Transcript Chapter 1

Module 7
Process Management
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Wisdom from Texas Instruments
“Unless you change the process, why would
you expect the results to change”
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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
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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
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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
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Product Development Paradigms
Traditional Approach
• Design the product
• Make the product
• Sell the product
Testing, feedback
& redesign are
key!
Which sounds like?
Continuous Improvement!
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Deming’s Approach
Design the product
Make it with
appropriate tests
Put it on the market
Conduct consumer
research
Redesign with
improvements
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Product Development Process
Idea
generation
Concept
development
Product &
process design
Full-scale
production
Product
introduction
Market
evaluation
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Quality Engineering
• System Design
– Functional performance
• Parameter Design
– Nominal dimensions
• Tolerance Design
– Tolerances
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Loss Functions
Traditional
View
loss
no loss
loss
nominal
tolerance
Taguchi’s
View
loss
loss
Loss is progressive as variation increases.
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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
Where:
L = Loss (in Dollars)
x = Quality characteristic (Diameter, concentration, etc.)
T = Target value for x
k = Constant
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House of Quality
Interrelationships
Technical requirements
Voice of
the
customer
Customer
requirement
priorities
Relationship
matrix
Technical requirement
priorities
Competitive
evaluation
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Quality Function Deployment
technical
requirements
component
characteristics
process
operations
quality plan
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Motorola’s Approach
to Process Design
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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.
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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?
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Basic Components of Services
• Physical facilities, processes, and
procedures
• Employee behavior
• Employee professional
judgment
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Key Service Dimensions
Customer contact and interaction
Labor intensity
Customization
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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
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After Action Review
1.
2.
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4.
What was supposed to happen?
What actually happened?
Why was there a difference?
What can we learn?
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Supplier and Partnering Processes
• Recognize the strategic importance of
suppliers
• Develop win-win relationships through
partnerships
• Establish trust through openness and
honesty
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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
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Benefits of Effective Supplier Process
Management
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Reduced costs
Faster time to market
Increased access to technology
Reduced supplier risk
Improved quality
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Process Improvement
• Productivity improvement
• Work simplification
• Planned methods change
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Kaizen
Stretch goals
Benchmarking
Reengineering
Traditional
Industrial
Engineering
New approaches from
the total quality
movement
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Stretch Goals
• "An organizational goal with an objective probability of
attainment that may be unknown but is seemingly impossible
given current capabilities.“ ~ Sim Sitkin
• Stretch goals are ambitious goals that challenge current
assumptions and processes, and inspire teams to re-imagine
what they previously thought possible. They differ from regular
goals because of this level of difficulty; stretch goals seem
impossible at the outset, while regular ones are perceived as
challenging but achievable.
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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
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Information Management
• If you don’t measure results, you can’t tell
success from failure
• If you can’t see success, you can’t reward it –
and if you can’t reward success, you are
probably rewarding failure
• If you can’t recognize failure,
you can’t correct it
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Process Flow
Measurement
Data
Analysis
Information
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Use of Information and Analysis
Validation
Customer
Requirements
Prediction
Measurements
Control
Processes
Results
Design
Measurement supports executive performance review
and daily operations and decision making.
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Benefits of
Information Management
• Understand customers and customer
satisfaction
• Provide feedback to workers
• Establish a basis for reward/recognition
• Assess progress and the need for corrective
action
• Reduce costs through better planning
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Example: Federal Express
• “We measure everything.
Then…we prioritize what
processes are key to the
company.”
• Most data collection systems are
automated, making it fast and
easy.
• Seeks internal measures that are
predictors for external measures.
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Example: Ritz-Carlton
• “We only measure what we must.
But, we make sure that what we
measure is important to our
customers.”
• 50% marketing and financial data;
50% quality-related productivity
data.
• Cost of quality is top priority. Are
improvements important to
customers, providing a good return,
and done quickly?
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The Cost of Quality (COQ)
• COQ – the cost of avoiding poor quality,
or incurred as a result of poor quality
• Translates defects, errors, etc. into the
“language of management” – $$$
• Provides a basis for identifying
improvement opportunities and success
of improvement programs
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Quality Cost Classification
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Prevention
Appraisal
Internal failure
External failure
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Return on Quality (ROQ)
• ROQ – measure of revenue gains against
costs associated with quality efforts
• Principles
– Quality is an investment
– Quality efforts must be made financially
accountable
– It is possible to spend too much on quality
– Not all quality expenditures are equally valid
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