Quality Management

Reference Material to study:

• A Guide to the Project Management Body of Knowledge, Chapter 8 (1996 edition)
• Quality Management for Projects and Programs, Ireland, Lewis R., 1991
• PMP Challenge!, ESI, Quality Section
• PMBOK Q&A, PMI, Quality

What to Study?

• The PMBOK phases of Project Quality Management: Quality Planning, Quality Assurance, and Quality Control (Be familiar with Inputs, Tools and Techniques, and Outputs for each phase)
• Know the difference between Quality Control and Quality Assurance
• Project characteristics and attributes (the bilities) (Ireland, Chapter II)
• Cost of Quality (Ireland, Chapter IV)
• Statistical Concepts and Quality Tools (Ireland, Chapter V)
• Cost Trade-offs
• Difference between the Deming, Juran, and Crosby Management approaches
• Pareto and fishbone diagrams

Key Definitions

Control: The process of comparing actual performance with planned performance, analyzing variances, evaluating possible alternatives, and taking appropriate corrective action as needed.

Control Charts: A graphic display of the results, over time and against established control limits, of a process. They are used to determine if the process is in control or in need of adjustment.

Corrective Action: Changes made to bring expected future performance of the project into line with the plan.

Cost of Quality: The cost incurred to ensure quality. Includes quality planning, quality control, quality assurance, and rework.

Pareto Diagram: A histogram ordered by frequency of occurrence that shows how many results were generated by each identified cuase.

Performance Reporting: Collecting and disseminating information about project performance to help ensure project progress.

Project Quality Management: The processes required to ensure that the project will satisfy the needs for which it as undertaken.

Quality Management
Processes

Quality Planning:

• The process of identifying which quality standards are relevant to the project and determining how to satisfy them.
• Inputs include: Quality policy, scope statement, product description, standards and regulations, and other process outputs.
• Methods used during quality planning include: benefit/cost analysis, benchmarking, flowcharting, and design of experiments.
• Outputs include: Quality Management Plan, operational definitions, checklists, and inputs to other processes.

Quality Assurance:

• The process of evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards.
• Inputs include: Quality Management Plan, results of quality control measurements, and operational definitions.
• Methods used include: quality planning tools and techniques and quality audits.
• Outputs include: quality improvement.

Quality Control:

• The process of monitoring specific project results to determine if they comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance.
• Inputs include: work results, Quality Management Plan, operational definitions, and checklists. .
• Methods used during quality control include: inspection, control charts, pareto diagrams, statistical sampling, flowcharting, and trend analysis.
• Outputs include: quality improvements, acceptance decisions, rework, completed checklists, and process adjustments.

Quality Management
Concepts

Definition of Quality: (from Ireland book)

• Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
• Some goals of quality programs include:
  • Fitness for use. (Is the product or service capable of being used?)
  • Fitness for purpose. (Does the product or service meet its intended purpose?)
  • Customer satisfaction. (Does the product or service meet the customer's expectations?)
  • Conformance to the requirements. (Does the product or service conform to the requirements?)

Quality Movements:

• Deming Prize (Overseas)
  • Administered by the Union of Japanese Scientists and Engineers (JUSE)
  • Awarded to overseas companies that demonstrate a superior quality program
  • Checklist includes: organization's policy, structure, education, collection, dissemination, and use of information, analysis of problems, establishment and use of standards, management system, quality assurance, effects, and future plans. (See Ireland, Appendix A)
  • Deming's 4 step cycle for improvement: Plan, Do, Check, Act
  • Deming's major points for implementing quality
    1. Participative approach
    2. Adopt new philosophy
    3. Cease mass inspection
    4. End awards based on price
    5. Improve production and service
    6. Institute leadership
    7. Eliminate numerical quotas
    8. Education and training
    9. Encourage craftsmanship

• Malcolm Baldrige
  • The Malcolm Baldrige National Quality Improvement Act was established in
    Aug. 20, 1987.
  • Purpose of the act was to promote quality awareness; to recognize quality acheivements of U.S. companies, and to publicize successful quality strategies.
  • Covers the following seven categories: (See Ireland, Appendix B)
    1. Leadership
    2. Information and Analysis
    3. Strategic Quality Planning
    4. Human Resources
    5. Quality Assurance
    6. Results
    7. Customer Satisfaction
• Department of Defense: Total Quality Mgmt (TQM)
  • Quality is key to maintain level of readiness
  • Quality is vital to our defense, requires a commitment by all personnel
  • Quality is a key element of competition
• Philip Crosby (ITT): Quality is Free
  • Four absolutes of quality mgmt:
    1. Quality is conformance to requirements.
    2. The system of quality is prevention.
    3. The performance standard is zero defects.\
    4. The measurement of quality is the price of noncomformance.
  • 14 steps to improving quality.
    1. Mgmt commitment
    2. Quality improvement team
    3. Measurement
    4. Cost of quality
    5. Quality awareness
    6. Corrective action
    7. Zero defects planning
    8. Employee education
    9. Zero defects day
    10. Goal setting
    11. Error cause removal
    12. Recognition
    13. Quality councils
    14. Do it over again
• Juran
  • Attitude breakthrough
  • Identify vital new projects
  • Knowledge breakthrough
  • Conduct the analysis
  • Institute change
  • Overcome resistance and institute controls

