Quality Management Standards (CBMEC1 Finals Handouts) PDF

HOLY CROSS OF DAVAO COLLEGE CBMEC1 – OPERATIONS MANAGEMENT WITH TQM FINALS HANDOUTS QUALITY MANAGEMENT STANDARDS WHAT ARE QUALITY MANAGEMENT STANDARDS? Quality management standards establish a framework for how a business manages its key activities. They identify an agreed...

HOLY CROSS OF DAVAO COLLEGE CBMEC1 – OPERATIONS MANAGEMENT WITH TQM FINALS HANDOUTS QUALITY MANAGEMENT STANDARDS WHAT ARE QUALITY MANAGEMENT STANDARDS? Quality management standards establish a framework for how a business manages its key activities. They identify an agreed way of doing something, either making a product, managing a process, or delivering a service. What are quality standards? Quality management standards are details of requirements, specifications, guidelines, and characteristics that products, services, and processes should consistently meet in order to ensure: their quality matches expectations they are fit for purpose they meet the needs of their users Four Main Components of Quality Management System (QMS) ▪ Review the findings of your ▪ Identify your goals and baseline quality management system ▪ Assemble internal resources ▪ Re-evauate both the processes ▪ Determine quality standards and and the product the requirements to meet those ▪ Begin the quality management standards process again ▪ Determine what procedures will be used to ensure criteria is being met ▪ Control, measure, and monitor your output to ensure ▪ Organize supporting it meets the expected criteria documentation (ISO ▪ Identify areas where there is documentation, policies, an opportunity for improvement procedures, training materials, work instructions, etc).in a document management system ▪ Train employees on new processes ▪ Deploy the quality management system ADVANTAGES AND DISADVANTAGES OF IMPLEMENTATION OF QUALITY MANAGEMENT STANDARDS Advantages 1. Consistency. Standards ensure consistent quality, reducing errors and defects. 2. Customer Satisfaction. Higher quality often leads to increased customer satisfaction and loyalty. 3. Efficiency. Streamlined processes and standardized procedures can improve efficiency.  4. Competitive Edge.Meeting or exceeding standards can provide a competitive advantage. 5. Risk Reduction. Minimizes risks associated with product or service failures. 6. Continuous Improvement. Emphasizes a culture of improvement and innovation. Disadvantages 1. Costs. Implementing and maintaining standards can be expensive. 2. Rigidity. Overemphasis on standards might limit flexibility and creativity. 3. Time-Consuming. Compliance with standards can be time-consuming. 4. Resistance to Change. Employees might resist new standards or changes in processes. 5. Complexity. Standards might be complex, making interpretation and implementation challenging. 6. Focus on Documentation. Excessive documentation could shift focus from actual quality to paperwork. PURPOSES OF QUALITY MANAGEMENT SYSTEMS (QMS) A Quality Management System (QMS) is an organized framework of policies, processes, and procedures aimed at ensuring that an organization's products or services consistently meet customer requirements and regulatory standards. Here are the key purposes of a QMS: 1. Ensuring Product and Service Quality Consistency: Establishes standard operating procedures to ensure products and services are consistent in quality, reducing variability and defects. Customer Satisfaction: Ensures that products and services meet or exceed customer expectations, leading to increased customer satisfaction and loyalty. 2. Compliance with Regulations and Standards Regulatory Compliance: Helps organizations comply with industry-specific regulations and standards, avoiding legal issues and penalties. Standards Adherence: Ensures adherence to international standards like ISO 9001, which can enhance credibility and marketability. 3. Improving Efficiency and Reducing Waste Process Optimization: Identifies inefficiencies and areas for improvement, streamlining operations and reducing waste. Cost Reduction: Improves resource utilization and reduces costs associated with rework, scrap, and non-conformances. 4. Facilitating Continuous Improvement Kaizen and PDCA Cycle: Encourages continuous improvement through methodologies like Kaizen and the Plan-Do-Check-Act (PDCA) cycle. Feedback Loop: Implements mechanisms for collecting and analyzing feedback to drive ongoing improvements in processes and products. 5. Enhancing Risk Management Risk Identification: Identifies potential risks in processes and products, allowing for proactive measures to mitigate them. Preventive Actions: Establishes procedures for implementing preventive actions to avoid issues before they occur. 6. Boosting Employee Engagement and Training Clear Guidelines: Provides clear guidelines and procedures, helping employees understand their roles and responsibilities. Training and Development: Ensures employees receive the necessary training to perform their tasks effectively and contribute to quality objectives. 