies as follows:
 Enumerative study. A study in which action will be
taken on the universe.
 Analytic study. A study in which action will be taken
on a process to improve performance in the future.
• The term universe is somewhat synonymous with
population: the entire group of interest.

Quantifying Process Variation
Enumerative and Analytic Studies
Common Descriptive Statistics

Quantifying Process Variation

Quantifying Process Variation
Acceptance Sampling
• Acceptance sampling
 Quality control technique applied to discrete lots or
batches
 Lot is a collection of physical things
 Batch is usually applied to chemicals
• Acceptance sampling schemes has three elements
 The sampling plan
 The action to be taken on the current lot or batch
 Action to be taken in the future

Quantifying Process Variation

Acceptance Sampling
• “Acceptance sampling methods are generally based on
ANSI/ASQ Z1.4 (formerly MIL-STD 105E), or variants
of the plan known as Dodge-Romig Sampling tables.”
• Acceptance sampling is fundamentally flawed and
should not be used in the modern organization.
• Samples are typically not from a homogenous sample.

Quantifying Process Variation

Statistical Control Charts
• Two categories of control charts
 Those for use with variable or continuous data (e.g.,
measurements)
 Those for use with attributes data (e.g., counts)
• Basis for all control charts is the rational subgroup.

Quantifying Process Variation

Statistical Control Charts
• Rational subgroups have the following properties:
 The observations within the subgroup are
independent, which implies that none of the
observations influences or results from any other.
 The observations within a subgroup are from a
single stable process.
 The subgroups are formed from time-ordered data
collection.

Quantifying Process Variation
Process Capability Studies
According to the text:
•

•

Process capability analysis is a two-stage process that involves:
 Bringing a process into a state of statistical control for a
reasonable period of time
 Comparing the long-term process performance to management
or engineering requirements
Process capability analysis can be done with either attribute data
or continuous data if, and only if, the process is in statistical
control, and has been for a reasonable period of time.

Application of process capability methods to processes that are not
in statistical control results in unreliable estimates of process
capability and should never be done.

Quantifying Process Variation
Process Capability Studies
• Performing a process capability study includes the
following steps:
 Select a candidate for the study
 Define the process
 Procure resources for the study
 Evaluate the measurement system
 Prepare a control plan
 Select a method for the analysis
 Gather and analyze the data
 Track down and remove special causes
 Estimate the process capability
 Establish a plan for continuous process improvement

Chapter 10
Quality Audits

Quality Audits

According to the text
• An audit is a comparison of observed activities and/or
results with documented requirements.
• The evidence provided from audits forms the basis of
improvement in either the element audited, or in the
requirements.

Quality Audits

According to the text
• ISO 19011, Guidelines for Auditing Quality Systems,
defines a quality audit as a
systematic, independent and documented process for obtaining
audit evidence (records, statements of fact or other information,
which are relevant to the audit criteria and verifiable) and
evaluating it objectively to determine the extent to which the audit
criteria (set of policies, procedures or requirements) are fulfilled.

Quality Audits

• Three types of quality audits
 Systems

 System audits are the broadest audits in terms of scope.
 Quality systems are the most commonly audited.

 Products

 Product audits are performed to find out if the system did its
job and produced the results it was expected to produce.

 Processes

 “Process audits are conducted to verify that the inputs, actions,
and outputs of a given process match the requirements.”

Quality Audits
• Product Audits
 Conducted from the customer perspective
 “ISO 9000:2000 divides products into four generic
categories:
 Hardware
 Software
 Processed materials
 Services”

 “ISO 9000 defines four facets of product quality:

 quality due to defining the product to meet marketplace
requirements
 quality due to design
 quality due to conformance with the design
 quality due to product support.”

Quality Audits
• Process Audits
 Specific activities in organizational units
 “Process audits compare the actual operations with the
documented requirements of the operations.”
 “Process audits should begin with an understanding of
how the process is supposed to operate.”

Quality Audits
• System Audits
 Arrangement of processes
 “Systems audits concentrate on the relationships
between the various processes in the system.”
 “In the case of quality audits, the concern is with the
quality system. The quality system is the set of all
activities designed to ensure that all important quality
requirements are determined, documented, and
followed.”

Quality Audits

Planning and Conducting the Audit
• Audits are usually pre-arranged.
• Pre-arranged audits are less disruptive to the operations
cycle.
• Documentation can be reviewed prior to the audit onsite.

Quality Audits

Planning and Conducting the Audit
• The following are timings for audits:
 Pre-award audit
 Surveillance audit
 Contract renewal
 Problem resolution
 In-process observation

Quality Audits
Planning and Conducting the Audit
According to the text, the following are steps in preparing the
audit:
• Choose the audit team. Verify that no team member has
a conflict of interest.
• Meet with the audit team and review internal audit
procedures.
• Discuss forms to be used and procedures to be followed
during the audit.
• Perform a desk audit of the quality manual and other
documentation to verify the scope of the audit and
provide an estimate of the duration of the audit.

Quality Audits
Planning and Conducting the Audit
•
•
•
•
•
•
•
•
•

Assign audit subteams to their respective audit paths.
Contact the auditee and schedule the audit.
Perform the audit.
Write corrective action requests (CARs) and the audit
summary report, listing the CARs in the audit summary.
Conduct a closing meeting (exit briefing).
Issue the audit summary report.
Present the complete audit findings, including all notes,
reports, checklists, CARs, etc., to the quality manager.
Prepare a final audit report.
Follow up on CARs.

