Quality In a Virtual World

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Quality In a Virtual World
MSE 269 Quality and Operations
Management Special Presentation March 9, 2001
Zac Ballard Stan Baran Ed Li Eric
Lupo
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Dilbert, by Scott Adams
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Introduction

• No discussions in coursework re. managing
  outsourcing
• Outsourcing and global supplier/OF partners are a
  growing trend.

• HP organizations are taking up this trend, but
  many business leaders lack experience about what
  outsourcing entails and how it can be effectively
  managed
• The discussion today is centered around
  outsourcing and how quality is managed within a
  outsourced environment.
• The goal is to provide a few key takeaways that
  may help you in your future positions.

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What is Outsourcing?
Outsourcing is the strategic use of outside
resource to perform activities traditionally
handled by internal staff and resources.
Why Outsource?
Where is the money spent?
1.Reduce and control operating costs 2.Improve
company focus 3.Access to world-class
capabilities 4.Free resources for other purposes
5.Resources not available internally
6.Accelerate reengineering benefits 7.Function
difficult to manage 8.Share/Reduce risk 9.Make
capital funds available 10.Cash Infusion
Source The Outsourcing Institute. 2000
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Setting the stage

• The company has changed to an aggressive
  outsourcing strategy
• Any function eligible for outsourcing
• Confusion and organizational settling
• Three situations RD Outsourcing, Mfg
  Outsourcing and the Quality group itself
• Quality recognized as a basis for competition
• The core of what was considered quality (white
  coats) has shifted to the contract manufacturer

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Aegis Program

• What was the situation confronting the Aegis
  program?

• Outsourcing control chip used in the aegis
  product
• 1st prototypes built. 4/6 non-operational.
• Unclear what the problem maybe
• Suspect third tier manufacturer
• Incomplete or mismatch in desired specifications
• Group is facing time to market pressure. Quality
  vs TTM
• Having difficulty moving forward with Excetech

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Subcontracting RD
What could you do to avoid this situation in the
future?
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QFD Approach
Source Guinta, L.R. and Praizler, N.C. (1993).
The QFD Book. AMACOM Books, New York.
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Dilbert, by Scott Adams
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The best option for subcontracting?
vote
CM

• Dont

In-house
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Subcontracting Manufacturing

• How do you assure quality when subcontracting
  manufacturing?

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Q Dept. in a Virtual World

• What Roles Work?
• Advisor
• Consultant
• Data/Analysis of Customer Satisfaction
• Trainer
• Design Team Member
• Customer Trouble Shooting
• SPC(?)

• What Roles Dont Work?
• Police/Sheriff
• Data Gathering of process (CMs should be doing
  this)
• Implementation
• Nagging

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Rethinking Outsourcing
Core
Context

• Best Practices for Quadrant 1
• Build controls
• Retain visibility after outsourcing.
• Constantly monitor risk position

Engage
Disengage
Mission Critical
Control
I
II
III
IV
Supporting
Entrust
Source Geoff Moore. Comments at ITL Seminar on
3/2/2001.
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Top 10 Factors for Successful Outsourcing
1.Understanding company goals and objectives 2.A
strategic vision and plan 3.Selecting the right
vendor 4.Ongoing management of the relationships
5.A properly structured contract 6.Open
communication with affected individual/groups 7.Se
nior executive support and involvement 8.Careful
attention to personnel issues 9.Near term
financial justification 10.Use of outside
expertise
Source The Outsourcing Institute
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Five Ways to Improve Contracting
1.Use Quality Functional Deployment 2.Use a
teaming approach 3.Use a group-based integrated
planning approach 4.Incorporate change into the
model 5.Focus Metrics on customer satisfaction
and quality
Source Five Ways to Improve the Contracting
Process
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Summary / Takeaways

• Subcontracting is a reality most of us can
  count on working with it. But there are various
  alternatives.
• Quality in a virtual world is a mindset
  --Integrate Quality ownership into all
  departments.
• Quality group itself needed but changed in
  function.
• Strong management and leadership is key
• Clear concise communication
• From management to the employees
• From the company to the contractor
• Partnering helps achieve goals on both sides.
• Integrate Quality ownership into all departments.