Sprint Quality Handbook

HANDBOOK

Quality

© 1998, Sprint and Marshall♦Qualtec. No portion of this document may be distributed

Tools for Improving Meetings

Tools for Problem Solving with Numbers

Tools for Problem Solving with Ideas

•Plan-Do-Check-Act

•Quality Improvement Story

Tools for Improving Meetings

•Action Plan •Mission

•Brainstorming •Multivoting

•Code of Conduct •PAL

•Consensus •Parking Lot

•Drivers and Restrainers •Plus/Delta

•Meetings

Tools for Problem Solving with Numbers

•Check Sheet •Pareto Chart

•Control Charts •Process Indicators

•Cost/Benefit Analysis •Quality Indicators

•Cost of Quality •Scatter Diagram

•Cycle Time •Sigma

•Data •Standard Deviation

•Graphs (bar, line, pie) •Targets

•Histogram •Valid Customer

•Mean Requirements

Tools for Problem Solving with Ideas

•Activity Network Diagram •Process

•Affinity Diagram •Process Block Diagram

•Baldrige (Malcolm) Award •Process Decision Program

•Benchmarking Chart

•Brown Paper •Process Decomposition

•Chairman’s Quality Award Diagram

•Checklist •Process Improvement

•Control Sytem •Process Maturity

•Flowcharts •Process Workbench

•Interrelationship Diagram •QI Story Checklist

•Ishikawa Diagram •QI Storyboard

•Levels of Quality •Seven Management and

•Matrix Diagram Planning Tools

•Potential Improvements •Seven Quality Control Tools

Matrix •Task-on-Arrow

Following are the icons and the use that they signify: Tools for Improving Meetings

Tools for Problem Solving with Numbers

Tools for Problem Solving with Ideas

A Note about the Examples

The various tools and techniques that make up Sprint Quality can be valuable resources in our business activities and work assignments. Likewise, these same tools and techniques can be useful in our personal lives – from helping a son or daughter choose the right college, to chairing a committee, to running the PTA’s rummage sale. To illustrate this point and to make this handbook entertaining as well as educational, the examples involve a fictional couple, George and Betty, who both work at Sprint. Betty and George have a track record of bad vacations, linked to inadequate planning and poor communication. Their vacation blunders are impressive – a Caribbean beach resort during the height of hurricane season, for-getting to pack hiking boots for a backpacking trip, a visit to relatives where everyone argued, and even sampling the delights of a remote tropical locale while a revolution was under way. Last year’s vacation was the worst of all. One evening as they lingered over coffee, Betty came up with a brilliant idea – she and George would use Sprint Quality tools to plan and carry out their next vacation. As you look through this handbook, you can see just how Sprint Quality tools helped George and Betty plan the best vacation ever – and how these same tools can help you at

World-Class

That’s easy to say, a lot harder to achieve. But when the

rewards are exceptional customer satisfaction, inspired

innova-tive and empowered employees, and superior financial results,

you may decide that taking steps to get there is worth some

extra effort.

This newly revised Sprint Quality Handbook can help make

your journey easier. You’ll find sections on meeting tools,

number tools and idea tools – all illustrated entertainingly

with examples involving George and Betty, a couple who

have saved enough time and made enough money by using

Sprint Quality tools that they have the luxury of planning

a perfect vacation.

You’ve probably already been using some quality tools. If so,

this guide can be a double-check to make sure you’re getting

all that you can out of them.

Other tools may sound vaguely familiar. Now is the time to

satisfy your curiosity by finding out just what they are and

how they can work for you.

And there may be tools that you’ve never heard of. Take a

few minutes to browse and stop at the ones that could make

a difference in how you do business.

Just as some people see the glass as half empty – others as half

full – so will some associates see this handbook as so big that

it’s overwhelming, while others will see it as so big that it

offers enormous potential for moving ahead at Sprint.

Introduction 1

Introduction to Sprint Quality 2

Structured Problem Solving 9

Plan-Do-Check-Act 10

Quality Improvement Story 11 Tools for Improving Meetings 21

Action Plan 22

Brainstorming 24

Code of Conduct 27

Consensus 28

Drivers and Restrainers 31

Meetings 32 Evaluation Form 33 Minutes Form 34 Observation Sheet 35 Pre-meeting Checklist 36 Post-meeting Checklist 37 Mission 38 Multivoting 39 PAL 40 Parking Lot 42 Plus/Delta 43

Tools for Problem Solving

with Numbers 45 Check Sheet 46 Control Charts 48 Cost/Benefit Analysis 58 Cost of Quality 60 Cycle Time 61 Data 62

Graphs – Bar, Line and Pie 63

Tools for Problem Solving with Numbers (cont.)

Histogram 69 Mean 76 Pareto Chart 77 Process Indicators 79 Quality Indicators 80 Scatter Diagram 81 Sigma 83 Standard Deviation 86 Targets 87

Valid Customer Requirements 88 Tools for Problem Solving

with Ideas 89

Activity Network Diagram 90

Affinity Diagram 92

Baldrige (Malcolm)

National Quality Award 94

Benchmarking 96

Brown Paper 98

Chairman’s Quality Award 100

Checklist 101 Control System 102 Flowcharts 104 Interrelationship Diagram 108 Ishikawa Diagram 111 Levels of Quality 118

Table of Contents

Tools for Problem Solving with Ideas (cont.)

Matrix Diagram 120

Potential Improvements Matrix 122

Prioritization Matrix 125

Problem Statement 128

Process 130

Process Block Diagram 131

Process Decision

Program Chart 133

Process Decomposition Diagram 135

Process Improvement 137 Process Maturity 140 Process Workbench 142 QI Story Checklist 150 QI Storyboard 151 Seven Management

and Planning Tools 152

Seven Quality Control Tools 155

Task-on-Arrow 156

Theme Selection Matrix 157

Tree Diagram 159

Appendix 161

Courses on Sprint Quality 162

Enrolling at the

University of Excellence 164

Ordering Sprint Quality Materials 165

Sprint Quality Reading List 166

Sprint Quality Handbook –

Evaluation Form 169

An alphabetical index of tools.

