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Softheon™
Enterprise ContentManagementSystem
Process and Daily Work
Management

Softheon Inc. r20030724 3
Table of Contents
Chapter 1. Introduction..................................................................................................................7
Overview................................................................................................................................7
Objectives ..............................................................................................................................7
Overall Management Process..................................................................................................8
Workshop Materials ..........................................................................................................9
Workshop Procedure ........................................................................................................9
Total Quality Management (TQM).................................................................................... 11
Exercise............................................................................................................................... 14
Components of TQM............................................................................................................. 15
Policy Management (PM) or Policy Deployment................................................................ 15
Performance Improvement .............................................................................................. 15
Daily Work Management (DWM)...................................................................................... 15
Benefits of DWM Control Systems ................................................................................... 18
Exercise............................................................................................................................... 19
Chapter 2. Choose Top – Priority Process ................................................................................... 21
Overview.............................................................................................................................. 22
Objectives ............................................................................................................................ 22
What is a Process?............................................................................................................... 23
Exercise............................................................................................................................... 25
Case Study .......................................................................................................................... 26
Identifying the Major Work Processes .................................................................................... 27
Top – Priority Process........................................................................................................... 29
What is a Top-Priority Process?....................................................................................... 29
Choosing a Top-Priority Process...................................................................................... 29
Work Process Prioritization Matrix.......................................................................................... 30
Case Study .......................................................................................................................... 33
Exercise............................................................................................................................... 34
Chapter 3. Document the Work Process ....................................................................................... 35
Overview.............................................................................................................................. 36
Objectives ............................................................................................................................ 36
Customer/Supplier Model ................................................................................................ 37
The Customer ...................................................................................................................... 38
Classification of Customers by Impact .............................................................................. 40
Flowcharting......................................................................................................................... 44
Process Flowcharts......................................................................................................... 45
Steps to Flowchart a Process .......................................................................................... 46
Case Study .......................................................................................................................... 47

Exercise............................................................................................................................... 48
Chapter 4. Build the DWM System............................................................................................... 51
Overview.............................................................................................................................. 52
Objectives ............................................................................................................................ 52
Valid Requirements............................................................................................................... 53
Criteria to Determine Valid Requirements ......................................................................... 53
Process to Establish Valid Requirements ......................................................................... 55
Case Study .......................................................................................................................... 56
Indicators ............................................................................................................................. 57
Characteristics of indicators ............................................................................................. 57
Types of indicators.......................................................................................................... 58
Developing Managing Points ........................................................................................... 59
Case Study .......................................................................................................................... 61
Exercise............................................................................................................................... 62
Developing Checking Points .................................................................................................. 63
Case Study .......................................................................................................................... 64
Exercise............................................................................................................................... 66
Specs and Targets................................................................................................................ 67
Factors to Consider in Establishing Targets ...................................................................... 67
Targets are Not Control Limits ......................................................................................... 67
Case Study .......................................................................................................................... 68
Constructing Quality Indicator Chart ....................................................................................... 70
Example............................................................................................................................... 71
Filling in the DWM System..................................................................................................... 72
Exercise............................................................................................................................... 73
Chapter 5. Implement the DWM System....................................................................................... 77
Overview.............................................................................................................................. 78
Objectives ............................................................................................................................ 78
How to Implement DWM in the Workplace.............................................................................. 80
Case Study .......................................................................................................................... 83
Homework Exercises ............................................................................................................ 84
Chapter 6. Process Stability ........................................................................................................ 87
Overview.............................................................................................................................. 88
Objectives ............................................................................................................................ 88
Process Control Charts ......................................................................................................... 89
Types of Control Charts .................................................................................................. 90
Case Study .......................................................................................................................... 95
Exercise............................................................................................................................... 97

Chapter 7. Process Capability...................................................................................................... 99
Overview:........................................................................................................................... 100
Objectives: ......................................................................................................................... 100
Process Capability .............................................................................................................. 101
Exercise............................................................................................................................. 102
Histogram .......................................................................................................................... 103
Why is the Histogram Useful?........................................................................................ 106
How is a Histogram Constructed? .................................................................................. 107
Corrective Action ................................................................................................................ 109
Case Study ........................................................................................................................ 110
Overall Improvement Strategy ....................................................................................... 112
Additional Capability Measures ...................................................................................... 115
Chapter 8. Standardization and Replication ................................................................................ 117
Overview............................................................................................................................ 118
Objectives .......................................................................................................................... 118
Standardization .................................................................................................................. 119
Method to Implement Standardization ............................................................................ 119
Case Study ........................................................................................................................ 121
Case Study ........................................................................................................................ 122
Case Study ........................................................................................................................ 123
Case Study ........................................................................................................................ 124
Case Study ........................................................................................................................ 126
Replication ......................................................................................................................... 127
Summary ........................................................................................................................... 128
How to Determine Managing Points ..................................................................................... 131
How to Determine Checking Points ...................................................................................... 132
Advantages of Defining Accountabilities ............................................................................... 134
Daily Work Management: Steps and Explanations ................................................................ 135
Variations of Flowcharting ............................................................................................. 136

Chapter 1. Introduction
Overview
The purpose of this unit is to introduce you to the big picture of Total Quality
Management (TQM) and show you how daily Work Management fits into that
picture.
Objectives
When you complete this unit, you’ll be able to:
 Identify the three components of Total Quality Management
 Identify the five principles of Total Quality Management
 Describe the relationship of Daily Work Management (DWM) to
Polity Management and Quality Improvement Teams
 List the goals of Daily Work Management

Overall Management Process
Act
Voice of Customer
Mission & Vision
3 - 5 Year Plan
Draft Annual Objectives
Deploy Objectives
Conduct Annual Review
& Diagnosis
Conduct Regular Review
& Diagnosis
Implement Plans
Negotiate Final Objectives &
Develop Plans
Voice of Business
Plan
Act Do
Check
Plan
Check Do

Introduction
WorkshopMaterials
This manual is the essential item for this course. From time to time, your
instructors will be giving you hand-outs of other materials to supplement what is
in the manual.
WorkshopProcedure
As we go through this course, we will follow a basic model summed up in three
words:
 Know
 Show
 Do
This means that first we will go over the concept or idea (KNOW).
Next, we will give examples of its application (SHOW).
Finally, we will apply the concept ourselves in an exercise (DO).
DAILY WORK MANAGEMENT
Introduction

Introduction
To achieve an integrated vision of quality, the entire organization – every
associate, every department, and every task – must be considered vital links in
the quality chain. This means that every person is a valuable resource whose
understanding and involvement are necessary for the success of TQM.
We can sum up what TQM is all about in five principles:
 Continuous improvement
 Customer success
 Management by fact
 Innovation
 Respect for others
But how can this be accomplished? TQM aims at integrating all aspects of the
organization through a model made up of three components (see below). When
this integration is complete, Total Quality Management, or TQM will be the
management system by which business is conducted in your organization.
Policy
Deployment
Performance
Improvement
Daily Work
Management
TQM

Introduction
TotalQuality Management(TQM)
The objective of TQM is to continuously improve all the processes that deliver products
and services to the customer. TQM provides a comprehensive method for achieving
that objective.
First let’s explore the elements of this definition.
 What is continuous improvement?
True improvement is a never-ending cycle. It begins with a plan for
improvement in customer satisfaction, continues when we do what we
plan or put the plan into operation, check to see how we have done, and
act upon what we learn.
The cycle is often referred to as PLAN, DO, CHECK, ACT or the
Shewhart Cycle.
Act Plan
Check Do
We build this cycle of continuous improvement on a careful analysis of the data
from our process. In quality improvement we try to strike the right balance
between intuition and facts.

Introduction
 Who is our customer?
The customer is whoever receives our product or uses our services. In
TQM we do everything to improve customer satisfaction. If we satisfy
our customers, our organization will survive and prosper. If we do not
satisfy our customers, sooner or later, our organization will not survive.
There are two kinds of customers, internal (inside the organization) and
external.
 What is customer success?
Customer success and satisfaction are why we exist.
1. Customer Success gos far beyond satisfaction.
 W need ttounderestand customer needs and business
 Proctively find solutions fo them
There are at least four aspects to customer satisfaction:
 Quality (fit tocustomers’ requirements)
 Cost (as low as possible)
 Delivery (sent to the right place at the right time)
 Corporateresponsibility (associateand society as a whole benefit)
2. Managementby fact
 We study our industry,markets,customers,competition and our own
business.
 We gather and consider all facts.
 We do not act on motions
 We analyzethe problem based on data

Introduction
 Innovation?
Everyone can innovate by creating a difference with a purpose.
 The focus is to achieve customer success, assurecompany profitability
and growth.
 We approach problems with breakthrough mentality.
 Respect for others
 We treat others in ways that we ourselves would want to be
treated.
 We act with respect for the individual’s time, responsibilities
and opinions.
 What are our products and services?
 The products or services we provide are the end result of
countless transactions and decisions (processes) made inside
our organization by a complex interaction of individuals or
departments (internal customers). These people must
cooperate with one another to finally satisfy the needs and
expectations of the external customer. Some of us never
work directly with the external customer; for us, our
customer is the person or department “next in the process.”
If we all do a good job of satisfying the needs and reasonable
expectations of our “next process customer,” it will become
easy to satisfy the external customer.

