Cost of Poor Quality

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Materials info consultancy private
limitedwww.materials-info.com

• Cost of Poor Quality and how to address the same

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Improving process Quality of your suppliers

• Terminolgy
• Cost of poor quality (COPQ) The costs
  associated with providing poor quality products
  or services.
• There are four categories
• internal failure costs (costs associated with
  defects found before the customer receives the
  product or service),
• external failure costs (costs associated with
  defects found after the customer receives the
  product or service),
• appraisal costs (costs incurred to determine the
  degree of conformance to quality requirements)
• prevention costs (costs incurred to keep failure
  and appraisal costs to a minimum).
•  

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Improving process Quality of your suppliers

• Ever Changing customer requirement 
• In this competitive scenario the customer
  requirements keep changing in terms of defects
  acceptance standard.
• Gone are the days of the catagorization of
  defects in IPTV i.e incidence per thousand
  vehicle. Now it is ppm i.e parts per million.
• Again the need for this ever changing customer
  requirements lies in competition, environment and
  other regulations, Government policies, end user
  requirement/preferences

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Improving process Quality of your suppliers

• Consequences of this change
• The Manufacturer needs to maintain the required
  ppm level demanded by end customer.
• Any higher level of ppm occurring in the company
  due to various reasons including in coming
  supplies, manufacturing issues etc need to be
  absorbed by the Manufacturer.
• Increase the cost of inspection in terms of
  resources to avoid the defects being passed on to
  the customer
• Increase in the cost of production

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Improving process Quality of your suppliers

• Consequences of this change
• Still there are chances of defects being passed
  on to the end customer , thus attracting penalty
  clauses and possible loss of business.
• Resultant less focus by Manufacturer in
  continuous improvement programs, technology and
  intellectual property right generation programs.
• Chances of competitor getting more share of
  business
• Loss of Morale in working staff.

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Improving process Quality of your suppliers

• What is being Practiced in Industry
• Taking up the issues with suppliers for their
  material/process problems
• Demanding 8D and other reports of root cause
  analysis of the problem.
• Vendor development/STA team of the manufacturer
  interacting with suppliers for the closing of the
  issue
• Submission of action plan and root cause analysis
  by the suppliers

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Improving process Quality of your suppliers

• What is Missing
• Root cause analysis shall really be effective to
  find out the real reason of the problem which in
  many cases is not done properly
• This can happen due to timeline , project and
  other internal pressures at manufacturers end
  due to which the thrust is to close the problem
  in minimum time.
• The problem can repeat again either in the same
  product, some other similar project/product
• The idea shall be to simulate the defect creation
  and then closure of the same which in many cases
  does not happenin true sense.

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Improving process Quality of your suppliers

• Manufacturers expectations
• Maintaining the ppm of running projects as per
  the end customer requirement to avoid incurring
  rejection inhouse.
• Since any of such rejections can even become a
  field/warranty issue a proper root cause analysis
  in really critical to decide the design changes
  as required.
• Launch of new projects in a timely manner and
  meeting end customer expectations.
• The new project shall be launched within
  stipulated Quality i.e ppm and cost targets.

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Improving process Quality of your suppliers

• Vendor/suppliers point of view
• Ever changing manufacturer requirement during
  the project
• Excess pressure for closing the issue related to
  material/manufacturing during development/subseque
  nty without allowing required time and analysis.
• Requirements which are not feasible and can not
  be met for which manufacturer is too fussy..
• Vendor not having a feeling to be part of the
  whole project and not involved completely and
  only changes being told to them and that also at
  last moments with minimum time to react.

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Improving process Quality of your suppliers

• What we in Materials Info can do
• Taking up such specific material/manufacturing
  process issues with the suppliers
• Conducting awareness sessions at supplier end to
  make them realise the criticality of the
  material/process in the end product performance
  and making them feel their role and importance in
  the same.
• Working with suppliers at their premises
  throughout the process flow sequence.
• Identifying , understanding and solving the
  issues along with suppliers for both reported and
  known issues and for potential issues which may
  be faced in future.
• Conducting a detailed root cause analysis to make
  sure the simulation of the issue and proper
  corrective action and closing documentation to
  avoid recurrence of the problems.