7. Increasing Competitive Advantage Market Differentiation: Demonstrates a commitment to quality, which can differentiate the organization in a competitive market. Customer Trust: Builds trust with customers and stakeholders by consistently delivering high-quality products and services. WHAT IS THE INTERNATIONAL ORGANIZATION FOR STANDARDIZATION (ISO)? ISO stands for the International Organization for Standardization, an independent, non- governmental international organization that develops and publishes standards to ensure the quality, safety, efficiency, and interoperability of products, services, and systems. Here are detailed aspects of ISO: History and Formation Founded: ISO was established in 1947. Location: Headquarters are in Geneva, Switzerland. Membership: It has 167 member countries, with each country represented by its national standards body. For example, ANSI (American National Standards Institute) represents the USA, while BSI (British Standards Institution) represents the UK. Purpose and Mission Purpose: To facilitate international trade by providing common standards among different countries. This ensures that products and services are safe, reliable, and of good quality. Mission: Develop international standards through a consensus-based process involving technical experts from member countries. Standards Development Process 1. Proposal Stage: A need for a standard is identified, and a proposal is submitted by member bodies or technical committees. 2. Preparatory Stage: A working group of experts prepares a working draft. 3. Committee Stage: The draft is shared with the technical committee for review and comment. 4. Enquiry Stage: The draft is circulated as a Draft International Standard (DIS) for voting and comments. 5. Approval Stage: The final draft is presented to ISO member bodies for approval. 6. Publication Stage: Once approved, the standard is published as an International Standard (IS). TYPES OF STANDARDS Quality Management: For example, ISO 9001, which sets out the criteria for a quality management system. Environmental Management: ISO 14001, which provides requirements for an environmental management system. Information Security: ISO 27001, specifying the requirements for an information security management system. Food Safety: ISO 22000, which outlines the requirements for food safety management systems. Health and Safety: ISO 45001, which sets out the requirements for occupational health and safety management systems. Benefits of ISO Standards 1. Consistency: Ensures products and services are consistent in quality. 2. Efficiency: Streamlines operations and reduces waste. 3. Market Access: Facilitates international trade by ensuring products meet global standards. 4. Customer Satisfaction: Enhances customer trust and satisfaction by ensuring product quality. 5. Regulatory Compliance: Helps organizations meet legal and regulatory requirements. 6. Risk Management: Assists in identifying and mitigating risks. Certification Voluntary Process: While adhering to ISO standards is voluntary, organizations can seek certification to demonstrate their compliance. Certification Bodies: Independent third-party bodies conduct audits and issue certifications to organizations that meet the standards. Who Approves ISO International Standards? Experts in the related fields internationally agree upon the ISO standards. These people know what their industries need, such as manufacturers, sellers, buyers, customers, trade associations, users, or regulators. What Are the 2 Most Popular ISO Standards? The two most popular ISO standards are ISO 9001 and 14001. 9001 provides criteria for quality management systems, while 14001 provides criteria for environmental management systems. What Is an Example of an ISO Standard? Some examples of ISO standards include the calibration of thermometers, food safety regulations, and the manufacturing of wine glasses. ISO standards also cover shoe sizes, musical pitches, security management, and environmental management. What Is ISO 9000? ISO 9000 is a standard that focuses on quality management and quality assurance. Companies use the standard to develop and maintain their quality systems. The goal of ISO 9000 is to apply to companies in all industries. Areas of focus include relationship management, customer focus, and leadership. Examples of quality management standards ISO international standards are the most widely accepted set of quality standards globally. ISO 9001:2015 specifies the requirements for a quality management system businesses can use to develop their quality agenda. Other standards related to quality include: the remaining ISO 9000 family, including ISO 9000 and ISO 9004 the ISO 14000 family for environmental management systems ISO 13485 for medical devices ISO 19011 for auditing management systems ISO/TS 16949 for automotive-related products Other types of best practice standards Standards can help you to achieve best practices in a wide range of business activities, not just quality management. For example: accessibility standards - can help make services or premises accessible to disabled users occupational health and safety standards - can help reduce accidents in the workplace information security standards - can help keep sensitive information secure food safety standards - can help prevent food from being contaminated environmental management standards - can reduce environmental impact and waste energy management standards - can help cut energy consumption ADVANTAGES OF QUALITY MANAGEMENT SYSTEMS Implementing a quality management system, such as ISO 9001, offers numerous benefits to business owners. It typically increases efficiency and productivity and is likely to give an edge over competitors. ISO 9001 builds upon seven key principles. By following these principles, it will be able to reap the rewards of greater consistency, better customer satisfaction, and stronger performance. In short, the SEVEN PRINCIPLES OF QUALITY MANAGEMENT are: 1. ENGAGEMENT OF PEOPLE. Everyone in the organization contributes to the processes by using management systems like ISO 9001. Therefore, to get the most out of quality management ISO, open communication about problems and knowledge and experience exchange with the team is essential. Every employee in the business needs to be aware of their responsibilities and appreciate how they contribute to the company's success. This will assist the business in becoming certified and show how dedicated the company is to raising standards. 