Action Plan 22

Activity Network Diagram 90

Affinity Diagram 92

Baldrige (Malcolm)

National Quality Award 94

Benchmarking 96

Brainstorming 24

Brown Paper 98

Chairman’s Quality Award 100

Checklist 101 Check Sheet 46 Control Charts 48 Control System 102 Cost/Benefit Analysis 58 Cost of Quality 60 Cycle Time 61 Code of Conduct 27 Consensus 28 Data 62

Drivers and Restrainers 31

Flowcharts 104

Graphs – Bar, Line and Pie 63

Histogram 69 Interrelationship Diagram 108 Ishikawa Diagram 111 Levels of Quality 118 Matrix Diagram 120 Mean 76 Meetings 32 Evaluation Form 33 Minutes Form 34 Observation Sheet 35 Pre-meeting Checklist 36 Post-meeting Checklist 37 Mission 38 Multivoting 39 PAL 40 Pareto Chart 77 Parking Lot 42 Plus/Delta 43

Potential Improvements Matrix 122

Prioritization Matrix 125

Problem Statement 128

Process 130

Process Block Diagram 131

Process Decision

Program Chart 133

Process Decomposition Diagram 135

Process Indicators 79 Process Improvement 137 Process Maturity 140 Process Workbench 142 Quality Indicators 80 QI Story Checklist 150 QI Storyboard 151 Scatter Diagram 81 Seven Management

and Planning Tools 152

Seven Quality Control Tools 155

Sigma 83

Standard Deviation 86

Targets 87

Task-on-Arrow 156

Theme Selection Matrix 157

Tree Diagram 159

Valid Customer Requirements 88

The Sprint Quality Tool Box

Introduction to Sprint Quality

Sprint Quality (Sprint kw˘o´l ˘ı-t¯e) n. 1. The way

we run our business at Sprint. 2. The set of tools

and techniques for problem solving, process

improvement, reengineering, and management

used by Sprint. 3. Symbolized by the Sprint

Quality “diamond.”

To successfully run a business like Sprint, we must do many things well – we must create and communicate a vision for the entire company,

establish overarching goals and values, establish and execute business strategies, develop products and services that meet the needs of our customers, hire and train employees, solve day-to-day problems, and more. Sprint Quality addresses how we should accomplish such tasks. A company’s vision statement is the most fundamental expression of how it will grow profitable market share. Our vision is supported by the mission statements of each of our business units and corporate departments. Achieving our vision will rely on the successful pursuit of our goals and values.

Our desire to be “the standard by which others are measured” implies that we will continually redefine our industry by setting new standards for a telecommunications company’s image, products and services, and business practices ... something we have been doing for years.

The Sprint Quality Diamond

The symbol of Sprint Quality is the Sprint Quality Diamond. It serves as a visual reminder of the key elements of Sprint Quality.

Teamwork Goals Essentials Principles _Management by Fact Respect for People Customers Employees Shareholders Strategic Integration Continuous Quality Improvement Customer Focus Structured Problem Solving The S print Q uality Diamond ™

Sprint’s Vision:

“To be a world-class telecom-munications company – the standard by which others are measured.”

Goals

The top of the diamond underscores Sprint’s Goals:

In all our decision making – in fact, in everything we do to conduct business – we must attempt to keep a balance between the three goals. It has been shown that companies maintaining this balance outperform other companies that focus on only one or two of the three goals (Corporate Culture and Performance. John P. Kotter and James L.

Heskett. New York, N.Y.: The Free Press, 1992).

Exceptional Customer Satisfactionoccurs when we deliver precisely what the customer expects – more often, it occurs when we “delight” our customers.

Delighting a customer can cost very little. Often the personal initiative of an “inspired, innovative and empowered employee” can lead to a delighted customer, with no increase in cost to us or the customer. In our efforts to delight the customer, we must take care not to spend resources on things that fail to add value for the customer. Well-inten-tioned but inappropriately overzealous service can cost more than the value perceived by the customer. We call this situation “gold-plated quality” and, of course, want to avoid it.

Measures of customer satisfaction come from several sources – surveys directly evaluate customer satisfaction; complaints indicate customer dissatisfaction; and process measures (such as cycle time and defects) can often predict customer satisfaction.

In our efforts to measure customer satisfaction, it is critical to remember that there is only one true measure of customer satisfaction – the ulti-mate “report card,” if you will – and that is market share growth.

Sprint’s Goals:

•Exceptional Customer Satisfaction •Inspired, Innovative and

Empowered Employees •Superior Financial Results

In a free economy, customers buy from companies that make the best overall offer and that provide the best overall value. We must be careful not to become so focused on surveys that we forget they only indicate

aspects of customer satisfaction. Market share growth is the key direct

measure of overall satisfaction.

For continued success, we must profitably increase our share of the markets where we’ve chosen to compete. And we grow market share by keeping existing customers, by selling more to existing customers and by acquiring new customers.

Inspired, Innovative and Empowered Employees At Sprint, our greatest asset is our employees. We hold a deep belief that if we are to be successful as a company, we must have employees who are truly “inspired, innovative and empowered.”

We foster teamwork, encourage open communication, provide a feedback-rich environment, give employees individual responsibility and authority to act, and provide rewards and recognition that support our goals. We provide training, education and development to enable employees to achieve their full potential.

As with everything that is important, we gauge our progress toward this goal by using direct measures, such as the annual Employee Attitude Survey, together with indirect measures, such as voluntary turnover.

Superior Financial Results As a public corporation, we are entrusted with the money that shareholders have invested in our company. It is essential that we achieve superior financial returns for our shareholders. We are proud of the fact that our total return to shareholders for the 10+ years ended December 31, 1997, exceeded stock market averages and the results of our major competitors.

Essentials

At the next level of the diamond, we find the three Sprint Quality Essentials:

Teamworkis essential for a large organization such as Sprint to operate effectively. This handbook includes tools and techniques that help teams work effectively.

Strategic Integrationis our method of meeting customer needs. It is essential for us to determine what our customers want, honestly evaluate what we currently provide them and gain insight into any gap between the two. We then work toward closing this gap by improving our key processes.

Continuous Quality Improvementdepends on individual and team efforts, since improvement often results from thousands of small efforts and a few breakthroughs.

We need to continuously improve every aspect of our business. It is not acceptable to rest on a plateau or be merely “good enough.” If we stop improving – or even slow down – while our competitors continue to improve, we are essentially falling behind.

Sprint Quality Essentials:

•Teamwork

•Strategic Integration

Principles

In addition to its Goals and Essentials, Sprint Quality includes four guiding beliefs or Principles. Found in the lower half of the Sprint Quality Diamond, these four Principles are:

•Customer FocusBecoming successful requires focusing on customers and understanding their needs.

