TOTAL QUALITY

MANAGEMENT (TQM)

Main Content:

1. Introduction, History, Production System

2. Understanding Quality
3. Commitment and Leadership: TQM
approach, Commitment & Policy, Creating a
Culture, TQM Model
4. Design For Quality: Design Control &
Management, Specifications & Standard
5. Focus on the Customer
6. Learning from the Quality Gurus
7. Baldrige Awards, Deming Prize
8. Six Sigma

Topic 1
The Foundations A Model
for TQM

Presented By:
Assoc. Prof. Dr. Nor Hayati
Saad

Previous Semester Achievement

Previous Semester Achievement

Previous Semester Achievement

(March 2014)
EMSTD2

EMSTD1

HISTORY / History of Quality Assurance

Industrial Revolution in 1800s: rise of inspection and
separate quality departments
-

- Scientific Management Frederick Taylor 1900s

- Bell Telephone Laboratories 1920s; Statistical Quality
Control
- Global Competition 1970s 1980s Japan
- Quality Revolution 1980 Deming
- Malcolm Baldrige National Quality Award (1987)
- Quality is a requirement for success in todays global
market 1997
7

HISTORY / History of Quality

Assurance (cont.)
- Skilled craftsmanship during Middle Ages
- Quality control during World War II
- Quality awareness in manufacturing industry

during 1980s: Total Quality Management

- Quality in service industries, government, health
care, and education
- Current and future challenge: keep progress in
quality management alive
8

PRODUCTION
SYSTEMS

What is a SYSTEM
A system is a group of related parts that works
together to achieve a goal.
The goal is whatever the system is supposed to do.

10

Classification of SYSTEMS
Systems

Natural Systems

Human Being

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Animals

Plants

Technological Systems

Others

Organizations

Products

Subsystems
A system can have many parts. Subsystems are
smaller systems that are combined to produce
larger systems.
Example:
System....
Computer
Subsystems... Keyboard, disk drive, monitor, printer,
etc

12

The Universal Systems Model

The universal systems model can be applied to all technological

systems and to many natural systems.

A system needs a goal that describes the purpose of the system.

All systems also have an input, process, and output.

INPUT
Resources put into
the system

13

PROCESS
Combines
resources

OUTPUT
What comes from
the system

WHAT IS PRODUCTION SYSTEM??

WHERE CAN YOU DETECT THE QUALITY?

Input
Input includes anything that is put into system. The input comes
from the resources.
A resource is anything that provides supplies or support for the
system.
All technological systems requires input from 7 categories of
resources.

14

People

Information

Energy

Materials

Tools and
machines

Time

Capital

Process
Process is a series of actions leading to an outcome.
Process transforms resources into product or service.
This is where resources are combined.
Production processes usually have 2 major subsystems:
Management and Production

INPUT

15

PROCESS

OUTPUT

Major Subsystems of Process

INPUT

16

PROCESS
Managing
Managing

Producing
Producing

Planning
Planning

Preprocessing
Preprocessing

Organizing
Organizing

Processing
Processing

Controlling
Controlling

Postprocessing
Postprocessing

OUTPUT

Output
Output is the result of a system.
Example:
Tv, computer, table, car, vegetables, meals..
Education, maintenance, catering..

17

All these outputs are planned and desirable.

Undesirable outputs from production systems include air and

water pollution, chemicals that are difficult to dispose of , and noise.

Waste materials are another kind of output produced by most

systems. Therefore, companies want to reduce or eliminate waste.

Feedback
Feedback occurs when information about the output
of a system is sent back to the system.
Feedback can improve the performance of a system.

