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.

 

Quality Management

Management requires everyone to work together for quality
Management requires everyone to work together for quality

A Fundamental Concept for Quality Management

Dr. Joseph M. Juran taught that quality management used the same three processes as financial management. They are:

  • Quality Planning
  • Quality Control
  • Quality Improvement

Quality Management – Quality Planning

Of the three elements, inadequate quality planning is a major source of quality deficiencies. Many of the remedies for quality improvement projects consist of re-planning quality. The best way to deal with poor quality is to prevent it in the first place. The earlier in the process a cause of poor quality can be removed the lower the cost to the company.

Quality Management – Quality Control

In creating quality control it is important to choose what to control, establish a unit of measurement, establish performance standards, measure performance, interpret the difference between actual versus the standard, take action on the difference. This is similar to Dr. Deming’s Plan-Do-check-Act cycle.http://technacon.com/category/dr-w-edward-deming

Quality Management – Quality Improvement

Improvement is created on a project by project basis. The first step is to identify specific projects, organize teams, discover causes, develop remedies, prove the effectiveness of the remedies, deal with cultural resistance, and establish controls to the hold the gains.

Quality Management – Return on Investment

As a rough rule of thumb, the average improvement project is worth $100,000 per year in decrease waste/cost while the average one-time cost is approximately $10,000-20,000.

Quality Management – Lessons learned

Some of the lessons learn through applying quality improvement projects are:

  • The return on investment in quality improvement is among the highest available to managers and quality improvement is not capital intensive.
  • The most decisive factor in the race for quality leadership is the rate of quality improvement

 

http://www.qualitycoach.net/products/jurans-quality-handbook-the-complete-guide-to-performance-excellence-9780071629737.asp

Quality Management follows the same basic principles as financial management, has a high return on investment and a low capital investment requirement.

Responsibilities

Quality is cyclical. Everyone contributes to the responsibilities

Quality is cyclical. Everyone contributes to the responsibilities

Who is Responsible for Quality?

Just who is responsible for quality; the customer or the processor or the supplier? Dr. Juran said they were all responsible for quality.

Customer Responsibilities

The customer must share in the responsibilities to produce a product that is fit for use. They must:

  • Transmit the needs to the supplier
  • Provide feedback to the supplier
  • Obtain feedback from the supplier

Transmitting the need is fairly clear. Provide accurate information as to specifications, delivery and expected costs. Providing feedback to the supplier is also easy to understand, if the product is unsatisfactory, tell them.

It is also necessary to provide positive feedback. At one company a customer service rep always did a little more for her clients. She would follow up on orders and check on their progress, not just in the MRP system but going out to the factory and making periodic physical checks. Thanks to her efforts more than a few errors were prevented. However, her supervisor had a performance measurement of time taking calls. When the rep was in the factory she wasn’t taking calls. There was no feedback system to her supervisor as to the effectiveness and importance of her actions so it did not appear on her performance reviews. Ultimately the rep was terminated.

The last bullet is one that is normally left out. Some of this comes from the concept “the customer is always right” or as one person put it “he who has the gold rules. The customer has the gold.” We supplied a product to an automotive manufacturer. The specification for the nut placement on the bolt was “8 mm max from the end”. Product shipped to specification. The first shift had been trained to slip on the product over both parts and tighten the nut. This was only possible if the nut had been backed off to the end of the bolt. The second shift slipped the product on one side and later inserted the other side. With the bolt backed off, the product would fall off before the assembly could be completed. Both shifts rejected the parts continually for the nut placement. The customer was furious over our “poor quality” back charging us and threatening to pull the business. They were not interested in hearing the cause of the problem. We were ordered to “fix it!” The fix – we sent our sales staff in once a month on both shifts to train the operators. The issue belonged to the customer they needed a mechanism to receive feedback.

Processor Responsibilities

The people and equipment producing the product are the most common owners of quality. They must:

  • Plan the process to meet the customer needs
  • Control the process to meet the customer needs
  • Improve the process based on customer feedback

This is the focus of most corrective actions and many people end up with the misconception that the processors own the quality responsibilities. This is not true. Quality is everyone’s job.

In my example of the customer service rep being fired for proactively checking in the factory, how many people caught the fact that she was addressing a symptom of poor quality and not the root cause? Since she was finding repeated mistakes in the process which would have produced poor quality parts, she should have gone to the person in charge and pointed out the situation. That should have resulted in root cause analysis and corrective action and she would not have needed to be in the factory.