Introduction
Exercise
Please fill in the blanks.
1. The __________________ is whoever receives our product or uses our
services.
2. There are two kinds of customers. They are __________________ customers
and __________________ customers.
3. List four of your customers below:
4. List the four phases of the Shewhart Cycle:
1.__________________________________________
2.__________________________________________
3. __________________________________________
4.__________________________________________

Introduction
Components of TQM
As mentioned earlier in this “introduction” section, TQM is a management
system consisting of three components. Those components are:
Policy Management(PM)or Policy Deployment
This is a process led by upper management whereby a few important business
priorities are established for the entire organization. By assessing the voice of the
customer, the voice of the business, and the voice of the employees, a long-term
plan can be established consistent with the organization’s vision. Leadership
then enrolls the organization through deployment of the policy where short-term
plans and targets are negotiated and monitored.
PerformanceImprovement
These teams are made up of six to eight employees whose purpose is to improve
their customers’ satisfaction by improving their work processes or eliminating
problems using a seven-step problem-solving model. Through encouragement
and recognition a large percentage of the organization can be empowered to get
involved in moving the organization ahead.
Daily Work Management(DWM)
This process deals with the routine and recurring work of an organization and
allows individuals to get involved in quality improvement. Realizing that we all
have internal customers who receive our products or services allows each of us
to improve our particular contribution to the business. By identifying our
customers and their needs, we can establish targets for our work processes and
then define measurements in specific terms. Continual monitoring will allow us
to know how well we are satisfying our customers on an on-going basis and if
improvement to our work process is warranted.
1-12

Introduction
To better understand the DWM system, it is appropriate to examine it from
different prospectives.
 First, we must identify the customer (internal or external).
 Then, we need to communicate with the customer until we reach
agreement on a set of valid requirements that are both desirable and
possible.
 And then, design the work process to be sure that we meet their valid
requirements.
Yet, in our daily work, this procedure is often neglected. Identifying the
customer is usually easy, but talking to the customer may be difficult. If the
relationship is troubled, we may find it hard to sit down and talk things over in a
spirit of mutual problem solving. On the other hand, if the relationship is going
smoothly, we tend to take it for granted and not bother to communicate
regularly.
Then, assuming that communication has occurred, it’s even harder to make sure
that the work processes can consistently fulfill the valid requirements. In too
many instances, the product or service provided to the next process customer
does not effectively address how they will actually use it. This is a never-ending
tasks in the maintenance of quality. This process is designed to help continually
insure that all daily work satisfies customers’ needs and reasonable expectations.

Introduction
We must use the data and facts in the decision making and the management of
our organization.
The DWM system has a wealth of procedures, processes, and tools that help
apply this principle to daily work. By proceeding systematically, by gathering
the necessary data, and by interpreting that data as objectively as possible, all
personnel are able to self-manage on-going processes.
The Plan-Do-Check-Act cycle is a fundamental part of Daily Work Management.
The establishment of a DWM Control System for each routine (ongoing) work
process includes the process flow, indicators, targets and limits, and corrective
action. These pieces in turn provide a benchmark for making the system even
better. Remember, the continuous improvement of products and services for
the customer is what will help achieve our vision and ensure customer success.
DAILY WORK MANAGEMENT is then a continuous improvement process.
Planning begins with the selection of a routine work process for which a DWM
Control System will be established. Doing involves the implementation of the
DWM system. Checking occurs when the results are measured, and Acting
takes place when countermeasures for improvement are taken and processes are
standardized and replicated.

Introduction
Benefits of DWM ControlSystems
 Increased communication in the workplace; employees better
understand what they are doing.
 Allows precise identification for improvements of routine work
processes.
 Provides focus to quality teams (especially functional teams) in Steps
1 or 2 (Reason for Improvement, Current Situation).
 Helps maintain the gains achieved from quality teams in Step 6
(Standardization).
 Assists in the training of employees in the work area.

Introduction
Application of what is learned in one Daily Work Management system to other
similar work processes.
Identifies those processes that are directly related to the few key areas requiring
breakthrough, as verified through Policy Management.
Exercise
1. List the four different perspectives in the development of DWM system
1. ____________________________________
2. _____________________________________
3. _____________________________________
4. _____________________________________
2. List the three steps to satisfaction of our customers’ needs and expectations.
1. _____________________________________
2. _____________________________________
3. _____________________________________
3. Describe the last instance you met with your customer to review his/her
valid requirements. Also write in the date you met with the customer.

Chapter 2. Choose Top – Priority Process
Choose Top -
Priority Process
Document the Work
Process
Build the DWM
System
Implement the DWM
System
Standardize &
Replicate
Change the Process
Using P-D-C-A
Is
Process
Stable?
Is
Process
Capable?
N N
Y Y
PLAN
DO
CHECK
ACT

Choose Top-Priority Process
Overview
This unit describes a method for you to identify your major work processes. It
also provides techniques for prioritizing those processes and choosing your top-
priority process.
Objectives
When you complete this unit, you’ll be able to:
 Define a process
 Explain the concept of a top-priority process
 Choose one of your top-priority processes to work on
 Plan a strategy for communicating with your customers about your
top – priority processes
 Use quality tools to help define your top-priority processes

What is a Process?
Before we get into the nuts and bolts of putting together a DWM system, it is
important that we have a common understanding of what is meant by process.
Within the context of DWM we define process as:
“A repetitive and systematic series of actions or operations whereby an input is
used to achieve an outcome, which is a product or the achievement of a defined
goal.”
Let’s break this definition apart to examine it more closely.
Repetitive Actions and/or operations are on-going and are performed
in more or less the same fashion on a recurring basis.
Actions or There is a clearly observable and definable set of
Operations activities associated with the process.
Input…Outcome Every process must have both inputs and outcomes. These
can take many forms from programming instructions to
molten steel. Generally speaking, a process takes a
measurable input and transforms it through change,
addition, or subtraction into a
measurable outcome.
In DWM, we are usually concerned with the most common, on-going processes
in the workplace. They may not be literally “daily” but they are repetitive. Some
processes that are weekly or monthly lend themselves well to this type of
analysis.
To sum it up, when we are looking at work processes, we are looking for on-
going series of activities whereby we take something delivered to us by a
supplier (input) and transform it to deliver an outcome or output to a customer.
This transforming may also be referred to as “adding value.” That is, we receive
an input, add value to it, and pass it on.

Choosing Top-Priority Process
Here’s another way to think of a process…
Materials
Methods
People
Machines
Problem
(Outcome)
(Input) (Input)
(Input) (Input)
“Repeatable” and “Predictable” are very important characteristics of a process.

Exercise
Identifying Work Processes
Please write a “P” next to the items which are work processes”
1. ____ Employee attitude
2. ____ Completing a Quality Story
3. ____ Driving to work
4. ____ A luncheon meeting with a customer
5. ____ Developing your training plan
6. ____ Preparing for an ISO9001 review
7. ____ Putting components into a circuit board
8. ____ Employee satisfaction
9. ____ Talking with your co-workers
10. ____ Putting boards through the wave solder machine

Case Study
Major Work Processes at Eric’s Grocery Service (EGS)
It is time to introduce you to our example, Eric’s Grocery Service.
Eric and his two sons, Bob and Joe, have been running a grocery delivery service
for some years. It has always been a local service and is becoming quite popular
with the customers. In addition to their regular walk-in business, they have a
delivery service. Profits have been declining recently, so Eric feels it is time to
look at the business and make some hard decisions.
When Eric, Bob, and Joe sat down to talk about the major work processes
involved in the business, they brainstormed a list and multivoted down to the
following:
 Hiring and training staff (check out clerks, shelf fillers, etc.)
 Ordering/buying grocery items and other materials
 Taking orders, cleanup
 Delivery

Identifying the Major Work Processes
Review of the three stages of brainstorming
 During the Generation Phase of brainstorming, the leader reviews
with team members these Rules for Brainstorming:
 Clearly state purpose (what to improve in our work area)
 Each person takes a turn, in sequence, around the group
 Present one thought at a time
 Do not criticize or discuss any idea
 OK to pass
 Build on ideas of others
 Record ideas and make visible to the whole group (flip
chart)
 The leader states, in specific, precise terms, the topic to be
brainstormed and makes it visible.
 A scribe records ideas and makes them visible to the whole
group.
 The generation phase begins and continues until all ideas have
been exhausted.
 During the Clarification Phase of brainstorming, the team goes over
the list to make sure that everyone understands all the items. Don’t
discuss ideas; criticism and discussion will take place later, during the
evaluation stage and in multivoting.
 Finally, during the Evaluation Phase, the team reviews the list to
eliminate duplications or to combine items, as needed.

