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QPQUALITY PROGRESS

innovation:

Encourage It p. 38 Implement It p. 30

Hitting the Marktarget streamlines its complex

supply chain p. 22

Use the tools and methodologies you receive as an ASQ member to make a difference in what is important to you—in schools, government, hospitals, factories, businesses, and socially responsible initiatives.

Find the answers to your quality issues, big and small, in the ASQ Knowledge Center, home to the Quality Body of Knowledge (QBOK®). Learn how to apply quality tools by reading the more than 30,000 articles and case studies, hot topics, and Ask an Editor, and use the powerful Knowledge Center Search options to help you fi nd what you need.

FOR MORE INFORMATION ON YOUR ASQ MEMBER BENEFITS, VISIT www.asq.org/membership.

Get more out of your ASQ membership!Solutions

Putting Best Practices to Work | June 2010 | www.qualityprogress.com

ContentsFEATURES

• “Added Traction” Add-ons Three online tables illustrate a new balanced scorecard method (p. 44).

• Now More Insight Examples of a control plan and a service level agreement accompany “Now What?” (p. 30).

• Ready Reference Tools and information on quality fundamentals, including a comprehensive glossary of quality terms.

www.qualityprogress.comOnly @

SUPPLY CHAIN MANAGEMENTBull’s-eyeTarget closely manages its suppliers to ensure store-brand items are safely produced and efficiently delivered to store shelves.

by William H. Murphy

INNovATIoN Now What? A New Mexico health system discovered how to replicate a successful project and ensure it would be implemented—correctly and consistently—at multiple sites.

by Clark Carboneau, Jon Banks, Tony Armijo and John A. Zondlo

What’s the Big Idea? Great innovators aren’t always born. They can be made—with the right training and commitment from employers.

by Aditya Bhalla

BALANCED SCoRECARDAdded Traction Increase your balanced scorecard’s potency by incorporating quality tools and continuous improvement methods into the system.

by Alex Fedotowsky

22

30

38

44

16

38

22

QP • www.qualityprogress.com4

Inbox• Scrutinizing a problem-solving method.

Expert Answers• Transitioning to a new industry. • Structuring a quality department.

Keeping Current• Quality concerns for Tylenol maker.• High marks for airlines’ performance. Mr. Pareto Head

QP Toolbox

QP Reviews

QP Calendar

DEPARTMENTS 8

12

14

15

72 74 76

Up FrontThe Century of Quality?

3.4 Per Million Aligning strategy to process.

Career Corner Excelling in a changing quality landscape.

Quality in the First PersonSearching online for training opportunities.

Statistics Roundtable Statistical engineering put to the test.

Standards Outlook Proper audit follow-up.

One Good IdeaTaking quality to the task level.

Mail Quality Progress/ASQ600 N. Plankinton Ave.Milwaukee, WI 53203Telephone Fax 800-248-1946 414-272-1734414-272-8575

E-mail Follow protocol of first initial and full last name followed by @asq.org (for example, vellifson@asq.org).

Article Submissions Quality Progress is a peer-reviewed publica-tion with 85% of its feature articles written by quality professionals. For information about submitting an article, call valerie Ellifson at 800-248-1946 x7373, or e-mail manuscripts@asq.org.

Free QP LiveSubscribe to our free electronic newsletter, QP Live, for a summary of each issue’s contents. visit www.asq.org/keepintouch.html, or contact ASQ customer care at help@asq.org.

Photocopying Authorization Authorization to photocopy items for internal or personal use or the internal or personal use of specific clients is granted by Quality Progress provided the fee of $1 per copy is paid to ASQ or the Copyright Clear-ance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. Copying for other purposes requires the express permission of Quality Progress. For permission, write Alice Haley, Po Box 3005, Milwaukee, WI 53201-3005, call 414-272-8575 x7406, fax 414-272-1734 or e-mail ahaley@asq.org.

Photocopies, Reprints And MicroformArticle photocopies are available from ASQ at 800-248-1946. To purchase bulk reprints (more than 100), contact Barbara Mitrovic at ASQ, 800-248-1946. For microform, contact ProQuest Information and Learning, 300 N. Zeeb Road, Ann Arbor, MI 48106, 800-521-0600 x2888, international 734-761-4700, www.il.proquest.com.

Membership and Subscriptions For more than 60 years, ASQ has been the worldwide provider of information and learn-ing opportunities related to quality. In addi-tion, ASQ membership offers information, networking, certification and educational opportunities to help quality profession-als obtain practical solutions to the many problems they face each day. Subscriptions to Quality Progress are one of the many benefits of ASQ membership. To join, call 800-248-1946 or see information and an application on p. 71.

List Rentalsorders for ASQ’s member and nonmember buyer lists can be purchased by contacting Rose DeLuca at the Walter Karl List Manage-ment Co., 845-732-7019 or fax 845-620-1885.

COLUMNS

QUALITY PROGRESS

Quality Progress (ISSN 0033-524X) is published monthly by the American Society for Quality, 600 N. Plankinton Ave., Milwaukee, WI 53203. Editorial and advertising offices: 414-272-8575. Periodicals postage paid at Milwaukee, WI, and at additional mailing offices. Institutional subscriptions are held in the name of a company, corporation, government agency or library. Requests for back issues must be prepaid and are based on availability: ASQ members $15 per copy; nonmembers $23 per copy. Canadian GST #128717618, Canadian Publications Mail Agreement #40030175. Canada Post: Return undeliverables to 2835 Kew Drive, Windsor, ON N8T 3B7. Prices are subject to change without prior notification. © 2010 by ASQ. No claim for missing issues will be accepted after three months following the month of publication of the issue for domestic addresses and six months for Canadian and international addresses.Postmaster: Please send address changes to the American Society for Quality, PO Box 3005, Milwaukee, WI 53201-3005. Printed in USA.

ASQ’s Vision: By making quality a global priority, an organizational imperative and a personal ethic, the American Society for Quality becomes the community for everyone who seeks quality technology, concepts or tools to improve themselves and their world.

- STAY ON TOP Executives on maintaining quality.

- MAKE THE CONNECTIONEnhance the value of quality tools.

NEXT MONTH

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6

52

55

56

58

68

80

ASQ’S SOFTWARE SHOWCASE AND DIRECTORY p. 61

17

68

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A Practical Field Guide for AS9100CErik Valdemar Myhrberg, Dawn Holly Crabtree, and Rudy Hacker

The purpose of this fi eld guide is to assist the reader, step-by-step, in implementing a quality management system (QMS) in conformance with AS9100C. This fi eld guide has been created to foster an inner-reliance between senior management, middle management, functional teams, and the individual. Users of the fi eld guide will fi nd within it practical tools, tips, and techniques useful for not only implementing a QMS but also for maintaining one. Item H1388 Member Price: $42 List/Forum/Division Price: $70

Beyond the Ultimate Question: A Systematic Approach to Improve Customer LoyaltyBob E. Hayes

Business growth depends on more than asking a single question, but are there critical elements of a customer feedback program that are absolutely necessary for its success? Can a company exclude some elements from its program without adversely impacting its effectiveness? How important are certain components in increasing customer loyalty? This book answers these questions. It represents the fi rst scientifi c study that has tried to identify the best practices of customer feedback programs that lead to higher levels of customer loyalty. Item H1371 Member Price: $39 List/Forum/Division Price: $65

Corporate Sustainability Planning Assessment Guide: A Comprehensive Organizational AssessmentDonald C. Fisher

Corporate sustainability planning has risen in prominence over the past few years among leading organizations as a tool to achieve strategic dominance within the global marketplace. This manual is designed to serve as an easy-to-use guide for an organization’s cross-functional self-assessment team(s) to assess and score its corporate sustainability efforts and includes the Global Reporting Initiative (GRI) index.Item H1373 Member Price: $48 List/Forum/Division Price: $80

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In this pocket guide, bestselling author J.P. Russell focuses on the methods and techniques of conducting internal and external process audits. Learn how to evaluate process controls, use process fl ow, turtle, spider, and tree diagrams, verify process conformity and effectiveness, and compose an audit report assessing compliance, controls, risk, and process optimization. This guide is ideal for individuals who have a general understanding of auditing techniques and is written for auditors who conduct fi rst-, second-, and third-party audits to any standard or work instruction.Item H1346 Member Price: $15 List/Forum/Division Price: $25

For a list of all books from ASQ Quality Press, visit www.asq.org/quality-press.

QP • www.qualityprogress.com6

uPfront

Gains and Pains A check: quality progress in the 21st centuryPoor qualitY in the form of unsanitary conditions, careless maintenance—and ques-

tionable contingency planning—even the mishandling of a customer complaint can result

in anything from the bruising of a customer’s loyalty to heart sickness to maybe just plain

sickness.

An unprecedented oil spill, tainted lettuce and recalled children’s medicine were among

the quality-related headlines last month. Ten years in, has what Joseph M. Juran predicted

would be “the Century of Quality” lived up to this lofty title? What would Juran say about

today’s state of affairs?

“In the 1990s—and it will extend well into the next century—we’re going to see the West

scaling up its quality revolution,” Juran predicted in a February 1999 Quality Digest inter-

view. “My belief is that historians in later decades will look back on the 21st century as the

Century of Quality, much as the 20th century has been the Century of Productivity, largely

following Frederick Taylor’s model.”

It’s easy to question our progress when quality-related lapses and missteps seem so prev-

alent. Yet, there are many places where quality flourishes. Many of those stories are featured

in QP each month, and June is no exception. This month’s cover story, “Bull’s-eye,” p.22,

showcases the supply chain efficiencies achieved by retail giant Target via its well-executed

quality plans and systems. High standards for its supply chain partners lead to high-quality

products arriving on Target’s store shelves quickly and efficiently.

You’ll also find articles that offer insights and ideas that can help you build, refine and

maximize your own quality projects and plans. “What’s the Big Idea?” (p. 38) explains how

companies can cultivate innovative thinking among employees—it doesn’t need to be some-

thing someone either has, or they don’t.

“Now What?” (p. 30) discusses replicating quality successes throughout a system. Presby-

terian Healthcare System is the basis for this case study on a “dissemination project.” The

teachings can be applied to just about any industry.

I feel lucky to be able to hear and read about quality triumphs every day as part of my

job. Even better, you get to play a role in many of these stories. QP is here to help you in

your charge—to grow, learn, and do your job better, smarter and quicker. If you have a suc-

cess or story to share, consider writing for QP.

Now, I pose this question to you: Where do you think we stand in relation to Juran’s vi-

sion for the Century of Quality? Do you think it’s achievable? Are we there yet? Will we ever

be? Write to me at editor@asq.org.

There are only 90 more years to make Juran’s vision a reality. We best get to work. QP

Seiche Sanders

Editor

PublisherWilliam A. tony

executive editor andassociate PublisherSeiche Sanders

associate editorMark Edmund

assistant editorBrett Krzykowski

manuscriPt coordinatorValerie Ellifson

contributinG editornicole Adrian

coPY editorSusan E. Daniels

art directorMary uttech

GraPhic desiGnerSandy Wyss

Production Cathy Schnackenberg

advertisinG ProductionBarbara Mitrovic

diGital Production sPecialistsEric Berna, Laura franceschi

media salesnaylor LLCLou BrandowKrys D’Antonionorbert Musial

marketinG administratorMatt Meinholz

editorial officesPhone: 414-272-8575fax: 414-272-1734

advertisinG officesPhone: 866-277-5666

asQ administrationexecutive director Paul E. Borawski

managing directorsChristopher D. BaumanJulie GabelmannBrian J. LehouillierMichelle MasonLaurel nelson-rowe

to promote discussion of issues in the field of quality and ensure coverage of all responsible points of view, Quality Progress publishes articles representing conflicting and minor-ity views. opinions expressed are those of the authors and not necessarily of ASQ or Quality Progress. use of the ASQ logo in advertisements does not necessarily constitute endorsement of that particular product or service by ASQ.

QualitY ProGress

QP

2011 World Conference on Quality and Improvement

CALL FOR PAPERSASQ invites you to join us and share in our efforts to promote, advocate, and demonstrate the contributions quality can make to business, the community, and the world. The Society is developing the 2011 World Conference on Quality and Improvement and is looking specifi cally for presentations that can integrate the conference theme with one or more of the focus areas outlined below. We invite you to share your best practices, successes, and proven techniques to an audience representing an array of countries, backgrounds, and industries.

THEMEThe New Role of Quality: Tomorrow’s Applications of Proven Quality ToolsToday’s challenges have brought many to re-examine the role that quality can play in the organizations and communities that we work and live in. In the face of these challenges, some people are getting back to the basics, and others are looking for innovation and creativity to pave the way. Today, more than ever, quality has a role to play. Whether traditional or new, conservative or inventive, quality is critical.

FOCUS AREAS• Global • Organizational Excellence• Risk Management • Quality Basics• Building a Quality Culture

SUBMIT YOUR PAPER AT wcqi.asq.org. THE SUBMISSION DEADLINE IS AUGUST 2, 2010.

CALL FOR TEAM ENTRIESSee how your team compares to the best and get the recognition your company deserves! Finalists will be selected for the only live team recognition process of its kind to be held at ASQ’s 2011 World Conference. Preliminary round entries are due September 13, 2010. For more information, please visit wcqi.asq.org or email gbalagopal@asq.org.

QP • www.qualityprogress.com8

Designing qualityI read with interest the April is-

sue of QP and the many articles

regarding the quality problems

Toyota is having. I saw very little

discussion regarding quality of

design, which appears to be the

root cause of most of Toyota’s

current quality problems, in-

cluding the stability-control is-

sues of its Lexus GX 460 premium SUV.

The Toyota Production System (TPS)

focuses on conformance to the design, not

determining that the design is fit for use

and foolproof. What the TPS guarantees

is that when a design deficiency exists,

all of the products will have the design

deficiency.

As a solution, several writers mentioned

a robust system for customer feedback.

While I support such systems, they are

reactive in nature. If the manufacturer uses

the system to identify design deficiencies,

the lag time is extreme. It is best suited for

addressing the softer areas of customer

dissatisfaction, not to identify significant

product deficiencies.

Having worked in the automotive and

aerospace industries, I can assure you the

former has much to learn from the latter

when it comes to ensuring design quality.

This raises the topic of software design,

redundancy and quality assurance.

As automobiles become computers with

wheels, it behooves the automotive industry

to implement a robust software quality as-

surance program. The industry can benefit

by studying and adopting the standards and

work of the International Aerospace Quality

Group, which addresses design quality with

the same intensity as conformance.

Gene Barker

Kent, WA

Strategy shiftI am writing to comment on

Henry Lindborg’s Career Corner

column, “Lesson Learned,” in

the April 2010 issue (pp. 56-57).

Toyota’s troubles are significant

for quality professionals, but

not in the way you might think.

Quality at Toyota, in the form of

the infamous TPS, did not cause

the current problems at the automaker.

What appears to have happened is that

Toyota changed its strategy from mak-

ing the best (highest-quality) cars in the

world to being the biggest automaker in

the world. In the process, it unintention-

ally drove home a different set of cultural

behaviors that resulted in the woes that

played out so publicly in recent months.

How did this happen? As business con-

sultant and author Jim Collins points out in

many of his books, it is one thing to achieve

a certain level of organizational excellence

and another to maintain it over time. It is a

characteristically human trait to relax after

achieving a goal.

It may be that after years of focusing on

quality as a strategy to differentiate its prod-

uct and drive growth, Toyota executives felt

they had mastered quality and could move

on to the strategy of being the largest auto-

maker. In doing so, they reduced quality to

an operational—or worse, a tactical—initia-

tive within the organization. The unintended

consequence of such a change in strategy is

that people may do things under a strategy

of “be the biggest” that they may not do

under a strategy of “be the best.”

Toyota made its reputation on quality,

and that is what most people remember.

Sadly, the implication of this for quality pro-

fessionals may be the erroneous connec-

tion in people’s minds that quality caused

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Toyota’s roadmap to recovery—and the lessons we can learn p. 16

QPCar Trouble

QUALITY PROGRESS

Plus: A Critical Look at Root Cause p. 32

MillerCoors Uses Stats To Deliver Effi ciency p. 38

CHAIR OF THE BOARDRoberto M. Saco, Aporia Advisors Inc.

PRESIDENTPeter L. Andres, the Boeing Co.

PRESIDENT-ELECTE. David Spong, the Boeing Co. (retired)

TREASURERJames J. Rooney, ABS Consulting

PARLIAMENTARIANKarla Riesinger, ASQ

DIRECTORSLloyd o. Barker, AlcoaBelinda Chavez, United Space Alliance.Darlene Stoddard Deane, Ford Motor Co.Herbert Goldstein, ortho-Clinical DiagnosticsAlexis P. Goncalves, Innovation Insight NetworkRichard A. Gould, RG Management SolutionsHarold P. Greenberg, American Certification

Corp.Clayburn W. Hodges, WachoviaJoni Judd, J&L Analytical ServicesMarc P. Kelemen, NanoSynopsisKay A. Kendall, BaldrigeCoachLou Ann Lathrop, General MotorsRichard A. Perlman, Bayer HealthCareAimee H. Siegler, Benchmark ElectronicsArthur Trepanier, Lockheed MartinSteven E. Wilson, U.S. Department of Commerce

Seafood Inspection Program

QP EDITORIAL REVIEW BOARDRandy Brull, chair

Administrative Committee Brady Boggs, Randy Brull, Jane Campanizzi, Larry Haugh, Jim Jaquess, Gary MacLean,R. Dan Reid, Christine Robinson, Richard Stump

Technical reviewersI. Elaine Allen, Andy Barnett, David Bonyuet, John Brown, Bernie Carpenter, Ken Cogan, Linda Cubalchini-Travis, Ahmad Elshennawy, Tim Folkerts, Eric Furness, Mark Gavoor, Kunita Gear, Lynne Hare, Ron Kenett, Ray Klotz, Tom Kubiak, William LaFollette, Shin Ta Liu, Pradip Mehta, Gene Placzkowski, Paul Plsek, Tony Polito, Peter Pylipow, Philip Ramsey, R. Dan Reid, Wayne Reynolds, John Richards, James J. Rooney, Anil Sengupta, Sunil Thawani, Joe Tunner, Jeffrey Vaks, Manu Vora, Jack Westfall, James Zurn

QPQUALITY PROGRESS

June 2010 • QP 9

the current problems—or did not uncover

them—or that Toyota no longer makes a

quality product.

Clearly, something changed in the sys-

tem. And while quality—in the form of the

TPS and the Toyota Way—did not cause the

problems, quality tools and techniques can

be used to uncover and fix the root causes.

Leaders determine the strategy of an

organization and focus everyone on ac-

complishing it. The lesson for leaders is to

be careful what you focus on, because you

may get more than you bargained for from

your followers.

Michael P. Levy

Washington, D.C.

Cause and effect fallaciesIn the April 2010 article “Under Scrutiny”

(pp. 32-37), Mark Paradies writes that cause

and effect analysis has “major shortcom-

ings.” one of these, he says, is that people

jump to conclusions and only look for

information that confirms their theory.

This can be

true, but it is not

how root cause

analysis should

be conducted,

and it is not how

I was taught to

do it. The same

argument can be

made about any

problem-solving

or research effort, including the new cause

and effect analysis he proposes.

He also writes that people look for one

root cause, missing the possibility of other

causes. That is not how I was taught, nor

is it how I train people to do it. In Guide to

Quality Control, Kaoru Ishikawa specifically

instructed practitioners to be “certain all

the items that may be causing dispersion

are included.”

Usually, there are several root causes to

any problem. What Paradies failed to men-

tion is the use of Pareto analysis, which

allows the major causes to be addressed

and the main impact of the problem to be

resolved. For more than 20 years, people

have been solving many problems and im-

proving quality this way, even though they

didn’t find all the root causes.

What is more disturbing is that Paradies

writes, “Human performance issues (hu-

man errors) cause most quality problems.”

I once heard W. Edwards Deming say only

6% of the quality problems are caused by

frontline workers. Deming said the workers

are “handicapped by the system, and the

system belongs to management.”

Because managers are human, I sup-

pose it still fits that errors are caused

by humans. But Deming said one of the

main obstacles to improving quality is to

blame the workers, and problem-solving

efforts should

be focused on

processes and

systems, not

the people. To

attribute all

quality problems

to human error

moves the focus

away from the

processes.

Paradies tries to prove the misconcep-

tions of cause and effect analyses, and

suggests some improvements. In my view,

these improvements have always been

part of effective cause and effect analysis. I

guess it depends on how you’re taught.

Dennis Sowards

Mesa, AZ

Too simple?In the article “Under Scrutiny,” Paradies

makes a good point regarding the overly

simplistic single causal chain application

of the five whys technique, but he does so

by implying that problems occur without

cause, and then goes on to posit that the

root cause is the absence of a best practice

and knowledge. This seems like another

simplistic single cause to me.

Dismissing a useful technique because it

may be misused seems ill advised. It makes

sense to ask the whys for a variety of

potential causation paths and use fishbone

diagramming, which is based on the notion

there are many potential root causes.

In the article, Paradies references

the fishbone diagram as one of the old

methods, even though effective use of the

fishbone approach does exactly what he

suggests in his new method, which is far

from anything new.

The point of problem resolution is—and

has been for centuries—to understand the

problem, identify potential causes, single

out the actionable ones, plan, act and

adjust.

Problems arise from causes and condi-

tions. It is the problem solver’s job to find

those causes and conditions, and come up

with a solution that addresses them. The

problem solver must not lose track of the

reality that in complex systems, you can

never be sure of the effect any action may

have. often, there is interplay among a

variety of causes and conditions.

We also should be aware we cannot

wait until all cause possibilities are identi-

fied. Many root causes are not actionable.

Analysis overkill is just as debilitating as

jumping to false conclusions.

George Pitagorsky

New York

ROOT CAUSE ANALYSIS

FOR MANY YEARS, quality improvement practitioners have been

taught to fi nd root causes of problems by using a set of tools based on the

theory of cause and effect. These tools include the fi ve whys and fi shbone

diagrams. Many users of these techniques, however, fi nd that some problems,

especially those caused by human error, keep happening.

Because of the failure of these techniques to stop problems, some problem

solvers might start wondering:

• Am I using the tools correctly?

• Is there a misconception in using cause and effect to fi nd the root

causes of problems that produces unacceptable results?

• Is there another technique to help me go beyond basic cause and

effect analysis and get better results when investigating quality issues?

If you use cause and effect to fi nd root causes, you might want to rethink

your beliefs on this concept and look at what some consider to be misconcep-

tions in applying commonly taught root cause analysis techniques.

In 50 Words Or Less • Cause and effect analysis

has inherent limitations that may result in root cause analysis misconcep-tions and hinder problem-solving efforts.

• Problem solvers need help analyzing human perfor-mance issues.

• A new defi nition of root cause could help people realize a systematic pro-cess beyond cause and effect is needed for root cause analysis.

by Mark Paradies

Under Scrutiny

New approach to root cause analysis can help clear up misconceptions

April 2010 • QP 33

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QP • www.qualityprogress.com12

A change is comingQ: I want to change industries and apply

my quality background somewhere other

than manufacturing. Where do I begin?

Submitted via QP reader survey

A: With a shift in the U.S. gross domestic

product from manufacturing to service,1 it

makes sense to start there. And after being

in the financial services industry for some

time, I have observed a couple of truisms.

First, the manufacturing sector is about

20 years ahead of the service industry in

its quality journey. This comes from my

firsthand experience in the service realm,

where a manufacturing quality profes-

sional’s knowledge and experience are

quite valuable.

Second, finding a coach to help you

with the transition is helpful—and almost

a necessity. I figured out the transition on

my own, but it was not easy to shift to a

new industry, and I made mistakes along

the way. Considering some of the following

points might make the transition easier.

My transition into the industry began in

September 1999, when I received a phone

call from a former supervisor who had left

the company and started a consulting firm

with another colleague.

They were working with a major financial

institution in North Carolina, which led him

to ask me what I thought about going to

work for a bank. My answer: I didn’t think

much of it, and I didn’t know anything about

banking. After I went to the bank’s website,

however, I saw there could be a fit. The rest

is history, and I’m glad I made the transition.

The takeaway here is effective network-

ing can be the catalyst for an industry

change. Never burn bridges, and keep all of

your relationships healthy. I owe my transi-

tion to financial services to my former boss.

