Operations Management

Quality Excellence at Rolls-Royce & Swiss Federal Railway

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Table of Contents
1 Introduction ................................................................................................ 1 2 Rolls-Royce Quality System ...................................................................... 1 3 SBB Passenger Traffic Quality System.................................................... 3 4 Customer Needs and Quality Process ..................................................... 4
4.1 4.2 Jurans Trilogy vs RR-QMS & SBB QMS ................................................................ 4 Crosbys 14 Steps vs RR-QMS & SBB QMS ............................................................ 5

5 Use of TQM and Six-Sigma in Rolls-Royce & SBB .................................. 8

5.1 5.2 5.3 Process Strategy ......................................................................................................... 8 Performance Management........................................................................................ 10 Supply Chain Management .......................................................................................11

6 Sustainability & Innovation.................................................................... 11 7 Conclusion.................................................................................................. 13 8 Appendices ................................................................................................ 14

8.1 8.2 8.3 8.4 Appendix 1 Demings 14 Principles...................................................................... 14 Appendix 2 Crosbys 14 Steps .............................................................................. 14 Appendix 3 Jurans Trilogy ................................................................................... 15 Appendix 4 Rolls-Royce Quality Targets ............................................................. 15

9 References.................................................................................................. 16

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1 Introduction
Quality is the most important criteria to stay competitive in the market and to run a sustainable business. Be it in service sector or in manufacturing, quality is very important to meet the threshold of the competition and to maintain competitive advantage. This paper discusses the applicability of the quality theories in services and manufacturing industries. There are many theories of quality management but the top 3 theories that are regarded most in the industry are called Deming model, Crosby model and Juran model. The Deming model is based on the 14 principles (Appendix 1) laid and advocated by Dr W Edward Deming. Philip B Crosbys 14 steps (Appendix 2) to quality improvement are the basic principles of Crosby model, which brought a significant change in quality management practice in American companies. Dr Joseph M Juran developed the quality trilogy (Appendix 3) of quality planning, quality control and quality improvement, which is the basis of Juran model. Processes of any company can be broadly categorised into 2 categories, Core Processes and Support Processes. The core processes differ from a manufacturing organization to a service organization and the quality approach also differs mainly due to two factors (1) nature of output from the process (2) level of customer contact. In a service organization there is a high level of customer contact throughout the service delivery period. This requires a quality approach of high customer involvement and high level of process flexibility. A customers contact with a manufacturing organization is primarily through the product that the customer uses. So the quality approach in the manufacturing organization needs to be primarily focused on the product quality and cost. This report discusses the quality management processes in Rolls Royce, a manufacturing company, and Swiss federal railway (SBB), a service company, and critically analyses whether these processes are adequately designed to meet their customer needs. The next section on this report discusses the quality approach in process strategy, performance management and supply chain management and analyses the approach suitable for innovation and sustainability.

2 Rolls-Royce Quality System

Rolls-Royce plc, the British engineering company, the foremost manufacturer of power systems and services for use on land, sea and in the air. Rolls-Royce manufactures engines, pressure vessels and turbines for transport, defence, aerospace and nuclear industries. Because of the nature of the industry and the risks involved, quality of products and services is a must to survive in the industry. Rolls-Royce has 30,000 of its engines in service with its broad customer base comprising more than 500 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces and more than 2,000 marine customers, including 50 navies. Its customers needs are 100% reliability, minimum downtime and optimum lifetime operating cost of the engine fleet. To meet its customers needs, Rolls-Royces quality management system adequately covers the quality assurance and quality control in its supply chain and manufacturing processes. Although the RRQMS is adequate to assure quality of the products but there have instances of lapses in adherence to quality processes. There have

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been lawsuits against Rolls-Royce alleging the company ignored quality inspections and safety issues at one of its factories in the US (ODoherty, 2011). The recent incident of Trent 900 engine failure was due to a manufacturing defect in the oil feeder tube, which did cost 56 million to Rolls-Royce to fix the problem. Some of the instances show failure in adherence to the quality processes but to ensure that its customers dont face any catastrophic failures, Rolls-Royce has implemented a very innovative technology to do a real-time monitoring of performance of its engines in service. Rolls-Royce has adopted an in-house developed quality management system (RRQMS) to integrate business management, product and service quality. RRQMS ensures that controls are applied consistently in business, design, manufacturing, servicing and supply chain activities all across the company.