INPUT

PROCESS

FEEDBACK
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OUTPUT

Production Systems
The goal of a production system is to manufacture or
construct products.
Clothes, appliances, books Manufacturing
Building, road, bridge Construction

Two kinds of outputs could be produced:

Good or Service

19

Characteristics of Goods
Tangible product
Consistent product
definition
Production usually
separate from
consumption
Can be inventoried
High/ Low customer
interaction
20

1995 Corel Corp.

Characteristics of Service

1995 Corel Corp.

21

Intangible product
Produced & consumed
at same time
Often unique
High customer
interaction
Inconsistent product
definition
Often knowledge-based

Goods Versus Services

Goods

Can be resold
Can be inventoried
Some aspects of quality

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measurable
Selling is distinct from
production
Product is transportable
Site of facility important for
cost
Often easy to automate
Revenue generated
primarily from tangible
product

Service

Reselling unusual
Difficult to inventory
Quality difficult to measure
Selling is part of service

Provider, not product is

transportable
Site of facility important for
customer contact
Often difficult to automate
Revenue generated
primarily from intangible
service.

Goods
HOW & WHY YOU
SEGREGATE DIFFERENT
TYPE OF PRODUCT IN THE
MARKET?

23

QUALITY?

24

Understanding of Quality
Modern Importance of Quality
The first job we have is to turn out quality
merchandise that consumers will buy and
keep on buying. If we produce it efficiently
and economically, we will earn a profit, in
which you will share.
- William Cooper Procter
[American Businessman, a manufacturer who established the nation's first profit-sharing
plan for employees]
25

Defining Quality
ASQC (American Society for Quality Control)- quality is a
subjective term for which each person has his or
her own definition

Whats your definition?

26

Defining Quality
In technical usage, quality can have two
meanings:
the characteristics of a product or service that
bear on its ability to satisfy stated or
implied needs, and
a product or service free of deficiencies

27

Defining Quality - Gurus

Deming - non-faulty systems
Out of the Crisis

Juran - fitness for use

Quality Control Handbook

Crosby - conformance to requirements

Quality is Free

28

Armand Feigenbaum author: Total Quality Control (1961)

quality

is a customer determination based on

the customers actual experience with the
product or service, measured against his or
her requirements - stated or unstated,
conscious or merely sensed, technically
operational or entirely subjective - and always
representing a moving target in a competitive
market.
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Stouts View
Quality

30

Performance
Expectation

Defining Quality

Definition of Quality by managers of 86 firms:

-Perfection
-Consistency
-Eliminating waste
-Speed of delivery
-Compliances with policies and procedures
-Providing a good, usable product
-Doing it right the first time
-Delighting and pleasing customers
-Total customer services and satisfaction

26

Defining Quality- (3) Different

Views
Customers view (more subjective)
the quality of the design (look, feel, function)
product does whats intended and lasts
Producers view
conformance to requirements (Crosby)
costs of quality (prevention, scrap, warranty)
increasing conformance raises profits
Governments view
products should be safe
not harmful to environment
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Five (5) Types of Product

Quality
Transcendent/ Inspiring Quality
Inherent value or innate excellence apparent to the

individual.
Product-Based Quality
The presence or absence of a given product attribute.

User-Based Quality
Quality of the product as determined by its ability to

meet the users expectations.

33

Five Types of Product

Quality (contd)
Manufacturing-Based Quality
How well the product conforms to its design

specification or blueprint.
Value-Based Quality
How much value each customer separately attributes

to the product in calculating their personal cost-benefit

ratio.

34

Transcendent (Judgemental)
definition of Quality
Excellence
You just know it when you see it..

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Product-based definition
Quantities of product attributes

36

User-based definition
Fitness for intended use.
How well the product its intended use.
Satisfying customer needs

37

Value-based definition
Relationship of usefulness or satisfaction to
price.

Quality vs. price

33

Value-based Approach
Manufacturing

dimensions

Performance
Features
Reliability
Conformance
Durability
Serviceability
Aesthetics
Perceived quality

39

Service dimensions
Reliability
Responsiveness
Assurance
Empathy
Tangibles

Manufacturing-based
definition
Conformance to specifications, or desirable
outcome of the engineering and
manufacturing practice.
Targets and tolerances: 236 +/- 0.3cm