Maybe the best way to get your name

out there is to speak at conferences. I have

registered with a national organization and

have presented multiple times—locally and

nationally. In addition, organizations regu-

larly post requests for speakers or papers

on their websites.

Another way to make professional con-

nections is by participating in quality award

programs. I was involved with the Malcolm

Baldrige National Quality Award for four

years and made contacts in many differ-

ent areas, particularly in industries outside

manufacturing.

Writing magazine articles and columns is

another good way to network. I began my

working relationship with QP as a member

of its editorial board. After reviewing several

articles, I tried writing one of my own. Since

then, I’ve contributed a handful of articles to

ASQ and another national organization, an

exercise that has been very rewarding and

an excellent way to stay sharp.

Participation in professional social

networking sites is another excellent way

to network, keep up with your old contacts

and leverage them for future opportunities.

These websites are just like your resume

in that they need to be kept current with

recent accomplishments and added job

responsibilities.

One particular networking site, LinkedIn,

allows you to recommend colleagues. Tak-

ing the time to do this for your contacts is

an excellent favor to do for someone. And

don’t hesitate to ask someone you know

for a recommendation.

Since moving from manufacturing to

service 11 years ago, I’ve learned there

are two critical components to the transi-

tion. One involves a coach, and the other

involves an exercise.

Having a coach to help with the transi-

tion is crucial. I quickly realized there were

abundant opportunities to have a significant

impact on my company in the quality area.

What I did not have was someone caution-

ing me to take it slowly and to be pragmatic.

After making the transition, you may

see—as I did—that while there are impact

areas at every turn, the company may not

be ready for change, and your bosses may

not see the need for a quality system.

To find your way through new oppor-

tunities, I suggest writing a white paper

outlining your value proposition and articu-

lating your value to the new company.

In my case, the white paper was a

roadmap and, later, the basis for several

magazine articles. There was nothing earth

shattering in the content. Rather, the funda-

mental approaches to quality—the things

that made me successful in manufactur-

ing—were highlighted, emphasized and

simplified. The secret was to keep things

simple, pragmatic and incremental.

Taking the time to put together a similar

paper will give you experience with articulat-

ing your value proposition. This will help you

be succinct in future job interviews, thus not

overwhelming prospective employers.

Another key lesson is that what is

perfect can be the enemy of what is good.

Knowing how to cherry-pick elements of a

exPeRTANSWe RS

Effective networking can be thecatalyst for an industry change.

June 2010 • QP 13

exPeRTANSWe RSquality system rather than implementing a

full-blown system helped get management

on board. It was easy for them to digest the

quick-hit value add of a particular area with-

out getting bogged down in the details of a

wholesale quality system implementation.

To summarize, it boils down to network-

ing and knowing your value proposition.

These two things can facilitate your transi-

tion out of manufacturing into a different

industry. Here’s wishing you the best of luck

with a successful search and transition.

Keith Wagoner

Director, continuous improvement

Lincoln Financial Group

Greensboro, NC

REfEREncE1. Bureau of Economic Analysis, “Gross Domestic Product:

First Quarter 2009 (Final),” www.bea.gov/newsreleases/national/gdp/2009/pdf/gdp109f.pdf.

Get organizedQ: I have 30 years of experience with qual-

ity assurance and quality control (QA/QC) in

the government service industry, as well as

with regional quality management. I have

organized quality departments in which

accountability is to clients first—working

as a change agent on their behalf—and the

president or CEO second. The programs I

have managed have been successful.

The problem I face now is that manage-

ment does not understand total quality man-

agement (TQM) and is dictating to me. As a

result, quality is a dumping ground for other

people’s work. Is there a guideline written

on how to organize a QA/QC department?

Abu Nasser

Columbus, OH

A: You mention you already have experi-

ence organizing quality departments and

that the programs have been successful.

You know what works, and that probably

adds to the frustration in your current

situation because you are being told to do

something different.

To answer your question, there is no

universally accepted written guideline for

organizing a quality department. Many orga-

nizations build their quality organization on

the ISO 9000 standard, which will ensure

your department has critical policies and

procedures in place. But effective manage-

ment must go beyond those requirements.

I suggest you consider reviewing ASQ’s

body of knowledge (BoK) for certified qual-

ity managers. The ASQ BoK is not as widely

recognized or accepted as the ISO stan-

dards, but it may provide the level of detail

you seek. Compare your department’s

structures, systems and activities against

the BoK requirements to assess the vitality

of your department.

In a perfect world, you could persuade

your boss to participate in this assessment

with you. You will both benefit because

you will be working with an objective

standard. You mentioned your boss does

not understand TQM, so the process will be

informative for him and perhaps make him

less likely to dictate.

If your quality systems are already

strong, you will benefit because your boss

will see evidence of your efforts during the

assessment. If weaknesses and gaps are

identified, work with your boss to formu-

late an improvement plan.

It is unfortunate your department has

become a dumping ground. As quality pro-

fessionals, we recognize the necessity of

a technically competent staff. If your boss

is willing to participate in the assessment,

he may gain a deeper awareness and

appreciation for the experience and skill

levels required to run a successful quality

organization.

As the quality manager, you play a critical

leadership role within the larger organiza-

tion. You will need to work with your man-

agement peers to ensure work assignments

are performed by the appropriate depart-

ment. For example, your staff should not be

responsible for process design, but you can

provide support for design reviews and per-

haps lead process improvement initiatives.

Based on your many years of experi-

ence, you may expect certain things and

take other things for granted. Some of your

peers may not have the benefit of prior

experience working with a world-class

quality organization. Be patient and work

with them as a partner.

You may want to try having candid

one-on-one conversations with the other

managers to determine whether there are

negative perceptions regarding you or your

staff. Perceptions are hard to overcome,

but if the issues are not addressed, they

will inevitably find their way to your boss

and trigger another round of negative

feedback. Some of the toughest problems

we face as quality professionals are not

technical, but instead are political and

interpersonal.

Andy Barnett

Consultant, Master Black Belt

Houston

foR MoRE InfoRMatIonWestcott, Russell T. (editor), The Certified Manager of Quality/

Organizational Excellence Handbook, third edition, ASQ Quality Press, 2006.

askEd and answEREdSooner or later, everyone runs into a problem they can’t solve alone. Let us help. Submit your question at www.qualityprogress.com, or send it to editor@asq.org, and our subject matter experts will help you find a solution.

QP • www.qualityprogress.com14

FFor almost 28 years, anyone talking about

how best to handle a product recall inevi-

tably mentioned Johnson & Johnson—the

company behind a variety of over-the-coun-

ter medications, including Tylenol.

But the basis for that mention—the

tampering crisis in 1982—is starting to look

like a pebble compared with the mountain

of problems that have emerged in the last

few months.

Nearly 30 years ago, the drugmaker

sprang to action when cyanide-laced cap-

sules of Tylenol Extra Strength killed seven

people in the Chicago area. The company

recalled 31 million bottles of the drug and,

two months later, relaunched the product

with tamper-proof packaging and a media

blitz touting its commitment to safety. The

tab for the recall and relaunch topped $100

million. The payoff was a market share that

went from 7% immediately after the recall

to 30% a year later.1

But those heroic efforts are history,

replaced most recently by a sweeping recall

of a variety of children’s medications. And un-

like the 1982 incident, when the bottles were

tampered with post-production, this time the

company has nobody but itself to blame.

The root of the problem was a plant in

Fort Washington, PA, operated by McNeil

Consumer Healthcare, a unit of Johnson

& Johnson. The plant was already in the

crosshairs of the U.S. Food and Drug Admin-

istration (FDA), which had it under a more

rigorous inspection schedule since 2008.2

That proved to be a telling move, as the

plant’s latest inspection in April revealed a

list of issues that surfaced in an FDA report:

• After receiving 46 consumer complaints

between June 2009 and April 2010 about

foreign materials in its drugs, McNeil

failed to initiate “corrective and

preventive action.”

• Quality control procedures were

not followed, and lab facilities

were inadequate for testing and

approving products.

• Plant employees were not

trained in “current good manu-

facturing practices.”

• Pieces of equipment were lay-

ered with dust, and others were

patched together with duct tape.

• McNeil knowingly bought con-

taminated raw material from suppliers.

The bacteria, later identified as Burkhold-

eria cepacia, was discovered on drums

the supplier used to transport raw mate-

rials, but McNeil said those drums never

reached the plant in Fort Washington.3

“Remaining drums from that lot were

sent to us, all of which tested negative for

bacteria. Samples of finished product also

tested negative,” said Johnson & Johnson

spokesman Marc Boston. The FDA inspec-

tion reported a different result, however, as

the agency identified a handful of contami-

nated drums at the Fort Washington facility.4

The agency said—and testing con-

firmed—that no suspect material was used

to manufacture any of the recalled prod-

ucts. But the potential for contamination led

the FDA to recommend a recall—McNeil’s

fourth since September 2009, when chil-

dren’s Tylenol liquid products were pulled

due to a substandard ingredient.

That had consumers running for generic

brands and looking for answers that were

tough to come by in the days following the

most recent recall. Complaints rolled in

about the company’s recall website, people

struggled to reach customer service repre-

sentatives on the recall hotline, and those

who did get through were offered coupons

rather than refunds.

The company quickly added more infor-

mation to the website and staff members

to man the phones, but that didn’t quell the

frustrations of parents who were forced to

toss their children’s Tylenol products for the

second time in less than a year.

“It makes me question their quality con-

trol,” said Mark Mandel, a microbiologist at

Northwestern University’s Feinberg School

of Medicine in Chicago and father of a

21-month-old daughter. “It makes me won-

der if they have the parents’ best interest

and the children’s best interest at heart.”5

—Brett Krzykowski, assistant editor

RefeRences1. Judith Rehak, “Tylenol Made a Hero of Johnson & Johnson,”

New York Times, March 23, 2002.2. Alison Young, “Tylenol Recall Puts Drug Plant Inspection on

Fast Track,” USA Today, May 6, 2010.3. Parija Kavilanz, “Children’s Tylenol Recall: FDA Slams

Factory Conditions,” http://money.cnn.com/2010/05/04/news/companies/tylenol_recall_fda_inspection_report, May 6, 2010.

4. Parija Kavilanz, “Bacteria Identified in Tylenol Recall,” http://money.cnn.com/2010/05/05/news/companies/childrens_tylenol_recall_bacteria/index.htm, May 6, 2010.

5. Natasha Singer, “Tylenol, Generics and Trust,” New York Times, May 2, 2010.

kEEPINgCURRE NTPRoDUCT SAFETy

Bad MedicineRecall is the latest hit for Tylenol maker

June 2010 • QP 15

kEEPINgCURRE NT

Mr. Pareto Head BY MIKe CRoSSeN

Editor’s note: The U.S. Pharmacopeial

Convention (USP) is a scientific, non-

profit, standards-setting organization that

advances public health through public

standards and related programs to help

ensure the quality, safety and benefit of

medicines and foods. Don Singer, a qual-

ity scientist in the pharmaceutical and

foods industries for more than 30 years,

attended the USP’s recent membership

meeting as an ASQ delegate and compiled

this report. Singer has been a member of

ASQ’s Food, Drug and Cosmetics Division

for 29 years and is a certified pharma-

ceutical good manufacturing practice

professional. He is also a former member

of ASQ’s board of directors.

Patient care and key collaborations among

USP and its partners to develop quality

standards in medicine were the main

topics discussed at the recent USP 2010

Membership Meeting.

Top officials from organizations that

actively partner with USP offered keynote

speeches and discussion to empower USP

members to continue addressing public

health issues related to health, medicines,

drug and food ingredients, and standards

for drugs, food ingredients and dietary

supplements. About 500 people attended

the event.

Margaret Hamburg, M.D., commissioner

of the U.S. Food and Drug Administration

(FDA), expressed confidence in the part-

nership the FDA and USP have in promot-

ing a common public health mission and

addressing public health issues relating to

quality standards of drugs, foods and their

ingredients, especially in recent years. The

commissioner also praised USP’s global

reach, which can become influential when

“working with counterpart agencies and

industries overseas to help establish

science-based quality standards.”

Michael Maves, M.D., CEo of the

American Medical Association, addressed

the importance of shared interests in drug

standards, Medicare, drug naming, dietary

supplement quality and patient safety.

(continued on p.16)

HEAlTHCARE

PuBlic HealTH, food sTandaRds addRessed aT RecenT usP evenT

STANDARDS

iso Releasesnew Toy safeTy sTandaRds Two new standards related to reduc-

ing the risk of children being injured by

unsafe toys, playground equipment or

dangerous substances have been ap-

proved by the International organization

for Standardization (ISo).

The standards are additions to

the ISo 8124 Safety of toys series of

standards. Part 3: Migration of certain

elements spells out the maximum

acceptable levels of dangerous sub-

stances such as arsenic, cadmium, lead,

mercury and other materials possibly

found in toys.

Part 4: Swings, slides and similar

activity toys for indoor and outdoor fam-

ily domestic use details requirements

and testing methods for the children’s

equipment.

For more information about the

new standards, visit www.iso.org/iso/

pressrelease.htm?refid=Ref1319 (case

sensitive).

QP • www.qualityprogress.com16

kEEPINgCURRENT

QP looks back on a person or event

that made a difference in the history of

quality.

June 18, 1887E.H. Waloddi Weibull, a Swedish engi-

neer, scientist and manufacturer and

the namesake of Weibull distribution,

was born on this date.

He began his career in the Royal

Swedish Coast guard in 1904 and

eventually achieved the rank of major

in 1940. During that time, he also took

courses at the Royal Institute of Tech-

nology in Stockholm, Sweden, becom-

ing a full professor in 1924.

Weibull obtained his doctorate from

the University of Uppsala in Uppsala,

Sweden, in 1932. later, he worked in

Swedish and german industries as an

inventor and as a consulting engineer.

In 1939, he published his paper on

Weibull distribution in probability theory

and statistics. It can be applied in sev-

eral areas, including survival analy-

sis, reliability engineering, industrial

engineering, extreme value theory and

weather forecasting.

In 1941, Bofors, a Swedish arms

factory, gave him a research professor-

ship in technical physics at the Royal

Institute of Technology in Stockholm.

There, he continued to publish papers

related to the strength of materials,

fatigue, rupture in solids, bearings and

the Weibull distribution.

BIBLIOGRAPHY Abernethy, Robert B., “Biography of Dr. e. H. Waloddi

Weibull, 1887-1979,” Barringer & Associates, July 20, 2003, www.barringer1.com/weibull_bio.htm.

daTeinqualiTyHisToRyusP meeting (continued from p.15)

Thomas Menighan, CEo of the Ameri-

can Pharmacists Association, stressed

the need for collaboration to lead the way

to healthcare reform. Menighan said the

“medication use crisis in this country,”

referring to drug interactions, “is literally

exploding” and presents a major opportu-

nity for doctors, nurses, pharmacists and

others to advance public health.

Jennie Chin Hansen, president of the

Association of American Retired Persons

and CEo of the American geriatrics

Society, echoed Menighan and pointed

out that a growing population of older

Americans is using more medications per

person.

of 3 billion yearly prescriptions, nearly

40% are not taken properly, leading to ad-

verse drug events and higher healthcare

costs, she said.

asq input and usP resolutionsAlso at the meeting, USP members voted

to approve nine key resolutions that will

help determine USP strategy and benefit

public health during the next five years.

one of the resolutions could make

ASQ and its Food, Drug and Cosmetic

Division a key contributor to USP by

developing quality standards for food

ingredients and strengthening the role

of the Food Chemicals Codex as a

global compendium of internationally

recognized standards for the purity and

identity of food ingredients.

The ASQ division’s contribution to the

discussion resulted in a USP white paper

and resolution No. 6, “Continue and Ex-

pand Commitment to Quality Standards

for Food Ingredients.” other opportunities

may exist for further ASQ collaboration

relating to another resolution to promote

quality standards for dietary supple-

ments.

For more information about the USP

resolutions, visit www.usp.org. To read

the USP white paper, visit ASQ’s Food,

Drug and Cosmetic Division website at

www.asq.org/fdc.

AUToMoTIvE

GRouPs, auToMakeRs Revise GuideTwo major automotive groups and automo-

tive suppliers—along with the Big Three

automakers and Toyota—have refined the

warranty management process included in

an industry manual that is expected to ulti-

mately help improve customer satisfaction

and the warranty process.

The second edition of the CQI-4 manual,

also known as Consumer-Centric Warranty

Management: A Guideline for Industry Best

Practices, was rolled out last month and

includes a self-assessment and toolkit. A

training program to educate users of the

CQI-14 warranty management process

is expected to begin in July, said leaders

of the Automotive Industry Action group

(AIAg) and the original Equipment Suppli-

ers Association.

The goal of CQI-4 is to reduce field

warranty claims, which in turn improves

consumer satisfaction “as measured by

short-term initial quality and long-term

vehicle durability and reliability,” said J. Scot

Sharland, AIAg’s executive director.

In addition to Chrysler, Ford Motor Co.,

general Motors Corp. and Toyota, 17 sup-

plier member companies helped revise the

guideline and develop the training.

“A cultural change focusing on reducing

incident rate is needed,” said Dave Sakata,

vice president of technology at Freuden-

berg-Nok and a leader of the Consumer-

Centric Warranty Management workgroup.

“It is necessary to develop continuous

improvement processes that keep track of

warranty parts information and other data

for further investigation, and to conduct

root cause analysis so that solutions and

lessons learned can be determined and

implemented in current and future pro-

grams,” he said.

you can find out more about the

guideline and training program at www.

consumercentricwarranty.com.

June 2010 • QP 17

kEEPINgCURRENTCUSToMER SATISFACTIoN

qualiTy RePoRT: aiRlines iMPRove PeRfoRMance in 2009As airlines fly fewer flights and passengers

book fewer trips in the air, the nation’s

leading carriers are improving performance

in many areas, including on-time perfor-

mance and reduced customer complaints.

In fact, this is the second consecutive

year that leading carriers have improved

their scores in the annual U.S. Airline

Quality Rating (AQR) study—a joint re-

search project funded as part of faculty

research activities at Purdue University

in Indiana and Wichita State University

in kansas. last year, airlines had the

third-best overall score in the 19 years

researchers have tracked airline perfor-

mance. In total, 18 airlines were examined

in the study’s 20th year.

The AQR was developed as an objective

method for assessing airline quality based

on several performance criteria. The 2009

AQR scores were based on 15 elements in

four major areas focused on airline perfor-

mance most important to air travelers.

In 2009, airlines improved in three

areas:

• on-time performance.

• Baggage handling.

• Customer complaints.

The only area in which performance

dropped was related to denied boardings,

or passengers being “bumped.”

comparing numbersThe overall leading carrier rankings

changed little from 2008 to 2009, and the

top four airlines remained the same. The

top 10 carriers were:

1. Hawaiian.

2. AirTran.

3. JetBlue.

4. Northwest.

5. Southwest.

6. Continental.

7. Frontier.

8. U.S. Airways.

9. American.

10. ExpressJet.

The report also found:

• Hawaiian Airlines had the best on-time

performance (92.1%), while Atlantic

Southeast—ranked 17 out of the 18

airlines—had the worst (71.2%).

• Fourteen airlines improved their on-

time arrival performance, and only six

of the airlines had an on-time arrival

percentage more than 80%.

• JetBlue had the lowest involuntary de-

nied boardings rate at zero per 10,000

passengers. American Eagle, ranked

18th in the overall list, had the highest

rate at 3.76 per 10,000 passengers.

• overall, nine airlines improved their

denied boarding rates last year.

• AirTran had the best baggage han-

dling rate with 1.67 mishandled bags

per 1,000 passengers, while Atlantic

Southeast had the worst with 7.87

mishandled bags per 1,000 passen-

gers.

• Customer complaints per 100,000 pas-

sengers dropped from 1.15 in 2008 to

0.97 in 2009.

While the majority of the report indi-

cated good news for airlines and their

passengers, the study’s authors said there

is still room for improvement.

“Seeing a continuing upturn in quality

is good news for all air travel consumers,

but it does not mean we have fixed the

system,” said Brent Bowen, professor

and head of the department of aviation

technology at Purdue. “Industry will never

be successful in terms of quality until it

can be successful financially. The financial

crisis in the industry is a significant factor

in the decline of quality.”

The biggest challenge for airlines will be

to improve performance quality as more

people choose to fly.

“Every time there are more planes in

the sky and more people flying, airline per-

formance suffers,” said Dean Headley, as-

sociate professor of marketing at Wichita

State University. “Airlines are focused on

generating revenues, not necessarily on

customer service.”

BIBLIOGRAPHYBowen, Brent D., and Dean e. Headley, “Airline Quality Rating

2010,” April 12, 2010, http://aqr.aero.

—Nicole Adrian, contributing editor

QP • www.qualityprogress.com18

kEEPINgCURRENTsHORtRunstHe AMeRIcAn nAtIOnAL Stan-

dards Institute (ANSI) has announced

this year’s World Standards Week will

be celebrated Sept. 21-24, and that

Sept. 23 will be World Standards Day.

visit www.ansi.org/meetings_events/

wsw10/wsw.aspx?menuid=8 for a

preliminary schedule and other infor-

mation about activities related to the

standards celebrations.

cusToMeR saTisfacTion scoRes

remained relatively unchanged in the

fourth quarter of 2009, according to

the most recent American Customer

Satisfaction Index (ACSI). Analysts saw

the scores as a good sign in a troubled

economy. For more information about

the quarterly scores and commen-

tary, visit www.theacsi.org/index.

php?option=com_content&task=view

&id=13&itemid=31.

THe fedeRal coMMunicaTions

Commission (FCC) has approved the

ANSI-ASQ National Accreditation

Board/AClASS to accredit laboratories

that test telecommunication equip-

ment subject to FCC rules. For more

information about this development,

visit www.aclasscorp.com/news/

archives/2010/03/fcc-recognition-for-

aclass.aspx.

THe BaldRiGe naTional Quality

Program is one of the top 10 leader-

ship development programs among U.S.

government and military organizations,

according to Leadership Excellence

magazine. The publication chooses its

top leadership development programs

from more than 1,000 candidate orga-

nizations based on seven criteria: vision

and mission; involvement and participa-

tion; measurement and accountability;

curriculum; presenters, presentations

and delivery; take-home value; and

outreach. This is the third straight year

the Baldrige program has been included

in the magazine’s rankings. For more

information about the rankings, visit

www.leaderexcel.com/best_ranking.

html.

THe JuRan insTiTuTe has relaunched

its website in an effort to make it more

interactive and user-friendly. visit www.

juran.com to look over the changes and

new features.

A neW RADIO frequency identifica-

tion (RFID) standard has been released

by the International organization for

Standardization (ISo). The standard, ISo

17367:2009, Supply chain applications

of RFID—Product tagging, defines the

basic features of RFID for use in the

supply chain when applied to product

tagging. For more information about

the standard, visit www.iso.org/iso/

pressrelease.htm?refid=Ref1293 (case

sensitive).

tHe sIXtH eDItIOn of Juran’s Qual-

ity Handbook, the classic compen-

dium for many quality professionals

that was first published in the 1950s,

has been released. New topics have

been added by co-author and editor-

in-chief Joseph A. De Feo of the

Juran Institute, including sections on

benchmarking best practices, continu-

ous innovation, eco-quality, lean, root

cause analysis, Six Sigma, and agile

software and systems development.

The book, published by Mcgraw Hill,

retains material originally written by

Joseph M. Juran.

weBwaTcHThis month’s Web Watch focuses on supply

chain management. For more quality-relat-

ed websites, visit www.asq.org/links.

www.ism.wsThe website for the Institute for Supply

Management (ISM) offers services and infor-

mation focusing on education and research

related to purchasing and supply manage-

ment. ISM members can access an extensive

database of articles and resources, a career

center and ISM’s monthly magazine, Inside

Supply Management. Membership dues can

be waived for qualified applicants. Nonmem-

bers can access tools and guides, informa-

tion on certifications, and conference and

program schedules.

www.leanscm.netThis website is a place for supply chain

management professionals to interact with

subject matter experts (SME). It is divided

into several topics, including supply man-

agement, Six Sigma, team management,

career management, lean management,

software management and customer rela-

tionship management. Each topic is owned

by an SME, who provides information and

moderates discussion.

www.supply-chain.orgThe Supply-Chain Council is a not-for-profit

membership organization that exists mainly

to disseminate its Supply Chain opera-

tions Reference (SCoR) model. The website

provides nonmembers access to SCoR over-

view materials, IT vendors, consultants and

researchers who support SCoR, as well as

a calendar of events. It also links to related

organizations. Members have access to the

current version of SCoR, complete contact

information for all members, conference

presentations, white papers and research

study results.

