Basic Statistics For Process

Control- Chapter 1-2-3:

Quality Basics
fetiye.unsal@tbcollege.com
 Length Time Activity

50 8:00 8:50 Chapter 1- 2- 3

Agenda –Basic 10 8:50 9:00 Break
Statistics for Process
Control 50 9:00 9:50 Chapter 1- 2- 3

10 9:50 10:00 Break

45 10:00 10:45 In Class Work

 Evaluation Timetable
Evaluation Assignment 1 May 24, 2022
Timetable –Basic Quiz 1 June 7, 2022
In Class Assignment June 21, 2022
Statistics for Process Assignment 2 July 12, 2022
Control Quiz 2 July 26, 2022

Project/ Presentation August 9, 2021

 Part 1
• How Do Gurus Define Quality? Why do we need to know Quality
Gurus?
• Quality Form & Definition of Total Quality Control
Part 2
• Process and Process Improvement
• Variation & Introduction of how to control the Variation in the
Learning Process
• Productivity & what is the difference between quality &
Objectives productivity?
Part 3
• A History of Managing for Quality & Modern Quality Principles
• Measuring Equipment for Quality
• American Society for Quality
  Henry Ford, American industrialist and founder of the Ford Motor
Company, once said that “Quality means doing it right when no
one is looking.”
 The American Society for Quality defines quality as a subjective
What is term for which each person has his or her own definition. In
technical usage, quality can have two meanings: (1) the
Quality? characteristics of a product or service that bear on its ability to
satisfy stated or implied needs and (2) a product or service free
of deficiencies.
 Edwards Deming, well-known consultant and author on the
subject of quality, describes quality as nonfaulty systems
What is Quality?
 Dr. Joseph M. Juran, in his book Juran’s
Quality Control Handbook, describes quality
as fitness for use.
 Quality Is Free, Philip Crosby discusses
quality as conformance to requirements and
nonquality as nonconformance
 The Juran Trilogy is an improvement cycle that
is meant to reduce the cost of poor quality by
planning quality into the product/process. In the
planning stage, it is critical to define who your
customers are and find out their needs (the “voice of
the customer”)
JURAN’S QUALITY TRIOLOGY
  Quality can take many forms.
Design  Quality of design means that the product or service has been
& designed to successfully fill a consumer need, real or perceived.

Conformance  Quality of conformance—conformance to requirements—refers

to the manufacture of the product or the provision of the service
& that meets the specific requirements set by the consumer.
 Quality of performance means that the product or service
Performance performs its intended function as identified by the consumer
Armand Quality is:

Feigenbaum,
 a customer determination which is based on the customer’s
author of Total actual experience with the product or service, measured against
Quality his or her requirements—stated or unstated, conscious or merely
sensed, technically operational or entirely subjective—and
Control always representing a moving target in a competitive market.
 A process takes inputs and performs value-added activities on those
inputs to create an output.

Processes and
Process
Improvement
 no two products or
 its meaning that

occurrences are exactly alike

Variation  In manufacturing, variation is often identified as the difference
between the specified target dimension and the actual part
dimension.

 In service industries, variation may be the difference between the

type of service received and the type of service expected..
  To manufacture products within specifications, the processes
producing the parts need to be stable and predictable. A process
is considered to be under control when the variability (variation)
from one part to another or from one service to another is
Process in stable and predictable.

Control ?
 When a process is predictable, very little variation is present.
 Statistical process control practitioners use a variety of
techniques to locate the sources of variation in a process.
  Productivity’s principal focus is on doing something
more efficiently.
 Quality, on the other hand, focuses on being effective. Being
Quality & effective means achieving the intended results or goals while
meeting the customer’s requirements.
Productivity
 So quality concentrates not only on doing things right (being
productive), but also on doing the right things right at the first
time (being effective).
Stable &
Unstable
Process

Normal Distribution (mathsisfun.com)

