Baldrige National Quality Program

1. Baldrige National Quality Program BaldrigeNational Quality Program The Path to Excellence and Some Path-Building Tools

2. The Baldrige Framework “The Baldrige Award enjoys very broad, positive recognition among leaders in each of the Baldrige Award-eligible sectors. . . . More than 70 percent of leaders surveyed among Fortune 1000 companies said they are likely to use the Criteria for Performance Excellence.” Booz Allen Hamilton • Results from using the Criteria: • Better employee relations • Higher productivity • Greater customer loyalty • Increased market share • Improved profitability

3. Six Sigma Six Sigma concentrates on variation reduction by using statistical methods to lower process defect rates to less than 3.4 defects per million opportunities. • Six Sigma Methodologies: • DMAIC - define, measure, analyze, improve, and control • DMADV - define, measure, analyze, design, and verify

4. Lean is focused on the elimination of all nonvalue-adding activities and waste from an organization’s processes. Map and understand value stream • Waste includes • Scrap • Rework • Inspection • Inventory • Queuing time • Transporting materials • or products • Redundant motion • Anything for which a final customer would not want to pay • Goals: • Increase productivity • Eliminate waste • Maximize resource • utilization Customer- defined value Make value stream flow Continuous process improvement

5. ISO 9001: 2008 A standards-based approach to managing an organization’s processes to consistently deliver products that meet customer requirements. The approach is based on registering a quality management system that complies with the standard. Quality Management System

6. The Baldrige Criteria • The Criteria for Performance Excellence emphasize • Continuous performance improvement • Innovation • Integration • Results • Sustainability • The Criteria for Performance • Excellence focus on common requirements and are • Nonprescriptive • Holistic • Inclusive • Adaptable • Integrative

7. The Baldrige Criteria, Six Sigma, and Lean are complementary, not mutually exclusive. Many organizations use Baldrige to develop an overall performance map to identify areas that need improvement, and then they may use one or more of these tools to design operations or improve processes within the organization. .

8. Six Sigma and Lean How they relate to the seven Baldrige Criteria Categories

9. The Leadership Category • Baldrige, Six Sigma, and Lean all benefit from leaders who • Align financial and human resources • Communicate cultural norms • Encourage and provide resources • Solidify a culture of organizational excellence • Only Baldrige addresses the overall leadership system.

10. Strategic Planning Category • Six Sigma and Lean can be methodologies for coordinating resource use toward organizational objectives identified using the Baldrige Criteria. • Six Sigma provides tools for measuring progress.

11. Customer Focus Category Quantification of customer needs is the key. Customer- defined value Map and understand value stream Lean environments aim for all process steps to be something for which the customer is willing to pay. Make value stream flow Continuous process improvement In Baldrige and Six Sigma, the voice of the customer is used to identify areas of needed improvement.

12. Measurement, Analysis, and Knowledge Management Category • Six Sigma isdata-driven: • specific metrics • data collection • data analysis • control data • Baldrige measures and improves processes, business results, and overall organizational performance. • Lean measures, analyzes, and reduces • wait time • inventory • batches • process time • rework • ISO 9001 monitors and measures process performance.

13. 100 Employee Engagement 95 85.6 90 85 79.9 80 75 70.2 70 65 59.6 56.7 60 55 50 2005 2006 2007 2008 2009 Workforce Focus Category • Six Sigma, Lean, and ISO 9001 methodologies require • Leadership development • Training • Compensation alignment • Culture shift

14. Process Management Category • Six Sigma, Lean, or ISO 9001 methodologies are used to • Generate standard operating procedures • Set specification and control limits • Identify explicit corrective actions • Optimize processes Baldrige processes are interrelated and interdependent steps along the path to customer engagement and organizational sustainability.

15. Results Category Six Sigma, Lean, and ISO 9001 are data-driven and results-oriented. Their use leads to tracking systems (control charts, scorecards, rolled throughput yield charts, etc.) and results monitoring in functional business areas where the methodologies are applied. Baldrige addresses all results—process, leadership, product, customer, financial, and workforce.

16. Summary The Baldrige Criteria focus on business results and organizational improvement and innovation systems. Six Sigma and Lean methodologies drive waste and inefficiencies out of processes that users of the Baldrige Criteria identify for improvement. Six Sigma, Lean, and ISO 9001 focus on organizational improvement and innovation processes.

17. Resources for More Information • Most Baldrige National Quality Program (BNQP) documents are available in printed form and on the BNQP Web site. • To obtain these documents, call (301) 975-2036, send e-mail to baldrige@nist.gov, or visit the Web site www.nist.gov/baldrige.