1
Deming’s 14 Points for TQM
1. Constancy of purpose
Create constancy of purpose for continual improvement of products and service to society, allocating resources to provide for long range needs rather than only short term profitability, with a plan to become
competitive, to stay in business, and to provide jobs.
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Deming’s 14 Points for TQM
2. The new philosophy
Adopt the new philosophy. We are in a new economic age, created in Japan. We can no longer live with commonly accepted levels of delays, mistakes, defective materials, and defective workmanship. Transformation of Western management style is necessary to halt the continued decline of business and industry.
3
Deming’s 14 Points for TQM
3. Cease dependence on mass inspection
Eliminate the need for mass inspection as the way of life to achieve quality by building quality into the product in the first place. Require statistical evidence of built in quality in both manufacturing and
purchasing functions.
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Deming’s 14 Points for TQM
4. End lowest tender contracts
End the practice of awarding business solely on the basis of price tag.
Instead require meaningful measures of quality along with price. Reduce the number of suppliers for the same item by eliminating those that do not qualify with statistical and other evidence of quality. The aim is to minimize total cost, not merely initial cost, by minimizing variation. This may be achieved by moving toward a single supplier for any one item, on a long term relationship of loyalty and trust. Purchasing managers have a new job, and must learn it
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Deming’s 14 Points for TQM
5. Improve every process
Improve constantly and forever every process for planning, production, and service. Search continually for problems in order to improve every activity in the company, to improve quality and productivity, and thus to constantly
decrease costs. Institute innovation and constant improvement of product, service, and process. It is management's job to work continually on the system (design, incoming materials, maintenance, improvement of
machines, supervision, training, retraining).
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Deming’s 14 Points for TQM
6. Institute training on the job
Institute modern methods of training on the job for all, including management, to make better use of every
employee. New skills are required to keep up with changes in materials, methods, product and service design,
machinery, techniques, and service.
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Deming’s 14 Points for TQM
7. Institute leadership
Adopt and institute leadership aimed at helping people do a better job. The responsibility of managers and supervisors must be changed from sheer numbers to quality. Improvement of quality will automatically improve productivity. Management must ensure that immediate action is taken on reports of inherited defects, maintenance requirements, poor tools, fuzzy operational definitions, and all conditions detrimental to quality.
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Deming’s 14 Points for TQM
8. Drive out fear
Encourage effective two way communication and other means to drive out fear throughout the organization so that everybody may work effectively and more productively for the company.
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Deming’s 14 Points for TQM
9. Break down barriers
Break down barriers between departments and staff areas. People in
different areas, such as Leasing, Maintenance, Administration, must work in teams to tackle problems that may be encountered with products or service.
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Deming’s 14 Points for TQM
10. Eliminate exhortations
Eliminate the use of slogans, posters and exhortations for the work force, demanding Zero Defects and new levels of productivity, without providing methods. Such exhortations only create adversarial relationships; the bulk of the
causes of low quality and low productivity belong to the system, and thus lie beyond the power of the work force.
11
Deming’s 14 Points for TQM
11. Eliminate arbitrary numerical targets
Eliminate work standards that prescribe quotas for the work force and numerical goals for people in management. Substitute aids and helpful leadership in order to achieve continual improvement of quality and productivity.
12
Deming’s 14 Points for TQM
12. Permit pride of workmanship
Remove the barriers that rob hourly workers, and people in management, of their right to pride of workmanship. This implies, among other things, abolition of the annual merit rating (appraisal of performance) and of Management by Objective. Again, the responsibility of managers,
supervisors, foremen must be changed from sheer numbers to quality.
13
Deming’s 14 Points for TQM
13. Encourage education
Institute a vigorous program of education, and encourage self improvement for everyone. What an organization needs is not just good people; it needs people that are improving with education. Advances in competitive position will have their roots in knowledge.
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Deming’s 14 Points for TQM
14. Top management commitment and action
Clearly define top management's permanent commitment to ever improving quality and productivity, and their obligation to implement all of these
principles. Indeed, it is not enough that top management commit
themselves for life to quality and productivity. They must know what it is that they are committed to—that is, what they must do. Create a structure in top management that will push every day on the preceding 13 Points, and take action in order to accomplish the transformation. Support is not enough:
action is required!
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Chapter 10
Project Management
16
Definition of Project Management
Work Breakdown Structure
Project Control Charts
Structuring Projects
Critical Path Scheduling
OBJECTIVES
17
Project is a series of related jobs usually directed toward some major output and requiring a significant period of time to perform
Project Management are the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project
Project Management
18
Structuring Projects: Pure Project Advantages
Pure Project
A pure project is where a self-contained team works full-time on the project
The project manager has full authority over the project
Team members report to one boss
Shortened communication lines
Team pride, motivation, and commitment are high
19
Structuring Projects: Pure Project Disadvantages
Duplication of resources
Organizational goals and policies are ignored
Lack of technology transfer
Team members have no functional area "home"
20
Functional Project
President Research and
Development Engineering Manufacturing
Project A
Project B
Project C
Project D
Project E
Project F
Project G
Project H
Project I
A functional project is housed within a functional division
Example, Project “B” is in the functional area of Research and Development.