Review of the Multivoting Technique
 First vote – each person votes for as many items as desired, but only
once per item. Circle the items receiving a relatively higher number
of votes than the other items. (Example: A team has ten members.
Items receiving five or more votes are circled.) Count the circled
items.
 Second vote -- Each person gets to vote a number of times equal to
half the circled items. (Example continued: If six items received five
or more votes, then each person gets to vote three times during the
second vote).
 Continue multi-voting until the list is reduced to three to five items
that can then be further analyzed. Never multivote down to only one
item!

Top – Priority Process
What is a Top-Priority Process?
Most simply put, the “top-priority process” is one of our major work processes,
which is not consistently meeting our customers’ needs and reasonable
expectations.
In some cases, you will find clear feedback from customers in the form of
comments or complaints, which point to the top-priority process. In other
instances, you will need to dig deeper to decide which of your processes need
work first.
It would be very unlikely for you to have access to customer feedback while in
this course; but for the sake of practice, we will identify some processes together
and then use a prioritization matrix to decide which are most probably “top-
priority” processes.
Choosinga Top-Priority Process
Using multi-voting techniques, you usually identify three to five significant
processes that are part of your daily work. It is likely that all of these processes
are important to you; however, we can deal effectively with only a single process
at a time. We will use a prioritization matrix to help us focus on a single process.

Work Process Prioritization Matrix
The prioritization matrix is a tool to help you evaluate your work processes
using the criteria of impact on customer and need to improve in order to
prioritize them.
Example of a Work Process Prioritization
Ratings: 1. Little 2. Somewhat 3. Moderate 4. Great 5. Extreme
 To use the matrix, enter each of the processes from your multivoted
list in the left-hand column.
 Then rate each of the processes as follows:
1. Impact on Customer
Use a 1-to-5 scale to rate one of the processes on the criteria of
impact on customer. For each of the remaining processes, determine
whether there is a greater, lesser, or similar impact on the customer.
Then determine the appropriate rating relative to the ones already
made.
Work Processes
Impact on Customer
(A)
Need to Improve
(B)
Overall
Rating
(C)
The four or five work
processes resulting
from the group's
multivote.
A rating based on
knowledge and
judgment of the direct
effect this work
process has on
customer satisfaction.
A rating based on
the difference
between the present
performance and
that needed to
satisfy customers.
A result of
multiplying A
X B

Those processes that are likely to have a significant direct impact
on the external customer should receive a high rating. When the
process does not directly affect the external customer, we should
take into account other factors, such as the number of other
functions, internal customers, or employees affected. Processes
that affect more functions or employees should be assigned
higher ratings.
Occasionally, you may need to split this into two columns in
order to better evaluate the impact on both the external and
internal customer.
If multiple raters disagree by one point or more on any single
rating, more detail about the process might be obtained using
the flowchart process, interviewing customers, and identifying
valid requirements.
2. Need to Improve
This rating procedure should then be repeated for the need to
improve criterion.
There are many ways to evaluate the need for improvement –
number of requests or complaints from customers, frequency or
amount of rework, number of deadline changes, cost overruns,
etc. These should also be evaluated against one another to come
up with an overall rating.
As with impact on customer, if multiple raters disagree by one
point or more on any single rating, more detail about the process
might be obtained using the flowchart process, interviewing
customers, and identifying valid requirements.

3. Overall Rating
To achieve an overall rating, multiply the two values for each
process. The item with the highest ranking is the process to
choose as the top-priority process.
As with all tools, you may have to adapt this matrix to your
own organization and its needs. You may find that you need
more or different categories. The model we have used is
meant only as an example; a matrix should be used flexibly
and creatively to help you prioritize in the most effective way.

Case Study
Selecting the Top-Priority Process at EGS
At Eric’s Grocery Service (EGS) everything seems to be running smoothly except
for the hiring process and the delivery service.
In hiring, they seem to be having trouble attracting and keeping associates who
have sufficient education to keep orders straight.
In the delivery, they have received complaints about slow delivery and the
quality of the dairy products.
To choose the top-priority process, Eric and his sons filled out the matrix below.
Work Processes
Impact on
Customer (A)
Need to Improve
(B)
Overall
Rating
( C)
Hiring Process 3 4 12
Delivering Grocery 4 5 20
Preparing the Package 5 1 5
Taking Orders 3 2 6
Ordering 3 2 6
The four or five work
processes resulting
from the group's multi-
vote.
A rating based on
knowledge and
judgment of the
direct effect this work
process has on
customer
satisfaction.
A rating based on
the difference
between the
present
performance and
that needed to
satisfy customers.
A result of
multiplying
A X B
Ratings: 1. Little 2. Somewhat 3. Moderate 4. Great 5. Extreme
Based on the matrix and their own judgment of this situation, they decided to
work on the delivery process.

Exercise
Choose the Top-Priority Process
To choose one of the major workprocesses from your
workplace.
 Brainstorm a list of your workprocesses.
If it helps, you may want to thinkof different
accountabilities. Remember,these areon-going
repetitiveactivities.
(Guidelines for effective brainstormingcan be found on
page 7.)
 Select three to five of the processes which you feel are
most important in meeting your customer’s needs. The
customer may be internal or external.
(Use multivotingprocess; guidelines for effective
mulitvotingcan be found on page 8.)
 Complete the WorkProcess Prioritization Matrix to
Determine and choose the top-priority workprocess.
 25 minutes – breakout (review your homeworkand
reach consensus)
 15 minutes – all groups report their decision
Purpose:
Agenda:
Limit:

Chapter 3. Document the Work Process
Choose Top -
Priority Process
Document the Work
Process
Build the DWM
System
Implement the DWM
System
Standardize &
Replicate
Change the Process
Using P-D-C-A
Is
Process
Stable?
Is
Process
Capable?
N N
Y Y
PLAN
DO
CHECK
ACT

Document the Work Process
Overview
This unit will help you to identify customers of your top-priority process and
instruct you in flowcharting your top-priority process.
Objectives
 When you complete this unit, you’ll be able to:
 Identify the customers of your top-priority work process
 Describe your work process
 Construct a flowchart of your top priority process
 Evaluate your involvement with your customer
 Use micro and macro flowcharts

Customer/SupplierModel
Your Process
Your Suppliers Your Customers
Inputs Outputs
Requirements & Feedback Requirements & Feedback
This figure illustrates how requirements and feedback drive the process as it
converts supplier inputs into outputs delivered to customers.

