SixSigma Guide

SixSigma :

Introduction:

Six Sigma was the expression given as a synonym by Motorola in 1986 for their quality program. Since then, a general defenition has developed, and it has become a useful technique for measuring quality. It has become a tool used particularly among technology driven companies such as Allied Signal, General Electric, Kodak, and Texas Instruments. What does it mean to be “Six Sigma” anyway? Its goal is to reduce output varibability through process improvement. Six Sigma refers to an organizations measure of quality that strives for near perfection. What can it do for your organization? If your organization is focused on customer satisfaction, then Six Sigma will offer you a method and some tools for identification and improvement of both internal and external process problems to better meet customers’ needs by identifying the variations in your organization’s processes that might influence the customer’s point of view negatively.

How Does Six Sigma Work, and How To:

How to:

Okay, okay, how do you use Six Sigma then? Six Sigma is based on the normal distribution theorem by Carl-Friedrich Gauss with this formula:

This formula describes a curve whose form is defined by two parameters, the mean average value, and the standard deviation “sigma.” Six Sigma is the tool used to help design highly capable parts that meet set specifications, namley customer specifications. These specifications are +/- six standard deviations from the process mean, which is the center line.

As you can see from the picture, +/-6 deviations (6 sigma) contains 99.9999% of all values. It can never reach 100% though. This means that there will always be room for improvement. Requirements and environmental boundaries must be considered when calculating a six sigma value as well.

The idea is to identify all of the opportunities for defects and then count the actual number of them that occur, and then normalize this value to one million opportunities to find the Defects per Million Opportunities. Now you can determine the corresponding sigma value. You must locate a table of values for the one-sided normal distribution.

Ideally, defects should be below 3.4 defects (standard deviations) per million opportunities for a defect. This means that ideally, the implementation of six sigma will result in an average of only about 3.4 defects per million units produced.

Other Helpful Sources for Six Sigma Information:

1.) General Electric created a Six Sigma Academy in 1994. The Web Site may be helpful for more information and training.

2.) SixSigma, Six Sigma Quality Resources for Achieving Six Sigma Results. The web site has plenty of information, discussion forums, and updated news on the subject.

3.) The site is also a good source of information and offers definitions and step by step instruction on the how to’s of Six Sigma.

4.) General Electric is considered one of the Benchmarks in this area. The web site is very helpful, not only for information, but for some real life uses.

5.) Motorola is the company who introduced this method. It is also considered a major benchmark for Six Sigma Method.

Conclusion:

Six Sigma is far more in depth than this document has illustrated. It is a tool that if used correctly, can identify key areas of business processes that need attention to lower defect rates. One of the greatest advantages is that all the measured improvements achieved through this techneque can be directly converted into financial results. In fact, more and more shareholders even require that Six Sigma method be implemented.

Six Sigma

Six Sigma

Introduction

In its broadest sense Six Sigma is a methodology that firms can use to improve the output quality of a process. Six Sigma has its roots in the repetitive processes of manufacturing; however, the same tools can be used in any business process from hiring new people to effective product design and marketing plans.

The foundation of the Six Sigma program is statistics; sigma stands for standard deviations from the mean of a data set in other words a measure of variation, while Six Sigma stands for six standard deviations from the mean. When a process reaches the six sigma level that process will be running close to perfection, producing a mere 3.4 defects per million. By using statistical and analytical tools firms can reduce the amount of variation in a process by removing the causes of variation therefore increasing the output quality of the process.

Six Sigma should not be viewed as a way to achieve one very successful project. Six Sigma should become a company wide mantra and be implemented as a core part of the companies culture and strategy with training from top to bottom in order to see the fullness of its benefits.

Some examples of companies that have successfully implemented a Six Sigma program are:

• GE boasts gains of $2 billion to the bottom line in 1999 and $2.4 billion in 2001 because of Six Sigma.
• Motorola saved $15 billion in the first 10 years of Six Sigma implementation.
• Dupont realized more than $1.6 billion in cost savings the first four years of Six Sigma.
• Many other companies and even municipalities have had similar success by implementing Six Sigma.

How to organize a Six Sigma program:

Jim Collins’ advice to start with the right people is definitely applicable here. Implementing Six Sigma requires having the “right people in the right seats” to be successful.

Six Sigma is no different. Studying some of the companies listed above will prove that having the right people with the right skills and a shared vision is the foundation for success. The key players of the Six Sigma team are the:

1. Champion:

(Usually upper management/ executive officers) The Champion is the person responsible for instilling the vision of Six Sigma and communicating it across the firm. The Champion should receive Six Sigma training in order to be an effective leader. While most likely not as knowledgeable in the use of specific tools in Six Sigma, a Champion must have an understanding of what the Black and Green Belts are doing in order to relay updates and accomplishments to upper management and throughout the company. The champion also assists the Black Belts by dedicating resources, assists in choosing projects, and is the advocate for the Black and Green Belts.

*Some programs distinguish between Champion and Executive leadership, it’s up to you.

2. Master Black Belt:

A master Black Belt is a Black Belt that has had extensive experience with the Six Sigma methodology. When a firm first tries to implement a Six Sigma program it may be necessary to hire the services of a master Black Belt to help facilitate correct implementation and initial success. The Master Black Belt can act as a coach to the Black and Green Belts by drawing on extensive experience relating past problems and how they were solved. The Master Black Belt can also evaluate project results and give feedback to Black and Green Belts on performance and implementation.

3. Black Belts:

The rank of Black Belt is achieved through a proper accreditation program that teaches the Six Sigma process and tests understanding of the tools to be used. Black Belts have a strong understanding of statistical methods of data collection and analysis and must have experience in past Six Sigma projects. Their full time responsibility is to Six Sigma projects. Black Belts work as project managers and are responsible for all the traditional roles of that assignment, communicating often with the Champion throughout a process. If there are no Black Belts in an organization it might be necessary to train some and secure the services of a Master Black Belt to mentor and develop new Black Belts. Adams, Gupta, and Wilson suggest that a company develop one black per every million in revenue, or in some cases .5-4.0% of employees should be Black Belts.