Quality Audits
Planning and Conducting the Audit
• Formal audits include:

 Audit purpose and scope
 Audit observations
 Conclusions and recommendations
 Objectives of the audit
 Auditor, auditee, and third-party identification
 Audit dates
 Audit standards used
 Audit team members
 Auditee personnel involved
 Statements of omission
 Qualified opinions
 Issues for future audits
 Auditee comments on the report (if applicable)
 Supplementary appendices

Quality Audits
Product, Process, and Materials Control
According to the text
•

Work instructions must establish quantitative or qualitative means for
determining that each operation has been done satisfactorily.

•

These criteria must also be suitable for use with related inspections or
tests, because work instructions serve operating personnel,
supervisors, inspectors, managers, and even customers.

•

Work instructions include the documented procedures that define how
production, installation, or servicing will take place.

Quality Audits
Product, Process, and Materials Control
Work instructions should include:
•
•
•
•
•
•
•
•
•
•

The manner in which the work will be done
The equipment needed to do the work
The working environment
Compliance with other procedures and documents
Process parameters to be monitored and how they will be
monitored (e.g., checklists, control charts)
Product characteristics to be monitored and how they will be
Monitored
Workmanship criteria
Maintenance procedures
Verification methods (process qualification)

Quality Audits

Classification of Characteristics
• Characteristics are usually classified as:
 Critical
 Major
 Minor
 Incidental

Chapter 12
Effective Change Management

Effective Change Management

According to the text
• Effective improvement requires changing the
fundamentals of the process or product.
• Experts agree: change is difficult, disruptive, expensive,
and a major cause of error.

Effective Change Management

• Common reasons organizations decide to make changes
 Leadership
 Competition
 Technological advances
 Training requirements
 Rules and regulations
 Customer demands

Effective Change Management
According to the text
• Change will meet resistance for many different reasons.
• Change is a balance between the stable environment
and the need to implement TQM. Change can be
painful while it provides many improvements.
• There are four times change can most readily be made
by the leader: when the leader is new on the job,
receives new training, or has new technology, or when
outside pressures demand change.
• Leaders must learn to implement change they deem
necessary, change suggested from above their level,
and change demanded from above their level.

Effective Change Management
According to the text
• There are all kinds of reaction to change. Some
individuals will resist, some will accept, and others will
have mixed reactions.
• There is a standard process that supports the
implementation of change. Some of the key
requirements for change are leadership, empathy, and
solid communications.
• It is important that each leader become a change
leader. This requires self-analysis and the will to
change those things requiring change.

Effective Change Management

Roles
• Four roles in the change process
 Official change agent
 Sponsors
 Advocate
 Informal change agent

Effective Change Management

Goals
• Three goals of change
 Change the way people think or act in the
organization.
 Change the norms.
 Changing the organization’s systems or
processes.

Effective Change Management
Mechanisms Used by Change Agents
• Building buy-in
• External roadblocks
• Individual barriers to change
 People may be apprehensive or even fearful of
change.
 It is natural, perhaps even productive, to be
skeptical of change.

Effective Change Management
Mechanisms Used by Change Agents

Effective Change Management
Mechanisms Used by Change Agents
• Buy-in can be achieved by using the following
steps:
 Define key stakeholders
 “Measure baseline level of buy-in for each key
stakeholder. How committed are they to
change?”
 Analyze buy-in reducers and boosters for each
key stakeholder or stakeholder group.
 Improve by addressing issues.
 Control with a plan to maintain buy-in.

Effective Change Management
Mechanisms Used by Change Agents
• Buy-in can be measured by:
 Hostility
 Dissent
 Acceptance
 Support
 Buy-in

Effective Change Management
Mechanisms Used by Change Agents
• Stakeholder buy-in can be reduced by:
 Unclear goals
 No personal benefit
 Predetermined solutions
 Lack of communication
 Too many priorities
 Short-term focus
 No accountability
 Disagreement on who the customer is
 Low probability of implementation
 In sufficient resources
 Midstream change in direction or scope

Effective Change Management
Project Deployment
• Selecting projects
 Pareto Prioritization Index
 Prioritization Matrix Approach to Project
Selection
 Project Selection Using Constraint Theory
 Comparison of TOC with Traditional
Approaches
 Using Constraint Information to Focus Six
Sigma Projects

Effective Change Management
Project Deployment
• Selecting projects
 DMAIC/DMADV Methodology
 Five-step methodology
 Define
 Measure
 Analyze
 Improve
 Control

Chapter 13
Define Stage

Define Stage
According to the text
• The Define stage includes the following objectives
(Keller, 2011a):
 Project definition. Define the project’s scope, goals,
and objectives; its team members and sponsors;
and its schedule and deliverables.
 Top-level process definition. Define the
stakeholders, inputs and outputs, and broad
functions.
 Team formation. Assemble highly capable team from
the key stakeholder groups; create common
understanding of issues and benefits for project.

Define Stage
• Project Definition

 Requires understanding of the business and the various roles of
the stakeholders and customers.
 Stretch goals
 Goals that go beyond “what was foreseeable with the current
corporate structure, resources, and/or technology”
 “The idea was to expand beyond incremental improvements, to
rethink the business, operation, or process to a point where orders
of magnitude improvements could be achieved.”
 “Bear in mind that an organization going from 4 sigma to 6 sigma
needs to reduce defects per million opportunities (DPMO) from
6210 to 3.4 (a 99.95 percent reduction).”

