UNIT-II

Quality
Management

DR. KIRAN GARG

 QUALITY
“Conformance to requirement or specifications”-Crosby
 Different meaning under different circumstances.
 Refers to the quality of the product, process performance
 Refers to the degree to which requirement of the customers being fulfilled.
 Can realized by comparing it with some standards.
 Begins with the design of a product, followed by establishing standards of measurement, use
of proper material, selection of suitable manufacturing process etc., quality is a relative term
and it is generally used with reference to the end use of the product.
Juran defined as “Quality is fitness for use. The Quality of a product or service is the
fitness of that product or service for meeting or exceeding its intended use as required by the
customer.”
 Overview of Quality Management Techniques

Quality management techniques involve controlling activities and planning to

ensure that the service or product is fit for the purpose.
The quality of the product makes the reputation of the company and also it
fetches the customers for the company.
Quality has some parameters which are designed by the respective organization.
On these parameters or techniques, the product is created. The parameters may
vary from organization to organization.
 Fundamental Factors Affecting Quality (9M’s)

1. Market: Technology advancement, new products and variety dynamically changing customers
wants . Role of companies to identify needs and then meet it with existing technologies or
by developing new technologies.
2. Money: The increased global competition necessitates huge outlays for new equipments
and process. This should be rewarded by improved productivity. This is possible by minimizing
quality costs associated with the maintenance and improvements of quality level.
3. Management: Because of the increased complex structure of business organization, the
quality related responsibilities lie with persons at different levels in the organization.
4. Men: The rapid growth in technical knowledge leads to development of human resource
with different specialization. This necessitates some groups like, system engineering group to
integrate the idea of full specialization.
5. Motivation: If we fix the responsibility of achieving quality with each individual in the organization with
proper motivation techniques, there will not be any problem in producing the designed quality products.

6. Materials: Selection of proper materials to meet the desired tolerance limit is also an important
consideration. Quality attributes like, surface finish, strength, diameter etc., can be obtained by proper
selection of material.

7. Machines and mechanization: In order to have quality products which will lead to higher productivity
of any organization, we need to use advanced machines and mechanize various operations.

8. Modern information methods: The modern information methods help in storing and retrieving needed
data for manufacturing, marketing and servicing.

9. Mounting product requirements: Product diversification to meet customers taste leads to intricacy in
design, manufacturing and quality standards. Hence, companies should plan adequate system to tackle all
these requirements.
 CONTROL

The process through which the standards are established and met with standards is called control. This
process consists of observing our activity performance, comparing the performance with some standard and
then taking action if the observed performance is significantly too different from the standards.

1. Choose the control object

2. Choose a unit of measure

3. Set the standard value

4. Choose a sensing device which can measure

5. Measure actual performance

6. Interpret the difference between actual and standard

7. Taking action.
 Need for Controlling Quality

1. No yardstick for comparing the quality of goods/services.

2. Difficulty in maintaining consistency in quality.

3. Dissatisfied customers due to increased maintenance and operating costs of products/services.

4. Increased rework cost while manufacturing products/providing services.

5. Reduced life time of the products/services.

6. Reduced flexibility with respect to usage of standard spare parts.

7. Hence, controlling quality is an essential activity.

 Quality Control-
“Regulatory process through which we measure actual quality performance, compare it with standards,
and act on the difference”

 Used to maintain a desired level of quality in a product or service.

Systematic control of various factors that affect the quality of the product.
Depends on materials, tools, machines, type of labour, working conditions etc.
Involves inspection as a valuable tool, emphasis is on quality future production.
Aims at prevention of defects at the source, relies on effective feedback system and corrective action
procedure.

“Quality control is the mechanism by which products are made to measure up to specifications determined
from customers, demands and transformed into sales engineering and manufacturing requirements, it is
concerned with making things right rather than discovering and rejecting those made wrong”.
 Types of Quality Control

Not a function of any single department or a person, in fact responsibility of supervisor to turn
out work of acceptable quality.

