2. September 2010 by Mustafa Shraim.

I recently made a presentation on lean thinking at a meeting hosted by The Project Management Institute (PMI)-Central Ohio Chapter . I started by asking the group for their input on two questions:

1. From your experience, what are some examples of waste (non-value adding activities)?
2. What is most important to your customer when it comes to the product or service they receive?

I didn’t have a chance to go over the results during the presentation (ran out of time!) but I wanted to share the feedback. The group represented different industries including IT, Law / Legal Services, Automotive, Research & Development, Construction, Retail, Hair Styling,  Public Administration, and Public Health. However, almost half of the attendees were IT professionals.

For the first question, here is a list of answers. The number next to the activity represents the number of times that answer was repeated:

• Meetings (10)
• Defects / Correction & Reworks (5)
• Paperwork Bureaucracy / Checklists (4)
• Indecisiveness / Waiting too long for answers (3)
• Gold Plating (2)
• Others receiving one vote include: Handoffs, overdevelopment of application, time loss, added functionality, retraining, resistance to change, scope creep, processing policy changes, filing trips (transport), producing the wrong product, double-checking, re-design, overlapping trades, large inventory during slow economy

The answers for the second question about what the customer is looking for came as follows:

• Quality / Functionality (7)
• Value / Efficiency (4)
• Cost Control / Within Budget (4)
• On-time (3)
• Customer Service / Expertise (2)
• Others receiving one vote include: stability, reliability, security, access to service, and accuracy.

In lean thinking, waste refers to any activity that absorbs resources but produces no value. Also by definition, value-adding refers to activities the customer is paying for - meaning, they add value to the product or service being produced. Somewhere in between, there are activities (sometimes called enablers) that the customer is not paying for but considered important (e.g. administrative paperwork, rework, and some meetings).

For those of us in project management, it would be worthwhile to look back at a completed project (through schedule, log, interviews, etc.) and:

1. List all activities / tasks in the project
2. Identify the type of task / activity (e.g. waste, value-adding, or enabler)
3. Include time and/or cost for each activity
4. Determine total time for each type of activity

 If we do this exercise for a few projects and see similarities, then we we’ll be able to plan our projects so that:

• Waste is eliminated or minimized
• Enablers are streamlined, replaced or improved
• Value-adding activities are optimized

 Is this possible?

Posted in Modes of Waste, Lean survey, Lean Thinking, Lean Project Management, Waste reduction, value stream, Lean | Print | No Comments »

15. August 2010 by Mustafa Shraim.

Everyone knows that becoming Lean is a gradual ongoing process. Some gains, particularly those involving value stream maps, may have a significant impact on reducing lead time and associated costs. However, other gains, such as applying the 5-S system, contribute to the overall success but in smaller increments.

Gradual ongoing gains may also be realized from applying Lean concepts in quality management systems (QMS). From experience, many organizations have implementation problems and are heavy on documentation for reasons such as:

• The belief that all tasks require work instructions or procedures
• One person owns the QMS. As a result he or she is free to introduce additional items (procedures, forms, frequency of events) without real evaluation of the impact on leanness
• The QMS has redundant and/or more-frequent-than-needed tasks. This includes the circulation for signature on an updated document or over-documenting a simple step
• Copies of documents where they are NOT needed
• Change of the QMS guard which  means adding more documents. Usually, it is easier to add than eliminate documents thinking that all existing documents are needed (or they would not be there in the first place!!)
• Just in case mentality: thinking that having more would likely impress the external auditor

How do these examples affect leanness?

 I am sure that there are many examples and questions about this issue.  A Lean QMS group on LinkedIn was started to share ideas and experiences. Please join as it is open for all!

Posted in value stream, Quality Management System, QMS, Waste reduction, cost reduction, Lean, Quality Steps, Uncategorized | Print | No Comments »

24. June 2010 by Mustafa Shraim.

In order to provide the best value to the customer, quality (of product and service) as experienced by the customer must be managed. By “managed”, I mean planned for, controlled, and improved. Many companies engaged in applying lean concepts focus on internal operations with little attention to quality. Or quality might be addressed one issue at a time, as needed. For example, if you’ve been applying lean concepts (e.g. value stream maps) but still get many customer complaints / high external failure costs, this might be an indication.

The fact of the matter is that applying lean concepts should not be in conflict with providing high quality that the customer wants. The objectives of a lean system are to improve quality, eliminate waste, reduce lead time, and reduce total costs. In his book “Lean Thinking”, leading expert Jim Womack outlines steps for applying lean starting with identifying value. Value is specified by the customer and created by you (the producer).