The Customer
Our customers make a vital contribution to the quality of our work. What do we
mean by this? It is our customers who determine whether our work is quality
work or not. Unfortunately, many of us do not take enough time to clearly
identify who our customers are or what it is that they really want from us. For
example, some of us concentrate on the external, or end customer with whom we
may actually have little or no contact and overlook the “next process customer.”
It is vital that we take the time to accurately assess who our customers are and
what it is that they really need from us.
External customers are groups or individuals external to the organization who
receive or are affected by our products and services. This can include not only
those who buy our products and services, but governmental regulators and the
consumers who use our products and live in the communities where we work.
There are, then, two categories of external customers.
Direct Customers – thosewho
receive and use our products and
services
Indirect Customers – those whoare affected by our
work, or whohave authority over us,but whomay not
actually use our products or services themselves
Internal customers are groups or individuals whose ability to perform their jobs
is impacted by the quality of receivers, each of whom contributes in some way to
the product or service, which is provided to the external customer.
External
Customers

Unless we work together cooperatively and productively, with shared goals and
open communication, we will not be able to satisfy the needs of the external
customer. To illustrate this, look at the graphic depiction of the Customer Chain.
Each link represents a process or department or work group within the
organization. It may often be only the last link (process) which serves the
external customer directly.
The external customer is not necessarily the person who receives the output from
your work. Yet, the product or service you provide to the next process customer
has an effect on the external customer. Remember, “a chain is only as strong as
its weakest link.” One of the foundations of DWM is that the person who can
judge our work best is the person who uses it, or the customer next in the
process.
This next customer is anyone who receives or uses your output, including:
 Other departments or work groups.
 Other employees.
 Suppliers, subcontractors, trades.
 The wholesaler or retailer.
Your Organization
Processes Processes Processes
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e
s
s
Internal Customers
E
X
T
E S
R A
N T
A I
L S
F
C A
U C
S T
T I
O O
M N
E
R
Process Process Process Process

Classification ofCustomersby Impact
Any major process (payroll, invoice processing, production, marketing, etc.) will
likely affect numerous customers. Sometimes the number is so great that it
necessitates prioritization according to the significances of the impact. For
example, if twenty customers are directly dependent upon us as a single-source
supplier, they must be taken to be of greater significance than eighty customers
who do business with us by who have other options.
We must car about all our customers, but we must also be able to identify those
whose interests are most closely dependent upon us because it is their needs that
we must address first.
Identifying these customers is important since failure to recognize them may
result in their legitimate needs and expectations not being met. The reason that
we undertake the Daily Work Management process is o be sure that we are
satisfying the needs and reasonable expectations for our customers every time.
The more we keep customers in mind, the more likely it is that we will provide
quality products and service to them. Identifying and defining all your
customers is essential to the DWM process.

Flowcharting

Process Flowcharts

Steps to Flowcharta Process

Case Study

Exercise
Purpose: This exercise will give you practice in constructing a macro
flowchart.
Agenda: Identify the customer of you process.
Construct a macro flowchart of this process. Use the Easel
pd and also draw the flowchart on your special Daily Work
Management Process sheet.
Limit: Breakout with your group for 30 minutes.

Process Flow Chart
Step/Time
Dept/
Person

Chapter 4. Build the DWM System
Choose Top -
Priority Process
Document the Work
Process
Build the DWM
System
Implement the DWM
System
Standardize &
Replicate
Change the Process
Using P-D-C-A
Is
Process
Stable?
Is
Process
Capable?
N N
Y Y
PLAN
DO
CHECK
ACT

Build the DWM System
Overview
This unit will help you to choose ways to measure whether or not your top-
priority process is conforming to customer valid requirements. But
measurements have no meaning without a reference. After identifying
indicators, we will establish targets to let us know how well we are doing on
each indicator. We will set up two types of indicators; managing points and
checking points. Because we use targets with each of these points, we will
review construction of indicator charts.
All that remains is to fill in the other information that will enable you to use the
Daily Work Management system as a daily management tool. In this unit, you
will decide what level of detail you need and you will finalize the Daily Work
Management system for your top-priority process. Then, we will review the
factors necessary for a successful implementation of a Daily Work Management
system in the workplace.
Objectives
 After completing this unit, you’ll be able to:
 Identify customers and valid requirements (prioritize if necessary)
 List the characteristics of managing and checking points
 Develop checking points for your top-priority process and consider
managing points for your top-priority process
 Set improvement targets for your points (indicators)
 Identify other items in your DWM system that you need to include in
order to make it an effective management system
 Complete the DWM system for your top-priority process

Valid Requirements
Let us begin by describing what we mean by valid requirements. Valid
requirements are the needs and reasonable expectations of the customer that the
supplier has agreed to deliver.
Criteria to Determine Valid Requirements
In general terms, valid requirements refer to needs and reasonable expectations
of our customers. To identify which of the needs are true valid requirements,
simply take each of the needs and ask: Is this requirement…
Reasonable? You or your organization can meet the requirement (it does
not violatecompany procedures, equipment capability,
etc.).
Understandable? The customers verify that you understand what they require
from you.
Measurable? In some way you can objectively determinethe degree or
frequency of meeting the requirement.
Believable? Employees will be agreeableto strivefor that level of
achievement.
Achievable? Can you meet therequirement (is the desired performance
level theoretically possible)? If not, you may need to
renegotiateas facts and data become available.
This R-U-M-B-A list contains the five criteria that will identify a true valid
requirement.

Need
customer
valid
requirements
Get customer input
List all customers
wants and needs
Examine wants vs. needs
with customer
Negotiate
with customer
Needs
Verified?
Apply RUMBA
criteria
Needs
meet
RUMBA?
Negotiate
with customer
Y
Y
N
Customer
valid
requirements
established

Process to Establish Valid Requirements
 Consider a specific product. Get customer input by asking questions such as:
 What problems do you have with our products and services?
 What would you like to have that you are not getting?
 What do you currently like about our products and services?
After listingall the customers needs, look over the list together.
 The customer’s list of needs will most likely include wants (expectations, things that
enhance, add value, make convenient, etc.). Continue negotiatinguntil you mutually
agree which are needs (the musts). Then negotiate on the remainingwants and keep
those that you both agree are reasonableexpectations.
 Next, apply the following criteria to the list of needs and reasonableexpectations.
Those that meet all five criteria become valid requirements. Simply take each of the
agreed upon needs and reasonableexpectations and ask, “Is this…”
 reasonable? Y/N
 understandable? Y/N
 measurable? Y/N
 believable? Y/N
 achievable? Y/N
 For each agreed upon need and reasonableexpectation, if all answers areyes, that
one requirement is valid. Any no answer implies further negotiation is necessary
until it becomes a yes answer. If it cannot become a yes answer,then the need or
reasonableexpectation is not a valid requirements and should not be accepted as
such. Again, win/win negotiation and effective communication are thekey.

Case Study
Eric’s Grocery Service Identifies Customer’s Valid Requirements
When Eric, Bob and Joe began to try to identify customers for their delivery
process, they had a “little” fight. Eric through that the customer was the person
placing the order. Bob and Joe, who had each delivered groceries when the
regular delivery person was sick, felt very strongly that the direct customer was
the person who used the groceries. He or she was the one who had to be
satisfied, no matter who had placed the order. Finally, Eric threw up his hands
and agreed.
Customer: Person who uses the groceries
Next, they had to determine how to satisfy this person. To get the information
they needed, they decided they would have to call customers two days after they
had received the groceries (or sometimes the next week) and ask them a series
of questions based on delivery as the top-priority process.
Grocery Survey
1. Did you have any problems with our delivery service?
2. What would you like us to do that we don’t do for your now?
3. What do you like about our present service?
They used the survey for two weeks and got feedback from over 200 customers.
Some of the feedback used words that made Eric blush and Bob turn red in the
face. But Joe summarized it in just a few words:
1. Sometimes your delivery is too slow (“more than 30 minutes
from the time order was placed” was mentioned frequently).
2. Sometimes the dairy products were not cold enough when
arrived.
When they applied the R-U-M-B-A criteria, it seemed that the quality of the dairy
products and faster delivery met the criteria. The challenge would be to find a
way to measure them.

Indicators
Most of us can tell others what we do for a living, sometimes even why the job
we do is important to our customers. However, if someone (perhaps even a
customer!) were to ask, “How do you know that you are doing a good job?”
coming up with a clear answer night be more difficult. To speak with facts about
whether or not you are doing a good job requires knowing how to measure a good
job. That is where indicators come in.
An indicator is defined, in this context, as a measure of meeting valid
requirements. Indicators are used to monitor both the effectiveness or condition
of a part of the work process (checking points) and the quality of the output or
outcome of the process (managing points).
Characteristicsof indicators
No matter what type they may be, all indicators should be:
 Measurable
They can be expressed quantitatively (in time, dollars,etc.).
 Verifiable (observableand auditable)
Multiple, independent observers of the process should be able to agree on the results obtained
from measuringthe process. Accurate records should be kept so that themeasurements can be
tracked over time.
 Cost Effective
Indicators must be chosen with economy of time and cost in mind. Ideally, data for
indicators will beavailablefrom existingsources and/or management information
systems. In any case, common sense would tell us that thebenefits gained from using an
indicator should exceed the costs associated with tracking it.