•Respect for PeoplePeople deserve respect and exhibit far higher performance when they receive it.

•Management by FactBasing decisions and actions on fact, rather than speculation, produces far better business results.

•Structured Problem SolvingSolving problems in an organized, systematic way greatly improves the chances of finding the best solution. (See Structured Problem Solving in your handbook.)

Sprint Quality Principles:

•Customer Focus •Respect for People •Management by Fact

The values we share at Sprint are tremendously important to all of us. By creating a set of values, we don’t have to write policies and procedures for every possible situation that we will face in our business lives at Sprint.

Customer First We anticipate, understand, meet and exceed our customers’ needs and expectations to achieve exceptional customer satisfaction.

Integrity in All We DoOur actions and decisions reflect the highest ethical, legal and professional standards.

Excellence Through Quality We will individually and collectively use Sprint Quality in our daily activities to achieve excellence as a company.

Respect for Each Other We care about our company, our work, our customers and each other. This caring is a unique source of our company’s energy, strength and excellence.

Growth Through Change We will grow as a company, as individuals and as professionals by creating, anticipating and responding to change.

Community Commitment We willingly serve the charitable and civic needs of our communities.

Productive Work Environment We provide a safe and accessible work environment.

Representative Work ForceWe recruit and develop individuals who reflect the diversity of our communities.

Shareholder ValueWe will increase shareholder value, build the financial strength of our company and, as a result, prosper as individuals.

Sprint’s Values:

Our values provide guidance to help us set priorities and make decisions.

Structured

Problem

Solving

Plan-Do-Check-Act

Sprint Quality tools and techniques can be most helpful when they’re used within a problem-solving structure. There are two general methods you might consider: PDCA and the QI Story. PDCA – Plan-Do-Check-Act – will work for most of the problems you encounter. Here’s how you use PDCA:

Planyour improvements. Who will handle the improvements? When

will they take place? How will you check your progress?

Doit. Try out your improvements on a small scale to make sure

they work.

Checkwhat you did. Compare the Plan and the Do. Did you meet your objectives? What did you do well, and what could be improved? What did you learn?

Actto further improve what you did. Document and standardize the

improvements that worked. Apply these improvements wherever they would be helpful.

When you use PDCA, be sure that you understand the current situation, recognize the possible negative consequences of your improvements and identify the resources you need to implement your improvements. PDCA can be a fast, ongoing way to make sure your processes are constantly getting better.

The Sprint Quality Handbook 11

Quality Improvement Story

Although PDCA works well for most problems, you may need to use another strategy for more complex problems. The QualityImprovement Story – QI Story, for short – is a more detailed version of PDCA. The QI Story is useful when you’re faced with an especially large and complex problem, or with a problem that didn’t improve to your satisfaction when you used PDCA. The QI Story helps you define a problem, identify root causes, determine possible improvements and check how well those improvements worked.

Seven Steps of the QI Story

2. Problem Identification 3. Root Cause Analysis 4. Potential Improvements 5. Verification

6. Full Implementation 7. Future Plans

The QI Story Checklist and QI Storyboard (see Tools for Problem Solving with Ideas) serve as additional tools to speed and document

Step 1: Reason for Improvement

Identify the general problem area (the “theme”) and the reason for working on it. Key questions to ask include – What do we do (ie. what work/products do we produce)? For whom do we do it (who is our customer)? How well are we doing (what is our customer’s view)? How do we know (what is our indicator)?

Key Activities

•Research for themes:

– Review departmental processes and indicators. – Survey external/internal customers.

– Identify what the team already knows (brainstorm). – Interview associates from the work area.

•Determine clear management ownership for process(es) being considered as themes (Checkpoint #1).

•Document the “as is” process(es) used in the problem areas (Checkpoint #2).

•Consider customer needs to help select the theme (Checkpoint #3).

•Set an indicator to track the theme (Checkpoint #4).

•Determine how much improvement is needed using data (Checkpoint #5).

•Demonstrate the impact the theme will have if improved.

•Schedule QI Story activities. Consider the urgency of solving the problem when establishing the schedule (Checkpoint #6).

The Sprint Quality Handbook 13

Helpful Tools/Techniques

•Brainstorming/Multivoting

•Brown Paper, Process Flowchart (“As Is”), Process Workbench, Task-on-Arrow

•Control Charts

•Control System

•Graphs and Check Sheet

•Interrelationship Diagram

•Theme Selection Matrix

Examples

Graph Flow Chart

Good

Step 2: Problem Identification

Select a specific problem from the general problem area (the “theme”) identified in Step 1 and set a target for improvement. Step 2, combined with Step 1, enables us to focus on a specific problem rather than a broad area. Having this focus will make it easier to determine root causes in Step 3.

Key Activities

•Collect data on all aspects of the theme.

•Stratify the theme to a level specific enough to permit analysis (Checkpoint #7).

•Select a problem from the theme’s subgroups.

•Identify the Valid Customer Requirements (Checkpoint #8).

•Write a clear problem statement that addresses the gap between the current and targeted values (Checkpoint #9).

•Establish a method for setting goals or targets (Checkpoint #10).

•Present theme and problem statement to management and/or sponsor.

Helpful Tools/Techniques •Check Sheet •Control Charts •Graphs •Histogram •Pareto Chart

•Problem Statement Matrix

Examples

Good

Target

The Sprint Quality Handbook 15

Step 3: Root Cause Analysis

Identify and verify the root causes of the specific problem identified in Step 2. Root cause analysis will be easier to do if the problem has been significantly narrowed in Steps 1 and 2.

Key Activities

•Analyze the problem’s causes and effects (Checkpoint #11).

•Continue analysis to the level of actionable root causes (Checkpoint #12).

•Select the root causes with greatest probable impact (Checkpoint #13).

•Verify the selected root causes with data (Checkpoint #14).

Helpful Tools/Techniques

•Check Sheet

•Drivers and Restrainers

•Graphs •Histogram •Ishikawa Diagram •Pareto Chart •Scatter Diagram Examples

Step 4: Potential Improvements

Plan improvements that will correct the root causes identified in Step 3; then test these improvements on a small scale.

Key Activities

•Develop and evaluate potential improvements which: – Attack verified root causes (Checkpoint #15).

– Meet Valid Customer Requirements (Checkpoint #16). – Are cost beneficial (Checkpoint #17).

