PROBLEM SOLVING

DECISION MAKING
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Problem solving for total quality 01
Two model for solving and preventing
problems02
Problem solving and decision making
tools 03
Decision making for total quality &
Decision making process 04
Objective Vs Subjective decision
making 05
Scientific decision making and problem
solving06
Employee involvement in problem
solving and decision making 07
Role of information in decision making 02
Creativity in decision making
04
 Problem Solving
FIX IT REPLACE IT

a problem is solved only when its recurrence has become

impossible or significantly less probable. IN TOTAL QUALITY
problems are solved once and for all.

product or service quality improves

Could the
costs decrease
managers apply
the total quality
principles to customer satisfaction improves
problem
solving? competitiveness improves

the probability for success improves.

Problem Solving for Total Quality

 Problems
Laten Problem Existent Problem
waiting in the wings for the right the ones that have manifested
combination of circumstances to bring themselves as processes that have
them to life. Because they have yet to gone wrong, as defective products, as
occur, they are not obvious until we go errors in work, and through other
searching for them. symptoms of trouble

PROACTIVE REACTIVE
if conditions are right, a problem has
this problem could occurred, and it must
occur, and we need to always be to eliminate the potential be solved before we
prevent it. for the problem to occur (latent) or can move on.
repeat (existent).
 Two Models For
Solving And
Preventing Problems
The Plan–Do–Check–Adjust Cycle
PDCA cycle
is a kind of generic, basic format for bringing order and logic
to the problem-solving process The cycle started with design
the product, production, sales, and market research.
Plan
The problem must be defined, relevant information
gathered, the root cause of the problem identified, possible
solutions developed and considered, and the best
alternative selected for implementation.

Do
Implement the solution chosen as best.

Check
Monitor the implemented solution and gather data relevant
to the original problem, Analyze the data to determine
whether the implemented solution eliminated the problem.

Adjust
it will be necessary to “adjust” the implemented solution.
Adjust can also mean discard the implemented solution
and try a different approach.
 Two Models For
Practical Problem-Solving Process Solving And
Step 1: Perceive the Initial Problem
Preventing Problems
perceives that a problem (latent or existent).
Existent problems will usually be obvious and must be dealt with expeditiously.
Latent problems are often discovered by improvement teams searching processes and product or
service designs for vulnerability.