On time arrival
40

10:30 pm

Same taste
everytime,
everywhere

Quality Perspectives
transcendent &
product-based

Customer
products
and
services

user-based

needs

value-based

Marketing

Design
manufacturingbased

Manufacturing
Distribution

41

Information flow
Product flow

Shift to Quality
Isolated
Economies
Focus on
quantity

Pre-World War II
42

Period of
change from
quantity to
quality

1945

Global
Economy
Focus on
Quality & Quantity

1990s

Customer-Driven Quality
Meeting or exceeding customer

expectations
Customers can be...
Consumers
External customers
Internal customers

43

Unique Challenges for

Service Providers
Strategic Service Challenge
To anticipate and exceed customers expectations.
Distinctive service characteristics
1. Customers participate directly in the production process.
2. Services are consumed immediately and cannot be stored.
3. Services are provided where and when the customer desires.
4. Services tend to be labor intensive.
5. Services are intangible.

44

Service Providers
WHAT ARE EXAMPLES OF

CRITICAL SERVICE FOR

CUSTOMERS?

45

Total Quality
- Customer satisfaction and reducing costs
- A systems approach that integrates organizational

functions and the entire supply chain

- Stresses learning and adaptation to change
- Based on the scientific method

46

Demings View of a
Production System
Suppliers of
materials and
equipment

Design and
Redesign
Receipt and test
of materials

A
B
C
D

Consumer
research
Consumers

Production, assembly
inspection

Distribution

Tests of processes, machines, methods

INPUTS
47

PROCESSES

OUTPUTS

Three Levels of Quality

Organizational level: meeting

external customer requirements

Process level: linking external and
internal customer requirements
Performer/job level: meeting internal
customer requirements
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Organizational Level
External customer requirements.
Questions are:
Which product and service meet your
expectations
Which do not.
What product and services do you need that you
are receiving.
What product and services do not need that you
are receiving.

49

Process Level
Organizational units are classified as functions or
departments.
Questions:
What product and services are most important to the
external customer
What process produces those products and services
What are the key inputs to the process
Which processes have the most significant effects on
the organization customer-driven performance
standards
Who are my internal customers and what are their
needs
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Performer / Job Level

Standards (Accuracy, completeness, innovation, timeliness and cost) for
output must be based on quality and customer
requirements.
Questions:
What is required by the customer, both internal and
external
How can requirements are measured
What is the specific standards for each level

51

PRINCIPLES OF TOTAL
QUALITY MANAGEMENT
TQM conveys a company-wide effort that
includes all employees, suppliers, and
customers, and that seeks to continuously
improve the quality of products/services and
processes to meet the needs and
expectations of customers.

52

Attributes to TQM

53

Customer focus (what)

Commitment and Leadership (who)

Strategic Planning (how)

Continuous Improvement (when)

Empowerment and Teamwork

Attributes to TQM
IN A SMALL GROUP,
DISCUSS THE ATTRIBUTES/
FEATURES OF TQM

54

Customer Focus

55

Customer judge of quality

Service package

Customer relationship

Internal customer

Commitment and
Leadership

56

Long term commitment

leadership for quality

Organisations team TQM team leaders

Overcome resistance to change

Strong quality focus

Strategic Planning?
+

Environmental analysis

Company Vision

Determine corporate mission

+
Form a strategy:
Plan-Do-check-act
Critical success factors
Plan (milestone, person in charge, resources)
Review the cycle
Learning from the previous experience.
57

Continuous Improvement

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Enhancing value to the customer throughout

new and improve products and services

Reducing errors, defects and wastes

Improving responsiveness and cycle time

performance

Improving productivity and effectiveness in use of

all resources

Empowerment and
Teamwork?

59

Focus on customer: 3
Classes of Customer
Needs

60

Dissatisfiers : those needs that are

expected in a good or service

Satisfiers : needs that customers say

they want

Delighters : new and improve

features that customers do not expect

Quality - Gurus
WHO IS QUALITY GURUS?

HOW THEY DEFINE THE

QUALITY?