1. Off-line quality control: Deals to select and choose product and process parameters in such a
way that the deviation between the product or process output and the standard will be minimized.
Much of this task is accomplished through product and process design.

Example: Taguchi method, principles of experimental design etc.

2. Statistical process control: Involves comparing the output of a process or a service with a standard and
taking remedial actions in case of a discrepancy between the two. Determine whether a process can produce
a product that meets desired specification or requirements. The corrective action is taken in that operational
phase. This is real-time basis.

3. Acceptance sampling plans: A plan that determines the number of items to sample and the acceptance
criteria of the lot, based on meeting certain stipulated conditions (such as the risk of rejecting a good lot or
accepting a bad lot) is known as an acceptance sampling plan.
 Steps in Quality Control

1. Formulate quality policy.

2. Set the standards or specifications on the basis of customer’s preference, cost and profit.

3. Select inspection plan and set up procedure for checking.

4. Detect deviations from set standards of specifications.

5. Take corrective actions or necessary changes to achieve standards,

6. Decide on salvage method i.e., to decide how the defective parts are disposed of, entire scrap or rework.

7. Coordination of quality problems.

8. Developing quality consciousness both within and outside the organization.

9. Developing procedures for good vendor-vendee relations.

 Objectives of Quality Control

1. To improve the companies income by making the production more acceptable to the customers.

2. To reduce companies cost through reduction of losses due to defects.

3. To achieve interchangeability of manufacture in large scale production.

4. To produce optimal quality at reduced price.

5. To ensure satisfaction of customers with productions or services or high quality level, to build customer
goodwill, confidence and reputation of manufacturer.

6. To make inspection prompt to ensure quality control.

7. To check the variation during manufacturing.

 Benefits of Quality Control

Improving the quality of products and services.

Increasing the productivity of manufacturing processes, commercial business, corporations.

Reducing manufacturing and corporate costs.

Determining and improving the marketability of products and services.

Reducing consumer prices of products and services.

Improving and/or assuring on time deliveries and availability.

Assisting in the management of an enterprise.

 Seven Tools for Quality Control

To make rational decisions using data obtained on the product, or process, or from the consumer,
organizations use certain graphical tools. These methods help us learn about the characteristics of a process,
its operating state of affairs and the kind of output we may expect from it. The seven quality control tools
are:
1. Pareto charts
2. Check sheets
3. Cause and effect diagram
4. Scatter diagrams
5. Histogram
6. Graphs or flow charts
7. Control charts
 1. PARETO CHARTS

Pareto charts help prioritize by arranging them in decreasing order of importantce.

Limited resources these diagrams help companies to decide on the order in which they should address
problems. The Pareto analysis can be used to identify the problem in a number of forms.

(a) Analysis of losses by material (number or past number).

(b) Analysis of losses by process i.e., classification of defects or lot rejections in terms of the process.
(c) Analysis of losses by product family.
(d) Analysis by supplier across the entire spectrum of purchases.
(e) Analysis by cost of the parts.
(f) Analysis by failure mode.
Example: The Fig. 6.1 shows a Pareto chart of
reasons for poor quality. Poor design will be the
major reason, as indicated by 64%. Thus, this is
the problem that the manufacturing unit
should address first.
A — Poor Design
B — Defective Parts
C — Operator Error
D — Wrong Dimensions
E— Surface Abrasion
F — Machine Calibrations
G — Defective Material
 CHECK SHEET

Systematic record keeping or data collection

observations are recorded as they happen which
reveals patterns or trends.

Data collection through the use of a checklist is

often the first step in analysis of quality problem.

A checklist is a form used to record the

frequency of occurrence of certain product or
service characteristics related to quality.

