P a g e
PROCESS CONTROL AND IMPROVEMENT
Lecturer: Giang Nguyen SCLM 449
Case Study 2
Nguyen Hieu Nhi
Nguyen Thi Ai Vinh
Nguyen Thi Tu Trinh
Truong Thi Tu Nguyen
Duong Thi Phuong Thao
Summary of the current situation and quality management system of VWG 3
Suitable alternative tools and techniques 4
New approaches for quality management system for the company 5
Recommendations for implementation action plan and possible timeline 7
P a g e
I. Summary of the current situation and quality management system of VWG
In 1947, VWG had been founded in Blackpool. This company began to manufacture hand crafted automotive parts.
In the early 90s, small sports cars became popular, they decided to make an innovation. It means that they would modify, assemble in order to enhance the quality of cars. Their products are premium cars which are different from the other companies. Therefore, they placed craftsmanship ate the heart. This was why their products have a high price.
In 2010, with the demand of customers, VWG sold their in-house products and designs to other car assembly plants. Moreover, they could manufacture high end a chrome plated gear shift, dash surround assemblies and door handle which were their innovation.
With this achievement, their products penetrated the foreign market.
However, in 2013, turnover was higher than £38 million, pre-tax profits were only £2.8 million which was seen as the lowest profit margin in the previous 5 years. The CEO explained that: “During the transition, the company has not achieved efficiencies of production, so we have to find some solutions to fix this problem.’’
Quality management system:
· Firstly, all cars which leave the assembly line will be inspected in order to ensure that they satisfy the high standards of the company.
· Secondly, they take 10% most items as a batch “ sample basis” in order to check the quality. This activity will be completed after the polishing process but before packaging process. If any batches are rejected, they will be inspected 100%. Regarding the chrome plated gear shift, they will be inspected 100% for both surface finish as well as dimensional accuracy. If the degree of the defect can not accept, rejected parts will be reworked or scrapped.
· Thirdly, Quality Assurance Department staff have a right to check quality problems of the production staff. But in fact, the quality and manufacturing team can negotiate together. Therefore, the inspectors are usually joked and pranked in terms of enjoying the expense of Jonh’s team.
II. Suitable alternative tools and techniques
From the perspective of finding the problems in the VWG car manufacturing company in the early stage, there are many factors related to the quality issues in the company thereby needing a tool that has specific features in defining, analyzing and covering the whole problems. Therefore, we should use the cause – n – effect diagram (Fishbone diagram, Ishikawa).
The Polishing Shop
Do not know how to decide what constitutes a serious scratch that needed to be
Unsure how to measure the
The production team was too busy to discuss about keeping production levels
The production staff thought the expectation was too
The bonus are paid for production efficiency not
The production staff could not spend all day worrying about every little
One batch of gear sticks had deep scratches and half of them had serious dints,
The perception between Sam Aston in the polishing shop and Bill Ratchet, the production supervisor were
THE QUALITY ISSUE
100 cars sold, around five had been returned with complaints about paint defects, dented body panel and serious electrical problem.
When the customers returned the products which must cost a lot of money in the long
The overtime costs is largely due to re – working product in Polishing and on the car line.
Customers Services and the sales team
The reason why we choose this diagram in order to define and analyze the dilemma in this case:
· Firstly, this tool can describe the relationship clearly and logically. From this diagram, we can recognize what departure in the company has the most influent in the quality thereby recognizing the small details in each reason easily.
· Next, show all causes simultaneously. Any cause or causal chain featured on the fishbone diagram could lead to the problem. Therefore, we can pursues and visualize the chain of the problems and know the reason that made a great contribution to the problems more easily.
· Finally, using the Fishbone diagram (Ishikawa) we can brainstorm all the process and factors that play a crucial role in causing the dilemma. Thus, having the whole picture about the problems in finding the solution might lead the result effectively.
III. New approaches for quality management system for the company
The VWG has been applied some methods such as 5S, Kaizen and Total Productive Maintenance (TPM) but they are not efficiency and accuracy. Hence, there were many mistakes cannot be eliminated. The firm should apply “six sigma” quality control method to deal with any problems and improve the quality level of the products. Six-sigma is a methodology to enhance the capacity of business processes based on statistic to reduce defects and improvement in profits and quality of cars as well as customers satisfaction.
This method can find defects per millions by five phases:
Define the issue, improving activity, the project goals, and customer (internal and external) requirements. It is important to understand the voice of customers to understand mistakes of the process need to be solved.
There are some problems in car production, the rework and customers return costs.
The purpose of this phase is to collect data from the process performance and understand the current quality of products. To be more precise, the team focuses on measure what data is collected and from what source which takes time and effort to the team. It is critical and possible to gain the most reliable results.
