A Tale of Two Companies: Different Quality Management Starting Points!

Quality Management

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Company 1

The CEO came in to my office carrying a product and said, “The label is off centre on this item.  It has a quality defect.”  I responded, “Is that actually a quality defect?  Quality is a measure of conformance to a standard, and we have no standards.”  The CEO didn’t quite understand the distinction.  Certainly the item was mis-labelled.  But there was absolutely no Quality management process in the company.

Company 2

I toured all of the company’s facilities around the globe.  It seemed like we had a tremendous amount of resource working on quality.  But they were spending 100% of their time on inspection.  A report subsequently  confirmed my concerns.  Over 10% of our entire direct workforce was spending the vast majority of their time doing 100% inspection.   We had a Quality management system but it’s only principle was to inspect in quality.

Whichever the situation was, proper Quality management objectives required something to change in both cases!

 

The Starting Points

Both of these companies knew of the word “Quality”.  But their views of what it meant were diametrically opposed.

In Company 1 if you asked anyone what quality was they would describe the aesthetic characteristics of an item.  They considered an item as defective if it didn’t look as nice as every other similar item.  However they had no concept of “Quality Management”.

In Company 1 there were absolutely no Quality controls, no Quality metrics, no Quality standards, and no Quality processes.  Further there was no one in the entire company that had “Quality” in their title.  No one was accountable or responsible for ensuring the delivery of Quality products.  The only measure which came close was some tracking the Legal team was doing on customer complaints of poor quality.  But who wants their Quality Management program to begin and end with the Legal Department?

In Company 2 management and many employees understood that we had to inspect in the quality we delivered.  Many people did have the word “Quality” included in their titles.  But Quality Management manifested itself in an extensive program of inspection, touch up and repair, and re-inspection.

There were no comprehensive or globally ratified programs in Company 2.  This included preventive or corrective action and doing the analysis to take a problem to root cause.  Also addressing the issues at the source or point of origin and reducing opportunities for error needed strengthening.  Further error-proofing the process, and holding all parties responsible for building in quality in the first place was key.

Creating a Proactive Quality Management System

In Company 1 my focus began with education.  We needed to create a Proactive Quality management program.

 

Quality Management

 

The first step was to hire a Quality leader in to the company to spearhead this program.  Unfortunately it took some time to convince the CEO and the Executive team that we needed this role.  The product line was changing and we were entering space which made Quality management essential.

When we got our new Quality leader we began implementing our new Quality management program.  We had to put in place all of the basics.  We created a new Quality manual.  A set of appropriate metrics was established.  We started tracking performance and reporting to the appropriate constituents within the company and with our suppliers.

Our entire Supplier program was reinvented.  We had to create a Vendor manual and communicate our expectations to vendors.  Also a review of our vendor base and a new vendor selection/ratification process was established.  Additionally vendor audits began and tracking of their corrective actions started.

All products were subject to a stringent testing and qualification process.  Vendors were informed of issues and held accountable for corrective and preventive actions.

Our facilities were educated on issue identification, reporting, and management of customer feedback.  They were educated on standards of measurement and communication with customers.   And they were advised of action status with our suppliers and designers.

And overall we began a weekly and monthly reporting process to ensure that we were regularly reviewing results.  We also had a real-time alert process set up as well to handle issues requiring immediate attention.

In short, we put in place the beginnings of a proper Quality management system.  There would be much more to do but we had put the basics in place.

 

Fine-Tuning an Intelligent Quality Management System

Company 2 already had a Quality management program in place.  People were educated on what quality was.  And there were metrics in place.  Plus we tracked performance with both suppliers and customers.  The major  problem was that we spent most of our time inspecting in quality.

First we raised awareness that we had 10% of our direct workforce inspecting in quality.  Then the Quality leadership team took some time to get their heads around this.  At first they were concerned that if we didn’t do the same level of inspection then we were compromising quality.  They had to come to their own self-realization that there was a more efficient way to achieve our quality goals.  And with this realization the team very quickly shifted its focus to designing a more intelligent Quality management system.

We began in Receiving.  Here we were inspecting all of the parts coming in the door.  By completing an analysis of quality performance by sku we could quickly identify which skus never had quality issues.  Further we could determine what dppm (defective parts per million) was acceptable.  And we also engaged suppliers and communicated their quality performance to them.  We expected our suppliers to build in quality at their end as well so that we didn’t have to inspect it in.  As such all of this enabled us to implement an intelligent inspection sampling plan (including direct to line delivery) in Receiving.

We applied the same principles to the processing areas.  And we started measuring first pass yield on the process steps.  Defect tracking by process step and by operator was institutionalized.  Employees were educated on preventing and catching defects instead of building up piles of product for repair.

All of the Quality standards, metrics and controls were reviewed and agreed on Globally.  Thus from that point forward there would be only one interpretation of Quality.  With that standardization and alignment we would ensure we had a consistently high quality process any where around the globe.

A strengthened Kaizen program was put in place to provide the forum to address quality improvement.  From there we targeted areas where repair and touch-up were done in the process.  The focus was on defect reduction if not elimination, and reducing the opportunities for error.  And the Kaizen also provided a platform for ongoing skills training and reinforcement.

This enhanced Quality management system was ratified globally as a part of the Global Process Excellence program.  As a result Our Quality levels improved even further and defects continued to decline resulting in Best In Class Quality performance.

 

Conclusion

It doesn’t matter what your starting point is or what industry you are in. Any organization requires a robust, proactive quality management system.  

Your employees will prefer this approach.  Your customers will be very pleased with the results.  And your company will benefit in every possible way from maintaining a tremendous focus on quality!

 

Check out Quality Management (Part 2) – Design in Quality First!

Please check out our other blog posts at https://supplychaingamechanger.com.

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