Compare and contrast Lean thinking and Quality Management Theory Can they be complemented to achieve business success ?

Group: QRMS1202_Team5 :
Jainwit Tongbai Zeyd Bohurler Mathews John Thomas Oliphant Apoorva Ravikrishnan Vasileios Zisis ID: 1255321 ID: 1265886 ID: 1259600 ID: 1258996 ID: 1262022 ID: 1266493

CONTENTS :

Evolution of Quality Management Theory Deming Philosophy Deming Cycle by Dr. Shewhart Ishikawa Quality Theory Total Quality Management Six Sigma Lean Thinking Compare and Contrast : Fit for business success

Evolution of Quality Management Theory

Early 1950s

Americans who took the messages of quality to Japan

Late 1950s

Japanese who developed new concepts in response to the Americans

1970s-1980s

Western gurus who followed the Japanese industrial success

Deming Philosophy : Quality Management Theory

Management is to be responsible for 94% of quality problems. Place the importance and responsibility both individual level and company level. 14 points of philosophy Small , large organisation ; public , private or service sectors.

Demings Quotes Quality Management Theory

It is not enough to do your best, you must know what to do, and then do your best. W. Edwards Deming If you do not know how to ask the right question, you discover nothing. W. Edwards Deming

Quality is everyone's responsibility. W. Edwards Deming

Hold everybody accountable ? Ridiculous ! W. Edwards Deming

You should not ask questions without knowledge. W. Edwards Deming

Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them. W. Edwards Deming

Lack of knowledge... that is the problem. W. Edwards Deming

Deming 14 Points
Edwards Deming Philosophy 1 Create constancy of purpose towards improvement of product and service 2 Adopt the new philosophy. We can no longer live with commonly accepted levels of delay, mistakes and defective workmanship 3 Cease dependence on mass inspection. Instead, require statistical evidence that quality is built in 4 End the practice of awarding business on the basis of price 5 Find problems. It is managements job to work continually on the system

6 Institute modern methods of training on the job 7 Institute modern methods of supervision of production workers, The responsibility of foremen must be changed from numbers to quality 8 Drive out fear, so that everyone may work effectively for the company 9 Break down barriers between departments 10 Eliminate numerical goals, posters and slogans for the workforce asking for new levels of productivity without providing methods

11 Eliminate work standards that prescribe numerical quotas 12 Remove barriers that stand between the hourly worker and their right to pride of workmanship 13 Institute a vigorous programme of education and retraining 14 Create a structure in top management that will push on the above points every day

Deming 14 Points
1. Constancy of purpose: 2. The new Philosophy :

3. Cease mass production inspection:

4. End lowest tender contracts :

Deming 14 Points
5. Improve every process 6. Institute training on the job :

7. Institute leadership of people

8. Drive out fear

Deming 14 Points
9. Breakdown barriers 10. Eliminate slogans / Do it right first time

11. Eliminate arbitrary numerical targets:

12. Permit pride of workmanships

Deming 14 Points
13. Encourage education 14. Top management commitment and actions :

Institute a vigorous programme of education and self-improvement.

Put everybody in organisation to work to accomplish the change.

Systematic Approach : Deming Cycle by Dr. Shewhart

Quality Process is Under Control

Father of Gurus

Dr. Ishikawa 7 QC Tools : Quality Management Theory

Late 1950s Japanese developed new concepts in response to the Americans

Management of Quality

Customer Orientation
Managing the Quality Customer Orientation Japanese Way of Quality 7 Quality Tools

Dr. Ishikawa 7 QC Tools

Late 1950s Japanese developed new concepts in response to the Americans 7 Tools : Pareto analysis Cause and effect diagrams Stratication Check sheets Histograms Scatter charts Process control charts Which are the big problems? What causes the problems? How is the data made up? How often it occurs or is done? What do overall variations look like? What are the relationships between factors? Which variations to control and how?

Dr. Ishikawa 7 QC Tools

Late 1950s Japanese developed new concepts in response to the Americans 7 Tools : Pareto analysis Cause and effect diagrams Stratication Check sheets Histograms Scatter charts Process control charts Which are the big problems? What causes the problems? How is the data made up? How often it occurs or is done? What do overall variations look like? What are the relationships between factors? Which variations to control and how?

Total Quality Management : Concepts

At its core, total quality management (TQM) is a management approach to long term success through customer satisfaction. In a TQM effort, all members of an organization participate in improving processes, products, services, and the culture in which they work.

