ETCETERA, INC.

A Case Study In Quality Improvement

by

D. L. Kimbler, Ph.D., P.E.Department Of Industrial Engineering

Clemson University

Copyright D. L. Kimbler 1991. All Rights Reserved.

1. Introduction

Etcetera, Inc. is a manufacturer of specialty key tags. They have aproduct line of metal and plastic key tags, some of which have standard symbolsand messages; some items may be customized. Their primary market is college bookstores and similar off-campus stores, and they produce their standard productswith symbols for this market. Custom products have standard symbols withadditional messages; these are typically purchased by campus organizations topromote or commemorate special events. The company has been in business for 15 years, and has been moderatelysuccessful. There are 175 employees, 120 of whom are in production orproduction-related jobs. The company has grown steadily over the years. It hasdeveloped a reputation among its major customers for timely delivery and goodproducts at a reasonable cost. The company had $8,000,000 in gross sales lastyear, an all-time high. The company is a family-owned business, but isconsidering converting to an employee stock ownership plan. There are rumorsthat the president and major owner is considering retiring within the next fewyears. The owners of Etcetera are considering diversifying into a less capital-intensive mode. While their market has been good, they would like to hedge theirinvestments. They have selected desktop publishing as a service to provide tothe same market they now serve. This would involve publishing things such asnewsletters, promotional publications, and small books that could be produced atlow cost and sold profitably in small quantities. They expect their customerswould be student organizations and small colleges that do not operate their ownpresses. This diversification would be less equipment intensive than theirpresent product line, and would take advantage of their existing marketingnetwork. This company is at a crossroads, and the management seems to recognize it. They are considering both expansion and major reorganization. They are alsobecoming concerned with competition. Since the product line involves relativelysimple technology, it is certainly possible that competitors could become afactor. Existing competitors tend to operate within the regions that they serve,so competition within a region is virtually non-existent. In fact, most of thecompetitors in this market act as if they belong to an exclusive club, and so farthere has been a congenial and amiable relationship among the companies thatshare this market. Recently, however, a key tag producer in another part of the country waspurchased by a group of Canadian entrepreneurs, ostensibly to procure aproduction facility to support a similar market among Canadian colleges. Thishas the owners worried. Not only has a stranger joined the club, but the plansof the new company are not clear. There is a possibility that an infusion ofcapital into the newly purchased company would lead to an attempt to take marketshare. This potential attack on market share, possibly coming during areorganization of the company, has the Etcetera owner group concerned. Theywould like to sell their holdings and move to Keowee Key, but they feel an almostpaternal responsibility to the company. While they believe the company is securein the short term, they would like to leave it in a state conducive to successin the long term. A few of the owners have attended seminars on quality at tradegroup meetings and professional society meetings, and the others have read ofchanges taking place in many industries. They have decided that quality is thekey to retaining market share. You have been hired as a quality improvement specialist. In communicationswith the company so far (which have been limited to meetings with the president),you have learned a few general things about the company, mostly the historydescribed above. Your job is to conduct a comprehensive study of operations,

recommend quality improvement actions, and assist in developing a long-termquality improvement strategy.