4. Green Belts:

Green Belts are essentially assistants to the Black Belts in their job. Effective Green Belts have an understanding of statistics but don’t have the expertise and experience with the Six Sigma tools and projects like Black Belts. Green Belts typically do the leg work under Black Belt direction such as data collection and so on. However, it is important for Green Belts to be involved with the whole process of choosing projects, analyzing processes, using Six Sigma tools, and improving processes so that they can achieve the level of Black Belt and advance into a leadership role. Generally Green Belts work on Six Sigma projects part time while still taking care of their normal responsibilities. (AGW) There should be approximately 10 Green Belts for every Black Belt in a company as a general rule.

The Tools

There are numerous tools and techniques that can be used in Six Sigma the implementation of which is dependant on the current project. These tools include: Control Charts, Pareto Analysis, Histograms, Run Charts, Cycle time, t-test, F ratio, FMEA, fault tree, and Ishikawa Diagrams. In Six Sigma Deployment, Adam, Gupta and Wilson provide an extensive list of possible tools and techniques along with their components and expected outcomes. Successful Black Belts will possess a working knowledge of these tools and when they are appropriately used.

A Case Study

An example of a Six Sigma Project is the process of receiving orders and shipping custom computers. Whenever customers are involved in a process there will be some variation and in all processes there will be defects. In the case of a customized computer company there is a process for receiving orders from the customer including specifications, shipping address, and billing information, etc. Over time there will be customer complaints which are a manifestation of defects and variation. A Six Sigma project will define the process and what is happening. Black Belts will identify and categorize the defects and use tools such as the fishbone diagram or failure mode analysis to trace these defects back to the root cause. The Six Sigma team will then work to eliminate the cause/s. In the computer company case the cause of many of the defects could be untrained customer service personnel who do not receive all the correct information from the customer or it could be a faulty component used in many of the computers such as a bad hard disk. Black Belts and Green Belts will work together to find the root cause/s and eliminate it/them. Six Sigma team members must be creative and possess good problem solving skills because of the divergence of the Six Sigma process as it is applied to a wide variety of projects.

More information about Six Sigma can be attained from the plethora of books written on the subject and web sites that offer instruction on the Six Sigma methodology. There are many proprietary works and programs about Six Sigma, as such the student of Six Sigma should study widely to find the best program from the plethora of choices. Some of the books available are listed in the Literature Review.

[F] Quality Maturity Analysis

Quality Maturity Analysis

Quality maturity analysis [QMA] may be defined as an assessment of an organization’s level of maturity in relation to the quality system it has chosen to operate within. The assessment may take on different forms depending on the type of organization, quality system employed, current level of quality maturity, or other factors.

The goal of all quality management systems is continuous, measurable improvement in quality related to the production of goods and services, and overall organizational operating excellence. Quality maturity analysis is a tool that enables an organization to evaluate its progress toward quality goals, and in setting new goals.

A good time for an organization to perform its first QMA is prior to, or in the process of selecting a quality management system to adopt. A thorough assessment of current quality levels and practices will assist the organization in selecting the quality system that provides the best fit for the organization’s products, culture, and business strategy. This prior assessment will also point out existing strengths and weaknesses, and define additional resources that will be required to begin implementation of the quality system.

Once a quality system is selected, and a continuous improvement strategy is developed, regular benchmarking of measured progress to established plan goals should be performed using QMA as a tool to perform the assessments.

Hewlett Packard has employed a form of QMA that it terms “Quality Maturity System” reviews as a part of the Total Quality Control system adopted by the company in the late 1970’s. Each business unit within HP has a QMS review every two years at a minimum, the time-frame of repeat reviews may be shortened if urgent improvement goals are set by the business unit managers and the reviewers.

The QMS review process has three objectives:

v To develop understanding of the strengths and weaknesses of the business unit in implementation of TQM.

v To provide expert consultation by the reviewers to assist and guide business unit managers in the implementation of TQM.

v To identify best practices within individual business units and share them across the HP organization as a whole.

A review normally lasts two days, it is performed by a team of two company trained and certified reviewers; with at least one of them being a HP quality manager. The second reviewer may be a business unit manager of another product line who is familiar with quality methods and the QMS review procedure.

During performance of the review, the purpose or underlying intent of the review is to assist and support the business unit being reviewed in making positive progress toward quality goals, not to find what is “wrong” with its practices.

Five critical areas are the focus of the review process:

v Planning – how the business unit develops its strategic plan and how effectively it is implemented.

v Customer Focus – how the business unit identifies/stratifies customers, understanding of customer needs and analysis/response to customer feedback.

v Process Management – how products and services are delivered to customers, does the business unit function as in integrated organization? Is clear ownership of processes exhibited and are SPC procedures employed to ensure process integrity?

v Improvement cycle – evidence that customer data is used in the Plan-Do-Check-Act problem solving process.

v Total participation – How actively the organization enlists the active support of all employees in its quality model.

The reviewers use a tightly structured agenda in order to complete the review in a timely manner, typically the review agenda is as follows

[1]:

AGENDA ITEM PARTY REVIEWED TIME ALLOWED
Business
Overview General Manager ½ hour
Planning Management Team 3 hours
Customer Focus Marketing/Quality 2 hours
Departmental
Reviews Functional Mgrs. 3 ½ hr. each
- Process Mgmt.
- Improvement Cycle
Participation General Manager 1 hour
Quality/Personnel
Quality
Contribution Quality 1 hour

The reviewers provide initial feedback to the business unit team at the end of the second day of the review. A full written report of the review is provided to the business unit managers within two weeks. The report includes assessment of observed strengths and weaknesses; and recommended actions to address weaknesses. The business unit management team then has one to two months to develop a corrective action plan and submit it to the reviewers.
Quality maturity analysis in the end is about the journey an organization takes on the continuous improvement path, it may result in an organization continuing to evolve within the same quality model, point out a need supplement the current model with another, or to adopt an entirely new model.

The following resources were used in the preparation of this paper, and provide more information on quality maturity as it is applied and used.