  A normal distribution, sometimes called the bell curve, is a distribution that occurs
naturally in many situations.
A Normal  For example, the bell curve is seen in tests like the SAT and GRE. The bulk of students
will score the average (C), while smaller numbers of students will score a B or D.
Distribution (Bell  An even smaller percentage of students score an F or an A. This creates a distribution
Curve) that resembles a bell (hence the nickname). The bell curve is symmetrical. Half of the
data will fall to the left of the mean; half will fall to the right.
  The standard deviation is a measure of the amount of
variation or dispersion of a set of values. A low standard
Standard deviation indicates that the values tend to be close to
Deviation the mean (also called the expected value) of the set, while a
high standard deviation indicates that the values are spread
out over a wider range.
Normal
Distribution
So, using the
Standard Deviation
we have a
"standard" way of
knowing what is
normal, and what is
extra large or extra
small.
Rottweilers are tall
dogs. And
Dachshunds are a
bit short, right?
  Find the variance and standard deviation of the following scores
EXAMPLE on an exam: 92, 95, 85, 80, 75, 50
  Find the standard deviation of the average temperatures recorded
Example over a five-day period last winter: 18, 22, 19, 25, 12
Empirical Rule
The standard
normal
distribution is
a normal
distribution
with a mean of
zero
and standard
deviation of 1.
  The percentages for the first 2 intervals are
somewhat larger than what we would expect using
the Empirical Rule. The Empirical Rule indicates that
approximately 68% of the observations will fall
within 1 standard deviation of the mean. It also
Empirical Rule indicates that approximately 95% of the
& Chebyshev’s observations will fall within 2 standard deviations of
the mean.
Theorem
 Chebyshev’s Theorem says that at least ¾ or 75% of
the observations will fall within 2 standard deviations
of the mean and at least 8/9 or 88.8% of the
observations will fall within 3 standard deviations of
the mean.
 Quality has existed for
thousands of years.

The Evaluation
of Modern
Quality
Modern quality
principles have
evolved over
time
  Inspection refers to those
activities designed to detect or
find nonconformances existing
Inspection in already completed products
and services. Inspection, the
detection of defects, is a
regulatory process..
  It refers to the use of specifications and inspection of completed
parts, subassemblies, and products to design, produce, review,
sustain, and improve the quality of a product or service.
Quality
Control Quality control refers
Quality control broadly to the process of
(QC)
managing product quality to
meet a desired standard.
  The use of statistical methods for production monitoring and parts
inspection became known as statistical quality control (SQC),
wherein statistical data are collected, analyzed, and
interpreted to solve problems.

Statistical
Quality
Control (SQC)
  Prevention of defects by
Statistical applying statistical
methods to control the
Process process is known as
Control statistical process control
(SPC).
  is a management
approach that places
emphasis on continuous
process and system
Total quality improvement as a means of
achieving customer
management satisfaction to ensure
(TQM) long-term
company
success.
ANSWER
 Kaizen is a Japanese
term meaning
"change for the
better" or
"continuous
improvement."
 International Organization for Standardization (ISO)

Iso 9001 :2015

Quality Iso 14001:2015
Standards Iso 18001:2018

https://www.iso.org/standard/63787.html
  The Six Sigma concept was developed at Motorola Corporation as
a strategy to deal with product and
Six Sigma system failures.
Methodology
 Define-Measure-Analyze-Improve-Control
(DMAIC).
Green belt
Lean
production
  Lean production focuses on driving waste out
of the production cycle.
7 waste:

 Producing defective parts

 Producing more parts than needed
Lean  Excessive inventories
production  Unnecessary activities
 Unnecessary movement of people
 Unnecessary transportation or handling of materials
 People waiting
  Kanban & just-in-time,
 Small batch sizes
Lean  Reduced setup times

production  Zero Defects

 Flexible Workers
 ….
  the American Society for Quality (ASQ) provides an opportunity
for collaboration on innovation, creativity, and change. Knowledge
of quality tools and techniques is essential for an organization’s
financial success and
 ASQ provides access to this knowledge.
 ASQ provides connections with other professionals interested in
The American improving the way they do business and advancing their career.
Society for  ASQ provides training and certification in a variety of areas
including: auditor, Certified Quality Technician, Certified Quality
Quality (ASQ) Engineer, Certified Quality Inspector, Certified Reliability Engineer,
Certified Process Analyst, Lean, Six Sigma Green, Black, and
Master Black Belt, and others..

