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A Quality Strategy. Karachi September, 2010 Alan Power [email protected] In Association with Octara. My Personal History. Management Development & Training (ICL & TSB) Mainstream Personnel (UDT & Mortgage Express) General Management (TSB Homeloans)

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a quality strategy

A Quality Strategy

Karachi

September, 2010

Alan Power

[email protected]

In Association with Octara

my personal history
My Personal History
  • Management Development & Training (ICL & TSB)
  • Mainstream Personnel (UDT & Mortgage Express)
  • General Management (TSB Homeloans)
  • Quality Management (Lloyds Banking Group)
    • EFQM Assessor
    • BQF Assessor
    • Jury Member, Quality Scotland Foundation & Excellence South West
tsb homeloans some successes
TSB HomeloansSome Successes
  • Established as a centralised home loans operations in 1990
  • Loan assets increased from £3.4 billion to £10 billion by 1996
  • Productivity improved by 127%
  • Staff morale improved to 97% satisfaction
  • Customer satisfaction averaged 98.6%
  • Winner of the Quality Scotland Foundation Award for Business Excellence 1996

[email protected]

agenda
Agenda

QUALITY

  • What is it?
  • Does it work?
  • Is it here to stay?
  • What are the key components?
  • Where do I start?
  • How do I access support?
quality

Quality

What is it?

does it work

Does it work?

Porsche – approach to quality

1991 1992 porsche were in a crisis situation
1991 - 1992 :Porsche were in a Crisis Situation
  • 1990 profit of $10 million on sales of $3.1 Billion
  • 1992 loss of $154 million on sales of $1.6 billion
  • Sales not looking to rebound in the short term 1-2 years
  • Company set to go under within 18 months
porsche actions taken
Porsche - Actions Taken
  • Appoint the first CEO from outside of the Porsche family
  • Wendelin Wiedeking came from auto parts industry
  • Wiedeking makes the decision to use external consultants
  • Toyota’s consulting wing is engaged
slide9

General I & R

3-5 years skilled

I = Inspectors R = Re-workers

Pre-Delivery Inspection Centre 5 – 15 years

Paint / Body I & R

5-10 years skilled

Production line worker 0-3 years

Production line worker 0-3 years

Production line worker 0-3 years

PRODUCTION LINE

Final I & R

20 years skilled

CUSTOMER

Pre-Delivery Inspection Centre 5 – 15 years

Mechanical

I & R

5 – 10 years skilled

Production line worker 0-3 years

Production line worker 0-3 years

Production line worker 0-3 years

General I & R

3-5 years skilled

toyota s general observations
Toyota’s General Observations
  • The product that was delivered to the customer was a “quality product” (though still had much higher warranty costs than Toyota and Lexus)
  • The change / revolution they needed was in the operational areas
  • They needed to move from an industry of “checking” to a right first time process philosophy
toyota s operational observations
Toyota’s Operational Observations
  • Porsche had never in the history of the company built a car first time fault free
  • Porsche “plan” to get it “wrong” every day
  • They had, built a system of checking and skilled inspectors to find the faults
  • Built a system and skilled workforce to re-work the faults
  • Developed checking and reworking in to the career path for their “high performance” staff
comparison with toyota
Comparison with Toyota
  • Checking and reworking had become an industry in Porsche
  • All the highly skilled staff were removed from the actual process
  • In Toyota they plan to get it right
  • They get it right and self inspect early in the process not at the end
  • The highly skilled guys are in the process “coaching and improving.”
summary
Summary
  • Porsche took circa 30% out of their operational costs over 3 years
  • 1993 loss of DM 239 million on sales of DM 1.9 billion
  • 1995 profit of DM 2 million on sales DM 2.6 billion
  • Productivity doubled in the period while defects dropped by 75%
  • July 27 1994 a Carrera rolled off the production line error free at final inspection, the first time in the companies 44 year history.
developments in japan
Developments in Japan
  • Marshall Aid
  • Dr W Edwards Deming
  • The ‘vital’ visit of 1950
  • The Deming Prize for industry
  • The Deming Prize for schools.