June 2010 • QP 19

kEEPINgCURRENTasqnewsqualiTy in duBai The Dubai

Quality group (DQg) held an

event for DQg members, ASQ

members and other quality pro-

fessionals in February in Dubai,

United Arab Emirates. About 100

people attended the gathering,

which was sponsored by Middle-

sex University in Dubai. Robert

Chalker, ASQ global managing

director, and Tommy Tam, ASQ

global new business develop-

ment director, represented ASQ.

They discussed ASQ’s “Future of Quality”

report and presented an overview of ASQ.

qualiTy foRuM in cHina More than

300 people attended a quality forum orga-

nized by ASQ China and the Shenzhen As-

sociation for Quality earlier this year. ASQ

China members and other quality profes-

sionals discussed the evolution of quality

and what’s expected of quality profession-

als today. Presenters included kevin Wu,

ASQ China’s general manager; lestie Carey,

an organizational change specialist; and

Peter Shi, an ASQ member.

HunTeR awaRd deadline Applica-

tions for the 2010 William g. Hunter

Award are now available through ASQ’s

Statistics Division. The award, named for

the division’s first chairman, recognizes

leaders in applied statistics. Nominees do

not need to be members of the division

but must demonstrate significant con-

tributions to the field and “inspirational

leadership and application.” Nominations

are due July 15. visit www.asqstatdiv.org/

awards.htm for award criteria, nomina-

tion forms and other details. you can also

contact Robert H. Mitchell, one of the

award’s organizers, at 651-736-8684 or

rhmitchell@mmm.com with questions.

new Book on lean and HealTHcaRe

Two efficiency experts recently wrote

an ASQ Quality Press Book about lean

principles in hospital settings after they

took their daughter to an emergency room

and saw first-hand how lean could improve

healthcare practices. Lean Doctors: A Bold

and Practical Guide to Using Lean Prin-

ciples to Transform Healthcare Systems,

One Doctor at a Time, describes Aneesh

and Carolyn Suneja’s journey through Chil-

dren’s Hospital of Wisconsin and illustrates

six steps they say will help implement an

effective lean system in healthcare. The

book is available at www.asq.org/quality-

press/display-item/index.html?item=H1387

(case sensitive). There, you can also find a

link to a free webinar on the book and the

benefits of lean in healthcare.

lean ceRTificaTion ASQ is now offering

lean certification through a new alliance

with the Society of Manufacturing Engineers,

the Association for Manufacturing Excel-

lence and the Shingo Prize for operational

Excellence. To learn more about this certifi-

cation and ASQ’s 16 other certifications, visit

www.asq.org/certification/index.html.

saMia al-yousef, dubai quality Group managing director, (second from left) presents a memento of appreciation to Robert chalker, asq Global managing director, during the recent dubai event. others at the presentation were sunil Thawani, asq country counselor for the united arab emir-ates (far left) and Tommy Tam, asq Global new business development director (far right).

STANDARDS DEvEloPMENT

TaG 176 HonoRs five MeMBeRsTechnical advisory group (TAg) 176 presented awards at ASQ’s spring standards

meetings in San Diego. Those honored included:

• scott Bickley, TAg 176 secretary/treasurer—Unsung Hero Award.

• charles cianfrani, TAg member—outstanding Professional Achievement.

• denise Robitaille, TAg 176 vice chair—outstanding Professional Achievement.

• dan Harper, TAg mem-

ber—Honorary lifetime

Achievement.

• Harrison wadsworth,

TAg member—Honor-

ary lifetime Achieve-

ment.

TAg 176 develops the

U.S. positions on inter-

national standardization

activities of ISo technical

committee 176 on quality

management and quality

assurance.

THRee TaG 176 MeMBeRs who were honored at a recent meeting include scott Bickley, (third from left), denise Rob-itaille (third from right) and dan Harper (second from right). others in the photo are: (from left) Bill Tony, asq publisher, alka Jarvis, TaG 176 chair, and (far right) Paul Palmes, former TaG 176 vice chair.

QP • www.qualityprogress.com20

kEEPINgCURRENT

QuIck POLL ResuLtsEach month at www.qualityprogress.com, visitors can take an

informal survey, and we post the results. Here are the numbers

from a recent Quick Poll:

“what aspect of the healthcare reform bill will have the

biggest impact on quality?

• Medicare reimbursing for quality of care 44.7%

• Quality-based reporting requirements 34.2%

• Comparative effectiveness research 10.5%

• grants rewarding best practices 10.5%

visit www.qualityprogress.com for this month’s poll question:

“How does your organization support innovation now vs.

when the economy was better?”

• less supportive

• More supportive

• No change

POPuLARItY cOntest

QP regularly tallies the web traffic to www.qualityprogress.

com. The top five most accessed articles this month are:

1. James J. Rooney, lee N. vanden Heuvel, Donald k. lorenzo

and laura o. Jackson, “Cause and Effect,” February 2009,

www.asq.org/quality-progress/2009/02/basic-quality/

cause-and-effect.html.

2. Michael S. Perry, “A Fish (bone) Tale,” November 2006,

www.asq.org/quality-progress/2006/11/problem-solving/

a-fish(bone)-tale.html.

3. James J. Rooney and lee N. vanden Heuvel, “Root Cause

Analysis for Beginners,” July 2004, www.asq.org/pub/

qualityprogress/past/0704/qp0704rooney.html.

4. Simha Pilot, “What is a Fault-Tree Analysis?” March 2002,

www.asq.org/quality-progress/2002/03/problem-solving/

what-is-a-fault-tree-analysis.html.

5. QP’s Annual Salary Survey, “Holding Steady,” December

2009, www.asq.org/quality-progress/2009/12/salary-survey/

holding-steady.html.

QPonlineonPaPeR

ASQ

ausTRalian qualiTy GRouP awaRds HonoRaRy TiTle To PasT asq PResidenT The Australian organisation of Quality (AoQ) has awarded

former ASQ President H. James Harrington the title of “global

leader in Performance Improvement Initiatives,” the first time

the recognition has been given to someone outside Australia.

“He is an inexhaustible creative au-

thor of over 36 books that have added

value to countless businesses around

the world,” Shan Ruprai, the president

of AoQ, said in a prepared statement.

“Harrington writes the books that other

consultants use.”

In addition to this recognition, Har-

rington was appointed to an advisory

board to contribute to a task force formed by former House

Speaker Newt gingrich earlier this year that will address jobs

and the economy.

The task force, organized by gingrich’s political advocacy

group, “will discuss ways of turning American economic prob-

lems around,” according to a statement prepared by the group.

Harrington served as president of ASQ from 1985-1986.

To educate newcomers and refresh practitioners and

professionals, QP features a quality term and defini-

tion each month.

quality loss function

A parabolic approximation of the quality loss that occurs when a quality characteristic deviates from its target value. The quality loss function is expressed in monetary units: the cost of deviating from the target increases quadratically the farther the quality characteristic moves from the target. The formula used to compute the quality loss function depends on the type of quality characteristic being used. The quality loss function was first introduced in this form by genichi Taguchi.

souRce:“Quality Glossary,” Quality Progress, June 2007, p. 54.

woRdToTHewise

June 2010 • QP 21

Q Who’s Who in naMe: lori A. Terpstra.

Residence: Conn, ontario.

educaTion: Terpstra received a bachelor’s of science degree from the University of guelph

in guelph, ontario, followed by an MBA from Wilfrid laurier University in Waterloo, ontario

and college diploma in quality from Conestoga College in kitchener, ontario. She is an ASQ

certified manager of quality/organizational excellence, quality engineer, reliability engineer,

quality auditor, quality technician, mechanical instructor and quality improvement associate.

She is also an International Register of Certified Auditors and Registrar Accreditation Board-

trained auditor and has received a Six Sigma Black Belt from Six Sigma Academy Florida.

cuRRenT JoB: Service operations manager at Shred-Tech in Cambridge, ontario. Shred-

Tech designs and manufactures reduction systems and shredding machinery.

inTRoducTion To qualiTy: Terpstra said she fell into the quality

field almost by accident. While going to the University of guelph, she

worked part time in a research lab and became part of a test method

development team working on DNA fingerprinting. Her involvement

in quality kept growing and evolving from there.

asq acTiviTies: A member since 1995, Terpstra is the 2009-2010

chair-elect for ASQ Section 405 and has been a preliminary round

judge for the International Team Excellence Awards for the last two years. She has

spoken twice at the World Conference on Quality and Improvement and presented at

her local and Chicago sections. Terpstra recently served as vice chair for the ASQ section

in Raleigh, NC, and has volunteered at ASQ headquarters, developing exams for several

certifications.

PuBlisHed: She has had two papers published that were associated with ASQ world

conferences in 2001 and 2002, as well as an After 5 Session presentation for the 2009

world conference.

RecenT HonoRs: Terpstra was named an ASQ fellow earlier this year. Three times while

she worked at Moen, she was a member of teams that received Team Excellence Awards.

She also received a Corporate Ring of Quality Award while working at ITT Corp.

PeRsonal: Married for five years. Four-year-old son and expecting her second child in

october.

favoRiTe ways To RelaX: Reading with her son, helping on her farm (Terpstra’s

husband is a full-time farmer) or working with her horses, especially those she rescues,

rehabilitates and finds new homes for.

qualiTy quoTe: A lot of people understand the concept of quality. Many understand

the methods and techniques required to implement quality processes, procedures and

products. only a few can turn those methods and techniques into actions and com-

mit themselves to the dedicated time and effort needed to overcome the hurdles and

resistance to make quality happen as an infrastructure component (way of life) at their

companies and services. To reach excellence, you have to be one of those few.

CUSToMER SATISFACTIoN

MoRe cusToMeRs Ready To swiTcH THeiR BanksBank customers continue to be less loyal

to their banks, in large part because of

perceived poor service and high fees,

according to a J.D. Power and Associates

study released last month.

For the fourth straight year, however,

retail banking customers’ overall satis-

faction averaged 748 on a 1,000 point

scale—slightly better than 749 last year.

The percentage of customers who said

they “definitely will not” switch banks dur-

ing the next year decreased significantly

during the past three years to 34%, com-

pared with 46% in 2007. Poor customer

service was cited by 37% of the custom-

ers who changed their primary bank this

year. High fees were cited by 29% of those

who switched banks.

For more details about the 2010 U.S.

Retail Banking Satisfaction Study, visit

http://businesscenter.jdpower.com/news/

pressrelease.aspx?id=2010068.

STANDARDS

new weBinaR deTails iso 9001:2008A new ASQ webinar describes the ins and

outs of the ISo 9001:2008 standard. ISo

9001 experts Charles Cianfrani and Jack

West—who co-authored ISO 9001:2008

Explained, third edition—along with Joseph

J. Tsiakals, provide an overview of the new

standard, address its key changes and

answer commonly asked questions.

The 90-minute webinar is available to

ASQ members.

For more information and to access the

webinar, visit www.asq.org/knowledge-

center/iso-9001/index.html.

An inside look at how Target ensures quality in a complex

supply chainby William H. Murphy

Bull’s-eye

All compAnies wAnt to build a stronger brand by ensur-

ing customer satisfaction. Along the way, of course, the companies want to

make a profit.

A company’s ability to achieve these goals hinges on the effective flow of

goods and services into and through its organization, coordinated by supply

management teams responsible for developing a world-class supply base,

purchasing competitively priced goods and services, reducing costs, improv-

ing cycle times and accelerating time to market.1

These challenges are set against a backdrop of an extraordinarily com-

plex array of factors and forces quality departments must address. Indeed,

the issues and challenges many quality managers face today have evolved

to include the mission of strengthening their companies’ capabilities across

entire supply chains.2

The story of one major retail chain illustrates many of these challenges

while adding to the body of research that supports quality’s

essential role in value creation through the use of quality

tools, processes and procedures.

June 2010 • QP 23

supply chain management

In 50 Words Or less

• To ensure product quality and on-time delivery to stores, retail chain Target has developed a compre-hensive system to man-age its supplier relation-ships.

• The system includes strict requirements for suppli-ers and overseas factories it uses to manufacture store-brand products.

• This system and its global quality program promote and protect Target’s brand.

QP • www.qualityprogress.com24

Retailers are faced with an abundance of quality is-

sues as they pursue their mandate of providing quality

goods and services to consumers, and they must en-

sure quality is inherent in the thousands of products

lining store shelves. Without quality, there will be long

lines at return counters, customer dissatisfaction, the

possibility of legal action and customer exodus to com-

petitors.

Another factor adding to the challenges for retailers

is the advent of the store brand. Retailers can no lon-

ger rely on national brands to ensure product quality

or delivery through the supply chain, so they look to

manufacture their own products or rebrand private-

label goods. Ultimately, inferior product quality and

systemic failures in the supply chain assure the demise

of any retailer.

target’s focus on qualityTarget Corp. is one retailer that has placed great focus

on quality and formed quality groups to play critical

roles in supply chain activities and other areas of the

company. Launched in 1962 by the Dayton Co. as its

entry into mass-market discount merchandising, Tar-

get operates nearly 1,750 stores in 49 states with an-

nual sales of more than $65 billion in 2008. Last year,

Target placed 19th on Fortune’s list of “America’s Most

Admired Companies.”3

Without question, Target’s ongoing efforts to “strive

to exceed our guests’ expectations” require an aston-

ishing amount of behind-the-scenes effort from its

quality teams.

Kelly Joyce is the group manager of quality assur-

ance for Target Compliance and Production Services

(TCPS).4 Joyce reports to the TCPS director, who also

directs Target’s global compliance team on social

compliance.

Joyce has a team of quality assurance (QA) managers

and QA engineers that executes quality for all of Tar-

get’s hard (nonfabric-based) goods. This includes gen-

eral consumer goods, toys, furniture, decorative items,

school and office supplies, electronics, holiday and par-

ty goods, appliances, lighting, sporting goods, kitchen

and dining goods, pet products over-the-counter com-

modities, cosmetics, and health and beauty items.

Coming to Target with an operational and indus-

trial engineering background, Joyce has now been

with the company for six years. She had spent 20-

plus years in factory settings in industries such as

electronics, automotive, consumer goods and medi-

cal devices. Her background includes product R&D,

process design, factory design and just-in-time manu-

facturing.

In this interview, Joyce discussed her group’s efforts

to ensure quality throughout the expansive and contin-

uously changing network of supply chain participants.

She also talked about the global quality program Target

uses to ensure best-in-industry performance. Overall,

seven recurring themes emerged from our discussions:

1. All employees live the brand promise.

2. Quality is embedded in the entire sourcing strategy.

3. Variability is driven out of the system. When prob-

lems are identified, aggressive corrective action

steps are taken.

4. Consequence management rules, and procedures

are built in and transparent.

5. People are the essential force behind the success of

quality.

6. Quality never takes a backseat, and it always takes

precedence over other priorities, no matter how

pressing they may seem.

7. Quality never rests on its laurels.

The following are excerpts from our series of con-

versations and correspondence as they relate to these

seven themes.

All employees live the brand promise.

Joyce talked about the brand promise Target makes,

bringing it up early in our discussions, again when

discussing her team and yet again when talking about

Target’s global platform for quality. Target does have

the advantage of a concise, catchy, customer-focused

statement—“Expect More. Pay Less”—that is con-

stantly supported throughout the organization.

But just how central is quality in Target’s strategy?

Many companies talk quality. Meanwhile, others live

quality. This can be reflected in people, processes and

financials. Where does quality live at Target?

Joyce: Target lives quality through our brand prom-

ise, “Expect More. Pay Less.” I have always been im-

pressed knowing our brand promise isn’t just a buzz

word for advertising. It is very well accepted and un-

derstood by everyone at Target. In fact, our internal

surveys repeatedly result in high scores in the areas of

understanding Target’s mission and team member con-

1

June 2010 • QP 25

nection to the mission. It may sound trite, but at Target

we actually live our brand promise.

Quality is embedded in the entire sourcing strategy.

In hard-good lines, Target works with more than 3,000

factories. This large network of suppliers and factories

requires constant hands-on efforts by Target Sourcing

Services (TSS) teams and its TCPS team.

Complexity abounds in this sourcing scenario: New

products are constantly being considered, seasonal

items add pressure for the team, and at any given time,

a factory is responsible for multiple SKUs. As Joyce

said, “Walk into a Target store, and look at the breadth

and depth of products carried. You can imagine what

we are dealing with.”

Joyce stressed Target’s committed drive for total

quality. She discussed the top-down commitment to

quality at Target, with reporting lines direct to top

management. Quality works hand-in-hand with several

other Target teams. Quality is ensured before products

ever reach the shelves.

Joyce: As part of TSS, TCPS strives to enforce our

compliance, safety and quality standards around the

world. The goal of TCPS is to achieve exceptional in-

store product quality for our own branded products.

To do this, we validate that our supplier partners op-

erate efficient, safe and ethical factory environments.

Teams at headquarters focus on setting policy, creating

procedures, administration and enforcement, while

overseas teams validate our QA processes at supplier

factories. Teams include QA, global compliance and

product safety recall.

Every department works toward delivery of best

quality and best value. Quality is especially embedded

in our sourcing goals: team, speed, quality and global

expertise. Quality’s critical execution lies in product

implementation by our sourcing, product design and

development (PDD) and QA teams. Formal quality

departments exist in the following teams: TCPS, food,

packaging and corporate assurance. So, while my

group works mostly on product execution, quality pro-

grams span all efforts at Target.

For instance, here at headquarters, cross-functional

teams work directly with product designers, mer-

chants and sourcing managers, developing processes

to ensure more efficient, effective systems from con-

cept to shelf.

Although a major focus of TCPS is proactive (prior

to shipment with suppliers), other times, problems are

identified at the store level. For instance, there is a re-

porting system that provides metrics on the number of

returns of certain products—whether there have been

common complaints about a particular product, pat-

terns related to any claims or personal injury, or con-

cerns related to safety overall.

While multiple groups at Target see and use these

reports, our team aggressively sifts through this in-

formation. After we have clarity when it comes to the

drivers of the issues, information is fed back to the sup-

plier and factory, or to other departments as needed.

Let me give you one instance we dealt with recently.

We had a growing number of returns of a particular

gazebo. Our investigation of the reports identified a

pattern for the returns that did not relate to product

quality. Instead, many shoppers had returned the gaze-

bo, saying it had been impossible to set up. Ultimately,

what we discovered from our guest reports was that

our instructions to build the gazebo had been the un-

derlying cause.

We worked with a usability lab to develop a much

more comprehensive set of instructions. Only then

did we engage suppliers with the solution. As this sug-

gests, our PDD team and our QA teams often work to-

gether to develop an essential component that ensures

product quality. At the end of the day, you might say we

are involved in executing the whole product—that is,

whatever our guests pick up from the shelves has been

touched by our teams.

supply chain management

Business is all about communication, relationships and finding the right product in the right place.

2

QP • www.qualityprogress.com26

Variability is driven out of the system.

The large number of SKUs Target carries—includ-

ing store and private-label brands, as well as national

brands—creates a huge complexity for quality assur-

ance. With hard-good lines coming from more than

3,000 factories around the world, along with ongoing

adjustments made to Target’s product mix (whether

being driven by design teams or competitive pres-

sures), there are many ways variability can enter the

system, with inferior or even harmful products finding

their way to store shelves.

Target’s systems thinking extends globally, reaching

every factory with rigorous requirements, all support-

ed by quality tools as standard operating procedure

(SOP).

Joyce: Our first non-negotiable requirement is that

every factory must meet our global social compliance

requirements. As per our contracts, Target is autho-

rized to conduct an unannounced social compliance

audit at any time. If a factory expects to continue

working with Target, it must pass these audits. We have

consequence management procedures stated clearly

to our suppliers, which make failing these audits an

avoid-at-all-costs proposition to our suppliers and their

selected factories. Ultimately, that’s the first purpose of

our business partner management program.

Of course, QA is essential to our program. When a

factory comes online, we evaluate the factory. These

evaluations are thorough, including an assessment of

the quality of products being produced, documenta-

tion, capabilities and capacities verification.

Our teams ask specific questions while using a rat-

ing system. The rating system reveals whether a sup-

plier will be allowed to use a particular factory, along

with identifying corrective actions needed. We have

factory ratings spanning from “pass-excellent,” “good

to go,” “pass—use this factory with caution,” to “fail-

ing—this factory cannot be used.”

The outcome of a single failed factory evaluation

doesn’t end a supplier relationship. The supplier must

seek another fully functioning quality factory for Tar-

get. Following any failed factory evaluation, it is up to

the supplier to decide whether it continues to work

with that factory with other retailers. It [the failed

evaluation] just means the factory is unacceptable for

Target. Over time, if a supplier repeats poor factory de-

cisions, it will impact Target’s willingness to accept the

risk of a continuing relationship with the supplier.

The main processes we execute are factory evalu-

ations, product testing and product inspection. We

also have preproduction planning. Our product inspec-

tions are definitely based on statistical average quality

limit (AQL) tools. Again, we validate quality and have

some pretty strong AQL standards and escalation pro-

cesses we use during inspections. We use corrective

action tools if we have product failure, and we quickly

determine the origin of the problem and then how it

occurred. We identify the steps needed to prevent the

failure in the future.

Supporting our factory evaluations are online cor-

rective action tools. Basically, when a factory evalua-

tion is completed, our manufacturing technician han-

dling the evaluation enters the data into these online

tools, providing an evaluation summary. While the

report automatically generates a corrective action re-

port, our Target technician is responsible for making

specific recommendations in that report.

The supplier’s factory in question is given deadlines

to fix the issues identified in the report. Soon after that

deadline, we return to the factory and perform another

evaluation based on the previously identified failure

points. If the factory has not been able to fix the cor-

rective actions required, the factory can’t be used.

Overall, we have been working to standardize many

quality principles in our everyday processes. Stan-

dards for product, supplier, environmental and social

compliance are benchmarked into our policies and

procedures. We extensively use quality statistical tools

(for example, statistical process control and AQL) in

our product quality validation processes.

Target has embraced Six Sigma throughout our

business processes and has created 6Sigma@Target, in

which the tools of Six Sigma are used in formal project

management, problem solving and process improve-

ment. There is a formal Six Sigma department that facil-

itates the use of Six Sigma throughout the organization.

consequence management rules, and procedures are

built in and transparent.Target works to put every supplier and factory on a lev-

el playing field with no surprises for anyone. Target is

also transparent regarding the consequences of failing

to meet requirements. Although Target fully supports

3

4

June 2010 • QP 27

suppliers and factories and offers guidance for them

to perform corrective actions, there are certain non-

negotiables at the core of every relationship.

Joyce: Our suppliers are fully aware of our require-

ments, and we are extremely transparent in these re-

quirements. At the start of all negotiations, suppliers

must sign a “standards of supplier engagement” agree-

ment that clearly spells out our requirements. Our

global social compliance requirements are the founda-

tion, and we have no tolerance for failures here.

For most areas, however, SOP is our factory rating

system. Factories can receive a green, yellow or red

score. If a new factory scores in the red zone, the fac-

tory is rejected. For factories in existing relationships

with suppliers, a red zone score leads to developing an

exit plan.

In terms of particular actions, we use a three strikes

platform. Severing the relationship occurs only if there

are repeated failures despite promises from the fac-

tory to improve. Collectively, this is what we refer to

as consequence management. Again, Target has a level

playing field for all, with the highest of standards being

detailed in our negotiations and ensuing contracts.

At the same time, we know how difficult it is to

manufacture a product, and we will work with suppli-

ers to be successful. We will definitely make recom-

mendations on how suppliers can improve. Over time,

if we see there is no supplier improvement—because

of a lack of capabilities or a lack of willingness—we

just stop the process with those particular suppliers.

people are the essential force behind the success

of quality.The genesis of Target’s quality program is located at its

headquarters in Minneapolis, where leadership from

TSS, TCPS and their counterparts work. There, about

50 team members (employees) are focused on quality,

but other quality-focused team members are stationed

around the world. Having Target employees placed

globally means everyone pursues quality with the same

commitment.