 https://asq.org/customer-services/contact-asq
Quality Basics
6th Edition

Chapter 2

Quality Advocates

Copyright © 2018, 2012, 2007 Pearson Education, Inc. All Rights Reserved.
Chapter 2: Dr. Armand Feigenbaum (1920-2014)
Quality Landmark text: Total Quality Control
Advocates (1951)
  Dr. Feigenbaum’s Definition of Quality:
 Quality is a customer determination which is
Chapter 2: based on the customer’s actual experience with
the product or service, measured against his or
Quality her requirements—stated or unstated,
Advocates conscious or merely sensed, technically
operational or entirely subjective—always
representing a moving target in a
competitive market.
  Dr. Armand Feigenbaum
Chapter 2:
Quality  Was the first individual to encourage treating quality as a
fundamental business strategy; an approach to doing business that
Advocates makes an organization more effective.
  Dr. Armand Feigenbaum
Chapter 2:  Quality is not a factor to be managed but a method of
‘managing, operating, and integrating the marketing,
Quality technology, production, information, and finance areas
throughout a company’s quality value chain.’
Advocates  1997: Changing Concepts and Management of Quality Worldwide
  Dr. Walter Shewhart (1891-1967)
Chapter 2:  Father of Statistical Process Control
 Control of Quality of Manufactured Product
Quality  Van Nostrand Reinhold, 1931

Advocates
  Dr. Shewhart: Inventor of Control Charts

Chapter 2:
Quality
Advocates
  Dr. Shewhart proposed that controlled and uncontrolled
variation exists.

Chapter 2:  A phenomenon will be said to be controlled when, through the use

of past experience, we can predict, at least within limits, how the
Quality phenomenon may be expected to vary in the future. Here it is
understood that prediction within limits means that we can
Advocates state, at least approximately, the probability that the observed
phenomenon will fall within the given limits.
  Dr. Walter Shewhart proposed:
 Common (Chance) Causes
 Controlled variation that is present in a process due
to the very nature of the process.
Chapter 2:  Special (Assignable) Causes
Quality  Uncontrolled variation caused by something
that is not normally part of the process.
Advocates
  Dr. W. Edwards Deming (1900-1993)
 The Father of Quality Management

Chapter 2:
Quality
Advocates
Second Order
of the Sacred
Treasure
Chapter 2: Quality Advocates
  Create a constancy of purpose toward improvement of
product and service, with the aim to become competitive
and to stay in business and to provide jobs.
 Adopt a new philosophy.
 Cease dependence on inspection to achieve quality.
 End the practice of awarding business on the basis of price
tag alone. Instead minimize total cost.
Dr. Deming’s  Constantly and forever improve the system of production and
service.
Fourteen
Points
Dr. Deming’s Fourteen Points
continued.
 Institute training on the job.
 Institute leadership.
 Drive out fear.
 Break down barriers between departments.
 Eliminate slogans, exhortations, and targets for the
workforce.
 Eliminate arbitrary work standards and numerical
quotas. Substitute leadership.
 Remove the barriers that rob people of their right to
pride of workmanship.
 Institute a vigorous program of education and self-
improvement.
 Put everybody in the company to work to accomplish
the transformation.
Chapter 2: Quality
Advocates
 Dr. Deming’s Plan-Do-Study-
Act Cycle
  Dr. Deming’s Theory of Profound Knowledge

Chapter 2:  An appreciation for a system

Quality  Knowledge about variation
 Theory of knowledge
Advocates  Psychology
Chapter 2:
Quality
Advocates
Dr. Joseph M. Juran (1904- 2008 )
Chapter 2: Quality Advocates

 Juan’s Philosophy
 Big Q versus Little q
 Proposed the big ‘Q’ and little ‘q’ in Quality
 ‘q’ = the products in manufacturing
 ‘Q’ = ALL processes in all industries
Chapter 2:
 Philip Crosby (1926-2001)
Quality
Advocates
  Philip Crosby proposed that:
Chapter 2: “QUALITY IS FREE"
Quality  The lack of quality is costly. Spending money
to reduce waste or improve efficiency saves
Advocates money in the long run.
  Crosby’s Four Absolutes of Quality
1. Quality Definition: Conformance to
Requirements
2. Quality System: Prevention of Defects
3. Quality Performance Standard: Zero Defects
Chapter 2: 4. Quality Measurement: Costs of Quality
Quality
Advocates
 Crosby’s Five Erroneous Assumptions
about Quality
1. Quality means goodness, luxury or
shininess.
2. Quality is intangible and therefore not
measurable.
3. An economics of quality exists.
4. Workers are the source of quality
problems.
5. Quality originates in the quality Chapter 2:
department. Quality
Advocates
 Dr. Kaoru Ishikawa
(1915-1989)
 Ishikawa Proposed Seven Tools of Quality