Step 2: Clarify the Problem

grasping the situation thoroughly before proceeding with the problem solving is vitally important, but
it is a very difficult concept to teach.
a. Observe with an open mind.
This is a reminder to refrain from assuming anything relative to the problem at this point
b. Compare the actual situation to the standard.
This requires the problem solver to compare the actual data from the process or product
with that specified in the relevant standard.
c. Does a variance exist?
If there is no variance, then either the situation is problem free or the problem is not what it
seemed to be.
d. Is there more than one variance?
If only a single variance is indicated, the No output of this diamond takes us directly to the
last element of Step 2, substep f, bypassing the need to prioritize.
e. Prioritize.
When improvement teams analyze processes, it is not uncommon to find multiple
possibilities for variances.
f. Set an improvement objective.
We arrive at this block with a single problem in mind, either because there was only one
problem or because we deliberately selected the most important of a set of problems.
Step 3: Determine the Point of Cause (POC) Two Models For
The intent of this step is to move our attention upstream to where the Solving And
problem’s cause took life. That could be far removed from where the Preventing Problems
problem was first detected.
Step 4: Determine the Root Cause Using the Five Way Analysis
Caution must be taken at this step. It is often easy to determine a
cause that seems to fit the problem perfectly and yet does nothing to
prevent the problem from recurring.
a. First Why
asking “Why are we buying materials that we do not need?” the team quickly determines
that the unneeded purchases are the result of purchasing department purchase orders
b. Second Why
To understand the problem more fully, the team members have to understand how ERP work
“Why does the ERP system issue requests for material?”
c. Third Why
The team members need to determine the cause of the erroneous material requests. They
ask, “Why are many of the ERP material requests invalid?” The ERP system is a computer
program with access to various relevant data and information relative to the enterprise.
d. Fourth Why
Having determined that the inventory data contain errors, the team asks, “Why are the
inventory data inaccurate?”
e. Fifth Why
The team members are beginning to think they are almost there, but they decide to probe
at least one layer deeper. They ask, “Why wasn’t the inventory system
 Two Models For
Step 5: Develop and Implement a Countermeasure Solving And
Continuing, the team found it easy to articulate their solution Preventing Problems
(countermeasure). It has four components: To correct the immediate
problem,
1. The team must acquaint the management with ERP requirements
for inventory accuracy.
2. Management must commit to, and support, the upgrading of the
inventory system.
3. Until virtually 100% inventory database accuracy is achieved, the
organization must restore manual checks on the system to prevent
unnecessary material orders. To prevent similar problems in the
future
4. A procedure must be implemented to ensure
a.Understanding of the needs of prospective new systems before committing to them.
b.Concurrent availability of suitable infrastructure support for any new systems that are
implemented.
Step 6: Determine the Effectiveness of the Countermeasure
The team now has to determine whether the improvement objective developed in substep 2f is being
satisfied by the implementation of the countermeasure.
Step 7: Change the Standard
Whether the “standard” in question is a product specification, a manufacturing process, or a work
instruction, the team must update it to reflect any change(s) made through the countermeasure
Problem-solving And
Decision-making Tools
Decisions and solutions based on information that
is inaccurate or tainted by personal opinions,
exaggeration, or personal agendas are not likely to
be optimal, regardless of the problem-solving
model used. The information collection step can be
made more effective through the use of the total
quality tools introduced in Chapter 15.
Today’s business decisions and problem
solutions cannot be made without sufficient
knowledge of all the relevant factors, which
often means that the collective knowledge of
the organization must be tapped. At the
least, we must be smart in our decision
making and problem solving, or we may find
ourselves on the path to ruin
DECISION MAKING FOR
TOTAL QUALITY
Decision making is the process of selecting
one course of action from among two or more
alternatives.
Decision making is a critical task in a total
quality setting. Decisions play the same role in
an organization that fuel plays in an
automobile engine: They keep it running. The
work of an organization cannot proceed until
decisions are made
 Evaluating Decisions
There are two ways to evaluate decisions.
The first is to examine the results. In every
case when a decision must be made,
there is a corresponding result. That result
should advance an organization toward
the accomplishment of its goals. To the
extent that it does, the decision is usually
considered a good decision. Managers
have traditionally had their decisions
evaluated based on results. However, this
is not the only way that decisions should
be evaluated. Regardless of results, it is
wise also to evaluate the process used in
making a decision. Positive results can
cause a manager to overlook the fact that
a faulty process was used, and in the long
run, a faulty process will lead to negative
results more frequently than to positive
ones
THE DECISION-MAKING PROCESS
Identify or Anticipate the Situation
Anticipating the situation is like driving defensively; never assume
anything. you can anticipate the consequences that may occur. The
better managers know their employees, technological systems,
products, and processes, the better able they will be to anticipate
troublesome situations.

Gather the Facts

Even the most perceptive managers will be unable to anticipate all
situations or to understand intuitively what is behind them. the manager
should separate causes from symptoms and determine the root cause
of the poor attitude.

Consider Alternatives
Considering the alternatives involves two steps: (1) list all of the various
alternatives available and (2) evaluate each alternative in light of the
facts.

Choose the Best Alternative, Implement, Monitor, and Adjust After

all alternatives have been considered, one must be selected and
implemented, and after an alternative has been implemented,
managers must monitor progress and adjust appropriately.
OBJECTIVE VS SUBJECTIVE
• Objective decision is one which is not influenced
by one’s personal feelings, perspectives,
interests and biases. Instead, it considers only
verifiable facts and all stakeholders’ interests
(perhaps equally). An objective decision seeks to
maximize the benefits, net of costs, conform to
the rules and values of those stakeholders.

• Subjective decision is based on personal

opinions, interpretations, points of view, emotions
and judgment. It is often considered ill-suited for
scenarios like news reporting or decision making
in business or politics.
 Scientific Decision Making and
Problem Solving Breakdowns and Delays
Equipment breakdowns delay work, causing production Variation
personnel either to work overtime or to work faster to In a total quality setting,
catch up. Overtime adds cost to the product without consistency and predictability are
adding value. When this happens, the organization’s important. When a process runs
competitors gain an unearned competitive advantage. consistently, efforts can begin to
When attempts are made to run a process faster than its improve it by reducing process
optimum rate, an increase in errors is inevitable. variations

