Fitness for Use

Quality is fitness for use

Quality is fitness for use

Fitness for Use Categories

Dr Juran defined a non-conformance or reject or defect as “unfit for use”. Parts could be broken into one of four categories:

  • Fit for use and conforming to specification
  • Fit for use but not conforming to specifications
  • Not fit for use but conforming to specifications
  • Not fit for use, not conforming to specifications

Conforming to Specifications Not conforming to   specifications
Fit for use   These are no problem – no action is required This causes seriousInternal communications   problems
Not fit for use   This causes serious External communications   problems These are no problem – no action is required

 

Fitness for Use = Specifications

In two of the four categories, the specifications are useful. The supplier and the customer agree and the customer always get product that they want. When the parts are fit for use and conform to specifications product ships and everyone is happy. In the same way, if the product is not fit for use and does not meet the specification, the supplier will incur a cost but not lose a customer. Everyone is in agreement.

Fitness for Use≠ Specifications

Two of the categories generally lead to a level of (sometimes) controlled chaos. When the parts are fit for use but fail to meet the specification the specifications need to be changed. Understand fitness for use does not mean a product that will function but is cosmetically unsatisfactory. This product meets all the needs of the customer and they see no difference between these products and what they normally receive. Internal communications and conflict will occur until the specifications are revised.

The other category should be considered catastrophic for the supplier. The product does NOT meet the customer’s needs but the supplier views it as conforming to specification, or satisfactory product. It is here that a root cause analysis and long term preventive action is needed.

Controlling Specifications Controls Fitness for Use

Specifications are key documents for training and communication. The customer either sends their specifications or orders a catalog cut which defines the product performance. The first key step to controlling quality starts at Sales. When they take the order, they must understand and communicate the customer needs. If the customer does not what variations in color greater than .5 microns, sales must communicate this back to engineering. Engineering and manufacturing must look at the specifications and their process capability and decide of the specifications can be met. If not they must communicate back to Sales to negotiate a solution.

Clear communication at the start of the process which defines what can and cannot be done is the first step to good quality product, a satisfied customer, and a profit for the supplier.

 

Point 9 – Are You Talking to Me?

Break down barriers

Break down barriers between departments and staff areas. People in different areas, such as Leasing, Maintenance, Administration, must work in teams to tackle problems that may be encountered with products or service.

Dr. W. Edward Deming

If you every want to see a head butting contest, put an experienced tool and die maker with a freshly graduated tooling engineer. If you don’t have a vested interest it can be entertaining. Certainly, I found it significantly enlarged my four letter word vocabulary.

The company faced an unacceptable defect level being generated from the tool. Root cause analysis guide us to a poor understanding, and therefore almost non-existent communication, between engineers and the tool makers. Each vocally attributed the problem to the other.

Our solution, have them trade positions for a day. The engineer got his hands dirty and once he got over being self-conscious actually had some fun running mills, lathes and all the other toys the tool maker used. The tool maker got to try his hand at CAD and got an earful of just how little information the engineer had to work with. Each came away from the project with respect for the other and the freedom to communicate instead of blame.

We started a program having new hire engineers working in the tool room and training toolmakers on the engineer’s toys. Each learned to respect the other. The groups went from snubbing each other in the lunch room to wearing a path in the floor tile between each others’ work stations.

Our next step introduced Failure Mode and Effect Analysis (FMEA). We now had people who were willing to work together instead of point fingers. As soon as we armed them with data and invited them to utilize their education and experience our quality made a geometric improvement. Where 3 sigma had been an unrealistic dream, we made the jump to 6 sigma and parts per million defect levels.

This break though came because we broke down barriers, increasing respect and communications. If we had started the FMEA without first developing respect between the participants our success would have been minimal.

Where are the communication barriers in your company?

Point 8 – Drive Out Fear

Encourage effective two way communication and other means to drive out fear throughout the organization so that everybody may work effectively and more productively for the company.