The characteristics may be measurable on a

continuous scale such as weight, diameter, time
or length.
 DIMENSIONS OF QUALITY-
Manufactured Products
1. Performance: for example, how well a car handles or its gas mileage.
2. Features: “extra” items added to the basic features, such as a stereo CD, leather interior in a car.
3. Reliability: A product will operate properly within an expected time frame.
4. Conformance: The degree to which a product meets preestablished standards.
5. Durability: How long the product lasts; its life span before replacement.
6. Serviceability: The ease of getting repairs, the speed of repairs, and the courtesy and competence
of the repair person.
7. Aesthetics: How a product looks, feels, sounds, smells, or tastes.
8. Safety: Assurance that the customer will not suffer injury or harm from a product; an especially
important consideration for automobiles.
9. Other perceptions: Subjective perceptions based on brand name, advertising, and the like.
 A Mercedes and a Ford
These quality characteristics are weighed by the customer pickup truck are equally
relative to the cost of the product. In general, customers “fit for use,” but with
will pay for the level of quality they can afford. If they different design
feel they are getting what they paid for (or more), then dimensions for different
they tend to be satisfied with the quality of the product. customer markets that
result in significantly
different purchase prices
 DIMENSIONS OF QUALITY FOR SERVICES

Service quality is more directly related to time, and the interaction between employees and the
customer.
1. Time and timeliness: How long must a customer wait for service, and is it completed on
time? For example, is an overnight package delivered overnight?

2. Completeness: Is everything the customer asked for provided? For example, is a mail order
from a catalogue company complete when delivered?

3. Courtesy: How are customers treated by employees? For example, are catalogue phone
operators at L.L. Bean nice and are their voices pleasant?
4. Consistency: Is the same level of service provided to each customer each time? Is your newspaper
delivered on time every morning?

5. Accessibility and convenience: How easy is it to obtain the service? For example, when you call L.L.
Bean does the service representative answer quickly?

6. Accuracy: Is the service performed right every time? Is your bank or credit card statement correct every
month?

7. Responsiveness: How well does the company react to unusual situations, which can happen frequently in
a service company? For example, how well is a telephone operator at L.L. Bean able to respond to a
customer’s questions about a catalogue item not fully described in the catalogue?
 Quality from the producer’s perspective –
the way provider see
Product development is a function of the quality characteristics (i.e., the product’s fitness for use)
the customer wants, needs, and can afford.

Product or service design results in design specifications that should achieve the desired quality.

Once the product design has been determined, the producer perceives quality to be how
effectively the production process is able to conform the specifications required by the design
known as the quality of conformance.

Quality during production focuses on making sure that the product meets the specifications
required by the design.
 Example
If new tires do not conform to specifications, they wobble. If a hotel room is not clean when a guest checks in,
the hotel is not functioning according to the specifications of its design; it is a faulty service. From this
producer’s perspective, good quality products conform to specifications—they are well made; poor-quality
products are not made well—they do not conform to specifications.

Achieving quality of conformance involves design, materials and equipment, training, supervision, and
control.

When equipment fails or is maladjusted, when employees make mistakes, when material and parts are
defective, and when supervision is lax, design specifications are generally not met. Key personnel in achieving
conformance to specifications include the engineering staff, supervisors and managers, and, most important,
employees.
 FINAL PRESPECTIVE in Quality

Customer’s perspective of product quality is product or service price.

Producer’s perspective, important consideration is achieving quality of conformance at an acceptable cost.

Product cost is also an important design specification. If products or services cannot be produced at a cost
that results in a competitive price, then the final product will not have acceptable value—the price is more
than the consumer is willing to pay given the product’s quality characteristics. Thus, the quality
characteristics included in the product design must be balanced against production costs.

The final determination of quality is fitness for use, which is the customer’s view of quality. It is the
consumer who makes the final judgment regarding quality, and so it is the customer’s view that must
dominate.
To make sure that products and services have the quality they have been designed for, strategy
to achieve quality throughout the organization is required . This approach to management of
quality throughout the entire organization has evolved into what is generally referred to as a
quality management system (QMS)
History of Quality Management
Quality is the utmost important thing, which is handled with care by every company because
whole the reputation of the company is based on the quality of the product of that company.