Define Stage

• Work Breakdown Structure
 “Special purpose tree diagram used to break down
problems or projects into their components”
 Reduces large processes down to small processes
 Limit the project to just a few categories

Define Stage
• Pareto Diagrams
 “the process of ranking opportunities to determine
which of many potential opportunities should be
pursued first.”
 According to the following steps are used for Pareto
analysis
 Determine the classifications (Pareto categories) for the

graph.
 Select a time interval for analysis.
 Determine the total occurrences (i.e., cost, defect counts, etc.)
for each category.
 Compute the percentage for each category by dividing the
category total by the grand total and multiplying by 100.

Define Stage

 Rank order the categories from the largest total occurrences to
the smallest.
 Construct a chart with the left vertical axis scaled from 0 to at
least the grand total. Put an appropriate label on the axis.
 Label the horizontal axis with the category names.
 Draw in bars representing the amount of each category.
 Draw a line that shows the cumulative percentage column of
the Pareto analysis table.

Define Stage
• Project Charters
 Charters include:
 Project goals
 Objectives
 Deliverables
 Charter is a contract between the team and the
sponsors.
 Charters have key elements:
 what, who, why, and when

Define Stage
• Project Scheduling
 Project scheduling systems is used to:
 Aid in planning and control of projects.
 Determine the feasibility of meeting specified
deadlines.
 Identify the most likely bottlenecks in a project.
 Evaluate the effects of changes in the project
requirements or schedule.
 Evaluate the effects of deviating from schedule.
 Evaluate the effect of diverting resources from the
project, or redirecting additional resources to the
project.

Define Stage

• Project Scheduling
 Project scheduling includes four phases

 Planning
 Breaking the project down into activities
 Scheduling
 Construct a time chart of all activities relative to other
activities in the project.
 Improvement
 Information obtained while constructing the schedule can
be used for improvement of the project.
 Controlling
 the use of the network diagram and time chart for making
periodic progress assessments

Define Stage

Team Formation
 Team members are selected from certain stakeholder
groups.
 Good teams are limited to five to seven members.
 Responsibilities of the team could include:
 Take responsibility for success
 Follow through on commitments
 Contribute to discussions
 Actively listen
 Communicate clearly
 Provide constructive feedback, especially to team leader
 Accept feedback

Define Stage

Team Formation
 Team leaders should adopt the following behaviors:

 Avoid arguing for your own position.
 Avoid “win-lose” stalemates in the discussion of opinions.
 Avoid changing your mind only to avoid conflict and to reach
agreement and harmony.
 Avoid conflict-reducing techniques such as the majority vote,
averaging, bargaining, coin-flipping, trading out, and the like.
 View differences of opinion as both natural and helpful rather
than as a hindrance in decision making.
 View initial agreement as suspect.

Define Stage

Team Formation
 Team leaders should adopt the following behaviors:

 Avoid conflict-reducing techniques such as the majority vote,
averaging, bargaining, coin-flipping, trading out, and the like.
 View differences of opinion as both natural and helpful rather
than as a hindrance in decision making.
 View initial agreement as suspect.
 Avoid subtle forms of influence and decision modification.
 Be willing to entertain the possibility that your group can
achieve all the fore going and actually excel at its task.

Define Stage

Stages in Group Development
 The stages of group development according to Bruce
W. Tuckman are;
 Forming
 Storming
 Norming
 Performing

Define Stage

Stages in Group Development
 Ways to deal with conflict includes:

 Do not tighten control or try to force members to conform to the
procedures or rules established during the forming stage. If
disputes over procedures arise, guide the group toward new
procedures based on a group consensus.
 Probe for the true reasons behind the conflict and negotiate a
more acceptable solution.
 Serve as a mediator between group members.
 Directly confront counterproductive behavior.
 Continue moving the group toward independence from its
leader.

Define Stage

Chapter 14
Measure Stage

Measure Stage
According to the text
• Measure stage objectives include (Keller, 2011a):

 Process definition. Define the process at a detailed level
including decision points and functions.
 Metric definition. Define metric to reliably establish process
estimates.
 Process baseline. Use the defined metrics to establish the
current state of the process, which should verify the
assumptions of the Define stage. Determine whether the
process is in statistical control.
 Measurement systems analysis. Quantify errors associated
with the metric.

Measure Stage
Process Definition
•

Process flowchart shows inputs, actions, and outputs of a system.
 Input
 “The factors of production or service: land, materials, labor,
equipment, and management.”
 Actions
 “The way in which the inputs are combined and
manipulated in order to add value. Actions include
procedures, handling, storage, transportation, and
processing.”
 Outputs
 “The products or services created by acting on the inputs.”
 “Outputs are delivered to the customer or other user.
Outputs also include unplanned and undesirable results,
such as scrap, rework, pollution, etc. Flowcharts should
contain these outputs as well.”

Measure Stage
Metric Definition
• “The project definition includes a statement of the
metric(s) that will be used to evaluate the process.”
• Choose metrics that will help the organization improve
customer satisfaction and business performance.
• Good metrics will provide input for database decision
making.
• “Metrics provide us with a statement of what is critical to
quality, cost, and/or scheduling; how these will be
measured and reported.”

