Transcript Document 7462479

IE 3265
R. Lindeke, Ph. D.
Quality Management in POM
–Part I
Topics
• Managing a Quality System
– Total Quality Management (TQM)
• Achieving Quality in a System
– Look early and often
– 6 Sigma – an approach & a technique
– Make it a part of the process
• The Customers Voice in Total Quality
Management
– QFD and the House of Quality
• Quality Engineering
– Loss Function
– Quality Studies
– Experimental Approaches
• T.M.; FMEA; Shainin
Total Quality Management – consider this:
• TQM as a philosophy states that Quality is a TOP
Management responsibility with Customer Satisfaction as
the primary target, continuous improvement as the credo,
the way of action being based on FACTS and not
opinions, while every employee must be involved.1
• The strategy is to concentrate on simplification and
improvement of processes and organizing action around
supplier-customer relations (internal as well as external).
– Use of inter-disciplinary teams for improvement and
problem solving, to monitor and ACT on internal and
external quality information is critical.
– Each organization should continuously benchmark
themselves against their competition and train all
employees in the philosophy of TQM!
1. Maynard's Industrial
Engineering Handbook, 5th ed.,
Total Quality Management
According to Feigenbaum:
• “Total quality control is an effective system
for integrating the quality development,
quality-maintenance, and quality
improvement efforts of the various groups in
an organization so as to enable marketing,
engineering, production, and service at the
most economical levels which allow for full
customer satisfaction.”
Deming's 14 points for Quality
Achievement
1.
2.
3.
Create consistence of purpose
toward improvement of product or
service, with the aim to become
competitive, stay in business and
provide jobs.
Adopt the new philosophy. We are
in a new economic age. Live no
longer with defective methods and
poor workmanship.
Cease dependence on inspection.
Require statistical evidence of
process control from suppliers.
Deming's 14 points for Quality
Achievement
4.
5.
6.
7.
End the practice of rewarding business
on the basis of price. Reduce the
number of suppliers.
Improve Constantly and forever. Use
statistical methods to detect the
sources of problems
Institute modern aids for training on the
job.
Institute leadership. Improve
supervision
Deming's 14 points for Quality
Achievement
8. Drive out the fear to express ideas and
report problems
9. Break down barriers between
departments
10. Eliminate production quotas, slogans
and exhortations
11. Create work standards that account for
quality
Deming's 14 points for Quality
Achievement
12. Institute a training program
in statistical methods
13. Institute a program for
retraining people in new
skills
14. Put everybody in the
company to work to
accomplish the
transformation. The
transformation is
everybody's job.
Emphasize the 13
proceeding points every
day.
Achieving Higher Quality Levels
-- focusing on the Production System
• Many times companies are tempted to
spend more for higher quality
• However, Rarely can quality be bought or
inspected in – it must flow from a good
process where quality is made a part of
everyone’s Job
• We must understand that tighter tolerances
are a last resort that lead to non-linear extra
costs and quality can be achieved through
other means
• We must analyze our products and
processes to determine what factors
actually lead to producing quality in the
processes and get control of them
Achieving Quality
• Inspect EARLY and often –
make it part of each Operators
Duties
• If possible Early means by the
supplier!
• An operator is both a
Customer of incoming quality
as well as a supplier of downstream quality – they have a
vested interest in a better
quality level
• Never rest until its perfect! –
(which it can never be) since
the targets keep moving.
Examining this Production Flow Chart – One
of the VERY Important Quality Tools!
• A total of 81 steps are documented
• Of this number, 50 include inspection
(about 62%!)
• 22 of the 50 inspections are performed
during a processing operation (45%) so
they add no (or little) extra cost to the
process
• The ‘topmost’ step is incoming inspection
• The last steps are inspection during
packing and analyzing Returned Items
Make Quality An Integral Part Of
Manufacturing And Service
• Develop and document good habits
and processes
• Design Quality assurance (inspecting
for acceptability) into the system so as
to put it close to the possible source of
any problems
• Check Quality Early and Often
• Maintain Quality Performance records
– Identify & Correct problem processes
– Develop (and nurture) highly reliable
product sources and suppliers
– As quality improves reduce quality
inspections!!!