1. Flow Chart
2. Control Chart
3. Check Sheet
4. Histogram
5. Pareto Diagram
6. Cause and Effect Diagram
7. Scatter Diagram
Chapter 2:
Quality  Dr. Ishikawa’s Cause and Effect Diagram

Advocates(
Chapter 2:
Quality
Advocates
  Check Sheets
 Check Sheets are data recording devices that collect data (events)
according to category. A check sheet is a data recording
Chapter 4:  device that is essentially a list of categories.
Quality
Improvement:
Problem
Solving
 Categories, a check or mark is placed on the check sheet in the
appropriate category.
 Check sheets are often used in conjunction with other quality
assurance techniques.
 The information from these sheets will help the team focus their
problem-solving efforts.
 The Pareto chart is a graphical tool for ranking causes of
problems from the most significant to the least significant.

the Pareto principle for use in problem identification.

Pareto Chart Also known as the 80–20 rule. It is stating that 80 percent of
problems come from 20 percent of causes.
( 80-20 rule)
To encourage management to focus their improvement
efforts on the 20 percent “vital few.”

Where can you this chart? These charts are applicable. any
problem that can be separated into categories of occurrences.
Quality Improvement:
Problem Solving

 Pareto Charts;
 graphically rank causes of
problems from the most
significant to the least
significant.

https://www.youtube.com/watch?v=oCc6VU2kYQI
 Select Determine Gather Use Determine Calculate
A Pareto chart Select the
subject for the
Determine what
data need to be
Gather data
related to the
Use a check
sheet to gather
Determine the
total number of
calculate the
percent of the

is constructed chart. Problems,

a department or
a process.
gathered.
Determine if
numbers,
quality problem. data. nonconformities
and
total in each
category.

using the percentages, or

costs are going
to be tracked.

following
steps:
6) Determine the costs associated with the nonconformities or defects.

7) Select the scales for the chart. Y axis scales are typically the number of A Pareto chart
occurrences, number of defects, dollar loss per category, or percent. The x axis
usually displays the categories of nonconformities, defects, or items of interest. is constructed
using the
8) Draw a pareto chart Draw a Pareto chart by organizing the data from the following
largest category to the smallest.
steps:
The largest bars represent
9) Analyze the chart or charts.

the vital few problems.

 Dr. Ishikawa;

 Promoted the use of quality circles.

Focused on four areas to influence
quality
1. Market-in Quality
2. Worker Involvement
3. Quality Begins and Ends with
Education
4. Selfless Personal Commitment
Chapter 2:
Quality  Dr. Genichi Taguchi (1924 - 2012)

Advocates
Chapter 2:
Quality  The Taguchi Loss Function

Advocates
  The Taguchi loss function is a concept in quality engineering and
robust design introduced by Japanese engineer and statistician
Genichi Taguchi. It is a fundamental concept in the field of quality
management and is used to quantify the economic loss or cost
associated with variations in product or process quality.
 The main idea behind the Taguchi loss function is to recognize that
The Taguchi even small deviations from the target or nominal values in
product or process characteristics can result in increased costs or
loss function reduced customer satisfaction.
 The Taguchi loss function is typically represented by a curve that
illustrates the relationship between the quality of a product or
process and the associated financial losses or customer
dissatisfaction. The curve resembles a quadratic function that
increases more rapidly as you move away from the target value
in either direction.
 Choose one topic from this lecture, research it, and discuss how this
Class activity knowledge will affect your work career.
Quality Basics
6th Edition