Measure Stage
Establishing Process Baselines
• “The performance of the existing process must be
established via a baseline to ascertain how well the
current process meets the customer requirements and
validate the project justification noted in the Define
stage. ”
• Control charts are important at this stage so results of
improvement achieved can be properly estimated at a
later date.
• Obtaining customer feedback is important part of this
process.

Measure Stage
Measurement Systems Analysis
According to the text:
• A measurement is simply a numerical assignment to
something, usually a non-numerical element.
• Measurements convey certain information about the
relationship between the element and other elements.
• Measurement involves a theoretical domain, an area of
substantive concern represented as an empirical
relational system, and a domain represented by a
particular selected numerical relational system.

Measure Stage
Measurement Systems Analysis
• Four measurement scales

 Nominal
 Are not measurements; are category labels in numerical
form
 Ordinal
 Natural ordering of numbers
 Interval
 “Consist of measurements where the ratios of differences
are invariant.”
 Ratio
 “Are so-called because measurements of an object in two
different metrics are related to one another by an invariant
ratio.”

Measure Stage

Measure Stage
Measurement Systems Analysis
According to the text
• Good measurement systems have:
 First, it should pro duce a number that is “close” to
the actual property.
 Second, if the measurement system is applied
repeatedly to the same object, the measurements
produced should be close to one another; that is, it
should be repeatable.
 Third, the measurement system should be able to
produce accurate and consistent results over the
entire range of concern; that is, it should be linear.

Measure Stage
Measurement Systems Analysis
According to the text
• Good measurement systems have:
 Fourth, the measurement system should produce
the same results when used by any properly trained
individual; that is, the results should be reproducible.
 Finally, when applied to the same items the
measurement system should produce the same
results in the future as it did in the past; that is, it
should be stable.

Measure Stage
Measurement Systems Analysis
• Definitions

 Bias
 “The difference between the average measured value and
a reference value.”
 Calibration
 “Process of comparing measurements with standards.”
 Repeatability
 “Variation in measurements obtained with one
measurement instrument when used several times by one
appraiser, while measuring the identical characteristic on
the same part.”

Measure Stage
Measurement Systems Analysis
 Reproducibility
 “Variation in the average of the measurements made by
different appraisers using the same measuring instrument
when measuring the identical characteristic on the same
part.”
 Stability
 “The total variation in the measurements obtained with a
measurement system on the same master or parts when
measuring a single characteristic over an extended time
period.”
 Linearity
 “The difference in the bias values through the expected
operating range of the gage.”

Chapter 15
Analyze Stage

Analyze Stage

According to the text
• Analyze stage objectives include (Keller, 2011a):
 Value stream analysis to determine value-producing
activities
 Analyze sources of process variation
 Determine process drivers

Analyze Stage
Value Stream Analysis
According to the text
• Value stream analysis starts by defining the value of the
product or service in the eyes of the customer. Value is
alternatively defined as:
 Something the customer is willing to pay for
 An activity that changes form, fit, or function
 An activity that converts an input to an output
• Value is only relevant at a specific price and point in
time.

Analyze Stage
Value Stream Analysis
According to the text
• Once value has been determined for a given product or
service, its value stream can be identified.
• The value stream represents the steps taken to deliver the
specific product or service.
• Value streams may be generated a number of ways.
• A process map is a useful tool for displaying the value
streams, particularly when movement into functional
departments is displayed via swim lanes.

Analyze Stage
• Process steps:
 Steps that create value for the customer.
 Steps that create no customer value, but are required
by one or more required activities (including design,
order processing, production, and delivery
 Steps that create no customer value. They should and
can be eliminated immediately.

Analyze Stage
• Trying to improve efficiency can create waste in the
product value stream.
• “This batch-imposed waste is compounded if changes
occur in design or customer needs, as the work in progress
(WIP) or final good inventories require rework or become
scrap.”
• Common reasons to consider batches:
 When the cost of movement of material is significant
 When the setup time dominates the per item cycle time
 When the process is designed for multiple items

Analyze Stage
According to the text
• Setup time is defined as the time to change from the last
item of the previous order to the first good item of the next
order.
• Setup includes:
 Preparation
 Replacement
 Location
 Adjustment activities

Analyze Stage
Analyze Sources of Process Variation
• Quality function deployment (QFD)
 QFD has four phases:
 Organization phase
 Descriptive phase
 Breakthrough phase
 Implementation phase
 House of Quality
 “The result of when the requirement matrix is
enhanced by showing the correlation of the columns
with one another.”

Analyze Stage
Analyze Sources of Process Variation
• Cause and Effect Diagrams
 Fishbone diagrams
 “Cause-and-effect diagrams are tools that are used to
organize and graphically display all of the knowledge a
group has brainstormed related to a particular problem.”
 “The brainstormed ideas are categorized into rational
categories and subcategories.”
 “The cause-and-effect diagram is drawn to depict the
relationships of the data in each category and each of
its subcategories.”

Analyze Stage
Analyze Sources of Process Variation
• Scatter Diagrams
 “A plot of one variable versus another:
 The independent variable is shown on the horizontal
(bottom) axis
 The dependent variable is shown on the vertical
(side) axis.”
 “Scatter diagrams are used to evaluate the correlation
of one variable with the other.”

