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Philip Crosby: Zero Defects

What level of quality should we be expecting in our manufacturing processes? Philip Crosby, a quality manager and consultant, had an answer that was as simple as it was uncompromising: 100 per cent conformity… zero defects.

Philip Crosby

 

Short Biography

Philip Crosby was born in West Virginia, in 1926. He gained an undergraduate degree from the Ohio College of Podiatric Medicine after serving in the US Navy in the Second World War. He also served in Korea, before a series of roles in industry. 1957, he started working for Martin-Mariettta on the Pershing Missile project. It was here that he developed his concept of ‘zero defects’ and reduced waste material costs by 30 per cent.

In 1965, he became Director of Quality at ITT, where he stayed until 1979. This was the year that his book, Quality is Free: The Art of Making Quality Certain, was published. It was big success, so he left ITT to found Philip Crosby Associates, inc. From then on, Crosby was a much in demand consultant, floating his company in 1985, for $30 million.

He continued to write, producing Quality Without Tears in 1984, and twelve other management books up to his retirement in 1991. At this point, he quickly un-retired and founded a new business, Career IV, inc, which provided lectures and seminars for senior executives. He died in 2001.

The Zero Defects Philosophy

Crosby was adept at framing his ideas in simple lists. Let’s start with his Four Absolutes of Quality Management:

  • Quality means conformance to requirements, not goodness.
  • Quality is achieved by prevention, not appraisal.
  • Quality has a performance standard of Zero Defects, not acceptable quality levels.
  • Quality is measured by the Price of Nonconformance, not indexes.

In Quality is Free, Crosby set out fourteen steps to creating quality:

  1. Management commitment to quality improvement.
  2. Quality improvement team with representatives from each department or function.
  3. Quality measurement to determine the status of quality throughout the company.
  4. Determine the cost of quality to discover where action  to correct a defect will result in greater profitability.
  5. Quality awareness for all employees, about the cost of defects to the company.
  6. Corrective action should become a habit.
  7. Establish an ad-hoc committee for the Zero Defects Programme to communicate and that everyone should do things right first time.
  8. Supervisor training on the 14 steps.
  9. Zero Defects Day – when supervisors explain the programme to their people and make a lasting impression.
  10. Goal setting – usually, 30, 60, and 90-day goals.
  11. Remove the causes of error.
  12. Recognise those who meet their goals or perform outstanding acts with a non-financial prize or award.
  13. Quality Councils: regular meetings of quality professionals and team-leaders, to discuss improvements.
  14. Do it over again: During a typical 12-18 month programme, much of the learning will dissipate. So re-start the programme afresh with a new  Zero Defects Day.

Quality without Tears

Crosby went further. In his 1984 book, Quality without Tears, he mooted the idea of a ‘quality vaccination serum’ – a culture of quality, built on:

  • Integrity – from the CEO down
  • Systems – to measure conformance, educate  employees and suppliers, enact corrective action, and make defect prevention into a routine.
  • Communications – of problems, progress, and  achievement.
  • Operations – to test and demonstrate procedures, products and systems before they are implemented, and then continual re-evaluation.
  • Policies – clear, unambiguous policies that put quality first.

Other Pocket Blogs you may like to read

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Taiichi Ohno: Lean Production

The engineer behind many aspects of the Toyota Production System (TPS) can justly be described as instrumental in creating one of the world’s great manufacturing businesses. But his influence goes far wider, with many of the management ideas that we take for granted originating as a part of the TPS. I promised you we’d look at him when we examined the lessons from his boss, Eiji Toyoda, so let’s see what we can learn from Taiichi Ohno.

Taiichi Ohno

 

Short Biography

Taiichi Ohno was born in China, where his father was working on the Manchuria Railway, in 1912, and grew up in the Aichi prefecture of Japan, attending the Nagoya technical High School. In 1932, he joined the Toyoda Automatic Loom Works, which had been established by Sakichi Toyoda, who was highly innovative in the looms he designed and built. When Toyoda sold off the loom business to a British company, he determined to invest the money in an automobile business, to be headed by his son, Kiichiro Toyoda.

Kiichiro Toyoda set out to learn from US motor manufacturers, and started manufacturing vehicles in 1936 and it was he who first introduced the idea of ‘Just in Time’. However, it was when Taiichi Ohno was tasked with increasing productivity that the company started to make the breakthroughs which would later form the groundwork for Toyota’s great commercial achievements of the 1960s onwards, under Eiji Toyoda.