Typesof indicators
In the context of DWM there are, as mentioned before, twp types of indicators
which are important to us. They are 1) outcome or managing points, and 2)
checking points.
 Outcome or managing points are the measures we use to determine
the quality of the product or service we provide to our customers. By
linking them closely to our customers’ negotiated needs and
reasonable expectations (valid requirements), we are able to
accurately assess our performance. In most instances, our customers
have multiple valid requirements. Often these involve the accuracy,
timeliness, dependability, or cost of the product/service provided.
Consequently, before developing managing points be sure you
understand all of the customer’s needs and reasonable expectations.
 While outcome or managing points assess our degree of conformance
to valid requirements, they are usually “after the fact,” and are not
very useful in helping us identify the causes of non-conformance. A
different type of indicator, upstream in the process, is needed for this
purpose.
 Checking points are the upstream measures, taken at critical points
in the process, that allow us to assess the performance of our process
before it is too late to do anything about it. These indicators serve as
early warning signs that something is wrong, long before the output
or outcome of the process occurs. By monitoring and evaluating
checking points, we can take corrective action on our process before
there is a significant adverse impact on the outcomes of the process,
hence, on our customers.

Developing ManagingPoints
Once you have identified valid requirements for the customer of your top-
priority process, create a way to measure each outcome. These measures, when
linked with the corresponding valid requirements, will be effective managing
points. The following guidelines can be helpful:
 Make the measure and the valid requirement as closely related as possible.
For each item specified in the valid requirements, thereshould be a corresponding
managing point. If the customer needs the product/servicetobe “accurateand
timely,” you should be able to measurejust how “accurate”and how “timely”your
process output is.
 Measure at intervals that allow you to make useful judgments.
Measure often enough to catch problems before too much damage has been done.
On theother hand, it can be costly and time-consumingto measuretoo frequently.
You need to find the right balancefor each managing point.
 Describe how to measure to get reliable results.
Describe precisely the actions that someone must take in order to make the
measurement. Provide enough detail so that the sameresults can be obtained,under
the same circumstances,nomatter whotakes the measure. The measure is reliable
when you can count on it to be consistent even when different people aredoing the
measuring.
 For rare or difficult measures, use a “second level” indicator.
Sometimes the thingthat you want tomeasureoccurs too rarely or is too difficult to
obtain (expensive, complex). In this case, you try to find something to measurethat
is related to or dependent upon the outcome directly;then you measure it, instead.
This is called a second level indicator. For example, you might want tomeasurethe
fat content of your food. This can be very complex, so instead you measure the types
of foods and the amounts of them that you eat; this will give you an approximation
of the fat content.
 When conformance is greater than 80 percent, measure “defective” instead of
“correct” for greaterimpact.
Because thenumber of defects is usually a small percentage of total output, thereis a
temptation touse that number in the indicator. For example, if you say that you
deliver your product on time 90 percent of the time, you look pretty good. If you
trackdefects, however,the 10 percent ratethat affects your customer will be
uppermost in your mind. This is important sinceit is measuringthe outcome from
the customer’s point of view. When, as a customer, I get something late, I don’t
really carehow many are delivered on time. In addition, this method will allow a
clearer pictureof improvement/changes in the indicators.

 Avoid using averages as outcome quality indicators.
As we mentioned before, averages can be misleading. Subcontractors receiving
payments morethan 10 days late do not care that the average late payment is made
only twodays past the due date. A more meaningful indicator would be the number
of times that payments aremade more than twodays after payments aredue.
Valid Requirement Managing Point
Vendor payments sent no later
than twodays prior to past due date
Number of checks not sent at least twodays
prior to past due date
Take all discounts offered by vendors Ratioof discounts lost to discounts offered

Case Study
Develop Managing Points for Eric’s Grocery Service
When Eric, Bob and Joe reviewed the process flowchart, they tried to see where
the customers’ valid requirements would fit.
The first valid requirement was for speedy delivery. How fast is fast enough?
After reading what the customers had said, it seemed that 30 minutes was the
maximum time they wanted to wait from the time the order was placed. So the
three of them agreed on their first managing point: they would have the order
taker record the time of the order and the delivery person record when the
groceries were handed over to the customer. This would tell them the number of
minutes from the time the other came in until the groceries were delivered. The
managing point would be percentage of deliveries exceeding 30 minutes.
The second valid requirement was the temperature of dairy products when
delivered. The dairy products were the last to be picked up while getting the
order ready for delivery. The obvious questions was how cold is cold enough? It
seemed that keeping the dairy products as close to “freezer temperature” as
possible was the most desirable. They decided to keep a record of when the
dairy products were taken out of the freezer (the last items to be picked). When
subtracted from the time of delivery, they could measure the number of minutes
from the time the dairy items came out of the freezer until delivered. The second
managing point would then be percentage of times that freezer-to-delivery
exceeded 10 minutes.
These, then, were the two managing points that they chose for Eric’s Grocery
Service.

Exercise
Purpose: Develop Managing Points that Indicate Overall Quality
Agenda: Recall your customer’s valid requirements
For each valid requirement, select a Managing Point and
Propose a
Method whereby it could be measured
Limit: 15 minutes, so manage your time with your group carefully!
Notes:

Developing Checking Points
Once you have described the work flow and developed quality indicators of
customer satisfaction, it is time to move “upstream” in the work process. It is
only by establishing “control points” throughout the process, that you can be
sure the outcome will be satisfactory to the customer. We call the measurement
of these control points “Checking Points.” Checking Points differ from
managing points in that they measure performance within the process, not the
overall conformance to valid requirements. Monitoring and assessing the data
from checking points will help you take action early in the process to ensure a
satisfactory outcome.
There are two steps in developing checking points
1. Review the process flow chart. Choose “control points” in the process so
that, when measured, they will tell you how the process is performing. Try
to set these where there is a logical change, decision point, or sub-outcome
in the process, such as when the process moves from one process customer
to the next. Another way of choosing checking points is to look at the
process and decide where you would be most hurt if things went wrong.
For example, if we are delivering groceries, we need to count the right
amounts of the items on the list – if we do not, our delivery can never be
satisfactory.
2. Decide how best to measure the performance at each control point to
collect the data that will display the actual condition of that step in the
process.

Case Study
Eric’s Grocery Store Checking Points
When Bob and Joe told Eric that they had to talk to him about checking points,
he muttered to himself and said he had to go to see an old friend. “You do it,
boys,” he said, and off he went.
Bob and Joe looked at the process flow. Where could they help assure the
outcome(timely delivery and dairy products close to freezer temp) by taking
measurements?
After some soul-searching, they came up with two checking points:
C1=The length of time between when the order was placed and when the order
was ready for delivery.
C2=The length of time between when the dairy items were removed from the
freezer and delivery of the groceries.

Process Description: Eric’s Grocery Service

Exercise
Purpose: Select appropriate checking points.
Agenda: 1. Identify logical places or breaks in the process that should
be measured.
2. Determine an appropriate indicator for each break
identified.
Limit: 25 minutes, so please manager your group’s time effectively!

Specs and Targets
A spec (or specification limit) is a number, or numbers, that reflect the customer
valid requirements. The specs allow for measurement of conformance to the
valid requirements. They are the “M” in “RUMBA.”
A target is a milestone you wish to reach, expressed either as a percentage of
conformance (or non-conformance) to valid requirements or as a numerical
value. We establish targets after we analyze data and review our valid
requirements. A target then shows the improvement in customer satisfaction
you are aiming to achieve over time. To achieve a target, you must improve the
process.
Factors to Consider in Establishing Targets
Customer valid requirements
Past performance
Competitors’ performance
Waste
Targets are Not ControlLimits
While a target shows the performance level you are aiming to achieve over time,
control limits show actual performance. To set control limits, we use statistical
calculations based upon historical data. Control charts should be used to
understand existing levels of variation in the process in order to select the most
appropriate methods for improvement. We will discuss process stability and
process capability in a later unit.

Case Study
Establishing Targets at Eric’s Grocery Store
Bob and Joe continued their pursuit of DWM (Eric had gone on vacation). Their
task now was to establish targets for the managing points they had developed.
The first managing point, M1, was the number of minutes between receipt of the
order and delivery of the groceries. They knew from their survey that 30 minutes
was delivery time by customers. Their measure of customer valid requirements
was a 30-minute spec.
In order to set the first indicator target, the delivery man collected data for two
weeks on the percentage of deliveries that were made in less than 30 minutes.
Seventy percent were delivered in less that 30 minutes; therefore, 30 percent
exceeded 30 minutes. The best day in this two-week period had 20 percent of
the deliveries exceeding 30 minutes.
First Managing Point Target
They established the target of only a 20 percent delivery defect rate based on the
single nest day performance.
The second point was the number of minutes between taking the dairy products
out of the freezer and delivery. Bob and Joe knew it was not enough to deliver
on time; items should also arrive in good shape. They reasoned that dairy
products should never be more than 10 minutes from the freezer to the customer.
The spec for the second managing point became 10 minutes.