•Develop an action plan that:

– Answers who, what, when, where, and how (Checkpoint #18). – Reflects the forces (Drivers and Restrainers) impacting successful

implementation (Checkpoint #19).

•Present potential improvements to management and/or sponsor to gain their approval and cooperation.

•Test or pilot the potential improvements on a small scale.

Helpful Tools/Techniques

•Action Plan

•Cost/Benefit Analysis

•Drivers and Restrainers

•Potential Improvements Matrix

•Tree Diagram

Examples

Potential Improvements Matrix Action Plan 3 2 6 3 3 3 3 3 1 3 1 1 2 2 4

The Sprint Quality Handbook 17

Step 5: Verification

Verify that you have reduced a problem and its root causes and/or improved a process, and confirm that you have met the target for improvement. If what you tried didn’t work or didn’t work as well as you expected, study what worked and didn’t work, and go through Step 3 and Step 4 again.

Key Activities

•Confirm the effects of potential improvements, making sure the root causes have been reduced (Checkpoint #20).

•Confirm you used the same tracking indicator you used in Step 1 (Checkpoint #21).

•Compare the results to the target established in Step 2, and verify that the results met or exceeded the target (Checkpoint #22).

•Implement additional improvements if results are not satisfactory.

Helpful Tools/Techniques •Control Charts •Graphs •Histogram •Pareto Chart Examples Effect Before After Target Good Before After

Step 6: Full Implementation

Prevent the problem and its root causes from recurring. Implement the improvements wherever possible.

Key Activities

•Make your improvements part of daily work (Checkpoint #23): – Create/revise the work process.

– Create/revise standards.

– Train employees on the revised process and/or standards.

•Establish periodic checks with assigned responsibilities to monitor the improvements (Checkpoint #24).

•Consider other areas for implementation (Checkpoint #25).

•Present the results of your improvement to management and/or sponsor with recommendations on other areas that might benefit from the improvements. Helpful Tools/Techniques •Control Charts •Control System •Graphs Examples Control System Control Chart Control System

The Sprint Quality Handbook 19

Step 7: Future Plans

Plan what to do about any remaining problems. Evaluate the effectiveness of the problem-solving process, including the effectiveness of the team.

Key Activities

•Analyze and evaluate any remaining problems related to the theme (Checkpoint #26).

•Plan further actions, if necessary.

•Review what you’ve learned relating to problem-solving skills and group dynamics (i.e., team effectiveness) (Checkpoint #27). – What was done well?

– What could you improve?

– What could you have done differently?

Helpful Tools/Techniques

•Action Plan

•PDCA

•Plus/Delta

Examples

Action Plan Plus/Delta

Tools for

Improving

Meetings

Action Plan

An Action Plan is a prioritized list of what needs to be done, when it needs to be done and who needs to do it.

Use

You can use an Action Plan to help explain an improvement plan and clarify roles, responsibilities and deadlines. You can review the Action Plan at any time – or at the end of PDCA or QI Story steps – to deter-mine whether the plan is on track or needs to be changed.

Example

To prepare the house for their absence during their vacation, George and Betty made an Action Plan of everything they needed to do before they left.

Action Plan

(Review daily; file for future reference)

Prepared by George Date 5/16/97 Page 1 of 1 Location/Project Vacation Period Summer

No. Task/Project Due Date Assigned to Date Assigned Status/Remarks 1 Ask Janice to 6/30/97 Betty 5/16/97 Tell her about

feed cat cat’s medicine

2 Call Bruno to get 6/30/97 George 5/16/97 He can recycle

mail & newspaper newspapers

3 Ask Horace to 6/30/97 Betty 5/16/97 Tell him security

check on house alarm code

4

Turn off air- 7/12/97 Betty 5/16/97 This will

conditioning save money

5

Get rid of spoilable 7/11/97 George 5/16/97 Give to local

Steps

1. Break downthe task into steps.

2. Consider the hardware, software, people and other resources involved in each step.

3. Brainstorm, if necessary, for other items of possible significance. 4. Add to the list until you feel it is complete.

Although an Action Plan may have different formats, it should answer:

•Who

•What

•When

•Where

Brainstorming

Brainstorming is a technique used to quickly generate, clarify and evaluate a large list of ideas, problems and issues.

Team members tap into their creativity to find the best solutions for problem solving and decision making. Brainstorming facilitates respect for people on the team by allowing everyone to contribute to the problem-solving process and to be heard without criticism or judgment.

Use

Use Brainstorming as a technique to:

•Collect improvement opportunities and/or problem areas.

•Identify possible causes when constructing an Ishikawa (or Fishbone) Diagram.

•Suggest Potential Improvements.

•Identify Drivers and Restrainers.

Example

Steps

First Phase: Generation

1. State the topic to be brainstormed in specific terms, and write it on a flip chart.

How Can We Make This Year’s Vacation Better?

Determined to make this year’s vacation better than last year’s, George and Betty brainstormed a list of improvements.

1. Better hotel service.

2. Bring something to do if it rains.

3. Go someplace with better climate (not so hot). 4. Fight less.

5. Work with friendlier travel agency.

6. Double-check hotel and plane reservations. 7. Go someplace where we know the language. 8. Stay healthy.

9. Stay at cleaner hotel. 10. Get traveler’s checks.

11. Eat better food; research restaurants more. 12. Maintain more cheerful attitudes.

13. Get more sleep; quieter hotel. 14. Rent car to get around.

15. Know more about area where we’re going. 16. Have friend check on house while we’re away. 17. Plan more activities (don’t want to be bored). 18. Pack less.

Hints for Effective Brainstorming

One thought at a time. Do not criticize any ideas. Pass if needed.

2. Select a recorder to capture ideas on the flip chart.

3. Generate ideas, with each team member taking a turn, until all ideas are exhausted.

Note: An alternative is the “popcorn” approach, in which team members speak out whenever they have an idea.

Second Phase: Clarification

4. Go over the brainstormed list as a team to eliminate duplication and make sure everyone understands all of the items.

Third Phase: Evaluation

5. Evaluate ideas and select those for further action by using Multivoting, a Prioritization Matrix or other Consensus techniques.

Code of Conduct

A Code of Conduct reinforces the Sprint Quality Principle of “Respect for People” in meetings and in daily communication with others. You may use the Code of Conduct shown below or modify the Code to best suit your needs.