Figure 1: Rolls-Royce Core Processes

The Rolls-Royce QMS is based on 8 quality management principles 1. Customer Focus 2. Leadership 3. Involvement of People 4. Process Approach 5. System Approach to Management 6. Continual Improvement 7. Factual Approach to Decision Making 8. Mutually Beneficial Supplier Relationships The framework of the RRQMS covers all aspects of the business processes, starting with strategic planning and leadership, supply chain management, product engineering, product delivery and services. These above 8 principles are applied at 5 different levels in the RRQMS. The Figure 2 below depicts the 5 different levels in RRQMS

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Figure 2 : 5 Levels of Rolls-Royce Quality Management System

3 SBB Passenger Traffic Quality System

Swiss federal railway (SBB) is regarded as the most reliable and most punctual railway system in the world. SBB operates a 3000-kilometer network of tracks, 300 million travellers and 60 million tons of freight is transported annually between 800 railway stations. SBB has been consistently maintaining the track record of punctuality of its services, 95.7% of the trains arrive within 5 minutes of delay (Weidmann et al., 2006). In order to fulfil the demand for quality, customer satisfaction, productivity and profitability SBB implements its own quality management system complying with the ISO9001 quality guidelines.

Figure 3: Swiss Federal Railway (SBB) Core Processes

The core operations in Passenger Traffic are Train Management, Rolling Stock Management and Infrastructure Maintenance. SBB has 2,300 drivers to run over 6,000 trains safely, efficiently and punctually. More than 80 planning, control, management and HR controlling specialists ensure the correct deployment of locomotive crews. SBB also organises locomotive crews to work special trains at short notice, as well as for managing day-to-day business. SBB ran over 163 special trains for the affected customers due to the ash cloud
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problem in 2010. The nature of the processes is such that it needs to be highly flexible to accommodate for any real-time changes or emergencies.

Figure 4: Swiss Federal Railway (SBB) Train Management

The quality approach taken by SBB is an in-house developed system. Quality is ensured at every stage form staff recruitment tests to online train management system. Despite the high level of safety and quality assurance major accidents like the derailment in 2010 and minor safety incidents with employees have also been reported.

4 Customer Needs and Quality Process

The primary objective of the quality process is to ensure consistency of quality that customer needs. Processes and procedures is to defined to reduce the variability of the output produced. This section analyses whether the quality processes at Rolls-Royce and SBB are adequately designed to meet customer needs in comparison with the quality processes proposed by Juran and Crosby.

4.1 Jurans Trilogy vs RR-QMS & SBB QMS

The standards of compliance as defined in RRQMS are BS5750 (Detection of Defects or Quality Control), ISO 9001/2/3 (Prevention of Defects or Quality Assurance and Continuous Improvement or Quality Management). These standards of compliance are the universal processes as defined in Jurans quality trilogy. Jurans trilogy does not explicitly differentiate the quality assurance process. RRQMS defines the quality assurance as a separate process in addition to the Jurans trilogy. Quality planning at Rolls-Royce is done in 2 steps. The step 1 starts with planning the individual aspects of people, processes,
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materials, equipments, and resources. In the 2nd step of quality planning, a systems approach is taken to integrate the individual aspects quality. A robust quality control process is implemented in all steps of a product cycle, in design, manufacturing, supply chain and services. The 2 dimensions of the quality control processes are internal quality and external quality. The external quality control is monitored through the supplier relationship system called SABRe. The quality of suppliers products is controlled through physical verification, witness of processes, review of quality documents and records. Quality planning in Rolls-Royce starts at top level with strategic planning to achieve quality goals, which is a continuous improvement process. As an example, Rolls-Royce targets to reduce the delivered defects (measured as parts per million) by 10 times in every 2 years. The quality assurance process in Rolls-Royce is a defect prevention technique. This prevention technique applies to external defects as well as internal defects. This process involves short listing and certification of suppliers, plant maintenance, process monitoring, technology upgrades, etc. Jurans Trilogy Quality Planning RR QMS Quality targets are clearly defined and reviewed every 2 years. Inspection and verification processes are in place to control product quality. Total quality assurance is ensured at every stage in the supply chain from procurement, manufacturing and engine testing. Real-time engine performance is monitored to detect engine problems at early stages and bring design improvements. SBB QMS Performance targets are agreed with government and reviewed every 4 years. Service quality monitoring is done from the punctuality and safety records and customer feedback. Employee training and infrastructure maintenance carried out to prevent errors and customer dissatisfaction. Projects undertaken to improve the punctuality, safety and customer experience.