Dr. W. Edwards Deming

The headline read “Confidence Declines to Lowest since February”. The Conference Board’s index fell almost 5 points in a month. Unemployment at 9.6% is at a 26 year high. The CEO Economic Outlook Index declined from 94.6 in June to 86 in September, because there were fewer company executives expecting sales and head count to improve. (See MSN Money News Center)

Anyway you look at it, there is more than enough fear to go around. So what is the impact on employees? In most cases, people “keep their heads down and their mouths’ shut”, not a good thing. Management isn’t told about problems out of fear of more layoffs, which causes a decrease in product quality, productivity, and increases delivery times and costs. That kind of response to fear puts a company out of business.

What is a business owner to do? Dr. Deming said it, “Drive out fear.”

Have a Plan

This is not going to be a fast recovery. What do you need to do, if the economic situation does not improve, for the next 12 months? Look at head count, purchases and expenses. How do you stay in business and provide jobs? What indicators will you track and what do they need to be to get you out of protection mode? Write it down and follow it.

Layoffs

How are layoffs being done? Eating the elephant in small bites has its advantages, but not when it comes to driving out fear. That monthly cut of a few more people month after month, leaves everyone worried that they will be next. People focus on surviving – putting a roof over their family’s head and food on the table. You need them focused on keeping quality at a high level and looking elsewhere for cost cutting measures. Make the cuts deep and quick, and then sit down and discuss, with employees that remain, their jobs are safe, you’ve done all the cuts for your planned period of time, a year, so they can come to work and not wonder if they are next. It means everyone will have to do more with less, but they can at least be sure they are safe. Tell them you don’t want them to be afraid.

Honesty

Tell your employees the truth; there won’t be bonuses, big parties, or new equipment purchases. Reward programs are cancelled for everyone. You are keeping the cash expenditures low to protect their jobs. Ask for their help. Recognize those making suggestions with praise, and where possible, identify what they saved. Keep a running tally board, when it totals the gross annual cost of a single average employee’s wage make a posting, “Because of these people’s suggestions one person’s salary for a year has been saved, thanks to them we all have jobs.”

Tighten Your Belt

I once worked for a company where the owners laid off one third of the workforce, had the managers take a 20% pay cut, and then went out and bought themselves very expensive cars and remodeled their offices. This is an extreme, but often, employees don’t see where management is  also making concessions. It is very normal for frustrated people to look at the “other guy” and feel slighted. Management is a prime target. If you are cutting management perks and/or salaries communicate what you are doing, too. Make a statement such as, “Management chose to give up benefits and salary equal to X number of employees’ salaries.”

New Ideas

Necessity is the mother of invention. Now is the time to look at your products and drive out costs. Focus your designers and engineers to spend a portion of their time looking at existing products. Listen carefully to employees ideas and see if they can be expanded across a line of products.

Increase Sales

Get your sales force out mining existing customers. A salesperson coming through the door with an idea to cut the customer’s costs is going to get time with the purchasing agent. Now is when you build relationships, if your sales force helped in the bad times, the customer will remember it in the good times and be less likely to switch to a competitor. Get your designers focused on lower cost replacement products, particularly for your competitions’ lines. Figure out how you can get the other guy’s business.

Smile and Hang On

Scots kings used to have to eat dinner in front of their subjects. The idea being, if the king ate well, he wasn’t worried. If the king wasn’t worried his subjects didn’t need to be afraid. Your employees are looking at you for their cues. If you come through the door with a scowl and a worried expression, they are going to be afraid and go back to head down, mouth shut mode. Worry cannot add a minute to your life, quite the contrary, it will hurt your health and possibly shorten your life. You’ve made your plan and implemented it, now help your staff with your skill set. If you’re an engineer at heart, throw some ideas out to the designers. If you’re a people person, get your sales staff charged up. Put your energy into creating improvement and you will drive out the fear that would otherwise cripple your company. You’ll come out the other side of this ‘economic downturn’ stronger and positioned for real growth.