S

PRINT

Q

UALITY

THE WAY WE RUN OUR BUSINESS

CODE OF CONDUCT

>Respect Each Person >Share Responsibility >Question and Participate >Attend All Meetings; Be on Time >Listen Courteously

>Keep an Open Mind >

> > >

Consensus

Consensus is a method of group decision making in which a group actively discusses the issues and supports a common decision.

Use

Use Consensus to:

•Eliminate a “we-they” feeling.

•Reach a “win-win” decision – this guarantees that nobody will lose.

•Develop ownership of the decision and support for implementation of the decision.

•Focus on the problem, not on personalities.

•Pool knowledge and experience.

•Gain support of entire group.

•Integrate ideas and feelings of all group members.

•Make better quality decisions.

Steps

1. Prior to the meeting, prepare your position using your knowledge of the problem.

2. Express and explain opinions so the group knows how each person feels and benefits from everyone’s thoughts.

3. Listen to everyone’s opinions and feelings. Then apply logic and understanding to modify individual positions.

4. Avoid using techniques such as voting or simply giving in to save time; realize that differences in opinion help reach a better decision.

More

Consensus is not the same as voting, as shown by the comparison below:

Consensus Voting

•Everyone agrees (to varying •Majority wins, others lose. degrees) on solution.

•Win/win method. •Win/lose method, unless unanimous.

•Ensures commitment by all •Ensures commitment by

to course of action. majority to course of action.

•Time-consuming, can be •Done within a limited period.

frustrating.

•Useful when quality and •Useful when large numbers of

acceptance of decision people must be involved in

both important. decision.

Both methods of making a decision can be useful, but the differences should be well understood. Voting is clear-cut in its results and can be done within a limited time period, making it the most efficient way of arriving at a decision. Furthermore, when a large number of people are involved and want some voice, voting may be the only workable system.

Consensus requires that all decision-makers discuss an issue until everyone agrees to some degree on a solution. Consensus does not mean that everyone shares an equal degree of enthusiasm; it simply means that everyone is at least willing, in good conscience, to go along with the decision. No one should have reservations serious enough to stop the decision or take a different course of action after the meeting’s conclusion.

Consensus is a win-win method. It guarantees that no one will lose badly because it requires that the decision not be made until everyone can, at a minimum, “live with” that decision.

Note: The purpose of Consensus is to allow a team to agree on a general course of action based on facts presented through discussion. Consensus does not necessarily imply or require absolute agreement; in fact, attempting to achieve absolute agreement on every issue can paralyze a team and consume an unreasonable amount of time. Rather, the intent of consensus is to ensure that team members agree enough with the decision to fully support it.

Drivers and Restrainers

Drivers and Restrainers is a tool that identifies information for and against a plan of action.

Use

Consider the following categories when using Drivers and Restrainers:

•People •Time

•Environment •Methods

•Dollars •Materials

Example

Steps

1. List reasons that support taking an action (Drivers) and compare them to the reasons that hold you back from taking the action (Restrainers).

2. Once this tool has helped you choose a plan of action, decide how you will overcome (or minimize) the Restrainers and maximize the Drivers.

Should We Go to the Floating Restaurant?

While on their vacation, George and Betty debated whether or not to try out a floating restaurant they passed during one of their walks on the dock. They made a list of Drivers and Restrainers to help them decide.

Drivers Restrainers

George loves the menu Betty only so-so about the menu Good view of the ocean George gets seasick easily Comfortable atmosphere Entrees rather pricey

Recommended by travel agent Storm blowing in, rough waves Long wait to get seated

Meetings

Meetings provide an arena for employees to identify problems, investigate their causes and develop workable solutions.

Use

Meetings foster improved levels of communication and cooperation among team members.

Components of a Meeting

•Select appropriate meeting time and location to maximize member participation.

•Prepare and distribute PAL (written agenda) before meeting.

•Have meeting recorder take minutes and note action items, responsibilities and expected completion dates.

•Distribute minutes as soon as possible after meeting.

•Post minutes, if appropriate.

•Evaluate meetings using Plus/Delta or Meeting Evaluation Form.

•Designate recorder to capture ideas on flip chart or other group visual tool.

•Designate timekeeper to work with team leader to ensure that all agenda items are covered in allotted time.

Meetings: Evaluation Form

Use

When handed out at the close of a meeting, this form allows team members to anonymously express their opinions of a meeting’s effec-tiveness. Team leaders can use this form to evaluate past meetings and appropriately improve future meetings.

Sample of a Meeting Evaluation Form

I was notified of this meeting in sufficient time to prepare for it. I understood why this meeting was being held (i.e., information sharing, planning, problem solving, decision making, open discussion, etc.) and what specific outcomes were expected. I understood what was expected of me as a participant and what was expected of the other participants (including the leader, coordinator, chairperson, facilitator, etc.).

I understood how the meeting was intended to flow agenda, schedule, design, etc.) and when it would terminate.

Most participants listened carefully to each other. Most participants expressed themselves openly, honestly and directly..

Agreements were explicit and clear, and conflicts were openly explored and constructively managed.

The meeting generally proceeded as intended the agenda was followed; it ended on time) and achieved its intended purpose. My participation contributed to the outcomes achieved by the meeting.

Overall, I am satisfied with this meeting and feel my time here has been well spent.

1 2 3 4 5

Strongly Disagree DisagreeUndecided

Agree Strongly Agree 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Circle one number for each statement. Meeting:

Date: Time:

Adapted from The 1981 Annual Handbook for Group Facilitators, University Associates. (i.e.,

Meetings: Minutes Form

Use

This form helps a recorder keep track of attendees, action items and decisions reached. You may use the form shown below or modify it to best suit your needs.

Sample of a Meeting Minutes Form

TEAM NAME MEETING DATE

TEAM MEMBERS

TOPICS DISCUSSED, ACTION ITEMS AND DECISIONS REACHED (Data, Lists, Matrices, etc.)

1.

2.

3.

4.

5.

Next Meeting Date: Time: Location:

PRESENT PRESENT TEAM MEMBERS

Meetings: Observation Sheet

Use

This sheet can help a meeting facilitator keep track of team members’ participation.

Sample of a Meeting Observation Sheet

Suggests procedures Requests facts Names Behavior Summarizes or clarifes information

Pulls related ideas together

Shows concern

Encourages others

Expresses own feelings

Solicits others’ feelings

Attempts to reconcile disagreement

Checks with group to determine agreement

Offers compromise idea at risk of own Provides facts 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Meetings: Pre-meeting

Checklist

A Pre-meeting Checklist can help a team leader focus on key issues before a meeting so the meeting runs efficiently. The Checklist can help meeting participants make the most of their time.

