Archive for 2006
What do we mean by “Adding Value?”
We hear so much about the importance of “adding value” to our processes and during quality management system audits. In principle, each of us contributes in some manner or form adding value, but this is not always the case. Occasionally, it is unclear whether an event adds value. Here are three useful tests:
• Does the event physically transform the product in some way? If so, it probably adds value.
• If the customer observed the event, would he balk at paying its cost? If so, the event probably does not add value.
• If the event were eliminated, would the customer know the difference? If not, the event is probably non value added.
There are several dictionary definitions of “value” but all focus on the concept of something being useful. “Adding Value” therefore means to make something more useful. Some organizations have used ISO 9001:2000 to develop a quality and operational system that is integrated into the way they do business, and is useful in helping them achieve the strategic objectives of the business. Conversely, other organizations have created a bureaucratic set of procedures and records that do not reflect the way the organization actually functions and simply adds costs, without being useful. This does not add value. Let’s look at two different approaches:
• A non-value added approach asks, “What procedures do we have to write to get the ISO9001:2000 certification?”
• A value added approach asks, “How can we use our ISO 9001:2000 based quality management system to help us to improve our business and enhance customer satisfaction?”
Our experience has shown that the approach an organization takes to “adding value” is likely a function of the level of maturity of the organization’s quality culture and the maturity of its quality management system in respect to the requirements of the ISO 9001:2000 Standard. It is important to define that in this context:
The Quality Guru refers to “Quality culture” as to the degree of awareness, management commitment, and overall collective behavior of the organization with regard to its quality and operational performance success.
What do you and/or your organization use to identify a “Quality Culture” Let me know and I will post your comments in our October Newsletter.
How’s Your Customer Support System?
In a recent issue of “Quality Insider” readers were asked: “Most of us have to call a customer support number at some time. Usually, that number connects to an automated attendant that steps you through a phone tree before connecting you to an actual humanoid. How often do you find yourself either lost in the phone tree or connected to the wrong customer support department?” Here are the results:
•0 percent of the time (I never have problems with automated attendants.)4.4%
•25 percent of the time 35.6%
•50 percent of the time 33.7%
•75 percent of the time 21.6%
•100 percent of the time (I always have problems with automated attendants.)4.7%
Are you losing customers based upon your customer support system? Let us know what your customers would say!
Quality Digest Survey Results:
Can Six Sigma be overused?
• Yes 72.3%
• It depends 15.8%
• No 11.9%
Does Six Sigma lead to tunnel vision?
• Yes 43.8%
• It depends 35.5%
• No 20.7%
Other comments included:
• "It depends on the individual, not Six Sigma tools or methodology."
• "It depends on the ultimate understanding that the movers and shakers for Six Sigma have within the company. One must always look at the whole picture and not just the immediate incident/report."
• "Users need to be careful not to focus too heavily on cost reduction and lose site of product quality. A certain amount of common sense and good judgement have to be applied to all projects."
• "We can get hung up on the financial returns projects and ignore the just-do-it projects."
• "Overused? No. Wrongly applied? Yes. Not every problem needs or lends itself to a DMAIC project. And tunnel vision, like beauty, is in the eye of the beholder."
1. Fragmented processes causing delays and defects: Firefighting versus Fire Prevention. The focus must be preventing defects, errors, and mistakes.
2. Customer Complaints: For every customer that complains about your product or service, there are 16 more that won’t tell you directly. Word of mouth can kill you!
3. Supplier Complaints: Do your suppliers complain about the last minute delays imposed on them?
4. Employee’s Whining: What’s stopping your employees from doing a good job? “I could do my job better if ____”.
5. Blaming People: The problems are in your processes, not your people. Six Sigma is process focused.
6. Knee jerk Reactions: Managing by Gut feelings. “We’ve always done it this way”. Data driven methods create improvements.
7. Margins are low, expenses are high, and our growth is stalled: Defects and delays eat away at profits, and lack of a strategic focus inflates expenses.
8. Field failures: How many customer service personnel do you have? How large is your warranty and repair efforts?
9. Too many inspectors: You cannot inspect quality in, but you can build it in.
10. Absenteeism and turnover: Employees don’t want to do a bad job. Are your internal systems preventing your employees from doing a good job?
W. Edwards Deming
Dr. Deming is the ultimate of the quality gurus. He developed, implemented, and made work many of the ideas that we currently use in quality. The story of his going to Japan and teaching the Japanese about quality has become legend. But, what did he teach? What are the nuggets of information we should remember?
The first of his teachings is the fourteen points of quality management:
1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company.
9. Break down barriers between departments.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11. a. Eliminate work standards on the factory floor. b. Eliminate management by objective.