If the customer specifies value, why not study what they want? What types of complaints have we encountered in the past? Can we summarize such complaints on a Pareto chart? What complaints are repeated? Do we have survey results? Any informal data from sales or field service? Answering such questions upfront will help us determine value as perceived by the customer. Once that value is determined, it can then be identified and controlled on the value stream.

Posted in Waste reduction, value stream, customer satisfaction, quality costs, cost reduction, costs of nonconformance, Lean | Print | No Comments »

16. April 2010 by Mustafa Shraim.

In previous posts, I discussed the different costs of quality (CoQ). To summarize, prevention and appraisal costs are those related to conformance of the product or service. On the other hand, internal and external failure costs result form experiencing non-conformance, where “external” means that this experience is told by the customer.  At the ASQ-Columbus Spring Conference held at Columbus State on April 14, someone asked me if the concept of “Quality Costs” applies to sectors outside manufacturing. To prove that it does, many people from different service industries such as healthcare, education, finance, government, and information technology, among others, shared their examples during the presentation. If you would like to view / download the presentation, please go to our website.

Another question was related to the reason that while analyzing quality in terms of costs seems to be an eye-opener, why isn’t the concept used more often? One of the most challenging implementation issues for a Quality Costs program is separating such costs from other costs of doing business. Traditional accounting systems are not designed with such concept in mind. Therefore, your options are to either:

• Change the cost structure of the accounting system (must get the accounting department on board!)
• Build a separate system for capturing CoQ

It may not be simple to do either but it is well-worth the efforts.

Posted in Waste reduction, customer satisfaction, quality costs, costs of nonconformance, cost reduction | Print | No Comments »

9. March 2010 by Mustafa Shraim.

In the previous post, I related the Toyota issue of sticking accelerator to the type of costs incurred. When failure occurs after the product reaches the customer, the associated costs are regarded as External Failure costs. This goes much further upstream than just replacing the defective part or settling a liability issue. Many examples where given in the previous post as well.

Here, I would like to relate this to the type of error. In general, there are 4 scenarios:

1. Your product or service is GOOD and your QC program let it PASS
2. Your product or service is GOOD and your QC program REJECTED it
3. Your product or Service is NO GOOD and your QC program let it PASS
4. Your product or service is NO GOOD and your QC program REJECTED it

Now guess which scenario affected Toyota’s reputation and bottom line!

When QC lets a NO GOOD product go to the customer, that’s a serious type of error (Type II). This is often called “Consumer’s Risk” beacuase the customer is paying a price as well as Toyota (In this case, deaths resulted from failure). The impact of such error for Toyota, primarily because it deals with safety, is huge and most likely will last a long time.

Posted in Types of error, quality control, quality costs, costs of nonconformance, Process Control | Print | No Comments »

19. February 2010 by Mustafa Shraim.

The Toyota case of sticking accelerator is a good example of how External Failure costs can add up very quickly. As mentioned in the previous post, external failure costs (the worst type of quality costs) are those related to a failure after the product has reached the customer. In addition to the impact on Toyota’s near-perfect reputation, and the loss customer confidence in the brand name, other immediate costs are incurred by the company and include, but not limited to, the following:

• Recall costs
• Warranty (of unaffected cars)
• Replacement / repair of sold and unsold cars
• Training service staff on special repair
• Liability / lawsuits
• Downtime at factories
• Wages during downtime
• Scrap and disposition of questionable parts
• Troubleshooting / Corrective actions
• Trips made by executives / engineers / designers
• Public relations
• Working with suppliers
• Dealership support
• Overtime for suppliers (for making good replacement parts)
• Additional freight and premium freight for replacement parts
• Additional legal council (in many countries)
• Discounts for future sales

It is estimated that, with the lawsuits associated with the recall, this will cost Toyota over $2 Billion. The question is could this have been prevented? or at least taken seriously after the very first few complaints? was failure mode and effects analysis (FMEA) or equivalent done for the break subsystem?

Posted in Waste reduction, FMEA, customer satisfaction, quality costs, Process Control, costs of nonconformance, Lean | Print | 1 Comment »

22. January 2010 by Mustafa Shraim.

In many cases, we know exactly what we want to work on. We have a chronic problem that generates scrap, or we may have many customers complaints resulting in returns or recalls. In such cases, we get our team of Lean Six Sigma experts to start working…

But what if we don’t have one specific BIG problem? Should we relax and forget about it? Not really! A report on costs of quality (CoQ), especially those concerning non-conformance, will be worth our efforts.   

