Compare and contrast Lean thinking and Quality Management Theory

Can they be complemented to achieve business success ?

Group: QRMS1202_Team5 :

Jainwit Tongbai ID: 1255321Zeyd Bohurler ID: 1265886Mathews John ID: 1259600Thomas Oliphant ID: 1258996Apoorva Ravikrishnan ID: 1262022Vasileios Zisis 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 1950’s Americans who took the messages of quality to Japan

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

1970’s-1980’s 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.

Deming’s Quotes Quality Management Theory

“ Profit in business comes from repeat customers,

customers that boast about your project or service, and

that bring friends with them.”

W. Edwards Deming

“It is not enough to do your best, you must know what to do, and then do your

best.”

W. Edwards Deming

“Lack of knowledge... that is the problem. ”

W. Edwards Deming

“ Hold everybody accountable ? Ridiculous ! ”

W. Edwards Deming

“Quality is everyone's responsibility. ”

W. Edwards Deming

“If you do not know how to ask the right question, you discover nothing.”

W. Edwards Deming

“ You should not ask questions without knowledge.

”

W. Edwards Deming

Deming 14 Points

Edwards Deming Philosophy

1 Create constancy of purpose towards improvement of product and service2 Adopt the new philosophy. We can no longer live with commonly accepted levels of delay, mistakes and defective workmanship3 Cease dependence on mass inspection. Instead, require statistical evidence that quality is built in4 End the practice of awarding business on the basis of price5 Find problems. It is management’s job to work continually on the system

6 Institute modern methods of training on the job7 Institute modern methods of supervision of production workers, The responsibility of foremen must be changed from numbers to quality8 Drive out fear, so that everyone may work effectively for the company9 Break down barriers between departments10 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 quotas12 Remove barriers that stand between the hourly worker and their right to pride of workmanship13 Institute a vigorous programme of education and retraining14 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 isUnder Control

Continious Improvement Control C

harts

Father of Gurus

Dr. Ishikawa – 7 QC Tools :Quality Management Theory

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

CustomerOrientation

Management ofQuality

7 Quality Tools

Managing the QualityCustomer OrientationJapanese Way of Quality7 Quality Tools

Dr. Ishikawa – 7 QC Tools

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

7 Tools :

• Pareto analysis Which are the big problems?• Cause and effect diagrams What causes the problems?• Stratification How is the data made up?• Check sheets How often it occurs or is done?• Histograms What do overall variations look like?• Scatter charts What are the relationships between factors?• Process control charts Which variations to control and how?

Dr. Ishikawa – 7 QC Tools

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

7 Tools :

• Pareto analysis Which are the big problems?• Cause and effect diagrams What causes the problems?• Stratification How is the data made up?• Check sheets How often it occurs or is done?• Histograms What do overall variations look like?• Scatter charts What are the relationships between factors?• Process control charts Which variations to control and how?

• 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 : Concepts

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 PrinciplesLean 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 Principles

There are four lean enablers:

• Value Stream Mapping

• Visual Management

• Standardisation

• 5 S (sort, segregate, shine, standardise, sustain)

Lean Enablers

We can use six lean techniques (especially during NPI)

1. Project Management

2. Integrated Product Team

3. Knowledge Management

4. Risk Assessment

5. Requirements Capture

6. Core Competence

Lean Techniques

Six Sigma Business Advantages

• It focuses on the customer• It gives clear objectives and goals to aim for

• 3.14 dpmo• It’s a systematic approach• Its Measurable and quantifiable• It uses well-proven statistical tools• It gives a change in culture

• Inspired by Deming’s 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

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References

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