Finding members for the TSS and TCPS teams is a

critical component of Target’s strategy. As Joyce noted,

TSS employs more than 2,000 team members world-

wide, 450 of whom execute QA, working directly with

suppliers at their factories. Target leaders feel strongly

that commitment to a global quality program is the

best way to ensure quality.

Joyce: Nearly all TSS and TCPS QA personnel are

Target team members. Target only uses third-party en-

tities in factory quality processes if we do not have a

global presence in that country and it isn’t feasible to

send one of our team members. Overall, this is a very

low percentage.

Our team members are located in sourcing offices

all over the world. Most of our people are local to their

regions, although there are a small number of expatri-

ates in the system. We’ve found it is much more effec-

tive having local people performing the quality-related

activities. Business is all about communication, re-

lationships and finding the right product in the right

place. Having local people do this is much, much more

effective.

Regardless of country, most of our team members

are either engineers or quality people, and we seek

candidates who have performed quality tasks in at

least one factory. Our QA managers are definitely en-

gineers who are highly educated—some with master’s

degrees in engineering, and some who have been edu-

cated in the United States.

Along with strong educational backgrounds, our goal

is to hire candidates who have factory experience in a

quality role. Target is fairly unique in the retail industry

in that we have this global network with our own people

performing QA tasks overseas instead of outsourcing it

and managing quality from the United States.

We have an extensive training program for our over-

seas teams that includes in-person and online train-

ing. We also employ trainers worldwide in all of our

major overseas offices, giving us locally-based trainers

whose sole job is staff training.

All team members have access to our procedures

and best-methods database, as well as a learning

management system. Wherever we roll out a new

process (for example, factory evaluations), there

is a sequence of training operations. In addition to

formal on-the-job training, we also train employees

about Target stores, understanding Target guests and

branding so our overseas staff can better understand

Target without the benefit of ever having shopped at

one of our stores. Finally, all training, procedures and

implementation is validated through a formal office

assessment program that includes self-assessments

and formal audits.

supply chain management

5

QP • www.qualityprogress.com28

The bottom line is that everyone in our organiza-

tion receives extensive training and support. Our

global team has the same access to all best-method

processes being developed. We have a huge database

of best methods and procedures that everyone ac-

cesses globally.

This arrangement keeps our entire global team

aligned with best practices. Any time we develop new

supplier or factory processes, we immediately develop

training programs. These programs typically include

online presentations for trainers to use with teams

around the world. We also have headquarters involve-

ment: Either I or other headquarters team members

regularly travel to our global offices to train others.

Our online database has a learning management

system that is also accessible to our overseas team

members. We have a corporate assurance team respon-

sible for auditing the overseas offices and assisting the

local offices in making adjustments based on identified

opportunities for improvement. Finally, our training

efforts go beyond Target personnel by engaging sup-

pliers in training activities. The purpose is to ensure

that all parties develop a shared awareness of our drive

for total quality and their critical role in making this

happen.

Quality never takes a backseat.

Throughout the conversation, Joyce repeatedly dis-

cussed total quality as a mandate, despite the many

pressures placed on retailers. For instance, pressures

can easily escalate as holidays approach, marketing

campaigns converge and the urgency to have certain

product on the store shelves heightens.

These pressures are real and can have a large im-

pact on the success or failure of businesses if product

misses shelf targets—even by a day or two. In these

situations, great pressure is often placed on quality

teams to let things slide. But best-in-industry perform-

ers never lose sight of their priorities, no matter how

tempting the short-term opportunity may seem.

Joyce: Our QA team is constantly under perfor-

mance pressures. It isn’t just holidays. We are always

under pressure. That’s why you hire a team of engi-

neering and manufacturing professionals. Every day,

we’re making risk-based decisions. There is truly no

pressure when it comes to safety and regulatory fail-

ures. That’s an easy matter, and Target is extremely

supportive of those decisions. If we have those types

of failures, product will not leave the factory, regard-

less of what was supposed to be on the shelf.

When we’re outside of that failure type, we need to

make go/no-go decisions in terms of releasing product

to stores. For instance, a factory recently produced an

order of spring seasonal wrapping paper. But the blue

was a different tint than required. We decided the blue

would still be acceptable for our guests.

At the same time, we told the supplier that only

the initial shipment would be accepted, and the fac-

tory would need to remake all product in the queue.

Although color or tint may seem trivial, we work with

design themes across product categories, and consis-

tency is essential.

I’ve found that if any of our colleagues from other

groups have ever lived through a product recall or a

product withdrawal, it really helps because they be-

come advocates for our work and decisions. Overall,

the good news is that we work daily with our mer-

chants and product design groups. They clearly un-

derstand what our requirements are, so there isn’t this

undue pressure by any Target personnel pushing us to

pass products through the system that do not warrant

acceptance.

Quality never rests on its laurels.

Typically, efforts to create and maintain a rock-solid

quality program are accompanied by high work inten-

sity caused by unforeseen challenges or roadblocks.

These challenges range from a changing sea of suppli-

ers, factories and product lineups to pending laws and

rulings to internal pressures from outside-of-quality

teams.

Despite this reality, as quality programs mature, it

seems possible that quality leaders might be able to

envision a time when everything that quality touches

is good-to-go, and there will be a time to sit back, put

up their feet and take things a bit easy. I threw this idea

out to Joyce.

Joyce: Never. There is always, always work to be

done. Although we are very satisfied with the progress

we’ve made during the past several years, we are always

moving forward. There is so much more improvement

that we can make, and that’s what makes it exciting.

6 7

June 2010 • QP 29

When people ask me during interviews exactly what

it is that I like most about working for Target, my per-

sonal answer always addresses the connection to the

brand mission we live at Target.

Also, it is never boring. I find it exciting to come to

work anticipating exciting challenges ahead and know-

ing my director and the resources at Target support

our efforts at TCPS. I admit there are days when I wish

it was boring. But it’s never boring. There is always

something new we are trying to improve—something

we are trying to push forward.

Even now, we’re working on strategies that will

make a difference and affect change years and years

from now. I think any true quality professional would

never suggest you can just rest on your laurels. Believe

me, continuous improvement processes are alive and

well at Target.

completing the circleJoyce made it clear that Target systematically evalu-

ates all stages of supplier relations, beginning with

supplier selection. Further, Target team members

work with multiattribute templates that include expan-

sive criteria for supplier and factory evaluations and

provide global team members consistent and system-

atic evaluation processes.

Target also has SOP related to steps required by

suppliers, accompanied by the full support of Target

team members, if substandard evaluations result. Ad-

vocating processes and steps to engage suppliers and

factories is not new.5, 6 But you don’t necessarily hear

about retailers developing and advancing these quality-

driven strategies.

At Target, systematic selection processes are transi-

tioned into the ongoing application of total quality man-

agement principles and processes, completing the circle

for Target and ensuring best-in-class performance.

Target faces an ongoing challenge when it comes to

supply base rationalization. Although some may argue

a small supply base is needed to build relationships,

major retailers such as Target must work with many

suppliers and thousands of factories across hard-goods

and soft-goods lines. That challenge is compounded

by the new super-store formats that incorporate food

lines, pharmaceuticals and other innovative products.

Despite these complexities, retailers must do more

than merely cope. They need to assert control so they

maintain their brand promise. Target is exemplary in

that it has a proactive engagement strategy spanning

the world, ensuring its total quality mandate across all

supply chain relationships.

Given its success, an aggressive commitment to its

mission and a powerful quality program, Target’s fu-

ture seems to be on good footing. The retailer’s place

on Fortune’s list of “America’s Most Admired Compa-

nies” may become a familiar sight in the coming years.

For competitors, reviewing the seven themes Joyce

addressed may reveal gaps in their own quality ef-

forts—gaps that must be closed if they wish to keep

pace. QP

ReFeReNCes AND NOTes1. paul D. cousins and Robert spekman, “strategic supply and the manage-

ment of inter- and intra-Organizational Relationships,” Journal of Purchas-ing and Supply Management, Vol. 12, no. 6, 2003.

2. David K. Watkins, “Quality Role in management’s global sourcing,” Quality Progress, april 2005, pp. 24-31.

3. Details on the company history and financials were found at www.target.com.

4. conversations between Kelly Joyce and the author began in October 2008, and the author visited target headquarters in november 2008. Follow-up phone calls and e-mail exchanges with Joyce took place through march 2009.

5. s.B. Bargla, “a case study of supplier selection for lean supply by using a mathematical model,” Logistics Information Management, Vol. 16, no. 6, 2003, pp. 451–459.

6. l. De Boer, e. labro and p. morlacchi, “a Review of methods supporting supplier selection,” European Journal of Purchasing and Supply Manage-ment, Vol. 7, 2001, pp. 75–89.

supply chain management

WILLIAM H. MURPHY is an associate professor in the department of management and marketing at the University of Saskatchewan in Saskatoon. He holds a doctorate in marketing and business administration from the University of Wisconsin-Madison.

Retailers must do more than merely cope. they need to assert control so they maintain their brand promise.

OK, so you’ve identified an area with improvement potential,

picked a team to examine the problem, invited stakeholdersto brainstorming sessions that

help analyze potential solutions,ran a quality and cost analysis ofthose solutions, gained approval

from top management to establisha pilot project, selected metrics to

judge the success of the pilot project,rolled out the solution on a wider basis and determined it should be

implemented at every site across your entire organization ...

June 2010 • QP 31

innOvatiOn

?... NowWhat

Developing solutions for complex, chronic, systemic problems

requires management’s commitment of resources

coupled with an improvement process such as lean

Six Sigma. For many organizations, regardless of industry,

maximizing the resource expenditure requires spreading the

solutions to all pertinent departments and facilities within the

organization. This is the story of one organization’s efforts to develop

and implement a dissemination process that would consistently spread

its improvement solutions across all facets of the organization. While this

takes place in a healthcare setting, the solution can be customized for any industry.

by Clark Carboneau, Jon Banks,Tony Armijo

and John A. Zondlo

QP • www.qualityprogress.com32

The struggle to implement evidence-based best

practices in healthcare is ongoing and well document-

ed.1 Presbyterian Healthcare Services (PHS) knows

these difficulties all too well. A nonprofit integrated

healthcare system in New Mexico, PHS has eight hos-

pitals throughout the state, including a 450-bed acute-

care facility at its main site in Albuquerque.

The challenge for management and staff was to

spread the solutions from an improvement team at the

pilot site to other areas. Initial difficulties limited the

potential gains in patient safety and cost reductions.2

So, in response, PHS developed a collaborative pro-

cess to deploy its solutions (see Figure 1).

spreading solutionsThe ingredients for a successful dissemination project

include:

• Senior leadership support.

• Key stakeholder meetings.

• Biweekly meetings during implementation.

• Project manager’s on-site support.

• Use of a service level agreement (SLA).

• Post-spread control plan.

Of course, a dissemination project is useless with-

out a solution to disseminate. So PHS targeted four ar-

eas of potential improvement at its main hospital and

assigned a team to each one:

1.Pressure-ulcerprevention:The goal of the pres-

sure-ulcer prevention project was to reduce hospi-

tal-acquired pressure ulcers enterprisewide from

18% to 5% or less. The secondary goal was to pro-

vide the tools and the foundation for a sustainable

culture of standardized best practices for pressure

ulcer prevention across all Presbyterian Regional

Hospitals (see Figure 2).

2.Hand-hygiene compliance: Effective hand-hy-

giene compliance has long been known to prevent

hospital-acquired infections. The goal of the hand-

hygiene project was to raise compliance at all PHS

regional hospitals to a level that meets or exceeds

Spreading innovations flowchart / Figure 1

A

A

Black Belt(BB)

Verify thatsolutions

from originalproject arestatisticallysignificant

No

1

Spread teamand BB

On-site visitoverviewmeeting

10Spread team

and BB

On-site visitworkingmeeting

11Spread team

and BB

Hold biweeklyteleconferences

to discussSLA itemsand issues

12Spreadteam

Fullyimplement

SLA

13Spreadteam

On-site auditto verify

solutions arein place and

effective

14Spreadteam

Controlplan inplace

15Spreadteam

Spreadprojectclosed

16

BB

Verifycurrentproject

performancemeasures atspread site

Start ofprocess

End ofprocess

3

BB

Set up andhold key

stakeholdersmeeting

SLA = service level agreement

9

Seniorleaders

Articulatevalue of

spread toreceiving

site

4Seniorleaders

IdentifyChampion

and processowner at

each spreadlocation

5

Seniorleaders

Spread onhold untilsteps 4–7in place

6Spreadteam

Spreadprojectcharter

elementsdefined

8

7Seniorleaders

Delaystart until

significanceis proven

2

No

Yes Yes

Solutionsare

significant?

Are neededresourcesavailable?

Seniorleaders

Verify on-siteadministrator(Champion)supportsspread

June 2010 • QP 33

the Joint Commission’s national pa-

tient safety goal of 90%.3 The second-

ary goal was to develop a sustainable

culture of hand-hygiene compliance

that was peer enforced (see Figure 3).

3.Emergency department (ED) co-

pay: The goal of the ED co-pay project

was to increase the number of co-pays

collected in the ED at the time of ser-

vice from 5% to 15%. The metric for

this project was the percentage of co-

pays collected from patients who had

co-pays due—defined as “potential co-

pays” (see Figure 4, p. 34).

4.Health information management:

The ability to make complete electron-

ic medical documentation available in

a timely manner assures patient safety

and service. The health information

management process had a long cycle

time that resulted in delays of availabili-

ty of electronic medical documentation

for follow-up and future patient care.

The existing process batched an abun-

dance of documentation, which resulted

in inefficiencies and multiple handlings,

contributing to the overall cycle time. The

project goal was to reduce cycle time from

66 hours per chart to fewer than 30 hours

(see Figure 5, p. 35).

Flowchart overviewCommitment by senior leadership is criti-

cal to the success of a dissemination proj-

ect.4 PHS senior leaders have made a com-

mitment to standardize processes across

all of the system’s facilities.

If one hospital completes a Black Belt

(BB) or Green Belt project with proven

solutions, the other hospitals within the

system are expected to implement them.

The initial hospital has the responsibility

for leading the dissemination process. Spreading inno-

vations must not be left to chance; rather, a detailed

dissemination process is required.5

The spreading innovations flowchart is based on

three principles:

1.Collaboration. Each hospital has its own site dis-

semination team, but all site team members meet

every two weeks via teleconference to discuss prog-

ress, barriers, what is working and what isn’t. Build-

ing collaboration among the various sites aids the

effort by providing an opportunity for each team to

offer its perspective on spreading the innovations.6

innOvatiOn

Pressure-ulcer incidence rate (original project) / Figure 2

30%

25%

20%

15%

10%

5%

0%Q3

2007Q4

2007Q1

2008Q2

2008Q3

2008Q4

2008Q1

2009Q2

2009Q3

2009Q4

2009Q1

2010

Per

cen

tage

Time period

Pressure ulcer prevention target = 5%

Hand-hygiene compliance rate (original project) / Figure 3

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Per

cen

tage

Compliance rateafter improvements

Compliance rate before improvements

3/20

07

4/20

07

5/20

07

6/20

07

7/20

07

8/20

07

9/20

07

10/2

007

11/2

007

12/2

007

1/20

08

2/20

08

3/20

08

4/20

08

5/20

08

6/20

08

7/20

08

8/20

08

9/20

08

10/2

008

11/2

008

12/2

008

1/20

09

2/20

09

Month/year

QP • www.qualityprogress.com34

2.Pull vs. push. The main hospital in Albuquerque

could not dictate—or push—the spread of solu-

tions to the other hospitals. For the solutions to

be accepted by the regional hospitals, they needed

to understand them and then choose to implement

them.

3.One-on-onesupport. The BB travels to each site

for a day-long visit to meet the site team and provide

leadership for the dissemination project. Included

in the visit is a detailed explanation of each solu-

tion, assistance with adoption (if needed) and de-

velopment of an SLA for implementation. For an ex-

ample, see “Hand-hygiene service level agreement”

online at www.qualityprogress.com.

Flowchart walkthroughStep 1: Verify solutions. In the context of the Six

Sigma method of define, measure, analyze, improve

and control (DMAIC), project dissemination should be

considered as early as the design phase. But it is im-

portant to confirm the implemented solutions from the

original project demonstrate a statistically significant

improvement before dissemination is initiated.

Step2:Confirmproofof thesolution. If solu-

tions from the original project are not considered

significant, senior leaders must delay the start of the

dissemination project until the impact of solutions can

be verified. It is a considerable waste of time and re-

sources to disseminate a process that has questionable

outcomes. This step should be considered a hard stop

in the process until solutions are verified.

Step 3: Verify current process performance

measures. The receiving site may already have per-

formance measures concerning the original project.

Confirming those measures exist is crucial because the

current baseline performance is invaluable in integrat-

ing the improvement project at the receiving sites. If

they do not exist, this is a good starting point for ad-

dressing outcome and in-process measures that will

need to be collected in association with the dissemina-

tion project.

Step4:Articulatethevalueofdissemination.

This action creates the foundation for acceptance

and the necessary cultural change associated with

the new process. This is the time to articulate the val-

ue to all involved at the site—from senior leaders to

front-line staff. If this step is not emphasized and in-

tegrated into the dissemination process, the chances

of the site accepting and sustaining the changes are

compromised.

Step5:Identifychampionandprocessowner.

On-site champions and process owners are essential to

dissemination, which could otherwise be

viewed as an outside process imposed on

the receiving site. The champion and pro-

cess owner communicate and reinforce

the value of dissemination to the receiving

site and are crucial to successful imple-

mentation of the new process.

Step 6: Verify on-site champion

support. The champion’s role is to re-

move obstacles, support the implementa-

tion and ensure sustainment of the new

process. If this role is not completely

defined and agreed upon, the implemen-

tation and sustainment of the process is

in jeopardy.

Step 7: Verify on-site resources.

A few of the basic resources needed on

all dissemination projects are available

to staff to work on the project, time for

staff to work on the project and money

to purchase materials. If these essential

resources are not available, senior leaders

Emergency department co-pay collection rate (original project) / Figure 4

3/1/

083/

15/0

83/

29/0

84/

12/0

84/

26/0

85/

10/0

85/

24/0

86/

7/08

6/21

/08

7/5/

087/

19/0

88/

2/08

8/16

/08

8/30

/08

9/13

/08

9/27

/08

10/1

1/08

10/2

5/08

11/8

/08

11/2

2/08

12/6

/08

12/2

0/08

1/3/

091/

17/0

91/

31/0

92/

14/0

92/

28/0

9

30%

25%

20%

15%

10%

5%

0%

Per

cen

tage

Date

June 2010 • QP 35

must delay the start of the project. It is a considerable

waste of time to try and spread a process without es-

sential resources. If that’s the case, this step should be

considered a hard stop in the process until resources

are provided.

Step 8: Define dissemination project charter

elements. The charter helps define the parameters

that govern the dissemination process. The elements

include the goal, scope and timeline of the project.

Without clearly defining these elements, the process is

at risk of expanding outside the original project bound-

aries, diluting the solution’s impact.

Step9:Keystakeholdermeeting. The purpose

of this meeting is to bring all site-team members to-

gether as a collaborative team. Participants may not

know each other prior to the meeting, so during the

first meeting, each participant is given a contact list of

those who will be working on implementing the same

solutions.

The collaborative approach is efficient

and cost effective. Bringing all people

involved with the dissemination project

together as a team costs less than holding

multiple separate meetings.

Because travel time and costs were

considerations for the PHS dissemina-

tion project, the meeting was held via

teleconference. In addition, a SharePoint

site was used, with site members dis-

cussing:

• The project charter.

• A high-level review of the original proj-

ect.

• The DMAIC method and key improve-

ment tools used.

• The proven Xs of the project (for ex-

ample, root causes).

• Project solutions.

• Pros and cons of key tools specific to

the receiving site.

• The schedule for biweekly teleconferences for the

duration of the dissemination project.

• Plans for on-site BB visits.

Step 10: On-site visit. An e-mail or directive to

each site declaring the need for dissemination will not

suffice in spreading solutions. Understanding the per-

son doing the work and his or her unique environment

will build credibility and the needed good will for proj-

ect success.

In The Tipping Point, Malcolm Gladwell credits the

successful agricultural salesmen as the ones who pull

on their boots and go out into the field with the farmer.7

All workers are busy doing their jobs. A dissemination

project is just one more item added to an already jam-

packed schedule. For the project to be successful, the

project manager must step out of his or her everyday

environment and into the environment of the site re-

ceiving the solution.

The day-long visit consists of an opening meeting,

innOvatiOn

Health information management chart cycle time (original project) / Figure 5

90

80

70

60

50

40

30

20

10

0

Ho

urs

Previous process New process

6/20

08

7/20

08

8/20

08

9/20

08

10/2

008

11/2

008

12/2

008

1/20

09

2/20

09

3/20

09

4/20

09

5/20

09

6/20

09

7/20

09

8/20

09

9/20

09

10/2

009

11/2

009

12/2

009

1/20

10

2/20

10

Month/year

it is a considerable waste of time andresources to disseminate a processthat has questionable outcomes.

with all stakeholders invited. This includes the site

champion, process owner, dissemination team mem-

bers and all staff members who come in contact with

the process.

During two of our PHS dissemination projects, we

discovered that maintenance and purchasing were

overlooked during the site visit. Because of this, we

received pushback from both depart-

ments. They were not present during the

project overview and explanation of the

solutions; naturally, they questioned and

resisted the labor and costs involved.

The opening meeting lasted one hour

and involved a review of the problem’s

root causes, an explanation of each solu-

tion in detail and an open discussion.

The facility walkthrough with the site

process owner involved verification of

each solution and modification of the

original solution to meet the needs of a

unique environment. Because one hospital

did not have patient admission packets, a

solution modification placed the hand-

hygiene message in patient rooms rather

than in the patient admission packets.

The walkthrough also included the

development of an SLA to implement all

solutions by an agreed-upon date. At that

time, a commitment of resources was

agreed upon between the process owner

and the champion.

Step11:Biweeklyteleconferences.

This includes project updates and dis-

cussion of issues among the site teams.

Because these meetings include all dis-

semination team members, each site can

provide insights into problem resolution.

For example, the hand-hygiene team

brainstormed and shared the cost of pur-

chasing gel dispenser labels among three

sites.

Step12:Fully implementtheSLA.

Work on this step begins immediately

following the on-site visit. The process

owner should verify the SLA is complete

before the project manager schedules the

on-site project audit.

Step13:On-siteaudittoverifyso-

lutions. A few site process owners said that knowing

an on-site audit was coming kept the dissemination

project a priority for them. The original site-specific

SLAs were used by the auditors as the audit checklists

for each site. The process owner was responsible for

leading the audit by demonstrating proof that each so-

lution had in fact been implemented.

Pressure-ulcer prevention rate (spread project) / Figure 6

1/20

09

2/20

09

3/20

09

4/20

09

5/20

09

6/20

09

7/20

09

8/20

09

9/20

09

10/2

009

11/2

009

12/2

009

1/20

10

Target = 5% or less

10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

Per

cen

tage

Month/year

Hand-hygiene compliance rate (spread project) / Figure 7

100%

95%

90%

85%

80%

75%

Per

cen

tage

1/20

09

2/20

09

3/20

09

4/20

09

5/20

09

6/20

09

7/20

09

8/20

09

9/20

09

10/2

009

11/2

009

12/2

009

1/20

10

Month/year

QP • www.qualityprogress.com36

The SLA proved to be a useful tool by

allowing someone other than the project

manager to be the auditor. This also al-

lowed staff members, who were already

going out to the regional hospitals on

other business, to act as auditors. The av-

erage audit time required for each project

was one hour.

Step14:Putacontrolplaninplace.

A control plan was developed for each

dissemination project. Each plan focused

on relevant control subjects with ongoing

data collection and monitoring for sus-

tainability. For an example, see “Emer-

gency department co-pay control plan” at

www.qualityprogress.com.

Step15:Closeproject. After the SLA

is complete, the project BB continues to

monitor and report on the project status

for four months at the project tracking

meeting. If the project remains in control during that

time, the BB officially closes the project. The control

metrics continue to be monitored on an executive

council scorecard for another 12 months.