21
Structuring Projects
Functional Project: Advantages
A team member can work on several projects
Technical expertise is maintained within the functional area
The functional area is a “home” after the project is completed
Critical mass of specialized knowledge
Structuring Projects 22
Functional Project: Disadvantages
Aspects of the project that are not directly related to the functional area get short-changed
Motivation of team members is often weak
Needs of the client are secondary and are responded to slowly
23
Matrix Project Organization Structure President
Research and
Development Engineering Manufacturing Marketing Manager
Project A Manager Project B Manager Project C
24
Structuring Projects Matrix: Advantages
Enhanced communications between functional areas
Pinpointed responsibility
Duplication of resources is minimized
Functional “home” for team members
Policies of the parent organization are followed
25
Structuring Projects Matrix: Disadvantages
Too many bosses
Depends on project manager’s negotiating skills
Potential for sub-optimization
26
Work Breakdown Structure
Program
Project 1 Project 2 Task 1.1
Subtask 1.1.1 Work Package 1.1.1.1
Level
1 2 3 4
Task 1.2
Subtask 1.1.2
Work Package 1.1.1.2
A work breakdown structure defines the hierarchy of project tasks,
subtasks, and work packages
27
Gantt Chart
Activity 1 Activity 2 Activity 3 Activity 4 Activity 5 Activity 6
Time Vertical Axis: Always
Activities or Jobs
Horizontal Axis: Always Time Horizontal bars used to denote length of time for each activity or job.
28
Microsoft Project Example
Detailed Gantt Chart
29
Network-Planning Models
A project is made up of a sequence of activities that form a network representing a project
The path taking longest time through this network of activities is called the “critical path”
The critical path provides a wide range of scheduling information useful in managing a project
Critical Path Method (CPM) helps to identify the critical path(s) in the project networks
30
Prerequisites for Critical Path Methodology
A project must have:
well-defined jobs or tasks whose completion marks the end of the project;
independent jobs or tasks;
and tasks that follow a given sequence.
31
Types of Critical Path Methods
CPM with a Single Time Estimate
Used when activity times are known with certainty
Used to determine timing estimates for the project, each activity in the project, and slack time for activities
CPM with Three Activity Time Estimates (P.E.R.T.)
Used when activity times are uncertain
Used to obtain the same information as the Single Time Estimate model and probability information
Time-Cost Models
Used when cost trade-off information is a major consideration in planning
Used to determine the least cost in reducing total project time
32
Steps in the CPM with Single Time Estimate
1. Activity Identification
2. Activity Sequencing and Network Construction
3. Determine the critical path
From the critical path all of the project and activity timing information can be obtained
CPM with Single Time Estimate
33Example #2
Consider the following consulting project:
Activity Designation Immed. Pred. Time (Weeks)
Assess customer's needs A None 2
Write and submit proposal B A 3
Obtain approval C A 4
Develop service vision and goals D B,C 4
Train employees E C 2
Quality improvement pilot groups F D, E 5
34
First draw the network
A B None A 2 3C A 4
D B,C 4
E C 2
F D,E 5
Act. Imed. Pred. Time
A 2
B 3
C 4
E 2 D 4
F 5
Activity Description
Earliest Start
Earliest Finish Activity Time Latest
Start
Latest Finish
35
Determine slack times and Critical Path
A 0 2 2 0 2
B 2 5 3 3 6
C 2 6 4 2 6
E 6 8 2 8 10 D 6 10 4 6 10
F 10 15 5 10 15
S=
S=
S= S=
S=
0 S=
0
1 0
2
0
36
P.E.R.T. Program Evaluation and Review Technique:
CPM with Three Activity Time Estimates
Task Immediate Predecessors
Optimistic Most Likely Pessimistic
A None 3 6 15
B None 2 4 14
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
37
Ex 2. Expected Time Calculations
Task
Immediate Predecesors
Expected Time
A None 7
B None 5.333
C A 14
D A 5
E C 11
F D 7
G B 11
H E,F 4
I G,H 18
Task
Immediate
Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
B None 2 4 14
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
6
Time Pess.
+ Time) Likely
4(Most +
Time
= Opt.
Time Expected
6
15 4(6)
= 3 Time
Expected
38
Ex 2. Expected Time Calculations
Task
Immediate Predecesors
Expected Time
A None 7
B None 5.333
C A 14
D A 5
E C 11
F D 7
G B 11
H E,F 4
I G,H 18
Task
Immediate
Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
B None 2 4 14
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
6
Time Pess.