[E] Operational Auditing

Operational Auditing

Increased competition, a shrinking world, and the decentralizing of operations are factors that have greatly magnified the role which operational auditing plays in the success of a company. The desire of management to monitor the overall operations of the company has increased the amount of internal auditors finding themselves involved in operational audits. The function has started to assume an even greater importance than any time in the past.

Operational Auditing Defined

Operational auditing is a technique used by an organization to evaluate it’s effectiveness, efficiency, and nature of its operations and report to appropriate persons the results of the evaluation along with recommendations for improvement. The objectives are to assure management that its goals are being carried out and whether or not they are capable of being improved.

Operational auditing uses common sense along with logical audit techniques to apply findings to organizational objectives, operations, controls, communications, and information systems. The auditor performing the evaluation is concerned with the whom, what, when, where, why, and how of running an efficient and effective operation. This means that the auditor must have knowledge of the company’s operations.

How to use Operational Auditing

The purpose of operational auditing is to assist employees of the company in effectively performing their responsibilities. The auditing provides them with analysis, recommendations, advice, and information concerning the activities reviewed. In order for the audit to be successful and provide this type of feedback, five phases of an operational audit exist and must be completed. The five steps are: preliminary preparation, field survey, program development, audit application, and reporting and follow up. Each step in the audit has its purpose and depends on the success of the previous step.

In the preliminary preparation step, the auditor must research and have a good understanding of the company that he/she is auditing. The history of the company, available technology, values of the company, and unique characteristics of the company are just a few of the things that an auditor will want to have knowledge of. It is important that the goals, objectives, policies, strategies, and tactics of the company also be clearly revealed by management to the auditors.
In the field survey step, the auditor uses the information in the first step to begin asking questions of management. More specific problem areas, sensitive activities, and crucial operations will be identified in this step. When this step is completed, the auditor will know where to focus the audit efforts on. The next step will be to develop a written audit plan that will set the objectives and steps to follow during the audit. This plan is usually a well-detailed outline on what is to occur in order to accomplish the objectives of the overall audit. Since each audit is unique in its objective, this step is important to the success of the audit.

Once the audit plan has been well developed, the auditor will begin to apply the plan and perform the audit. The audit will more than likely take place on the auditee’s premises. During this step the problem areas, sensitive activities, and crucial operations that were identified in the field survey will be reviewed in depth. In this step techniques such as cause-and-effect relationships are developed to be able to report recommendations, conclusions, and other findings. This is usually the most time consuming step in the audit and it is important for all information to be carefully recorded and documented in order to be able to refer to it after the physical audit has taken place.

If the audit application step is done effectively, the reporting and follow-up step is much easier to perform. This is perhaps the most critical part of the operational audit. A good audit report will effectively communicate the recommendations and conclusions to management. The report will be supported by all the documented facts, findings, and opinions that were gathered during the audit application. The reporting step should include a follow up step to determine what if any action needs to take place in order to improve the operations of the company.

Some companies have an internal audit department that can effectively perform all of these duties. In other cases, a company will hire an auditor to come in and perform the audit for them. In either case, careful and correct audit standards need to be used to prevent any bias or inaccurate conclusions from occurring.

An Example of an Operational Audit

The Oklahoma Employment Security Commission had an operational audit performed in their department in November of 2000. The commission and executive directors wanted to make sure that operations within the agency were efficient and correctly following management instructions, federal and state laws, regulations, policies, and procedures. In their case, the audit was performed by the Oklahoma Department of Internal Audit. The internal audit department reported to the commission and executive directors throughout the activities of the audit.
References for Further Information

There is a great amount of literature available for reading on the topic of operational auditing. The Institute of Internal Auditors founded in 1941 has developed credentials for those who wish to work in the auditing field. There are a large number of organizations that offer seminars and workshops for those companies who wish to start or improve an audit department within their company. For the companies who do not find it feasible to implement an internal audit department, there are many auditing firms out there who are specialized to perform the work for them. More CPA firms are becoming involved with this type of work as well. Below is a list of sources that I found useful in learning about operational auditing.

[D] ISO/TS 16949:2002

ISO/TS 16949:2002

Introduction

How do automotive manufacturers assure that the numerous parts that they receive from suppliers are of the highest quality? How do automobile manufactures assure that suppliers provide products that manufacturers can be responsible for and are worthy of the manufacturers name? Automotive manufacturers assure quality by requiring registration to automotive quality standards that provide quality assurance. ISO/TS 16949:2002 is the latest automotive quality standard which was developed to be a new universally accepted quality standard for automobile suppliers. The ISO/TS 16949:2002 standard was developed to be an automotive standard for the customers’ of automotive manufacturers and it is aligned with the ISO-9001: 2002 standard. The purpose of ISO/TS 16949:2002 was to create standardization in the quality management standards for automobile suppliers throughout the world. ISO/TS 16949:2002 is a process approach quality standard, which places requirements that assure consistent quality, throughout organizations that supply automobile manufacturers. By requiring ISO/TS 16949:2002 certifications, automobile manufacturers can be assured that all of their suppliers are adhering to a consistent set of quality standards that are strict and intertwined throughout the supplier’s organization.

History

The ISO/TS 16949:2002 standard was released in March 2002, and is the replacement of the ISO/TS 16949:1999 standard, which was cancelled with the release of version 2002. The ISO/TS 16949:2002 standard was developed by an ad hoc group of automotive manufacturers and their respected trade associations. The developing group was comprised of the International Automotive Task Force, the Japan Automobile Manufacturers Association, and was supported by an ISO technical committee. The goal was to develop a worldwide universally accepted set of quality management standards for the automotive industry that would replace the need to have multiple certifications to serve Europe, Asia, and the U.S.