Quality Control

Quality Improvement

4.2 Crosbys 14 Steps vs RR-QMS & SBB QMS

The Rolls-Royce QMS derives many of its principles from the Crosbys 14 steps to quality. The table 1 below draws a comparison of Crosbys 14 steps and the equivalent processes in Rolls-Royce QMS. Crosbys 14 Steps Step 1: Management Commitment Rolls-Royce QMS The 2 principle of Rolls-Royce QMS is about leadership, which has a direct correlation to the step 1 in Crosbys 14 steps. There is a formalised quality policy and targets. Managements commitment is evidenced from
nd

SBB QMS ISO 9001 compliance and allocated budgets and undertaken quality improvement projects are evidence of management commitment.

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Step 2: Quality Improvement Team

Step 3: Quality Measurement

Step 4: Cost of Quality Evaluation

Step 5: Quality Awareness

the budgets allocated for plant and technology improvements to achieve the quality targets (Appendix 4). Rolls-Royce has quality improvement teams comprising participants from its suppliers, employees from different departments and customer representatives drawing the improvement plan and monitoring the improvements all thought out its supply chain and delivery. The principles of process approach and factual approach to decision making derives this step of quality measurement. Product verification thorough automated co-ordinate measuring machines (CMM) tracks and monitors the defects. Statistical process control in the supply chain and manufacturing line monitors the current and potential problems. The principles of factual approach to decision making and systems approach to management are implemented through the processes of measuring waste and potential losses due to damage to the reputation. Crosbys step 4 is all about measuring waste and using it a tool for decision making. Employee trainings, internal and external audits are examples in Rolls-Royce that implements this step 5 from Crosbys 14 steps. Planned and ad-hoc plant maintenance takes the corrective action needed in its manufacturing line. There is no direct evidence of ad-

Quality compliance team identifies the quality gaps and improvement opportunities. It is SBBs internal team unlike the team at Rolls-Royce.

Real-time onboard tools (as shown in Figure 4) are used for measuring service quality and regular customer feedback is collected to check customer perspective of quality of service.

SBB QMS does not have provision for measuring cost of quality. Measuring cost of quality in a service sector can be very complex and difficult to measure.

Step 6: Corrective Action

New and existing employees are regularly trained on various aspects of customer interaction, safety and service standards. Maintenance is one of the core processes in SBB to ensure quality of service. There is no evidence of SBB

Step 7: Establish an

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Ad Hoc Committee for the Zero Defects Program

Step 8: Supervisor Training

Step 9: Zero Defects Day

Step 10: Goal Setting

Step 11: Error Cause Removal

Step 12: Recognition

Step 13: Quality Councils

hoc committee and zero-defects program process in RR-QMS. But Rolls-Royce hosts a variety of events to celebrate the excellence and achievements in quality. Employees and Supervisors go through cross skills trainings to develop flexibility in workforce. Through trainings and restructuring Rolls-Royce has been able to achieve 10% higher output per operator (Llyod, 2003). There is no direct evidence of celebrating zero-defects day in RR-QMS. But Rolls-Royce hosts a variety of events to celebrate the excellence and achievements in quality. Continuous improvement quality targets drives innovation and process improvement in RollsRoyce (Appendix 4) Monitoring the performance of its engines through the EHM (Engine Health Monitoring) system helps in identifying potential design problems and fixing them before engines reach to the fatigue stage. Rolls-Royce recognises and rewards its suppliers and employees every year through award ceremonies. The principle of employee involvement and mutually beneficial supplier relationship are behind the process of recognising and rewarding employees and suppliers. Quality improvement information is shared across all departments but RR-QMS does not directly address establishment of quality councils

following step 7 as defined in Crosbys model.

Trainings as described in step 4.

SBB does not follow a zero defects day.

Service agreements with Swiss government and rail companies. Any reported incident in the service disruption is investigated by a panel of experts to identify the error cause and actions are taken to remove the error cause. Various employee awards and team awards distributed annually to recognise the innovation and improvements brought by high performers.

SBB quality management system does not have provision for quality councils.

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Step 14: Do It Over Again

within the organisation for the purpose of sharing quality improvement information. The principle of continuous improvement and quality targets, technology and process improvements establishes this 14th step in Rolls-Royce.