In looking at Toyota’s productivity levels shortly after the war, Ohno realised that the gap in performance between Toyota and the top US manufacturers of a factor ten could not be due solely to a poor Japanese workforce. He considered that the significant factor was waste; ‘Muda’. As he experimented, and took on board Kiichiro Toyoda’s ideas of Just in Time production, he gradually, over the years from 1945 to the mid-1970s, built up a coherent set of principles and practices that has come to be known as the ‘Toyota Production System’.

Towards the end of his life, Ohno spoke and wrote extensively (most notably: ‘Toyota Production System: Beyond Large-Scale Production‘) about the TPS – perhaps more than his superiors really felt comfortable with. In doing so, he frequently used the metaphor of a supermarket to describe how Just in Time principles work. He had first seen, and been captivated by, supermarkets on a visit to the United States in 1956. Ohno died of heart failure in May 1990.

The Toyota Production System

The three principles at the heart of the the Toyota Production System are easy to state:

  1. Produce components just in time for their use (‘Just in Time’ production)
  2. Build quality in every part of the process (‘Jidoka’)
  3. Create one continuous process (the ‘Value Stream’)

Just in Time Production

As if the phrase Just in Time has not become well-enough known, it is supported by an idea and a practical tool that have each become central to manufacturing processes world-wide… and, indeed, to other business and organisational processes.

The first of these – and Ohno’s starting point for his reforms – is the idea of waste, or ‘Muda’. Ohno waged a systematic campaign to eliminate all possible forms of waste. In so doing, he identified the seven categories that are often known as the ‘Seven Wastes’.

  1. Defective Production – producing defective products
  2. Overproduction – producing more than is needed
  3. Waiting – idle, non-productive time
  4. Transporting – the wasted time and risks of damage or loss
  5. Inventory – holding unnecessary stock and therefore incurring capital costs
  6. Motion – the wear and tear and the accidents that arise in moving things around a plant
  7. Excessive Processing – over-specification of components, or unwanted functionality, for example

Some people add other wastes to Ohno’s original seven, most commonly placing Non-used employee talent (wasting skills) between number 3 and 4 in my ordering, so create the mnemonic acronym: DOWNTIME.

Ohno also developed a system of signboards that track progress of goods through the manufacturing process, which are called ‘Kanbans’. The kanban board is now widely used to track progress in projects throughout commerce, especially in managing software projects under agile project management methodologies.

Quality

Ohno examined every part of the manufacturing process and looked for ways to reduce errors, increase safety, and improve reliability. When he found them, he instituted rigorous staff training. The principle of building quality into everything is ‘Jidoka’. And, although he did not originate the idea of continuous improvement, known as ‘Kaizen’, Ohno’s concept of Jidoka involved daily improvement in a cycle of detecting problems, stopping production, removing the cause of the problem, and then incorporating the improvements into the standard workflow.

Another of Ohno’s greatest innovations is his problem solving methodology, the Five Whys, a way of getting at the root cause of a problem. This intelligent approach to stopping a machine when a fault arises and injecting human problem solving is Ohno’s idea of intelligent automation, or ‘autonomation’; ‘ninben no tsuita jidoka’.

Value Stream

Instead of seeing a factory as a series of inter-connected processes as Henry Ford had done, Ohno saw it as one continuous connected process. And ensuring that its efficiency is optimised is the idea of work levelling; ‘Heijunka’. This is central to eliminating waste, or Muda and is about rearranging (dynamically) the allocation of work to ensure that every resource is fully utilised at all times.

Introducing Change

Many of Ohno’s ideas seem obvious to us now but they did not at the time. And, inevitably, he encountered much resistance from the Toyota workforce. He employed one principal strategy to deal with this, that had two simple components: patience and persistence. Evolving the Toyota Production System took thirty years and, no doubt, it is ongoing today.

Adoption outside of Japan

Outside of Japan, Ohno’s ideas have been widely adopted and modified. The TPS is now more generally known as ‘lean manufacturing’ and the principles of lean thinking are increasingly being applied throughout the economy in sectors like retailing, services, telecommunications and even government service.

There does seem to be a difference, however, between Ohno’s and the two Toyodas’ philosophy and that of modern western businesses with which I am familiar. Here, we see organisations seeking to use lean principles to ‘sweat their assets’ to cut staff numbers and compel them to work harder to achieve greater productivity with fewer resources. Toyota instead thought that by making its process more efficient, its workforce could produce more without significant increases in the cost base, and so exploit new markets to create more profit.