By following these steps, PHS saw the improve-

ments of its main site duplicated throughout the or-

ganization (see Figures 6-8). In the process, it ensured

future results that begin as one location’s achievement

can be turned into widespread success. QP

REfEREncES1. Clark Carboneau, “Using Diffusion of innovations and academic Detailing to

Spread Evidence-Based Practices,” Journal for Healthcare Quality, 2005, vol. 27, no. 2, pp. 48-52.

2. Carol vanDeusen Lukas, “implementation of a Clinical innovation: the Case of advanced Clinic access in the Department of veterans affairs,” Journal of Ambulatory Care Management, 2008, vol. 31, no. 2, pp. 94-108.

3. Clark Carboneau, Eddie Benge, Mary t. Jaco and Mary Robinson, “a Lean Six Sigma team increases Hand Hygiene Compliance and Reduces Hospital acquired MRSa infections by 51%,” Journal for Healthcare Quality, January 2010.

4. M. Rashad Massoud, Gail a. nielsen, Kevin nolan, Marie W. Schall and Cory Sevin, “a Framework for Spread: From Local improvements to Systemwide Change,” institute for Healthcare improvement innovation Series white paper, 2006.

5. Marjorie L. Pearson, valda v. Upenieks, tracy Yee and Jack needleman, “Spreading nursing Unit innovation in Large Hospital Systems,” Journal of Nursing Administration, 2008, vol. 38, no. 3, pp. 146-152.

6. Everett M. Rogers, Diffusion of Innovations, Free Press, 2003.7. Malcolm Gladwell, The Tipping Point, Little Brown, 2002.

ToNy ArMIJo is a lean Six Sigma Black Belt at Pres-byterian Health Services. He earned an MBA from the College of Santa Fe in New Mexico. Armijo is a senior member of ASQ and is a certified quality auditor and Six Sigma Black Belt.

JoHN A. ZoNDlo is a lean Six Sigma Black Belt at Presbyterian Health Services. He earned a master’s degree in hospital administration from the University of Minnesota.

ClArk CArBoNeAU is a lean Six Sigma Black Belt at Presbyterian Health Services in Albuquerque. He earned a Deming Scholar MBA from Fordham Univer-sity in New york. Carboneau is a senior member of ASQ and a certified manager of quality/organizational excellence.

JoN BANkS is a lean Six Sigma Black Belt at Presbyte-rian Health Services. He earned a bachelor’s degree in occupational therapy from Colorado State University in Fort Collins.

Emergency department co-pay collection rate (spread project) / Figure 8

16%

14%

12%

10%

8%

6%

4%

2%

0%

Per

cen

tage

Month/year8/2009 9/2009 10/2009 11/2009 12/2009 1/2010

June 2010 • QP 37

innOvatiOn

SPREAD THE WORDinitiating an improvement project organizationwide is a process fraught with obstacles. Share your tips for overcoming them by using the comment tool on this article’s page at www.qualityprogress.com.

W

BigIdea?

t’sah eht

QP • www.qualityprogress.com2

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In 50 Words Or Less • Text for 50 words or

less is Vectora Roman 9 on 11 with hanging indents.

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headlineDeckhead goes here

by AUTHOR NAME

As mArkets evolve, so do customer

demands, preferences and expectations. The current

wave of innovation stems from the attempt to dif-

ferentiate the superficial from the meaningful. In the

knowledge economy, agility in rolling out a stream of

innovative products and services will be the determi-

nant of continued success.

But how do you make innovation a way of life that

isn’t restricted to new product launches? One of the

critical success factors of a cultural transformation

will be the training provided to encourage individuals

to develop innovation skills. Mandating group par-

ticipation in creativity workshops or implementing

metrics, such as ideas per employee, may not yield

expected results.

In 50 Words Or Less • In successful organi-

zations, innovation isn’t limited to prod-uct design.

• Instead, it should be viewed as a skill that anyone can develop.

• By following a few simple steps, any em-ployee can become an innovative problem solver.

Fostering innovation turnsemployees into problem solvers

by Aditya Bhalla

June 2010 • QP 39

InnovatIon

QP • www.qualityprogress.com40

Unlike data-driven methods such as Six Sigma, in

which the learning process is more predictable, suc-

cessful innovation training depends on an individual’s

creative ability. There is no known way to automate

an individual’s thinking processes to generate ideas.

Some of the popular approaches to idea generation,

such as brainstorming, are mostly based on trial and

error, and have unpredictable success rates.

In our daily lives, we run into problems that require

creative solutions. But that doesn’t mean we always

solve them creatively. The creative solution is a simple

solution to a problem that, from the standpoint of con-

ventional thinking, requires complex and expensive

solutions. The paradox of the creative innovation is

that although it is relatively easy to come up with a

complex innovation, a simple, unconventional innova-

tion is by no means an easy task.

it’s electricThere is a lesson to be learned from two great inven-

tors—Thomas Edison and Nikolai Tesla. Edison is well

known for his recipe for innovation: “Genius is 1% in-

spiration and 99% perspiration.”1

Edison filed for 1,093 patents during his lifetime,

and his approach was simple: Conduct a large number

of simultaneous experiments on every possible idea.

For any invention, his army of 1,000 researchers would

check out 1,000 different ideas in each trial. To discov-

er the right material for the carbon light-bulb filament,

more than 6,000 experiments were conducted.2 For the

nickel-iron battery, 10,296 experiments were carried

out.3 The alkaline cell required 50,000 tests.4

Tesla’s pertinent observation sums up the woes of

adopting Edison’s approach to product design or prob-

lem solving: “If Edison had a needle to find in a hay-

Types OF psychOLOgIcaL InerTIa1. Inertia associated with the usual functioning of an object (a computer mouse can be used only for mov-

ing the cursor on the screen).

2. Terminological inertia or the use of technical jargon (reduction of “synthetic inventory” in corporate

banks).

3. Inertia caused by usual form or appearance (scientists must wear white coats).

4. Inertia caused by usual properties, conditions or parameters (team must always have a manager).

5. Inertia caused by usual principle of action or area of knowledge (the application of new lean concepts to

manage a team of software professionals).

6. Inertia caused by usual composition or components (a data-entry operation must have a person keying

in values into the system).

7. Inertia caused by usual constancy of an object or character (calls to a technical support desk must

always progress from lower-skilled staff to higher-skilled staff).

8. Inertia caused by usual dimension (in a call center, there can’t be more than one customer-service rep-

resentative talking to one customer).

9. Inertia caused by a nonexistent prohibition (you shouldn’t make a sales pitch to an irate customer).

10. Inertia caused by habitual action (underwriting work for any particular customer case cannot be split

among several underwriters).

11. Inertia caused by a single solution (the tendency to stop exploring other solution ideas).

12. Inertia caused by mono-object (silo-based thinking to process improvement).

13. Inertia caused by usual value, or importance, of the object (software must be tested by an independent

team of testers before release).

14. Inertia caused by traditional conditions of an application.

15. Inertia caused by the known pseudo-similar solution, or the tendency to superficially apply the similar

solutions that worked in the past (reward structures).

16. Inertia caused by superfluous information (the tendency to provide or seek information not related to

the core of the problem). —A.B.

June 2010 • QP 41

stack, he would proceed at once with the diligence of

a bee to examine straw after straw until he found the

object of his search. I was a sorry witness of such do-

ings, knowing that a little theory and calculation would

have saved him 90% of his labor.”5

So why should we concern ourselves with a couple

of scientists quibbling over their differing approaches

to scientific research? Most of us in the service indus-

try work on mundane customer transactions and don’t

intend to file patents any time soon. Right?

At the beginning of the innovation journey, many or-

ganizations find that most of their employees are mim-

icking Edison in their trial-and-error approach to any

situation. If you’ve witnessed a senior manager clutch-

ing his head and pleading with his charges to use their

brains before they act, then you’ve seen a live example

of the frustration with this trial-and-error mind-set.

innovation democratizationIs innovation a stroke of luck or genius, or is it a skill

that can be acquired by anyone? This question has

troubled mankind throughout history.

Psychologist Edward Thorndike described the trial-

and-error method and said the key to problem solving

lies in the acquisition of rational skills through a mul-

tiple repetition of random attempts.6

Genrich Altshuller, the founder of TRIZ (a Russian

acronym for “theory of inventive problem solving”) car-

ried out in-depth research of the patents database to

determine whether there were underlying patterns to

problem solving. His research showed that innovation

was not the result of a magical stroke of luck or genius,

but rather a skill anyone can develop.7

His research, supported by a growing fraternity of

scientists, eventually culminated in the algorithm of

inventive problem solving (ARIZ). To many people, the

idea of creating an algorithm to guide innovation was

counterintuitive. With the development of TRIZ, inno-

vation is no longer considered the exclusive realm of

scientists. The power to innovate is now in the hands

of ordinary people.

That’s a potential positive for an organization, but it

can’t be maximized until you know what type of brain-

power you have on staff.

People with unskilled minds are characterized by

the lack of boldness in their thinking. When confronted

with difficult problems, the unskilled adopt a trial-and-

error approach to solving them. On the other hand,

skilled innovators differ in their ability and the speed

at which they find the contradiction in the problem and

generate bold ideas to resolve it.

Scientists refer to this as an ability to overcome

psychological inertia, which is one of the core traits

of successful innovators (see sidebar, “Types of Psy-

chological Inertia”). The other is knowledge of ARIZ.

These skills allow successful innovators to identify the

hidden contradictions in any situation and resolve the

identified contradictions based on the proven princi-

ples used by great inventors.

Acquiring mastery over a subject and training the

mind to overcome psychological inertia requires many

hours of training, followed by demonstrated applica-

tion on a project. Here’s an example application:

A large telecommunications company in an emerg-

ing economy has millions of subscribers, who receive

telephones for the duration of their subscription peri-

od. Distribution is managed through a large franchisee

retail network that includes several thousand outlets.

The franchisee is the point of contact for all custom-

ers. If the customer terminates the service for any rea-

son, the franchisee recovers the telephone on behalf of

the company and returns it to the company warehouse,

where it can then be reused for a new customer.

A company audit found that hundreds of thousands

of telephones were not yet recovered. The reasons the

auditors identified included the customer still possess-

ing the telephone, or the telephone being at the com-

pany’s warehouse but not accounted for.

The company wants to recover the phones and,

more importantly, set up a process to ensure the situ-

ation does not happen again. How would you help re-

solve this problem?

InnovatIon

Innovation is no longer considered the exclusive realm of scientists. the power to innovate isnow in the hands of ordinary people.

QP • www.qualityprogress.com42

To better appreciate the difference between the ap-

proaches adopted by skilled innovators and unskilled

minds, present the situation to your staff. Ask them for

input to set up a process to ensure this problem does

not arise in the future.

the 4P solutionWhen presented with any problem-solving scenario,

those with unskilled minds tend to come up with safe

ideas that can be broadly classified as punish, pay,

plead and pray. Using the telecommunications exam-

ple in the sidebar, here are a few ways the four catego-

ries are applied:

Punish:

• Punish franchisees by imposing a penalty or a fine

for unrecovered phones and by imposing tougher

contracts on new and existing franchisees.

• Punish customers by not refunding their security

deposits and charging heftier security deposits from

new customers.

• Punish the business unit heads of each region for

bad recovery rates, telling them to correct the situa-

tion or face dismissal.

Pay:

• Provide incentives to the franchisees to recover and

return the phones.

• Provide incentives to the customers to return the

phones.

Plead:

• Appeal to the customer’s common goodwill and

conscience.

• Appeal to the franchisee’s common goodwill.

• Appeal to the staff to minimize business losses.

Pray:

• When the previous ideas stop working, those with

unskilled minds will hope for things to improve and,

at the same time, plan for a write-off of bad assets.

Those approaches do not yield a robust solution

that will prevent the problem from recurring:

• Punishing the franchisees and the customers will

only hurt market share in the long run.

• Providing incentives is a way of rewarding bad prac-

tices.

• Appealing to the customer’s conscience may work

only for limited scenarios, such as when linked to

religious or similar emotive topics.

• Writing off bad assets will simply erode the financial

worth of an organization.

A good approachThe following is a simplified representation of an effec-

tive innovator’s four-step problem-solving approach:

1. Identify the hidden conflict or contradiction in the

problem. Innovations happen only when we resolve

contradictions.

2. Envision the ideal solution using ideality—a techni-

cal concept of TRIZ—that envisions a scenario in

which the source of the problem solves the prob-

lem. Another simplified understanding of ideality

is the ability to obtain the useful functions of the

process without needing the process to exist.

3. Explore a wider canvas of solution space free from

psychological inertias.

4. Make use of readily available resources to formulate

solutions that are cost effective and easy to deploy.

Now, apply each step to the telecommunications

example:

1. One of the contradictions at the heart of the problem

is that if we provide incentives to the franchisees to

retrieve the phones, we will be able to retrieve most

of them. But we run the risk of franchisees seeking

more incentives over time, leading to increased cost

of operations.

2. By applying the concept of ideality, the innovator

can formulate ideas that allow the organization to

retrieve phones without using complex tracking

mechanisms.

3. Consider a situation in which you are walking with

your loved ones, and someone tries to pull you away

against your will. As you are being dragged away

from them, you can see them clearly, but they are un-

able to see you. What would you do? Most likely, your

answer would be to yell out to them while struggling

to free yourself from your captors. So, what if the

phone were to yell out, asking to be rescued? What

if it made so much noise that the abductors were

forced to hand it over back to you? Is that nonsensi-

cal or infeasible? Perhaps not. All non-trivial ideas

appear that way the first time they are presented.

4. The innovator then explores readily available re-

sources to turn the ideas into a feasible solution

concept. A spare battery would allow the phone to

emit emergency signals to communicate with the

network, even if the phone is disconnected from the

main power supply. At the same time, technology

can be used to make the phones of terminated ac-

counts emit irritating sounds that force the customer

June 2010 • QP 43

to approach the franchisee to fix the problem or to

turn over the phone.

Are there problems that need to be fixed before the

solution can go live? Yes, but the innovator’s mind will

be able to generate ideas and systematically cull the neg-

ative elements to arrive at a mistake-proof final concept.

As this example demonstrates, organizations need

to invest in training to help their employ-

ees acquire the traits of the skilled innova-

tors. When that happens, the organization

can succeed in solving day-to-day prob-

lems with non-trivial ideas.

Get on the trainDifferent strokes for different folks. That

cliché is applicable to organizations seri-

ous about training their staff members to

unleash their full thinking potential and

overcome psychological inertia.

Sending staff to innovation or creativity

workshops does not provide for sustain-

able results because each mind has its own

pace of development. Short-term exposure

in a workshop does not allow the partici-

pants to evolve and adopt the new way

of thinking at their self-determined pace.

When the participants go back to their

posts, old thinking habits will set in, and

their initiative will be lost.

A blended learning approach allows

each person’s mind to follow its own pace

of development. It also provides manage-

ment the opportunity to identify the innova-

tors who exist within the organization. This

group can be leveraged to formulate non-

trivial ideas ranging from launching new

products to fixing complex problems. QP

reFerences1. the Quotations Page, “thomas a. Edison,”

www.quotationspage.com/quote/2054.html.2. the Franklin Institute, “Edison’s Lightbulb,” www.fi.edu/

learn/sci-tech/edison-lightbulb.3. Grace Products Corp., “the Life of thomas Edison,” www.

graceproducts.com/edison/life.html.4. thomas alva Edison Foundation, “Useful Science Projects

From Edison,” www.charlesedisonfund.org/experiments/edison-pdf/edison_ch6.pdf.

5. thinkexist.com, “nikola tesla Quotes,” http://thinkexist.com/quotes/nikola_tesla.

6. new World Encyclopedia, “Edward L. thorndike,” www.newworldencyclopedia.org/entry/Edward_L._thorndike (case sensitive).

7. Selectorweb.com, “tRIZ,” www.selectorweb.com/triz.html.

InnovatIon

AdityA BhAllA is innovation practice head at QAi Global in New delhi, india. he earned a master’s degree in management from the institute of Manage-ment technology in Ghaziabad, india. Bhalla is an ASQ member and is a certified Six Sigma Master Black Belt and level 3 tRiZ practitioner.

Fine-tune your balanced scorecard and make it a machine geared toward continuous improvement

by Alex Fedotowsky

In 50 Words Or Less • A balanced scorecard

(BSC) can be used as a cyclic, continuous improvement tool to create synergy within an organization.

• Incorporating lean, Six Sigma, theory of constraints and con-tinuous improvement methods into the BSC can help link individual projects and activities to strategic goals and can change an organiza-tion’s culture.

added

The balanced scorecard (BSC) is accepted in the busi-

ness world as a valid instrument with which to translate and deploy an organi-

zation’s business strategy throughout its infrastructure.

The BSC was first developed by Robert S. Kaplan and David P. Norton as a

tool to link the traditional financial lagging metric to three leading metrics of

learning and growth, process and customer. At about the same time, Lawrence

Maisel developed a similar scorecard approach.

June 2010 • QP 45

BALANCED SCORECARD

QP • www.qualityprogress.com46

The four metrics, sometimes referred to as per-

spectives, have associated key performance indica-

tors (KPI). The senior management team normally

determines the KPIs to link leading indicators (people,

process and customer) to the lagging indicator (finan-

cials).

To ensure the successful deployment of a BSC, mul-

tiple levels of linked KPIs must cascade through divi-

sions, departments and the individual performance or

shop level. When an organization can link the perfor-

mance of an individual or the smallest unit to top-tier

KPIs, you know you have a working BSC.

What must an individual worker, supervisor or man-

ager do each day to move a KPI in the right direction?

The cascaded KPIs can provide managers a way to

motivate workforce behavior and improve operations

within their control in real time and anticipate finan-

cial or performance results.

Deploying a completely linked BSC, however, is not

easy. Many organizations struggle to make the BSC

work as it’s intended. In some cases, they simply sub-

stitute poorly selected leading metrics to satisfy stake-

holders.

The BSC can and should be used as a cyclic, con-

tinuous improvement tool to create a synergy not eas-

ily achieved by competitors. The BSC has the ability to

integrate lean, Six Sigma, theory of constraints (TOC)

and continuous improvement methods into a cohesive

unit that can change an organization’s culture and help

it achieve its strategic mission.

People seem to react positively to posted metrics

with goals set by the BSC objectives. When business

strategy is deployed through a BSC, a knowledgeable

workforce will deliver the solutions to meet the goals.

a new look bscSince its conception, the BSC has gone through multiple

designs and changes to fit organizational goals; how-

ever, this new way of designing a BSC, which combines

lean, Six Sigma, TOC and continuous improvement, will

create higher visibility for improvement projects.

Lean, Six Sigma and TOC all use a cyclic structure

to continuously improve and achieve desired busi-

ness results. Walter A. Shewhart introduced the plan-

do-check-act (PDCA) cycle (and W. Edwards Deming

popularized it) to provide a systematic method to solve

problems by applying scientific methods and then

moving to the next problem. Cycles of logical steps

have become a proven way to continuously improve.

By using the BSC, can the improvement cycle be

used at the strategic business level? The primary stra-

tegic goal for any organization should be to always

improve in every way. The BSC can help achieve that.

Figure 1 compares the PDCA cycle with the idea of

positioning the BSC as a cycle of improvement. As the

PDCA cycle starts with the plan phase, a BSC starts

with people and repeats. When results don’t meet the

target, ask the question, “What can we do next to sup-

port our people to improve the processes that delight

our customers and generate more profits?”

We can refer to this as the people-process-custom-

er-financials (PPCF) cycle.

cyclic nature of improvementTypically, organizations follow one of these four pat-

terns as part of their improvement efforts:

1. Continuous improvement: PDCA and repeat.

2. Six Sigma: Define, measure, analyze, improve, con-

trol (DMAIC) and repeat.

3. Lean: Identify value, make value flow and repeat to

pursue perfection.

4. TOC: Identify the constraint, exploit the constraint,

subordinate everything to the constraint, elevate

the constraint and repeat.

What’s missing in each of these four patterns is an

established BSC that can make a difference. Building

a BSC, complementing it with the PPCF cycle and re-

peating as necessary should be an option all organiza-

tions must consider.

At Organization X, for example, lean Six Sigma proj-

ects were not directly linked or referenced to a top-tier

KPI. When the BSC is designed to function as a cyclic

continuous improvement instrument pulling lean, Six

Balanced scorecard (BSC) cycle / FIgure 1

PlanAct

DoCheckFinancials

People

Process

Customer

PDCA cycle BSC cycle

June 2010 • QP 47

Sigma and theory of constraints (LSSTOC) projects to

move KPIs in a positive direction, the organization has

a well-developed improvement system.

In many organizations, LSSTOC efforts are often

ancillary and not linked to the organization’s strategy.

Maybe that’s why LSSTOC projects are often referred

to as the flavor of the month, or they move sluggishly—

because they do not have senior management’s full at-

tention.

When each person, manager and department can

clearly see how their efforts positively affect a metric

for the organization to be more successful, the culture

will change. The workforce will see the business need

to support and drive LSSTOC projects toward success,

with their ideas leading the charge. The BSC has the

ability to make that culture change happen.

Organizations that have a working BSC can achieve

satisfactory results within segments of their organiza-

tions. But gaps can exist that consist of incomplete

links from work-area performance to the organization’s

top-tier KPIs. For example, back at Organization X, a

BSC was deployed as a quality sustainment instrument

but not as a governing, organizationwide improvement

instrument. In this situation, quality metrics (outputs

from processes) were sometimes confused as process

metrics.

Table 1 is a model of a BSC structure that required

updated improvements to create a structure to link the

cascaded KPIs. In this case, there was only one level

of metrics at the departmental level. This scorecard

did not provide linked information to improve from

red (alert) to yellow (warning) to green (acceptable)

status. The BSC structure had missing metric links and

lacked well-defined improvement objectives.

In this example, the department was in constant

firefighting mode from the supporting units that had no

local scorecard to gauge their impact on the depart-

mental-level metrics, and a corporate-level scorecard

didn’t exist. The goal of the new design was to create

a clear path from individual performance from local

work-area metrics to the top KPIs (see Table 1).

A project was completed to develop a BSC model

in which the improvement method would become the

framework to transform the organization into a con-

tinuous-improvement enterprise. The next step was to

design a BSC to best illustrate the new top-level cyclic

BSC.

The Maisel model provides a good BSC founda-

tion for designing a flow of strategy deployment and

upward assessment. The structure in Figure 2 (p. 48)

would greatly benefit from better-defined metrics sepa-

rated and aligned with newly introduced top-tier KPIs.

In this case, there were no operational definitions

documented to communicate consistency of metric

BALANCED SCORECARD

Single level of scorecard metrics at department level / TABle 1

scorecard objective Metric Target status

Monthly posted color-coded status resulting in daily firefighting in attempt to change status

Process—sustain repair station

ISO audits Pass all audits with no major findings

customer—align to customer expectations

Defect rate Zero defects

On-time delivery 95% on-time delivery

People—improve work environment

Supervisor work-area assessment report

Weekly on first day of week

Town hall meetings Monthly on first day of month

People—optimize workforce effectiveness

Manager, supervisor training

80% trained

Management performance review Personnel goals and actions not linked to improve local, department or corporate-level balanced scorecard metrics.

• On-time delivery: 87% (yellow)

• leadership training: 85% (green)

• Defect rate: 22% (red)

• Audits: 100% compliance (green)

QP • www.qualityprogress.com48

meaning. The LSSTOC improvement efforts will deliver

new process metrics such as throughput, cycle time and

process yields. To improve the BSC, the organization

needs to pursue a way to integrate the improvement

metrics, cyclic nature and language through the struc-

ture of the new scorecard’s design.

The power of the BSC lies in its ability to change

the culture, focusing on the people KPIs that will drive

the desired results in the process KPIs. Improving the

process KPIs will improve the customer KPIs. When

customers are satisfied and the BSC strategy is to seek

higher levels of customer satisfaction, you can expect

positive results recorded in the financial KPI. When

you continue this cycle, expect even better customer

satisfaction and financial results.

We developed a generic version of the new BSC

model. Up until now, the BSC has been successfully

deployed primarily to sustain quality requirements.

A new BSC is designed to incorporate LSSTOC and

continuous improvement language into the core

strategy and provides the leading indicator with the

initiatives to ensure financial (the lagging indicator)

success.