Incremental improvements and regular projects undertaken to repeat the cycle of quality improvements.

5 Use of TQM and Six-Sigma in Rolls-Royce & SBB

The philosophy of TQM is implemented in most of todays organisations but also it is misinterpreted very often. TQM is a culture of managing to improve the effectiveness, flexibility, competitiveness of an organisation. Quality has always been at the forefront for Rolls Royce and it started adopting the principles of TQM in the year 1979 (MartnezLorente et al., 2000) and in the 100 year old history of SBB, achieving service excellence has always been in the blood of the business. TQM principles are based on three things (i) Customer Satisfaction (ii) Employee Satisfaction and (iii) Continuous Improvement, where as Six-Sigma is about variability of any process output. The three levels of Six Sigma implementation are (i) As a Metric (ii) As a Methodology (iii) As a Management System. Six Sigma underpins the TQM principles, Statistical Process Control and the other principles of quality management. Rolls Royce has a robust and mature Six Sigma program. Roll-Royce's improvement journey to performance excellence has the broad leadership support throughout the company to ensure true cultural change to embrace quality throughout the production and delivery process to please Rolls-Royce customers (Dave, 2011). Six Sigmas emphasis on defects measurement makes it relevant for manufacturing industry where the process steps are well defined and repetitive and defects can be measured. Measuring defects in a service process can be illogical to assume that all defects are equal. Though SBB does not implement the statistical definition of Six Sigma, which is 3.4 defects per million opportunities, it implements the core principles of continuous improvement for growth and productivity.

5.1 Process Strategy

Process based approaches and process based management are helping organizations improve and gain a competitive advantage. The process strategy at Rolls Royce is primarily focused on the repetitive nature of the assembly line work and testing of the assembled engines where as the process strategy at SBB is focused on the process flexibility to make the customer experience delightful while availing its services at the railway stations or the onboard services. There are some many sub processes within these organizations which follow the product focus strategy and mass production strategy. Continuous improvement at Rolls Royce is essential to meet the increasing expectations of its customers and to maintain competitiveness. Rolls Royce uses consistent methods for improvement, which include Define Measure Analyze Improve Control (DMAIC). Embarking on a Six Sigma program means delivering top-quality service and products while virtually eliminating all internal inefficiencies. The process strategy at Rolls Royce is
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aimed at achieving the goal of 40 day engine delivery through process optimization and efficient production. Each engine series is a different product but the new engine development follows a similar cycle. The core engine common technology is the same for all engines. The process strategy for the core engine constituent components is mass production focused to gain reduced costs that are achievable from volumes. The Figure 5 below shows the 4 elements for achieving process excellence at Rolls Royce. Figure 5: Rolls-Royce Process Maturity Cycle

The Six Sigma program at Rolls Royce has been able to achieve 95%+ component delivery performance. Customer delays are a rare event. Less inventory and improved stock turns through the ERP system that has enabled Rolls Royce to shorten component manufacturing lead times. The capacity and load mismatch has dropped by a factor of ten over recent years, leading to not only easier planning but also a reduction in indirect labour and hence costs. Improvement on engine lead time from 473 days to 40 days (Llyod, 2003) Although SBB never publicised its quality management and process strategy practices as Six Sigma or TQM program but core principles and philosophies are inherent in its corporate culture. The principles of TQM and Kaizen are more prevalent in SBB than the Six Sigma approach. Some of the recent projects undertaken by SBB underpin their belief in TQM. The Dynamic Railroad Traffic Management program is designed to increase operational efficiency, network capacity and stability in heavily used mixed traffic networks while minimizing the cost of new infrastructure. Every train always has an up-to-date, conflict free schedule with an accuracy of seconds (Weidmann et al., 2006). In order to fulfil demands relating to quality, customer safety and satisfaction,
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productivity and profitability, the SBB implemented the Netbook mobile computing project. This project replaced approximately 40 tons of paper daily, and has enabled SBB to greatly reduce the preparation time necessary for Locomotive Crews prior to the start of a trip, thus enabling a more effective and efficient use of their time. The philosophies of TQM, customer satisfaction, employee engagement and continuous improvement, are well adopted in this project. The Taktfahrplan ("clockface timetable") project greatly in 1982 improved the connection time at hub stations reducing the travel time for customers. The Rail2000 project, an ambitious programme to improve the company's services, was put into effect. It was the greatest timetable change since the introduction of the Taktfahrplan

There are few projects that have resemblance to the Six Sigma methodology, e.g the safety performance improvement project done by partnering with DuPont in 1993. The project reduced the safety related incidents from 4,255 in 1993 to 2,220 by 1997 saving SBB CHF 6.6 million. DuPont is one of the early adopter of Six Sigma models and their experience in Six Sigma projects helped SBB on this project. The Six Sigma culture is not very prevalent in SBB for process strategy. Adopting Six Sigma methodology and culture would greatly enhance the process strategy and measurement of process improvements and accuracy at SBB.

