The document discusses the QCD (Quality, Cost, Delivery) management approach, initially developed for the automotive sector, aimed at measuring and improving manufacturing processes through data-driven decision making. It outlines the essential components of quality, cost types, delivery expectations, and profitability measures relevant to the QCD framework. The methodology promotes lean manufacturing principles and is applicable across various industries to enhance business performance.

1. Quality (Q) – Cost (C) –
Delivery (D)
Rahul Laxman Iyer
ASQ Certified Quality Engineer
Mesa AZ
2 November 2015

2. Introduction
● Q-C-D is a management approach originally
developed to help companies within the
automobile sector
● Utilized to access different components of the
production process
● Used to provide accurate feedback in the form
of facts and figures that help senior managers
make logical and beneficial decisions
● Aids in prioritization of tasks required
● Focus of Lean Manufacturing

3. Benefits of Q-C-D
● Straight forward method of measuring processes
● Applicable to both simple and complicated business
processes
● Basis for comparing businesses & processes
(Benchmarking)

4. Basis of Quality (Q)
● Performance: ability to meet primary operating
characteristics
● Conformance: the degree to which a certain
product meets the customer’s expectations
● Special Features: additional features of a product
or service
● Aesthetics: the product’s looks, sound, feel, smell,
or taste

5. Basis of Quality (Q)--continued
● Durability: how long the product lasts before it has
to be replaced
● Reliability: the time until a product breaks down
and has to be repaired, but not replaced
● Serviceability: speed, courtesy, competence and
ease of repair
● Perceived quality: affected by the high price or the
good aesthetics of a product

6. Basis of Quality (Q)--continued
● Product components
– The quality of a product depends almost entirely on
the quality of the supplied materials
– One cannot produce a high-quality end product from
low-quality components
● Consequences of poor quality
– Business loss
– Reduced Productivity
– Increased Costs

7. Basis of Cost (C)
● Four Types Of Manufacturing Costs
– Raw materials
– Direct Labor
– Variable Overhead
– Fixed Overhead
● Cost Reduction
– Reducing material costs
– Adopting lean manufacturing
– Upgrading machine technology
– Implementing robot-based automation

8. Basis of Delivery (D)
● Being On Time When Promised Per Contract
– Not Being Late
– Not Being Early

9. Increasing profitability with
QCD
● Seven measures used to increase profitability ( "QCD:
measuring manufacturing performance" (PDF). http://nationalarchives.gov.uk
– Not right first time (NRFT): Wasted resources, effort and time –Cost of
Poor Quality (COQ, COPQ)
– Delivery schedule achievement (DSA): analyzes how well a supplier
delivers what the customer wants and when they want it
– People productivity (PP): The time it takes (in staff hours) to produce a
good quality product
– Overall equipment effectiveness (OEE): Measure of how well a
company uses its equipment and staff (Availability, Performance,
Quality)
– Value added per person (VAPP): Measure of how well people are used
to turn raw materials into finished goods (Output Value, Input Value,
Number of Employees)
– Floor space utilisation (FSU): Measures the sales revenue generated by
a square meter of factory floor space

10. Increasing profitability with
QCD: Calculations Illustrated
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11. Increasing profitability with
QCD: Calculations Illustrated -
Continued
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12. Quality (Q) – Cost (C) –
Delivery (D)
● Q-C-D is a management methodology that can be
used for lean manufacturing and process
improvement
● Originated in automotive industry, but can be
applied to virtually almost any industry
● Emphasizes making decisions based upon data
● A tool to improve business profitability