A Quality Strategy

1. A Quality Strategy Karachi September, 2010 Alan Power alanmpower@aol.com In Association with Octara

2. My Personal History • Management Development & Training (ICL & TSB) • Mainstream Personnel (UDT & Mortgage Express) • General Management (TSB Homeloans) • Quality Management (Lloyds Banking Group) • EFQM Assessor • BQF Assessor • Jury Member, Quality Scotland Foundation & Excellence South West

3. TSB HomeloansSome Successes • Established as a centralised home loans operations in 1990 • Loan assets increased from £3.4 billion to £10 billion by 1996 • Productivity improved by 127% • Staff morale improved to 97% satisfaction • Customer satisfaction averaged 98.6% • Winner of the Quality Scotland Foundation Award for Business Excellence 1996 Alanmpower@aol.com

4. Agenda QUALITY • What is it? • Does it work? • Is it here to stay? • What are the key components? • Where do I start? • How do I access support?

5. Quality What is it?

6. Does it work? Porsche – approach to quality

7. 1991 - 1992 :Porsche were in a Crisis Situation • 1990 profit of $10 million on sales of $3.1 Billion • 1992 loss of $154 million on sales of $1.6 billion • Sales not looking to rebound in the short term 1-2 years • Company set to go under within 18 months

8. Porsche - Actions Taken • Appoint the first CEO from outside of the Porsche family • Wendelin Wiedeking came from auto parts industry • Wiedeking makes the decision to use external consultants • Toyota’s consulting wing is engaged

9. General I & R 3-5 years skilled I = Inspectors R = Re-workers Pre-Delivery Inspection Centre 5 – 15 years Paint / Body I & R 5-10 years skilled Production line worker 0-3 years Production line worker 0-3 years Production line worker 0-3 years PRODUCTION LINE Final I & R 20 years skilled CUSTOMER Pre-Delivery Inspection Centre 5 – 15 years Mechanical I & R 5 – 10 years skilled Production line worker 0-3 years Production line worker 0-3 years Production line worker 0-3 years General I & R 3-5 years skilled

10. Toyota’s General Observations • The product that was delivered to the customer was a “quality product” (though still had much higher warranty costs than Toyota and Lexus) • The change / revolution they needed was in the operational areas • They needed to move from an industry of “checking” to a right first time process philosophy

11. Toyota’s Operational Observations • Porsche had never in the history of the company built a car first time fault free • Porsche “plan” to get it “wrong” every day • They had, built a system of checking and skilled inspectors to find the faults • Built a system and skilled workforce to re-work the faults • Developed checking and reworking in to the career path for their “high performance” staff

12. Comparison with Toyota • Checking and reworking had become an industry in Porsche • All the highly skilled staff were removed from the actual process • In Toyota they plan to get it right • They get it right and self inspect early in the process not at the end • The highly skilled guys are in the process “coaching and improving.”

13. Operational Performance: Post Lean

14. Summary • Porsche took circa 30% out of their operational costs over 3 years • 1993 loss of DM 239 million on sales of DM 1.9 billion • 1995 profit of DM 2 million on sales DM 2.6 billion • Productivity doubled in the period while defects dropped by 75% • July 27 1994 a Carrera rolled off the production line error free at final inspection, the first time in the companies 44 year history.

15. Is it here to stay?

16. Business Excellence/Quality Management A short history Alanmpower@aol.com

17. Developments in Japan • Marshall Aid • Dr W Edwards Deming • The ‘vital’ visit of 1950 • The Deming Prize for industry • The Deming Prize for schools. Alanmpower@aol.com

18. What are the key components?

19. The Global Response • Excellence & Self-Assessment • Baldridge • EFQM • Lean Thinking • Identifying & eliminating waste • Six Sigma • Motorola

20. European Excellence Model Enablers Results Leadership People Processes People Results Key Performance Results Policy & Strategy Customer Results Partnerships & Resources Society Results Innovation and Learning Alanmpower@aol.com

21. Leadership People Processes People Results Key Performance Results Policy & Strategy Customer Results Partnerships & Resources Society Results …planned, managed and improved • identifying communication needs • developing communication policies, • strategies and plans based on need • developing and using a variety of • communication channels • sharing best practice • and knowledge …identified, developed and sustained ... involved and empowered …and the organisation have a dialogue …rewarded, recognised and cared for How to use the model

22. Lean Thinking The Toyota Production System (TPS)

23. Lean Thinking?

24. exercise Exercise Pass the ball

25. The 7 Wastes‘TIMWOOD’ • The waste of Transporting • The waste of Unnecessary Inventory • The waste of Unnecessary Motions • The waste of Waiting • The waste of Overproduction • The waste of Over Processing • The waste of Defects Alanmpower@aol.com

26. Waste of Talent + Foot Soldiers Heroes Performance Walking Wounded Terrorists (well poisoners) - + - Effort

27. Quality Control Does is it add value or is it a WASTE of time? Alanmpower@aol.com

28. exercise Inspection Exercise How many “f” s in the following text? Piccadilly “Number One” cigarettes are made from the finest rich matured Virginia leaf, grown in districts famous for the smoothness and flavour of their tobaccos. THE HOUSE OF PICCADILLY, LONDON Alanmpower@aol.com

29. exercise Inspection Exercise How many “f” s in the following text? Piccadilly “Number One” cigarettes are made from the finest rich matured Virginia leaf, grown in districts famous for the smoothness and flavour of their tobaccos. THE HOUSE OF PICCADILLY, LONDON Alanmpower@aol.com

30. Quality Control Alanmpower@aol.com

31. 5 Key Principles There are five key principles that we focus upon with Lean: Specify value Identify the value stream Create Flow Create Pull Strive for Perfection GEMBA The point where value is created People, Motivation, Workload & Culture

32. To specify Value, you need to ask: Specifying value • Who is the customer? • What do they value in the service or product that you provide? • What influences their ‘buying decision’?

33. The cost of value Alternatively - ask yourself the question: “Is this an activity that a customer would be prepared to pay for?”

34. To identify value and non value you need to understand the process • Follow a product or service from beginning to end and ‘map’ it • Identify those actions that add value and those that don’t • Redesign the process • Standardise and document.

35. Types of process maps 5 days 10 days 4 • Activity Map Cross-Functional Map Swim Lane Map Value Stream Map Alanmpower@aol.com

36. SIPOC Template Process Name Process Purpose Supplier Input Process Output Customer

37. Step 1: the basic processes/work stations The process starts in the top left with the supplier and ends in the top right with the customer. The process has three main steps which are placed in between running from left to right.

38. Step 2: Flow type and inventory The work is pushed through the process at every step. You have noticed that inventory is building up in the warehouse awaiting transport between Site A and Site B and between process steps at Site B.

39. Step 3: information flow

40. Step 4: quantification and measures

41. Step 5: improvement opportunities

42. Future state map

43. But before you start, clean up the mess! Workplace Organisation The 5Ss

44. What a mess! Alanmpower@aol.com

45. Find the file! Alanmpower@aol.com

46. Is everything I need here?

47. Find the order! Think Break

48. Where is the frying pan? alanmpower@aol.com

49. The 5SsOr the 5Cs and the meaning in English • Seiri – sort – cleanup • Setion – set in order - configure, orderliness or organisation • Seiso – shine – clean and check – maintenance • Seiketsu – standardise – conformity • Shitsuke – sustain – custom & practice – training and routine Alanmpower@aol.com

50. Visual Control