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the global response
The Global Response
  • Excellence & Self-Assessment
    • Baldridge
    • EFQM
  • Lean Thinking
    • Identifying & eliminating waste
  • Six Sigma
    • Motorola
european excellence model
European Excellence Model

Enablers

Results

Leadership

People

Processes

People

Results

Key

Performance

Results

Policy &

Strategy

Customer

Results

Partnerships

& Resources

Society

Results

Innovation and Learning

[email protected]

how to use the model

Leadership

People

Processes

People

Results

Key

Performance

Results

Policy &

Strategy

Customer

Results

Partnerships

& Resources

Society

Results

…planned, managed and improved

  • identifying communication needs
  • developing communication policies,
  • strategies and plans based on need
  • developing and using a variety of
  • communication channels
  • sharing best practice
  • and knowledge

…identified, developed and sustained

... involved and empowered

…and the organisation have a dialogue

…rewarded, recognised and cared for

How to use the model
lean thinking

Lean Thinking

The Toyota Production System

(TPS)

exercise

exercise

Exercise

Pass the ball

the 7 wastes timwood
The 7 Wastes‘TIMWOOD’
  • The waste of Transporting
  • The waste of Unnecessary Inventory
  • The waste of Unnecessary Motions
  • The waste of Waiting
  • The waste of Overproduction
  • The waste of Over Processing
  • The waste of Defects

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waste of talent
Waste of Talent

+

Foot

Soldiers

Heroes

Performance

Walking

Wounded

Terrorists

(well poisoners)

-

+

-

Effort

quality control

Quality Control

Does is it add value or is it a WASTE of time?

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inspection exercise

exercise

Inspection Exercise

How many “f” s in the following text?

Piccadilly “Number One”

cigarettes are made from the finest

rich matured Virginia leaf, grown

in districts famous for the smoothness

and flavour of their tobaccos.

THE HOUSE OF PICCADILLY, LONDON

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inspection exercise1

exercise

Inspection Exercise

How many “f” s in the following text?

Piccadilly “Number One”

cigarettes are made from the finest

rich matured Virginia leaf, grown

in districts famous for the smoothness

and flavour of their tobaccos.

THE HOUSE OF PICCADILLY, LONDON

[email protected]

5 key principles
5 Key Principles

There are five key principles that we focus upon with Lean:

Specify value

Identify the value stream

Create Flow

Create Pull

Strive for Perfection

GEMBA

The point

where value

is created

People, Motivation,

Workload & Culture

to specify value you need to ask
To specify Value, you need to ask:

Specifying value

  • Who is the customer?
  • What do they value in the service or product that you provide?
  • What influences their ‘buying decision’?
slide33

The cost of value

Alternatively - ask yourself the question:

“Is this an activity that a customer would

be prepared to pay for?”

to identify value and non value you need to understand the process
To identify value and non value you need to understand the process
  • Follow a product or service from beginning to end and ‘map’ it
  • Identify those actions that add value and those that don’t
  • Redesign the process
  • Standardise and document.
slide35

Types of process maps

5 days

10 days

4

  • Activity Map

Cross-Functional Map

Swim Lane Map

Value Stream Map

[email protected]

slide36

SIPOC Template

Process Name

Process Purpose

Supplier

Input

Process

Output

Customer

step 1 the basic processes work stations
Step 1: the basic processes/work stations

The process starts in the top left with the supplier and ends in the top right with the customer.

The process has three main steps which are placed in between running from left to right.

step 2 flow type and inventory
Step 2: Flow type and inventory

The work is pushed through the process at every step. You have noticed that inventory is building up in the warehouse awaiting transport between Site A and Site B and between process steps at Site B.

but before you start clean up the mess

But before you start, clean up the mess!

Workplace Organisation

The 5Ss

find the order
Find the order!