The techniques that we discussed above are some of the total techniques and the companies
should focus on the adaptation of the right technique,

The quality management techniques may vary from work to work so the holistic and wise
approach should be there while selecting the technique for the quality enhancement in the
particular industry.
 Total Quality Management
It is an old technique of quality management,

Focus is given on each and every step of manufacturing to ensure that the quality remained maintained
from the inception.
It cost-effective and also easy to implement.

It is a customer-oriented technique because while implementing this technique customer’s needs are
given the most priority.
It saves the resources of the company and also productivity is high.

This technique has prevailed basically in the information technology sector etc.
 Six Sigma

Six Sigma is a very old method of quality management and used widely in industries like mechanical
and electrical works.

This is a technique in which the focus is one the quality improvement of the product by removing or
eliminating the defects which are a hurdle in the quality.

The sigma basically is the Greek name of the standard deviation method in mathematics.

To understand the six sigma one should understand the value of sigma because its basic concept is
based on that, every engineer who works in the industry unit should aware of the six sigma method
because whole the work is carried out with that particular technique.
Top-down and bottom-up approach
Orders are passed from top officials to lower level and also information is passed
from lower level to higher official.
If we talk about the top-down approach in this technique the higher officials take
a report from the lower officials about the work and quality measures.
The bottom-up approach basically depends upon the information sharing from
lower hierarchy to the upper hierarchy about the work done and about the quality
parameters which are followed by the workers.
The main agenda of this approach is to maintain the quality of the product by co-
operating with each level so that a good product is delivered.
 ISO
“International organization for standardization”
It is the a body which gives the certification of quality to the products and also to various type of
companies. It is based in Geneva, Switzerland.

Every establishment in the world whether it is a company, an industry or other firms should have to
take the certification of quality assurance from the ISO.

This ISO certification also works as an assurance to the customer that the product is genuine and safe
to consume. The ISO tag is there on every product

There are very hard formalities which are to be followed to get the status of ISO approved.

ISO tag is also the sign of good quality and every industry is running to get this mark to make its
product as a genuine product.
 Cost of Quality

The cost of quality is the difference between the cost of the production including manufacturing, sale
and other expenses and cost incurred without any defect during the production.

The main idea behind the cost of quality is to make the product cheaper and defect-free. The manager
basically focuses on cost reduction and quality improvement so that there is a benefit of the customer
and as well of the company.

The cost to quality is a new concept and rarely used for quality control because a skillful person is
required to make the charts and accounts. But the MNC’s are used this method a large scale.
 Kaizen

Kaizen is an old Japanese technique to maintain the quality of the product, this particular technique
primarily focuses on each and individual level of process and include all types of workers.

The agenda is to impact on each level which results in a mass improvement in the whole product.

The lower hierarchy of employees is focused because they are the one who works at ground zero and
the top management provide every type of facility to them so that they work with full enthusiasm and
also the material which is used in the product is wisely selected so that there should not be the quality
reduction.
Quality Tools
The 7 basic tools help us to improve, guiding and developing the project with quality strategy.

These are graphical representation to evaluate the data.

This practice was first founded by Japan and implemented in a training program. Later found the
improvement of quality in complex issues industries of the entire country, eventually using quality
spreader all over the world.

The effective use of 7 quality tools helps in maintaining the standards in quality and service.

This helps in identifying the issue in the production process, controls, and provides a solution to
mitigate future defects. These Quality tools are used to map the quality and provide them with a
continuous improvement in the production process.

All the 7 quality tools are detailed and studied under the Lean Six Sigma study, which teaches
quality in production.
 Cause-and-Effect Diagram

This is also called a fishbone chart or Ishikawa diagram. This is used to identify the cause and
effect of the problem and re-arrange and implement ideas strategically.

When to use this method?

•This is used to identify the root cause of the problem.
•When the project diverts from its planned schedule
•Identification of Risks.

Procedure to follow:
• Estimate the problem statement and continue drawing a straight line with branches as like
fishbone.
•Analyze the problem using a brainstorming technique and implement it into the branches for a
quick view of the problems.
 Check Sheet
It is a sheet prepared in a structured way. This is used for collecting and analyzing information.
This tool is compatible with a wide variety of applications.