Summarizing:
• Defects found early
are much less costly
that those found later
in the product life
cycle
• “Make it right the First
Time”
7 Tools of Quality Improvement
•
Check sheets used to gather information on problem
under investigation – where and how much
•
Pareto Diagram – the so called 80-20 chart used to
identify the “vital few” that cause the most problems –
helps to focus the improvement studies
•
Histogram – shows stratification in production
•
Scatter Diagram – used to identify relationships
between variables
7 Tools of Quality Improvement
• Flow Charts – describes, visually, the process
under study. Allows teams to focus on problem
areas and structural issues
• Cause-and-effect diagrams – also called
fishbone diagrams relates relationships between
various factors influencing the problem under
study.
• Control Chart – charts of SPC to that assess
status of the problem under study.
An Aside – Quality and Process
Control in Foundry
• Lets look again at last week Economics
Problem
• Your Homework saw only part of the whole
problem
• Those “separated” parts that didn’t justify
saving the machine
• Total Quality Management suggest that we
strive for continuous improvement and delight
our customers by exceeding their expectations
• Lets see what fixing quality and getting smaller
lots through in less time can do for us.
Machine Replacement analysis – After Tax
Basis with added QuickChange Tooling
• When purchased, average “Lot Size” was 7500
molds and patterns took 45 minutes to change
• Currently, production lot size has fallen to 375
molds but with significant investment pattern
change is now 5 minutes
– Indicates 375/310 = 1.21 hr/pattern ‘run’ or 375 molds
every 1.21+0.083 (1.29) hours with pattern change
– Real Production rate is: 290 molds/hr (580 parts/hr)!
(fixing the horrors of JIT!)
Machine Replacement analysis –
After Tax Basis
• “Product Issues”
– Prod Costs (labor/mat’l/etc.)
= 7.00
– Avg. Sale Price
= 8.00
– NOTE: in most JIT systems cost must drop 5 –
10% annually to customer!!!!
• Annual Income Defender (Rev – Costs)
– Costs: Pr. Cost (All Castings) + Q. Costs + M. Costs =
7*(580*18*251) + 109150 + 12000 = $18,364,230
– Revenue: Price * #Good Parts = 8*(580*18*.971*251) =
$20,355,578
– Income: 20,355,578 - $ 18,364,230 = $1,891,350
ATCF for this case w/ Quick
Change tooling added on:
YR
0
BTCF
Deprec.
-650000 na
Tax. Inc
Taxes
ATCF
NPV at 12%
-103750
39425
-610575
-610,575.00
1
1891492.2
156250
1735242
-659392
1232100
1,100,142.23
2
1891492.2
111250
1780242
-676492
1215000
968,598.13
3
1891492.2
111250
1780242
-676492
1215000
864,837.11
4
1891492.2
111250
1780242
-676492
1215000
772,132.60
5
1891492.2
56250
1835242
-697392
1194100
677,532.43
5
220000
220000
-83600
136400
77,393.36
PV@12%
$3,850,060.87
Present Worth Comparison -- Now
• We are much closer to the
Challengers NPW of $4,422,000 but
still we still “make the purchase”
• Lets see the effect of fixing the
Quality Issues
– Now we work 20 hour/day
– Quality Iceberg costs fall to $7000 to do
spot inspections and pay warranty
claims
– Production Quality increases to 99.5%
good!
Machine Replacement analysis – After Tax
Basis with Quality Issuss ‘Fixed’
• When purchased, average “Lot Size” was 7500
molds and patterns took 45 minutes to change
• Currently, production lot size has fallen to 375
molds but without significant investment pattern
change is still 45 minutes
– Indicates 375/310 = 1.21 hr/pattern ‘run’ or 375 molds
every 1.21+.75 (1.96) hours with pattern change
– Real Production rate is: 190 molds/hr (380 parts/hr)!