Quality Concepts:

• Zero Defects
  • Implies that there is no tolerance for errors within the system.
  • The goal of all processes is to avoid defects in the product or service.
  • Similar to six sigma: almost zero defects
• The Customer is the Next Person in the Process
  • The internal organization has a system that ensures the product or service is transferred to the next person in the process in a complete and correct manner.
  • The product or service being built is transferred to another internal party only after it meets all the specifications and all actions at the current work station.
  • Avoids incorrectly assembled components and poor workmanship.
• Do the Right Thing Right the First Time (DTRTRTFT)
  • Implies that it is easier and less costly to do the work right the first time than it is to do it the second time.
  • Entails the training of personnel to ensure sufficient skills and tools to correctly complete the work.
• Continuous Improvement Process (CIP) (From Japanese word, Kaizen)
  • A sustained, gradual change to improve the situation.
  • Differs from innovation -- does not make a sudden jump to a plateau where it matures over time. (see Ireland, I-6)
  • Focuses on 11 principles: constancy of purpose, commitment to quality, customer focus and involvement, process orientation, continuous improvement, system-centered management, invenstment in knowledge, teamwork, conservation of human resources, total involvement, and perpetual commitment.

Project Characteristics/Attributes that bear on quality:

• Producibility (technology required)
  • Ability of a product or service to be produced within the existing technology, human resources, skills, knowledge, and materials at a cost compatible with market expectations.
  • Producibility is one of the most critical aspects of developing any new product.
• Usability (effort expended to use)
  • The ability of a product to perform its intended function for the specified user under the prescribed conditions.
  • Usability is determined by examing performance, function and condition of a product.
• Reliability (MTBF)
  • The degree to which a unit of equipment performs its intented function under specified conditions for a specified period of time.
  • Computed by 2 methods of Mean-Time-Between-Failure (MTBF):
    • Predicted MTBF: Based on a mathematical computation of a component failure using a tree diagram to determine sequential failure aspects of the component rated periods. Least desirable method because it cannot account for enviornmental variations that can degrade components to lower rates.
    • Actual MTBF: Use of field collected data to compute the failures under realistic operating conditions to find the average time between failure. The actual reliability will seldom be the same as the predicted reliability.
• Maintainability (Mean-Time-To-Repair: MTTR)
  • The ability of a unit to be restored within a specified time to its performance capability under the environmental operating conditions within a specified, average period of time.
• Availability (Probability of performance)
  • The probability of a product being capable of performing a required function under the specified conditions when called upon.
  • The key parts of availability are reliability and maintainability.
• Operability (Expected conditional use)
  • The ability of a product to be operated by human resources for specified periods of time under given conditions without significant degradation of the output.
• Flexibility (Expected variable use)
  • The ability of a product to be used for different purposes at different capacities and under different conditions.
• Social Acceptability (Environment and safety)
  • The degree of compatibility between the characteristics of a product or service and the prevailing values and expectations of the relevant society
  • The degree to which a public accepts a product for use.
• Affordability (Return for quality required)
  • The ability to develop, acquire, operate, maintain, and dispose of a product over its life.

Cost of Quality:

• Cost of quality is the total price of all efforts to acheive product or service quality. This includes all work to build a product or service that conforms to the requirements as well as all work resulting from noncomformance to the requirements.
• The typical project should have a goal of between 3-5% of the total value as the cost of a quality program depending on the type of project and its total dollar value.
  • Cost to build right the first time
  • Training programs
  • Statistical Process Control (SPC) Costs
• Cost of a quality system is often viewed as a negative cost because errors in work have been traditionally accepted as a cost of doing business.

Cost of Conformace:

• Planning
• Training and indoctrination
• Process control
• Field testing
• Product design validation
• Process validation
• Test and evalution
• Quality audits
• Maintenance and calibration

Cost of Nonconformance

• Scrap
• Rework
• Expediting
• Additional material or inventory
• Warranty repairs or service
• Complaint handling
• Liability judgments
• Product recalls
• Product corrective actions

Cost of Non-Quality:

• Cost of non-quality is estimated to be 12-20% of sales.
• Waste of time and materials
• Rework of poor quality products
• Additional material
• Delays in schedule
• Product and service image
• Corporate image

Major Cost Categories of Quality:

• Prevention Cost - cost to plan and execute a project so that it will be error-free
• Appraisal Cost - cost of evaluating the processes and the outputs of the processes to ensure the product is error-free
• Internal Failure Cost - cost incurred to correct an identified defect before the customer receives the product
• External Failure Cost - cost incurred due to errors detected by the customer. This includes warranty cost, field service personnel training cost, complaint handling, and future business losses.
• Measurement and Test Equipment - capital cost of equipment used to perform prevention and appraisal activities.