Point 5 – Improve Every Process

Improve every process

Improve constantly and forever every process for planning, production, and service. Search continually for problems in order to improve every activity in the company, to improve quality and productivity, and thus to constantly decrease costs. Institute innovation and constant improvement of product, service, and process. It is management’s job to work continually on the system (design, incoming materials, maintenance, improvement of machines, supervision, training, retraining).

Dr. W. Edward Deming

Improve constantly and forever, Wow, that is a tall order. Larger companies are able to staff for improvement, but what can the little guy do?

The first step is to prioritize, go for the biggest bang for the investment first. That does mean collecting data. Start with a Cost of Quality report. How much do you scrap? How much do you spend on rework?

When I go into plants to implement ISO9001 I expect to get them certified in system that is indicative of the company culture but I also look for where there is waste and I can reduce costs. I take a visit to the scrap bin and here is the trick, I look for similar parts with similar defects. This tells me there is a system failure. It can come from two places, the design of the part or the method of manufacture. I work backwards from the parts and look to save my client the annualized cost of my contract.

Service providers are a little different. There is no scrap box to look in. What I generally find with them is each employee has a different way of doing each job and there are no written directions or procedures. Each person is sure their way is best. Frequently they have found out about a customer problem and have incorporated a preventive measure in their own method. By listening and applying this information and then training the entire staff, making sure to acknowledge the source and reason for the preventive measure we create a streamline system that addresses all customer issues. We have searched out the problems and created improvement.

Both the manufacturer and the service provider do have customers. Both have complaints that can be used to create real and systematic improvement. Both have the opportunity to call their customers and really listen to what the customer wants and needs. A requirement of ISO 9000 is continuous improvement. The companies that deliver on that element grow.

My bank is ISO 9000 certified. I talked to one manager and he said the certification didn’t mean much to the average customer. What did make a difference was the consistency of accurate and reliable performance, from both new and long time employees. The customers found the bank listened to them and implementing safe new systems that made banking easier at no charge. ISO 9000 had created a system of continuous improvement that kept and drew in new customers. The bank has been able to stay in business, loan money and provide jobs. To quote the good Doctor, “So simple”.

Point 4 – End Lowest Tender Contracts

End the practice of awarding business solely on the basis of price tag. Instead require meaningful measures of quality along with price. Reduce the number of suppliers for the same item by eliminating those that do not qualify with statistical and other evidence of quality. The aim is to minimize total cost, not merely initial cost, by minimizing variation. This may be achieved by moving toward a single supplier for any one item, on a long term relationship of loyalty and trust. Purchasing managers have a new job, and must learn it.

Dr. W Edward Deming

We all do it. We go to a grocery store and will but the item that costs a few pennies less. Our perception is “they’re all the same”, but are they?

A very long time ago, before generics dominated the market, a major pharmaceutical manufacturer hired me as an engineer. Generics dominated conversations. Should they be allowed to replace brand name products? A well respected television news program did a segment on the subject. They stood in front of our plant, held up a generic pill and made the statement the pill was the same as anything made in our plant, the only difference was our pill cost a dollar and the generic cost a dime. What they didn’t know, or didn’t say, was our pills held the effective ingredient content to plus or minus 1% while the generic held the effective ingredient to plus or minus 25%. Generics took over the market and now if you want a name brand product, the doctor must write the prescription as “no substitutes” and some pharmacies will try very hard to get the patient to allow them to substitute. They insist, generics are exactly the same as name brands, they just cost less.

We look at suppliers the same way. They have to be the lowest price item coming through the door or we won’t buy. The companies that do research and could give us the next breakthrough product are competing with off-shore elements that copy the researching facilities products in violation of patent and copyright laws. And we support the theft by purchasing the cheapest initial product.

A bolt manufacturer can produce excellent product that never needs sorting or inspection. It goes direct to the lines and never causes a problem. A new supplier comes in a fraction of a cent cheaper in initial cost and we jump on the deal. Of course every tenth bolt has damaged threads and can’t be used but we buy from them and pat the purchasing agent on the back for our great savings.

How do we turn this around?

