MODULE 5 Quality Monitoring 29 August 2014 Lesson 4: Safety Stock

Module Objective After completing this module, the student will be able to implement best practices, predict variations in product specifications and processes, interpret process control and capability data, and use Lean and Six Sigma to assist suppliers in the continuous performance improvement process

LESSON 1 Variation and Quality 06January2014

Lesson Objectives Upon completion of this lesson, you should be able to: Analyze variation in a Quality Assurance (QA) process to determine its impact on quality of products or services, efficiency, and cost Contrast traditional vs. modern QA processes to highlight the importance of variation reduction Identify why 100% manual inspection is not an effective QA process Contrast the philosophies of three quality gurus: Deming, Juran, and Crosby

Lesson Topics This lesson will cover the following topics: Variation in a QA Process Traditional vs. Modern Quality Inspections Philosophies of Deming, Juran, and Crosby

What’s In It For Me? Your understanding of the best practices from traditional and modern QA processes will enable you to support your suppliers’ efforts to reduce variation, reduce cost, increase efficiency, and improve the quality of their products or services

Lesson Introduction What impact do variations in a process have on quality, schedule, and cost?

Variation in a QA Process Lesson Topics: Variation in a QA Process Traditional vs. Modern Quality Quality Assurance Philosophies of Deming, Juran, and Crosby

Types of Waste – “TIM WOOD” Waiting Overproduction Inventory Defects Transportation Overprocessing Motion

Variation in a QA Process Deviations from the target tolerance in a product or process Variation within the tolerance range is acceptable Variation outside the tolerance range is considered unacceptable

Variation in a QA Process (cont.) Variation Attributes Prime source of waste Contributes to poor quality, cost, and schedule performance Variation occurs due to: Common causes Special causes

Characteristics of Common Causes of Variation Common causes in variation include: Small variations Part of normal system functioning Common causes are also known as natural causes or chance causes Common causes in variation are: Expected when performed according to the standard operating procedures Often difficult to identify

Characteristics of Special Causes of Variation Special causes in variation: Occur occasionally Cause a large variation in characteristics Are unexpected Occur when: Standard procedures are not followed There is a significant variation in the environment Special causes are also known as: Abnormal causes

Design Specifications and Variation Devise a test strategy that demonstrates the quality of the product to the customer Test strategies depend on the: Complexity of the product Degree to which testing can be accomplished at various points Cost of testing

Design Specifications and Variation (cont.) Consider a test strategy that encompasses: Build components and test Integrate components and test Testing after each successive build or integration reduces the chance of failure in the end product

Example: Design Specification and Variation In a sample design specification, correct placement of a weld is measured from 1.00 ± 0.01 Defective Good 0.99 Lower Specification Limit 1.00 Nominal Dimension 1.01 Upper

Exercise: Penny-Dropping Game (1 of 3) Goal: Achieve quality placement of pennies If a penny falls within the center of the target, it is considered good placement (or quality placement) Any pennies that fall outside of the center of the target are considered defective placement

Exercise: Penny-Dropping Game (2 of 3) Equipment needed: Paper towel cardboard tube United States (U.S.) penny Ruler Target

Exercise: Penny-Dropping Game (3 of 3) Perfect quality is achieved by locating the penny in the center of the target Quality degrades with increasing distance from the center of the target

Variation Histograms Which of the frequency histograms represents better penny-dropping performance? Observations Number of Defective Defective Observations Number of Defective Defective

Importance of Variation Reduction As a product approaches its target specifications: Prevents cost from rising Overall performance improves Variation reduction is enforced through: Standardized Procedures for operations Machine setup Preventive maintenance Leveled, regularized production schedules

Question and Answer Small variations that occur as part of typical system functioning are due to what type of variation causes? Special cause Common cause Typical cause Usual cause

Question and Answer What type of variation occurs when standard operating procedures are not followed? Special cause Atypical cause Common cause Unusual cause

Which method does not enforce variation reduction? Question and Answer Which method does not enforce variation reduction? Standardization of procedures for operations Machine setup Preventive maintenance Quality analysis of finished products

Taguchi Techniques for Quality Engineering Continuous reduction of variation improves quality Higher quality levels within tolerance limits Better quality to the customer More competitive product Lower loss

Example: Taguchi Techniques Example of one transmission manufactured in two different countries Transmissions only installed in American cars Results differed due to variation

Example: Taguchi Techniques (cont.) Reduced variance yielded fewer warranty claims for one set of transmissions Investigation determined that transmissions with fewer warranty claims were built to tighter tolerances within the allowable range

Taguchi Loss Function Loss includes: Warranty repair Rework Dissatisfied customer (lost future sales) Loss Quality Cost = a(1-x) 2 0.99 1.00 1.01

The Goalpost Perspective Defective Good 0.99 1.00 1.01 Target Range

The Goalpost Perspective (cont.) Contrast these philosophies: Goalpost Stops improvement efforts once dimensions are within the target range (i.e., Good range) Taguchi Continually reduce variation on an ongoing basis In effect, shrink the target range over time

Results of Variation Variation results in: Higher warranty cost Customer dissatisfaction Reduced customer perception of quality Lower sales

Traditional vs. Modern Quality Lesson Topics: Variation in a QA Process Traditional vs. Modern Quality Quality Assurance Philosophies of Deming, Juran, and Crosby

Results of Improving Quality Improving quality means reducing variation Decreasing Variation in Dimensions Late 1800s 1910 - 1990 Now? High Quality, data and analytics Craftsman Era Mass Production

Traditional vs. Modern Quality Changes in quality management philosophies can be summarized Dimension Traditional (Pre-1980) Modern (Now) Responsibility for Quality QC Department Production Departments Role of QC Department Enforcers Facilitators, Resource Supplier of Quality Acceptance Sampling Supplier Certification Quality vs. Cost Tradeoff between Quality and Cost No Tradeoff: Improved Quality Reduces Cost