At the heart of this is a different approach to pricing. The Western approach is to lower your cost base as low as you can, to determine a profit level, and then to sell at the price that these dictate.

'Typical' Western approach to pricing

Toyota’s success was build on a different philosophy: that the market fixes the price it will pay, and you optimise your processes to set your unit costs. Your profit is the difference.

'Successful' Toyota approach to pricing

Learn More

Toyota describes the Toyota Production System on their website, at: http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/

 

 

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Eiji Toyoda: Yes we can

Eiji was not a management theorist and neither did he found a business. His genius lies in his absolute determination to take on a huge challenge and do difficult things… and he did it twice.

Eiji Toyoda

Brief Biography

Eiji Toyoda was born in 1913 and grew up near Japan’s third city, Nagoya. There, his father had a textile mill, so Toyoda grew up surrounded by the potent combination of engineering and business that was to define his life. He studied engineering at Tokyo Imperial University and, upon graduating in 1936, he joined his cousin’s Toyoda Automatic Loom Works business, where they set up an automobile works and soon changed the name to Toyota.

Toyoda took on a number of roles in setting up research and production planning, but the steady growth of the business was interrupted in 1941, when Japan entered the war. The General Motors car parts they needed were no longer available, and besides; the country now needed trucks. So Toyota became a truck manufacturer. In the early years after the war, trading was tough and Toyoda was heavily involved in the inevitable lay-offs. But he also decided to diversify the company’s future by establishing Toyota Motor Sales.

But there was still precious little to sell. In 1950, Toyoda visited a Ford plant in Dearborn, Michigan. In the time since Toyota had produced their first car in 1936, they had built around 2,500. What Toyoda saw was a plant producing 8,000 every day. He saw immediately that this was the future and determined to revolutionise Toyota’s manufacturing.

Toyoda – like many of his Japanese contemporaries – was often described as under-stated, or taciturn. This was characterised by his outward response to his experience in Michigan. He wrote back to Toyota headquarters that he ‘thought there were some possibilities to improve the production system.’ He brought a manual of Ford’s quality-control methods, which he had translated into Japanese, changing all references to Ford to ‘Toyota’.

This was the start of his first big challenge.

In 1955, Toyoda led the introduction of Toyota’s first mass production car, the Crown. It was a huge success in Japan, but in serving the Japanese market, it was poorly suited to the US Market, where it failed to gain a foothold. That came in 1960, when Toyota launched two new models, the Corona and the Corolla. Both sold massively in the US and, by  1975, Toyota overtook Volkswagen as the largest car importer into the US.

By then, Toyoda had been appointed president of Toyota, serving for longer than anyone to date, from 1967 to 1981, when he stepped into the newly created role of Chairman. It was as Chairman that he really took on and equalled the US, forming a joint venture with General Motors in 1984 to manufacture Toyota cars in the US.

But it was a year earlier, in 1983, that he kicked off his second big challenge: to create a luxury car to challenge the best.

This was to become the Lexus, which later grew into a new brand, to create a clear marketing distinction between the mass-market Toyota cars and the elite Lexus vehicles. His success was complete. Lexus regularly competes with prestige German marques Audi, BMW and Mercedes.

In 1984, Toyoda resigned from the Chairmanship although he continued to go into the office (where all three of his sons are executives) into his nineties. He died, shortly after his 100th birthday, in 2013.

Challenge 1: Become a World Class Manufacturer, to rival the US ‘Big Three’ auto manufacturers

Toyoda set out to take US mass-production ideas and fine tune them to the point where he could out-compete the US auto giants. He worked with a veteran loom engineer, Taiichi Ohno (who deserves, and will doubtless get, his own Pocketblog one day). They created together the ‘Toyota Production System (TPS)’ which is now more generically known as ‘Lean Production’. It rested on three core tenets:

  1. Just in time (JIT) production
    Ohno extended the concept of quality to reduction of waste and asked ‘why stockpile components?’. The result was a revolution
  2. Value Stream – also known as Value Chain
    To make JIT work, you need to see the production process as a part of a longer stream of activities from procurement to production to delivery. Customer demand drives ordering.
  3. Kaizen and Responsibility
    TPS makes everyone responsible for quality. While Toyota did not invent continuous improvement, or Kaizen, it is only when everyone takes responsibility for quality that it can really work.