Chapter 3

Quality Systems

Copyright © 2018, 2012, 2007 Pearson Education, Inc. All Rights Reserved.
Chapter 3:  Within a Quality Management System, the necessary ingredients
exist to enable the organization’s employees to identify, design,
Quality develop, produce, deliver, and support products or services that
the customer wants. A QMS is adaptable to the ever-changing
Systems needs, requirements, and expectations of its customers.
  ISO 9000
Chapter 3:  The purpose of the ISO 9000 standards is to facilitate the
multinational exchange of products and services by providing
Quality a clear set of quality system requirements. The standards
Systems provide a baseline against which an organization’s quality
system can be judged.
Chapter 3:  ISO (meaning equal) encourages organizations to develop,
install, and utilize a quality management system that supports
Quality continuous improvement through the prevention of defects, and
Systems the reduction of variation and waste.
Chapter 3:  ISO 9000 encourages organizations to understand and manage
Quality how each process’ performance affects other related processes
when those processes intersect and interact.
Systems
  ISO 9001:2015 Major Clauses
1. Scope
2. Normative Reference
3. Terms and Definitions
4. Context of the Organization
Chapter 3: 5. Leadership
6. Planning
Quality 7. Support
Systems 8. Operation
9. Performance Evaluation
10. Improvement
  TS 16949:
 TS 16949 defines automotive industry standards world-wide
 TS 16949 has two components:
 ISO 9001 AND
 Customer Specific Requirements
 PPAP Production Part Approval Process
Chapter 3:  FMEA Failure Modes and Effects Analysis
Quality  MSA Measurement Systems Analysis
 APQP Advanced Product Quality Planning and Control
Systems  QSA Quality System Assessment


  ISO 14000 Environmental Management
 Standard encourages voluntary environmental protection
Chapter 3: and the prevention of pollution while taking into account the
Quality economic needs of society.

Systems
  ISO 14000 standards do not enforce environmental laws or
Chapter 3: regulate environmental activities of an organization.
Quality
Systems
  Malcolm Baldrige National Quality Award
 Established 1987
 Awarded by the President of the United States
 Offered in the following business sectors:
 Education, healthcare, manufacturing,
Chapter 3:  nonprofit/government, service, and small business.

Quality  www.nist.gov

Systems
  Malcolm Baldrige National Quality Award is named
after Malcolm Baldrige. Secretary of Commerce from
1981 until July 1987.
Chapter 3:  Baldrige was a proponent of quality management as a key
to this country’s prosperity and long-term strength. He
Quality took a personal interest in the quality improvement act
Systems that was eventually named after him and helped draft an
early versions. In recognition of his contributions,
Congress named the award in his honor.
  Key Elements of the Malcolm Baldrige National Quality
Award

1. Leadership
2. Strategy
3. Customers
Chapter 3: 4. Measurement, Analysis, and Knowledge Management
Quality 5. Workforce
6. Operations
Systems 7. Results
  Leadership:
 Examines senior-level leadership commitment too and
involvement in process improvement, organizational
Chapter 3: governance, and social responsibilities.

Quality  Strategy:
 Examines senior-level leadership commitment too and
Systems involvement in process improvement, organizational governance,
and social responsibilities.
  Customers:
 Examines how well the organization listens to the voice of the
customer.
 Measurement, Analysis, and Knowledge Management:
 Examines how an organization gathers, analyzes, and uses
Chapter 3: information and performance measurement systems to encourage
excellent performance.
Quality
 Workforce:
Systems  Examines how an organization enables its workforce to perform to
its fullest potential in alignment with the organization's overall
strategic objectives.
  Operations:
 Examines how an organization designs and manages the work
performed, product design and delivery, innovation, and
operational effectiveness.
Chapter 3:  Results:
Quality  Examines an organization’s performance in the areas of product
and process results, customer-focused results, financial and market
Systems results, workforce-focused results and leadership and governance
results.
 Six Sigma
Bill Smith, Reliability Engineer,
Motorola Corporation
The increasing complexity of
Chapter 3: systems and products used by
Quality consumers created higher than
Systems desired system failure rates.
Holistic approach to reliability
and quality and developed a
strategy for improving both
(1988).
https://www.youtube.com/watch?v=MIssDGB7pJc
 Six Sigma is a structured, data driven
methodology,
Chapter 3: for eliminating waste,
Quality from processes, products, and other
Systems business activities,
while having a positive impact on
financial performance.
 Six Sigma Perceptions
 Perceived to be a business system that
improves the bottom line.
 Perceived as fitting naturally into the business
systems of most companies.
 Perceived as being more easily and more
successfully launched than traditional Total
Quality Management programs.