The future of the BSC is to fit LSSTOC and the score-

card together as a cohesive force. Competitors who

cannot accomplish this synergy will fall further behind

in their attempts to gain market share from organiza-

tions that have accomplished this feat. By cascading

the same structure, understandable improvement lan-

guage, and metrics into all organizational levels, the

BSC becomes easier to read and use to improve the

business.

alignment model of bsc metricsYou can look at the BSC structure in five parts to un-

derstand how the levels of an organization can report

the KPI results from the work area and line them up

with corporate KPI metrics to work toward business

objectives. Depending on the size and levels of your

organization, you may require fewer levels.

1. Top-tier organizational KPIs.

• Financial KPI = Quarterly reported financial

reports.

• Customer KPI = Monthly average customer

satisfaction index reported from departments.

• Process KPI = Monthly average throughput

reported from all departments.

• People KPI = Total average employee retention

Corporate top-tier key performance indicator metrics trend chart / FIgure 2

People driving processes to satisfy customers to improve financialsTOC = theory of constraints

Percentageof workforcetrained in lean,Six Sigma andTOC.

Total numberof employee-implementedimprovementsper month.

Workforceemployeeretention ratefor entireworkforce.

People

Total monthlyaveragecycle time.

Total montlyaveragequality firstpass yield.

Total monthlyaveragethroughput.

Process

Totalreportedmonthlyon-timedeliveries.

Totalreportedindexedcustomersatisfaction.

Customer

Quarterlyrevenues andprofits.

Quarterlyoperation costsavings.

Financials

June 2010 • QP 49

rate reported from all departments.

2. Departmental KPIs.

• Financial KPI = Quarterly reported department

operating costs and savings.

• Customer KPI = Monthly average reported

customer feedback ratings.

• Process KPI = Monthly average work areas

throughput.

• People KPI = Monthly average employee

retention rate reported from all shops.

3. Work-area KPIs.

• Financial KPI = shop operating costs.

• Customer KPI = monthly reported complaints.

• Process KPI = monthly shop or work-area

throughput.

• People KPI = work-area employee retention rate.

4. Management performance review KPIs.

• Financial KPI = quarterly reported work-area

operating costs and savings.

• Customer KPI = monthly number of complaints

reported to manager.

• Process KPI = monthly value-added work

throughput in supervised area.

• People KPI = leadership skills assessment.

5. Posted work-area metrics. These will motivate

the workforce to make improvements that link to

the organizations’ top KPIs (for example, cycle time,

throughout, work in progress and on-time deliveries).

Figure 2 illustrates scoreboard layout for a cor-

porate top-tier KPI trend chart as posted throughout

the organization in key areas. The people, process,

customer and financial labels with arrows provide

the workforce a sense of direction and involvement

to help management achieve the business goals. This

layout can be used at all levels that link to the top-tier

scoreboard.

Figure 3 illustrates a scoreboard for a localized

work area. At this level, the involvement becomes

more meaningful in the workforce’s daily activities and

helps the workforce believe it can make a difference.

After lining up the cascaded KPIs, the next goal is

to show how a BSC can serve as the big-picture, cyclic

improvement machine for any organization. The model

is designed to link the ground-level shop and manag-

er’s performance metrics through department metrics

and toward the organization’s top-tier KPIs.

With this model, management will have a cyclic

path to perpetually communicate strategy through the

organization’s infrastructure and have an assessment

tool to link projects and activities upward through the

organizational layers achieving strategic goals.

The paramount goal of any organization should be

to continually improve. A BSC designed to facilitate

continuous cyclic improvements to achieve a strategic

goal should become the primary instrument an organi-

zation uses.

BALANCED SCORECARD

Work-area key performance indicator metrics trend chart / FIgure 3

People driving processes to satisfy customers to improve financials

Quarterlypercentageworkforcetrained.

Number ofemployee-implementedlean ideasper month.

Quarterlyemployeeretention rate.

People

Monthlylead times.

Monthlyquality firstpass yield.

Monthlythroughput.

Process

Monthlycustomercomplaints.

Percentageon-timedeliveries.

Customer

Vendor partsand materialscost reduction.

Workarea/shopsavings/costavoidance.

Financials

Online Tables 1-4 at www.qualityprogress.com pres-

ent the new model, starting with the top-tier corporate

scorecard. The tables illustrate the connecting struc-

ture of the KPI metrics, actions and goals needed to

achieve the organization’s desired strategic targets.

The model’s purpose is to illustrate how to commu-

nicate with the BSC. In reality, a fine-tuned BSC with

objectives, action plans and measures should be word-

ed more precisely to ensure everyone knows the goals

and what must be done.

The BSC will work if you keep the metrics structure

simple, show how it’s meaningful to the workforce, use

it as motivation and show its cascading alignment. Fig-

ure 4 is the final presentation of what a well-aligned

BSC model focused on continuous improvement can

look like to make sense to stakeholders.

Finally, if you are familiar with Eliyhu Goldratt’s five-

step process to identify and elevate system constraints,

the cascaded alignment of the BSC metrics can serve

to detect organizational higher-level constraints at the

work-area and department levels. The senior manage-

ment team will have almost real-time knowledge to

help it allocate resources that alleviate the constraint

and move on to the next constraint. Figure 5 illustrates

how you can follow the trail.

Workforce-driven resultsThe BSC is a proven instrument to deploy strategy

and tie activities from all levels that help achieve the

strategic goals. The BSC can be used as the primary

instrument to achieve financial results with customer

satisfaction through better processes driven by the

workforce.

In the earlier example of Organization X, the core

Corporate BSC perspectives

Strategic objective Action plans Measures

Financials Lagging KPI

KPI = monthly operating costs and reported profits

• Validated total savings by management and customer.

• Total lowered operating costs.

• Validated revenue profits increase.

• Future improvement opportunities presented customer.

• Improve on leading KPIs starting with people perspective (PDCA cycle).

• Identify new lean Six Sigma projects.

• Update top-tier KPI metrics.

• Overall project cost savings reported.

• Corporate financial reports.

• LSSTOC projects savings presented.

Customer Leading KPI

KPI = customer satisfaction index

• Increase customer satisfaction.

• Retain existing customers.

• Win back lost customers.

• Reduce customer operating costs.

• Weekly meetings with customers.

• Teams evaluate products and services using QFD tools.

• Visit customer site monthly.

Organizationwide

• Customer satisfaction index.

• Percentage complaints.

Process Leading KPI

KPI = production throughput

Total averaged:

• Reduce cycle time.

• Reduce WIP.

• Increase throughput.

• Increase quality and yield.

• Complete LSSTOC projects that impact system constraints and voice of the customer priorities.

• Maintain organization metrics.

• Facilitate employee ideas to improve processes.

Organization averaged process metrics:

• Throughput.

• Cycle time.

• WIP.

• Quality yield.

People (priority) (Learning and growth) Leading KPI

KPI = employee retention rate

• Train and retain entire 100% of workforce to meet and improve ability to meet/exceed customer requirements.

• Develop and support genuine leadership and teamwork throughout organization.

• Involve entire workforce to improve work processes.

• Provide training for employees to improve processes.

• Senior leaders periodically visit work area.

• Conduct periodic team meetings with improvement agenda.

• Deploy an employee idea implementation system.

• Percentage of employees trained in lean Six Sigma and required job skills.

• Employee retention rate.

• Number of implemented improvement ideas per employee.

BSC = balanced scorecard KPI = key performance indicator WIP = work in progress PDCA = plan-do-check-act QFD = quality function deployment LSSTOC = lean, Six Sigma, Theory of Constraints

Department level BSC perspectives

Strategic objective Action plans Measures

Financials Lagging KPI

KPI = monthly department operating costs

• Validated savings by management and customer.

• Lower operating costs.

• Validated revenue profits increase.

• Future improvement opportunities presented customer.

• Improve on leading KPIs starting with people perspective (PDCA cycle).

• Identify new LSSTOC projects.

• Update and post department KPI metrics.

• Overall project cost savings reported.

• Corporate financial reports.

• LSSTOC projects savings presented.

Customer Leading KPI

KPI = customer satisfaction index

• Increase customer satisfaction.

• Retain existing customers.

• Win back lost customers.

• Weekly meetings with customers.

• Teams evaluate products and services using QFD tools.

• Customer satisfaction rating.

• Percentage complaints.

Process Leading KPI

KPI = production throughput

Department targets:

• Reduce cycle time

• Reduce WIP.

• Increase throughput.

• Increase quality and yield.

• Complete LSSTOC projects that impact system constraints and voice of the customer priorities.

• Deploy and maintain weekly/monthly work area metrics.

• Facilitate employee ideas to improve processes.

Department averaged process metrics:

• Throughput.

• Cycle time.

• WIP.

• Quality yield.

People (Priority) (Learning and growth) Leading KPI

KPI = employee retention rate

• Train and retain 100% of workforce to meet and improve ability to meet/exceed customer requirements.

• Develop and support genuine leadership and teamwork (cross-departmental, shop).

• Involve workforce to improve work processes within their area of influence.

• Provide training for employees to have skills to improve processes.

• Managers periodically visit work area.

• Conduct periodic team meetings with improvement agenda.

• Deploy a employee idea implementation system.

• Percentage of employees trained in LSSTOC and required job skills.

• Employee retention rate.

• Number of implemented improvement ideas per employee.

• Percentage of employees participating in improvements.

BSC = balanced scorecard KPI = key performance indicator WIP = work in progress PDCA = plan-do-check-act QFD = quality function deployment LSSTOC = lean, Six Sigma, Theory of Constraints

Unit/shop level BSC perspectives

Strategic objective Action plans Measures

Financials Lagging KPI

KPI = monthly shop operating costs

• Validated savings by finance department.

• Lower operating costs reported.

• Future improvement opportunities presented to management.

• Improve on leading KPIs starting with people perspective (PDCA cycle), continue lean and CI initiatives.

• Update and post shop KPI metrics.

• Overall project cost savings reported.

• Corporate financial reports.

• Lean Six Sigma projects savings presented.

Customer Leading KPI

KPI = customer complaints

• Increase internal customer satisfaction.

• 100% on-time delivery.

• Zero complaints.

• Weekly meetings with cross-functional teams.

• Root cause tools and analysis on complaints.

• Percentage of complaints from external customers.

• Percentage of complaints from internal customers

Process Leading KPI

KPI = production throughput

• Reduce cycle time

• Reduce WIP

• Increase throughput

• Increase quality and yield

• Complete selected area lean Six Sigma projects.

• Deploy and maintain weekly/monthly work area metrics.

• Facilitate employee ideas to improve processes.

Shop area process metrics:

• Throughput.

• Cycle time.

• WIP.

• Quality yield.

People (Priority) (learning and growth) Leading KPI

KPI = shop employee retention rate

• Train and retain 100% work area workforce to meet and improve ability to meet/exceed customer requirements.

• Supervisor leadership training.

• Involve 100% shop workforce to improve work processes within their area of influence.

• Provide training for employees to have skills to improve processes.

• Supervisor in work area daily.

• Conduct periodic team meetings with improvement agenda.

• Deploy a shop employee idea implementation system.

• Percentage employees trained in LSSTOC and required job skills.

• Employee retention rate.

• Number of implemented improvement ideas per employee.

• Percent of employees participating in improvements.

BSC = balanced scorecard KPI = key performance indicator WIP = work in progress PDCA = plan-do-check-act CI = continuous improvement LSSTOC = lean, Six Sigma, Theory of Constraints

Personnel BSC Evaluation Strategic Objective Action Plans Measures

Financials Lagging KPI

Performance KPI = work area cost avoidance savings.

• Validated work area savings.

• Validated 100% on-time delivery.

• Future cost saving improvement opportunities presented by your staff.

• Improve on leading KPIs starting with people perspective (PDCA cycle).

• Assure update and posted KPI metrics in your area of management.

• Work project cost savings reported.

• Corporate financial reports.

• LSSTOC projects savings presented.

Customer

Leading KPI = percentage on-time delivery to internal customer.

Set targets

• Increase internal customer satisfaction.

• 100% on-time delivery.

• Zero complaints.

• Weekly meetings with your customers.

• Maintain and post real-time percent delivery metrics.

• Internal Customer satisfaction index.

• Percentage of complaints

Process

Leading KPI = throughput.

Work area improvements with targets.

• Reduce cycle time.

• Reduce WIP.

• Increase throughput.

• Increase yield.

• Complete LSSTOC projects that impact work area constraints.

• Deploy and maintain weekly/monthly work area metrics.

• Facilitate employee ideas to improve processes in work area.

Work area metrics for process you manage.

• Throughput.

• Cycle time.

• WIP.

• FPY.

People (Priority) (learning and growth)

Leading KPI = supervised area employee retention rate

• Provide 100% training for your workforce.

• Develop and display genuine leadership to motivate your workforce.

• Lead workforce to improve work processes within their area of influence.

• Schedule technical and lean skills training.

• Conduct daily team meetings with improvement agenda.

• Implement daily ideas from employees in your work area.

• Percentage of employees trained in LSSTOC and job skills.

• Employee retention rate.

• Number of implemented improvement ideas per employee.

• Percent of employees participating in improvement.

BSC = balanced scorecard KPI = key performance indicator WIP = work in progress PDCA = plan-do-check-act LSSTOC = lean, Six Sigma, Theory of Constraints FPY = first pass yield

Work-area posted KPI metrics trend charts

People driving processes to satisfy customers to improve financials

Quarterlypercentageworkforcetrained.

Number ofemployeeimplementedlean ideasper month.

Quarterlyemployeeretention rate.

People

Monthlylead times.

Monthlyquality firstpass yield.

Monthlythroughput.

Process

Monthlycustomercomplaints.

Percenton-timedeliveries.

Customer

Vendor partsand materialscost reduction.

Workarea/shopsavings/costavoidance.

Financials

Corporate KPIs

Supervisor addressesresources and constraints withwork-area employees daily that

impact the BSC metrics.

Assessment Linking work-area activitiesupward through the BSC layersachieving strategic goals.

ManagementCommunicating strategydownward through companystructure into the work areas.

KPI = key performance indicator

Balanced scorecard (BSC) visible cascading structure / FIgure 4

QP • www.qualityprogress.com50

strategy was to improve processes to reduce cost, in-

crease customer satisfaction and be rewarded finan-

cially. The focus was on the BSC structure alone.

Of course, the BSC model must be fine tuned with

details of a real situation, requiring carefully selected

input from multilevel teams, and then linked to a mis-

sion and vision statement. Depending on your strategic

drivers and situation, your BSC could be noticeably dif-

ferent than the one in the example. The model is valid,

however, for organizations desiring a holistic approach

to improvement.

Incorporating people-driven LSSTOC and continu-

ous improvement activities as the priority method will

make the BSC a far more powerful tool and allow the

organization to correct inefficiencies, helping it achieve

targets set by KPIs.

Often, LSS projects get stuck inside a system, gener-

ating some results but nothing significant because they

don’t get the attention of senior managers. By working

with TOC in the cyclically aligned BSC model, LSSTOC

activities with limited resources can produce a greater

return on investment versus the dismal results that will

be achieved by spreading resources thinly throughout

the organization’s improvement projects.

The future of the BSC has the logical mechanism

to link LSSTOC and the scorecard as a cohesive force.

In doing so, organizations that cannot accomplish this

synergy will fall further behind in any attempt to gain

market share. QP

ACKNOWLEDGEMENTSThe author wishes to thank the founders of the Prioritized Scorecard system,

Mike Simms and Mike Fedotowsky.

BIBLIOGRAPHYGoldratt, Eliyhu, Theory of Constraints, North River Press, 1999.Goldratt, Eliyhu, and Jeff Cox, The Goal: A Process of Ongoing Improvement,

North River Press 2004. Kaplan, Robert S., and David P. Norton, The Balanced Scorecard: Translating

Strategy Into Action, Harvard Business Press, 1996.Olve, Nils-Goran, Jan Roy and Magnus Wetter, Performance Drivers: A Practical

Guide to Using the Balanced Scorecard, Wiley, 1999.

© 2010 Alexander Fedotowsky

Following metric trends upward, toward top-tier KPI metrics, can assist in identifying organizationwide system constraints that impede positive BSC results.

Top-tier BSC organization’sKPI Metrics

DepartmentBSC metrics

DepartmentBSC metrics

DepartmentBSC metrics

Unit BSCmetrics

Work-areaperformance

metrics

Unit BSCmetrics

Work-areaperformance

metrics

Unit BSCmetrics

Work-areaperformance

metrics

Unit BSCmetrics

Work-areaperformance

metrics

Unit BSCmetrics

Work-areaperformance

metrics

Unit BSCmetrics

Work-areaperformance

metrics

• Priority (red) constraint affecting BSC results, next constraint (yellow).• Provides the organization information on where to focus lean Six Sigma, TOC resources to make more of an impact for the top-tier KPIs.

BSC = balanced scorecard KPI = key performance indicator TOC = theory of constraints

Applying theory of constraints / FIgure 5

June 2010 • QP 51

BALANCED SCORECARD

ALEX FEDOTOWSKY is an internal lean Six Sigma consultant in the defense aerospace industry with L-3 Communications at Fort Rucker, AL. He has a bachelor’s degree in physics from the Massachusetts College of Liberal Arts in North Adams. Fedotowsky received his Master Black Belt from the Harrington Institute and is an ASQ-certified quality manager, software quality engineer, quality improvement associate and manager of quality and organizational excellence. He is an ASQ member.

QP • www.qualityprogress.com52

3.4 Per Million BY T.M. (TOM) KUBIAK

The Driving ForceCreating line of sight from strategy to process

Not loNg ago, I conducted a work-

shop at a client’s site to help develop a

pipeline of meaningful lean Six Sigma

(LSS) projects. Before I had a chance to

describe how I planned to conduct the

workshop, members of the client’s newly

formed project identification and selection

team began furiously rattling off project

after project.

One team member actually grabbed a

marker and began scribing on flip-chart

paper as other team members called out

ideas. This activity continued for about 15

minutes as I watched quietly and let the

situation play out.

When the commotion subsided, I

thanked them for their unsurpassed level

of enthusiasm as I retrieved a document

I received earlier that morning from the

CEO. The document was the organiza-

tion’s strategic plan.

I quietly thumbed through the document

as everyone watched and waited for me to

take control of the meeting. When I did, I

told them they had generated quite a list

in such a short period of time, and it was

evident they were proud. Side conversa-

tions suggested more than a few hoped the

meeting would be finished shortly.

Clearing my throat in a rather atten-

tion-getting manner, I asked with a fake

puzzled look on my face, “How do these

projects support the strategic plan I have

here in my hand?”

Of course, it was a rhetorical question.

The answer was obvious to anyone who

actually read the strategic plan. Many to

most of the projects did not link to the

strategy. A few other projects’ links to the

strategy were—at best—tenuous.

The silence was deafening as the audi-

ence looked back at me with blank stares.

Mind you, this was not the first time I’ve

received blank stares. Not wanting to

break the silence with noise, however, I

remained quiet, fully expecting several of

the team members to ask, “What do you

mean?” or “Why do we care?” And I was

not disappointed. Several individuals leapt

forth and spoke in unison.

“Glad you asked,” I sighed with relief.

“Let’s talk about that.”

Earlier that weekMany organizations that have implement-

ed LSS initiatives have frequently voiced

concerns or expressed disappointment

with the extent to which the initiative

has failed to advance the organization’s

business objectives. If you have ever had

the opportunity to revive several failed

implementations, this is not particularly

surprising, as many tend to follow a com-

mon path:

1. Hire some or all of the Master Black

Belts and Black Belts.

2. Now, hire the LSS leader.

3. Announce training opportunities.

4. Now, develop or purchase the training.

5. Fill training classes with whoever signs

up.

6. Belt candidates show up without a

project or sponsor.

7. Mad rush ensues to get any type of

projects for candidates.

8. Conduct training to the level of the

candidate.

9. Projects fail as sponsor loses interest

or transfers, or candidate transfers.

10. Organization blames lean Six Sigma.

At this point, you may think this is an

exaggeration and that no implementa-

tion can be that bad. But they can be that

bad—or worse. In fact, most of the 10

points listed in the pattern happened at

my client’s organization before I arrived

that day for the workshop.

Let’s not dwell on the list of 10, however,

and focus on item No. 7: “Mad rush ensues

to get any type of projects for belt candi-

dates.”

Earlier that week, training began as

scheduled. Most candidates, however, did

not arrive prepared with projects. Those

who did bring projects brought ones

that were trivial and, for the most part,

inappropriate for LSS. Realizing its initia-

tive had just ground to a halt, the client

decided to bring me in to help.

Herding catsIt was clear from the rumblings around

the table that many of the team members

did not understand the concept of busi-

ness planning and execution. They also

didn’t seem to understand how project

Equation for success / Figure 1

+ =Planning Execution Results

Only effective planning coupled with effective execution will yield the desired results.

June 2010 • QP 53

selection fit into the planning and execu-

tion process.

To help give them some perspective,

I showed them Figure 1, which illus-

trates—at a very high level—how planning

(regardless of level) combined with execu-

tion generates results. In the simplest of

terms, Figure 1 represents an equation

that can have profound effects on an orga-

nization’s survivability.

Figure 2 provides greater visibility into

the impact of the level of effectiveness

of planning and execution on results,

depending on the approach taken:

1. All dressed up and no place to

go. This approach is taken when an

organization has an effective plan-

ning process but doesn’t know how to

execute. When plans are deployed for

execution, chaos often ensues. At best,

this approach yields average results

(blue box).

2. Ready, fire, aim. Note the level of ef-

fectiveness of the processes is reversed

from the first approach. This approach

is chosen by organizations that don’t

know how to plan but do know how

to execute. While it is a foolhardy

approach, organizations choosing this

way falsely believe effective execution

can make up for poor planning. Like

the first approach, this approach, at

best, yields average results.

3. Going out of business. Organizations

that plan and execute poorly generally

don’t choose this approach. It’s usually

thrust upon them. Such organizations are

doomed to failure (burgandy box). The

only exception is the fourth approach.

4. Luck favors fools. This approach,

while identical to the third approach,

yields different results. There are the

occasional organizations that plan and

execute poorly and survive in spite of

their inabilities. Of course, some orga-

nizations like to cite their exceptional

results, as shown by the green box in

Figure 2.

Upon further review, however, it

often becomes clear a causal relation-

ship between planning and execution

processes and results is all but nonexis-

tent. Essentially, those positive results

occur by chance or pure luck. This can

be a dangerous situation for organiza-

tions to be in and is even worse when

they fail to recognize they’re in it.

5. Who dares, wins. This approach

occurs when planning and execution

are effective and are derived from a

thoughtful, directed effort. In this case,

results follow and business objectives

are achieved. Organizations choosing

this approach come out ahead over the

long haul.

At this point, most of the team mem-

bers were buying into the idea that effec-

tive planning and execution were required

to generate intended results. A few team

members were even beginning to ask de-

tailed questions regarding how project se-

lection fit into this process.

Creating line of sightFortunately, I never go anywhere

without Figure 3, (p. 54) which depicts

the complete flow of top-level planning

through process execution, culminating in

customer and shareholder value. Several

important aspects should be evident in

Figure 3, including:

• While the flow from strategy to process

is straight, planning must be system-

atically decomposed into manageable

Choose your own destiny / Figure 2

+ =Planning1. All dressed up

and no place to go.Execution Results

+ =Planning2. Ready, fire, aim. Execution Results

+ =Planning3. Going out ofbusiness.

Execution Results

+ =Planning4. Luck favors fools. Execution Results

+ =Planning5. Who dares wins. Execution Results

Level of effectiveness

Approach Level of effectiveness

Outcome

The relationship among the level of effectiveness applied to planning and executionand the results generally expected.

QP • www.qualityprogress.com54

elements (for example, tactical and

operational planning) to create visibility

and subsequent alignment to processes.

Often, tactical and operational planning

is abbreviated or completely forgotten

by organizations. When these detailed

plans are created, however, such

alignment can be achieved. Meaningful

projects can be identified, selected and

prioritized for execution. Furthermore,

this alignment between strategy and

process creates a driving force for busi-

ness success.

• Processes are executed. While this is

self evident to quality and LSS profes-

sionals, often it is not apparent to other

disciplines and professionals. When

processes are executed, work is ac-

complished and results are achieved.

When processes are improved, better

results are achieved. And, as we know,

LSS projects drive improvement at the

individual process level.