Second Managing Point Target
Only 20 percent of the groceries should be delivered more than 10 minutes after
dairy products were out of the freezer. What data did Eric’s Grocery Store have
to support 20 percent? This question forms the basis for setting the target.
Importance of Managing by Facts
Why are facts needed to make decisions about setting targets? Think about your
own work area. If management by fact was used religiously, how would
conditions in your work area improve? How would service to our customers
improve?

Constructing Quality Indicator Chart
How are we doing? Are we meeting our targets? Are we satisfying our
customers? Nothing answers these questions like a picture. We use managing
points charts to tell us how we are doing. Usually, these charts are nothing but
line graphs or trend charts. We use them because they are easy to construct,
maintain, and understand.
Here are some of the guidelines for constructing Managing Points Charts:
 Construct and label a separatex-y chart for each point. Each managing point
needs its own specific chart so that we can clearly see the level of
performance. The title should show what is being measured.
 Use the horizontal axis as a time scale. The time scale should be divided to
reflect how often measurements are taken. This can be hourly, daily,
weekly, per occurrence, or whatever makes sense to the observers of the
process.
 Show the measurements of conformance (non-conformance) on the y-axis.
The scale you choose should mirror your best information about the history
of the process with a little extra on either end.
 Draw in the target(s) with broken (dashed) lines. Be sure to label the kind of
target; end-of-month targets versus end-of-year targets, for example.
 Fill in the indicator results as bold dots. Connect them with a solid line so
that trends can be seen.
 If the indicator is not a simple number but the result of a calculation, explain
how you do the formula. The person entering the data needs to know
exactly how to take the measurement. The person reading the chart needs
to understand what it means.
 Include an arrow on the indicator chart showing which direction is good.
The reader needs to have an easy way to tell if the trend is getting better or
worse.
 Include a source box somewhere on the chart which contains who drew up
the chart, when, and what the source of the data was.

Example
Managing Point Charts at Eric’s Grocery Store

Filling in the DWM System
You have chosen indicators and targets. The question now is how and who will
manage them? Or to put it another way: What do you need to know, or what do
your people need to know, to make the DWM system work?
The point is not to make it so crowded that people will be unable to use it.
Some Useful Checking Criteria
One of the easiest ways to get started is to think about the things that can go
wrong at each of our control points and develop checking criteria to prevent
their occurrence. This makes the DWM process a proactive tool for management.
Here are the remaining categories in the DWM system that need to be filled out:
 Indicator
What should be monitored: the managing or checking points? This area can
also include other items that need to be monitored on a regular basis
(quantity of supplies required to make pizza).
 Frequency
When the check should be made: the schedule for measuring/checking a
repetitive action that is taken to complete a process (check supplies daily).
 Responsibility
Who checks: the person responsible for checking the identified actions at the
appointed time (Bob to check supplies daily).
 Contingency Plan
A description of what action to take when exceptional conditions occur
(when supplies are below minimum required levels, call in order to
preferred supplier).
(This information should be placed in the Checking Item, Frequency,
Responsibility, and Contingency Plan columns of the Quality-in-Daily-Work
System).
 Miscellaneous Information
This is a place where you can note abbreviations, procedures, standards,
possible process changes, indicator refinements, or targets shifts, or any
other pertinent notes about possible improvements to you DWM system.

Exercise
Purpose: Finish building your DWM System so you can put it to
work.
Agenda: Within 24 hours after this class concludes, please fill out the
following
Items in your DWM system:
1. Identify what, when, who and a contingency plan for each
checking point and managing point. (indicator)
2. Enter your decisions on the DWM system sheet.
3. Post the sheet in your work area so you will be reminded
to complete your DWM system plans.
Limit: Variable; depends on the complexity of your DWM System
and the Number of team members involved. This step can
usually be completed in less than one hour.

Chapter 5. Implement the DWM System
Choose Top -
Priority Process
Document the Work
Process
Build the DWM
System
Implement the DWM
System
Standardize &
Replicate
Change the Process
Using P-D-C-A
Is
Process
Stable?
Is
Process
Capable?
N N
Y Y
PLAN
DO
CHECK
ACT

Implement the DWM System
Overview
Now that your Daily Work Management system sheet is complete, it is time to
put your system to work. (Implement it) In this section, you’ll make an action
plan for successful implementation of your DWM system. Each DWM system is
useful, not only for daily work management, but also for training. The DWM
system becomes the basis for standardization of work process.
Objectives
After completing this unit, you’ll be able to:
 Implement your DWM successfully
 Collect data on your Managing Points and Checking Points
 Gain control over your work
 Explain the relationship between your checking points and Symbol’s Golden
Thread

How to Implement DWM in the Workplace
To have success with your DWM System, you need the understanding and
support of everyone affected by it. This means that you must plan carefully for
its implementation. The easiest way to do this in an organized fashion is to
develop an action plan. It should contain such items as the following:
1. Review the DWM System with your supervisor.
Go over the process flowchart, the indicators and targets; discuss why and
how you chose them and make sure that your supervisor understands what
you have done.
2. Validate the identified valid requirements with your real customers.
Remember, they do not become valid requirements until the customer
validates them; this may mean getting involved in negotiations with
customers.
3. Check Managing Points against valid requirements and revise them if
necessary.
4. Make sure the managing points match the valid requirements as much as
possible; remember, we are doing all this for the sake of the customer. The
same can be said for targets. Examine and revise them as necessary to make
sure that they help us meet the customers’ expectations.
5. Revise the DWM System if your discussions with your supervisor or
customers warrant change.
6. Collect data for managing points and control points to be used for making
control charts or graphs.
7. Train users in your DWM system.
8. List any other items required for successful implementation.

Action Plan

Case Study
Eric’s Check sheet for Implementing the DWM System
Because Eric’s is such a small business, the action plan implementing the DWM
system was not very complicated.

Homework Exercises
Implementing DWM
Purpose: Draw up a plan for DWM implementation
Agenda: 1. Study the model action plan briefly.
2. Construct your own action plan, (barriers and aids might
assistyou) adapting it to your own DWM system.
Limit: In most cases, you can finish this phase in about 45 minutes.
Notes:

Action Plan

Chapter 6. Process Stability
Choose Top -
Priority Process
Document the Work
Process
Build the DWM
System
Implement the DWM
System
Standardize &
Replicate
Change the Process
Using P-D-C-A
Is
Process
Stable?
Is
Process
Capable?
N N
Y Y
PLAN
DO
CHECK
ACT

Process Stability
Overview
In this unit, you will learn how to use control charts to judge process stability.
Objectives
After completing this unit, you’ll be able to:
 Define process stability
 Identify the various types of control charts
 Select control charts to use for your checking points with a selection
tree
 Interpret three patterns that you may encounter in using control
charts
 Decide on corrective actions based on control chart indications
 Define discrete and variable data

Common
Causes
Process Stability
Process Control Charts
The more we know about our process, the more likely we are to be able to
predict how it will operate. When we have observed our process and gathered
data on it, we can use control charts to track the performance of the process.
Control charts are line graphs with statistically calculated “limits.” By observing
how variation in the process causes the results to fluctuate, we can make some
objective decisions about when to take action and when not to take action,
because we do not always want to take action.
Variation is natural. All processes are subject to variation. But variation is of
two kinds. The first kind is the variation naturally inherent to any process. This
variation is due to common causes and is designed into any process. The second
kind of variation is imposed on the process from the outside. This kind is due to
assignable causes (often called “special causes”) and arises from particular and
identifiable sources. It is this second kind of variation that we want to be able to
isolate and take action on.
Here is a picture of a typical control chart:
TIME
M
E
A
S
U
R
E
M
E
N
T
Average
Upper Control Limit
Lower Control Limit
Special
Causes
Special
Causes

Process Stability
It is composed of:
o an upper control limit (UCL) which is, by convention, a dashed line.
o a center line (CL), representing the process average, which is solid.
o a lower control limit (LCL) also dashed.
o data points entered over time and connected by a solid line.
Control chart theory tells us that a process which exhibits normal or random
variation performs within the boundaries established by the upper and lower
control limits and is free of certain arbitrary patterns, which we will identify
under “Interpretation.”
The control limits are calculated using control chart constants, formulas which
are applied to the historical data from the process observations. Control limits
are never arbitrarily chosen or voted upon. The term “control limit” implies a
statistical limit, and has no direct relationship to specifications, action limits, or
targets. These comparisons are made later in process capability studies. Targets
should not be placed on control charts since they distort the picture. The control
chart is a picture of what is; the targets represent what we wish.
Typesof ControlCharts
There are two basic kinds of control charts—charts that track measured or
continuous (variables) data versus charts that track discrete or countable
(attributes) data.
Charts for Continuous Data
These are “double” control charts; the chart at the top tracks process averages;
the bottom chart tracks the range vales. See examples on page 11.