(still experiencing the horrors of JIT!)
Machine Replacement analysis –
After Tax Basis
• “Product Issues”
– Prod Costs (labor/mat’l/etc.)
– Avg. Sale Price
= 7.00
= 8.00
• Annual Income Defender (Rev – Costs)
– Costs: Pr. Cost (All Castings) + Q. Costs + M. Costs
= 7*(380*20*251) + 7000 + 12000 = $13,372,200
– Revenue: Price * #Good Parts = 8*(380*20*.995*251) =
$15,184,500
– Income: $15,184,500 - $13,372,200 = $1,812,300
ATCF for this case w/ Quality
Issues ‘Repaired’:
YR
BTCF
Deprec.
Tax. Inc
Taxes
ATCF
NPV at 12%
0
-650000 na
-103750
39425
-610575
-610,575.00
1
1788200
156250
1631950
-620141
1168059
1,042,959.88
2
1788200
111250
1676950
-637241
1150959
917,544.51
3
1788200
111250
1676950
-637241
1150959
819,252.62
4
1788200
111250
1676950
-637241
1150959
731,434.44
5
1788200
56250
1731950
-658141
1130059
641,195.48
5
220000
220000
-83600
136400
77,393.36
PV@12%
$3,619,205.29
Present Worth Comparison -- Now
• We are close to the Challenger’s NPW of
$4,422,000 but still we “make the purchase”
• But, as a rational organization, why wouldn’t we
consider doing both? Then:
– We can work 20 productive hour/day
– Quality Iceberg costs fall to $7000 doing spot
inspections and to pay (a few) warranty claims
– Production Quality increases to 99.5% good!
– And our hourly production rate increases to an
average of 580 castings an hour
Machine Replacement analysis – After Tax
Basis with added Q.Change Tooling
• When purchased, average “Lot Size” was 7500
molds and patterns took 45 minutes to change
• Currently, production lot size has fallen to 375
molds but with significant investment pattern
change is now 5 minutes
– Indicates 375/310 = 1.21 hr/pattern ‘run’ or 375 molds
every 1.21+0.083 (1.29) hours with pattern change
– Real Production rate is: 290 molds/hr (580 parts/hr)!
(fixing the horrors of JIT!)
Machine Replacement analysis –
After Tax Basis
• “Product Issues”
– Prod Costs (labor/mat’l/etc.)
– Avg. Sale Price
= 7.00
= 8.00
• Annual Income Defender (Rev – Costs)
– Costs: Pr. Cost (All Castings) + Q. Costs + M. Costs =
7*(580*20*251) + 7000 + 12000 = $20,400,200
– Revenue: Price * #Good Parts = 8*(580*20*.995*251) =
$23,176,340
– Income: $23,176,340 - $20,400,200 = $2,776,150
ATCF for this case w/ Fixed Quality
& Q. Change Investment
YR
0
BTCF
Deprec
.
-650000 na
Tax. Inc
Taxes
ATCF
NPV at 12%
-103750
39425
-610575
-610,575.00
1
2776336.4
156250
2620086
-995632.8
1780704
1,589,990.21
2
2776336.4
111250
2665086
-1012733
1763604
1,405,944.76
3
2776336.4
111250
2665086
-1012733
1763604
1,255,333.01
4
2776336.4
111250
2665086
-1012733
1763604
1,120,770.06
5
2776336.4
56250
2720086
-1033633
1742704
988,810.00
5
220000
220000
-83600
136400
77,393.36
PV@12%
$5,827,666.39
Now we have final identified the
capital source to achieve our goals!
• NPW of (totally) Fixed
Defender is nearly $1.4M
greater than the Challenger
• Really, if I was investigating
expenditures, why wouldn’t I
focus on doing both?