When to use this method?

•This is used to analyze the repetition of the data of the same problem or similar.

•This method is used in a repetitive operative application process.

•Collective set of sheets or format for the overview of problems.

Procedure to follow:
•Create the table format in sheets.

•Input details of the problems, when and how on a weekly basis.

•Calculate the overall problem using the table and record periodically.

•Update, Review and Monitor the data on a weekly basis.

 Control Charts

Charts are used to study how process changes overtimes in the graphical view. Comparing Present data to
historical limits leads to conclusions about whether the process is in control or it is out of control.
Variations of External factors may apply.

When to use this method?

• To find the routine flow of the project.

• Identify risk task and mitigate them.

• To find the outcome of the actual from planned.

• Continuous improvement or change in the process.

• Sampling distribution using a number of occurrences.

Procedure to follow:
•Input data in the appropriate control chart.
•The schedule time period for the data.
•Construct and analyze data.
•Every successor activity should be dependent on predecessor activity.
•Plot the data, plot out o control should be identified and identified as X.
•Out of control limits should be applied with theorem.
 Histogram

This graph is most commonly used for evaluating frequency distributions and how each value is
differentiated inWhen to use this method?
•When it consists of numerical data.

•Series of data in a timely manner.

•To have a clear understanding of the data.

•Analyze whether it can meet the customer’s requirement.

a different set of data.

Procedure to follow:
•Collect data and input in points.
•Draw X and Y plots and label the details in the bar chart.
 Pareto Chart

It’s a bar chart which shows the factors inaccurate way.

When to use this method?

•To analyze the risk in the task process.

•Focus on a critical point when many are there.

•Visual explanation and for easy communication delivery.

•Focus on a particular element in a cluster of data.

Procedure to follow:
•Plan the category of information for input.

•Provide necessary measurement details such as cost,

quantity.
•Plan the conception delivery of paring to chart (Set time
frame).
•Pareto chart should be grouped from high to low format.

•Develop the level bars of the chart.

 Scatter Diagram

The paring of Graphs with numerical data is called a scattered diagram; it is used to find the
relationship of the variables on each axis.

When to use this method?

•When multiple data with different variations.

•To find the cause and effect are relatively the same.

•To identify the root cause of the problem.

•To analyze the scattered plots.

Procedure to follow:
•Analyze similar pair of data.
•Construct an independent variable on X-
axis and a dependent variable on Y-axis.
•Plot data in the graph to identify the
points in each quadrant.
•Segregate the data in X and Y plots.
•The Data touching the intersection lines
should not be evaluated.
 Stratification

The strategy used to separate data is gathered from various sources. Patterns are
developed using stratification for run charts or flowchart. Stratification is the first
step in 7 Quality tools.

When to use this method?

•Stratification is done before the collection of data.
•Performed before collecting the collection of several source data.
•Different sources such as shift timings, intervals, manpower, material type, vendor,
product, etc.
Procedure to follow:
•Create departments; every subset of data are provided in separate departments.
•Sources of Data are collected before the evaluation of done, so this does not affect the final results.
•Stratification shares data to other tools to evaluate the results.
•Detailing the source data before analyzing.
The Costs of Quality

A good approach to understanding quality is to analyze the costs associated

with achieving, or failing to achieve it. There are three basic costs of quality.
These include the costs of prevention, appraisal, and failure.
Quality Cost
1. Preventive cost

2. Appraisal cost

3. Internal failure cost

4. External failure cost

 The Cost of Prevention

Prevention involves the use of conscious strategies to reduce the production of defective product, which by
definition does not conform to agreed-upon quality standards.

The entire system must be designed, coordinated, and controlled to prevent defectives. This includes the
materials and equipment used, appropriate skills, and the correct process to deliver product conforming to
standards. Generally by spending more, the percent of defectives can be reduced.

Defectives have been prevented from occurring by remedying a wrong.

