Ch.3 Quality Issues. 2/Ch.3 Quality... · Continuous improvement, Kaizen, is the never-ending effort to expose and eliminate root causes of problem. Continuous improvement involve

Module 2 : Supply Environment.

Ch.3 Quality Issues.

Edited by Dr. Seung Hyun Lee (Ph.D., CPM)IEMS Research Center, E-mail : [email protected]

■ Resolving Quality Problems. [Task 206]

Documentation of Corrective Action Process. ￭ The corrective-action process needs to be documented for both

the purchaser's and the supplier's benefit.

￭ Typical corrective-action process. ․ Phase 1. Resolve the problem at hand. The first phase of the corrective - . action process is to deal with disposition of the non conforming . goods and services.

․ Phase 2. Establish a date for a report from the supplier documenting the . cause of the non conformance and what corrective actions are . being undertaken to prevent the problem from happening again.

․ Phase 3. The goal of a corrective-action process is to implement appropriate .and effective changes thereby eliminating the cause of the problem


Root Cause Analysis. ￭ Concept. ․ Root cause is the fundamental, underlying reason for a problem. ․ Often, identifying root causes will lead to management policies or system design improvement.

￭ Purchaser's Role for Root Cause Analysis. ․ Gathers relevant data. ․ Identifies the internal causes that have allowed the problem. ․ Analyzes the comparative benefits and cost effectiveness of all available prevention options.


Handling Nonconforming Goods/Services. ￭ Return to Supplier. ․ The nonconforming goods may be designed for return to the supplier. ․ The purchaser is required to provide adequate protection for the goods until the supplier can make arrangements for the return of the nonconforming items. ․ The supplier may repair the goods or supply new material. Typically, the transportation costs will be paid by the supplier. ․ In the case of services, the option are to negotiate a discount on the performed service, or to have the supplier perform the service again.

￭ Return to Documentation. ․ If the nonconformance is simply a documentation discrepancy, it may be possible for the supplier to issue correct documentation without having to replace the goods.


Handling Nonconforming Goods/Services. ￭ Rework of Parts and Materials. ․ The supplier may elect to have the purchaser rework the nonconforming goods and either bill the supplier for the cost of repairs or credit the purchaser's account for the cost of the rework.

․ This may provide a quicker solution than having than the goods or service reworked by the supplier, but this solution must be approved by the supplier in advance.

￭ Renegotiation. ․ The purchaser may choose to renegotiate the terms of the agreement including payment terms, delivery quantities, or nonconformance procedures. ․ For example, the nonconformance goods may be accepted at a lower price.


Handling Nonconforming Goods/Services. ￭ Disposal. ․ If the nonconforming goods and services are not salvageable, arrangements must be made for their disposal. ․ The supplier is responsible for making such arrangements, but the purchaser must provide appropriate precautions for the care of the materials.

￭ Retraining. ․ Sometimes nonconforming goods or services result from improper or inadequate training of supplier personnel of others in the supply chain.

■ Quality Assurance. [Task 207]

Quality Assurance Requirements. ￭ Definition of Quality. ․ What the item or service must look like or do. ․ A frequency measure of how often it must conform to the specification.

￭ Acceptance Testing. ․ This includes all tests for compliance to specification or SOW that create the basis for acceptance of the goods and services. ․ Acceptance tests are especially critical for capital equipment to ensure that equipment is not accepted until it is performing to a predetermined level of quality.


Quality Assurance Requirements. ￭ Certification Requirements. ․ Organization may create quality standards which, when achieved, become the basis for the supplier to be certified, thereby qualifying for reduction or elimination of incoming inspection. ․ These standards usually include definitions of how the measurements are made and the minimum level of quality that will no longer require inspection.

￭ Inspection Location. ․ In-process, as the goods are made or as a service is produced. ․ At inspection stations. ․ At final inspection before shipment or at end of services.


Quality Assurance Requirements. ￭ The Level of Inspection. ․ No inspection at all. ․ Occasional audits or random inspection. ․ Routine sample inspection. ․ One-hundred percent inspections.

￭ Quality Documentation. ․ The result of inspection should be documented in a format that is easily understandable by both the purchaser and the seller. ․ If inspection take place at the purchaser's facility, then the data will become the basis of the supplier's quality measurement and should be fed back to the supplier on a regular basis.


Quality Assurance Requirements. ￭ ISO 9000 ․ ISO 9000 is a series of standards promulgated by the ISO. These standards are focused on measuring quality assurance.

․ The focus of ISO-9000 includes two main thrusts. 1. To document the procedure of the organization involved in processes that affect quality. 2. To perform actual operations in compliance with the documental procedure.

■ Total Quality Management. [Task 207]

Total Quality Management. ￭ Definition. ․ A management approach to long-term success through customer satisfaction. ․ TQM is based on the participation of all members of an organization in improving processes, goods, services, and culture in which they work. ․ TQM includes focus on the customer, continuous striving for improvement, a willingness to suspend judgement and really look at what is happening, and a willingness to work from data.