Chapter 3:
Quality Systems
 Six Sigma Traditional Quality
Systems

 Highly focused problem- Highly focused problem-

 solving system DMAIC solving system PDSA

Chapter 3:  Focus on profits

performance
Focus on improving organizational
including profit
Quality
 Tools include SPC, DOE, FMEA Tools include SPC, DOE, FMEA,
Systems  Project management, capability studies, benchmarking,
 Benchmarking. Theory of constraints

 3.4 defects/million Process capability

 Focus on metrics Measures of Performance

  Benefits of adopting the Six Sigma methodology:

Chapter 3:  Enhanced ability to provide value to customer

Quality 

Enhanced understanding of key business processes
Reduction of waste
Systems  Improved profit performance
  Six Sigma Methodology focuses on:

Chapter 3:  Customer knowledge

 Critical to Quality information
Quality  Core processes
Systems  Key business processes that deliver value
directly to the customer
 Accurate performance measures of both
  Six Sigma Methodology is based on:

Chapter 3:  Statistical Process Control Techniques

Quality  Data Analysis Methods
 Project Management Techniques
Systems  Systematic Training of Participants
Chapter 3:
 Six Sigma is data driven and profit focused.
Quality
Systems
Chapter 3:  The goal of Six Sigma is to reach 3.4 defects per million
Quality opportunities over the long term.

Systems
Chapter 3:
 Six Sigma seeks to reduce the variability present in processes.
Quality
Systems
Chapter 3:
Quality
Systems
  An improvement of just 1 sigma can
result in a ten-fold reduction in the
number of defects.

Chapter 3:  At three sigma, 66,800 defects per

million costing
Quality  $10/piece to fix = $668,000

Systems
 At four sigma, 6,210 defects per
million costing
 $10/piece to fix = $62,100
 At three sigma, 66,800 defects per million costing
$10/piece to fix = $668,000

At four sigma, 6,210 defects per million costing

$10/piece to fix = $62,100

Chapter 3:  Six Sigma projects are

selected based on their ability
Quality to contribute to and enhance
an organization’s financial
Systems performance.
Chapter 3:
 Six Sigma projects seek out sources of waste (overtime, warranty
Quality claims, production backlogs, and/or customer issues).
Systems
  Six Sigma projects have five phases:
 Define
Chapter 3:  Measure
Quality  Analyze
Systems  Improve
 Control
  Six Sigma projects have five phases:
Chapter 3:  Define
 Identify the problem/project
Quality  Define the requirements
Systems  Establish the goals to be achieved
  Measure:
Chapter 3:  Gather information about the current process
Quality  Define and measure key process steps and inputs
 Refine the problem statement and goals
Systems
  Analyze:
Chapter 3:  Identify potential root causes of the problem
Quality  Validate the cause and effect relationship
 Identify the vital few root causes
Systems
  Improve:
Chapter 3:  Identify potential root causes of the problem
Quality  Test solutions
 Measure results
Systems
  Control:
Chapter 3:  Evaluate and monitor improvements
Quality  Make adjustments as needed
 Establish standard procedures
Systems
  Essential tools used with DMAIC process:

 Process Maps
 Cause and Effect Diagrams
 Failure Modes and Effects Analysis (FMEA)
Chapter 3:  Measurement System Analysis (MSA)
 Process Capability Studies (CP. CPK)
Quality  Multivariate studies
Systems  Design of Experiments (DOE)
 Process Control Plans
  Six Sigma Project Participants
 Green Belts
 Formal training
 Complete a cost-savings project ($10,000+)
 Black Belts
 Advanced training (more advanced)
Chapter 3:  Complete cost-savings projects ($100,000+)
Quality  Master Black Belts
 Extensive training
Systems  Complete cost-savings projects ($1,000,000+)
  Six Sigma Acronyms

 APPQP - Advanced Product Quality Planning

 CTQ - Critical to Quality
 DFSS - Design for Fix sigma
 DMAIC - Define, measure, analyze, improve, control
Chapter 3:  DPMO - Defects per million opportunities
 DPU - Defect per unit
Quality  FMEA - Failure Modes and Effects Analysis
 KPIV - Key process input variable
Systems  KPOV - Key process output variable
 Process Owners - The individual responsible for the process and what it
produces
 Reliability - Measured as mean-time-to-failure
 Quality - Measured as process variability and defect rates
  In order to successfully adopt the Six Sigma methodology, an organization
must have:
 Visible management commitment
Chapter 3:  Visible management involvement
 Clear definition of customer requirements
Quality  Understanding of key business processes

Systems 

Sound measures of performance
Discipline
 Rewards