5.2 Performance Management

Performance management is all about execution, putting strategy to work (Horn, 2006). Be it business performance or individual performance, a balanced scorecard monitors results and identifies any areas for improvement. Performance management requires two elements as inputs (a) strategic objectives and performance indicators (b) current and actual performance against targets. Balanced scorecard has been in use for 2 decades and has proven to be a useful tool for management to develop strategy and monitor progress. Implementation, usefulness and accuracy of balanced scorecard at grass root level have been questioned for practicality (Gupta, 2004).

Figure 6: Six Sigma Business Scorecard by Praveen Gupta

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Rolls Royce has standard performance measures in every plant. The Key Performance Indicators are focused on Quality Cost and Delivery. The same measures are used in every cell, plant, business units and to the Rolls-Royce Board (Llyod, 2003). In a service industry the key performance indicator is customer satisfaction. Swiss Federal Railways performance indicators are customer satisfaction, safety, punctuality and environmental impact. Rolls Royce and SBB have their respective performance scorecards defined and monitored adopting the DMAIC methodology of Six-Sigma. All businesses, manufacturing and services sector, need a tool that can provide a framework for energise the workforce and continually improve the individual and organizational performance. For any Six Sigma scorecard to be implemented successfully it must be built upon the basics of business. The Six Sigma scorecard personifies leadership and management; aligns operations and drives customer service and sales; and promotes employee excellence and innovation(Gupta, 2004).

5.3 Supply Chain Management

Supply chain management is becoming very important for the companies to stay ahead of the competition. From the early 90s Six Sigma methodologies have been used to achieve substantial improvement in the supply chain quality. Managing supply chain Six Sigma projects is a very challenging as not only the direct suppliers but the suppliers suppliers are also required to be involved in the projects. GE, DuPont, Honeywell, Samsung, all these companies have been able to gain their competitive advantage through their Six Sigma projects. Samsung modified DMADOV framework to DMAEV by introducing the Enable stage in place of Design and Optimise for their Six-Sigma supply chain projects. The programme launched in 2003 at Rolls Royce aimed at simplifying the supply chain by embarking on a process of integrating components into logical kits. This programme greatly eliminated waste, reduced number of suppliers from 600 to 300 and enabled just in time supply chain management. The Trent 500 engine is a good example of this Six Sigma project, which uses 11,000 components covering 1,800 different parts. The kit now contains 30 logical packages requiring less space and cleaner floor halving the lead time and requiring 1/7th of inventory in assembly line.

6 Sustainability & Innovation

As the environment is becoming more and more competitive, innovation is no more a differentiation, but a necessity, and as consumers expectations on CSR are increasing, finding the balance between these variables is most likely to define how successful the company is (Yamasaki, 2011). The only way to sustain business in todays dynamic and competitive environment is through continuous innovation. There are many empirical evidences where the market leaders have lost their competitive advantage due to lack of continuous innovation, e.g the Japanese DRAM industry lost its market position to the Korean industry. Innovations can be radical or incremental and both are essential to stay ahead of the competition. The internet protocol TCP/IP was a radical innovation but in the early years of this innovation it was nowhere close to the quality benchmarks of telephony, the subsequent incremental innovations made it a sustainable technology. The Six Sigma approach has been very successful in generating incremental innovative ideas and projects. On the other hand companies like SBB, who dont follow the Six Sigma approach, are also