￭ Quality Tools. ․ Team training : A core competency is the ability of all members to work. ․ Benchmarking : A standard, or point of reference, used in measuring or judging such things as quality, performance, value, and price. ․ Kaizen : Continuous improvement.


Elements of Total Quality Management. ￭ Internal & External Customer. ․ Internal Customer. A person or department that receives another person's or department's product, service, or information within an organization ․ External Customer. A person or organization that receive a product, service, or information but is not part of the organization supplying it. The ultimate users, intermediate processors, and merchants.

￭ Quality Cost. ․ External Failure Costs. Costs associated with defects that are found after the product is shipped to the customer. ․ Internal Failure Costs. Costs associated with defects, such as errors or nonconformance, that are found before delivery of the product to the customer. ․ Appraisal Costs. Costs incurred in determining the degree of conformance to quality requirements. (Nonvalue-added costs) ․ Prevention Costs. Costs incurred in keeping failure and appraisal costs ot a minimum. (Value-added costs)


Elements of Total Quality Management. ￭ Quality at the Source. ․ Quality at the source refers to a producer's responsibility to provide 100 percent acceptable quality to the consumer of the material. The objective is to reduce or eliminate line stoppages and the need for quality inspections at shipping or receiving as a result of supplier defects.

․ Several requirements for the concept of quality at the source. 1. Company wide involvement. 2. Employee morale/attitude. 3. Prevention orientation. 4. Employee empowerment. 5. Development of world-class suppliers.


Elements of Total Quality Management. ￭ Employee Involvement & Empowerment. ․ Employee Involvement. The concept of utilizing the experience, creative energy, and intelligence of all employees by treating them with respect, keeping them informed, and including them and their ideas in decision-making process appropriate to their area of experience. Employee involvement focuses on quality and productivity improvement.

․ Employee Empowerment. A condition whereby employees have the authority to make decisions and take action in their work areas without prior approval. Empowerment is a natural extension of the long-understood and practiced idea of delegating authority commensurate with responsibility. Empowerment recognizes the value of the employee and the need to hire the right employee and then retain and develop that individual.


Elements of Total Quality Management. ￭ Continuous Improvement. ․ Continuous improvement, Kaizen, is the never-ending effort to expose and eliminate root causes of problem. Continuous improvement involve : - Everyone - managers and workers. - Finding and eliminating waste in machinery, labor, or production methods.

․ A general road map for getting started in a continuous improvement plan. 1. Establish a multi discipline team. 2. Develop an action plan : the goals, mission, and projects for the plan. 3. Develop specifications and standards. 4. Prioritize attributes. 5. Determine process control and capability. 6. Measure performance. 7. Take ownership.


Elements of Total Quality Management. ￭ Team Approaches. ․ Cross-functional, problem-solving teams. Cross-functional problem solving teams involve workers from different departments who recommend solutions to solve major company-wide problems.

․ Quality circles. A small group of people who normally work as a unit and who meet frequently to uncover and solve problems concerning the quality of items produced, process capability, or process control.

․ Self-directed work team. Generally a small, independent, self-organized, and self-controlling group in which members flexibility plan, organize, determine, and manage their duties and actions, as well as perform many other supportive functions. It can have the authority to select, hire, promote, or discharge its members.


Elements of Total Quality Management. ￭ Suggestion Programs. ․ One effective method of empowering employees and involving them in various aspects of the organization is to develop an effective suggestion program. Effective suggestion programs allow employees to have direct input into the operations and functions of the organization. - Reward all good suggestions. - Encourage participation. - Implement suggestion quickly. - Allow anonymous as well as named submissions. - Thank individuals who contributed.

￭ Reward and Appraisal System. ․ Team-related peer assessment. ․ Team appraisals by management with each team member reaping identical rewards. ․ The completely salaried workforce that benefits from overall profits.

■ Continuous Improvement Tools. [Task 207]

Techniques. ￭ Subjective Tools. 5 why, Brainstorming, Process Flow Analysis, Plan-do-check-act, Systematic Problem Solving, Nominal Group Techniques, Operator Observations, Fishbone Diagrams, Consensus Exercises, Use of Teams, FMEA/Fault Tree Analysis.

￭ Analytical Tools. Data Collection and Analysis, Pareto Analysis, Scatter Diagrams, Regression Analysis, Check Sheets, Data Matrix Analysis, Process Capability Analysis, Partitioning of Variation, Subgrouping of Data, Simple Trials, DOE, Analytical

Tests( χ 2, F, Z, t), Control Charting.

■ Statistical Tools. [Task 207]

Continuous Improvement Tools. ￭ Fishbone Diagram. ․ Breaks problems down into bite-size pieces. ․ Displays many possible causes in a graphic manner. ․ Is also called a cause & effect, 4-M or Ishikawa diagram. ․ Shows how various causes interact. ․ Follows brainstorming rules when generating ideas. ․ A fishbone session is divided into three parts : Brainstorming, Prioritizing, and Development of an action plan.


Continuous Improvement Tools. ￭ Control Chart.