/TS 16949 standard was to develop a universally accepted set of the need to have multiple certifications to serve Europe, the U.S.,
ISO/TS 16949:2002

The ISO/TS 16949:2002 standard is the consensus of international quality requirements, which consists of policies and procedures that ensures worldwide consistence with the suppliers of parts, materials, or finishing services. ISO/TS 16949:2002 is the international equivalent and combination of the QS-9000 standard, the EAQF standard, the VDA6 standard, and the AVSQ standard. Due to the fact that there are no plans to update QS-9000, VDA6, EAQF, or AVSQ, suppliers to automobile manufacturers are either required or encouraged to upgrade to ISO/TS 16949:2002. ISO/TS 16949:2002 expands beyond QS-9000 in that it focuses on the processes of the supplier’s organization, rather than results, and mandates requirements in quality improvement areas where QS-9000 just makes suggestions. QS-9000 is in a state where it has reached the end of its development life, is no longer being supported by manufacturers or suppliers, and is set to expire on December 15, 2003. QS-9000 is further weakened by the fact that problem suppliers maintain registration, it does not utilize the process approach to quality management, the credibility of the certification process is deteriorating, and the certification is not accepted worldwide. Ford, GM, and DaimlerChrysler currently recognize ISO/TS 16949:2002 and all three have notified suppliers of the impending required replacement of QS-9000 with ISO/TS 16949.

ISO/TS 16949:2002 has the goals of continual improvement, defect prevention, variation reduction, and the reduction of wastes in the supply chain. It requires suppliers to be focused on continual improvement throughout their entire organization. ISO/TS 16949:2002 has stipulations that require the continual monitoring and improvement of customer satisfaction and requires communication with suppliers and customers to assure quality. ISO/TS 16949:2002 also requires preventative action processes, improved employee training, and improved employee quality responsibilities. ISO/TS 16949:2002 provides detailed, sector specific requirements for employee competence, awareness and training, design and development, production and service, the control of monitoring and measuring devices, and measurement, analysis, and improvement. ISO/TS 16949:2002 provides the benefit of improved supplier products, improved process quality, improved global sourcing confidence, and a common, consistent quality systems approach.
Use of ISO/TS 16949:2002

ISO/TS 16949:2002 is a certification that is a beneficial and probable requirement for suppliers of automobile manufacturers. Obtaining an ISO/TS 16949:2002 registration allows U.S. suppliers to not only supply to domestic manufacturers, it also allows U.S. suppliers to become truly global and supply to manufacturers throughout the entire world. By obtaining an ISO/TS 16949:2002 registration, suppliers can avoid having to obtain the multiple registrations, which were formally necessary, based upon the region of the customer. ISO/TS 16949:2002 provides the benefit of needing only one registration, which is either recognized or required by all automobile manufacturers worldwide.

Not only does the ISO/TS 16949:2002 registration provide the benefit of allowing organizations to supply to automobile manufacturers, it also provides the benefit of improving the supplier’s entire organization. By adopting a thorough quality improvement program that focuses on the organization’s processes, improvement can be acquired throughout the entire organization.
Example and Information

Wescast Industries earned its ISO/TS 16949:2002 certification shortly after the release of the certification standards. Wescast Industries certified all five of its Ontario manufacturing facilities. Wescast Industries believes that ISO/TS 16949:2002 recognizes the commitment to quality and customer requirements, is a significant registration from a customer’s point of view, and will increase their global presence. The CEO of Westcast Industries stated that they were “proud to receive the internationally recognized standard of quality,” and that “this certification is significant to our current and future customers and will increase our global presence.”

Information about ISO/TS 16949:2002 can be obtained from the International Organization of Standards, which supplies a guideline of requirements for registration. Information can also be obtained from ISO/TS 16949:2002 registrars, who not only provide registrations, but also provide detailed information on the registration process and requirements. There are currently some journal articles on ISO/TS 16949:2002 and books are currently in the publication process, but not yet available.

[C] ISO 14000

ISO 14000

In today’s business world market pressures are forcing internationally and domestically competing companies to better understand the costs and benefits of their products and services. Environmental mismanagement of a firm can cause a lack of control and loss of revenue for a company. Standardizing the development and implementation of an Environmental Management System (EMS) can help companies start, improve, and monitor an environmental program. So this is where the ISO 14000 comes into effect.

The ISO 14000 is a world wide recognized voluntary set of standards formed by the International Standards Organization in Amsterdam to incorporating environmental aspects into operations and product standards. The ISO 14001 was completed in September of 1996 and is a set of specifications for implementing an EMS. The ISO14001 standard specifies requirements for establishing an environmental policy, determining environmental aspects and impacts of products and services, planning environmental objectives, implementation and operation of programs to meet objectives and targets, checking and corrective action, and management review. The following is a very brief introduction to how the ISO 14001 works and how it can be implemented into your company.

The first and most important step in how the ISO 14001 works is having a firm commitment from senior management. If the senior management needs to provide direction and focus on the EMS and if they do not follow through with a commitment then there is a good chance any EMS implemented will fail. So one senior management is on board the planning process begins. The planning process includes scheduling, budgeting, and assigning personnel, responsibilities and resources to the EMS. The planning process is broken down into four categories that cover

2.1) Environmental aspects,
2.2) legal and other requirements,
2.3) Objectives and targets, and
2.4) Environmental management program.

A plan should be developed, written down, and made accessible to anyone who wishes to see the plan. This is a great way to see where your organization is with its plan and where it is going.
The next step is to implementation and operation. Here you want to take the plan you developed in step one and execute it among your company.

The subcategories in this step are

3.1) structure and responsibility
3.2) training, awareness and competence
3.3) communication
3.4) environmental management system documentation
3.5) document control
3.6) and operational control
3.7) emergency preparedness and response.

So here is where you want to lay out your plan to your employees, provide training and consciences about the EMS, keep an open line of communication among personnel about environmental issues, document everything, and have an emergency plan in case something is to happen. An important issue to remember here is to document everything. This provides the organization with reference as to how the company is doing, where the organization is at with concerns to its plan, and where they are going.

The third step is to check and take the proper corrective action. Here you would wait a proper amount of time, say on quarter to one year, and review what has happen in that time.

The subcategories in this section are

4.1) monitoring and measurement,
4.2) non-conformance and corrective and preventive action,
4.3) records,
4.4) environmental management system audit.