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very successful in sustaining their business. Cost-effectiveness, environmental compatibility and social responsibility are the three central pillars of SBBs corporate strategy oriented towards sustainability. Tourism industry plays a significant role in Switzerlands economy and nature and the environment play a significant role in growth of the tourism industry in Switzerland. So sustainability of SBB cannot be achieved without taking care of the environment in its strategy and actions. In recent years SBB has started energy saving and climate protection programmes, which are continuous and ongoing. Sustainability in manufacturing industry also cannot be achieved without taking care of the environmental impact. The CO2 emission per passenger for a flight journey is 10 times higher than a train journey. The Rolls Royce group measures both the emissions of its products and the emissions of its manufacturing operations. As a power systems company Rolls-Royces primary contribution to sustainability is to develop technologies and products with an increasingly lower environmental impact. Rolls-Royces R&D investments are for developing products for future to respond to several of the major environmental challenges, through the provision of low-emissions, low-carbon and renewable energy solutions. Radical innovations and future products build the foundation for long term sustainability. Rolls-Royces tidal stream generator is such an example of radical innovation in renewable energy sector. Quality philosophies like Six Sigma and TQM can develop an organizational culture for incremental innovations. Japanese car industry and technology industry gained its competitive advantage through their quality initiatives and incremental innovations. But in a study conducted by Benner and Tushman in the paint and photography industries shows that the greater the number of ISO certifications, the fewer the number of original patents. The risk averse nature of quality process stops free thinking and risk taking. For generating new ideas it requires a free thinking environment. The creative workplace at Google allows being yourself. Rolls-Royces research wing employs creative and free thinking professionals to develop products for future. It invested a total of 923 million in its research and development activities. Research and development are fundamental to future success, providing technologies and intellectual property that allows competing on a global basis in highly competitive markets. Six Sigma culture of quality improvement and cost reduction, with its rigorous analysis, constricts choice, and as such does not mesh well with the more freethinking and risk-taking culture required for germinating new ideas (Cole & Matsumiya, 2007). The recommendation for Rolls-Royce is to continue with their TQM and Six Sigma implementation in their established production process and supply chain process and invest more in developing sustainable renewable energy products. SBB must continue with their focus on making it a delightful experience for their customers and adopt the Six Sigma principles to bring measurable, continuous and incremental innovations. Six Sigma trainings for employees and a focus on measurable incremental improvements can help SBB attaining higher quality goals.
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7 Conclusion
The quality approach in an organization is driven by the level of customer involvement. In manufacturing sector the process strategy is primarily product and mass production focused whereas in service sector it is focused on process and flexibility of processes. RollsRoyce follows a dual strategy with product focus and mass production focus. Rolls-Royce has a deep rooted culture of product excellence by adopting the principles of TQM and Six Sigma. SBB follows its own quality principles of delightful customer experience and continuous improvement, which has very close resemblance to the TQM principles. The principles laid out by the quality gurus like Juran, Crosby and Deming have a very common foundation which are applicable for manufacturing as well as service industries, RollsRoyce and SBB both follow these quality principles in their quality management system. Analysis of the supplier relationship process at Rolls-Royce and the Train management process at SBB shows that processes are designed keeping customer needs in view. But in both organisations there are quality lapses observed in some instances. To prevent these quality lapses and to improve on the observed quality gaps, it requires a process of continuous improvement. The quality philosophies like Six Sigma and TQM, both address the need for continuous improvement and build a culture of excellence. Rolls-Royce and SBB, both have their own balanced performance scorecard and they are measured and monitored against those scorecards. Quality approach can help organizations to bring incremental innovations and stay competitive with their competitors. Six Sigma approach can be applied to any of the core processes or the support processes to bring incremental improvements, reducing cost and increasing profitability. But researches and empirical evidences suggest that these quality approaches develop risk averse culture in organisations and stops them taking risks. For companies to stay ahead of the competition, sustainable and continuous radical innovations are required. To bring the radical innovations forward it requires a free thinking culture, which is beyond boundaries of quality and processes. Rolls-Royce spends huge money in its research and development for developing sustainable products for future. SBB spends huge money in its futuristic projects for making the Swiss and European railway services sustainable making less impact to the nature and environment. The new products and services from radical innovative thinking may lack the stability of quality of an established product but the follow-up incremental innovations and quality improvements will make the new products sustainable for future.

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8 Appendices
8.1 Appendix 1 Demings 14 Principles
1. 2. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place. End the practice of awarding business on the basis of price tag. Instead, minimise total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. Institute training on the job. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of an overhaul, as well as supervision of production workers. Drive out fear, so that everyone may work effectively for the company. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service. Eliminate slogans, exhortations, and targets for the workforce asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force. a) Eliminate work standards (quotas) on the factory floor. Substitute leadership. b) Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership. a) Remove barriers that rob the hourly paid worker of his right to pride in workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. b) Remove barriers that rob people in management and engineering of their right to pride in workmanship. This means, inter alia, abolishment of the annual or merit rating and management by objective. Institute a vigorous program of education and self-improvement. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.