• The categorization of the processes

depends on the specifics of the organi-

zation, though those provided in Figure

3 are common. In fact, the suggested

categorization may be beneficial in

helping prioritize selected projects, as

stakeholders of the processes are some-

what evident.

After discussing Figure 3 in depth, I sur-

veyed the team again. This time, the blank,

lifeless stares were gone, replaced with

looks of agreement and comprehension.

They had finally seen how planning, execu-

tion and processes connect to projects.

Remember the strategic planLSS project identification and selection

requires significant thought and time in-

vestment if it is to advance an organization

toward its business objectives.

The organization’s strategic plan, which

supports its business objectives, must be

dusted off and disseminated so it can serve

as the foundation for more detailed levels

of planning—in this case, tactical and

operational planning.

Tactical and operational planning helps

create visibility and subsequent alignment

to processes. After this visibility and align-

ment is created, LSS projects can be more

easily identified, selected and prioritized.

Projects can then be executed to drive

process improvement, which further en-

hances customer value and, consequently,

shareholder value or return.

One last thing worth mentioning: The

project identification and selection team

members reported directly to the CEO. QP

BIBlIogRaPHYBlazey, Mark L., Insights to Performance Excellence 2009-

2010: An Inside Look at the 2009-2010 Baldrige Award Criteria, ASQ Quality Press, 2009.

Kubiak, T. M. and Donald W. Benbow, The Certified Six Sigma Black Belt Handbook, ASQ Quality Press, 2009.

Reidenbach, R. Eric and Reginald W. Goeke, “Six Sigma, Value and Competitive Strategy,” Quality Progress, July 2007, pp. 45-49.

T.M. (TOM) KUBIAK is president and founder of Performance Improvement Solutions, an independent consulting organization in Weddington, NC. He is co-author of The Certified Six Sigma Black Belt Handbook. Kubiak, a senior member of ASQ, serves on many ASQ boards and committees, and is a past

chair of ASQ’s Publication Management Board.

the driving force / Figure 3

A clear line of sight exists from strategy through process.

Shareholdervalue

Customervalue

People,processes

Supplierprocesses

Customerprocesses

Supportprocesses

Operationalprocesses

Operationalplanning

Tacticalplanning

Businessstrategy

ResultsExecutionPlanning

External(customer orregulatory)

requirements

Businessobjectives

3.4 Per Million

Career Corner BY greg hutchins

School of Hard KnocksApplying lessons learned from promoting risk management

the first thing that came to mind as I

was thinking about this column was that I’d

share my experiences in launching a new

product and some of the hard lessons I’ve

learned on pitching—almost daily—proj-

ects and solutions to customers.

As you’ve probably gathered from

reading my recent columns, I’m concerned

about the future of the quality profession.

If I had to distill it, the prevailing quality

query has been: “Everyone is responsible

for quality, and if everyone’s responsible

for the quality of their work, what’s the role

of today’s and tomorrow’s quality profes-

sional?”

It’s a tough question with no easy

answer. My crystal ball shows some form

of risk management becoming the core of

quality management, and with that comes

good news and bad news.

First, the bad. I’ve been advocating

this theme for more than six years, and I

have often heard boos from many quality

naysayers. The good news is that during

the last six months, the evangelizing push

has become a pull. Quality professionals

are much more responsive and accepting

of risk management.

Here are some of the difficult lessons

I’ve learned from being a risk management

evangelist that can be applied to any career

or job.

Develop a unique value proposi-

tion. My firm’s is: “Risk management is the

future of quality. Period.” It’s simple, clear

and direct. It says risk management is criti-

cal to the livelihood and career advance-

ment of today’s professional. What’s your

unique value proposition?

Love your cause. My colleagues and

I got into quality because we wanted our

clients to be more competitive through

continuous improvement. It was a great

mission that worked for many years. Now,

our cause and mission is enterprise risk

management. Our clients want to capitalize

on upside risk and mitigate downside risk.

This is where we think you should go to

add value and kickstart your career.

Accentuate the positive. I pitch risk

management daily, and my mission is to

create a cause and generate energy around

the subject. Often, I’m tired of saying the

same things over and over again. At the end

of the day, I can hear fatigue in my voice or,

even worse, in the reaction—or lack of re-

action—from potential supporters. I realize

I need to maintain my enthusiasm. People

don’t respond well to negativity. They want

to hire and retain positive employees and

consultants.

See problems from the employer’s

side. Work is getting tougher for all of

us, but look at the challenges from the

employer’s point of view: margins are razor

thin, sales are flat, costs continue to rise,

and employers are passing the pain to

employees.

Is it fair for us? No, but we’re still

seeing the effects. Promotions and salary

increases aren’t as prevalent, and some

employers are asking for furloughs or give-

backs in salary, perks or benefits.

It’s tough out there for all employers

and employees, so before you say anything

about your boss or employer, take a mo-

ment and see it through his or her eyes.

Be overly courteous and thankful. If

you have decent-paying job, be thankful. If

you’re looking for a job, be overly courte-

ous and thankful. As an employer, we look

for folks who are courteous and have char-

acter. Unfortunately, there are still folks

who react to the market like it is time to

party, as was the case five years ago. This

attitude is especially toxic in these times

and will kill career and job opportunities.

Focus on your boss’s needs or your

client’s expectations. Your boss or client

has never seen or experienced this type of

economic downturn. He or she is wonder-

ing what to do and is looking to employees

for support and to consultants for solu-

tions. If you can’t give it to your boss or

client, they don’t need you and someone

else will fill your spot.

These are just some of the difficult

lessons I’ve learned. Being optimistic and

accentuating the positive may be the tough-

est thing to do in today’s economic climate.

People don’t want grumps—having a good,

even great, attitude may be one of the most

important things a person needs to survive,

prosper and excel in today’s workplace. QP

risk management is critical to the livelihood and advancement of today’s professional.

GREG HUTCHINS is the principal engi-neer with Quality Plus Engineering, a critical infrastructure protection firm headquartered in Portland, OR. He is a member of ASQ.

June 2010 • QP 55

QP • www.qualityprogress.com56

Seek and You Shall FindQuality manager uses web to net training for his employer

in march 2009, I joined a small com-

puter numerical control (CNC) job shop’s

management team as quality manager.

I started there after working in quality

management for 11 years, gaining experi-

ence developing new projects, launch-

ing new programs and participating in

automotive advanced product quality

planning program management.

At the job shop, I spent my early days

observing and learning who was who. I

also spent time evaluating how well the

ISO 9001 standard was being met and,

subsequently, identifying gaps that could

be filled quickly and others that needed

long-term attention.

In those early days, I could not find

any training records and started asking

other managers what training had taken

place and who had the records. You

might say my questions were met with

silence and slight smiles.

Have you ever volunteered for an

initiative and then wondered what your

total responsibilities would include?

After volunteering, I learned that 100%

of the ISO 9001 training and quality man-

agement system (QMS)-related training

responsibilities fell on me; HR and other

department managers didn’t have an

obligation.

There were zero records and zero

training initiatives for the past four years,

and on top of this, the next ISO 9001

third-party audit was scheduled to occur

within four months.

Filling in the gapsA big part of a fully functioning QMS

includes training, comprehension and

effectiveness verification. All training

should be documented, even if using a

simple Word table or Excel spreadsheet.

I knew I could not recreate history,

so one of my first action items as qual-

ity manager was to

develop a realistic

training plan that

included the major-

ity of the plant and

covered the next year.

The plan I developed

documented training

using existing training

forms and recording

methods.

Training the quality

personnel who report-

ed to me was easy. The

problem with plant-

wide training, however,

was getting people released from work

tasks for training and specifically fitting

the QMS training to them.

To figure it out, I spent break time

and lunch time searching the internet. I

used Google and typed in keywords ap-

plicable to the plant and industry. Doing

it this way saved time and resources.

The power of the search is yours to

control—you can start with keywords

and then search further by clicking on

“similar” after the search result appears

in the header.

I searched keywords that included

“CNC,” “manufacturing” and “training”

and found an article written for a tooling

magazine within the past year. The article

featured a Wisconsin-based CNC plant

similar to ours that obtained state fund-

ing to support and help subsidize lean

training for all employees.

The article was well written and told

a good story. Better yet, the article gave

me some ideas and solutions to use in

developing a long-term plantwide training

plan.

I searched the internet again, spe-

cifically for “Illinois” (my state),” “lean,”

“training” and “funding” and found

information and contacts for the Illinois

Manufacturing Extension Center (IMEC).

I identified a local contact, set up a

program-review meeting and invited the

job shop’s HR manager and operations

manager.

The power of the search is yours to control.

QualitY in the FirSt PerSon BY garY knapp

Up and runningTo make a long story short, within two

face-to-face IMEC meetings, an IMEC-

facilitated lean 101 course was planned

and implemented for completion before

the end of the year.

The IMEC program’s value-added

features included: an established pro-

gram ready to implement, a state-funded

program with funds available for applica-

tion, experienced trainers, and a proven

training plan and program with numerous

success stories.

The best sales feature—from manage-

ment’s perspective, anyway—was that

the state paid 50% of the training cost

through federal funds acquired specifi-

cally for this type of manufacturing devel-

opment in Illinois.

One basic need for a successful lean

program is baseline training across the

organization. Our training was successful

because it included plant operators and

set-up personnel, as well as engineers

and managers. Our next steps include:

• Establishing lean teams.

• Walking the plant seeking unused,

wasted and misplaced items.

• Implementing a 5S action plan with

frequent plant walks and audits.

• Getting people engaged and involved.

In the age of search engines and more

and more business systems transitioning

to electronic media, finding good bench-

marking information is easy. If you need

information, gap closure, ideas, recom-

mendations or any sort of help, start with

internet search engines to find what you

need. QP

author’s note If your plant is located in Illinois, contact IMEC for training and personnel development support. If you are located in another state, search the internet and find your options. Other search options include the national Institute of Standards and Technology at www.nist.gov. From there, find the Hollings Manufacturing Extension partnership (MEp) Inc. There you can learn more about MEp and its training, including lean.

June 2010 • QP 57

gary knapp is a quality manager at Faurecia in Dexter, MO. He earned his bachelor’s degree in political science and economics from University of Maryland University College, in College park. knapp is a senior member of aSQ and a certified quality manager, mechanical inspector, quality technician, quality auditor and quality engineer.

share your storyDo you have an interesting story about how you used quality in your personal life or how you came to work in quality? if so, e-mail your column for consideration for a future issue of QP to editor@asq.org.

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QP • www.qualityprogress.com58

StatiSticS Roundtable BY RogeR W. HoeRl and Ronald d. Snee

tried and trueOrganizations put statistical engineering to the test, see results

A review of pAst Statistics Roundta-

ble columns reveals that statisticians and

quality professionals are always looking

for better ways to increase the breadth

and effectiveness of the use of statistical

thinking and methods.

In last month’s column, we introduced

statistical engineering as an approach that

links statistical thinking with statistical

methods and provides a mechanism for

improving the effectiveness of statistical

thinking and methods.1

Statistical engineering works because

statistical concepts, methods and tools

are linked and sequenced, based on sound

science and embedded in work processes

with the aid of software. Embedding—in-

cluding statistical methods in the standard

operating procedures for business pro-

cesses—is a powerful method of institu-

tionalizing the proper use of statistical

methods.

Statistical engineering is effective in

solving problems and improving pro-

cesses. What follows are several cases

illustrating how statistical engineering is

used and the breadth of its application.

Transactional processesThe first example of statistical engineering

is improving the performance of a trans-

actional process: the process of collecting

money from those who are past due on

their accounts.

Statistical thinking and methods, as

well as proper use of data, can be imbed-

ded into the operation of the process to

improve performance and to institution-

alize this improved approach. Table 1 illus-

trates some simple ways statistical think-

ing and methods can be imbedded in such

a process. The statistical tools involved

include process maps, run charts, control

charts, Pareto charts, measurement sys-

tem analysis using attribute measurement

studies, and design of experiments (DoE).

Perhaps the only method requiring

some explanation is the use of DoE to

improve collection strategies. In fact, DoE

has many potential applications in the

service industries.2 This first example is

based on actual DoE applications in col-

lections at General Electric (GE).3

In this case, GE’s credit card division

had many collectors attempting to find

customers who owed money on their

cards, but they could not be found at the

address or phone numbers on record.

Many of these customers were willing to

pay, but GE had no way of getting them

their bills.

Unfortunately, each collector had his

or her own process, usually involving

multiple external data sources, such as

external credit agencies, public records or

other GE credit-card files.

By applying DoE to identify the most

effective collection strategy, GE was able

to standardize the approach taken by col-

lectors, resulting in additional collections

of almost $3 million per year.

At GE, the contribution of statistical

engineering was to identify how methods

effective in one application arena could

also be applied in a new arena—collec-

tions—and also to ensure the ongoing ap-

plication of these methods by embedding

them into standard work processes.

Managing product qualityAnother tangible example of statistical

engineering in the field of quality improve-

ment is the Product Quality Management

System (PQM) developed at DuPont in

the 1970s. PQM is an overall framework

for managing the quality of a product or

service. It provides an operational system

that enables marketing, R&D, production

and support personnel to work together

to meet increasingly stringent customer

requirements.

In his 1986 American Statistical As-

sociation Invited Presidential Address, Du-

Pont CEO Richard E. Heckert commented:

“Within two years, product quality had

improved to the point of commanding a

marketplace advantage, and more than

$30 million had been gained in operating

cost improvements. The statistically based

PQM system developed for ‘Dacron’ [a

polyester fiber] was expanded to other

products with further contributions in

earnings.”4

The statistical tools embedded in the

PQM approach included:

• Product and process sampling

schemes.

• Product lot release methods.

• Analysis of variance and variance com-

ponents.

• Cumulative sum control chart process

control.

• Shewhart control.

• Interlaboratory studies of measurement

methods.

• DoE.

• Response surface method.

• Data graphics.

A training system was also in place

to provide DuPont staff with the needed

knowledge and skills to use PQM.

Managing product quality was empha-

sized the tools were not. This was evident

June 2010 • QP 59

tried and trueOrganizations put statistical engineering to the test, see results

in the role definitions of PQM statisticians

and quality professionals found in DuPont’s

PQM manual in 1988:

• Leaders in developing their organiza-

tion’s strategy for quality management.

• Leaders in developing technology sys-

tems for quality management.

• Participants in the business planning

process.

• Participants in problem-solving activi-

ties.

• Leaders in initiating and implementing

quality management training systems.

This manual, which goes back more

than 20 years, indicates that the roles of

statisticians and quality professionals

are different when embedding statistical

thinking and methods in the processes

used to operate the business. Leader-

ship is required by those using statistical

engineering. This example illustrates

the leadership role needed to implement

statistical engineering by connecting sta-

tistical tools with statistical thinking. This

was illustrated in Figure 1 in last month’s

Statistics Roundtable column.5

The contribution of statistical engineer-

ing in this example was to integrate vari-

ous techniques (statistical and otherwise),

software, a training system, a manual

and new roles for statisticians and qual-

ity professionals into an overall quality

management system to improve quality at

lower costs.

In essence, the whole was greater

than the sum of the parts. This difference

was the unique contribution of statistical

engineering.

Streamlining experimentationAnother example involves streamlining

experimentation. This application of

statistical engineering was developed at

DuPont in the 1960s and was offered in

public workshops beginning in the 1970s.6

The strategy identifies three experi-

mental environments: screening, charac-

terization and optimization. The strategy

sequences and links a variety of experi-

mental designs that are used depending on

the experimental environment.

The screening phase explores the

effects of a large number of variables

with the objective of identifying a smaller

number of variables to study further in

characterization or optimization experi-

ments. Screening studies typically use

fractional-factorial and Plackett-Burman

designs to collect data. Additional screen-

ing experiments involving additional

factors may be needed when results of

the initial screening experiments aren’t

promising. On several occasions, we’ve

seen the screening experiment solve the

problem.

In the characterization phase, we try to

better understand the system by estimat-

ing interactions and linear (main) effects.

Here, full-factorial and fractional-factorial

designs are used.

In the optimization phase, we develop

a predictive model for the system to find

useful operating conditions through re-

sponse surface contour plots and perhaps

mathematical optimization. Response

surface designs are used to collect data in

these studies.

This screening, characterization and

optimization (SCO) strategy actually

embodies several substrategies that are a

subset of the overall SCO strategy, namely:

• Screening-characterization-optimiza-

tion.

• Screening-optimization.

• Characterization-optimization.

• Screening-characterization.

• Screening.

• Characterization.

• Optimization.

The end result of each of these

sequences is a completed project. There

is no guarantee of success in a given

instance, only that SCO strategy will

increase your chances of succeeding.

The strategy used depends on the ex-

perimental environment. These charac-

teristics involve program objectives, the

nature of the factors (Xs) and responses

(Ys), resources available, quality of the

information to be developed and the

theory available to guide the experiment

design and analysis. A careful diagnosis

of the experimental environment along

these lines can have a major effect on

the success of the experimental pro-

gram.7

Methods Purpose

incorporate flowcharts into training materials.

document and communicate collections process purpose and critical steps in process operations.

define and monitor critical process measurements using run charts and control charts.

define objective work standards; properly interpret process performance over time.

create monthly Pareto charts of the causes of defaulted accounts.

Quantify root causes of major ongoing issues.

develop formal procedures for analysis of discrete measurements prior to implementing Pareto charts.

ensure causes of defaulted accounts can be accurately measured; document measurement uncertainty.

develop formal procedures for applying designed experiments to improve collection strategies.

use scientific approach to ensure all collectors are using the best-known approaches.

statistical engineering to improve a collections process / table 1

QP • www.qualityprogress.comQP • www.qualityprogress.com60

StatiSticS Roundtable

Statistical engineering contributes by

taking proven DoE techniques, which are

often researched and taught in isolation

from one another, and integrating them

into an overall experimentation strategy.

This strategy allows practitioners to

achieve greater results than they could

achieve using the same DoE techniques in

isolation.

Improving sales and operationsJames L. Hess, vice president of operations

services at Leggett and Platt, described

another use of statistical engineering that

helped the the company improve its sales

and operational planning process, which

of course is a critical business process.8

This example involved embedding

statistical modeling and forecasting

methods within the demand planning part

of the process. Using data and applying

proven statistical methods are integral

to the business process, as is the com-

mercial software used to support the

workflows.

The statistical tools used included

Bayesian time series techniques for

modeling data. These techniques were

tailored to the application.

For example, if adequate data were

available, seasonality was incorporated

into the models. Rather than relying solely

on statistical methods, the models were

constructed and used to make forecasts

that can be revised based on outside

information, integrating statistical and

knowledge-based approaches.

The main benefits came from reduced

inventories for the same customer service

level and production efficiency. This freed

cash and reduced expenses associated

with carrying inventory. One of the most

significant benefits was the reduced op-

portunity for slow-moving and obsolete

inventory.

A smaller part of the business case

is improved labor efficiency. While the

financial impact of this approach is com-

pany confidential, Hess reported that this

business process approach contributed

significantly to the company’s bottom

line.

In this case, the contribution of sta-

tistical engineering was embedding the

methods to ensure institutionalization,

integration of statistical and knowledge-

based approaches, and tailoring the

Bayesian time series approach so it could

differentiate between cases with enough

data for seasonality estimation and cases

that didn’t have enough data.

Underlying theoryThe reasons for the effectiveness of

statistical engineering can be seen when

you consider the theory underlying its use.

We believe there are at least five aspects of

this theory:

1. A system or strategy to guide the use of

statistical tools is needed to effectively

use the tools.

2. The impact of statistical thinking and

methods can be increased by integrat-

ing several statistical tools, enabling

practitioners to deal with highly com-

plex issues that cannot be addressed

with any one method.

3. Linking and sequencing the use of

statistical tools speeds the learning of

the approach, thereby increasing the

impact of the method.

4. Embedding statistical thinking and

tools into daily work institutionalizes

their application.

5. Viewing statistical thinking and meth-

ods from an engineering context pro-

vides a clear focus on problem solving

to the benefit of humankind.

Over time, as statistical engineering is

used, this theory will be challenged and

revised as more is discovered. As a result,

the breadth, depth and effectiveness of sta-

tistical thinking and methods in practice

will increase—an objective on which the

vast majority of statisticians and quality

professionals can agree.

Realizing the promise Statistical engineering provides a thought

process that enables you to integrate,

link and sequence statistical tools in a

way that facilitates embedding the tools

in processes and systems used to run the

business. As a result, the sustainability of

the benefits on the problem solution or

process improvement is increased.

Broad use of statistical engineering will

move us closer to realizing the promise of

statistical thinking and methods. Leader-

ship by statisticians and quality profes-

sionals is required to effectively apply

statistical engineering. Assuming leader-

ship will result in impactful roles for those

who accept the challenge. QP

refereNCes1. Roger W. Hoerl and Ronald d. Snee, “Closing the gap,” Qual-

ity Progress, May 2010, pp. 52-53.2. J. ledolter and a.J. Swersey, Testing 1-2-3: Experimental De-

sign With Applications in Marketing and Sales Operations, Stanford Business Books, 2007.

3. gerald J. Hahn, necip doganaksoy and Roger W. Hoerl, “The evolution of Six Sigma,” Quality Engineering, Vol. 12, no. 3, 2000, pp. 317-326.

4. Richard e. Heckert, “Presidential Invited address,” ameri-can Statistical association annual Meeting, Chicago, 1986.

5. Hoerl and Snee, “Closing the gap,” see reference 1.6. Ronald d. Snee, “Raising Your Batting average,” Quality

Progress, december 2009, pp. 64-68.7. Ibid. 8. author communication with James l. Hess, 2009.

BiBLioGrApHYRoger W. Hoerl and Ronald d. Snee, “Moving the Statistics

Profession Forward to the next level,” The American Statistician, February 2010, pp. 10-14.

© 2010 Roger W. Hoerl and Ronald d. Snee

ROGER W. HOERL is manager of GE Global Research’s applied statistics lab. He has a doctorate in applied statistics from the University of Delaware in Newark. He is an ASQ fellow and a recipient of the ASQ Shewhart Medal and Brumbaugh Award. Hoerl is also an Academi-

cian in the International Academy for Quality.

RONALD D. SNEE is president of Snee Associates LLC in Newark, DE. He has a doctorate in applied and mathematical statistics from Rutgers University in New Bruns-wick, NJ. Snee has received the ASQ Shewhart and Grant medals, and is an ASQ fellow and an Academician

in the International Academy for Quality.

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66 QP • www.qualityprogress.com

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67June 2010 • QP

QP • www.qualityprogress.com68

StandardS OutlOOk BY J.P. Russell

Better togetherAn audit is meaningless without effective follow-up

ConduCting an audit correctly is

important because if it’s done wrong, the

results may not be credible. But even if

everything was done appropriately, follow-

ing up on the findings is just as important

because it gives meaning to the audit.

The two actions—the audit and the

follow-up—must go together for an audit

program to be effective. While the audit

gathers information about the existing

process or system, the follow-up audit

gathers data about auditee (or process

owner) actions to fix problems found dur-

ing the audit.

Consistent conclusionsIn a process or system audit, there are

findings and an audit conclusion that

should be consistent with the findings.

Findings may include conformity and

nonconformity statements, opportuni-

ties for improvement and systemic issues

regarding the effectiveness and efficiency

of the management system. Conclusions

may require maintaining the status quo,

adjusting the amount of oversight or rec-

ommending awards such as a certification

or license to operate.

Findings of conformity may require

no follow-up. Conformity indicates the

system operates according to the require-

ments and is effective. This gives manage-

ment confidence the organization goals

and objectives will be achieved.

If there are nonconformities, the audi-

tee is responsible for taking action. A non-

conformity (noncompliance) may result in

the auditee taking remedial or corrective

action. The audit should be followed up

to verify the agreed-on corrective actions

were taken.

It is the responsibility of the auditee to

keep management informed of the status

of actions taken. Corrective actions can be

followed up as a separate audit or as part

of a subsequent regularly scheduled audit.

Timing to address nonconformities may

depend on the importance or urgency of

implementing a solution. The follow-up

may be conducted by a member of the

audit team or other person assigned by

management.

If an audit is conducted on a prospec-

tive supplier to determine its capability to

meet customer requirements, following

up on actions to address nonconformities

may not be necessary.