61

Learning from Quality

Gurus: Quality Advocates
U.S. Quality Innovators:
- Walter Shewhart
- W. Edwards Deming
- Joseph M. Juran
- Armand V Feingenbaum
- Philip Crosby (1980s)

Japanese Quality Innovators:

- Kaoru Ishikawa
- Genichi Taguchi (1960s - 1980s)

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Walter A Shewhart
Walter Andrew Shewhart (March 18, 1891 - March 11,

1967)
an American Physicist, engineer and statistician,
sometimes known as the father of statistical quality
control.
Shewhart worked to advance the thinking at Bell
Telephone Laboratories from their foundation in 1925
until his retirement in 1956, publishing a series of papers
in the Bell System Technical Journal.
Pioneer of modern quality control:

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-recognized the need to separate variation into assignable

and unassignable causes (defined in control.)
-founder of the control chart (e.g. X-bar and R chart).
-originator of the plan-do-check-act cycle.

-perhaps the first to successfully integrate statistics,

engineering, and economics.
-defined quality in terms of objective and subjective
quality:
- objective quality: quality of a thing independent of
people.
- subjective quality: quality is relative to how people
perceive it. (value)
His work was summarized in his book Economic
Control of Quality of Manufactured Product (1931).
Shewharts charts were adopted by the American Society
for Testing and Material (ASTM) in 1933 and advocated
to improve production during World War ll in American
War Standards Z1.1-1941, Z1.2-1941 and Z1.3-1942.
64

W. Edwards Deming
William Edwards Deming (October 14, 1900 December 20,

1993) was an American Statistician, professor, author, lecturer

and consultant.
He is perhaps best known for his work in Japan.
Deming received a BSc in electrical engineering from the
University of Wyoming at Laramie(1921), a M.S. from the
University of Colorado (1925), and a Ph.D from Yale University
(1928). Both graduate degrees were in mathematics and
physics.
From1950 onward, he taught top management how to improve
design (and thus service), product quality, testing, and sales
(the last through global markets) through various methods,
including the application of statistical methods.
65

Studied under Shewhart at Bell Laboratories.

Contributions: well known for helping Japanese
companies apply Shewharts statistical process control.
Japanese scientists and engineers named the famed
Deming Prize after him. It is bestowed on organizations that
apply and achieve stringent quality-performance criteria.
Main contribution is his Fourteen Points to Quality:
create constancy of purpose.
cease dependence on inspection to improve quality
drive out fear and build employee trust.
seek long-term supplier relationship
eliminate numerical goals; substitute leadership
(abolish annual rating or merit system).
eliminate slogans, exhortations, and work-force
targets
66

Major Tenets/view of Demings

Philosophy
#

Workers can only correct 15% of the quality

problems.

The other 85% are managements responsibility,

because they are due to the system.
#

67

The production system must be stable for

quality to be realised. This can be tested with
statistical process control charts.

Major Tenets/ view of Demings

Philosophy
#

Quality is the continuous, incremental

improvement of a stable system.

Quality cannot be inspected into products;

It must be designed in through the products

and process design.

68

Major Tenets/ view of Demings

Philosophy
#

Teamwork and training in quality are

critical weapons in striving for
improvement.

Workers must have the right tools to

monitor and improve quality.

69

Demings Profound
Knowledge

4 parts:

70

Appreciation for a System and theory of

Optimisation.

Some Knowledge of the theory of Variation.

Some theory of Knowledge.

Some theory of Psychology

Joseph M. Juran
Contributions:

also well-known for helping to improve Japanese

quality.
directed most of his work at executives and the field
of quality management.
- developed the Juran Trilogy for managing quality:
Quality planning, quality control, and quality

improvement.

71

Feigenbaum
Developed the concept of Total Quality Control.
System for managing the entire value-chain connecting

supplier to customer.
His Three Steps to Quality are quality leadership,
modern quality technology and organisational
commitment.
If you want to find out about your quality, go out and

ask your customer.

Quality control staff = Facilitators.