2. Meetings with Key Personnel It is a truism that the people in the system know how to run it, and areyour best resource for finding improvements. Your initial task, then, is to talkwith some key people. They can show you how the system operates, share their ownideas, and be of invaluable assistance in your study. At the same time, you mustrecognize that they are products of their environment and education. Some thingsyou learn from them might be incorrect, some might be untrue, and almost all willhave inherent biases. Part of your job will be to discover the facts of thesituations. With some knowledge of the company and its products and processes, you canidentify a few key people, by position if not by name. You begin by seekinginterviews with these people. You may have a few key questions to ask each ofthem, depending on the work they do. You may also adapt or focus your interviewsbased on what you have found. These meetings should result in a subjectiveevaluation of conditions and attitudes. Much of what you hear may be opinion oranecdotal; these need to be confirmed or rejected based on real data.2.1 Irving Magnate, President Irving Magnate has been with the company since itsformation. He worked for his father, Theodore Roosevelt Magnate (known as "OldT. R."), in Magnate Stampings in various capacities for 25 years. When Etceterawas formed, Irving was company controller and Old T. R. was president and CEO. Irving became president at Old T. R.'s retirement ten years ago. Irving Magnateis also the ownership spokesman; the other family owners are involved in otherenterprises (some are retired), and leave the operation of Etcetera to Irving. For all practical purposes, Irving Magnate is authorized to make all decisions,including reorganization of the company. Irving's style of management could best be described as "enlightenedpaternalism". He thinks of himself as a surrogate father to the employees, andthese feelings are reciprocated. He is very concerned about the fate of thecompany and its employees after his retirement, and this has led him toinvestigate reorganization into an employee-owned enterprise. He has read extensively on issues in quality, and recently attended aseminar presented by a well-known consultant. He has come to the conclusion thatquality is the key to retaining market in an environment that is potentially morecompetitive that what now exists. Being both open-minded and conservative (notnecessarily a contradiction), he is receptive to change, but wants it justifiedand a new stability reached before reorganization. The meeting takes place in Irving Magnate's office at the plant. He offersyou coffee, and engages in casual conversation while he serves it. Uponreturning to his desk, however, he becomes all business, and asks "Where do westart?" "Mr. Magnate, I want to begin by asking about your commitment to thisprocess one last time. The likelihood is that our study will result in changesbeing made, both short-term and long-term. The study itself will be disruptiveto some extent, and we should not start unless you are fully committed and youremployees will understand and accept what we are doing. Starting this job andthen stopping it short could be worse than doing nothing. Are you fullycommitted, and have you communicated your commitment to the company?" "First, please call me Irv. We are like a family here. You have a betterparking place than I do, because visitors park near the lobby, and all employees,including me, park in the lot first come first served. But to answer yourquestion, I am fully committed. From what I have read and heard, I think Iunderstand the importance of my commitment. I appreciate your bringing up somepossible negatives, but I believe they are worth the risk. I have discussed thiswith the VP of Manufacturing and the Quality Manager, and we would like to defer

notifying the rest of the company until we can tell them more about what toexpect. I would like for you to tell me that as soon as you can." "Fine. I would like to talk to a few of your people today, and I can tellyou what to expect by the end of the day." "All right. I will draft an announcement with your help, and have itdistributed tomorrow. Now, how else can I help you?" "I would like to get a feel for your current status, and I would like tostart with an overview of the situation. What is your assessment of currentproduct quality?" "Our quality is very good, probably the best in the business. We hired aquality manager five years ago, and he has done an excellent job. He installeda quality audit system, and then trained some key people in quality, SPC, thingslike that. I think we had to hire a few inspectors, but the investment has beenworth it. I am not so concerned about present quality as keeping ahead of ourcompetitors." "How conscious are your workers of quality concerns?" "They are very aware of its importance. Every worker knows about our 'Doit right the first time' philosophy. We have a suggestion program, and aquarterly quality newsletter recognizing our best workers. In fact, your studyhere will fit right in with what we have been doing." "Are your suppliers involved in your quality program?" "No, and that is an occasional problem. We have had to step up ourincoming inspections. Our suppliers know that if we get bad material, we sendit back. Their contracts require replacement of bad material at no cost, so theyare usually pretty good." "Are you concerned about quality costs?" "Well, yes, to the extent that I am concerned about all costs. Our qualitycosts have gone up a little through hiring of inspectors, and I have hired you,so you know I think of it as an investment. We don't get a lot of returned goodsbecause we don't ship a lot of scrap. Our people know I won't tolerate shoddywork; quality has always been part of our reputation." "How much of an investment in time are you willing to make in improvement? In other words, how soon do you expect results from this study?" "I know better than to expect instantaneous results. I also know thatlong-term change takes a long time to accomplish. You told me your study wouldbe complete within a month, and I expect some concrete recommendations from it. Getting those in place, though, is another matter. I expect major changes totake up to a couple of years to show results, but I hope we can make some headwayin some areas sooner than that." "That's good. I wanted to be sure you were not expecting miracles. Allthe people involved, but most especially the management, need to understand, andaccept, that lasting improvement means changing the processes. This invariablyleads to someone's duties being changed, more responsibility given to theworkers, and a perceived dilution of management's authority. These things don'thappen overnight." "I'm not sure what you have in mind on dilution of management's authority." "Well, I start with the assumption that you have good workers and goodmanagers, but they don't necessarily understand that what is best for a singledepartment might not be best for the company. Some companies have managementsystems that guarantee that individual departments optimize their operations atthe overall cost of the company. We have what appears to be a fundamentalcontradiction. We would like to free the workers and managers of constraintsthat limit how well they do their jobs, but central authority or management getsin the way. If we proceed to give workers more authority, this dilutesmanagement authority, and it seems to mean that individuals, not departments,might optimize their own work at the cost of the overall company. To coordinatethese efforts, we need a system of operation that lets each person know his or