Challenge 2: Create a World Class Luxury Brand, to rival established German auto manufacturers

From a top secret meeting to a world class luxury marque, Toyoda created a new brand from nothing but determination and around $2 billion of investment. Well, you can do a lot with $2 billion (I think – I’d love to try). But who, in 1983, would have thought that a Japanese car maker would out-engineer the German luxury brands? To do this, Toyoda’s engineers had an eye for detail that today reminds me of Apple. They tested the Lexus on Japanese roads, but knew that Japan would not be their primary market if they were to succeed. So they built new roads in Japan, mimicking roads in the US, UK, and Germany, and tested the Lexus on these. In the process of building the first Lexus, Toyota innovated and experimented like never before.

And what did Toyota get for their 200 patents and 450 prototypes? The Lexus LS400 and the start of a whole new world class business.

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Joseph Juran: Quality Management

Joseph Juran is one of the leading thinkers on the route establishing a culture of quality throughout much of Japanese and then western business. He asserted that quality was nothing new or clever. Rather, it is elemental and elementary. That said, he watched as, for 25 years, his adopted homeland of the United States ignored the quality imperative. Then, in his late seventies, he lived to see American businesses wake up to quality. In his eighties and nineties, he was active and, indeed, energetic in consulting and advocating for quality.

Joseph Juran

Brief Biography

Joseph Juran began his long life in 1904, in Romania. His family emigrated to the United States, and from 1912, he grew up in Minnesota.  He gained his first degree in Electrical Engineering at the University of Minnesota (he later gained a Doctorate in Law at Loyola University) and went straight to working for Western Electric at its Chicago Hawthorn Plant (where Elton Mayo later conducted his famous studies).

In 1928, he wrote his first pamphlet on statistical approaches to manufacturing quality and rose up through the business. Along the way, he ‘invented’ the Pareto Principle (of which more later), but by 1945, he was ready for something else.

In 1945, he joined the faculty of New York University, to allow him time for lecturing, consulting and writing. In 1951, he published his first substantial book, the Quality Control Handbook. This is still in print, much updated, enlarged and revised, in its sixth edition, under the title Juran’s Quality Handbook: The Complete Guide to Performance Excellence. He was becoming well known, although initially, not so much in the US as in Japan. In 1954, he was invited to Japan for a series of lectures, and Japanese companies eagerly took up his ideas on how to increase their manufacturing quality.

In the US, the concept of quality was largely ignored. But in 1979, he founded the Juran Institute in the hope of increasing awareness of and engagement with his ideas. It was in the 1980s that quality started to rise up the agenda of US companies, and he became, in his 80s, a much in demand speaker and consultant. In 1988, he wrote the book that most marks his contribution, Planning for Quality – now out of print. The ideas, however, are all incorporated into later editions of other books.

Juran remained active, undertaking consultancy until the final years of his life. He died in 2008, survived, until the end of the year, by his wife of 81 years, Sadie, who was also born in 1904.

Juran and the Pareto Principle

Juran noticed early on that not all defects were equal. He found that some causes resulted in many defects and others in a few. A small number of causes accounted for a vast number of the defects. This, he recognised, was the same pattern as that which Italian economist Vilfredo Pareto found when looking at the distribution of wealth among Italian citizens. Juran recognised this as a general principle in the way some effects were distributed, and named it the Pareto Principle. It also became known as the 80/20 rule, because Juran found that around 80 per cent of defects were cause by 20 per cent of the underlying problems.

Juran and Deming

The other huge name in quality management was a contemporary of Juran’s, W Edwards Deming. However, where Deming put huge faith in the value of statistics, Juran saw another equally important effect, which his writings are at pains to stress. Possibly influenced by the work of Elton May at the Hawthorn plant, Juran placed huge emphasis on the human aspects of quality management. In so doing, he was an early exponent of employee empowerment.

Juran identified what has become known as his Quality Trilogy:

  1. Quality Planning
  2. Quality Management (or Control)
  3. Quality Implementation (or Improvement)

From these, he identified a nine-step roadmap to achieve the ideal of quality.

Quality Planning

1 Identify your customers
2 Determine their needs
3 Translate their needs into your own language

Quality Management

4 Develop a product that meets their needs
5 Optimise the product to your own needs too
6 Develop a process that can create the product

Quality Implementation

7 Optimise the process
8  Prove the process works under operational conditions
9 Operationalise the process

Company-Wide Quality Management

Perhaps Juran’s biggest contribution was to see quality as a cultural, rather than operational imperative. He argued that senior managers must not just be involved in, but must actively lead the quality processes. They must not delegate them: the impetus must come from the top and accountability and responsibility must remain there. However, he also saw empowerment of workers at all levels as a key to making quality work successfully.