Think Break

the 5ss or the 5cs and the meaning in english
The 5SsOr the 5Cs and the meaning in English
  • Seiri – sort – cleanup
  • Setion – set in order - configure, orderliness or organisation
  • Seiso – shine – clean and check – maintenance
  • Seiketsu – standardise – conformity
  • Shitsuke – sustain – custom & practice – training and routine

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calculating sigma example
Calculating SigmaExample
  • Number of units processed N = 500
  • Total number of defects D = 57
  • Number of opportunities O = 3
  • Defect per million opportunities

1,000,000 x {57/(500 x 3)} = 38,000

5. Look up table Sigma = 3.3

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slide56

Define, Measure, Analyse, Improve & Control (DMAIC)

Aim: To tackle problems using a method with a structured approach.

Output: A logical definition of a problem & implementation of solutions using root cause analysis.

Method:

Define

Measure

Analyse

Improve

Control

Review

Charter

Value Stream

Map for deeper

understanding

Identify

potential root

causes

Develop potential

solutions

Implement

mistake proofing

Identify key

input, process &

output metrics

Reduce list of

potential root

causes

Evaluate, select,

& optimise best

solutions

Develop SOPs,

training plan &

process controls

Validate problem

statement

& goals

Agree Scope

Develop

Operational

Definitions

Confirm root

cause effect on

output

Develop “To-Be”

Value Stream

Maps

Implement Solution &

Ongoing process

measurements

Validate Voice

Of Customer &

Voice of Business

Develop data

collection plan

Estimate impact

of root causes

on key outputs

Develop &

Implement Pilot

solution

Identify ways

to apply learning

(PIR)

Validate

financial benefits

Validate

measurement

system

Prioritise root

causes

Confirm

attainment of

improvement goals

Tollgate

Review

Identify high

level Process

Map (SIPOC)

Collect baseline

data

Develop full-scale

implementation

plan

Transfer control

& monitoring to

Process Owner

Revalidate

problem

statement& goals

Create

communication

plan

Determine

process

capability

Tollgate

Review

Tollgate

Review

Select & launch

team

Tollgate

Review

Refer to p;rocess

Complete

Improvement plan

[email protected]

Tollgate

Review

what is a belt
What is a ‘Belt’?
  • Yellow Belt – a process worker who has the skills to support a 6 Sigma project within the scope of his own role
  • Green Belt – a practitioner who may work full-time on a 6 Sigma project
  • Black Belt – a highly skilled practitioner who will work full-time leading 6 Sigma projects
  • Master Black Belt – one who trains other Black Belts.

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improving the transformation process
Improving the Transformation Process
  • Lean manufacturing
    • Elimination of waste (anything that does not add value to the final service, as recognised by the customer) in all operational areas including customer relations, product design and supplier networks
    • Aimed at waste, cycle time, reduction of work in progress, standardisation, cost reduction, flexibility and responsiveness
    • A bias to action
  • Six sigma
    • Improvement in the capability of business process to reduce variation in the final service e.g. time and quality (often measured by errors)
    • Aimed at complex problems, process capability, stability
    • A bias to analysis
  • Lean six sigma
    • A mix of both methodologies to establish throughout the organisation a set of rules and procedures that work to continuously generate results

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where does it fit strategically

Top down – Dubai QA

Self assessment

Process Excellence –

Lean & 6 Sigma

Continuous Improvement –

Lean &Kaizen

Culture

Where does it fit strategically?
quality management

Quality Management

The Human Side of the Enterprise

people
People
  • Measuring and monitoring employee competence
  • Measuring and monitoring organisational culture
  • Measuring and monitoring employee commitment.