72

Philip Crosby
Quality management advocate/ promoter, consultant,

and author.
Quality is Free

The four absolutes of quality including:

#1- quality is defined by conformance to requirements, not
goodness.
#2 - system for causing quality is prevention not appraisal.
#3 - performance standard is zero defects, not thats close
enough.
#4 - measurement of quality is the price of nonconformance,
not indexes.
73

Kaoru Ishikawa
Contributions:
- Considered as Japans leading figure in the area

of

TQM.
His inspiration came from the work of Deming and
Juran, and to a lesser extend, Feingenbaum.
Developed concept of true and substitute quality

characteristics
-true characteristics are the customers view
-substitute characteristics are the producers view
-Degree of match between true and substitute
ultimately determines customer satisfaction.
74

75

He is the originator of Fishbone Diagrams or

Ishikawa diagrams which are now used worldwide in continuous improvement to represent
cause - effect analysis.
Advocate of the use of the 7 tools
Advanced the use of quality control circles,
QCC (worker quality teams).
Respect for humanity as a management
philosophy - full participation.
Cross-functional management.

Genichi Taguchi

Contributions:

Taguchi methods emphasize consistency of

performance and reduced variation

Quality loss function (deviation from target is a loss to
society).
Parameter design (robust engineering) which is an
application of Design of Experiments:
Identify key variables
Reduce variation on the important variables
Open up tolerances on unimportant variables
76

MALCOLM BALDRIGE NATIONAL

QUALITY AWARD
The Baldrige National Quality Program and the
associated award were established by the Malcolm
Baldrige National Quality Improvement Act of
1987.
The program and award were named for Malcolm
Baldrige, who served as United States Secretary
of Commerce during the Reagan administration,
from 1981 until Baldriges 1987 death in a rodeo
accident.
77

The Malcolm Baldrige National Quality Award

recognizes U.S. organizations in the business, health
care, education, and nonprofit sectors for performance
excellence.
The Baldrige Award is the only formal recognition of
the performance excellence of both public and private
U.S. organizations given by the President of the United
States.
It is administered by the Baldrige Performance
Excellence Program, which is based at and managed by
the National Institute of Standards and Technology
(NIST),an agency of the U.S. Department of
Commerce.
78

THE MALCOLM BALDRIDGE NATIONAL

QUALITY AWARD

79

Simulate American companies to improve quality

and productivity

Recognise the achievements of those companies

and set an example for others

Establish guidelines and criteria for evaluating

quality efforts

Provide specific guidance for other American

enterprises that wish to learn how to manage
quality

Criteria for winning the Award :

80

Senior executive leadership

Information and analysis

Strategic quality planning

Human resource development and management

Management of process quality

Quality and operational results

Customer focus and satisfaction

MALCOLM BALDRIGE AWARD

RECIPIENTS

81

1988 MOTOROLA INC., GLOBE METALLURGICAL INC.

1989 XEROX CORP.
1990 CADILLAC MOTOR CAR, IBM, FEDEX.
1991 SOLECTRON CORP.
1992 AT&T NETWORK SYSTEMS, TEXAS INST.
1993 EASTMAN CHEMICAL
1994 WAINWRIGHT CORP.
1995 ARMSTRONG WORLD, CORNING TELECOM
1996 ADAC LABS
1997 3M DENTAL PRODUCTS
1998 BOEING
1999 STMICROELECTRONICS
2000 DANA CORP
2001 - CLARKE AMERICAN CHECKS, INCORPORATED, SAN ANTONIO;
UNIVERSITY OF WISCONSIN
2002 - MOTOROLA INC., BRANCH-SMITH PRINTING DIVISION
2003 - MEDRAD, INC., BOEING AEROSPACE SUPPORT
2004 - THE BAMA COMPANIES, TEXAS NAMEPLATE COMPANY
2005 - SUNNY FRESH FOODS, INC., DYNMC DERMOTT PETROLEUM
OPERATIONS.