Analyze Stage
Analyze Sources of Process Variation
According to the text
 To constructing a scatter diagram:

 Gather several paired sets of observations, preferably 20 or
more. A paired set is one where the dependent variable can be
directly tied to the independent variable.
 Find the largest and smallest independent variable and the
largest and smallest dependent variable.
 Construct the vertical and horizontal axes so that the smallest
and largest values can be plotted.
 Plot the data by placing a mark at the point corresponding to
each X–Y pair. If more than one classification is used, you may
use different symbols to represent each group.

Analyze Stage

Determining Process Drivers
• “Process drivers refer to the factors that have the largest
influence on the process.”
• Process drivers include:
 Correlation and regression analysis
 Linear models
 Least-square fit
 Analysis of residuals
 Designed experiments

Chapter 16
Improve/Design Stage

Improve/Design Stage

According to the text
• The objectives of the Improve/Design stage include
(Keller, 2011a):
 Propose one or more solutions to sponsor; quantify
benefits of each; reach consensus on solution and
implement.
 Define and mitigate failure modes for new
process/design; define new operating/design
conditions.

Improve/Design Stage

According to the text
• The Improve stage involves the deployment of methods
to close the gap between the current process state and
the desired state.
• Methods implemented must also be verified in this
stage to ensure that the desired effects are achieved
and can be maintained.

Improve/Design Stage

Define New Operating/Design Conditions
• “The Improve stage involves the deployment of
methods to close the gap between the current process
state and the desired state.”
• “Methods implemented must also be verified in this
stage to ensure that the desired effects are achieved
and can be maintained.”

Improve/Design Stage
Define New Operating/Design Conditions
According to the text:
• “The Lean tools to reduce or eliminate non–value
added activities, including unnecessary movement of
personnel or material, are also deployed at this time.”
• The outcomes of space reduction include:

 Decreased distance from “supplier” to “customer.” Both
internal and external suppliers and customers are affected.
This relocation reduces the wastes of unnecessary
movement of material and wait time for material.

Improve/Design Stage
Define New Operating/Design Conditions
 Less departmentalization, more multifunction work cells. Within
company walls, you may reassign individuals so they work
within multifunctional work cells, rather than functional
departments.
 This improves the flow of the process, so work is not batched
up at each department. The work cell approach, in which each
process step is close in location to its next step, also increases
visibility of problems as the item moves from one step in the
process to the next.
 Reduced overhead costs and reduced need for new facilities.
As space is used more efficiently, overhead costs are reduced,
as is the need for new facilities as new equipment is brought
on.

Improve/Design Stage
Define New Operating/Design Conditions
• 5S comes from the Japanese business world.
• 5S includes:
 Sort
 Straighten
 Shine
 Standardize
 Sustain

Improve/Design Stage
Define New Operating/Design Conditions
• Four-step approach to reduce setup times
 Classify each setup step as either internal or
external.
 Convert internal steps to external steps.
 Reduce time for remaining internal steps.
 Eliminate adjustments

Improve/Design Stage
Define and Mitigate Failure Modes
• “Understanding process failure modes allows us to define
mitigation strategies to minimize the impact or occurrence
of failures.”
• “These mitigation strategies may result in new process
steps, optimal process settings, or process control
strategies to prevent failure.”

Improve/Design Stage
Define and Mitigate Failure Modes
• Three types of human errors:
 Inadvertent errors
 Technique errors
 Willful errors
•

Human errors occur often due to lack of attention.

Improve/Design Stage
Define and Mitigate Failure Modes
•

Inadvertent errors include:




There is usually no advance knowledge that an error is
imminent.
The incidence of error is relatively small. That is, the task is
normally performed without error.
The occurrence of errors is random, in a statistical sense.

• Inadvertent errors can be reduced by the following:
 Fool proofing
 Automation
 Ergonomics or human factors engineering

Improve/Design Stage
Define and Mitigate Failure Modes
• Technique errors share common features:
 They are unintentional.
 They are usually confined to a single characteristic
(e.g., cracks) or class of characteristics.
 They are often isolated to a few workers who
consistently fail.

Improve/Design Stage
Define and Mitigate Failure Modes
• Willful errors (sabotage) include:
 They are not random.
 They don’t “make sense” from an engineering point
of view.
 They are difficult to detect.
 Usually only a single worker is involved.
 They begin at once.
 They do not occur when an observer is present.

Improve/Design Stage

Define and Mitigate Failure Modes
• Failure Mode and Effects Analysis
 “Failure modes and effects analysis (FMEA), also
known as failure modes, effects, and criticality
analysis, is used to determine high risk functions or
product features based on the impact of a failure
and the likelihood that a failure could occur without
detection.”

Chapter 17
Control/Verify Stage

Control/Verify Stage

According to the text
• The objectives of the Control/Verify stage include
(Keller, 2011a):
 Standardize new procedures/product design
elements.
 Continually verify project deliverables.
 Document lessons learned.
 Once the process or system has been improved, we
set about to control it so that the improvements are
maintained.

Control/Verify Stage

Performance Evaluation
• “Evaluating team performance involves the same principles
as evaluating performance.”
• “Performance measures generally focus on group tasks,
rather than on internal group issues.”