The cost of prevention goes up when quality standards are raised meaning a lower level of defectives. It is a
reasonable policy to raise the quality standards whenever the prior standards are being consistently met. The
costs involved in achieving these ever more stringent specifications will increase, gradually at first, and then
markedly as the technological limitations of the materials and the process are approached.
Preventive Cost: Any Efforts to Help
People “Do it right the first time and all
the time.”

Marketing, customer/user interaction

Product/service/design development
Purchasing and vendor partnership
Operations (manufacturing/services)
Quality engineering
Quality administration
Other prevention costs
The Cost of Appraisal (Inspection)

When product is examined to see whether it conforms to the agreed-upon standards, it is undergoing
inspection and appraisal.

That is the evaluation of whether or not the product conforms to the standards.

Inspection is one of steps in quality assurance. Product that is not judged to conform because it fails to fall
within the tolerance limits is sorted out.

The products that does not conform ,some of them must be scrapped; others can be reworked and sold for a
discount.

The usual way to sort out the items that do not fall within the tolerance limits is to inspect all of the items.
However, it is possible to use acceptance sampling (AS) methods, which, as the name indicates, consist of
inspecting a sample of the production lot
Appraisal Cost: Testing, inspection and
related equipment/supplies
Purchasing appraisal cost: incoming goods or products
Appraisal operations: testing and inspection
External appraisal: field test outside company
Data review
Cost supporting appraisal efforts.
 The Cost of Failure

The cost of failure rises linearly, at first, and then accelerates as the percentage of defectives increases. This
might reflect a replacement cost for failed items that are under warranty.

As the percent of defectives continues to rise, product failure costs can be far more severe.

Word of mouth among customers causes customer defections and so the cost of lost business escalates.

The curve starts to move up geometrically. Severe costs of failures occur when customers begin to defect to
competitors in large numbers as a result of serious product failures.

This lost revenue stream, often called the lost lifetime value (LTV) of customers, has to be taken into
account as a significant cost of failure. An estimate of the average LTV of a customer is an important guide
for deciding how much to spend to prevent failures that damage customer loyalty. LTV can be a large
amount of revenue.
Serious failures could involve liability of very large sums of money.

The expense of litigation in court trials, as well as the accompanying bad publicity, has costs that are
difficult to estimate.

Costs of failures are related to product callbacks, which require rework involving labor and material costs.
callbacks often carry other penalties beyond the cost of repairing or replacing failed product.

Curves that chart the cost of failure are likely to have steeply ascending, exponential, or geometric shapes.
 The Total Cost of Quality

The three kinds of costs permit derivation of a total cost curve. This curve is U-shaped. Total costs are
minimized at some level of percent defectives.

Situations might exist in which, for small increases in prevention costs, percent defectives will be
dramatically reduced.

There are conditions when the cost of failure does not rise exponentially because the impact of failure is
trivial (the pencil point broke) or because inspection catches 100% of the defectives. With effective
inspection, the percent defectives produced are substantially higher than the percent defectives shipped and
there is a cost of scrapping the product.

The total cost of quality increases geometrically as the percentage defectives rises.

Six-Sigma methodology assumes that this situation of serious consequences for failure often exists
Internal Failure Cost: Defects/problems
prior to shipping
Product design failure

Service failure

Purchasing failure: incoming part failure

Defectives/rejects/scraps/downgrading

Repair or rework

Materials review

Corrective actions
External Failure Cost: Problems after
Shipping
Complaint investigations
Problem solving
Failure analysis
Returned goods
Retrofit and recall
Warranty claims
Liability costs
Penalties
Others
What is Lean?
Lean production focuses on eliminating waste in processes (i.e. the waste of work in progress and
finished good inventories)

Lean production is not about eliminating people

Lean production is about expanding capacity by reducing costs and shortening cycle times between
order and ship date

