Chapter 7 Process Management THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 1 Wisdom from Texas Instruments “Unless you change the process, why would you expect the results to change” THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 2 Scope of Process Management • Process Management: planning and administering the activities – design, control, and improvement – necessary to achieve a high level of performance • Four types of key processes – – – – Design processes Production/delivery processes Support processes Supplier processes THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 3 AT&T Process Management Principles • • • • • • Focus on end-to-end process Mindset of prevention and continuous improvement Everyone manages a process at some level and is a customer and a supplier Customer needs drive the process Corrective action focuses on root cause Process simplification reduces errors THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 4 Control vs. Improvement Out-of-control Controlled process Improvement New zone of control Time THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 5 Leading Practices (1 of 2) • Translate customer requirements and internal capabilities into product and service design requirements early in the process • Ensure that quality is built into products and services and use appropriate tools during development • Manage product development process to enhance communication, reduce time, and ensure quality • Define, document, and manage important production/delivery and support processes THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 6 Leading Practices (2 of 2) • Define performance requirements for suppliers and ensure that they are met • Control the quality and operational performance of key processes and use systematic methods to identify variations, determine root causes, and make corrections • Continuously improve processes to achieve better quality, cycle time, and overall operational performance • Innovate to achieve breakthrough performance using benchmarking and reengineering THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 7 Product Development Paradigms Traditional Approach • Design the product • Make the product • Sell the product • • • • • Deming’s Approach Design the product Make it with appropriate tests Put it on the market Conduct consumer research Redesign with improvements THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 8 Product Development Process Idea generation Concept development Product & process design Full-scale production Product introduction Market evaluation THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 9 Quality Engineering • System Design – Functional performance • Parameter Design – Nominal dimensions • Tolerance Design – Tolerances THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 10 Loss Functions Traditional View loss no loss loss nominal tolerance Taguchi’s View loss THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM loss 11 Taguchi Loss Function Calculations L(x) = k(x - T)2 Example: Specification = .500  .020 Failure outside of the tolerance range costs $50 to repair. Thus, 50 = k(.020)2. Solving for k yields k = 125,000. The loss function is: L(x) = 125,000(x - .500)2 Expected loss = k(2 + D2) where D is the deviation from the target. THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 12 Design Objectives • Cost, Manufacturability, Quality, Public Concerns • Tools and Approaches – Design for Manufacturability – Design for Environment THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 13 Streamlining Product Development • Competitive need for rapid product development • Concurrent engineering - a process in which all major functions involved with bringing a product to market are continuously involved with the product development from conception through sales • Design reviews THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 14 House of Quality Interrelationships Technical requirements Voice of the customer Customer requirement priorities Relationship matrix Technical requirement priorities THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM Competitive evaluation 15 Quality Function Deployment technical requirements component characteristics process operations THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM quality plan 16 Motorola’s Approach to Process Design 1. 2. 3. 4. 5. 6. Identify the product or service Identify the customer Identify the supplier Identify the process Mistake-proof the process Develop measurements and control, and improvement goals. THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 17 Evaluating a Process • Are steps arranged in logical sequence? • Do all steps add value? Can some be eliminated or added? Can some be combined? Should some be reordered? • Are capacities in balance? • What skills, equipment, and tools are required at each step? • At which points might errors occur and how can they be corrected? • At which points should quality be measured? • What procedures should employees follow where customer interaction occurs? THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 18 Projects • Project initiation – direction, priorities, limitations, and constraints • Project plan – blueprint and resources needed • Execution – produce deliverables • Close out – evaluate customer satisfaction and provide learning for future projects THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 19 Basic Components of Services • Physical facilities, processes, and procedures • Employee behavior • Employee professional judgment THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 20 Key Service Dimensions Customer contact and interaction Labor intensity Customization THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 21 Control • The continuing process of evaluating process performance and taking corrective action when necessary • Components of control systems – Standard or goal – Means of measuring accomplishment – Comparison of results with the standard as a basis for corrective action A well-controlled system is predictable THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 22 After Action Review 1. 2. 3. 4. What was supposed to happen? What actually happened? Why was there a difference? What can we learn? THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 23 Supplier and Partnering Processes • Recognize the strategic importance of suppliers • Develop win-win relationships through partnerships • Establish trust through openness and honesty THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 24 Supplier Certification Systems • “Certified supplier” – one that, after extensive investigation, is found to supply material of such quality that routine testing on each lot received is unnecessary THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 25 Benefits of Effective Supplier Process Management • • • • • Reduced costs Faster time to market Increased access to technology Reduced supplier risk Improved quality THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 26 Process Improvement • Productivity improvement • Work simplification • Planned methods change • • • • Kaizen Stretch goals Benchmarking Reengineering Traditional Industrial Engineering New approaches from the total quality movement THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 27 Kaizen • Gradual and orderly continuous improvement • Minimal financial investment • Involvement of all employees • Exploit the knowledge and experience of workers THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 28 Agility • Flexibility – the ability to adapt quickly and effectively to changing requirements • Cycle time – the time it takes to accomplish one cycle of a process • Benefits – Improve customer response – Force process streamlining and simplification THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 29 Breakthrough Improvement • Discontinuous change resulting from innovative and creative thinking • Benchmarking – the search of industry best practices that lead to superior performance – Competitive benchmarking – Process benchmarking – Strategic benchmarking • Reengineering – radical redesign of processes THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 30 Process Management in the Baldrige Award Criteria The Process Management Category examines the key aspects of an organization’s process management, including customer-focused design, product and service delivery, key business, and support processes. This Category encompasses all key processes and all work units. 6.1 Product and Service Processes a. Design Processes b. Production/Delivery Processes 6.2 Business Processes 6.3 Support Processes THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 31