Look at your suppliers. When you go to evaluate the cost, look who helped you solve a problem with an innovative idea. Put a dollar figure to the increased sales or saved customer sales. Adjust the purchase price to reflect what the supplier did for you. Go talk to the line workers and look at the supplier costs on the cost of quality report. Adjust the supplier price accordingly. Point out to all the companies making an effort to quote how this information impacted your purchasing decision. Word will get around. Your suppliers will be watching what they do and looking to help you build your business and how can you beat that?

Point 3 – Cease Dependency on Mass Inspection

Eliminate the need for mass inspection as the way of life to achieve quality by building quality into the product in the first place. Require statistical evidence of built in quality in both manufacturing and purchasing functions.

Dr. W. Edward Deming

When ISO 9000 first came out, the auto manufacturers turned their noses up at it because it did not call for statistical process control. After significant discussion QS 9000 arrived to save the day. It should have been called ISO 9000 plus. The standard listed the ISO 9000 requirement and then added what the automotive companies had learned from Dr. Deming. Things stayed that way until 2000 when the ISO 9001 standard underwent major revisions to focus on continuous improvement and promote statistics.

Converting an inspection based workforce to statistical savvy operators isn’t as hard as it seems. It takes common sense. Process control limits are as simple as deciding when to mow the lawn and how much to adjust the blades or how high a temperature to set a stove when cooking up dinner. If you can compare them to everyday things that don’t use numbers, even the most math-a-phobic operator will lose the fear and begin to apply the technique, but that leads to point #8 and this is point #3.

Have you ever converted a process from inspection to statistical process control? How did it go? I did, it was a fun experience and I’d do it again.

Point 2 – The New Philosophy

The new philosophy

Adopt the new philosophy. We are in a new economic age, created in Japan. We can no longer live with commonly accepted levels of delays, mistakes, defective materials, and defective workmanship. Transformation of Western management style is necessary to halt the continued decline of business and industry.

Dr. W. Edward Deming

He spoke those words over 30 years ago but how much more true are they to today. Industry is going away from the USA in search of cheap labor, but has it been worth it?

What does management need to do differently to bring manufacturing back? What do we need do do differently with our children so they respect the person working in the factory? What do we need to do differently so people want to work for a company and have pride in what they do?

ISO started out as a European response to the superior quality of Japan and the USA. How do we bring business back on shore? What do we need to create an environment where manufacturing next door to your client is a wise business decision?

We start by looking at the real overall cost instead of chasing the short term profit. Moving off shore to reduce labor cost can be a false economy. Compare not just the labor and overhead savings but:

1. Increased shipping costs, especially expedited costs

2. Loss of control, does the new facility really understand your clients’ expectations? Assume makes an Ass out of U and Me, what is acceptable in one culture is anathema in another. Lead paint is unacceptable in the USA but used on childrens toys in third world countries.

3. Longer lead times. I dare you to get a rush shipment during Chinese New Year for the far east.

4. Putting a competitor in business. I worked with a fortune 100 company on a project. At the time they experienced extreme frustration. They had sent a product to a Chinese company for manufacturing quotation. The next thing they heard came not from the supplier but their customers. The quoting company had gone to their customers and under cut the fortune 100 company’s prices with an identical product, right down to the UL certification number. Everyone agreed it was a sad situation and the fortune 100 company had no recourse.

5. Addressing a dissatisfied customer. How much is in the pipeline when your customer notifies you of a problem? Add in the real cost of creating a gatekeeper while a solution is worked out and clearly communicated.

Don’t Skip the Good Stuff Part 5

            What is continual improvement of the quality management system? It is the big picture. It is looking at the performance of all the sub-processes that make the whole process, from getting the customer specifications and orders, to making sure the parts arrives on-time, at a reasonable cost and in a useable form.

            Here is where the quality manager has to avoid the biggest pitfall known to the engineering mind – trying to pick the fly poop out of the pepper. Engineers don’t know when to stop, and they are right, continuous improvement never stops but you have to know when to move on. I can say this as I am an engineer and there have been times when my engineering tendencies have driven my husband, a really knowledgeable construction consultant, to offer specific guidance (Honey, hand me the darned 2 x 4, it doesn’t matter that it’s off by a thirty-second).