Errors and Defects

Inefficiency
Errors cause defects and defects
reduce competitiveness. When a defect using more resources
occurs, one of two things must happen: the (time, material, movement, or
part or product must be scrapped altogether, something else) than necessary to
or extra work must be done to correct the accomplish a task. Inefficiency often
defect. Waste or extra work that results from occurs because organizations fall
errors and defects adds cost to the product into the habit of doing things the
without adding value way they have always been done
without ever asking why.
 Employee Involvement
Advantages Problem
Involving employees in decision making and problem solving
accurate picture of what the problem really is and a can lead to problems. The major potential problem is
more comprehensive list of potential solution and that it takes time, and managers do not always have time.
decision alternatives. It can help managers do a Other potential difficulties are that it takes employees away
better job of evaluating alternatives and selecting from their jobs and that it can result in conflict among team
the best one to implement. Perhaps the most members. Next to time, the most significant potential problem is
important advantages are gained after the decision that employee involvement can lead to democratic
is made. Employees who participate in the decision- compromises that do not necessarily represent the best
making or problem-solving process are more likely decision. In addition, disharmony can result when a decision
to understand and accept the decision or solution maker rejects the advice of the group.
and have a personal stake in making sure the
alternative selected succeeds.
Name Here
 Employee Involvement
Data Versus Information Problem
Involving employees in decision making and problem solving
can lead to problems. The major potential problem is
that it takes time, and managers do not always have time.
Data for one person may be information for another. Other potential difficulties are that it takes employees away
The difference lies in the needs of the individual. from their jobs and that it can result in conflict among team
Managers’ needs are dictated by the types of members. Next to time, the most significant potential problem is
decisions they make. For example, a computer that employee involvement can lead to democratic
printout listing speed and feed rates for a company’s compromises that do not necessarily represent the best
machine tools would contain valuable information decision. In addition, disharmony can result when a decision
for the production manager; the same printout maker rejects the advice of the group.
would be just data to the warehouse manager

Name Here
 Amount of Information
An old saying holds that a manager can’t have
too much information. This is no longer true,
With advances in information technologies, not
only can managers have too much information,
but also they frequently do. This phenomenon
has come to be known as information overload,
the condition that exists when people receive
more information than they can process in a
timely manner. The phrase “in a timely manner”
means in time to be useful in decision making.
 Management Information Systems
A management information system (MIS) is a system used to collect, store, process, and present
information used by managers in decision making. In the modern workplace, a management information
system is typically a computer-based system. A management information system has three major
components; hardware, software, and people. Hardware consists of the computer (be it a mainframe, mini-,
or microcomputer), all of the peripheral devices for interaction with the computer, and output devices such
as printers and display screens. Software is the component that allows the computer to perform specific
operations and process data. It consists primarily of computer programs but also includes the database,
files, and manuals. That explain operating procedures. Systems software controls the basic operation of the
system. (word processing, databases, computer-assisted planning, spreadsheets, etc.).

A database is a broad collection of data from which specific information can be drawn. For example, a
company might have a personnel database in which many different items of information about its employees
are stored. From this database can be drawn a variety of different reports—such as printouts of all
employees in order of employment date, by job classification, or by ZIP code. Data
are kept in electronic files stored under specific groupings or file names.

The most important component is the people component. It consists of the people who manage, operate,
maintain, and use the system. Managers who depend on a management information system for part of the
information needed to make decisions are users.
 Creativity Defined
Like leadership, creativity has many definitions, and viewpoints vary about whether creative people are born or
made. In modern organizations, creativity can be viewed as an approach to problem solving and decision
making that is imaginative, original, and innovative. Developing such perspectives requires that decision
makers have knowledge and experience regarding the issue in question.
Creative Process according to H. Von Oech, the creative process proceeds in four stages: preparation,
incubation, insight, and verification. What takes place in each of these stages is summarized as follows:
Preparation involves learning, gaining experience, and collecting or storing information in a given area.
Creative decision making requires that the people involved be prepared.
Incubation involves giving ideas time to develop, change, grow, and solidify. Ideas incubate while decision
makers get away from the issue in question and give the mind time to sort things out. Incubation is often a
function of the subconscious mind.
Insight follows incubation. It is the point in time when a potential solution falls in place and becomes clear to
decision makers. This point is sometimes seen as a moment of inspiration. However, inspiration rarely occurs
without having been preceded by perspiration. preparation, and incubation.
Verification involves reviewing the decision to determine whether it will actually work. t this point, traditional
processes such as feasibility studies and cost—benefit analyses are used.
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