Opportunities for Reducing Cost:

• Just-in-Time - concept of zero inventory in a manufacturing plant. Reduces cost of storing and moving parts; cost of inventory; cost of parts damaged through handling, etc.
• Product Life Cycle Cost - concept of reducing overall product life cycle cost by linking the cost areas of the product life cycle (R&D, acquisition, and operations and maintenance) and considering each one's cost implications for the other.
• Product Maturity - Identifying, documenting, and correcting failures early helps products acheive stablility earlier in the life cycle. (see Ireland, IV-9)
• Areas of Waste in Projects
  • Waste in rejects of completed work
  • Waste in design flaws
  • Waste in work-in-process
  • Waste in motion for manpower (under-trained employee)
  • Waste in management (Improper direction of work)
  • Waste in manpower (Misplaced or waiting workers)
  • Waste in facilities (Ordering excess material)
  • Waste in expenses (Unnecessary meetings, travel)

Statistical Concepts and Quality Tools

Statistical Quality Control:

• Method used to measure variability in a product for evaluation and corrective actions
• Normal Distribution Curve
  • Six standard deviations (+3 and -3) encompass 99.73% of area
  • Four standard deviations (+2 and -2) encompass 95.46% of area
  • Two standard deviations (+1 and -1) encompass 68.26% of area

Quality Control Systems:

• Process Control Charts
  • Statistical techniques used for monitoring and evaluating variations in a process.
  • Identifies the allowable range of variation for a particular product characteristic by specifying the upper and lower bounds for the allowable variation.
  • Upper Control Limit (UCL), Lower Control Limit (LCL), process average: the mean of the averages for the samples taken over a long period of time. (see Ireland V-2 through V-7)
  • Visual patterns indicating out-of-control state or a condition that requires attention:
    1. Outliers: a sample point outside the control limits
    2. Hugging control limit: a series (run) of points that are close to a control limit. Requires correction to prevent data points from going outside the control limit.
    3. Cycle: A repeating pattern of points.
    4. Trend: A series of consecutive points which reflect a steadily increasing or decreasing pattern.
    5. Run: A series of consecutive points on the same side of the average. Rule of thumb: considered abnormal if 7 consecutive points, 10 of 11, 12 of 14 data points are above or below the process average.
• Acceptance Sampling
  • Used when expensive and time-consuming to test 100%. Random sampling may be used to check the characteristics and attributes of a given lot of goods.
  • Determines whether or not the lot conforms to the specifications or standards necessary to support the overall project requirements.
  • Inspection and test standards must be established to ensure that procedures are adequate to determine whether a lot is conforming or nonconforming to specifications.
  • Standards must also be set for qualification of the sampled lot.
  • Important to select a sample size that will provide sufficient information about the larger lot of goods without costing a great deal of money.
  • Must determine the number of allowable defects before lot is rejected. (see Ireland V-8)

Tools of Quality Mgmt:

• Pareto Diagram
  • Ranks defects in order of frequency of occurrence to depict 100% of the defects. (Displayed as a histogram)
  • Defects with most frequent occurrence should be targeted for corrective action.
  • 80-20 rule: 80% of problems are found in 20% of the work.
  • Does not account for severity of the defects
• Cause and Effect Diagrams (fishbone diagrams or Ishikawa diagrams)
  • Analyzes the inputs to a process to identify the causes of errors.
  • Generally consists of 8 major inputs to a quality process to permit the characterization of each input. (See Ireland, V-13)
• Histograms
  • Shows frequency of occurrence of items within a range of activity.
  • Can be used to organize data collected for measurements done on a product or process.
• Scatter diagrams
  • Used to determine the relationship between two or more pieces of corresponding data.
  • The data are plotted on an "X-Y" chart to determine correlation (highly positive, positive, no correlation, negative, and highly negative) (See Ireland, V-14)
• Other Tools
  • Graphs
  • Check sheets (tic sheets) and check lists
  • Flowcharts

Quality and People in Project Management:

• Management defines type and amount of work
• Management is 85% responsible for quality
• The employee can only assume responsibility for meeting the requirements of completing the work when the employee:
  • Knows what's expected to meet the specifications
  • Knows how to perform the functions to meet the specifications
  • Has adequate tools to perform the function
  • Is able to measure the performance during the process
  • Is able to adjust the process to match the desired outcome
• Project quality team consists of:
  • Senior Mgmt
  • Project Manager
  • Project Staff
  • Customer
  • Vendors, suppliers, and contractors
  • Regulatory Agencies
• Reviews & Audits
  • Management reviews determine the status, progress made, problems, and solutions
  • Peer reviews determine whether proposed or completed work meets the requirements
  • Competency center reviews are used to validate documentation, studies, and proposed technical solutions to problems.
  • Fitness reivews and audits determine the fitness of a product or part of a project. (addresses specific issues)
• The collection of quantitative data for statistical analysis is the basis for proactive mgmt by FACT rather than by EXCEPTION. Mgmt by exception lets errors and defects happen before mgmt intervention.