• A RATIONAL
ORGANIZATION would
investigate solving all their
problems before investing in
expensive new technologies
This Thinking is Captured in the
Juran Trilogy
Lets consider the issue of Productivity
‘Considering Quality’
• We can define a processes Yield:
– Yld = I(%G) + I(1-%G)(%R)
• I = #units started
• %G is percentage of good product output
• %R is percentage of defects that can be re-worked (at added cost)
– Per Station in a System
• Example:
– Yld = 500(.94) + 500(1-.94).75 = 492.5 units on average
• Note: ¾ of the initially scraped items are recovered thru rework
– Given that direct Mfg costs are $57/unit and rework is ½ of this or $28.5
– Unit cost of each product shipped is
{KdI + Kr(I(1-%G)(%R))}/Yield
– Here: {57*500 + 28.5*22.5}/492.5 = $59.17/shipped unit
Product Yield in a “Multi-Stage” System
(we will neglect Rework for now)
• Yld = I(%g1)(%g2)(%g3) … (%gn)
• Looking at a 4 station line with the following quality
achievements:
•
•
•
•
St1: 94%
St2: 78%
St3: 92%
St4: 87%
• Starting with 500 pieces we only see:
• 500*.94*.78*.92*.87 = 293 totally good pieces make it
through the system!
• But if I need 500 to ship?
• Start with Yld/{(%g1)(%g2)(%g3) … (%gn)} = I (solve for I)
• Here I = 852 units
Product Yield in a “Multi-Stage” System
(we will neglect Rework for now)
• Given that a raw materials cost is $100 here. A
Quality Team may ask how much they could
invest in quality improvement along this line? –
initial target is to improve quality performance by
¾ at each station
• After Improvement:
–
–
–
–
St1: %g1’ = 100-.06*.25 = .985 (98.5%)
St2: %g2’ = 100-.22*.25 = .945 (94.5%)
St3: %g3’ = 100-.08*.25 = .98 (98%)
St4: %g4’ = 100-.13*.25 = .9675 (96.75%)
• Compute a new I’ value
Product Yield in a “Multi-Stage” System
(we will neglect Rework for now)
• New I’ = 500/(.985*.945*.98*.9675) = 566.53
• Still many defects (so we should keep trying to
improve) but this is a raw mat’l savings of 285
unit started/day compared to the starting point
• Or a savings of about $28550 each day thus
• $28550*250 = $7.1M a year saved here
• This is a huge amount of $’s saved that can be
invested in fixing the quality problems!
• But what would happen if we were to produce at
“6-Sigma” Levels?
• 6-Sigma was developed by Motorola to push the
systems to reduce defectives to 3.4 ppm (not 2%
-- or 20,000 ppm!)
Six Sigma Can Be Defined In
Many Ways.
• It’s a way of measuring processes;
• A goal of near perfection, represented by 3.4 defects per
million opportunities (DPMO);
• An approach to changing the culture of an organization.
• Most accurately, though, six sigma is defined as a broad and
comprehensive system for building and sustaining
manufacturing performance, success and leadership.
• In other words, six sigma is a context within which you will be
able to integrate many valuable best practices and concepts,
including system thinking, continuous improvement,
knowledge management, mass customization and activity
based management
Why Six Sigma?
“The central idea behind Six Sigma is that if you
can measure how many “defects” you have in a
process, you can systematically figure out how to
eliminate them and get as close to “zero defects”
as possible. Six Sigma has changed the DNA of GE
in everything we do and in every product we
design.”
The GE Company
Examples of the Sigma Scale
In a world at 3 sigma. . .
In a world at 6 sigma. . .
• There are 964 U.S. flight
cancellations per day.
• 1 U.S. flight is cancelled every
3 weeks.
• In MA, 5,390 newborns are
dropped each year.
• 1 newborn is dropped every 4
years in MA.
• In one hour, 47,283
international long distance
calls are accidentally
disconnected.
• It would take more than
2 years to see the same
number of dropped
international calls.