+ Time) Likely
4(Most +
Time
= Opt.
Time Expected
6
14 4(4)
= 2 Time
Expected
39
Ex 2. Expected Time Calculations
Task
Immediate Predecesors
Expected Time
A None 7
B None 5.333
C A 14
D A 5
E C 11
F D 7
G B 11
H E,F 4
I G,H 18
Task
Immediate
Predecesors Optimistic Most Likely Pessimistic
A None 3 6 15
B None 2 4 14
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E,F 1 4 7
I G,H 4 19 28
6
Time Pess.
+ Time) Likely
4(Most +
Time
= Opt.
Time Expected
6
30 4(12)
= 6 Time
Expected
40
B 5.33
A 7
C 14
D 5
E 11
F 7
G 11
H 4
I 18 Start
0
Finish 0
Example 2. Network
Duration = 54 Days
41
Example 2. Probability Exercise
What is the probability of finishing this project in less than 53 days?
p(t < D)
T
E= 54 t
D=53
cp2TE
-
= D
Z
42
Task Optimistic Most Likely Pessimistic Variance
A 3 6 15 4
B 2 4 14
C 6 12 30 16
D 2 5 8
E 5 11 17 4
F 3 6 15
G 3 9 27
H 1 4 7 1
I 4 19 28 16
(Sum the variance along the critical path.)
2 2
6
Optim.
- Pessim.
=
Activity Variance
41
2 =
43
There is a 43.8% probability that this project will be completed in less than 53 weeks.
p(Z < -.156) = .438, or 43.8 %
T
E= 54 D=53
See Excel function NORMDIST
p(t < D)
t
.156 -
41 = 54 -
= 53 T
-
= D
Z 2
cp E
44
There is a 43.8% probability that this project will be completed in less than 53 weeks.
T
E= 54 D=53
Using Excel function NORMDIST
45
Ex 2. Additional Probability Exercise
What is the probability that the project duration will exceed 56 weeks?
46
Example 2. Additional Exercise Solution
T
E= 54 t p(t < D)
D=56
p(Z > .312) = .378, or 37.8 %
In Excel use =1-NORMDIST(56,54,sqrt(41),true)
.312 41 =
54 -
= 56 T
-
= D
Z 2
cp E
47
In Class Example
Activity
Immediate
Predecessors Optimistic
Most
Likely Pessimistic
A - 1 3 5
B - 1 2 3
C A 1 2 3
D A 2 3 4
E B 3 4 11
F C,D 3 4 5
G D,E 1 4 6
H F,G 2 4 5
1. Draw the Network.
2. What is the critical path?
3. What is the expected project completion time 4. What is the variance of the project
5. What is the probability of completing the project within 16 days?
48
In class – Expected Times and Variance
Activity
Immediate
Predecessors Optimistic
Most
Likely Pessimistic
Expected
Times Variance
A - 1 3 5 3 0.4444
B - 1 2 3 2 0.1111
C A 1 2 3 2 0.1111
D A 2 3 4 3 0.1111
E B 3 4 11 5 1.7778
F C,D 3 4 5 4 0.1111
G D,E 1 4 6 3 5/6 0.6944
H F,G 2 4 5 3 5/6 0.2500
49
A 3
C 2
F 4
H 3 5/6 Start
0
B 2
E 5
G 3 5/6 D
3
Determine slack times and Critical Path
Activity
Immediate Predecessors
Expected Times
A - 3
B - 2
C A 2
D A 3
E B 5
F C,D 4
G D,E 3 5/6
H F,G 3 5/6
50
A 0 3
3 5/6 3 5/6
C 3 5 2 4 5/6 6 5/6
F 6 10
4 6 5/6 10 5/6
H 10 5/6 14 2/3
3 5/6 10 5/6 14 2/3
Start 0
B 0 2 2 0 2
E 2 7
5 2 7
G 7 10 5/6
3 5/6 7 10 5/6
D 3 6 3 3 5/6 6 5/6
Determine slack times and Critical Path
Activity
Expected
Times Variance
A 3 0.4444
B 2 0.1111
C 2 0.1111
D 3 0.1111
E 5 1.7778
F 4 0.1111
G 3 5/6 0.6944 H 3 5/6 0.2500
6832 .
1
cp
666 .
14 TE
83333 .
2 2
cp
51
52
Time-Cost Models
Basic Assumption: Relationship between activity completion time and project cost
Time Cost Models: Determine the optimum point in time-cost tradeoffs
Activity direct costs
Project indirect costs
Activity completion times
53
CPM Assumptions/Limitations
Project activities can be identified as entities (There is a clear beginning and ending point for each activity.)
Project activity sequence relationships can be specified and networked
Project control should focus on the critical path
The activity times follow the beta distribution, with the variance of the project assumed to equal the sum of the variances along the critical path
Project control should focus on the critical path