Sample of a Pre-meeting Checklist

The Purpose of the Meeting

Why is the team meeting today?

What would you like to see the team accomplish? Can all of that realistically be done at the meeting?

The Meeting Agenda

Review the agenda you have planned. If none, plan one now. How much time is planned for each item?

Is there sufficient time at the end to critique the meeting itself?

The Team Leader Role

How do you intend to open the meeting?

What quality improvement techniques will you use? Do you feel comfortable using them? If not, where can you get help?

The Team Member Role

Do you have any specific task or people worries concerning the meeting?

What can be done about them in this meeting?

What can you – or they – do about them in the long term?

The Facilitator Role

Is there anything specific you still need from your facilitator before the meeting?

When can you spend time with your facilitator after the meeting?

Meetings: Post-meeting

Checklist

Use

This checklist can help a team leader evaluate a meeting from a process viewpoint, note items that could have been improved and modify goals for future meetings.

Sample of a Post-meeting Checklist

Meeting Purpose

Do you think the meeting achieved its purpose?

People Dynamics

Did you notice which members contributed – and how? Were you satisfied with how the team interacted? What would you like to see changed?

How can that change be brought about?

Observing Effective Performance

Describe the effective behavior.

Explain the importance of the behavior. What can be done to reinforce the behavior?

The Team Leader’s Impact

How do you feel about how you led the meeting? What, if anything, would you do differently?

Improving Ineffective Performance

Describe any evident problem behaviors.

What alternate behaviors would help the situation?

Facilitator’s Role

How do you feel about your facilitator’s role at the meeting? (Appropriate? Timely? Helpful? Supportive to your leadership?) Were there times when you would have liked your facilitator to do something differently? (When? How? Why?)

Mission

A Mission statement states the core reason for existence of an organiza-tion, a department or a process. Every organizaorganiza-tion, department and process should have its own Mission statement, and each Mission state-ment should meet the following criteria:

•States core reason for organization, department or process to exist.

•Supports strategic direction of entire organization.

•Describes strategy of organization, department or process in achieving the vision (What we do).

•Reflects organization, department or process distinctive competence (How we do it).

•Externally focused – identifies customer (For whom).

•Clear and understandable.

•Serves as an energy force/is compelling.

•Actionable.

•Able to be measured.

•Dynamic.

•Broad enough to be flexible.

•Serves as decision-making template.

Example

George and Betty’s Mission is shown below:

To organize fun vacations by planning ahead and staying within our budget. We will do this by using Sprint Quality tools and techniques.

Multivoting

The Multivoting technique uses a structured series of votes by a team to help reduce a large number of ideas to a manageable few (usually three to five).

Use

Multivoting is often used after a team has discussed items on a Brainstorm list, and the list is still too lengthy for everything to be addressed.

Steps

1. First vote: Team members vote for as many items as they wish but vote only once per item. Members agree on the number of votes that determines whether an item should remain on the list. They circle the items receiving a higher number of votes than the other items. Example: A team of eight members generates a list of 14 items after round one. The team decides to circle items receiving six or more votes. In this example, the team circles eight items.

2. Second vote: Each person should vote a number of times equal to half the circled items.

Example continued: Each person gets to vote four times during the second vote.

3. Continue the Multivoting until the list is reduced to three to five items. Never Multivote down to only one item, because this reduces the process to a “one winner” scenario and creates a win/lose situation. Multivoting reduces the list to a workable number for group discussion and helps a group reach Consensus.

PAL

PAL is an acronym to help remember the three key points to planning and managing a meeting:

•P – Purpose

•A – Agenda

•L – Limits

Use

A PAL tells participants what they are supposed to accomplish in a meeting and helps them complete the activities that will lead them toward that accomplishment. A PAL can also include the date of the meeting, a list of the attendees and the exact location of the meeting.

Purpose:Establishing the purpose in advance lets everyone know the expected outcome of the meeting. If the meeting gets off track, suggest a relevancy check to get it back on track. If the issue being discussed is irrelevant, stop discussing it. If the issue is important but not part of the agenda, either put the issue in the Parking Lot or gain agreement from the participants to change the purpose of the meeting.

Agenda:Create an agenda with as much detail as appropriate to help keep the meeting on track. Meeting minutes should reflect action items and decisions resulting from the meeting agenda. (Hint: creating a PAL in advance often makes it easier to record meeting minutes.)

Limits:Establishing a specific meeting length in advance is respectful of people. Starting on time and ending on time is a golden rule of meeting management. If you need more time to complete the agenda, negotiate with the meeting attendees and gain their agreement to continue beyond the original time limits.

Note: Providing the PAL to attendees in advance of the meeting will help participants come to the meeting fully prepared.

Example

George and Betty made a PAL to make sure all of their questions were answered and needs were communicated during a meeting with their travel agent.

PAL – Meeting with Rhonda World, travel agent

Purpose: To plan George and Betty’s trip to Sprintsville Beach, Florida

Agenda: •Introductions

•George and Betty’s expectations (explain last year’s fiasco)

•Options (hotels, airfare, activities)

•Pricing

•Set up next meeting date

Limits: 2 p.m. – 3 p.m.

Date: March 18, 1997

Place: Wide World Travel Agency

Parking Lot

A Parking Lot is a tool to keep meetings, classes, etc., on track while allowing flexibility to deal with unanticipated issues.

Use

A Parking Lot provides an easy way for participants to keep the meeting focused on the proper agenda items.

Steps

1. If an item not covered on the agenda is being discussed and the group needs to move on, write the issue on a sticky note and place it in the Parking Lot. The Parking Lot can be a blank flip chart page, a paper on a wall, a desktop, etc.

2. Revisit the Parking Lot after the agenda items have been completed. 3. If there is not enough time to discuss the Parking Lot issues, plan a

second meeting, if appropriate.

4. If the Parking Lot items should be handled by another group, pass the information to the appropriate department.

Plus/Delta

The Plus/Delta technique determines the positive features of meetings, projects or other events, and it can help identify changes that would make future events more effective. Plus/Delta also provides an easy way to perform the “Check” step in PDCA (see Structured Problem Solving).

Use

Plus/Delta is used in meetings and can be used to critique and improve projects and processes as well.