[email protected]

organisational culture inventory

1

Organisational Culture Inventory

Humanistic-Encouraging: involvement and participation

Self-actualising: value creativity, quality and individual growth

Achievement: value setting and achieving challenging but realistic goals

Affiliative: constructive and collaborative relations

Perfectionistic: preoccupied with detail, use detail to block new ideas or to beat others

Approval: wanting to be liked, telling boss only what he wants to hear

Competitive: win-lose, besting, working against each other to win

Conventional: rule bound conservative, bureaucratic

Power: non-participative control, expert compliance

Dependent: hierarchical, do what told and refer upwards

Avoidance: punish mistakes, shift blame, avoid taking risks

Oppositional: critical of ideas, confrontational

The model reflects leadership styles in three groupings aggressive/defensive, passive/defensive and constructive.

how oci is used in lloyds banking group
How OCI is used in Lloyds Banking Group
  • Too much - Aggressive/Defensive
    • A competitive, win-lose organisation
    • People oppose new ideas from others
    • Use detail to challenge or block others
    • Things get done through power & control.
  • About average - Passive/Defensive
    • A lack of self-determination
    • Sense of powerlessness
    • People refer decisions upward
    • People avoid taking risks and making mistakes
    • Rule bound & bureaucratic organisation
  • Not enough - Constructive Styles
    • Achievement led
    • Value in quality, creativity, growth and relationship behaviours
    • Driver to be a value based business
commitment

Commitment

Employee Engagement

engaged employees are
Engaged employees are…..
  • More productive (by up to 43%)
  • More profitable (by up to 200%)
  • More customer focussed
  • Safer
  • Less likely to leave.

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yet a gallup survey shows
Yet, a Gallup survey shows…..
  • Less than a third (29%) of employees are engaged
  • More than half (54%) of employees are not engaged
  • While 17% of employees are actively disengaged!

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lean thinking2

Lean Thinking

Productivity Measurement

why measure productivity
Why measure productivity?

Without productivity measures how can you:

  • Know what to expect from your people?
  • Compare the performance of teams and individuals?
  • Make delivery promises?
  • Plan your day – work allocation and crewing?
  • Assess the impact of performance improvement initiatives?
  • Carry out forecasting and planning?
  • Cope with peaks and troughs of business?.
slide71

What can we measured?

  • Output per paid hour
    • good output ‘v’ paid hours
  • Effectiveness
    • time spent processing ‘v’ time at work
  • Efficiency
    • ‘actual’ time taken to produce good output compared to ‘expected’ time (i.e. the ‘should take’ time)
slide72

17

Other

Meetings & Training

20

Time spent in the office = 91

Processing Time

Processing Time

54

Time spent doing the right thing

Calculating Effectiveness

Effectiveness

Time spent walking in the right direction – doing the right thing

54

59%

Effectiveness =

x

100 =

91

slide73

Efficiency

Processing Time

Time spent ‘processing’

54

Walking quickly

Calculating Efficiency

Output Produced

42

Useful

‘Output’ produced

(hrs)

42

78%

Efficiency =

100 =

x

54

slide74

Output per Paid Hour

or

Absence

35

17

Other

Meetings & Training

Processing Time Paid For 126 hrs

20

Value for Money

Processing Time

Output Produced

54

42

Value delivered

Output per Paid Hour

=

Calculating Output per Paid Hour

42

33%

x

100 =

126

quality management customer feedback

Quality ManagementCustomer Feedback

Net Promoter Score

&

Complaints Management

the net promoter score1
The "Net Promoter Score"

In the following test, we will go through ten surveys based on the "Net Promoter Score" paradigm.

The selected criterion is a zero-to-ten scale, according to the degree of agreement to the selected unique statement:

"Would you recommend Brand X to a friend or a colleague?"

  • from 0 ="not at all likely"
  • to 10="extremely likely".

"Would you recommend Brand X to a friend or a colleague?"

net promoter score
Net Promoter Score

How likely are you to recommend this product/service/company to a friend or colleague?

Extremely Likely

Extremely Unlikely

Neutral

A company’s net promoter score is defined as the percentage of customers who are promoters of the company or brand, minus the percentage who are detractors. Reichheld (2003) has observed this measure to correlate with a company’s rate of growth.

total feedback
Total Feedback
  • The voice of the process
  • The voice of your employees
  • The voice of your customer.
quality management1

Quality Management

A strategic approach

so what s next for you

So, what’s next for you?

What should be your approach?

&

How can Octara help & support?

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