․ Line graphs that display a dynamic picture of process behavior. ․ Require approximately 100 data values to calculate upper and lower control limits.

․ Require only periodic small subgroups or x s to continue to monitor the

process. ․ A process which is under statistical control : have plot points that do not exceed the upper or the lower control limits. ․ When a process is in control, it is predictable.


Continuous Improvement Tools. ￭ Pareto Analysis. ․ Used to prioritize problems so that the major problems can be identified. ․ Help teams get a clear picture of where the greatest contribution can be made. Pareto diagrams are used to : 1. Analyze a problem from a new perspective. 2. Focus attention on problem in priority order. 3. Compare data changes during different time periods. 4. Provide a basis for the construction of a cumulative line.


Continuous Improvement Tools. ￭ Process Capability. ․ Concerning with magnitude of process variation. ․ Refers to the ability of the process to produce parts that conform to engineering specifications.

․ Cp=USL-LSL

6σR, Cpk= min｛ USL-X

3σR,

X-LSL3σR ｝

■ Design for Quality. [Task 207]

Quality Function Deployment. ￭ Definition. ․ A structured process or mechanism for determining customer requirements and translating them into relevant technical requirements that each functional area and organization level can understand ad act upon. ․ It also includes the appropriate monitoring and control of the manufacturing process to achieve the goal

￭ Voice of the Customer. ․ The starting point of QFD is the customer and the customer's needs and wants. In QFD this is called the "voice of the customer".

■ Design for Quality. [Task 207]

Quality Function Deployment. ￭ House of Quality.

Correlation matrix

Counterpart technical requirements

(HOWS)

Relationship matrix

Technical assessment and target values

Marketinginformation

and customerperception of

existing/competingproducts

Customerrequirements and

rating of importance

(WHATS)

1.

2.

3.

4.

5.

6.

■ Performance Check.

1. Which of the following statements BEST describes the purchasing department's role in quality assurance ? A. Purchasing should ensure that the quality specifications developed by the engineering department are adequate. B. Purchasing plays only a coordinating roles, with the engineering and quality control departments having the primary responsibility for quality. C. Purchasing has the primary responsibility for purchased materials, regardless of where the quality specifications originate. D. Purchasing's responsibility is to ensure that the receiving department compares all incoming material against quality standards.

2. When all or part of a shipment received from a supplier's is nonconforming, the buyer the right under the UCC to do all of the following EXCEPT A. Hold the material for future determination. B. Repair the material. C. Use the material as is D. Completely or partially reject the material.


3. An automobile manufacturer needs to recall its line of sport utility vehicles due to a transmission problem, which seems to be linked to a certain configuration that has never before proved to be faulty. The design engineers, production manager, purchasing manager for the parts, and other key parties are gathered together for their input on what changes have occurred. This is an example of A. Value engineering. B. ISO-9000 C. Root cause analysis D. Corrective action.

4. Which of the following is TRUE with regard to the nature of the relationship between prevention and correction costs of quality ? A. Costs for preventing quality problems tend to be lower than the costs for correcting quality problems. B. Costs for correcting quality problems tend to be lower than the costs for preventing quality problems. C. Costs for correcting and preventing quality problems tend to be about equal. D. The costs for correcting and preventing quality problems are indeterminable.


5. Which of the following is/are acceptable alternatives that a buyer may choose to employ when materials do not meet quality requirements ? Ⅰ. Reworking the material. Ⅱ. Having a technical representative from the supplier's firm resolve the problem. Ⅲ. Using the material for another purpose. Ⅳ. Rejecting the material.

A. l only B. lV only C. l, ll, and lV only D. All of the above.

6. In which of the following circumstances is the frequency of defective materials MOST likely to decrease ? A. When the buyer and supplier are in a partnership agreement. B. When dealing with high-priced materials. C. When dealing with a domestic supplier. D. When the buyer threatens the supplier with litigation.


7. Which of the following purchasing performance measurements is MOST likely to be used in an organization practicing a Total Quality Management philosophy ? A. Requisition cycle time. B. Quality of products/services purchased. C. Number of processes improved. D. On-time delivery.

8. An organization's efforts to establish a system of quality management is/are likely to result in which of the following ? Ⅰ. The quality system may initially raise costs to cover expense for early training, educational materials, and facilitators. Ⅱ. The progress of establishing the quality system may prove to be slow since it should be permitted to grow from below.

A. l only B. ll only C. Both l and ll D. Neither l nor ll


9. A successful benchmarking program is likely to including all of the following EXCEPT A. Comparisons to the "best" in the field. B. Data gathered from more than one source. C. A required list of specific measurements. D. The measurement of current processes.

10. With respect to incoming purchased materials, statistical sampling involves the inspection of A. Economic size lots. B. Every unit. C. Randomly chosen lots/units. D. The first 10 units.


Solutions.

1 2 3 4 5 6 7 8 9 10

C A C A D A C C C C

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Ch.3 Quality Issues. 2/Ch.3 Quality... · Continuous improvement, Kaizen, is the never-ending effort to expose and eliminate root causes of problem. Continuous improvement involve