Examples of what life would be
like if 99.9% were "good enough:"
•
1 Hour Of Unsafe Drinking Water Every Month
•
2 Long Or Short Landings At Every American Airports Each Day
•
400 Letters Per Hour Which Never Arrive At Their Destination
•
500 Incorrect Surgical Operations Each Week
•
4,000 Incorrect Drug Prescriptions Per Year
•
22,000 Checks Deducted From The Wrong Bank Account Each Hour
•
32,000 Missed Heartbeats Per Person Per Year
The Significance of ±6σ – In Complex
Manufacturing
99.99966% (3.4 NCPPM)
±6σ
100.00%
99.6605768% (3394.2 NCPPM)
Percentage of Undefected Products
99.7% (3000 NCPPM)
99.7% (3000 NCPPM)
80.00%
1 component at ±3σ
is Equivalent to
885 components at ±6σ!
60.00%
40.00%
±3σ
20.00%
4.96% (950436.9 NCPPM)
0.00%
0
1
200
400
600
Opportunities for Defects (OFD's)
800
885
1000
1200
Significance of 6Sigma in Modern
Manufacturing:
• Complex assemblies with large # of parts
can’t be delivered defect free without very
high quality levels for individual
components
• Traditional 3-Sigma system (99.7% good)
are really no match for 6-Sigma Systems
(99.99966% good)
• But 6-Sigma needs tools – it is a
methodology as well as a quality target!
Traditional QualityView vs. Six Sigma
QualityView
Traditional View
Six Sigma View
“Errors are inevitable”
“Errors can be eliminated”
•
•
•
•
•
•
•
Focus on cost
Quality not important
Culture of radical change
Little analysis performed
Cut middle management
Sporadic labor productivity
Brand erosion
Cost improvements
result in net income
•
•
•
•
•
•
•
Focus on customer requirements
Increased awareness of quality
Culture of continuous improvement
Data-driven analysis
Includes suppliers
Continuous productivity
Brand enhancement
Cost and Quality improvements
result in market share
Recognizing Quality
• Deming Prize. Established in Japan in 1951 by
quality guru W. Edwards Deming. The prestigious
prize has been awarded to Japanese companies
almost every year since inception in several
categories.
• Malcolm Baldrige National Quality Award
established by the U.S. Dept of Commerce in 1987
recognizes excellence in a) manufacturing
companies b) service companies and subsidiaries,
and c) small businesses.
• ISO 9000. A certification program established by
the International Organization for Standards based
in Switzerland. Certification can cost upwards of $1
million for large companies.
Listening to the Customer
An important part of TQM is determining what the
customer wants. This is done via
• Focus groups
• Customer interviews
• Customer surveys
Downsides: customers are not in a position to think of
new possibilities, or customers desires are
technically impossible to achieve. Also, surveys can
lead to bias depending on the manner in which
questions are worded.
QFD and the Customer’s voice: Using the
House of Quality
•
•
The House of Quality is
used to match up
customers desires with
capabilities during product
and process design
The Matrix allows a
company to examine
– Whats vs Hows
(relationship matrix)
– Whats vs Whys (Customer
competitive assessment)
– Hows vs Hows
(Correlation Matrix)
– How Much vs Hows
(Engineering Competitive
Assessment)
What about a Paper Maker?
• List Customer
Desires
• Shows how well they
are met by us and
competitors
• Compares Customers
desires to technical
Requirements (as
defined)
• Weighs importance
and technically
evaluates how well
we are doing
Breaking down the House of
Quality
• See Slide
Following from the customer to the
Product
• To employ the
approach, companies
start by assessing
needs of the
customer
• Then they feed the
ideas forward to:
– Product Design
– Process Design
– Production Design
• From Marketing all
the way to the worker
on the floor
Organizing for Quality
• The quality function should
not be relegated to a single
department, but should
permeate the entire
organization
• The quality function must
have an ongoing contact
with customers.
• Must transcend functional
organizational boundaries
• Must be overseen from a
high level of the firm.