MALCOLM BALDRIGE AWARD

RECIPIENTS
2006 - MESA PRODUCTS, INC., NORTH MISSISSIPPI MEDICAL CENTER
2007 - PRO-TEC COATING CO., MERCY HEALTH SYSTEM.
2008 - CARGILL CORN MILLING NORTH AMERICA, IREDELL-STATESVILLE SCHOOLS
2009 - HONEYWELL FEDERAL MANUFACTURING & TECHNOLOGIES, MIDWAY USA,
2010 - MEDRAD, NESTL PURINA PETCARE CO, K&N MANAGEMENT
2011 - HENRY FORD HEALTH SYSTEM, CONCORDIA PUBLISHING HOUSE,
SCHNECK MEDICAL CENTRE, SOUTH CENTRAL FOUNDATION
2012 - LOCKHEED MARTIN MISSILES and FIRE CONTROL Grand Prairie, Texas
(manufacturing); MESA PRODUCTS INC (small business) Tulsa, Okla. ; NORTH
MISSISSIPPI HEALTH SERVICES, Tupelo, Miss. (health care); CITY OF IRVING,
Irving, Texas (nonprofit)

82

Overview of the

Malcolm Baldrige
National Quality Award
(MBNQA)

83

What is the MBNQA?

MBNQA is a national quality award program,
created to recognize organizations that:
have outstanding processes/practices
practice measurable, continuous improvement
achieve customer-focused performance
excellence

84

MBNQA is a business review

Business Review - Inspect what we Expect
A business review is a formal process for evaluating
how an organization operates:
Have we defined what business we are in? Is it what
we excel at? Is it what the customer needs?
Do we know who our competitors are, and what
threatens our success?
Do we have specific actions planned to become the
best at what we do?
85

 Have we aligned the actions of all our partners and

vendors to ensure we are successful at our stated
objectives?
Do we have a work environment that promotes
innovation, empowerment, and a quality of work life
that will attract and retain the best talent available?
Have we documented how we work (processes) so
that we systematically meet customer needs?

86

What does MBNQA look for?

Visionary Leadership
Customer-driven excellence
Organisation and personal learning
Valuing employees and partners
Agility/ Rapidly respond to change
Focus on the future
Managing for innovation
Management by fact
Social Responsibility
Focus on results and creating value
systems perspective
87

What does MBNQA look for?

Leadership
Strategic Planning
Customer Focus
Information/ Analysis
Workforce
Processes
Results (45%)

88

Aproach Deployment
Continuous Improvement (55%)

Deming Prize
The Deming prize, established in December 1950 in
honor of W. Edward Deming; originally designed to reward
Japanese companies for major advances in quality
management.
Over the years it has grown, under the guidance of
Japanese Union of Scientists and Engineers (JUSE) to
where it is now also available to non-Japanese companies,
usually operating in Japan, and also to individuals
recognized as having made major contributions to the
advancement of quality.
Two categories of awards are made annually, the
Deming Prize for Individuals and the Deming Application
Prize.

89

90

Deming Prize Criteria

Broadly, the following considerations are taken into account
for the Deming Application Prize:
The emphasis of examination is on the implementation of
TQM
The actual implementation of TQM practices is appreciated
Usage of advanced statistical methods is not the basis
for success; appreciation and implementation of statistical
methodology are more important

91

Similar patterns of evaluation are adopted for both

manufacturing and non-manufacturing companies
Examination viewpoint criteria provides an overall
picture of TQM.
Examiners judge features that have been applied
by the company.

92

The Examination Viewpoint includes:

Top Management Leadership, Vision, Strategies
TQM Frameworks
Quality Assurance Systems
Management Systems for Business Elements
Human Resource Development
Effective Utilisation of Information
TQM Concepts and Values
Scientific Methods
Organisational Powers (Core Technology, Speed,
93

Vitality)
Contribution to Realisation of Corporate Objectives

Successful companies should score:

70 points or higher in the Executive Session
70 points or higher as the company average,
excluding the Executive Session
50 points or higher for any examined unit of the
company

94

SIX SIGMA
Six Sigma is a business management strategy originally
developed by Motorola, USA in 1981. As of 2010, it enjoys
widespread application in many sectors of industry,
although its application is not without controversy.
Six Sigma seeks to improve the quality of process outputs
by identifying and removing the causes of defects (errors)
and minimizing variability in manufacturing and business
process.
95