Example

After they returned home from their vacation, Betty and George created a Plus/Delta to evaluate their experience:

+

•Great travel agency

•George learned to water-ski

•Didn’t overpack

•Great food _ chose restaurants well

•Exceptional hotel service

•Resolved disagreements quickly

•Educational _ learned about Sprintsville Beach history

•Much better trip than last year

•Feel completely rested and almost ready for work

•Planning with Sprint Quality tools made trip go smoothly

∆

•Bring more money for gifts or create gift budget

•Betty needs more comfortable shoes

•Use sunscreen every day to avoid sunburn

•Research activities even more to avoid boredom

Steps

1. Using a flip chart, draw a line down the middle from top to bottom. On the top left-hand side, put a

+

2. Ask the participants to provide their feedback on the positive features of the event. List these comments on the left-hand side of the flip chart under

+

3. Ask participants which features need to be changed and what the changes should be to enhance the effectiveness and efficiency of the next event. List on the right-hand side of the flip chart under ∆. Using Plus/Delta provides valuable feedback and is part of the PDCA process.

•Plan– Meeting purpose, agenda and limits (PAL)

•Do– Conduct the meeting

•Check– Plus/Delta

•Act– Modify next meeting to improve on Deltas and retain Pluses

Note: Plus/Delta is useful if you review it before your next meeting. Use the suggested improvements, assuming they are practical.

Tools for

Problem

Solving

with

Numbers

Check Sheet

A Check Sheet (as opposed to a Checklist) is a simple form on which data are recorded using tick marks.

Use

Design the Check Sheet to display the different kinds of data that you will collect.

Determine categories of data by asking fact-finding questions:

What(what happens)?

Who(who does it, who receives it, who is responsible)?

Where(what place, what part, what section)?

When(what time of day/month, how often)?

How(how does it happen, how much, how long)?

The Check Sheet should clearly indicate who collected the data and where, when and how it was collected.

Example

Led astray one time too many by incompetent travel agents, Betty and George were determined to find a good agency. Convinced that managing by fact would help them, they collected data on several agencies to find one with a reputation for providing exceptional satis-faction. To do this, they determined how many times an agency was mentioned positively and negatively in several local publications.

Positive Negative Positive Negative Positive Negative

BY: George and Betty ON: January-February 1997

AT: their home FORMULA: N/A DATA COLLECTED

Traveler’s

Journal CompanionJourney The TravelBuff Totals 3 4 12 0 1 6 U Travel, We Book Baldrige Travel Funtime Travel AGENCIES MAGAZINES

Control Charts

Control Charts are line graphs used to track the performance of a process over time. Process results fall into statistically predictable patterns, called “distributions.” A bell-shaped curve, in which most observations fall in the center and fewer and fewer observations fall evenly on either side of the center, is an example of a “normal distribution.”

Control Charts illustrate the variability of a process within a pair of statistically calculated limits called control limits. All processes are subject to variation, and Control Charts help determine how much variation is acceptable and what kinds of variation are controllable and, therefore, can be improved. The measure of the variation in a set of data is called “range,” which is calculated by subtracting the lowest value in the set of data from the highest.

There are two main sources of variation:

•A “common cause” is a source of variation that is always present, a part of the random variation inherent in the process itself.

•A “special cause” is a source of variation that is not always present; it is sometimes called an assignable cause. A special cause is identified by a point beyond the control limits or by a non-random pattern within the control limits.

Statistical control occurs when all special causes have been removed from a process. This condition is illustrated on a Control Chart by the absence of points beyond the control limits and by the presence of only random patterns within the control limits. When the fluctuations within the process occur in a non-random pattern or go outside a control limit, the process is “out of statistical control.”

Control limits are statistically derived from samples of a stable process. They are not to be confused with specification limits, which are deter-mined by Valid Customer Requirements, regardless of what the process is capable of achieving. Ideally, the control limits are well within the specification limits, so there is confidence in the reliability of the process. If the control limits are very close to or outside the specification limits, the process is indicating that it may not be reliable in achieving the customer’s needs.

Use

Control Charts monitor the performance of an ongoing process and determine answers to the following questions:

•Is the process in statistical control?

•Does action need to be taken to keep the process in control or bring it back into control?

•Is the variation a result of common causes, special causes or both?

•Does an opportunity for process or system improvement exist?

•Have implemented potential improvements truly improved the process? Control Charts are used throughout PDCA and the QI Story process and can be particularly helpful in identifying problem areas and track-ing results.

Important Note:

Control Charts are most useful when they are created while the process is operating. In this way, the process can be controlled in near-real time. Creating a Control Chart after the fact will indicate if a process produced excessive variation in the past, but there is no way to eliminate the defects produced by that variation.

Examples

Control Charts can be classified into two main groups, depending on the type of data generated from the process. The chart below summarizes the types of Control Charts discussed on the following pages.

A Variable Control Chart deals with quantitative data – characteristics which can be measured. An example of variable data might be the number of days it takes Betty’s postcard to get to her friend, Janice, or the weight in pounds of George’s suitcase. You can construct an “X–, R” or “X, MR” chart to record data of this type.

An Attribute Control Chart deals with qualitative data that can be counted for recording and analysis. An example of attribute data might be whether or not Betty’s postcard got to her friend or the presence or absence of luggage tags on George’s suitcase. When the results are recorded in a simple yes/no fashion, you can construct c, u, np or p charts. For additional information on Attribute Control Charts, you may want to refer to pages 61-85 of Guide to Quality Control by Kaoru

Ishikawa, available from the Sprint Corporate Research Center. C CHART U CHART U CHART FIXED SAMPLE SIZE VARIABLE SAMPLE SIZE P CHART VARIABLE SAMPLE SIZE NP CHART P CHART FIXED SAMPLE SIZE

DEFECTS DEFECTIVE UNITS

YES/NO GOOD/BAD PASS/FAIL ATTRIBUTE DATA SAMPLE SIZE (1) SAMPLE SIZE (2-5) VARIABLE MEASURABLE X, MR CHART X,R CHART

Note: Because setting up Control Charts can involve a high degree of complexity, you may want to contact a Statistical Process Control (SPC) specialist if you need help.

Variable Control Charts

X– (X-bar), R Chart – This two-part Control Chart monitors processes with variable data. The data used on these charts are reported in small subgroups containing at least two (at most five) individual data readings.

Example: George and Betty sent five postcards per day. When they got home, they called their friends to find out when their cards arrived. On an X– Chart, George and Betty plotted the average number of days it took a particular day’s cards to get through the mail. They did this for each day of their vacation. They also computed the range in number of days it took each day’s cards to reach their friends. The X– Chart tracks how the process average varies from one point to another. The R (or range) chart tracks the variation that occurs.