Process Stability
 X,R chart, (read as X-bar, R); this is a double control chart which is
used to track averages and ranges of subgroups which range in size
from two to ten.
 X,MR chart, used to track subgroups which have only one data point
in a subgroup.
 Subgroups refers to the sampling size utilized to construct the control
chart.
Charts for Discrete Data
Two charts for tracking non-conforming (defective) items:
 npchart, analyzes the number of non-conforming items, and must have constant
sample size.
 p chart, analyzes the percent of non-conforming items.
Two charts for tracking non-conformities or defects in a process:
 c chart, shows the number of non-conformities, and must have constant sample
size.
 u chart, shows the percent of non-conformities.
There are other control charts for special circumstances. If you feel none of the
six listed here suits your needs, see a specialist to find out what chart might be
best.
How to Select the Appropriate Chart
By now you might be feeling overwhelmed. So many charts, so little time!
Choosing which chart is appropriate for your process is not as difficult as it
might seem. To make it easier, we are including the Control Chart Selection
Tree.

Process Stability
After you have identified what type of data you are going to monitor
(continuous or discrete) and whether you are monitoring numbers or
percentages, simply read through the tree until you come to the type and
description, which fits your data. Then use that type of control chart.
Control Chart Selection Tree

Process Stability
Interpretation of Control Charts

Process Stability
Corrective Action
Once you have identified the process as unstable (out of control), you should:
 Evaluate the circumstances surrounding the special causes.
 Implement and evaluate immediate countermeasures.
 Prevent recurrence by analysis of root causes and long-term
countermeasures.
 Recalculate the control limits once the system has been changed to
prevent the special causes.

Process Stability
Case Study
Judging Process at Eric’s Grocery Service
When it came to choosing which control charts to use, Bob said that he had line
graphs for his managing points. Since he was now trying to understand stability,
he constructed control charts for the time involved in each major step of the
process.
Bob understood the complexity that changing sample sizes added to control
charts. He knew that anywhere from 100 to 175 groceries were delivered each
day, so he randomly chose 5 deliveries each day for a month. He calculated the
time picking up the dairy items from the freezer to the time of delivery.
Bob then constructed two control charts and properly interpreted that both charts
indicated that the time involved for each step was predictable. Eric was anxious
to see if they were capable of meeting the targets her sons had set.
Review the indicators on the next page and discuss the following questions:
 Do you agree with Bob that the process is stable?
 What can you tell Bob about the capability of the process?
 What (if anything) is required to make the process capable?

Process Stability
Number of Minutes from order placement to picking up dairy items from
freezer

Process Stability
Exercise
Choosing Control Charts for Your Process
Purpose: Select at least one type of control chart for one of your
checking Points
Agenda: 1.. Review the process and identify what type of data the
checking point tracks.
2. Choose the most appropriate control chart
Limit: 15 minutes; discuss with your group

Chapter 7. Process Capability
Choose Top -
Priority Process
Document the Work
Process
Build the DWM
System
Implement the DWM
System
Standardize &
Replicate
Change the Process
Using P-D-C-A
Is
Process
Stable?
Is
Process
Capable?
N N
Y Y
PLAN
DO
CHECK
ACT

Process Capability
Overview:
In this unit, you will learn to use histograms to determine process capability.
Objectives:
When you finish this unit, you will be able to:
 Define process capability
 Use histograms to determine process capability
 Decide when to start a QI Story on a process
 Analyze your process to determine if it is stable and capable

Process Capability
Process Capability
Process stability refers to the predictability or consistency of our operations as
determined with control charts. Process capability is a judgment about whether
we are meeting our customers’ needs. We can, for example, regularly
(predictably) produce sub-standard goods. The business ideal is to have stable
processes and quality capable outputs.
There are four possible relationships between these two factors:
Stable and capable: The ideal state just described.
Stable, but not capable: We are free to concentrate on meeting
customer’s needs.
Not stable, but capable: Represents good luck since lack of stability
Indicates that we do not know what we are
doing.
Not stable and not capable: Not likely to be in business long!
Process capability is studied after a process is shown to be stable. Earlier, you
were asked to think of capable as meeting customer valid requirements. A
capability study will answer the question, “Are the process outcomes within the
parameters set by agreement with the customer?”
The tool you can use to get a picture of process capability is a histogram with
specification limits included. The exact calculation of process capability and a
process capability index are statistical formulas. The simpler approach is to use
the picture of the histogram with spec limits added.

Process Capability
Exercise
Purpose: Reinforce the meanings of process capability and stability
Agenda: Match Column A with the proper description in Column B
Limit: 10 minutes. Work individually then discuss with your co-
workers
Column A Column B
1. ____Stableand capable A. We are free to concentrateon meeting
customers’needs
2. ____Stable,but not capable B. Not likely to be in business long!
3. ____Not stable,but capable C. The Ideal State
4. ____Not stableand not capable D. Represents good luck since lack of
stability indicates that wedo not know
what weare doing

Process Capability
Histogram
A histogram (also called frequency distribution) is a visual representation of the
spread or distribution of data (for example, the height in inches of thirty-six
employees). Information in a histogram is represented by a series of rectangles
or “bars” which are proportional in height to the frequency (Y axis) of the data
groups or class sized (X axis).
Since the class sizes or data groups are equal in size, the rectangles are of equal
width. Therefore, the heights of these “bars” indicate the relative number of data
points in each class.
The number of occurrences (frequency) is plotted on the Y axis and the data
groups, or classes, are plotted on the X axis. To evaluate a histogram, we need to
know the central tendency of the data. The central tendency shows how well the
histogram is centered.
Check sheet of Heights of Our Employees for Histogram

10
8
6
4
2
0
Process Capability
59.5 62.5 65.5 68.5 71.5 74.5 77.5
Height (Inches)
There are three measures of central tendency:
 Mean (Average) – the sum of all the measured of counted data
divided by the total number of data points; for example, all the data
points added together equal 2,464 divided by 36 = 68.44 inches.
 Mode – the value repeated most often in the raw data. In this
example it is 70 inches. If the data are presented as a grouped
frequency like a histogram, we talk about modal class instead of the
mode. Modal class is the class interval with the highest frequency. In
this example, the modal class is 68.5 – 71.5.
 Median – the middle of all the measured or counted data points; for
example, in our data of 36 measurements, the median value is the
average of the two middle values since there is not a single middle
value (69+70=139 divided by 2=69.5 inches).
Modal Class
Central Tendency
Median
Average
68.44”
N
U
M
B
E
R
O
F
E
M
P
L
O
Y
E
E
S

Process Capability

Process Capability
Why is the Histogram Useful?
It is not always easy to review a page of measured data and be able to recognize
patterns or analyze what the data are trying to tell us. A histogram can provide
information on the degree of variation of the data as well as indicate the
distribution pattern with which we are working. Drawing a curve around the
heights of the bars of a histogram gives you the general shape.
Dispersion of the data can produce a wide variety of histogram shapes
depending upon the process or subject on which you have collected data. Some
of the more common shapes are shown on the previous page.
 Normal Type (Example A)
Normal (symmetric)typeis the most commonly occurringhistogram. Most values fall towards
the center of the distribution (central tendency)with thevariation balanced on both sides of the
center, giving a “bell-shaped”curve. As we begin learningabout applying other QC tools, such
as control charts,wewill focus on using normal distributions. Themode, median, and mean are
the same.
 Precipiced Type (Example B)
Most of the values appear on the extreme left in this example. This could occur in areas where
thereis a natural barrier,or in cases wherethe data has been sorted (products which do not
meet a particular specification limit areremoved from the data set; or the failure rateof
components).
 Skewed Type (Example C)
A skewed type has a long tail on one side. The variation is moreon one side than the other,
indicatinga shift of some variableduringthe process.
 Bi-Modal Type (Example D)
In a bi-modal (twin-peaked)type, there appear to be twopeaks (modes). This usually occurs
when twodifferent data groups are mixed; e.g., a population of very short people is added to a
population of extremely tall people. In effect, we have twohistograms pushed together.

Process Capability
How is a Histogram Constructed?

