Introduction: This series of articles is directed toward companies who have or are planning manufacturing operations. The topics explored will be focused on optimizing those operations and maximizing the cost/benefit aspect.
The Cost of Quality
Approaches to attaining a high quality product or process tend to fall into three categories. One group, prevention, is the optimum approach as it results in the lowest overall investment and the highest quality. Second in the hierarchy is the appraising of products or processes at some point in the manufacturing operation. You may have also heard of this as “inspecting in quality”. And lastly, should you go down neither of the two avenues above then you are making no effort to ensure product quality and will have a failure to meet the customers’ desires.
Let’s talk about prevention. In general the lowest cost of quality occurs when you detect problems in the first place, before those issues get into your supply and production chain. This is accomplished by controlling or specifying those upstream sources. Remember that these sources can be external suppliers or the “internal” supplier. That internal supplier is your operation. In many cases you will be your own customer so you should treat yourself well. In most cases this can be done by requiring your “suppliers” implement and adhere to a quality system such as ISO 9000 , AS 9100 and so on. This also applies to you. You need such a quality system so that your own processes are controlled.
We’ll spend more time in a future article on quality systems, but we’ll leave this for now with one more point. That point is that it is in your best interest that your suppliers have a good system for producing consistent high quality goods. Obviously this is true as you do not want to deal with their poor materials hobbling your processes. But it is also true for a more subtle reason. That reason is cost. If your supplier is turning out goods of ill-repute then that must be costing him additional time and money. Who do you think is picking up some of that tab? Yep, you are. I have assisted suppliers in the implementation of quality systems. It has a payoff.
We have been in a number of plants where “inspecting in” quality was the norm. That was their quality system and they were quite pleased to show you their inspection criteria, talk about how many inspectors they had, show us their bins of rejected parts and so forth (before some of you start tearing up the paper, yes, there some industries and some instances where in-process and final inspection are perhaps the only way to verify the goodness of the part and may in fact be required by a customer).
While they did indeed have a sound process for catching problems in their operation, it was costing them money and time. A quality system needs to address the two major sources of boo-boos. Problems arising from external sources can be caught with a receiving or incoming inspection process. If such a system is effective, no bad product will get into your operation.
However, you also need to ensure that you don’t build in some problems as you move through your own operation. You can certainly do this by having in-process and final inspections. I prefer in any operation to install poke yoke or mistake-proofing methods. In this way issues are found before they get infused into the mainstream. Another thing to consider here is one-piece-flow. In one piece flow you only allow a single operation to be performed on a single product at one time. That is, you don’t fill the pipeline with 100 parts that all have the wrong light bulb installed and then move those 100 on to the lens installation station. You do one at a time at the light bulb installation station. As opposed to batch processing, this ensures that if you have methods in place to identify a problem, you will typically only produce one bad item before you discover the problem. In a future article on process automation, we will spend some time discussing how automated quality verification can be designed into a process.
A very useful tool for you to put in place is a means for capturing and reporting the cost of quality. This should be in a visible place in your facility.
Our take-away from this discussion should be that quality, poor or good, has a cost attached. Also the cost of implementing a preventive quality system is typically less than any other alternative and will result in an overall reduction in operation costs.
Heather MacKinnon has over eight years experience in Engineering R&D, product design, manufacturing operations and facilities commissioning and management. She has a degree in mechanical engineering, an MBA and is pursuing certification as an energy manager. She owns her own consulting/general contracting business, focusing on lean and green development projects and product development.
John Herrick has over 30 years experience in manufacturing industries. He has a degree in engineering, an MBA and is a certified six sigma blackbelt. He is also a member of the Product Development and Management Association and a member of the board of directors of Inventors NorthWest. He is a principal in a Bend firm that provides product development services. (www.herrickprodev.com) He is also the author of the CBN series The Product Entrepreneur.
Producing good quality products costs money. But, producing poor quality products also costs money. In fact, it has been my experience that poor quality has a higher cost that good quality. Thinking about this for a minute, if the product quality were perfect then you would spend no money on scrap or reworking defective products. You would also not be spending time (money) on the replacement of materials that you found to be defective from a supplier. In a service industry the same pattern applies.