X, MR (Moving Range) Chart – This two-part Control Chart also monitors processes with variable data. This is similar to the X–, R Chart, except that it observes one item at a time. In other words, the X, MR Chart tracks how each process data point varies from another. Example: George and Betty plotted the number of days it took each card to reach its destination.

Steps

1. Decide on a measure to use in monitoring performance. Put this on the vertical axis.

2. Choose a time interval for taking measurements. Put this on the horizontal axis.

3. Calculate control limits. First, find the average and standard devia-tion for the data. The upper control limit (UCL) is the average plus approximately three standard deviations, while the lower control limit (LCL) is the average minus approximately three standard deviations. Mark these “control limits” on the vertical axis and draw a line for each horizontally along the length of the chart. Be aware that the upper and lower control limits are not the same as the customer specification limits.

4. Enter your measurements (data points) chronologically on the chart. 5. Draw a line connecting the data points.

After constructing the Control Chart, examine it to see where the data points are located. If the process continues to be fairly consistent and stable, most of the data points will randomly fall within the established control limits. Fluctuations within the process that occur in a non-random pattern or points that fall outside one of the control limits should be reported or investigated as special causes.

More

Components of Control Charts

Be sure to include these lines on your control chart 1. A Mean (X)– represents the average value of the process.

2. An Upper Control Limit (UCL) drawn at a calculated distance (approxi-mately three standard deviations) above the central line represents the maximum variation that can be expected if only common causes of variation are present.

3. A Lower Control Limit (LCL) drawn at a calculated distance (approxi-mately three standard deviations) below the central line represents the minimum variation that can be expected if only common causes of variation are present.

The horizontal axis tracks time or sequential order, and the vertical axis tracks the factor being studied.

UCL LCL X V ertical Axis Horizontal Axis

Understanding Control Charts

All of the following patterns indicate that something is occurring in the process that should be investigated. These patterns indicate that the variation results from a special cause.

Points Outside the Limit:

Control limits are calculated to measure the natural variability of a process. Any point on or outside the limits indicates a special cause of variation and requires investigation.

Run:

A Control Chart shows a run when points occur continually on one side of the center line. A run of seven points is considered abnormal. Also considered abnormal are 10 out of 11, 12 out of 14, or 16 out of 20 points on one side of the center line.

UCL LCL X UCL LCL X

Trending:

Seven points in a continuous upward or downward direction signify a trend.

Cycling (periodicity):

Fourteen or more points which alternate up and down are considered abnormal and require investigation.

UCL LCL X UCL LCL X

Hugging the Center Line:

On a Control Chart, “hugging” the center line (X–) occurs when most points fall very close to the center line. This circumstance usually means that different kinds of data have become mixed with the data of the test group; the data then must be resorted before constructing another graph. To determine if your Control Chart exhibits hugging, try drawing one line halfway between the center line and the UCL, and one line halfway between the center line and the LCL. If most of the points on your Control Chart appear between these lines and the center line, your Control Chart is probably hugging the center line.

UCL

LCL X 1/2 UCL

Hugging the Control Limits:

A line may also hug the control limits. If you draw one line that is two-thirds of the way between X– and the UCL, and one line that is two-thirds of the way between X– and the LCL, and if two out of three points (or three out of seven points or four out of 10 points) graphed lie between the drawn lines and the closest control limit, your graph exhibits hugging of the control limits.

Note: Control Charts can be powerful diagnostic tools. If special causes are detected, determine root causes and correct the problems. If no special

causes are present, it is not generally productive to investigate the causes of individual data points on the Control Chart. Instead, look at the entire

process and improve the process using Flow Charts and other Process Improvement tools and techniques.

UCL

LCL X 2/3 UCL

Cost/Benefit Analysis

Use

Cost/Benefit Analysis is a technique for determining the dollar impact of problems and potential improvements. This knowledge helps you prioritize and select improvements.

It is not necessary to have detailed accounting data in order to get a general idea of the financial impact of a problem or issue; it is all right to make some assumptions and verify them as you gather data.

Steps

There are two approaches to estimating costs: the “bottom-up approach” and the “top-down approach.”

Bottom-up Approach:Start with smaller units and build the estimate toward an overall amount.

1. Estimate how many times the problem occurs per unit of time. (Example: 12 occurrences/week)

2. Estimate cost per occurrence. (Example: $200 per occurrence) 3. Estimate total time involved.

(Example: 52 weeks)

4. Calculate total annual cost by multiplying above factors. (Example: 12 X $200 X 52 = $124,800)

Top-down Approach: Start with the overall cost of some budget item or other known variable and an estimate of the percentage of the total which represents the problem. Then calculate unit cost as shown below. 1. Estimate the percentage of some expenditure that applies to the

problem area (for example, percent of total labor devoted to the problem, percent of total “downtime” attributed to the problem). 2. Multiply the percentage by the budgeted annual cost to get the

estimated amount spent on the problem in one year. (Example: 10% of total labor x $185,000/year budgeted = $18,500/year)

3. Divide by unit of time.

(Example: $18,500/year divided by 52 weeks/year = approximately $356/week)

Cost of Quality

The Cost of Quality is the amount a company, division or department spends for overall quality. Estimates put the Cost of Quality at 15% -30% of revenue for the average company.

Cost of Quality Consists of Three Components:

•The Cost of Conformanceis the money and time spent to ensure that Valid Customer Requirements are being met. It includes money and time spent on both prevention (finding mistakes before they happen) and inspection (finding mistakes after they happen but before delivery).

•The Cost of Lost Opportunityis the profit impact of lost revenues that result from failure to meet customer requirements. If a company loses business because it has a reputation for poor quality, it loses revenue. The profit it could have made on that revenue is the cost of lost opportunity.

•The Cost of Nonconformanceis the money spent to fix products and services that do not meet Valid Customer Requirements. This cost includes money spent on warranties, credits and other customer con-cessions paid as a result of poor product or service performance.

Cycle Time

Cycle Time is the time that elapses from the moment a process begins to the moment the process ends. Reducing Cycle Time can lead to a competitive advantage.

Use

Cycle Time reduction can affect such areas as new product development, production and delivery. Goals are frequently expressed in multiples (for example, Motorola’s “10X” program, which aims to reduce cycle times by 10 times).