Employees should conduct 100% quality inspection for cars.
The purpose of this phase is to research the business process and the data collection to determine potential root causes of variation, waste, and defects. In this phase, the team uses statistical data analysis techniques to arrive at potential causes of the issue. Statistical data tool is necessary to gain value of this stage of this process.
Having about 10 cars returned with defects and complaints from customers per 100 cars sold. The client complains about paint mistake, noisy brakes, air conditioner not working or attitudes of sellers. Hence, the managers should have some punishes and training again for their employees.
Improving process performance by addressing and eliminating the root causes. This means that the team should choose a solution to improve the system. This is a phase for staffs to create new ways to do something better, cheaper or faster.
Controlling the improved of the process and future process performance. The team set up controls to sustain the system improvements and implements the solution and transfers the new improved process to the responsible owner.
Total Quality Management (TQM)
The VWG should also apply the Total Quality Management (TQM) methods to deal with the quality problems.
TQM method uses to improve quality and performance in the organization which will meet client expectations. The purpose of TQM is to ensure all employees work toward the objectives of improving goods quality as well as improve productivity and maintaining employee morale.
To be successful, VWG should focus on eight key elements:
Ethics is the discipline concerned with good and bad in any situation. Organization establishes a business code of ethics that all staffs are to adhere in the performance of their work. Individual ethics include personal rights or wrongs.
Integrity implies honesty, morals, values, fairness, and sincerity.
Trust is important to make sure customer satisfaction. Therefore, trust builds the cooperative environment crucial for TQM. It allows decision making at appropriate levels in the organization.
Training is very important to enhance productivity for employees. Supervisors are responsible for implementing TQM within departments and impart knowledge for their employees the philosophies of TQM.
To become successful in business, teamwork is also a crucial element of TQM. Teams provide more permanent improvements in processes and operations. It helps the business receive a better solution to solve problems. Therefore, the VWG should encourage employees to concentrate in teamwork.
It is the most important element in TQM. Leadership is common in the organization and requires the manager to provide an inspiring vision, make strategic directions that are understood by all values. More importantly, the supervisor has to commit in leading his employees to be successful in the business.
It binds everything together. The success of TQM demands communication with the organization members, suppliers, and customers. Communication with sharing of correct information is important.
It should be provided for both suggestions and achievements for teams as well as individuals.
IV. Recommendations for implementation action plan and possible timeline
We use PDCA (plan-do-check-act) to implement approaches including Six-sigma and the Total Quality Management for improving quality management system for the company. This is a cycle with four steps consisting of planning, doing, checking and acting. In these steps, we will explain what the company will implement the action plan with a possible timeline.
· Plan: they need to collect information to describe the whole problem through using use the cause – n – effect diagram (Fishbone diagram, Ishikawa). Thanks to this tool, they
can discover and analyses the root cause. And this is the quality issue. Thus, to solve this problem, we recommend the company the approaches including Six-sigma and the Total Quality Management. We think that it takes five days to implement. It means that they spend one day for collecting data and two days for analyzing the data to find the problem. After that, we spend two days to decide what approaches will be applied.
· Do: the company will execute as we planned. We will implement Six-sigma and Total Quality Management approaches to improve the quality level. It takes 10 days to implement this step.
· Check: the company needs to audit internally to determine the level of compliance. They also have to monitor the quality inspection. It means that they observe the level of defections through the control chart. Whether or not the defections excess the upper control level and the trend of defections. Depending on this chart, they can know how well or badly they apply the strategy. We think this step will happen within five days.
· Act: standardization of the successful solution to continual improvement. The company has to review the process that if the fraction defective excess the upper control level, they need to fix immediately. This step takes the company five days to do this step.
The company didn’t achieve the efficiency of production and the problem is the quality. The VWG has applied many ways to enhance the quality, but they are not efficiency and accuracy because of many mistakes cannot be eliminated. The board of director decides to use suitable alternative tools and techniques to find and evaluate the problems before solving them. The company then applies many methods to deal with quality problems. Firstly, the company use the six-sigma method to control the quality, the six-sigma is a good methodology to improve the quality to help find the defects through five phases. Finally, Total Quality Management (TQM) method solves the quality problems. TQM improves production and maintaining employee morale to enhance the quality.
ASQ (n.d). What is Six Sigma? Retrieved from
Investopedia (n.d). Total quality management-TQM. Retrieved from http://www.investopedia.com/terms/t/total-quality-management-tqm.asp
Master (n.d). The DMAIC approach: 5 phases of six-sigma. Retrieved from https://blog.masterofproject.com/dmaic-six-sigma/
Padhi (n.d).The Eight elements of TQM. Retrieved from https://www.isixsigma.com/methodology/total-quality-management-tqm/eight-elements- tqm/