Process Capability
To construct a graph, draw horizontal and vertical axes. The horizontal (X axis)
shows class intervals. The vertical (Y axis) shows frequencies. Draw a bar to
represent the frequency of data in each class. The bars should be touching.
The histogram is especially useful when wewant to get an accuratepicture of the
dispersion or spread of the data.

Process Capability
Corrective Action
Once you have identified the process as not capable:
Study the causes of the predictable variation.
Change the system to reduce variation.
Update the DWM system and document changes.
Reassess the stability of the process. (Changing the process can cause an out-of-
control condition for a period of time. Re-establish stability of the process before
evaluating improvements or process capability.)

Process Capability
Case Study
Process Capability at Eric’s Grocery Service
On the upside, everyone who works at Eric’s is now taking a strong interest in
the business (some of them are wondering where Eric, Bob, and Joe will look
next for improvement). Even complaints about delivery are down.
The X, R charts Bob prepared were both stable. Based on the charts, Bob was now
able to say to Eric:
“We will continue to take 24 minutes from the order time to the time of
removal from the freezer. We will also continue to take 11 minutes from
the time of removal from the freezer till the time of delivery. This process
is not capable of meeting either of our customers’ requirements until we
make a change.”
With the help of his son’s new-found tool, Eric was beginning to see a problem.
Since the total time from order to removal from freezer (when the order was
ready) exceeded 20 minutes by 4 minutes or 20 percent, but from freezer to
delivery exceeded 10 minutes by 1 minute or 10 percent, Eric concluded that the
bigger problem was in the order picking. He asked the boys what great tool to
use now. They both looked at each other and smiled. The data collection
strategy was going to pay off. From these 5 random orders per day, they would
calculate the time from receiving an order to order ready. They would then
construct a histogram of this data.

Process Capability
12.5 15.5 18.5 21.5 24.5 27.5 30.5 33.5 36.5
Time in Minutes
Joe immediately saw the bimodal natureof this histogram as well as the fact that
approximately 75 percent of the orders exceeded the 20-minute allotted time.
Bob suggested that some orders having fresh produce could take longer to
prepare and could explain this bimodal shape. But Joe was looking at the order
tickets. He saw that even though orders were all written at different times, they
were received by the preparation people in clusters. Eric, after looking over the
boys shoulders, exclaimed, “The orders are in clusters during busiest hours in
the evening when the call-in orders are the highest!” Eric was convinced enough
that from 5:00 to 8:00 he would also help take the phone orders so that after each
order was taken it would immediately be given to the order preparation people.
The following weeks the percentage of late deliveries was reduced considerably,
convincing the family to change the manner in which orders were being taken.
0
10
20
30
40
50
N
U
M
B
E
R
O
F
O
R
D
E
R
S
30 minute CVR
(Customer Valid
Requirement
Post the CVR
your
histograms
that show
process
capability
20 minutes

Process Capability
OverallImprovementStrategy

Process Capability

Specifications are the Voice of
Customer
Control Charts are the Voice of
Process

Process Capability
AdditionalCapability Measures
When a high volume of repetitive data is available, more sophisticated measures
may be used, such as:
Capability Index: Cp
Ratio of process spread (variation) to specification spread, expressed in terms of
standard deviation.
A Cp of 1.0 or greater means that the operation is capable of producing our
service with less variation than that of the specification. (But this measure does
not indicate if the mean of the process spread is at the same point as the mean of
the specification spread!)
Capability Index: Cpk

Chapter 8. Standardization and Replication
Choose Top -
Priority Process
Document the Work
Process
Build the DWM
System
Implement the DWM
System
Standardize &
Replicate
Change the Process
Using P-D-C-A
Is
Process
Stable?
Is
Process
Capable?
N N
Y Y
PLAN
DO
CHECK
ACT

Standardization and Replication
Overview
The purpose of this unit is to help you ensure that the gains achieved through the
Daily Work Management system are maintained. These gains should be
extended to similar functions.
Objectives
o After completing this unit, you’ll be able to:
o Distinguish between standardization and replication
o Describe the three elements necessary to accomplish standardization
o Explain how to identify areas for replication
o Identify how to use the DWM system for on-going process improvement
o Think of areas in Power Systems where we have not yet taken advantage
of replication

Standardization
As we said at the beginning of this course, “The objective of Total Quality
Management is to continuously improve all aspects of the products and services
we offer the customer. TQM provides a comprehensive method for achieving
that objective.”
We have used the DWM system to organize and implement customer-based
improvements to our top-priority process and have put indicators into place to
track the process. We must continue to monitor the indicators at regular
intervals to make sure that we are still meeting our customers’ needs. In this
way, the DWM system becomes an exercise in continuous improvement (P-D-C-
A). When difficulties arise, they present an excellent opportunity to start
problem-solving teams to investigate and solve them.
But the power of the DWM system comes from using it to “maintain the gains”
that have been achieved through setting it up. This is what we refer to as
standardization, making sure that the good effects of the system are not lost
through neglect or forgetfulness.
Method to ImplementStandardization
The most important element in our attempt to standardize is to sell our co-
workers in the usefulness of the DWM system. This can be achieved by making
the system “user-friendly.”
Remember that to draw up an effective DWM system, we have to go into
considerable detail. Once the system is established and working, however, we
need to make sure that we are using only the level of detail necessary. Nothing
will defeat the attempt to standardize a DWM system faster than overloading
our co-workers with a complicated system they can scarcely read, let alone
understand. We should use the KISS principle: keep it short and simple. The
very success of our efforts will depend upon our ability to reduce our DWM
system to manageable proportions.

There are three elements necessary for effective standardization:
1. Simplify
2. Train
3. Communicate
Let’s go over them one by one.
1. Review and simplify the DWM system to its essential working elements.
To do this, ask questions such as the following:
“Who needs to know this and why?”
“Is this element necessary to understand and follow the DWM system?”
“What purpose is served by this part of the system?”
By asking these questions, we hope to separate the necessary working elements
of the system from those aspects that were added as we tried to learn about the
process and to bring it into control.
Not every checking point is necessary; not every managing point that we first
identified is needed to satisfy the customer. Not every target is meaningful and
not every indicator chart will help us to understand the system.
Go ahead and re-evaluate the need for the managing and checking points on a
regular basis. You may have to make changes as you learn more about your
process. Your customers’ needs evolve and change.

Case Study
Simplification at Eric’s Grocery Service
After the DWM system was established,things ran more smoothly. However, as
time wore on, Eric began to wonder whether he was wasting some of his
precious time in indicators. Finally, he went to Bob and asked why he was
continuing to track the time from freezer to delivery.
Bob tried to show Eric how important this was for the crucial customer
requirement that the dairy products be cool. Eric agreed, but he pointed out that
in the two months he had been tracking, the numbers had never varied by more
than two minutes. With the heavy cardboard containers and insulated carrying
cases they used, was tracking a two minute difference meaningful? Bob had to
agree, however, reluctantly, that it did seem like a waste of time. Instead, he
suggested that sincethe indicator seemed to be well within control, they move to
a periodic rechecking. Eric thought that tracking the time for one week every
two months should be more than enough to let them know how this indicator
was doing.
Joe, whose specialty was charts, redid the DWM system and posted the new one.
Everyone thought that it looked good and was much easier to understand.
Morale actually improved and the groceries were delivered faster than before.

2. Train the people actually doing the job so that they understand and can
use the DWM system.
No matter how good it is in theory, the DWM system will not benefit the
customer unless all the people involved in the top-priority process
understand it and can implement it. Even when the processes we follow
at work are not ideal, we get used to them. The DWM system represents
a change in the way business has been done and that will mean it is a
threat to many.
If it is to succeed, we must enlist the understanding and cooperation of
everyone in the workplace. To do this, we must train them in the
meaning and operation of the new system before we try to implement it.
When this is done, we will often find that the workers themselves,
because of their understanding and experience, improve the system
before it goes into operation.
Case Study
Training at Eric’s Grocery Service
Bob and Joe had heard that training is necessary when trying to standardize the
new DWM system, but in their haste and enthusiasm, they tried to implement
the new system before everyone had a chance to learn about it fully.
Although the system worked well for the most part, the weekends tended to be
chaotic. The indicators always went out of whack on weekends. Finally they
realized that a large part of the problem was that on weekends, because of the
higher volume of deliveries, Bill, a senior in high school helped out with
deliveries. Because the new system had never been properly explained to him,
and he viewed it as just another thankless task, he did not always keep accurate
records.
When the situation was finally explained to him, things started to improve at
once and he even figured out a simpler way to keep the records of the time from
order to delivery.

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