            It is the Quality manager’s responsibility to evaluate the effectiveness of each step in the process and to determine where to improve the process. This means having a way to measure the performance of each step and a method to compare the various results. There are a number of tools to use.

            A good customer satisfaction survey is one. One of the most common things I see is a four or five generic question survey where any rating less than excellent draws attention like road kill draws flies. Sales staff and customers a like groan at the thought of filling the thing out and the input has no value. Do some research into your customer base. Talk to your sales staff, field engineers and repair people. They interacts with the customer in the field and you need their input on what is an effective line of questions to get real information from your customer.

            Complaints and returns are another resource when it comes to measuring customer dissatisfaction. There is a difference between measuring satisfaction and dissatisfaction. Depending on the price of a part, you may never know the customer has a problem. They may throw it away and go elsewhere without ever talking to you.

            Measuring internal costs to achieve customer satisfaction is a third. If you have to 100% sort parts before shipping them, this might be a process that needs to improve.

            Once you have all this data you must convert it into dollars of impact on the company. It is the only way to make a fair evaluation. How much is it taking away from profitability? How much sales have we lost? How much sales could we increase? Put a rough estimate together as to costs to evaluate a solution for each problem. Now you have a report that management can understand. Now you are ready to truly implement ISO 9000.

Don’t Skip the Good Stuff – ISO 9001

Most clients I work with start reading the standard at section 1 “Scope”. This is a significant miss-step.  The really good stuff starts back at the beginning in the Introduction.

Pick up a copy of ISO 9000 and turn to section “0.1 General” (If you don’t have a copy go to http://www.asq.org/books-and-publications.html and buy it.) Now read the very first line, “The adoption of a quality management system should be a strategic decision of an organization.”  Think about this, implementing ISO 9000 should provide a long-term benefit to the organization. It is not just a plaque on the wall and a certificate to mail to customers it provides a strategic advantage by:

  1. Lowering costs
  2. Increasing sales

The rest of the section is interesting reading, but if you’re in a hurry, skip down to section “0.2 Process approach”. “This International Standard promotes the adoption of a process approach when developing, implementing and improving the effectiveness of a quality management system, to enhance customer satisfaction by meeting customer requirements.”

Here is the trick to making ISO 9000 effective, the process isn’t just the turning of raw material into widgets. It starts at the taking of the order and the understanding of the requirements and goes all the way to delivery at the customer.

Inside the big picture process are myriad sub processes which ultimately must be broken down and evaluated. However, the job of the quality manager is to make sure the big pictures sees continuous and on-going improvement. Too often ISO 9000 is pigeon-holed as a manufacturing process.

I had just started for a new company. Somehow I always seemed to get hired by the guys who were up the unsanitary tributary without a visible means of locomotion, and I was the paddle that had to save them. Anyway, a major customer called and in a loud voice and not so subtle terms informed me that our unacceptable product was on its way back, and we were going to be charge for the time their line stood down while they found a supplier to replace us.

I looked at the documentation; everything going out had met the prints and specifications. I pulled some parts off the shelf and checked them, also good product. Then I went back and compared the part print to the customer supplied design specification. Our part was being made with a 45 degree angle. The customer needed a 135 degree angle. Our parts were bass ackwards.  I worked with the tooling engineer and got both a short term and long term fix in place and called the customer. They grudgingly agreed to accept an overnight shipment of parts before calling the competition. Things worked out and we ended up one of their top quality suppliers. But the important thing to remember is the broken part of the system had nothing to do with the manufacturing process.

What is a process? Section 0.2 “Process Approach” states “An activity using resources, and managed in order to enable the transformation of inputs into outputs can be considered a process.”

The input to my old employer’s failed process was the customer specifications. The output was the manufacturing documents so my co-workers could build the widget. The activity was translating from customer language to in-house language. Don’t get caught up in thinking the process is just manufacturing. Most of the big savings I find for clients comes before I ever step on the manufacturing floor.