Control/Verify Stage

Performance Evaluation
• Tangible performance measures include:
 Productivity
 Quality
 Cycle time
 Grievances
 Medical usage (e.g., sick days)
 Absenteeism
 Service
 Turnover
 Dismissals
 Counseling usage

Control/Verify Stage

Performance Evaluation
• Intangible measures include:
 Employee attitudes
 Customer attitudes
 Customer compliments
 Customer complaints
• “The performance of the team process should also be
measured.”
• “Project failure rates should be carefully monitored.”

Control/Verify Stage
Performance Evaluation
• Effectiveness measures include:
 Leaders trained
 Number of potential volunteers
 Number of actual volunteers
 Percent volunteering
 Projects started
 Projects dropped

Control/Verify Stage
Performance Evaluation
 Projects completed/approved
 Projects completed/rejected
 Improved productivity
 Improved work environment
 Number of teams
 Inactive teams
 Improved work quality
 Improved service
 Net annual savings

Control/Verify Stage
Recognition and Reward
• “Recognition is a form of employee motivation in which
the company identifies and thanks employees who
have made positive contributions to the company’s
success.”
• “The reason recognition systems are important is not
that they improve work by providing incentives for
achievement.”
• “Public recognition is better because of the following:

 Some (but not all) people enjoy being recognized in front of
their colleagues.
 Public recognition communicates a message to all employees
about the priorities and function of the organization.”

Control/Verify Stage
Recognition and Reward
According to the text
• Carder and Clark (1992) list the following guidelines
and observations regarding recognition:
 Recognition is not a method by which management
can manipulate employees.
 Recognition is not compensation.
 Recognition should be personal.
 Positive reinforcement is not always a good model
for recognition.
 Employees should not believe that recognition is
based primarily on luck.

Control/Verify Stage
Recognition and Reward
 Recognition meets a basic human need.
 Recognition programs should not create winners
and losers.
 Recognition should be given for efforts, not just for
goal attainment.
 Employee involvement is essential in planning and
executing a recognition program.

Control/Verify Stage
Principles of Effective Reward Systems
• Reward systems have the following characteristics
 They punish the recipients.
 They rupture relationships.
 They ignore reasons for behavior.
 They discourage risk-taking.
• “Most existing reward systems (including many
compensation systems) are an attempt by management
to manipulate the behaviors of employees.”

Control/Verify Stage
Principles of Effective Reward Systems
• Guidelines for designing reward systems
 Abolish incentive pay (something Deming advocated
as well).
 Reevaluate evaluation.
 Create conditions for authentic motivation.
 Design interesting jobs.
 Encourage collaboration.
 Provide freedom.

Control/Verify Stage
Job Training
• Three methods of job training
 Structured on-the-job training (OJT)
 Unstructured OJT
 The learner is often thrust on the experienced
employee without notice and is seen as a hindrance,
since this training time is interrupting the
experienced employee’s normal work load and
performance outputs.
 Job instruction training.

Control/Verify Stage
Job Training
• Developing OJT programs involves:
 Needs analysis
 Job analysis
 Course design
 Material preparation
 Validation
 Presentation
 Evaluation

Control/Verify Stage
Job Training
• Instructional games, simulations, and role-plays needs
analysis includes two techniques:
 “People learn better through active experience than
passive listening.”
 “People learn better through interacting with one
another than working alone.”

Control/Verify Stage
Job Training
• Instructional games have five characteristics
 Conflict
 Control
 Closure
 Contrivance
 Competency base
• “Simulation games. A simulation game contains the five
characteristics of instructional games, but in addition it
includes a correspondence between some aspect of the
game and reality.”

Control/Verify Stage
Job Training
• Role-plays have different forms including:
 Media
 Characters
 Responses
 Mode of usage
 Number of players
 Replay

Chapter 20
Resource Requirements to Manage the
Quality Function

Resource Requirements to Manage the
Quality Function
According to the text
•
•
•
•
•

Upper management has the key role in providing resources for
quality activities.
This is accomplished through the quality councils mentioned
earlier, as well as through routinely funding the activities of the
quality department.
One alternative is to add resources, but this is seldom feasible in a
highly competitive environment.
More commonly, priorities are adjusted to divert existing resources
to quality planning, control, and improvement.
This means that other work must be eliminated or postponed until
the payback from quality efforts permits its completion.

Resource Requirements to Manage the
Quality Function
Performance Evaluation
• Traditional Performance Appraisals
 Performance appraisal systems include:
 Standards for performance
 Evaluation period
 The assessment
 Meeting

Resource Requirements to Manage the
Quality Function
According to the text
• Other criticisms that have been leveled against
traditional performance appraisal include:

 Traditional performance appraisal focuses on the individual,
despite solid evidence that the variance in performance is
predominantly due to the system.
 It ignores, or at best, devalues, cooperative efforts.
 The goals it sets tend to be static.
 The nature of the appraisal (boss evaluating employee)
emphasizes the hierarchical status, at the expense of a
process-and-customer orientation.
 It reinforces command and control behavior and deemphasizes initiative.

Resource Requirements to Manage the
Quality Function
According to the text
 The multiple ratings/rankings/groupings are not statistically
valid.
 Few people are ever classified as “average.”
 It causes “high” performers to slack off, and “average” or “poor”
performers to brood.
 Appraisals are a detection-oriented technique.
 It leads to tampering with the system.

Resource Requirements to Manage the
Quality Function

• Alternatives to Traditional Appraisals
 Fix what’s broken
 Customer-supplier appraisals
 Process appraisals
 Managing personal growth
 The boss-less performance review

Resource Requirements to Manage the
Quality Function
Professional Development
• “Professional development is the set of activities
associated with obtaining and maintaining professional
credentials and of expanding one’s knowledge in one’s
chosen field.”