Supplier Responsibilities

The supplier is the company as a whole that takes and order and provides a good or service. The supplier is also the previous step in the process. It is imperative that the supplier:

  • Knows who are the customers
  • Understands the needs of the customers
  • Avoid creating problems for the customers
  • Obtains feedback from the customers

As a company it is not enough to understand your own product and offer a “take it or leave it” attitude. The world is competitive and someone else is willing to step in and understand the customer’s needs and deliver exactly what they need, when they need it. A supplier must understand how the product is being used and proactively offer goods or services that best fit the customer needs. In the example of the nut position, we did offer to make two part numbers with the only difference being the nut location. The down side was maintaining inventories so the ultimate solution was for our staff to train the customer’s operators. Once we went in and talked to the people using the parts we were able to come up with a solution that avoided a problem for the customer. Did the customer fail to take on the responsibility to train their operators? Yes. Did we step up and solve the customer problem? Yes.

In the case of the internal customer, it is important to know how our product/subassembly/service is used. At one plant, a subassembly was a piece of cord cut to a set length and dropped into a gaylord then shipped across the ocean. At the next step the operator would attach the cord to a hook and wind the cord up, securing it with a rubber-band. As you can imagine the cords were twisted and tangled together and difficult to separate, wasting a great deal of time and frustrating the operator. The ultimate solution was to buy the cord in spools and set up a machine to attach the cord, measure and cut to length and automatically wind it. As an interim step the people cutting the cord would wind and rubber-band it with a tail sticking out to have the hook attached. The time to do the next operation was cut to a fraction of the original time. An interesting by-product was the wound cords took up less space and decreased the shipping cost as well.

Quality is everyone’s responsibility. It is the customer’s responsibility, the processor’s responsibility and the supplier’s responsibility. When each takes their responsibilities and acts on it the overall cost goes down and the quality improves.

Do It Right The First Time – DIRTFT

DITRTFT or “Dirt foot” generally brought giggles but it served the purpose of grabbing people’s attention. The anachronism stood for “Do It Right the First Time”. The statement seems almost ludicrous in today’s business environment, but is it?

DIRTFT means Do It Right the First Time where "It" is the customer requirements.

What is the “It” in Do It Right the First Time?

“It” quite simply is the customer requirements. However, simple is not so simple. The customer requirements must be clearly defined and communicated. This is done with drawings and specifications but also must be considered when developing procedures and training programs, performing Failure Mode and Effect Analysis, and reviewing process capabilities.

At one plant where I worked, the customers were getting consistently non-conforming material. They were furious and they had a right to be. The problem had been going on for more than a year. The problem was not that the employees were making non-conforming product, or the tooling had not been maintained of the process capabilities were poor. The problem came when a dimension was transferred from a customer drawing to a working drawing and was reversed. As soon as we corrected the drawings, modified the tooling to manufacture to the drawings and gave the information to the operator to check the product, we went from 100% non-conformance to 100% conformance to requirements. Not following Do It Right the First Time can be caused anywhere in the process, not just at the operator level.

The Attitude of Do It Right the First Time

Have you ever had an employee say something along the lines of “Hey, I just do what I’m told and keep my head down and my mouth shut.” Do It Right the First Time does not even enter this picture. Creating an atmosphere where employees feel free to speak up when they see a problem or have a question is the first step in creating an atmosphere that supports “Do It Right the First Time.” In today’s economy with high unemployment, management must work overtime to make sure the negative attitude does not invade their facility. What are you doing to make sure your company employees have an attitude to “Do It Right the First Time”?

The Cost Of Quality

The Cost of Quality Report let's everyone see where money is being thrown away

The Cost of Quality Changes the Perceptions

Mr. Philip Crosby’s Cost of Quality report made a fundamental difference in the way Quality Managers spoke to upper management. Prior to the Cost of Quality report, Quality Managers were the keepers of “goodness”. They spoke in terms of reputation and subjective measures that frequently detracted, or appeared to detract from bottom line profitability. It caused much of upper management to “tune out” when the Quality Manager spoke.

The Cost of Quality Report quantifies the impact of both the cost of poor quality and the cost of preventive measures. With this report, Quality Managers were now able to speak upper management’s language of money. Decisions could be made on facts not emotions or corporate politics. It tied in well with Deming’s philosophies of resource allocation and the use of statistical process control.

In 1987, the price of conformance was about 5% of the total Cost of Quality; The price of non-conformance was about 25% of the Cost of Quality; and the cost of doing things right the first time was 70% of the Cost of Quality.

The Parts of the Cost of Quality report

 The Price of Non-conformance in the Cost of Quality Report

The Price of Non-conformance portion of the Cost of Quality report was fairly straight forward. Quite simply “what it cost to do things wrong.” It included:

  • reprocessing,
  • expediting,
  • unplanned service,
  • computer re-runs (remember this is the days of big mainframes and computer reports were requested during the day and run at night),
  • inventory,
  • customer complaints,
  • service after service,
  • downtime,
  • reconciliation,
  • and warranty.

This opened management’s eyes to profit opportunities. They were already spending this money, what if they could eliminate these costs and shift these dollars to the bottom line?