QUALITY ASSURANCE Lesson Topics: Variation in a QA Process Traditional vs. Modern Quality Quality Assurance Philosophies of Deming, Juran, and Crosby

Quality Assurance (1 of 3) 100% manual inspection does not guarantee quality Manual inspection is approximately 80% effective after several iterations MAKE - INSPECT REPAIR .. Six Sigma = 3.4 defects per million parts

Quality Assurance (2 of 3) Must be built into the product or process by the production staff Cannot be inspected into the product or service

Quality Assurance (3 of 3) Tactics: Reduce variability Root cause of defects Identify Resolve Revise process Mistake Proof (Poka Yoke) process using: Visual system Lean or Six Sigma tactics

Metrics (1 of 3) First-Pass Yield (FPY): First-time quality Percentage of parts that are made correct the first time without any rework FPY is the percentage of production units originally started into production that are delivered to the customer without needing any rework/repair in the production process

Metrics (2 of 3) Parts Per Million (PPM): Parts Per Million defects The average number of defective parts out of each million parts made

Metrics (3 of 3) Cost of Quality (COQ): Money spent on rework Money spent on scrap Money spent on warranty repair

Question and Answer Approximate how effective is 100% manual inspection after several iterations? 20% 50% 80% 100%

Question and Answer What term references the percentage of production units delivered to the customer without needing rework during production? Fault-Free Yield First-Pass Yield Net Yield Total Yield

Question and Answer Which metric measures the average number parts out of specification from every million parts produced? Defect Yield Fault Yield Net Faults Parts Per Million

Question and Answer To reduce variability, mistake-proof the process using visual systems, and_________________ . Allow 20% failure rate in the first cycle by default Hire enforcers to ensure quality at all cost Choose suppliers who continually strive to achieve levels of tolerance close to target levels Resolve only the top 10% of the root causes of defects

Philosophies of Deming, Juran, and Crosby Lesson Topics: Variation in a QA Process Traditional vs. Modern Quality Quality Assurance Philosophies of Deming, Juran, and Crosby

Philosophies of Deming, Juran, and Crosby Philip B. Crosby W. Edwards Deming Joseph M. Juran 1941 1951 1979 1982-1986 “Deming Wheel” Plan-Do-Check-Act (PDCA) “Vital few and trivial many” Juran Deming Pareto Principle (80/20 Rule) Crosby “Quality is Free” 14-point Management Plan

Job Aid: Philosophies of Quality Job Aid Activity: Refer to Module 5, Lesson 1, Job Aid 1 CME130_M5_L1_JA1_Philosophies_of_Quality_FINAL.docx Reference the Philosophies of Quality job aid while discussing the slides within this topic

W. Edwards Deming Key concepts: Management is responsible for 85% of defects There is no tradeoff between cost and quality Early Deming: Statistical tools Later Deming: Management philosophy Build quality into the product throughout the process

Joseph M. Juran Key concepts: Management is responsible for 80% of defects The cost of quality needs to get top management’s attention; show them the money The cost of quality is a system to formally account for these costs: Internal External Appraisal Prevention

Juran (1 of 4) Internal cost: Administrative costs Incurred before the product is delivered Scrap, rework

Juran (2 of 4) External cost: Incurred after customer receives the product Processing Customer complaints Customer returns Warranty claims Product recalls

Juran (3 of 4) Appraisal cost: Inspection Testing

Juran (4 of 4) Prevention cost: Continuous improvement Education and training

Philip B. Crosby Key concepts: “Quality is Free” — no tradeoff between cost and quality Cost of Quality (COQ) = 15% - 20% of sales

Cost of Quality Cost of Quality philosophies: Deming – There is no tradeoff between cost and quality Juran – The COQ accounts for internal, external, appraisal, and prevention costs Crosby – Quality is free. There is no tradeoff between cost and quality; the COQ is 15-20% of sales

Question and Answer Which quality management expert(s) indicated that the cost of quality is 15-20% of sales? Philip B. Crosby W. Edwards Deming Joseph M. Juran Milton C. Bradley

Question and Answer Which quality management expert(s) indicated that the cost of quality accounts for internal, external, appraisal, and prevention costs? Philip B. Crosby W. Edwards Deming Joseph M. Juran Milton C. Bradley

Question and Answer Which quality management expert(s) indicated that there is no tradeoff between cost and quality? Philip B. Crosby W. Edwards Deming Joseph M. Juran Both A and B Both B and C Both A and C

Question and Answer Which cost did Juran identify as being incurred by an organization before the product is delivered? Appraisal External Internal Prevention

Which quality management expert(s) indicated that quality is free? Question and Answer Which quality management expert(s) indicated that quality is free? Philip B. Crosby W. Edwards Deming Joseph M. Juran Both A and B Both B and C Both A and C

Question and Answer Which quality management expert(s) indicated that continuous improvement is a cost? Philip B. Crosby W. Edwards Deming Joseph M. Juran Both A and B Both B and C Both A and C

Question and Answer Joseph M. Juran believed that customer complaints represent which cost of quality category? Appraisal External Internal Prevention

Summary Having completed this lesson, you should now be able to: Analyze variations in a QA process to determine their impact on quality of products or services, efficiency, and cost Contrast traditional vs. modern QA processes to highlight the importance of variation reduction Identify why 100% manual inspection is not an effective QA process Contrast the philosophies of three quality gurus, Deming, Juran, and Crosby

Summary (cont.) Your understanding of traditional and modern QA processes will enable you to help your suppliers to reduce variation, reduce cost, increase efficiency, and improve the quality of products or services.