Sample Questions

1. The process of evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards is called:
   A. Quality Assurance
   B. Quality Control
   C. Quality Planning
   D. Quality Review
   
   
2. The process of monitoring specific project results to determine if they comply with relevant quality standards is called:
   A. Quality Assurance
   B. Quality Control
   C. Quality Planning
   D. Quality Review
   
   
3. A histogram ordered by frequency of occurrence that shows how many results were generated by each identified cause is:
   A. Statistical Histogram
   B. Juran Histogram
   C. Fishbone Diagram
   D. Pareto Diagram
   
   
4. Tools and techniques used during the Quality Planning process include:
   A. Benefit/cost analysis
   B. Benchmarking
   C. Quality audits
   D. a and b
   E. all of the above
   
   
5. The overall intentions and direction of an organization with regard to quality as formally expressed by top management is a:
   A. Quality Plan
   B. Quality Statement
   C. Quality Policy
   D. TQM
   
   
6. CIP is:
   A. Continuous improvement process
   B. A sustained, gradual change
   C. Includes constancy of purpose and commitment to quality as part of its focus
   D. a and b
   E. all of the above
   
   
7. The practice of ceasing mass inspections and ending awards based on price is credited to:
   A. Edward Deming
   B. Philip Crosby
   C. Juran
   D. Pareto
   
   
8. Quality is:
   A. Zero defects found
   B. Conformance to requirements
   C. The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs
   D. b and c
   E. all the above
   
   
9. The concept of making a giant leap forward followed by a period of maturity is:
   A. Innovation
   B. Continuous improvement
   C. Just in time
   D. Paradigm
   
   
10. The concept that it is easier and less costly to do the work right the first time is called:
    A. Zero defects
    B. Continuous improvement
    C. DTRTRTFT
    D. The customer is the next person in the process
    
    
11. The ability of a product to be used for different purposes at different capacities and under different conditions determines its:
    A. Usability
    B. Flexibility
    C. Operability
    D. Availability
    
    
12. Which of the following is not considered a cost of nonconformance to quality?
    A. Scrap
    B. Rework
    C. Expediting
    D. Process control
    E. all of the above are considered nonconformance costs
    
    
13. Cost of quality includes:
    A. Cost of all work to build a product or service that conforms to the requirements
    B. Training programs
    C. Cost of all work resulting from nonconformance to the requirements
    D. a and b
    E. all of the above
    
    
14. What percentage of sales is estimated to be the cost of non-quality?
    A. 3-5%
    B. 12-20%
    C. 30-40%
    D. 6-8%
    
    
15. A series of consecutive points on the same side of the average is called:
    A. Run
    B. Trend
    C. Outliers
    D. Cycle
    
    
16. Which of the following statements concerning acceptance sampling is false?
    A. Used when expensive and time-consuming to test the product 100%.
    B. The number of allowable defects before lot is rejected is predetermined.
    C. Inspection and test standards must be established to ensure that procedures can adequately
    determine conformance and nonconformance.
    D. If the number of defects found in the sample exceeds the predetermined amount, the entire lot
    is rejected.
    E. All of the above are true
    
    
17. 80% of the problems are found in 20% of the work is a concept of:
    A. Edward Deming
    B. Philip Crosby
    C. Juran
    D. Pareto
    
    
18. A structured tool, usually industry or activity specific, used to verify that a set of required steps has been performed is called:
    A. Quality Policy
    B. Check list
    C. Trend analysis
    D. Pareto diagram
    
    
19. A tool that analyzes the inputs to a process to identify the causes of errors is called:
    A. Cause and effect diagram
    B. Scatter diagram
    C. Ishikawa diagram
    D. Pareto diagram
    E. a and c
    
    
20. The concept of zero inventory is called:
    A. Six sigma
    B. Continuous improvement
    C. Just in Time
    D. Zero defects
    
    

Answers

1. A
2. B
3. D
4. D Quality audits are used during Quality Assurance
5. C
6. E
7. A
8. D Option B is from CII Publication 10-2; Option C is from ISO 8402)
9. A
10. C
11. B
12. D
13. E
14. B
15. A
16. E
17. D
18. B
19. E
20. C