 It uses a set of quality management methods, including

statistical method, and creates a special infrastructure of
people within the organization ("Black Belts", "Green
Belts", etc.) who are experts in these methods.
Each Six Sigma project carried out within an
organization follows a defined sequence of steps and has
quantified targets.
These targets can be financial (cost reduction or profit
increase) or whatever is critical to the customer of that
process (cycle time, safety, delivery, etc.).
96

The term six sigma originated from terminology

associated with manufacturing, specifically terms
associated with statistical modeling of manufacturing
processes.
Originally, it referred to the ability of manufacturing
processes to produce a very high proportion of output
within specification.
The maturity of a manufacturing process can be described
by a sigma rating indicating its yield, or the percentage of
defect-free products it creates.
97

A six-sigma process is one in which 99.99966% of the

products manufactured are free of defects, compared
to a one-sigma process in which only 31% are free of
defects.
Motorola set a goal of "six sigmas" for all of its
manufacturing operations and this goal became a
byword for the management and engineering practices
used to achieve it.
98

Six Sigma is a registered service mark and trademark

of Motorola Inc. As of 2006 Motorola reported over
US$17 billion in savings from Six Sigma.
Other early adopters of Six Sigma who achieved wellpublicized success include Honeywell (previously
known as AlliedSignal) and General Electric, where
Jack Welch introduced the method.
99
99

By the late 1990s, about two-thirds of the Fortune

500 organizations had begun Six Sigma initiatives
with the aim of reducing costs and improving
quality.
In recent years, some practitioners have
combined Six Sigma ideas with lean manufacturing
to yield a methodology named Lean Six Sigma.

100
100

Origin and meaning of the term

six sigma process
The term "six sigma process" comes from the notion
that if one has six standard deviations between the
process mean and the nearest specification limit, as
shown in the graph, practically no items will fail to
meet specifications. This is based on the calculation
method employed in process capability studies.

101

101

Capability studies measure the number of

standard deviations between the process mean and
the nearest specification limit in sigma units.
As process standard deviation goes up, or the
mean of the process moves away from the center
of the tolerance, fewer standard deviations will fit
between the mean and the nearest specification
limit, decreasing the sigma number and increasing
the likelihood of items outside specification
102
102

Origin and meaning of the term

"six sigma process"

Graph of the normal distribution, which underlies the statistical assumptions of the Six
Sigma model. The Greek letter (sigma) marks the distance on the horizontal axis
between the mean, , and the curve's inflection point. The greater this distance, the greater
is the spread of values encountered. For the curve shown above, = 0 and = 1. The
upper and lower specification limits (USL, LSL) are at a distance of 6 from the mean.
Because of the properties of the normal distribution, values lying that far away from the
mean are extremely unlikely. Even if the mean were to move right or left by 1.5 at some
point in the future (1.5 sigma shift), there is still a good safety cushion. This is why Six
Sigma aims to have processes where the mean is at least 6 away from the nearest
specification limit
103
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Methods
Six Sigma projects follow two project methodologies inspired
by Deming's Plan-Do-Check-Act (PDCA) Cycle.
These methodologies, composed of five phases each, bear
the acronyms DMAIC and DMADV
DMAIC is used for projects aimed at improving an existing
business process.
(Define-Measure-Analyze-Improve-Control)
DMADV is used for projects aimed at creating new product
or process designs.
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(Define-Measure-Analyze-Design-Verify)

DMAIC
The DMAIC project methodology has five phases:
Define the problem, the voice of the customer, and
the project goals, specifically.
Measure key aspects of the current process and
collect relevant data.
Analyze the data to investigate and verify causeand-effect relationships. Determine what the
relationships are, and attempt to ensure that all
factors have been considered. Seek out root
cause of the defect under investigation.
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Improve or optimize the current process based

upon data analysis using techniques such as
design of experiments, poka yoke or mistake
proofing, and standard work to create a new,
future state process. Set up pilot runs to establish
process capability.
Control the future state process to ensure that any
deviations from target are corrected before they
result in defects. Control systems are
implemented such as statistical process control,
production boards, and visual workplaces and the
process is continuously monitored.
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DMADV
The DMADV project methodology, also known as
DFSS ("Design For Six Sigma"), features five
phases:
Define design goals that are consistent with
customer demands and the enterprise strategy.
Measure and identify CTQs (characteristics that
are Critical To Quality), product capabilities,
production process capability, and risks.

