Quality Philosophies and Standards

(Baldrige, Six Sigma and Lean Mgmt)

Britt Watwood
Center for Teaching Excellence
VCU

What is meant by the term?

Quality

Qualitys
Foundatio
n
Quality
Philosophy &
Practice

Empowerment

Tools

 1930s
Shewart Cycle
1950s
Deming in Japan
1980

Productivity / Quality Circles

1985
Deming/Crosby/Juran
Late 1980s
Total Quality Mgmt
1990s
Baldrige Criteria
Current
Six Sigma
Lean Management

Quality
Evolutio
n

Quality
Overview
Product
Support

Lean

QMS

Markets &
Customers

Quality

VOC
Strategy
Formulation

Product
Operation

Malcolm
Baldrige
National
Quality Award

www.quality.nist.gov

Malcolm
Baldrige NQA

Twenty years evolving

A Framework and A Tool
Self-Assessment
Promotes Awareness of
Continuous Improvement and
Excellence
Sharing of Best Practices
Presented by the President
of the United States

Baldrige
is a
Process
A systems perspective
Built around core values
Linkages within the
framework

Core
Values
Visionary Leadership
Customer Driven Excellence
A Learning Organization
Valued Employees and Partners
Agility
Focus on the Future

Core
Values
Managing for Innovation
Management By Fact
Social Responsibility
Results and Value Driven
Overall Systems Perspective

Visionary
Leadership
Senior leadership has vision
Senior leadership
communicates that vision
Values and expectations
align with vision
Leaders are role models

Customer
Driven
Excellence
Quality and Performance are
Judged by the Customers
Customer Satisfaction
tracked and used to improve
processes
Customer Satisfaction of
Competitors Known and Used
to Improve Own Offerings

Organizational
Learning
Learning directed at
improved productsand
improved people
Embedded in all
processes
Continuous
Results in Positive
Change

 Committed to satisfaction,
development, and wellbeing of employees
Recognition Systems
Risk-Taking Encouraged
Strategic Alliances with
Suppliers

Valuing
Employee
s&
Partners

Agility

The ability to thrive

in the White-water
Rapids of Change
Cycle Time
Responsiveness

Focus
on the
Future
Long-Term Viewpoint
Long-Term Commitment to
Key Stakeholders
Strategic Focus on Resources,
Employee and Product
Development

Managing
For
Innovation
Innovation Part of the
Culture
More than
Sustainability
Meaningful Change to
Products and Services

Management

Measurement AND
Analysis of Performance
Key Processes Identified
Outputs Known
Yours and Competitors!

Comparison with
Benchmarks
Use of Trend Data

By
Fact

Social
Responsibility

Safe Work
Environment
Legal Work
Environment
Good Corporate Citizen

Results
& Value
Focus on Key Results
Creating Value for
Stakeholders

Customers
Employees
Stockholders
Suppliers / Partners
The Community

Both Leading and

Lagging Indicators

Systems
Perspective
Linkage and Alignment between
the Baldrige Categories

Leadership
Strategic Planning
Customer & Market Focus
Measurement, Analysis, & KM
Workforce Focus
Process Management
Business Results

Baldrige
Criteria
Organizational Profile
Environment, Relationships, &
Challenges
2
Strategic
Planning
1
Leadership

3
Customer &
Market Focus

5
Workforce
Focus
6
Process
Mgmt

7
Business
Results

Measurement, Analysis & Knowledge Management

ISO 9000

Commitment to Customer
Requirements
Documentation
Requirements
Resource Allocation
Measurement and Analysis

Standard
Deviation

Sigma is a
measure of
variation

Sigma
Variation
The sigma value is a metric
that indicates how well a
process is performing.
The higher the sigma
value, the better.
The higher the sigma
value, the more the
process is defect-free.