Lean is about understanding what is important to the customer

© 2004 Superfactory™. All Rights Reserved. 68

 Thinking Lean
Specify value
◦ can only be defined by the ultimate customer

Identify the value stream

◦ exposes the enormous amounts of waste

Create flow
◦ reduce batch size and WIP

Let the customer pull product through the value stream

◦ make only what the customer has ordered

Seek perfection
◦ continuously improve quality and eliminate waste

From Lean Thinking by Womack and Jones

© 2004 Superfactory™. All Rights Reserved. 69

Benefits
Lean provides tangible benefits

Reduces costs not just selling price

◦ Reduces delivery time, cycle time, set-up time
◦ Eliminates waste
◦ Seeks continuous improvement

Improves quality

Improves customer ratings and perceptions

Increases overall customer satisfaction

Improves employee involvement, morale, and company culture

Helps “transform” manufacturers

© 2004 Superfactory™. All Rights Reserved. 70

Toyota Production System (TPS)
Quality, Cost, Delivery
◦ Shorten Production Flow by Eliminating Waste

Just In Time
◦ The Right Part at the Right Time in the Right Amount
◦ Continuous Flow
◦ Pull Systems
◦ Level Production

Built-In Quality
◦ Error Proofing – Poka Yoke
◦ Visual Controls

Operational Stability
◦ Standardized Work
◦ Robust Products & Processes
◦ Total Productive Maintenance
◦ Supplier Involvement

© 2004 Superfactory™. All Rights Reserved. 71

Types of Waste
Overproduction

Excess inventory

Defects

Non-value added processing

Waiting

Underutilized people

Excess motion

Transportation

© 2004 Superfactory™. All Rights Reserved. 72

 Lean vs. Traditional
Manufacturing
Half the hours of engineering effort

Half the product development time

Half the investment in machinery, tools and equipment

Half the hours of human effort in the factory

Half the defects in the finished product

Half the factory space for the same output

A tenth or less of in-process inventories

Source: The Machine that Changed the World, Womack, Jones, and Roos, 1990.

© 2004 Superfactory™. All Rights Reserved. 73

 Lean vs. Traditional
Manufacturing
99.9% Customer Schedule Attainment

Defects of 15 PPM or less

4-6 Inventory Days of Supply

92%+ Operational Availability

Leveled, Sequenced Production

Order to Customer Use - Hours, not weeks

Functioning Supplier Partnership

Strong Production Control Function

Examples: Tier 1 Suppliers: Johnson Controls Seating, Litens Automotive Partnership, Cadimex, Denso Manufacturing, Toyota Motor Corporation.

© 2004 Superfactory™. All Rights Reserved. 74

Barriers to Lean
Implementing Lean Can Be Difficult Because it is Counterintuitive from a Traditional Paradigm:
◦ Buying multiple small machines rather than one big machine that offers economies of scale.
◦ Shutting down equipment when maximum inventory levels are reached rather than running flat out.
◦ Using standards to continuously improve.

There is no step-by-step cook book

◦ There are some basic steps but the how-to varies from organization to organization
◦ Requires an assessment of the company in order to map out the strategy

Company culture plays a big part in the how-to

© 2004 Superfactory™. All Rights Reserved. 75

Implementing Lean
Gain top Management “Buy In” and Support

Perform overall company assessment tied to company strategic, operational, and marketing plans

Develop strategic lean deployment plan

Integrate customized training with lean to improve specific skill sets, leverage training resources

Team Building, Communications, Problem Solving, Change Management, Lean Manufacturing Tools

Conduct “Kaizen blitz” high impact events

5S, Manufacturing Cell, Set-Up Reductions, Inventory Reductions, Work Standardization

Use an enterprise wide approach to help “Transform” a client’s culture and the way they do business.

© 2004 Superfactory™. All Rights Reserved. 76

Progress Toward Lean
Smaller lot sizes

Increased capacity / throughput

Higher inventory turns

More available floor space

Improved workplace organization

Improved quality : reduced scrap / re-work

Reduced inventories : raw, WIP, FG

Reduced lead times

Greater gross margin

Improved participation & morale

© 2004 Superfactory™. All Rights Reserved. 77

Lean Is A Journey
The Journey never ends

Toyota estimates it is only 50% waste-free

Where can we begin? Where can we improve?

© 2004 Superfactory™. All Rights Reserved. 78