Resource Requirements to Manage the
Quality Function
Professional Development
• Professional development includes:
 Credentials
 Professional certification
 Professional development courses
 Goals and objectives
 Goals should be specific and measurable.
 Goals should be challenging, yet realistic.
 Goals should be written.
 Goals should be accepted.
 Achieving the goals

Resource Requirements to Manage the
Quality Function
Coaching
• Successful coach needs the following skills
 Communication skills
 Listening skills
 Analysis skills
 Negotiation skills
 Conflict resolution skills
• “The coach must also possess sufficient subject matter
knowledge to assist the employee in achieving results.”

Resource Requirements to Manage the
Quality Function
Coaching
According to the text
• Brookfield (1986) identified six factors that influence
adult learning:

 More leaning takes place if learning is seen as voluntary, selfinitiated activity.
 More learning takes place in a climate of mutual respect.
 The best learning takes place in an environment characterized
by a spirit of collaboration.
 Learning involves a balance between action and self-reflection.
 People learn best when their learning is self-directed.

Resource Requirements to Manage the
Quality Function
Coaching
• Coaching process involves










Define performance goals.
Identify necessary resources for success.
Observe and analyze current performance.
Set expectations for performance improvement.
Plan a coaching schedule.
Meet with the individual or team to get commitment to goals,
demonstrate the desired behavior, and establish boundaries.
Give feedback on practice and performance.
Follow up to maintain goals.

Resource Requirements to Manage the
Quality Function
Coaching
• Situations that require coaching to improve
performance
 Administrative situations
 Setting objectives
 Performance reviews
 Salary discussions
 Career planning-development discussions
 Job posting and bidding discussions

Resource Requirements to Manage the
Quality Function
Coaching

 Project or task situations
 A specific project or assignment problem: for instance,
delays, quality problems, quantity problems, lack of
follow-through on commitments
 Absenteeism and/or tardiness
 Deficiency in effort or motivation
 Behavior that causes problems, for example,
aggressiveness
 Training: opportunity or assignment
 When someone new joins your group or team
 Conflicts between employees or within groups
 Communication problems or breakdowns
 When your own supervisor makes you aware that one of
your employees has a problem

Resource Requirements to Manage the
Quality Function
Coaching
• Forms of coaching
 Mentoring
 Peer coaching
 Executive coaching

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬

Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University

College of Administrative and Financial Sciences

Assignment 2
Quality Management (MGT 424)
Due Date: 02/11/2024 @ 23:59
Course Name: Quality Management

Student’s Name:

Course Code: MGT 424

Student’s ID Number:

Semester: First

CRN:
Academic Year: 2024-25-1st

For Instructor’s Use only
Instructor’s Name: Dr. Ibrahim Alotaibi
Students’ Grade:
/Out of 10

Level of Marks: High/Middle/Low

General Instructions –PLEASE READ THEM CAREFULLY
•

The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

•

Assignments submitted through email will not be accepted.

•

Students are advised to make their work clear and well presented; marks may be reduced for poor
presentation. This includes filling your information on the cover page.

•

Students must mention question number clearly in their answer.

•

Late submission will NOT be accepted.

•

Avoid plagiarism, the work should be in your own words, copying from students or other resources
without proper referencing will result in ZERO marks. No exceptions.

•

All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures
containing text will be accepted and will be considered plagiarism).

•

Restricted – ‫مقيد‬

Submissions without this cover page will NOT be accepted.

• The Assignment`s learning Outcomes:
In the 2nd assignment, the students are required to read thoughtfully the “ Nestlé Waters Unifying
real-time visibility across 26 factories” case study , and answer the related questions, upon
successful completion of the assignment the student should be able to:
1. State the importance of standardization and quality standards (CLO2)
2. Use quality improvement tools and practices for continuous improvement to achieve the
organizational change and transformation (CLO3)
3. Develop analytical skills of identifying pitfalls, or quality concerns through assimilated
and strategic planning. (CLO4)

• Instructions to read the case study:
“ Nestlé Waters Unifying real-time visibility across 26 factories” case study
Access below link to read the case study:

“ Nestlé Waters Unifying real-time visibility across 26 factories”
case study
This case study demonstrates the application of change management inside Nestle Waters
Company. In addition, it discusses the company need for quality improvement which encouraged
its engineers to search for alternative system to collect and analyze their data. Read the case, by
using your critical thinking skills answer the following questions:
1- Explain the driven reasons for changing the quality documentation system in the Nestle
Waters. (2.5 marks)
2- Outline the change objectives for both Retail Manufacturing and Home and Office
Manufacturing units. (2.5 marks)
3- How the InfinityQS® ProFicient™ system can control the operation processes? ( 2.5 marks)
4- Describe the management role in the change process? (2.5 marks)

Restricted – ‫مقيد‬

Important Notes: •
•
•

For each question, you need to answer not in less than 150 Words.
Support your answers with course material concepts, principles, and theories from the textbook
and scholarly, peer-reviewed journal articles etc.
Use APA style for writing references.