The Price of Conformance in the Cost of Quality

Measuring what was spent to make things correctly was a new concept. It was the cost to get things done right the first time. Inspection, engineering, preventive maintenance were just a cost of doing business. The idea that these needed to be looked at and justified opened the door to a revolution in the way management viewed costs.  The Price of Conformance included:

  • Review
  • Checking (Inspection)
  • Audit
  • Quality education
  • Test
  • Process proving
  • Procedure verification
  • Prevention
  • Inspection

The concept that collecting, reviewing and acting on these cost would lower them over time was revolutionary. By drawing attention to and reviewing these costs, corrective action could be defined and implemented.

How Much the Cost of Quality Report Identified

The first phase of the Cost of Quality would identify 60-70% of the actual costs and be driven from top management down. Once Quality Improvement Processes were implemented 90% of the actual costs would be identified with improvements in accuracy from that point forward. This information would come from the bottom up.The initial proposal had the Finance department issuing the Cost of Quality report. The course work gave detailed lists of data for each department to track and report.

Steps to implementing the Cost of Quality Report

In order to implement the Cost of Quality Report the first step was to educate managers and employees. The second step was to identify the elements by department. The third step was to give complete individual descriptions to the elements so everyone was using the same point of view. The fourth step was to determine a measurement base. The fifth step was to design the report including format, frequency and distribution. The sixth and last step was to develop and implement a strategy to utilize the Cost of Quality Report effectively.

The Purpose of the Cost of Quality Report.

The purpose of the Cost of Quality Report was not to account for every loss but rather to be a management tool that was used to determine areas that needed corrective action and to measure quality improvement. It was a basic communication tool that had everyone speaking the same language – money. So what could a Cost of Quality Report do for your company?

Zero Defects

Zero Defects means no inspectionsThis article is presented as part of an overview of the quality guru’s of the 1980’s. Zero Defects was a key phrase develop by Mr. Philip Crosby and presented by Philip Crosby Associates. Reading “Quality Is Free”, “Quality Without Tears”, and “Quality Without Pain” are helpful in understanding how Mr. Crosby developed his philosophy and encouraged others to use it. For more information about Philip Crosby Associates, go to http://www.philipcrosby.com/pca/index.html.

How does Zero Defects Relate to Conformance to Customer Requirements?

Much of the negative comments applied to the philosophy of Mr. Philip Crosby was a result of taking the term “Zero Defects” out of context. To understand Zero Defects a person must first accept that “conformance to customer requirements” constitutes an acceptable quality level. Therefore the goal is to meet the customer requirements 100% of the time.

Zero Defects is a Goal

It must also be noted that the goal is 100% conformance to customer requirements. To achieve that goal it may first be necessary to meet three sigma and then four sigma and then six sigma. Goals must be set using the cost of quality to determine how to apply resources. If one process is at a 6 sigma performance relative to meeting customer requirements and another equally utilized process is at 2 sigma performance, then scarce resources must be applied to the poorer performing process first.

The Effort to Reach Zero Defect Must Be Continuous

A basic tenet of Mr. Crosby’s philosophy was that improvement is a never ending cycle. This idea is also promoted by Dr. W. Edwards Deming, Dr. Joseph Juran and ISO 9001 and ISO 14001. The effort is continuous and never ending in order to stay in business, provide jobs and make a profit. So simple.

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 6 – Training Now? Are You Crazy?

Institute modern methods of training on the job for all, including management, to make better use of every employee. New skills are required to keep up with changes in materials, methods, product and service design, machinery, techniques, and service.

Dr. W. Edwards Deming

 

A business acquaintance of mine owned a small machine shop back in the ’70’s and 80’s. The last big recession, for those too young to remember.

He had eleven machinists working for him. Business slowed down and the employees knew there wasn’t enough work to keep everyone on board, someone would have to go. My friend called a company meeting. He walked in to some very tense men, each wondering if he was the one who was going to be leaving for good.

Instead of laying a man off, he instituted a program of extensive training and upgrading of skills. Everyday at least one employee was in training on new and better equipment. As his competitors went out of business he bought their newer equipment for a fraction of what it was worth. When the economy picked up my friend was ready, willing and able to produce good quality product at a fraction of the cost of his competition. When other companies tried to pirate his well trained workforce, his employees laughed in their faces. Their boss had stuck with them, they would stick with him.

How did he do it? For one thing he looked at a long term plan. He watched his money and kept a cushion so small hiccups didn’t have a disruptive effect. He had a good solid long term business plan with the track record to demonstrate its’ effectiveness so the banks would lend him money while other companies were being turned down.

Ultimately he fed back into point #1 he had a constancy of purpose to be competitive, stay in business and to provide jobs.

So what about you? Look at some of the grant programs available, you may be able to offer the training at no cost to your company. Even if you don’t have the cash reserves to buy new equipment, or pay roll is tight, ask the employees, would they take a temporary reduction in everyone’s salary to institute a training program that would make them more valuable in the long run? The answer might surprise you.

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?