2. CUSTOMER FOCUS. Establishing a strong customer focus is a great method to show that the business is dedicated to quality. It's important to collect consumer feedback, both positive and negative, since this can help identify non-conformities and enhance processes, which will help the firm perform even better. A company should consider the needs of all stakeholders, including owners, employees, suppliers, investors, and the general public, in addition to the customers.  3. LEADERSHIP. Strong leadership entails having a distinct vision for the future of the business. Effectively communicating this vision will guarantee that every team member is working toward the same goals, providing the organization with unity. As a result, employee motivation and productivity may increase. 4. PROCESS APPROACH. The ISO 9001 Standard's Plan Do Check Act (PDCA) principle will assist in fostering a process-driven culture throughout your organization. This tried-and- true method guarantees efficient planning, resource, and management of processes and interactions. It may align operations for improved efficiency and make it easier to reach goals by managing the many sections of the organization as a whole. It can find areas for improvement by measuring and analyzing these interconnected processes. 5. IMPROVEMENT. The ISO 9001 quality management system depends on continuous improvement, which is why it should be the company's main goal. It can uncover ways to enhance and strengthen your business by putting processes in place for identifying risks and opportunities, spotting and resolving non-conformities, and measuring and monitoring your efforts. 6. EVIDENCE-BASED DECISION-MAKING. Making informed judgments requires access to accurate and trustworthy data. For instance, needing the appropriate evidence to identify the underlying reason for a non-conformity. Ensure that those who require information can access it, and maintain open lines of communication. 7. RELATIONSHIP MANAGEMENT. It's possible for suppliers to give a competitive edge, but this requires a relationship based on trust. Long-term, mutually beneficial strategies must be balanced with short-term financial gains in order to forge such enduring relationships with suppliers and other interested parties. BENEFITS OF THE QUALITY PRINCIPLES Implementing these seven quality principles during the ISO 9001 certification process can help meet the Standard's key requirements. This will then help improve customer satisfaction and loyalty, increase employee motivation and productivity, and the use of resources. Continually strengthening processes will also help improve cost efficiency and build market share by responding rapidly to new opportunities. ADVANTAGES OF ISO 9001 Using ISO 9001 can help customers get consistent, good-quality products and services. This can, in turn, lead to new business, as well as: greater efficiency and less waste better and consistent control of major business processes a better understanding of customer needs regulation of successful working practices improved risk management increased customer satisfaction improved participation of employees better internal communication greater consistency in the quality of products and services differentiation of your business from its competitors increased profits reduction of costly errors  exploitation of new markets, both in the UK and overseas managing growth more effectively an embedded culture of quality The ISO certification is a globally recognized achievement and, as such, may help raise the international profile and increase business overseas. Benefits of ISO 9004:2018 to business ISO 9004 standard focuses on the quality of the organization, rather than the quality management of products and services as set out in ISO 9001. The standard gives recommendations for achieving long-term, sustained success and focuses on meeting the needs and expectations of all relevant interested parties, rather than just customers. ISO 9004 is applicable to any organization regardless of size, type, and activity. Its 2018 revision builds upon the previous ISO 9004:2009 version and includes an enhanced self-assessment tool that can help to: assess the level of maturity of the different components of your system identify and prioritize potential areas for improvement ISO 9004 is intended as guidance only. It is not intended for certification, regulatory or contractual use. Disadvantages of ISO implementation Despite the many benefits, possible challenges to implementing the ISO standards include: the cost of getting and keeping the certification (in the case of ISO 9001) the time involved resistance to change from within the business Certification to ISO 9001 isn't mandatory, but in some cases may be a prerequisite to working with certain clients such as public bodies. It should be evaluated carefully if certification makes sense for the business. Many organizations benefit from using the standard without actually seeking certification. Reasons Why Companies Should Be ISO Certified Obtaining ISO certification can offer numerous advantages for organizations. Here are some of the key reasons why companies should pursue ISO certification: 1. Improved Quality and Efficiency ▪ Consistency: ISO standards help establish consistent processes and quality control measures, reducing variability and defects. ▪ Process Optimization: Implementing an ISO-compliant quality management system (QMS) can streamline operations, enhance efficiency, and reduce waste. 2. Increased Customer Satisfaction ▪ Meeting Customer Expectations: ISO certification demonstrates a commitment to quality, ensuring that products and services meet or exceed customer expectations. ▪ Enhanced Trust and Loyalty: Customers are more likely to trust and remain loyal to organizations that adhere to internationally recognized standards.  3. Access to New Markets ▪ Global Recognition: ISO certification is recognized worldwide, facilitating access to international markets and improving competitiveness. ▪ Market Requirements: Many markets and clients require ISO certification as a prerequisite for doing business, especially in sectors like automotive, aerospace, and medical devices. 4. Regulatory Compliance ▪ Legal Requirements: ISO standards help organizations comply with legal and regulatory requirements, reducing the risk of fines and legal issues. ▪ Best Practices: Adopting ISO standards ensures that organizations follow industry best practices, keeping them ahead of regulatory changes. 5. Risk Management ▪ Proactive Approach: ISO standards encourage a proactive approach to identifying and managing risks, leading to improved decision-making and resilience. ▪ Preventive Measures: Implementing preventive actions and controls helps organizations avoid potential issues and minimize disruptions. 6. Employee Engagement and Development ▪ Clear Responsibilities: ISO certification provides clear guidelines and responsibilities, enhancing employee understanding and performance. ▪ Training and Growth: Continuous improvement processes and regular audits foster a culture of learning and development, leading to higher employee morale and retention. 7. Operational Excellence ▪ Continuous Improvement: ISO standards emphasize continuous improvement, encouraging organizations to regularly assess and enhance their processes. ▪ Efficiency Gains: Streamlined processes and reduced waste lead to cost savings and better resource utilization. 8. Reputation and Credibility ▪ Brand Image: ISO certification enhances an organization's reputation, signaling to stakeholders that the company is committed to quality and excellence. ▪ Competitive Advantage: Being ISO certified can differentiate an organization from its competitors, providing a marketing edge and increasing customer confidence. LEAN METHODOLOGY Fundamentals of Lean Methodology Though search inquiries on lean methodology will immediately bring “eliminating waste” to the front, this is not the complete definition. Fundamentally, the method emphasizes the idea of “continuous improvement.” Lean thinkers who brought the methodology from Japan to the West (specifically James Womack and Daniel Jones) specified five core principles: 1. Value: Understand what customers value in a product or service 2. Value Stream: What goes into maximizing value and eliminating waste throughout the entire process from design to production 3. Flow: All product processes flow and synchronizes seamlessly with each other 4. Pull: Flow is made possible by “pull,” or the idea that nothing is made before it is needed, thereby creating shorter delivery cycles 5. Perfection: Relentlessly pursue perfection by constantly engaging in the problem-solving process The idea is to refine internal processes as much as possible to give consumers the highest value possible in a product or service. Anything that doesn’t contribute to the product’s value to the customer is considered inefficient. Another key to lean is its definition of waste, of which there are eight types: 1. Motion: Unnecessary movement of people or processes (equipment and manufacturing machinery, for example). Repetitive movements that do not add value translates to wasted time and resources. 2. Over-processing: Doing unnecessary processes or steps than what is required to create a valuable product. 3. Extra-processing: Products require more work or quality than necessary to deliver value to the customer. 4. Defects: Manufacturing processes create defective products — which become wasted materials. 5. Transport: Like motion, but over greater distances to include the transport of tools, inventory, people, or products further than necessary. 6. Human Potential: Underused skills and talent due to poor employee management and team structure lead to a lack of morale and productivity. 7. Waiting: Idle equipment and waiting on materials or equipment can slow down processes and efficiency. 