If remedial actions were taken, it may

be appropriate to stop or discontinue

them at an agreed-on time. Some reme-

dial actions—such as sorting, containing,

selecting and extra checking—increase

costs and should be stopped when the cor-

rective action is implemented. If remedial

actions become part of the solution, the

extra costs should be justified.

Making the correctionIn many cases, nonconformities and

findings are systemic and require cor-

rective action to eliminate the cause of

the nonconformity, defect or undesirable

situation.

Eliminating the cause will ensure the

problem does not recur as a result of

the same cause. It’s necessary to verify

that corrective actions are effectively

implemented and reviewed to ensure the

action taken was suitable, adequate and

effective.

Use the following checklist to verify

implementation of the corrective action:

• Are people aware of the change and the

reason behind it?

June 2010 • QP 69

Not addressing opportunities for improvement is minimal thinking rather than maximum thinking.

• Was there training?

• Were documents changed?

• Were responsibilities defined?

• If affected, was the customer notified?

• Is the change being followed consis-

tently?

We want the corrective action to fix the

problem. This is where the audit program

pays back the organization. The person

reviewing the implemented corrective ac-

tion must verify the cause was eliminated

by ensuring the output process goals and

objectives have been achieved.

The request for corrective action

should be assigned to the process owner

or a team to determine the root cause

and actions to eliminate the cause of the

problem. The approved corrective action

plan should include measures to deter-

mine whether the corrective action was

effective.

The measures should include output

or deliverables of the process, as well

as process capability (effectiveness and

efficiency). The person reviewing the cor-

rective action should use the measures to

determine whether the corrective action

was effective. Quantifiable measures must

be used to determine effectiveness.

Output measures may include product

characteristics, delivery of a service, prod-

uct use, service deliverables and customer

feedback in the form of complaints or

surveys. Process measures may include

monitoring efficiency (cost), consistency

and variation.

The output of a process may include

product and service deliverables, such as

treatment, product or venue rental, plan-

ning, delivery of a product, application of

expert knowledge and benefit plans. It’s

important to look at the product and the

process because a solution to eliminate

causes of a problem should not come at

the expense of process effectiveness and

efficiency.

To verify the effectiveness of the cor-

rective action, use this checklist:

• Were output measures defined and

achieved?

• Were process measures defined and

achieved?

• Are processes capable?

• Are there records?

Don’t let it happen againDepending on the purpose of the audit,

opportunities for improvement—including

potential nonconformities, problems or

undesirable situations—may be observed

and reported. Preventive action eliminates

the cause of the potential nonconformity,

problem or undesirable situation.

Preventive action is proactive, and

corrective action is reactive. The person

checking preventive actions should follow

a path similar to the one for checking cor-

rective actions.

Many organizations do not require

improvement opportunities be addressed

by the auditee (process owner). Because it

is not a nonconformity (noncompliance),

management has the option of addressing

it or not. But why not require improve-

ment opportunities be addressed? Not

addressing opportunities for improvement

is minimal thinking rather than maximum

thinking.

If a person conducting an audit or

observing a process thinks there is an

opportunity to improve it, why not follow

up? It is interesting that organizations de-

velop programs to nurture feedback from

employees but dismiss improvement op-

portunities from an audit because it is not

required to be compliant with a standard.

It’s about timeTiming is everything. This is true when it

comes to checking corrective actions. If

you are auditing a management system

for the first time and find the procedures

have only recently been issued, what can

you conclude based on your assessment?

Do you have confidence the procedures

are effective? Corrective and preven-

tive actions should be implemented and

reviewed at agreed-on times.

Timing the review of corrective or

preventive actions after implementation

will vary, depending on the nature of

the actions, industry and organization

culture. I would start with a minimum of

three months for the initial review of the

actions taken. The final review could be

scheduled for 12 months from the initial

implementation.

Why perform a second review? Be-

cause you must ensure the actions taken

are sustained. You want to ensure the

actions taken are fully integrated into the

management system. It may seem like

extra work, but after you truly eliminate

causes of problems and potential prob-

lems, resources are freed to advance and

improve the organization.

You may want to follow the same steps

to review innovative actions taken to

change a process or system to better meet

organization objectives.1 For example,

innovative actions may address objectives

to control costs, improve safety, lower risk

or improve customer satisfaction.

After the final review is complete,

close out the corrective or preventive

action request and celebrate the team’s

QP • www.qualityprogress.com70

StandardS OutlOOk

success and the benefits realized for the

organization. It is time for interviews,

news releases and awards. Perhaps an

annual meeting would be a good time to

recognize contributions.

Uh-ohOccasionally, the cause of the problem or

undesirable situation is not eliminated.

This shouldn’t happen, but it does.

Either the approved corrective or pre-

ventive action plan did not eliminate all

the causes, or it didn’t eliminate the right

cause. If the corrective action is not effec-

tive, it needs to be recycled. If you recycle

several corrective actions each year, you

should revalidate the corrective action

and problem-solving processes.

As an auditor, I have reviewed ap-

proved corrective actions that were

nothing more than remedial action. The

so-called corrective action may appear to

be effective because the measurements

are wrong. What should an auditor do? Is

the auditor there to verify that the planned

corrective actions were implemented? Or

should the auditor report that the correc-

tive action plan was wrong from the very

beginning?

On one hand, ISO 19011 and the ASQ

certified quality auditor body of knowl-

edge emphasize the importance of auditor

competency. A competent auditor should

report his or her assessment of the situa-

tion and request that the corrective action

be recycled.

On the other hand, if an auditor (or

other person assigned follow-up responsi-

bilities) questions the creditability of the

corrective action, the auditee (process

owner) may become defensive. In re-

sponse, management of the auditing orga-

nization (or department that approved the

corrective action plan) may also become

defensive.

In the midst of this back and forth, the

auditor (or person assigned to follow-up)

feels like the target. If that individual

is assumed to be competent, his or her

judgment should stand without ques-

tion. At that point, there should be a

process to address this situation, such as

a higher-level review by people who are

free of bias.

Results come from checking, not ex-

pecting.2 All agreed-on action items must

be checked, which requires minimal time

and resources for well-managed organiza-

tions with a sharing and trusting culture.

Verification of corrective actions closes

the loop on actions to fix problems or

implementation of improvements. Closing

the loop ensures your organization ben-

efits from your audit program and other

assessment activities. QP

RefeRenCes1. J.P. Russell, Continual Improvement Assessment Guide,

AsQ Quality Press, 2004, p. 38.2. Ibid., p. 2.

follow meHave you seen an audit fall apart because of a lack of follow-up? Post your story on the QP discussion board at www.asq.org/discussionBoards (case sensitive), or e-mail it to editor@asq.org.

J.P. Russell is president of J.P. Russell & Associates in Gulf Breeze, Fl. He is also managing director of and provides training for QualityWBT Center for education. Russell is an AsQ fellow, AsQ-certified quality audi-tor, voting member of the American National standards Institute/AsQ

Z1 committee and member of the u.s. technical advisory group for International Organization for standardization technical committee 176. In 2008, Russell received the Paul Gauthier AsQ Audit Division award. He is the editor of The AsQ Auditing Handbook, third edition, and author of several AsQ Quality Press books, including The Process Auditing and Techniques Guide, second edition.

shaReYouR QualitYJouRneY

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2

Epoxy resinImpco’s Imseal-800 seals visible poros-

ity in castings and other metal parts. It

permanently fills blowholes, cracks and

other defects in situations where welding

or brazing would be impractical. The clear

sealant is ideal for laminating, potting

and encapsulating. The sealed area is

pressure-tight and can be drilled, tapped,

machined and processed.

Imseal-800 comes in a premeasured

packet. The epoxy and activator are

mixed before the packet is opened, and

the packaging itself can be used as the

applicator. It cures at room temperature

or can be accelerated by heat. It has

a Rockwell hardness of 97, a tensile

strength of 9,000 psi, a compressive

strength of 35,000 psi and a compressive

yield of 16,500 psi.

• Call: 401-521-2490.

• Visit: www.impco-inc.com.

Inspection probesRenishaw’s RLP40 and OLP40 inspection

probes offer a choice of signal transmission

technologies—radio or optical. Measuring

40 x 58.3 mm, the probes provide unidirec-

tional repeatability of 1µm. Both designs

are hardened and sealed to withstand

extreme environments typical of lathes

and turning centers. An eyelid protection

system prevents entry of chips that could

damage the probe’s internal parts.

The RLP40 probe and its interface con-

tinually hop from one transmission channel

to another, delivering signal robustness

and flexibility through frequency switching.

Radio transmission allows communication

between the probe and the interface, even

when line of sight is lost. The OLP40 uses

modulated optical transmission for high

resistance to light interference, and its 360°

transmission system allows the probe to

operate in any orientation.

A wide range of shanks is available,

including parallel and tapered designs, for

flexibility when mounting the probes in a

lathe or turning center turret.

• Call: 847-286-9953.

• Visit: www.renishaw.com.

Self-regulating heating cableEasyHeat has introduced SR Trace, a self-

regulating heating cable that varies its heat

output with changes in the surrounding

temperature. Because of the self-regulating

feature, it can be safely wrapped over itself

when installed on pipes, valves or flanges.

SR Trace cables provide freeze protec-

tion for plastic or metal pipes and vessels

at temperatures as low as -40º F. The

cables will also maintain liquids in pipes at

a constant temperature to prevent degra-

dation of the liquid or to preserve required

QP • www.qualityprogress.com72

QPTOOLBOx

June 2010 • QP 73

viscosity for flow conditions.

SR Trace cables feature tinned copper

bus wires, a copper ground braid, a flame-

retardant thermoplastic elastomer jacket

and a modified polyolefin over jacket. They

are available in power densities of 3, 5 and

8 watts per foot at 50º F.

• Call: 800-537-4732.

• Visit: www.easyheat.com.

Magnifying lamp The Daylight Co. has released the ESD

Ultra Slim Magnifying Lamp, which pro-

vides protection against static electricity

and electrostatic discharge (ESD). The

lamp features 28 W efficiency with the

combined power of a 7 in.-wide glass

magnifying lens, 1.5 in. diopter swing arm

lens, 6,500 Kelvin light spectrum and super

magnification.

The entire lamp is fully grounded and

has special dissipative materials to remove

static charges and prevent buildup of

static electricity. This lamp helps solve one

of the biggest problems facing manufac-

turers, testing agencies, repair facilities

and other industrial users: how to work in

environments that are prone to ESD.

• Call: 212-687-1765.

• Visit: http://us.daylightcompany.com.

Mini parallel gripper Techno-Sommer Automatic has ex-

panded its MGP800 series line of mini

parallel grippers with flat guides. The

grippers are designed for use in smaller

electronic or medical applications,

assembly and multiple pick-and-place

applications. They are available in eight

different sizes.

The MGP800 series uses a hardened

steel flat guide to ensure maximum

force and movement resistance. The

grippers have up to 400 N grip force

and a range of 1-12 mm stroke per

jaw. Magnetic sensors can be mounted

to sense the jaw position allowing for

positive feedback.

• Call: 800-819-3366.

• Visit: www.techno-sommer.com.

Internal and external connectors FasTest TwistMate internal and exter-

nal connectors feature stainless steel

construction for durability and corro-

sion resistance. TwistMate connectors

provide a seal that is a leak-tight connec-

tion to threaded pipe without the use of

wrenches and thread sealants. They are

ideal for a range of applications, includ-

ing filling, flushing, plugging, calibrating

and venting.

TwistMate connectors are twisted

onto the mating thread profile by hand.

When the system is pressurized with air,

gas or hydraulic pressure, the main seal

is pressed against the test piece, and

the connector automatically seals. The

internal piston action maintains the seal

with minimum pressure.

Depending on the model, TwistMate

connectors are rated for pressures up to

10,000 psi. The broad standard offering

includes sizes from 1/8 to 3 in. national

pipe taper.

• Call: 800-444-2373.

• Visit: www.fastestinc.com.

Got a quality product?Send your product description and photo to vellifson@asq.org.

QP • www.qualityprogress.com74

Innovative Lean DevelopmentTimothy Schipper and Mark Swets, CRC

Press, 2009, 200 pp., $39.95 (book).

This book is all

about applying

lean management

principles to the

product develop-

ment process.

The book’s eight

chapters describe

six principles of

lean development: identify and fill user

gaps, use multiple learning cycles, stabilize

the development process, capture knowl-

edge, use rapid prototyping and use lean

management principles.

The main strength of the book lies in

the two chapters devoted to using multiple

learning cycles. In this approach, teams

break a project into small sections lasting

approximately four weeks. Objectives are

developed specifically for this timeframe,

and then the team goes through a design-

build-test-review cycle for its section.

At the end of each four-week section,

an integration event is held in which the

project is reviewed and the set of design

alternatives is narrowed. The narrowing

of design alternatives is called set-based

design and is at the heart of lean develop-

ment.

These sections and cycles continue

until the project is finished and the product

is ready for manufacturing.

The authors give examples showing how

the principles are to be applied, but the ex-

amples are not detailed enough for anyone

interested in adopting this method to use

this book alone.

Overall, this is a good book for anyone

who wants an introduction to lean prod-

uct development. However, other sources

will be needed to proceed with imple-

mentation.

Brian Cocolicchio

New City, NY

The Pursuit of Something BetterDave Esler and Myra Kruger, New Ridge

Books, 2009, 288 pp., $15.95 (second edi-

tion, book).

Kruger and Esler’s

book is a positive

account of U.S. Cel-

lular’s journey from

ordinary to extraor-

dinary. This book

is not a reference

manual, textbook

or a technical refer-

ence. It is a background resource exploring

how improvement is possible, how it deliv-

ers emotional returns and how it results

in quality enhancements for everyone

involved.

The authors review the action programs

within U.S. Cellular as the company’s team

developed strategies to enhance employee

satisfaction, implement activities for deliv-

ering results, spark innovation and improve

customer satisfaction. Kruger and Esler

illustrate the company’s successes, failures

and extensive employee involvement. The

book helps readers feel as though they

are a part of the action and, in turn, they

can take the ideas and apply them in other

settings.

This book will be of interest to organi-

zational leaders and decision makers at

all levels. Executive officers will gain in-

sights from the details on how goals were

accomplished, customer reactions and

strategies for continued improvement.

Readers will have an opportunity to think,

ponder and test ideas.

Even though quality is not a primary fo-

cus of the book, it does give insights that

can be applied to quality implementations

at other organizations.

Jerry Brong

Ellensburg, WA

Corporate Sustainability Planning Assessment Guide Donald C. Fisher, ASQ Quality Press, 2010,

272 pp., $80 list, $48 member (book and

CD-ROM).

Assessing organi-

zational sustain-

ability requires

integration of

economic, environ-

mental and social

issues. Corporate

sustainability plan-

ning builds on core

values and provides a roadmap that af-

fects employees, suppliers and customers.

As the title implies, this book is a how-to

manual consisting of nine chapters, eight

appendixes and a CD-ROM containing use-

ful material.

The guide provides templates and pro-

cedures for identifying strategic improve-

ment opportunities regarding sustainabil-

ity efforts. It can be used to develop and

improve a corporate sustainability plan

addressing financial objectives, marketing

goals, HR management challenges and

risk management.

QPREvIEwS

This how-to manual provides clear and

well-organized procedures, but implement-

ing them will require additional experience

or knowledge found in other articles and

books.

Ron S. Kenett

KPA

Raanana, Israel

Leadership ElementsMike Mears, iUniverse, 2009, 364 pp.,

$25.95 (book).

This book offers

a unique look at

leadership and

management. Most

popular leader-

ship books contain

anecdotal nuggets

of wisdom from

football coaches,

ex-CEOs or business

school professors. Mears is none of these.

He is not only a leadership consultant and

lecturer, but he has also spent a lot of

time in the leadership seat as a company

president, a vice president and nuclear

submarine commander. when the CIA de-

cided to start its own leadership academy,

they called Mears.

His leadership and management ele-

ments are laid out like the periodic table

we all came to know in chemistry class.

Mears uses the periodic table as a frame-

work to identify and discuss individual

leadership and management competen-

cies. As in chemistry, individual elements

can be combined into fundamental

families. Mears combines his elements to

form the families of inspire, improve and

implement. The last section, rare earth ele-

ments, rounds out the book as a potpourri

of competencies not covered in previous

sections.

My personal bookshelf is replete with

scholarly works on leadership research

and assessment. Although I tend to scoff

at attempts to add anything useful to

applied leadership knowledge, I liked this

book. It provides a clear understanding and

method for thinking about and implement-

ing a strategy to improve organizational

performance.

This book will help readers become

more effective leaders. If you apply even a

couple of the elements, you can’t help but

become a better leader and, perhaps, a

better person.

James Kotterman

Michigan Manufacturing

Technology Center

Plymouth, MI

RECEnT RELEASES

Facilitating Project Performance Improvement Jerry Julian, Amacom, 2010, 224 pp., $29.95

(book).

Production Systems Engineer-ing: Cost and Performance OptimizationRichard E. Gustavson, McGraw-Hill, 2010,

256 pp., $125 (book).

Out of Another @#&*% Crisis! Motivation Through Humiliation Mike Micklewright, ASQ Quality Press, 2010,

256 pp., $20 member, $34 list (book).

Creating a Lean Culture: Tools to Sustain Lean ConversionsDavid Mann, CRC Press, 2010, 316 pp.,

$39.95 (second edition, book).

June 2010 • QP 75

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Quality America Inc. 65 800-722-6154 www.qualityamerica.com

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SigmaXL 65 888-744-6295 www.sigmaxl.com

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StatPoint Technologies Inc. 67 540-428-0084 www.statgraphics.com

StatSoft Inc. OBC 918-749-1119 www.statsoft.com

If you’d like your event included in QP Calen-

dar, submit information at least three months

in advance to vellifson@asq.org. Non-ASQ

organizations may list one event per issue.

july

7-8 An Introduction to Quality

Management. London. Visit the Chartered

Quality Institute at http://thecqi.org.

8-9 Certificate Issuers’ Accredita-

tion Workshop. Washington, D.C. Visit the

American National Standards Institute at

www.ansi.org.

12-13 Fundamentals of Strategic

Planning. San Francisco. Visit the Ameri-

can Management Association at www.

amanet.org or call 800-262-9699.

12-13 HACCP I: Prerequisite Pro-

grams. Guelph, Ontario. Call the Guelph

Technology Food Center at 519-821-1246

or visit www.gftc.ca.

12-16 Building and Implement-

ing Growth Strategies. Chicago. Call

the University of Chicago Booth School of

Business at 312-464-8732 or e-mail

exec.ed@chicagobooth.edu.

13-14 lean Certification Review

and Exam. Madison, WI. Call the Associa-

tion for Manufacturing Engineers at 224-

232-5980 or visit http://ame.org.

13-15 Automotive Refrigerant and

System Efficiency Symposium. Scotts-

dale, AZ. Visit the Society of Automobile

Engineers at www.sae.org.

13-16 SCOR Framework and SCOR

Project. Houston. Call the Supply Chain

Council at 202-962-0440 or e-mail info@

supply-chain.org.

14-15 The 6th Annual Midwest

Product Safety and liability Confer-

ence. Chicago. Visit Randall Goodden

International at www.randallgoodden.com

or e-mail info@randallgoodden.com.

23 Medical Device Risk Management.

Seattle. Call Hobbs Engineering at 303-

465-5899 or visit www.hobbsengr.com.

AuGuST

20 ISO/TS 16949 Requirements—Full

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eaglefoodregistrations.com.

23-25 The 2nd Canadian Quality

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Quality Congress at www.

canadianqualitycongress.com.

29-sept 2 Commercialization of

Micro-Nano Systems Conference. Santa

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facturing Engineers at www.sme.org.

QPCALENDAR

QP • www.qualityprogress.com 76

julyCanada—various locations

12 Supplier Auditing—Montreal

12-13 Supplier Auditing and Certifica-tion—Montreal

13 Supplier Auditing—Ottawa

13 Supplier Certification—Montreal

13-14 Supplier Auditing and Certifica-tion—Ottawa

14 Supplier Auditing—Toronto

14 Supplier Certification—Ottawa

14-15 Supplier Auditing and Certifica-tion—Toronto

15 Supplier Auditing—Kitchener

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23-27 Black Belt/Quality Engineering

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QP • www.qualityprogress.com78

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QP • www.qualityprogress.com80

Taken to TaskScale back quality implementation to get management on board

Many quality managers suffer

through daily confrontations with top

management and department heads who

aren’t committed to total quality manage-

ment (TQM).

As a result, these quality managers

think their processes are being side-

tracked and that they’re only in place

to satisfy contractual obligations. They

struggle to uphold a quality culture within

the organization and can lose their pas-

sion—or worse, their jobs.

But there’s an easy way to build quality

into the organization: by working inside

out—or, to put it another way, by applying

quality management principles at the task

level.

A task is a simple job assignment or

direct instruction from managers to team

members. By focusing on the task as a

miniature process that requires inputs and

produces outputs through a set of activi-

ties, task quality management can drive

organizational quality when top manage-

ment lacks commitment to TQM.

But there are a few things to keep in

mind when undertaking a project of this

nature:

Target: Less sophisticated manag-

ers relay tasks from their superiors in a

redundant fashion without putting much

effort in “processizing” the task to make

it a quality-oriented endeavor. In doing

so, they forget about the reason behind

the task and what will be accomplished.

Remember to identify the objectives of the

required task before getting under way.

Time: Most managers assign tasks with

their attention focused on the time spent

on the task. But, in some cases, they’re

not focused on the time as much as they

are on the output. Very few managers bal-

ance the requirements for individual tasks

while focusing on meeting tight deadlines.

If you want your project to be successful,

make sure you record the expected time

for completing the task.

Tools: Empowering your employees

is the key to building quality at the task

level. Being empowered means they have

the required knowledge, tools and skills to

achieve the desired results effectively and

efficiently.

Knowledge includes an understand-

ing of the contextual target the task aims

to fulfill, as well as a solid background

of technical information and reference

standards that assist decision making and

focus on the qualitative parameters of

the task performance. The tools required

for carrying out the task should facilitate

its completion within the predetermined

timeframe. Skills can only be acquired via

comprehensive training throughout the

process of completing the task.

Training: Very few managers take the

time to identify the training needed to

develop an employee’s skills and complete

the task at hand. When you identify the

training required for the task, include

future training needs.

Technical standards: Good document

control management requires keeping a

copy of the technical information and ref-

erence standards relevant to the assigned

task readily available and updated for easy

cross-reference. Unfortunately, it’s rarely

done in an effective way. When setting out

on a project, outline the applicable stan-

dards and keep updated copies on hand.

Tracking: Tasks undertaken by em-

ployees are generally not totally inde-

pendent of other related tasks. Thus, it’s

important to coordinate and integrate a

task’s inputs and outputs to ensure total

synchronization with related tasks. But

remember to place those actions under

the jurisdiction of employees carrying out

the assigned task. Otherwise, you run the

risk of leaving them unempowered, unmo-

tivated and, worst of all, uninformed.

Takeaway: Identify the format for the

submission of the results, and state the

deliverables. If the context is changed,

thereby requiring a different interpretation

or format for the task outputs or deliv-

erables, clarify the reason by explaining

the contextual history of the change and

correlating the subsequent task changes

required.

By taking quality to the task level,

you can optimize performance, improve

communication, empower employees

and avoid the oft-encountered conflicts

of adopting a full TQM initiative. These

smaller gains at the departmental level

can inspire top management to embrace—

and even champion—a quality culture

within the organization. QP

Magid Youssef is an architect at spiracle design in Mississauga, ontario. He earned a bachelor’s de-gree in architecture from ain shams university in Cairo, egypt. Youssef is a member of asQ and a certified quality assurance manager.

task-OrientedQuality is applied to small projects every day, even if we don’t always realize it. Share your experiences by logging on to the QP message board at www.asq.org/discussionBoards/index.jspa (case sensitive).

One GOOd Idea BY Magid Youssef

TO PURCHASE THIS STANDARD OR FOR MORE INFORMATION ON THE AEROSPACE INDUSTRY, VISIT www.asq.org/as9100 OR CALL 800-248-1946.

Implement the latest version of the AS9100 QMS standard today from ASQ. The International Aerospace Quality Group released this revised quality management standard tailored toward aviation, space, and defense industries. This revised standard includes all of the elements of ISO 9001 and additional requirements specifi c to the aerospace industry relating to quality and safety.

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