It is estimated that between 20% to 40%  of sales are quality-related costs. One third of CoQ is related to conformance (Prevention and Appraisal). The rest, or 67%, is related to non-conformance (failure). Failure costs are divided into two types: (1) Internal Failure: Failure cost incurred before release of the product to the customer or providing the service, and (2) External Failure: Any quality-related cost incurred after the product gets to the customer. Examples of internal failure include scrap, rework, re-testing, etc. As for external failure, warranty charges, returns, recalls, remedial upgrade of software are some of many examples.

There is a lot that can be done if we are able to separate our failure costs from the overall costs of goods sold, don’t you think?

Posted in Waste reduction, customer satisfaction, costs of nonconformance, cost reduction, Lean | Print | 1 Comment »

10. December 2009 by Mustafa Shraim.

As I proposed in the first post, company X is asking you for help to improve, but where do you start?

Let’s ask this question… In terms of improvement, what does company X need?
Could it be improving customer satisfaction - for example, quality, on-time delivery ?
May be it has something to do with cost reduction?
May be the customer wants lower prices?

Typical solutions might include:
Customer dissatisfaction: give more coupons / deals
Profit margins not there: lay-off employees
Competition / Customer wants lower prices: Use cheaper materials / less qualified workforce

This rush into taking action for a “quick fix” may backfire. Giving discount and coupons to quiet customers about quality may temporarily satisfy the customer but would likely reduce the profit margin. Cutting staff without studying long term effects would also affect quality and customer satisfaction.

The first step for any improvement initiatives should always be evaluating the status quo using meaningful measures. When we do this we should keep in mind the costs of nonconformance and modes of waste. Costs of nonconformance are related to costs incurred as a result of customer’s negative reaction (bad experience) with the company’s product or service. They can also be internally generated for various reasons but related to inadequate processes.

Can you think of examples?

Posted in customer satisfaction, Quality improvement, quality control, quality costs, costs of nonconformance, cost reduction | Print | 1 Comment »

9. September 2009 by Mustafa Shraim.

Six Sigma is a disciplined method that works in phases. A Six Sigma Black Belt (BB) learns that he/she must complete a phase before going to the next. The phases in order are: Define, Measure, Analyze, Improve, and Control (also known as DMAIC). To ensure that a BB does not go from one phase to the next prematurely, checkpoints (tollgates) are set up. These tollgates might be a number of questions (checklist items) that the Master Black Belt (MBB) or Champion goes through with the BB to ensure satisfaction with the phase. Once completed, the BB can move to the next phase.

After leading and coaching many Six Sigma projects, I found it more natural to go back and fourth between phases. For example, I found myself making a number of iterations among phases (Measure==>Analyze==>Improve==>Measure… and so on). Once the process is improved and measured to meet established goals, it can then move to the Control phase. Feedback to the Define should be open after evaluating process control.

In addition to measuring improvements using appropriate metrics, the real test of success is sustaining such improvements over time.

What is your experience?

Posted in Process Control, DMAIC, Quality Tools, Six Sigma | Print | 1 Comment »

17. June 2009 by Mustafa Shraim.

I am always amazed with all the acronyms, abbreviations, and buzz words used in the world of quality. There are always new twists on how we should manage for quality. I just started reading an article in Quality Progress (June 2009) that mentions a new method for Six Sigma called 6TOC (pronounced “six tock”). This method combines Lean Six Sigma with theory of constraints. Who knows what’s next on the Quality menu.

Moreover, debates are going on over which method or system should be implemented; ISO 9001, Baldrige criteria, TQM concepts, Lean, Six Sigma, and now may be 6TOC. Another debate might be which comes first, Lean or Six Sigma, ISO 9001 or TQM, among others.

This blog is about simplifying the concepts of management for quality. I know that many quality professionals like the sounds of the quality lingo. I also know that packaging quality concepts differently, particularly when combined with software, is attractive and makes one wants to buy and quickly implement the contents, as seen in the demo.

My proposition for this blog is build a case for simplicity. In the process, I am hoping that we deal with questions like:

• Who cares about the acronyms?
• Do we have to implement a known method to feel good about ourselves?
• What are the first few things we should make sure we have?
• How do we measure performance for excellence?
• Who comes first, the employee or the customer?
• Do we need interim goals? If so, how are they set?
• Can we use PDCA instead of DMAIC and get the same results?

To start off, let’s say you were asked to help Company X achieve performance excellence, what would you do first?

Posted in Quality Tools, Six Sigma, Quality Steps, Lean | Print | No Comments »