8. Inventory: Excessive products and inventory take up space, reveal overproduction, and create back work. What Are the Goals of Lean Manufacturing? Among the most prominent objectives of the Lean manufacturing method is creating efficiency by continuously examining the current processes and improving them. To achieve this, Lean has 4 different goals. 1. To improve the quality of delivered value (products or services).  2. To reduce delivery times and times to respond to customer requests. 3. To optimize work processes by eliminating waste (non-value-adding steps). 4. To reduce costs by meeting customer demands with as few resources as needed. What Are the Advantages of Lean Manufacturing? Before jumping to implement Lean manufacturing in your business, analyzing the advantages of the production methodology is crucial to align your expectations with reality. Along its evolution path, the method has proven its potential to bring: 1. Improved quality performance 2. Streamlined processes 3. Increased productivity 4. Increased employee satisfaction and morale 5. Increased profits What Are the Disadvantages of Lean Manufacturing? Once the advantages are cleared out, examining the disadvantages of Lean manufacturing will remove all doubt whether the method would fit your needs or not. Some of the most common drawbacks of Lean are related to: 1. Equipment failure 2. Supplier issues 3. Lack of acceptance by employees 4. High implementation cost In Which Sectors Is Lean Manufacturing Used? Originating as a way to reduce waste and improve production times in the manufacturing world, the production methodology is nowadays successfully applied in a number of domains. Thanks to its universally relevant attributes: continuous improvement and respect for people, we can see today lean manufacturing thriving in: A. Healthcare B. Software development C. Project management D. Construction E. Banking F. Education OVERALL EQUIPMENT EFFECTIVENESS OEE (Overall Equipment Effectiveness) is the gold standard for measuring manufacturing productivity. Simply put – it identifies the percentage of manufacturing time that is truly productive. An OEE score of 100% means you are manufacturing only Good Parts, as fast as possible, with no Stop Time. OEE Formula/ Calculation Your OEE calculation is based on a composite of the six big losses of your equipment broken down into three main areas; Availability, performance, and quality. It is a very simple calculation in reality; OEE = Availability% x Performance% x Quality% OEE (Overall Equipment Effectiveness) is the main performance measure that drives action within Total Productive Maintenance (TPM) and is used by the teams to focus their continuous improvement activities as well as identify those areas that require resources. TPM Six Losses There are six equipment losses identified within TPM that are used to calculate your OEE; Availability ▪ Breakdowns ▪ Changeovers Performance ▪ Minor Stoppages ▪ Reduced Speed Quality ▪ Defects ▪ Setup Scrap Calculating Availability Availability is the percentage of time available to run the machine within a shift after losses due to setups and breakdowns. It is calculated by recording the time lost due to breakdowns (unplanned stoppages of more than 10 minutes) in minutes and the time lost during setup (The last good part of one product to the first good part of the next) also in minutes, we then compare this to the total available time within the shift. Example; The shift is 8 hours long and we have 10 minutes allocated for maintenance work and cleaning each shift. Therefore we have 8 x 60 – 10 minutes or 470 minutes maximum available time. Supposing we lose an hour of production, 20 minutes due to breakdowns, and 40 minutes for setups then our percentage availability is;  Total time available – Breakdowns – Changeover x 100 Total Time Available 470 – 20 – 40 x 100 = 87% 470 Performance Calculation The performance percentage is based around the total number of parts that are produced within your available time compared to how many you should have made if you produced at the planned (design) rate. So in our example above with 410 available minutes, (if our production rate is designed to be 1 part per minute we should have produced 410 parts). However, this is often reduced by reduced speed losses (running machines slower than design speed) and minor stoppages (such as small jams that have to be cleared). In our example, our actual production is only 350 parts, so our performance percentage is; Total Number of parts produced Available time X production rate **350 is caused by the 350 = 85% delay of 60 minutes e.g. 410 x 1 410-60 = 350 minutes Quality Calculation Your percentage calculation for quality within your OEE measure compares the total number of parts produced and the total number of good parts. Product losses can be due to either bad-quality parts produced during normal production or parts produced during a setup for a new product. In our example, we have produced 350 parts, but assuming of these 15 were lost through setup, and 15 were defective products. Our quality percentage therefore becomes; Good Parts x 100 Total Number of Parts Produced 350 – 15 – 15 x 100 = 91% 350 We now have a figure for our individual measures and we can move forward to our OEE calculation, the OEE formula being; OEE = Availability% x Reliability% x Quality% So for our example above our OEE calculation is; 87% x 85% x 91% = 67%