Companywide Assesment Of Quality


Published on

Published in: Business, Technology
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Companywide Assesment Of Quality

  1. 1. Companywide Assesment of Quality By. Henmaidi, PhD. Industrial Engineering, Andalas University, Indonesia Based on Quality Planning and Analysis by Juran
  2. 2. Assesment Element <ul><li>Cost of poor quality </li></ul><ul><li>Standing in the marketplace </li></ul><ul><li>Quality culture </li></ul><ul><li>Operation of the company quality system </li></ul>
  3. 3. Cost of Poor Quality <ul><li>Definition: </li></ul><ul><ul><li>Cos of attaining quality </li></ul></ul><ul><ul><li>Extra cost incured due to poor quality </li></ul></ul>
  4. 4. Catagories of Quality cost <ul><li>Internal failure cost </li></ul><ul><ul><li>Scrap </li></ul></ul><ul><ul><li>Rework </li></ul></ul><ul><ul><li>Failure analysis </li></ul></ul><ul><ul><li>100 % sorting inspection </li></ul></ul><ul><ul><li>Reinspect/ retest </li></ul></ul><ul><ul><li>Avoidable process losses </li></ul></ul><ul><li>External failure cost </li></ul><ul><ul><li>Waranty charges </li></ul></ul><ul><ul><li>Returned material </li></ul></ul><ul><ul><li>Allowances </li></ul></ul>
  5. 5. Catagories of Quality cost <ul><li>Appraisal cost </li></ul><ul><ul><li>Incoming inspection </li></ul></ul><ul><ul><li>Final inspection and testing </li></ul></ul><ul><ul><li>Quality audit </li></ul></ul><ul><ul><li>Evaluation of stock </li></ul></ul><ul><li>Prevention cost </li></ul><ul><ul><li>Quality planning </li></ul></ul><ul><ul><li>New product review </li></ul></ul><ul><ul><li>Process control </li></ul></ul><ul><ul><li>Quality audit </li></ul></ul><ul><ul><li>Supplier quality evaluation </li></ul></ul><ul><ul><li>Training cost </li></ul></ul>
  6. 6. Example <ul><li>Example tyre manufacturer: </li></ul><ul><li>Total: $900.000 </li></ul><ul><li>71%: failure cost </li></ul><ul><li>Failure cost, 5 x appraisal cost </li></ul><ul><li>4.3 %: prevention </li></ul><ul><li>Consequences: </li></ul><ul><ul><li>Customer ill will </li></ul></ul><ul><ul><li>Customer policy adjustment </li></ul></ul>
  7. 7. Objective of Evaluation <ul><li>Quantifying the size of quality problem in term of money: improve communication </li></ul><ul><ul><li>Cost turn to be much higher than they had thought  (up to 20% sales) </li></ul></ul><ul><ul><li>It also reveals other problem areas </li></ul></ul><ul><li>Major cost reduction can be identified </li></ul><ul><li>Opportunity to reduce customer dissatisfaction </li></ul>
  8. 8. Relating the Grand Total to Bussiness measures <ul><li>Relationship which has greates inpact on upper management: </li></ul><ul><ul><li>Quality cost as % of sales </li></ul></ul><ul><ul><li>Quality cost compare to profit </li></ul></ul><ul><ul><li>Quality cost as % of COGS </li></ul></ul><ul><ul><li>Quality cost as % COGM </li></ul></ul><ul><ul><li>Effect of Quality cost on BEP </li></ul></ul><ul><li>Example: </li></ul><ul><ul><li>25% of manufacturing asset </li></ul></ul><ul><ul><li>25% of people </li></ul></ul><ul><ul><li>40% of space </li></ul></ul><ul><ul><li>70% of inventory </li></ul></ul>
  9. 9. Analysis of Quality Cost <ul><li>Relationship between internal and external cost: significant </li></ul>
  10. 10. <ul><li>To achieve significant cost reduction, failure cost must be attached first </li></ul><ul><li>An increase in prevention cost  lower failure cost </li></ul><ul><li>The largest opportunity for cost reduction is for product A. </li></ul><ul><li>Product A generate scrap and rework internally, but there are also external problem. Product B and C, the problem: internal and rework </li></ul>
  11. 11. Hidden Cost <ul><li>Potential lost sales </li></ul><ul><li>Cost of redesign </li></ul><ul><li>Cost of chaningin manufacturing process </li></ul><ul><li>Cost of software change </li></ul><ul><li>Cost includes in standard: based on history </li></ul><ul><li>Extra manufacturing cost due to defect </li></ul><ul><li>Scrap not reported </li></ul><ul><li>Excess process cost for acceptable product </li></ul>
  12. 12. Discovering the Optimum <ul><li>For manufacturing: Cost of quality is about 15% of sales income (5 – 35%) </li></ul><ul><li>For service: 30% of operating expense (25 – 40%) </li></ul>
  13. 13. Zone of Improvement
  14. 14. Company Culture on Quality <ul><li>Employees in organization have opinion, beliefs, traditions, and practices concerning quality: </li></ul><ul><li>Example: in a health care products industry: </li></ul><ul><ul><li>Use group approach </li></ul></ul><ul><ul><li>Round table of 15 individual </li></ul></ul><ul><ul><li>Series of topical graph was used </li></ul></ul><ul><ul><li>Held in 3 days </li></ul></ul><ul><li>Using questionnaire </li></ul><ul><li>Understanding quality culture is important for assesment </li></ul>
  15. 15. Assesment of current quality activities <ul><li>Have quality objective been established </li></ul><ul><li>Have quality objective been linked to bussines objectives </li></ul><ul><li>Are policies and plans  quality will be competitive </li></ul><ul><li>Is the approach led by management </li></ul><ul><li>Does it cover all process? </li></ul><ul><li>Effective system for early warning? </li></ul>
  16. 16. Systematic Approach <ul><li>MBNQA </li></ul><ul><li>ISO 9000 </li></ul>