Total Quality Management

The primary elements can be classified as: Customer-focused. Total employee involvement. Process-centered. Integrated system. Strategic and systematic approach. Continual improvement. Fact-based decision making. Communications. Total quality management can be summarized as a management system for a customer focused organization that involves all employees in continual improvement. It uses strategy, data, and effective communications to integrate the quality discipline into the culture and activities of the organization.

Total Quality Management

Total Quality Management has few short-term advantages. Most of its benefits are long-term and come into effect only after it is running smoothly.
Advantages of Total Quality Management:
Improves reputation- faults and problems are spotted and sorted quicker (zero defects) Higher employee morale workers motivated by extra responsibility, team work and involvement in decisions of TQM Lower costs Decrease waste as fewer defective products and no need for separate Quality Control inspectors

Disadvantages of Total Quality Management:

Initial introduction costs- training workers and disrupting current production whilst being implemented Benefits may not be seen for several years Workers may be resistant to change may feel less secure in jobs By focusing too much on the customers, the production based method might have a cheaper and more faster way of doing business and this method is rejected. Also the costs of inspection of processes as well as Research and development projects might be too costly.

Six Sigma

Motorola developed six sigma in 1987 Similar to other quality management techniques but represents an organizational approach to improvement Ford, Honeywell- famous organizations to have implemented six sigma

Definition

Business process that allows companies to drastically improve their bottom line by designing and monitoring everyday activities in ways that minimize wastes and resources while increasing customer satisfaction -Harry and Schroeder

Advantages of Six Sigma

Achieve maximum customer satisfaction and minimize the defects Profitability increases and Costs reduce Can be implemented in any business Targets Variation in the processes and focuses on the process improvement rather than final outcome Focuses on prevention on defects rather than fixing it

Disadvantages of Six Sigma

Emphasis on the rigidity of the process which contradicts innovation and creativity Require skilled man force A lot of real time barriers need to be resolved Immediate results are not seen

Lean Thinking Concept

Lean Principles Lean Principles There are five Principles that help us seek lean: Specify Value Identify the value stream Make the value flow

Let the customer pull

Pursue perfection

Lean Enablers

There are four lean enablers: Value Stream Mapping

Visual Management
Standardisation 5 S (sort, segregate, shine, standardise, sustain)

Lean Techniques

We can use six lean techniques (especially during NPI) 1. 2. 3. 4. 5. 6. Project Management Integrated Product Team Knowledge Management Risk Assessment Requirements Capture Core Competence

Six Sigma Business Advantages

It focuses on the customer It gives clear objectives and goals to aim for 3.14 dpmo Its a systematic approach Its Measurable and quantifiable It uses well-proven statistical tools It gives a change in culture Inspired by Demings Plan, Do, Check, Act cycle Through reducing variation it improves quality

TQM Business Advantages

It focuses on the customer Improves and unifies processes It gives employees moral through involvement in decisions By reducing waste is reduces costs Improves reputation through improved quality Uses analytical and statistical tools

Lean Manufacturing Business Advantages

It focuses on the customer Gives clear objectives and goals By reducing waste you also reduce costs and increase quality Reduces lead time Improves flow in processes Can be applied to all aspects of the business Increases employee knowledge, become experts in their field Improves cross-functional communication Builds customer and supplier relations Reduces effect of hierarchy

How can these tools be complemented to achieve business success?

All came about from the Japanese quality evolution All inspired from Deming's work All work towards reducing waste to maximise process utilization These tools naturally complement themselves Lean thinking moves towards JIT and zero waste TQM focuses on the customer Six Sigma focuses on reduction in variation To successfully implement a mixture of these depends entirely on the business application The mixture of techniques depends on what aspect the business would best benefit from focusing on

References
ECTI (Electrical Engineering/Electronics, Computer, Telecommunications and Information Technology Association), 2008. 5th Annual International Conference of Electrical Engineering/Electronics, Computer, Telecommunications and Information Technology Association. Bangkok, Thailand 14-17 May 2008. Bangkok: Thailand

Rahmere, R. , 2011. Top 50 EMS providers cross $150 billion mark , Electronics Manufacturing Asia, [online] Available at:< http://www.emasiamag.com/article5659top50emsproviderscross 150billionmark-Asia.html> [Accessed 29 July 2012]

SVI Plc., 2011. The milestones, annual report 2010-2011, Bangkok, Thailand: SVI Plc.

Whiteman, A. L., 2009. Project Management Challenges In The Global Economy, Project Management Solution, [online] Available at:<http://business.management6.com/Electronics-ManufacturingProject-Management-Challenges-In-The-download-w9119.pdf> [Accessed 28 July 2012]

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