You Might Also Like…

our articles on the leading modern quality methodology, Six Sigma:

  1. Belt up and Reduce Errors
  2. The DMAIC Solution Process
  3. Six Tools from Six Sigma

and also The Efficiency of Order: The 5S Methodology.

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Project Lifecycle

The Management Pocketbooks Pocket Correspondence Course

This is part of an extended management course. You can dip into it, or follow the course from the start. If you do that, you may want a course notebook, for the exercises and any notes you want to make.


Implementing business strategy usually means starting one or more projects. Whilst nothing would please me more (as a former professional project manager) than to devote a series of blogs to a thorough description of project management, that is not the role of these blogs and also, The Project Management Pocketbook already covers that ground.

So I shall limit myself, in the next few blogs, to some of the essential models that a project manager will need. We will cover:

Once the dates are passed, these links will work.

Four Stage Project

There are as many ways of representing the lifecycle of a project as project managers, but they all contain many of the same features, just different language for the stages, different choices of how detailed to be, and different graphical metaphors for how to draw it.

Here, we will use the version in the Project Management Pocketbook.

Project Lifecycle

Scoping

Define the purpose, aim, objectives and scope of the project to evaluate whether it makes good business sense and is therefore worth proceeding to the planning stage. Good business sense here means consistency with your organisation’s mission, vision and values, and a reasonable expectation that the benefits will exceed the costs.

Planning

Put together a detailed specification for what your project will produce and then use this as the basis to plan what you need to do, in what order, at what time, with what resources and allocating work to which people. Calculate the cost of your plan to create a budget and compare that with the benefits you will get if your project delivers to its specification and you can create a business case. You business case will guide your decision whether to invest in implementing your project.

Implementing

Now deliver your project, constantly monitoring for risks, changes, delays, overspends and the quality of your delivered products. Intervene where necessary to maintain control. At the end of the implementing stage, you can hand over the last of the things you have created to your customer, boss or client. Will they accept them? Only if they are fit for purpose.

Evaluating

How did it go? What did you learn? How did team members perform? Was it all worthwhile? Take this new knowledge into your next project and do that one even better.

Further Reading 

From the Management Pocketbooks series:

  1. Project Management Pocketbook
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Deming's System of Profound Knowledge

I recently did three blogs about towering management thinker, Peter Drucker:

  1. The Man who Invented Management
  2. Management by Objectives
  3. R.I.P. Corporate Clone: Arise Insightful Executive

Another hugely influential management thinker and a direct contemporary of Drucker’s was W Edwards Deming.

W. Edwards Deming

imageDeming was a mathematician and Physicist, who turned to statistics and management. In so doing, he became the most influential non-Japanese thinker in within Japanese industry, and a leader in the subject of quality – arguably the founder of TQM, Total Quality Management.

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On the subject of quality, he asserted that:

When people and organizations focus primarily on quality, quality tends to increase and costs fall over time.

However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time.

Profound Knowledge

Deming and Drucker were at one on the matter of knowledge.  Both believed deeply that managers need a wide knowledge over a broad spectrum of topics.  Deming went further than Drucker, in articulating this as a fundamental principle of management.

Deming said that managers need to have a ‘system of profound knowledge’.  The layout of profound knowledge has four parts, all related to one another:

  1. Appreciation for the system that they are a part of
    (What, today, we would call ‘systems thinking’)
  2. Knowledge about variation
    What drives quality and how to measure cause and effect statistically (as we do today, with processes such as Six Sigma)
  3. Theory of knowledge
    Understanding critical thinking processes and what we can and cannot know about a system.  His most famous single contribution is popularising the ‘Deming Cycle’ (which was actually invented by Walter Shewhart).
    Plan – Do – Check – Act
  4. Psychology
    How human beings respond in different situations

Challenge

This seems to me to be an excellent syllabus for a management programme, but I wonder how many managers are really learning about all four of these elements.  This system creates a synthesis of the management thesis and antithesis of the 20th Century:

Scientific Management versus People Management

14 Points for Management

In so doing, Deming articulated his 14 Points for Management.  These, whilst many have become commonplace today, still resonate well.

  1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
  2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
  3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
  4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
  5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
  6. Institute training on the job.
  7. Institute leadership (see Point 12 and Ch. 8). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
  8. Drive out fear, so that everyone may work effectively for the company (see Ch. 3).
  9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
  10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
  11. a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
    b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
  12. a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
    b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective (see Ch. 3).
  13. Institute a vigorous program of education and self-improvement.
  14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

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