Answers:
1. ……
2. …….
3. ……
4. ……

Restricted – ‫مقيد‬

InfinityQS Case Study | Food & Beverage

Keeping Success
Flowing Strong

Unifying Real-time Visibility Across 26 Factories
Nestlé Waters meets consumer needs by keeping its wide variety of products flowing through strong
distribution channels. The company has emerged as a substantial player in the bottled water market.
That leadership position is strengthened by the company’s continuous improvement efforts—starting
with a major initiative to improve quality and operational visibility across its production facilities.

Company Profile

Results

Nestlé Waters, the world’s leading bottled water company, has built a solid
reputation on the quality and purity of its products.

Established in more than

100 countries
Portfolio of

48 brands
87 manufacturing
sites operating in 30 countries

Central Statistical Process Control (SPC) solution enables
visibility of production processes—across multiple facilities.
Real-time visibility tools enable more effective decision making.
Computerized data output eliminates need for manual
documentation.
Reduction in manual documentation increases overall efficiency.
Real-time alarms—with assignable cause and corrective action
entries—streamline quality control process.

Annual revenue over

$8 billion
Market share of

CASE STUDY | FOOD & BEVERAGE

11%
infinityqs.com | 1

The Need: Real-time, On-demand Information at Their Fingertips

Nestlé Waters had been using a cumbersome, paper-based
system to collect and analyze data. When issues arose
that required immediate attention, the company’s quality
engineers had to disrupt operators on the production line to
retrieve the necessary data.
Nestlé Waters’ goal was to implement a system that would enable them
to easily monitor, review, and trend real-time quality data. In addition,
they wanted to standardize on one solution—across all their facilities—
to complement their existing IT infrastructure.

CASE STUDY | FOOD & BEVERAGE

infinityqs.com | 2

The Need: Real-time, On-demand Information at Their Fingertips

InfinityQS Professional Services & Software
Facilitate Workflow
After a thorough needs-analysis evaluation, Nestlé Waters determined that InfinityQS®
solutions best satisfied their criteria for quality documentation and analysis. To
accelerate and streamline the software implementation, the Nestlé Waters IT team
leveraged InfinityQS Professional Services. These expert services are provided by teams
of skilled, certified quality engineers, industrial statisticians, and Six Sigma Black Belts—
all with extensive manufacturing experience.

The Takeaway:
InfinityQS solutions provide a high
level of built-in configurability. If
you are also looking for this level of
flexibility, our Professional Services
teams can help you configure your
Quality Intelligence solution so that it
works the way you do.

The teams worked closely during all stages of the implementation, including planning, implementation
design, and project management. From an IT standpoint, the implementation focused on two separate
manufacturing units: Retail Manufacturing and Home & Office Manufacturing. They spread the
implementation across 16 Retail sites, as well as eight Home & Office sites, and integrated them with
corporate headquarters.

The Retail objectives were to:
› Upgrade all factories to the latest InfinityQS software release
› Organize the purchase of PCs required for workstations
› Image new PCs to the Nestlé Waters standard and install InfinityQS
› Ensure that the project leader had all necessary rights and permissions to access the servers

The Home & Office objectives were to:
› Format existing servers
› Install SQL databases and InfinityQS on the servers
› Purchase new PCs, image, put users in the user group, and grant necessary permissions
and access

CASE STUDY | FOOD & BEVERAGE

infinityqs.com | 3

Accelerating Process Improvements

Track Trends to Make More Accurate
& Timely Decisions
With InfinityQS solutions in place, Nestlé Waters now has real-time visibility
over production processes—both within individual sites and at the corporate
level across dozens of factories. By tracking trends in quality data, they
are able to make more accurate and timely decisions about process
improvements.
Nestlé Waters is using InfinityQS SPC software to review sampling frequency optimization
and inline monitoring, as well as to track quality improvement projects such as:
Cap torque and application analysis, supporting retail factories in
comparing different cap vendors

Lightweight bottle initiative, enabling process optimization to ultimately
reduce unnecessary full bottle testing

Air-consumption process data capture automation, using analysis
functions to optimize production processes

CASE STUDY | FOOD & BEVERAGE

infinityqs.com | 4

Improve Event Response Times

Get Usable Insights for Employees
at Every Level
Other improvements have come at a practical level.
“You can read the data rather than having to decipher
the writing of 150 different people. The data is at
your fingertips,” said Julie Chapman, Quality Systems
Manager at Nestlé Waters.
Nestlé Waters is also taking full advantage of InfinityQS’ realtime alarms. Any events that occur require assignable cause and
corrective action entries. Plant floor operators review, evaluate, and
respond to any events that occur—before they cause quality issues.

It is ultimately easier for the operator. Even with the
minimal computer skills many of the operators had in
the beginning, the overwhelming consensus is that they
prefer using InfinityQS over a paper system.
Julie Chapman
Quality Systems Manager, Nestlé Waters

CASE STUDY | FOOD & BEVERAGE

infinityqs.com | 5

About InfinityQS
In business for more than 30 years, InfinityQS is the leading provider of Statistical
Process Control (SPC) software and services to manufacturers worldwide. Our solutions
automate data collection and analysis during the manufacturing process, so you can
make real-time process improvement decisions and prevent defects before they occur.
Developed by industrial statisticians using proven methodologies for quality analysis
and control, InfinityQS solutions are saving leading manufacturers millions of dollars
each year.

For more information, visit www.infinityqs.com

[email protected]
1.800.772.7978
CASE STUDY | FOOD & BEVERAGE

infinityqs.com | 6

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