3. 4.

5. 6. 7.

8. 9.

10.

11.

12.

13. 14.

8.2 Appendix 2 Crosbys 14 Steps

Step 1: Management Commitment Step 2: Quality Improvement Team Step 3: Quality Measurement
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Step 4: Cost of Quality Evaluation Step 5: Quality Awareness Step 6: Corrective Action Step 7: Establish an Ad Hoc Committee for the Zero Defects Program Step 8: Supervisor Training Step 9: Zero Defects Day Step 10: Goal Setting Step 11: Error Cause Removal Step 12: Recognition Step 13: Quality Councils Step 14: Do It Over Again

8.3 Appendix 3 Jurans Trilogy

The concept of the quality trilogy is that managing for quality consists of three basic qualityoriented processes. Quality planning. Quality control. Quality improvement.

8.4 Appendix 4 Rolls-Royce Quality Targets

Targets for continuous improvement are: Halve the rate of customer incidents every 3 years. Halve the cost of non-conformance from all business processes every 3 years. Ten times reduction in delivered defects every 2 years, measured as parts per million (PPM) or defects per unit (DPU) as appropriate. Set benchmark lead times and achieve them including appropriate intermediate milestones within 3 years.

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9 References
Anon., 2004. Learning from Rolls-Royce's Experience. Cambridge Manufacturing Review. Anon., 2010. Rolls-Royce propels manufacturing process planning with Aras PLM. Aras Corp. Anon., 2011. Annual and Sustainability Report. Berne: SBB SBB. Anon., n.d. Rolls-Royce Deutschland Corporate Policy. [Online] Available at: www.Rollsroyce.com [Accessed 14 Jul 2011]. Antony, J., 2004. Pros and Cons of Six Sigma. Glasgow: Caledonian Business School. Chapman, A., n.d. Six Sigma history and definitions. [Online] Available at: http://www.businessballs.com/sixsigma.htm [Accessed 20 September 2011]. Cole, R.E. & Matsumiya, T., 2007. Too Much of a Good Thing? Quality as an Impediment to Innovation. California Management Review, pp.77-93. Crosby, P.B., 2005. Crosby's 14 Steps to Quality Improvement. American Society for Quality, (December), pp.60-64. Dave, H., 2011. ASQ Six Sigma Forum. Gupta, P., 2004. Six Sigma Business Scorecard. New York: McGraw-Hill. Horn, A., 2006. Linking Balanced Scorecard and Six Sigma to Drive Breakthrough Business Performance. Improvement and Innovation. Krajewski, L.J., Ritzman, L.P. & Malhotra, M.K., 2010. Operations Management Processes and Supply Chain. Ninth ed. Pearson. Lazonick, W. & Prencipe, A., 2005. Dynamic capabilities and sustained innovation: strategic control and financial commitment at Rolls-Royce plc. Industrial and Corporate Change, pp.501-42. Lewis, D., 2008. Learning Improvement Across a Complex Aerospace Enterprise. Lean Academy. Llyod, M., 2003. Rolls-Royce Operations Strategy. Rolls-Royce. Martnez-Lorente, A.R., Dewhurst, F. & Dale, B.G., 2000. Total Quality Management: Origins and Evolution of the Term. ODoherty, J., 2011. Second whistleblower joins Rolls lawsuit. Financial Times, 31 March. Reberts, J.P., 2009. Measurement technique requirements for gas turbine propulsion systems. Rolls-Royce. Rolls-Royce, 2011. Group Overview. [Online] Available at: http://www.rolls-royce.com/ [Accessed 7 July 2011]. UK, D.o.T.a.I., n.d. The Original Quality Gurus. [Online] Available at: http://www.dti.gov.uk/quality [Accessed 16 Jul 2011]. Waters, D., 1999. Operations Management. PriceWaterHouseCoopers. Weidmann, U., Laube, F. & Medeossi, G., 2006. Rescheduling and Train Control: A New Framework for Railroad Traffic Control in Heavily Used Networks. Yamasaki, L., 2011. Quality evolution as Competitive Weapon. London.

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