On the basis of these four subcategories we would observe and assess the EMS during the period, watch for problems that may arise and take the proper corrective actions, record all observances and changes, and finally audit the way things are being done to ensure that the best actions are being taken. This step gives you a chance to look at how things are working and make the necessary adjustments to perfect them. You should continually monitor how the implemented EMS is going but at least once a quarter to once a year audit your EMS to ensure that things are being done the way are suppose to be and if changes need to be made to conform to new advances or to conform with the original plan. I would also suggest auditing the plan once a year to see how you are in line with the original idea and if some changes need to be made as to the EMS goals.

So the final step in the ISO 14001 is for management to review the process similar to step 4 and start all over again with step 3. This is the process of continual improvement. Every organization should make every effort to achieve environmental excellence not only for the environment but for the bottom line of the company as well. The ISO 14000 gives an organization a chance to maximize the use of scarce resources, implement recycling programs, and get national and possible global recognition for environmental policies, all of which can contribute to the bottom line. But what companies actually use the ISO 14000 standards?

Ford motor company is a large supporter of the ISO 14001. All of fords manufacturing facilities became ISO 14001 certified as of the end of 1998. Also, to take it a step further ford required that at least one manufacturing site to be ISO 14001 standardized by the end of 2001 and all manufacturing sites shipping products to Ford by July 1, 2003 be ISO 14001 standardized. This is an aggressive step taken by Ford to show its commitment to the environment. However, Ford also intends to provide awareness training to its suppliers and hopes to make tools available to assist in the process of developing an EMS. Just as a side note, Ford has over 5000 different suppliers. So this is just a small example of how organizations are recognizing the need to have and EMS plan. With companies such as Ford and IBM on board you can see the importance for a company to adopt some form of a EMS.

This report has been a very brief introduction to the ISO 14000 standards. If you are interested in finding more information on the subject I would suggest some sites on the internet and some books. Www.iso.com is a great starting point to find out about the ISO 14000 and 9000. This site also offers you a place to roister your company as an ISO 14000 user. I would also suggest the American National Standards Institute web page at http://www.ansi.org/. This site offers you information on establishing a EMS and provides information on the ISO 14000 and other environmental standards. Some books of reference that are great sources of info are Green Profits: The Manager's Handbook for ISO 14001 and Pollution Prevention by Avrom Bendavid-Val and Nicholas P. Cheremisinoff. This book provides information on the principles behind EMS concepts, tools and techniques, and steps you can follow in implementing them. Finally, for further information you can contact the American Society for Testing and Materials by mail at ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, Pennsylvania, USA 19428-2959. They will provide you with pamphlets and information on training seminars you may attend.

[B] ISO 9000

ISO 9000

Companies today compete on a global scale. In order to remain competitive, organizations must be able to adapt to the corporate climate. One obstacle many companies are facing today is the ever-increasing standards of quality customers expect from their respective firms. To overcome this obstacle, many organizations have begun or completed the implementation of ISO 9000.

ISO 9000 is a quality system. It is a set of rules that can be followed by an organization in order for a company to understand the wants and needs of their customers. ISO 9000 is a generic system, allowing the standard to be applied in virtually any situation. ISO is not an acronym. Formed in 1947, in Geneva, Switzerland, ISO is a nickname used for the International Organization for Standardization. The word “isos” means, “equal” in Greek, and that is what ISO 9000 attempts to establish. The ISO 9000 standard is used in order to create organizations that are equal when it comes to customer service and meeting customer needs.

ISO 9000 is a European standard, however, it is being adapted throughout the world. The International Organization for Standardization believes there are two main points that should be understood in order to undertake ISO 9000 implementation. One is to promote development of standardization to facilitate international exchange of goods and services. Basically, this is to allow international companies to compete on the same level in regards to goods and services. The second is to promote cooperation in intellectual, scientific, technological, and economic activity. Sharing information allows companies to grow, and has been a key point in discussions from Robert C. Camp. His ideas of benchmarking are those of sharing information in order to allow both parties to benefit.

A commitment to ISO 9000 is necessary in order for it to be successful. Once a commitment is made, it is only a matter of time until the organization is compliant with ISO 9000. Once the commitment is made, the organization must come up with a plan in order to see what is feasible. Implementation of the plan will commence, and then, once completed, an ISO 9000 certificate can be issued.

Once ISO 9000 is implemented, it will benefit the organization in many ways. Customers will recognize the certification, as it holds an important place when most companies are looking to purchase from others. This will allow increased sales, while the actual implementation is contributing to higher quality and service. The organization on a whole will benefit, as it will allow the employees to operate in a more efficient way, and has shown to increase morale and team work efficiency.

ISO 9000 has a series of parts in which guidelines and rules are presented in order to achieve ISO 9000 certification. Specifically, ISO 9000 and 9004 are the guidelines, while ISO 9001, 9002, and 9003 are the categories in which an organization can apply in order to achieve ISO 9000 certification.

In part one of ISO 9000 documentation, ISO 9000 is the “Quality Management and Quality Assurance Standards – Guidelines for Selection and Use” section. This section is an overview of ISO 9000 certification and allows a company to decide which category they can apply for in order to achieve ISO 9000 certification.

ISO 9001 is the “Quality Systems – Model for Quality Assurance in Design/Development, Production, Installation, and Servicing” category within ISO 9000. This category is for use by companies within the manufacturing sector or organizations involved in the creation and delivery of a service.

ISO 9002, “Quality Systems – Model for Quality Assurance in Production and Installation” is the category for companies who perform many functions, with the exception of design and development, to implement. A job shop would be an example of a company who would apply for ISO 9002.

ISO 9003, “Quality Systems – Model for Quality Assurance in Final Inspection and Test” is used by non-manufacturing firms, such as distributors and warehouses. This standard is not being used as much as it was in the past, as more quality is now being built directly into a product. ISO 9003 is expected to be dropped from the ISO 9000 certification sometime in the future.