Example of
Sigma
Value
Yield

DPMO

30.9%
690,000
69.2%
308,000
93.3%
66,800
99.94%
6,210
99.98%
320
99.9997%
3.4

Sigma
1
2
3
4
5
6

Example of
Sigma Value
Most companies
operate at around 4
sigma the quality
standard set by the
US Government in
WW II

Yield

DPMO

30.9%
690,000
69.2%
308,000
93.3%
66,800
99.94%
6,210
99.98%
320
99.9997%
3.4

Sigma
1
2
3
4
5
6

What Does 99% Defect-Free Mean?

What Does 99% Defect-Free Mean?

200,000 wrong
drug prescriptions
each year

What Does 99% Defect-Free Mean?

Two short or
long landings at
major airports
each day

What Does 99% Defect-Free Mean?

5,000 incorrect
surgical
procedures every
week

What Does 99% Defect-Free Mean?

20,000 lost
articles of
mail every
hour

What Does 99% Defect-Free Mean?

Unsafe Drinking
Water for 15
minutes each
day

What Does 99% Defect-Free Mean?

No electricity
for 7 hours
each month

What Does 99% Defect-Free Mean?

50 dropped
newborns at
the hospital
each day

 The Cost of Quality

4 Sigma: 99.4%

6,210 defects
Industry Average
Lose 15-20% of sales

5 Sigma: 99.98%

233 defects
Lose 5-10% of sales

6 Sigma: 99.9997%

3.4 defects
Lose Less than 1% of sales

Defects
Effect
Costs

DMA
IC
Design
Measure
Analyze
Improve
Control

As a nation,
we seem to be obsessed
with LEAN

Effectiveness vs Efficiency
Six Sigma = Effectiveness
VOC

Process
Metrics

6
Selection

Lean
Metrics

6
Control

6
Improvement

Lean
Workload

Lean Mgmt = Efficiency

Lean
Process

Definition
The term lean is used
lean manufacturing uses

because
less

Labor in the factory

Manufacturing space
Capital investment
Materials
Time between the customer order
and the product shipment

Lean Mgmt Comparison

Lean

Traditional
Production

Based on forecast

Based on orders

Layout

Based on function /
department

Based on product flow

Batch size

Large

Small

Processing Batch & queue

Continuous flow

Quality

Assured during
processing

Lot sampling

Key Elements:

Stability
Quality
Continuous Flow
Kaizen
Pull System
Workload Balancing

Waste
Anything
Anything that
that adds
adds Cost
Cost
to
to the
the product
product
without
without adding
adding Value
Value

Waste
Value Added: 5%

Non - Value Added: 95%

Overproduction
Excess Inventory
Product Defects
Non-value added
processing
Wait time
Underutilized
labor
Excess motion
Unnecessary
Transportation

7 Types
of Muda

CORRECTION
WAITING

Repair or
Rework

Any non-work time

waiting for tools,
supplies, parts, etc..

PROCESSING
Doing more work than
is necessary

Types
of
Waste

INVENTORY
Maintaining excess
inventory of raw matls,
parts in process, or
finished goods.

MOTION
Any wasted motion
to pick up parts or
stack parts. Also
wasted walking

OVERPRODUCTION
Producing more
than is needed
before it is needed

CONVEYANCE
Wasted effort to transport
materials, parts, or
finished goods into or
out of storage, or
between
processes.

Workplace
Organization
Maintain through
empowerment,
commitment, and
discipline

Get rid of clutter

Sort
Organize the work area

Sustain

Set In Order

5S
Standardize

Shine

Use standard methods to

keep Sort, Set In Order,
and Shine to a condition

Keep machines and work

areas clean

KAI
To modify /
Change

ZEN
To make good /
better

KAIZEN

Gradual and orderly, continuous improvement.

Differences in
Six Sigma
Process Improvement
Reduced Defect Rate

Lean
Efficiency Improvement
Reduce Waste

Baldrige Criteria
Performance Excellence
across Entire System
Results Oriented

Emphasis

What Makes
Sense For
YOUR
Company ???

Questions???