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Analyze to develop and design alternatives,

create a high-level design and evaluate design
capability to select the best design.
Design details, optimize the design, and plan
for design verification. This phase may require
simulations.
Verify the design, set up pilot runs, implement
the production process and hand it over to the
process owner(s).

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Implementation roles
One key innovation of Six Sigma involves the
"professionalizing" of quality management functions.
Prior to Six Sigma, quality management in practice was
largely relegated to the production floor and to
statisticians in a separate quality department.
Formal Six Sigma programs borrow martial arts ranking
terminology to define a hierarchy (and career path) that
cuts across all business functions.
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Six Sigma identifies several key roles for its

successful implementation.
Executive Leadership includes the CEO and
other members of top management.
They are responsible for setting up a vision for Six
Sigma implementation.
They also empower the other role holders with the
freedom and resources to explore new ideas for
breakthrough improvements.

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Champions take responsibility for Six Sigma

implementation across the organization in an integrated
manner.
The Executive Leadership draws them from upper
management.
Champions also act as mentors to Black Belts.
Master Black Belts, identified by champions, act as inhouse coaches on Six Sigma.
They devote 100% of their time to Six Sigma.
They assist champions and guide Black Belts and Green
Belts.
Apart from statistical tasks, they spend their time on
ensuring consistent application of Six Sigma across various
functions and departments.
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Black Belts operate under Master Black Belts to apply

Six Sigma methodology to specific projects.
They devote 100% of their time to Six Sigma.
They primarily focus on Six Sigma project execution,
whereas Champions and Master Black Belts focus on
identifying projects/functions for Six Sigma.

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Green Belts are the employees who take up Six

Sigma implementation along with their other job

responsibilities, operating under the guidance of
Black Belts.

Some organizations use additional belt colours, such

as Yellow Belts, for employees that have basic
training in Six Sigma tools.

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TQM and Six Sigma

The Six Sigma process improvement originated in 1986
from Motorolas drive towards reducing defects by
minimizing variation in processes through metrics
measurement.
Applications of the Six Sigma project execution
methodology have since expanded to include practices
common in Total Quality Management and Supply Chain
Management, such as increasing customer satisfaction,
and developing closer supplier relationships.

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The main difference between TQM and Six

Sigma (a newer concept) is the approach.

TQM tries to improve quality by ensuring
conformance to internal requirements, while

Six Sigma focuses on improving quality by

reducing the number of defects and
impurities.
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The Quality Hierarchy

Total Quality
Management

Incorporates QA/QC activities

into company-wide system
aimed
at satisfying the customer

Quality Assurance

Actions to insure products or

services conform to company
requirements

Prevention
SPC

Quality Control
Detection

SQC

Inspection

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Operational techniques to make

inspection more efficient and to
reduce the costs of quality.
Inspect products

Current Practices
*

55% of US businesses use quality as a

performance indicator in 1991

70% of Japanese Businesses use quality as a

performance indicator in 1991

50% of Japanese businesses always translate

customer expectations in the design of new
products, compared to 40% in Germany and 22%

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in US.

Contd

Japanese businesses use technology twice

as much as US businesses in meeting
customer expectations.

47% of Japanese businesses always use

process simplification compared to 22% of
US businesses.

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Contd

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From about 1960 to 1990, the United States lost 40

percent of its market share to foreign competitors,
while Japan increased its foreign market by 500
percent.

For the Japanese, the secret to success was the

implementation of systematic quality efforts to
meet or exceed customer requirements and
expectations the first time and every time.
The three basic principles of TQM are to: focus on
achieving customer satisfaction, seek continuous
and longterm improvement in all the organization's
processes and outputs, and take steps to ensure
the full involvement of the entire work force in
improving quality.