Horses for courses – Picking your winner when it comes to quality improvement systems
Ian Hendra, Clearline Services Ltd. Lower Hutt
There are myriad systems and gizmos that you read about and even get trained in that offer to do “continual improvement” for you. Unfortunately, there’s little advice about the one to back except from sales pitches. The point of this paper is to describe the history of where some of the more famous systems came from and what they were trying to achieve. That way, you might have a basis upon which to choose the right one or more, of course.
In all organisations QA has to deal with a dilemma when it comes to where the funding comes from – and you can’t undertake any realistic continual improvement project without funding. The Venn diagram at Figure 1 shows the interrelationship between the three primary stakeholders being owners, staff and customers. The dilemma is that whilst revenue comes only from customers, staff and owners desire to share the rewards from margins added to costs. Hence funding for continual improvement represents a draw on staff remuneration and/or owners’ return on investment. So it helps to know whose interests are being served best by the various continual improvement systems around. We’ll return to this at the end of the paper.
Let’s deal with a field of seven. There are more for sure, but these represent the main runners.
Deming & TQM
Investors in people
Baldrige Business Excellence
First of all, you might think “Why isn’t he talking about “Lean Six Sigma”? That’s because they’re different and have different roots. We’ll cover Six Sigma later.
In 1990, Womack, Jones & Roos wrote a book called "The Machine That Changed The World". The book is a history of automobile manufacturing that combines the development in Japanese, American and European assembly plants.
They coined the phrase Lean Manufacturing to describe processes that optimised efficiency: Cell manufacturing, pull scheduling (Kanban) and 5S (Sort, Shine, Set-in-place, Standardise, Sustain) are among the tools that emerge.
But they’re not new, they hail from Eichi Toyoda and Taichi Ohno (Toyota Production System), back through Henry Ford, through Frank Gilbreth (process charts and time & motion study), Frederic Wilmslow Taylor (standardised work) back to Eli Whitney in the 1850s and his innovation of interchangeable parts. Some say it stretches back even to ancient Rome...and it’s nothing no more than common sense.
Its target is operational efficiency.
Deming & TQM
Dr W. Edwards Deming remains perhaps the most influential of all when it comes to modern quality assurance systems. Born in 1900, he became a statistician, and worked for US Bureau of Statistics. Process management through performance management and reducing variation were the basis of his approach. Figure 2 sums it up.
During the 1920s he worked at Western Electric’s Hawthorne Works alongside Dr Walter Shewhart the father of Statistical Quality Control (SQC). During WW2 he taught Shewhart’s methods to US suppliers for the war effort and in 1947 went to occupied Japan with Gen MacArthur. He taught SQC (forgotten in the US by then) as the means to rebuild Japan’s decimated manufacturing industry.
Again, derived from Shewhart’s work, he coined the Plan-Do-Check-Act model as the “scientific method” for continual improvement projects at this time. By 1951, so impressed were the Japanese with the outcomes of Deming’s work, they set up The Deming Prize and he was officially honoured with the equivalent of a knighthood.
In 1980 in US, NBC produced a White Paper and aired a TV show called “If Japan can…why can’t we?” that chewed over why US manufacturing was in decline whilst Japanese industry was leading the world.
It discovered that Japan’s success was due to an almost unknown American, Dr W Edwards Deming. Deming appeared on the show and was highly critical of American management “America should export everything it can except American management!”
In a way it was the Watergate of the day, but Deming started teaching again, using the “Red Bead Experiment”. He was already working with Nashua, but soon Ford, GM, Dow, Hughes and many more became interested. He promoted his 14 Points, the 5 Deadly Diseases, and the Obstacles and the seven Quality Control tools that are still taught on NZOQ’s Certificate of Quality Assurance.
1981 GOAL (The Growth Opportunity Alliance of Lawrence) was formed. “The Japanese have been using Deming techniques for 35 years but no-one was interested so none of it is in English”, so wrote Bob King, founder of GOAL. The Memory Jogger series of books was launched and with it the training necessary to underpin Deming’s work. In the background too, Dr Joseph Juran’s famous work on Quality Control served as reference. Soon Quality Function Deployment methods came along to provide tools that would better engage senior managers and the TQM movement was alive and well. Dr Deming died in 1993.
Once again, operational efficiency was the theme.