12. a. Remove barriers that rob the hourly worker ofhis right to pride of workmanship. b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everyone’s job one
The second of his nuggets of information is his seven deadly diseases:
1. Lack of constancy of purpose to plan product and service that will have a market and keep the company in business, and provide jobs.
2. Emphasis on short term profits.
3. Evaluation of performance, merit rating, or annual review.
4. Mobility of management; job hopping.
5. Management by use only of visible figures, with little or no consideration of figures that are unknown or unknowable.
6. Excessive medical costs.
7. Excessive costs of liability.
A Ten Step Method To Continuous Improvement
Continual improvement is a type of change that is focused on increasing the effectiveness and/or efficiency of an organization to fulfill its policies and objectives. It is not limited to quality initiatives. Improvement in business strategy, business results, and customer, employee, and supplier business relationships can be subject to continual improvement. Putting it simply, it means getting better all the time’. Continual improvement should focus on enablers such as leadership, communication, resources, organization structure, people, and processes – in other words, everything in the organization, in all functions at all levels. Continual improvement should also lead to better results, such as, price, cost, productivity, time to market, delivery, responsiveness, profit, and customer and employee satisfaction. There has been a tendency in total quality management programs to focus on departmental improvements which do not improve business results overall. Departmental improvements may merely move the constraints or problem somewhere else in the process chain.
What continual improvement is not:
Improvement is not about using a set of tools and techniques. Improvement is not going through the motions of organizing improvement teams and training people. Improvement is a result, so it can only be claimed after there has been a beneficial change in an organization’s performance.
Gradual, incremental, or breakthrough?
Continuous improvement is gradual never-ending change, whereas continual improvement is incremental change. Both types of improvements are what the Japanese call Kaizen. In the United States, Lean and Six Sigma improvement is common place. Breakthroughs are improvements, but in one giant leap – a step change. However, the method of achievement is the same, but breakthroughs tend to arise out of chance discoveries and could take years before being made.
When should continual improvement be started?
All managerial activity is directed either at control or at improvement. Managers are either devoting their efforts at maintaining performance, preventing change, or creating change, breakthrough, or improvement. If businesses stand still, they will lose their competitive edge, so improvements must be made to keep pace and stay in business. Every system, program, or project should provide for an improvement cycle. Therefore, when an objective has been achieved, work should commence on identifying what is meeting the requirements of the process, and what better ways of doing it.
There is no improvement without measurement. An organization must establish current performance before embarking on any improvement. If it does not, it will have no baseline from which to determine efforts.
There are ten steps to undertaking continual improvement:
1. Determine current performance.
2. Establish a need to improve.
3. Obtain commitment and define the improvement objective.
4. Organize the diagnostic resources.
5. Carry out research and analysis to discover the cause of current performance.
6. Define and test solutions that will accomplish the improvement objective.
7. Produce improvement plans which specify how and by whom the changes will be implemented.
8. Identify and overcome any resistance to the change.
9. Implement the change.
10. Put in place controls to hold new levels of performance, and repeat step one.
Where do the ideas come from?
If the organization has identified its critical success factors (that handful of things at which it must be supremely good in order to succeed), then focusing the attention of the continual improvement process onto one or more of these for a defined period might give rise to major improvements. No one in the organization, from top to bottom, is exempt from the responsibility for improvement. It is a normal component of all employees’ jobs to search out ways of improving performance. Furthermore, no one in the organization can be expected to do this without help and the necessary support.
What tools should be used?
The portfolio of tools used for continual improvement should be those which enable an organization to execute the ten steps above. These can include:
• Ishikawa fishbone diagram to examine cause and effect
• Failure mode and effects analysis to predict failure and prevent its occurrence
• Pareto analysis to identify the few influences on a situation which have the biggest impact
• Force field diagram to display the forces for and against change
• Charting techniques to demonstrate whether improvement is being achieved
Continual improvement is far more than a set of techniques.
For many organizations, it involves a radical change in attitudes. The defense of the status quo, and resistance to innovation, cannot be treated as normal management behavior. A fear of reprisals for reporting problems has to be replaced by congratulating people for identifying an opportunity to improve. Hoarding of good ideas within departmental walls must be a thing of the past as people share their knowledge and experience in the search for greater collective success. The importance of commitment
Continual improvement is about the entire organization and everything it does. It has to be a prime concern of executive management and its success depends upon commitment from the top. The commitment must also be highly visible. It is not enough to have a quality policy signed by the chief executive. If executive management does not demonstrate its commitment by doing what it says it will do, they cannot expect others to be committed.
Reward success !
The encouragement of people who have initiated improvements, however small, is an important component. This can be done in many ways, from displays on special improvement notice boards to the awarding of prizes. This is an area in which the culture and style of the organization has to be considered. The sudden introduction of a show business style into a staid environment may lead to cynicism rather than effective promotion of success.