1. 1 CASE-Summer-20071 Impact of Quality on Productivity By T.A. Khan PEC-Impact of Quality on Productivity

2. 2 CASE-Summer-20072 A Common Perception QualityProductivity Quality Productivity Quality Productivity 4 3 2 1 0 -2 -3 -4 4 3 2 1 0 -2 -3 -4 Trade off A False Perception

3. 3 CASE-Summer-20073 The following question arises – Are productivity and quality related? Are the two sides of the same coin? Can you have both? The answer of course is Yes. The quality management can also improve productivity – the number of units produced from available recourses. Effect of Quality Management on Productivity

4. 4 CASE-Summer-20074 Improving quality by reducing defects will increase good output and reduce inputs. In fact, virtually all aspects of quality improvement have a favourable impact on different measures of productivity – labour productivity and machine productivity. Improving product design and production processes, improving the quality of material and parts and improving job designs and work activity will increase productivity. Effect of Quality Management on Productivity

5. 5 CASE-Summer-20075 Product Yield It is a measure of output used as an indicator of productivity. It can be computed for the entire production process (or for one stage in the process) as follows: Effect of Quality Management on Productivity

6. 6 CASE-Summer-20076 Yield = (total input) (%age good units) + (total input) (1 - %age good units) (%age reworked) Effect of Quality Management on Productivity OR Y =(I) (%age G) + (I) (1 - %age G) (%age R) I=planned number of units of product started in the production process G=Good units produced R=Defective units that are successfully reworked

7. 7 CASE-Summer-20077

8. 8 8 Quality ---- Improvement Raw Material Raw Material Machine Conditions Machine Conditions Process Capabilities Process Capabilities Operators Education Operators Education Knowledge Knowledge Skills Skills Attitude Attitude

9. 9 CASE-Summer-20079 Raw Materials Tag Price Vs Total Cost of ownership Tag Price Vs Total Cost of ownership Supplier selection Supplier selection supplier Evaluation supplier Evaluation Communication with supplier Communication with supplier supplier development and partnership. supplier development and partnership. Supplier Performance Measurement and Monitoring Supplier Performance Measurement and Monitoring Supplier Relation Managements (SRM) Quality Management Systems

10. 10 CASE-Summer-200710 Machine Conditions Cleaning and Lubrication Cleaning and Lubrication Maintenance: Maintenance: Plans Plans Standard Spare Parts Standard Spare Parts Condition Monitoring Condition Monitoring Reduction in MTTR and Enhancement of MTBF. Reduction in MTTR and Enhancement of MTBF. Total Productive Maintenance Reliability Centered Maintenance 5S--- Programs

11. 11 CASE-Summer-200711 Process Capability Analysis

12. 12 CASE-Summer-200712 Operators Education Knowledge Knowledge Total Quality Management Total Quality Management Statistical Process Control Tools Statistical Process Control Tools Product Quality Attributes Product Quality Attributes Skills Skills Machine Operations (Settings & Timings) Machine Operations (Settings & Timings) Attitude Attitude Customer Requirements (Internal & External) Connecting to the “Big Picture” Customer Requirements (Internal & External) Connecting to the “Big Picture”

13. 13 CASE-Summer-200713