During the 1970s, large companies in the automotive industry tried to cut costs by reducing their quality inspection processes and demanding that their suppliers dramatically improve the quality of their supplies. Whilst this was de rigueur in Japan and they understood how it was done, it was tiger country elsewhere.
In 1979 Phil Crosby, ex Quality Manager for ITT, wrote “Quality is Free – how to manage quality so that it becomes a source of profit for your business”. He focussed on management failure as the principle cause of poor quality using his Quality Maturity Grid (still one of the best tools...) and a programme to facilitate improvement.
Of particular note, he introduced the four concepts of Zero Defects as follows...
1. Quality is conformance to requirements,
2. Defect prevention is preferable to quality inspection and correction,
3. Zero Defects is the quality standard,
4. Quality is measured in monetary terms – the Price of Non-conformance (PONC), hence “Quality is Free”.
Crosby brought a down-to-earth realistic approach that contrasted with the academic morés of Deming and Juran.
And again, operational efficiency was the theme.
Despite the hype and current fascination with Six Sigma as a silver bullet, there’s not much to it that wasn’t there before.
Developed as an in-house project by Motorola in 1987, following a takeover by Japanese interests, "six sigma” derives its name from the Gaussian distribution (bell curve) and that at +/- 6 standard deviations (sigmas), only 3.4 parts in a million fall outside the limits.
It follows that if you can reduce variation in the process so that six-sigma applies to reject levels, the process is very efficient. To get a scale here Shewhart and Deming worked on +/-3 sigma (99.7%) but high-quality semiconductor production is much better than six sigma and so is air travel!
The particulars of the methodology were first formulated by Bill Smith at Motorola in 1986.
Six Sigma was originally developed as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to other types of business processes a.
Based heavily on a PDCA methodology called DMAIC (design, measure, analyse, improve, control) six sigma got a huge boost when Dr Jack Welch, Chairman & CEO of General Electric (GE) took it on board as a company standard. Welch attributes the influence of Six Sigma as of significance in bringing about GE’s turnaround.
The fact remains that Six Sigma was heavily inspired by six preceding decades of operational quality improvement methodologies such as quality control, TQM, and Zero Defects, based on the work of pioneers such as Shewhart, Deming, Juran, Ishikawa, Crosby, Taguchi and others.
But, once again, operational efficiency was the theme.
Investors in people
Now for something completely different.
The Investors in People standard was written in the UK. It’s a standard for the development of people within an organisation and it too is based on a kind of PDCA methodology.
Initially it was administered through a section in the Department for Education and Employment (DfEE).
Investors in People UK was formed in 1993 to take national ownership of the Standard, protect its integrity and ensure its successful promotion and development
As demand for, and interest in, the Standard grew the section became Investors in People UK.
Although the company is, by definition, UK based and orientated in its operations, interest from overseas has given the Standard an international dimension, both in terms of protection and development. It has been most well received. Cranfield School of Management estimates there were about 40,000 registrations in 2008, covering 7.5 million people in the UK’s workforce. This time the focus is on people.
You won’t be alone here in the notion that your people are the key. Builder of billion-dollar enterprises eight times over, Sir Richard Branson said…
"Convention dictates that a company should look after its shareholders first, its customers next, and last of all worry about its employees. Virgin does the opposite. For us, our employees matter most. It just seems common sense to me that, if you start off with a happy, well-motivated workforce, you’re much more likely to have happy customers. And in due course the resulting profits will make your shareholders happy."
When the defence of your realm and the safety of your troops is your major concern, it’s not hard to understand that you need reliable supplies of armaments, vehicles, clothing, fuel and food.
You need assurance that your procured matériel will work right first time, every time. And you don’t want to be dependent on suppliers who may be out of reach. You need to manage the tactical risks, in other words.
In 1969 the Allied Quality Assurance Procedures (AQAPs) appeared from work undertaken from 1955 during the Cold War by committee AC-250 of the North Atlantic Treaty Organisation (NATO).
AC 250 was a committee of experts in quality assurance, and it still is; see the references for its URL. Their concern was how to assure supplies for a defence in Western Europe when the Atlantic was all but closed to shipping as it had been almost for most of WW2. Winston Churchill regarded the Battle of the Atlantic as the longest of the war and the advent of Soviet nuclear-powered submarines made it almost impossible to defend.