ISO 9004, “Quality Management and Quality System Elements – Guidelines” are the guidelines a company use to implement and interpret what category to apply for within ISO 9000. It helps the company seek direction and achieve what ISO 9000 has set out to create: quality and unity.
ISO 9000:2000 is an ISO 9000 update. Some of the changes include the integration of ISO 9001, 9002, and 9003, and important issues within ISO 9000 being clarified. Another related standard is ISO 14000, which is an extension of ISO 9000 into environmental certification. The support for ISO 14000 is not as great as ISO 9000, as integrating ISO 14000 can cause conflicting interests within an organization, due to opinions over environmental issues.

ISO 9000, as stated previously, can be implemented virtually anywhere. An organization just needs to determine which section of ISO 9000 implementation to proceed with, and from there is it simply a matter of following through with the standard. Companies such as IBM, Motorola, Exxon-Mobil, and Fed-Ex have all implemented some type of ISO 9000 standards. Once a company’s basic structure and goals have been identified, the implementation can begin. Taking a small manufacturing business as an example, the following paragraph describes the process involved in ISO 9000 implementation.

ISO 9001 would be the choice of the small manufacturing business, as ISO 9001 is the category for which manufacturing operations should choose to implement. Costs would break down into two parts: implementation and registration. The implementation costs include: Multiple Locations, Design, Non-existence of a Quality Program, and Significant Corporate Changes. The registering costs include: Design Responsibility, Number of Locations, and Size of Facility in Terms of Employment (Employees). There can also be additional costs, which do not register in dollars and cents, such as employee morale.

ISO 9000 is an important standard in the industry today. When companies choose to implement ISO 9000, they must think of not only the short-term transition period, but also the long-term future of the organization. Too often, companies do not see this, and implement ISO 9000 simply to remain competitive due to outside pressure. This can lead to failure of the implementation, and even to the point of failure of the company due to the loss in quality that may have existed before the implementation.

For additional information, many sources can be utilized. The Internet is a place that can be very helpful in learning more about ISO 9000. A good site to visit would be the International Organization for Standardization (http://www.iso.ch/). Also, the resources in the library or a specialized engineering library will be very helpful in obtaining ISO 9000 information. Finally, contacting a company directly to see a first-hand account of ISO 9000 implementation can be very informative.

ISO 9000:2000

What is ISO 9000:2000?

The International Organization for Standardization (ISO) was founded in 1946 “to develop a common set of manufacturing, common trade, and communications standards.” Based in Geneva, Switzerland, ISO is composed of more than 100 member nations that are represented by national organizations charged with creating standards (the US-based organization is called the American National Standards Institute).

[1]

ISO 9000 was first published in 1987, revised in 1994, and updated in 2000; hence the name ISO 9000:2000, the latter number referring to the last revision. The main reasons for 2000 revision were to improve user-friendliness; to give more attention to the process approach, continual improvement, and resource management; and to improve integration of quality management systems with other management systems.
The ISO 9000 family is composed of the 9000 series of two documents, ISO 9001:2000, Quality management systems—Requirements and ISO 9004:2000, Quality management systems—Guidelines for performance improvements, which outline specific requirements; ISO 19011, Guidelines for quality and/or environmental management systems auditing; and ISO 9000:2000, Quality management systems—Fundamentals and vocabulary.

[2]

ISO 9000:2000 is a set of general guidelines that organizations can adopt to improve their quality management systems; the guidelines are broad enough to apply to Fortune 500 companies as well as not-for-profit organizations. The guidelines are separated into eight quality management principles:
(1) Customer Focus,
(2) Leadership,
(3) Involvement of People,
(4) Process Approach,
(5) Systems Approach to Management,
(6) Continual Improvement,
(7) Factual Approach to Decision Making, and
(8) Mutually Beneficial Supplier Relationships.

How to Use the Concept?

In order to fully utilize the ISO 9000 family of principles, an organization must:
(1) Understand why it should use ISO 9000,
(2) How to implement ISO 9000, and
(3) How to obtain certification.

Why ISO 9000?

Many companies want to focus on continual process improvement in order to improve internal processes, decrease costs, and increase customer satisfaction and retention. “ISO 9001 is a vehicle to educate management about systems thinking, the process approach, and process improvement tools and techniques.”

[3]

The international acceptance of these standards makes them even more appealing to many businesses and organizations.

How to Implement ISO 9000?

ISO 9000 implementation responsibilities rest on management, employees, and internal and external auditors. Management responsibilities can be summarized in ten basic points:

• Communicate importance of meeting customer requirements.
• Develop an integrated overall plan.
• Ensure that quality starts at design stage to prevent problems.
• Monitor process capability.
• Measure key product and service characteristics.
• Continually improve processes.
• Create constancy of purpose.
• Demonstrate leadership. Work on the system to support the employee.
• Commit to ongoing training.Promote continual improvement rather than management by numbers.

[4]

Employee responsibilities include:

• Follow the most current work instruction.
• Identify problems and inaccuracies in work instructions and inform management.
• Make recommendations for process improvement.
• Identify and report to management all service or product nonconformity.
  

Auditors responsibilities include:

• Ensuring complete conformity to ISO standards.
• Monitor and review quality management system activity at appropriate intervals.
• Suggest corrective or preventive action as needed. (Scott)
  

How to Obtain Certification

After management, employees, and internal auditors have adopted and ensured ISO quality standards, the organization can then contact a accredited registrar (an approved auditor) that can issue official certifications.

Palmetto GBA—A Working Example of ISO 9000 in Service
Palmetto GBA, a Medicare and Medicaid claims processing contractor, has been focused on qualitative process improvement for 12 years. In 1998, The Centers for Medicare and Madicaid Services, one of Palmetto’s largest customers began requiring ISO 9001 certification for its business contracts. Palmetto decided to become 9001 certified to retain and satisfy its largest customers. Palmetto implemented a 4-phase program in order to comply with customer demands.

In the planning phase Palmetto read and understood the ISO 9001 standard and attended proper training. After receiving the training they were able to implement the second phase by performing GAP analysis between their existing system and the new Quality Management System. They identified problems in their current business processes by creating a flowchart of the sequence and interaction of all business processes, which allowed Palmetto to implement the third phase by analyzing problems and implementing new procedures. In the fourth and final phase Palmetto hired two certified auditors to audit processes full-time. They continually provided new ideas on improving quality management systems.

Palmetto gave a great example of qualitative improvements by utilizing ISO 9001 standards. Examples of quantitative improvements are evident with DuPont. DuPont used ISO 9000 to “increase on-time delivery from 70 percent to 90 percent, decreasing cycle time from 15 days to 1.5 days, increasing first-pass yields from 72 percent to 92 percent, and reducing the number of test procedures to one-third.”

[5]

Conclusion

The family of ISO 9000 including specifics found within 9001 and 9004 provide a way for companies to improve their business processes in order to accomplish the ultimate goal of pleasing their customers.

[A] Benchmarking

Benchmarking

There are many methods used by companies in an effort to improve quality in both their products and services. In the fast paced environment that surrounds industries today, they find themselves faced with the pressure to discover fail proof ways to run their businesses. Techniques that do not turn out successful can harm the company and also result in losses in costs and time.

A popular tool used today by many companies is benchmarking. It is a process that involves continuously comparing and measuring against other companies to gain information and learn from their experiences, processes and practices. It provides companies the opportunity to assess their own procedures and helps them to understand their industry better which leads to innovative thinking. It also helps them to identify what changes are essential to improve performance. Some benefits of benchmarking are a better understanding of customers and competitors, reduction in waste, quality problems and reworking, quicker awareness of important innovations, a stronger reputation within the market, and increased profits and sales turnover. Benchmarking is usually done with top performing companies in both the service and the business sectors. Many of these companies are Fortune 500 companies such as Ford, Nissan, or Motorola. However, others include smaller businesses that are only a fraction of the size. These firms looking to benchmark all recognize that success and advancement come from a clear understanding of how the business is doing, not just against last year’s performance, but against the best they can measure. There are two parties in the benchmarking process. The initiator is the firm that initiates contact and studies another company in an attempt to improve their own processes. The target firm, or the benchmarking partner, is the one being studied.

Of all the benchmarking tactics, the two most popularly used are competitive benchmarking and process benchmarking. Competitive benchmarking compares the performance of one organization to that of its competitor. This method is useful for estimating a company’s position in the industry. Process benchmarking evaluates business processes or practices that are vital to a firm’s performance. It involves the identification of the best practices used by an organization, regardless of what industry they are in. The practices are then studied and implemented by the initiator firm. The four most common types of benchmarking are process, performance, strategic, and internal benchmarking. Process benchmarking focuses on work processes and operation systems and tries to identify the most effective approaches used by other firms that perform similar work or deliver similar services. Performance benchmarking is competitive benchmarking and allows assessment of a company’s competitive position through the comparison of products and services and the analysis of statistics. Strategic benchmarking observes how others compete and usually moves outside of a company’s industry to look for best practices. This method is widely used by Japanese corporations. Internal benchmarking looks for internal winning strategies and tries to establish them equally throughout the company. Using this strategy, all the functions of a business’s operations are compared and measured against the best in class for competitiveness. The key advantage of internal benchmarking is its ease of implementation and also the minimal requirement of time and resources.

The benchmarking process is not an easy one. It requires more time and effort than most managers think. There are a series of steps to follow to ensure that the process is successful. The first step is to identify what is to be benchmarked and then determine what firm(s) to benchmark against. They should be a leader or “best in class” in the area that is being benchmarked. The next step is to establish how data will be collected and measured in order for it to be a meaningful comparison. Then, the company should analyze current performance levels and find the gaps between them and the target firm. Future performance levels should also be forecasted so that goals can be set. Next, the benchmark findings should be communicated to everyone concerned in order for them to understand what improvements need to be made. Specific actions should be implemented and progress should be continually monitored to determine whether or not the plan was really effective. The last step is to recalibrate benchmarks to ensure that the firm can react to and keep up with others’ improvements.

One example where benchmarking is used is Rank Xerox. Rank Xerox is part of Xerox Corp. who found itself in trouble when its market share went down fifty percent in 1980. Competitors were moving into the market and beating them out in price and quality. Xerox decided to benchmark such things as how their photocopiers were built, the cost of each state of production, selling costs, and service quality against both competitors and any other firms that it could learn from. Benchmarking is an everyday activity for Xerox and Rank Xerox. Their guiding principle is: “Anything anyone else can do better, we should aim to at least do equally well”. Their distribution was compared against such companies as 3M in Dusseldorf, Ford in Cologne, Volvo in Gothenburg and IBM’s international warehouse and French warehouse. By comparing with these best in class firms, Xerox was able to discover that warehouses were not efficient through a high level of automation but rather through efficient manual routines. Among many other findings, they also realized that they needed to update their systems because they took one extra day in information flow between the field and center. Through benchmarking, Xerox was able to improve its financial position, stabilize its market share, and increase customer satisfaction by forty percent in the past four years.

Xerox is just one example of the many companies that have grown more successful from using benchmarks. They were able to use the information they collected correctly and also keep the process a daily routine. Benchmarking is only a great tool for gaining knowledge and experience if it is employed properly.

QM Implementation Manual

Quality Maintenance :

A: Following data are required to implementation Quality Maintenance ,

· Quality defects - In-house and at Customer end.

For customer-end data,

• Customer end line rejection
• Field complaints.

In-house, data related to product & processes

Related to Product :

• Product wise defects
• Severity of the defect and its contribution - major/minor o Location of the defect with reference to the layout
• Magnitude and frequency of its occurrence at each stage of measurement
• Occurrence trend in beginning and the end of each production/process/changes. (Like pattern change, Tundish change, ladle/furnace lining etc.)
• Occurrence trend with respect to restoration of breakdown/modifications/periodical replacement of quality components.

Related to processes:

• The operating condition for individual sub-process related to men, method, material and machine.
• The standard settings/conditions of the sub-process
• The actual record of the settings/conditions during the defect occurrence. Data from first and last piece inspection report and rejection analysis report are also means to collect data on quality defects.

This data is usually compiled in a Quality loss format. For every quality defect 6W and 3H conditions are captured. For example,

• Which: Machine No. (123456 – QA Lal -09U)
• What: (Defect phenomena) tool mark
• Where: Location (on bore ID)
• When: time (during running, tool change etc.)
• Who: Operator (Mr. U)
• How many: Quantity rejected:

Data needs to be tracked for trends.

Therefore need to categorize them into families, such as wheel cylinders, torque plates, carriers, housings etc. and also process-wise to know the relationships.

We must know which processes contribute to which product defects. More than one process will contribute to more than one defect. Therefore need to go down to one more level of uncovering the phenomena.

All process conditions and defects data are put on the computer.These data should be retrievable at various locations to do different forms of analysis at any
time.

Based on the above data, 3M (Machine, material and Method) fuguai are identified. Countermeasures are implemented to eliminate the problem.

• Why: Rroot Cause
• How to do: Kaizen idea
• Horizontal deployment: Deploy in similar areas.
  

B : Collect data on Quality defects :

Data must be collected first by the teams working on the model machines, and later by the JH circles. The data collection for defects must be comprehensive for the following data:

• Type wise
• Pproduct wise
• Process wise
• Cause wise
• Machine wise.

Components individually or in combination cause quality defects. Machine and components to be both checked when defect is generated. Standards related to quality components are to be checked. Component wise phenomena have to be understood and stratification of quality defects is to be done. Then, machine components’ relation to quality characteristics/defect modes is thereby established.

Facts must be confirmed after visiting ‘Gemba’ (work place) and ‘Genbutsu’ (Real things/defectives).

Operators and inspectors must be trained to observe defects and the phenomena that create the defects. They must also be explained the immediate countermeasures - phenomena-wise. (This can happen when JH team observes very carefully ‘Why products are OK?’)

Then circle members are ready to start recording data and taking immediate countermeasures. They must also record the countermeasures taken so that analysis can be done QM teams for taking permanent countermeasures. Data collection must address both needs - for observing effects of quick and long-term countermeasures.

There must be a daily collection of data that must get compiled to observe trends over weeks and months. Quality defect trends with phenomenon, cause & kaizen idea along with implementation date can show a full picture of how Quality losses are being eliminated.

C : Make the Quality Matrix chart :

Quality Matrix is one of the means to achieve zero defects by identifying focus areas.

The purpose is to establish a relationship between process characteristics and quality characteristics.

Quality matrix can be made fewer than three categories depending on your company:

• Process-wise
• Operation wise
• Machine wise

The inputs to making this matrix come from:

• Product/process characteristics
• Types of defects
• Process sequence
• Product/process history - types and frequency of problems occurred with counter measures or corrective actions.
• Machine manual.
• Past record of defect modes are anlaysed to investigate the types of defects occurring in each process. Relation of product quality characteristics witheach defect mode is established. Relation of defect modes with eachprocess and sub-process is established.

Classification of defects can be by Safety

• Major characteristic affecting performance of product
• Defect generated in market
• A defect that will lead to customer complaint
• A defect that will become apparent in following process
• A defect from a previous process that becomes apparent in the current process

A team of people representing the following functions must develop this matrix:

Quality · Process planning · Maintenance engineers · Shop supervisors · Operators

D : Make inspection standards to sustain zero defects :

Check points are defined in terms of conditions that don’t produce defects. Such conditions are expressed in standard values. Check points can be related to 3M conditions - Method, machine & material.

1. Identify ‘3M’ conditions to achieve zero defects
2. Assess 3M conditions
3. Identify fuguai
4. Set 3M conditions (through countermeasures/Kaizens)
5. Establish standards to sustain zero defects. These standards should contain required value, frequency of check and how to check. In case there is some special attention required for checking then that must come up in an OPL. There must be also a clear indication for ‘action if not OK’.

Optimal conditions should contain the following parameters for each category of defects. E.g. ‘Bore undersize’

1. Machine
2. Work head spindle * Sizer Head alignment * Vibration * Workhead spindle runout
3. Wheel head * Pilot bore run-out * Vibration
4. Methods
5. Face support * Bore run out * B. Feeler * Diamond nose radius *Hole center to tip distance * Width
6. Material
7. Stock
8. Bore radius
9. Track size variation

For each of the specifications frequency of checks and responsibilities must be clearly indicated.

Review the inspection standards periodically for defect occur

Occurence (relation analysis of defect occurrence and standard). Ensure the
current situation and implement improvement activities and calibration of
equipment. Continuously, based on feedback, revise the inspection standard and
implement.

Develop operator’s skill on the revised standards through one-point lessons, visual aids, DO’s and DONOT displays to alert them. Continuously monitor dimensions by auto-gauging for critical and significant dimensions.

E : Methodology of zero defects

1. From defect we need to go to phenomenon
2. Do a why-why analysis
3. Go to root cause
4. Solution would be of two types: Poor design or human error.

For poor design of product/process we will need to strengthen the design. For human error we will need to implement Poka Yoke.

Full inventory of Root cause to Kaizen ideas and Kaizen actions has to be built up defect/phenomena wise. These need to be horizontally deployed.

Where problems are of Type B, why-why analysis may not be adequate to achieve zero defects, in those cases, PM Analysis is advised.

F : Exchange the ideas for elimination and for sustaining zero defects.

· Monitor continuously the defect rate on daily, weekly and monthly basis. Conduct circle meetings periodically to confirm corrective actions and whether they are effective.

· Establish standards for machine, equipments, and monitor their accuracy. Operate at controlled tolerance to the mean limit of the tolerance.

· Develop skill of operators to stop the machines when defects are noticed.

· Maintain machine and measuring equipments to the basic condition to prevent deterioration.

· Continuously monitor the incoming product quality.

Poka Yoke and PM analysis are necessary. Many of the companies, are putting in Poka Yoke for all processes which impact safety of product or operation and where there are any customer complaints. In addition to that the following suggestions are made:

· Poka Yoke working to be inspected. This can be ensured through ha TBM calendar.

· Kaizen inspection sheets are prepared and key points are added as Quality points in the JH check sheets.

· Setting master’s usage and first time right settings is done through education and training.