her role in the organization, not just the position title and reportingrequirement. If all of your people are well trained, understand their roles, andwork in an environment that fosters cooperation to achieve common goals, you havethat system of operation. Of course that is a much simplified description ofit." "And you are going to do this in a month?" "That's the key point. In a month, we can identify some process problemsthat can probably be profitably improved in the short term. The training,reaching a new level of understanding, and creating the environment to keep thesystem going can take a long time." "Is this the 'change in corporate culture' that I have read about?" "Yes, it is. And this is the most difficult part of improvement toachieve. You hear terms such as 'cultural change', 'transformation', and'continuous improvement'. They all mean essentially the same thing. Youeventually have to change the way you do business within the company to a modeand style that not just allows, but encourages all of your employees toparticipate in continuous improvement. The cultural change or transformation iswhat is necessary to get to this stage. And it is you and your management whowill be most affected by it. Some of this change can be accomplished simplythrough correct training of workers and management, to give them the tools to dothe job. But a large part of it is the acceptance by the management that thetransformation is necessary." "I see why you are concerned about commitment. I probably have somemanagers who will have trouble accepting all of this." "I would be surprised if you did not. This acceptance will really be yourjob, not mine. I can help some, with training slanted especially for yourmanagers, and with some good examples of successful companies who are in thistransformation. You can't simply copy what they do, because the system you endup with should be developed with your own needs and environment in mind. Thismeans the system will be created by your people, with some coaching and help." "Should we send some managers to visit Japan, and see what they are doing?" "Not right away, and possibly not at all. I think it is a mistake to thinkin terms of Japanese methods. Many of the things that need to be done are commonsense; they are difficult sometimes because they seem to be contradicted by whatwe have been taught and how we have practiced for years. We have the Japaneseexample to show us that what we have been taught is not necessarily right. Butthe methods the Japanese used are not uniquely Japanese. They had the benefitof some good teaching and coaching, from Deming and Juran, beginning in the1950's. But they didn't succeed simply because they are Japanese, and theydidn't succeed in a short time. As a country, they took about 20 years. Somecompanies developed much quicker, and continue to improve. The secret of theirsuccess was the way they used the training and coaching they got, with theircommitment to improvement over the long term. They use their management methodsin American plants with American workers, and are successful here, too. It isthis kind of commitment that I mean when I ask if you are committed. It is arecognition that, without this transformation, you are limited to short-termfixes that may be profitable in the short run, but do nothing to affect long termoperations. My team is going to begin with short-term problems, but you need tobe taking a longer view." "Well, now I understand better why you asked about my commitment, and I cansee how this might be more disruptive to management than the workers. I musttell you that I have some reservations. I will need to be convinced before wego beyond the process improvements we have talked about. I am still committedto your study, but what you are talking about is a major change in the company." "That's right, it certainly is. Let us do this. I will begin the study,and you can announce to your employees that my team will be conducting a month-long quality improvement study. During the course of the study, you will have

opportunities to see what we are doing, and how we are doing it. This will showyou what kind of training your line workers will need, because they should learnto do the same kinds of studies on their own. In the later stages of the study,I will want your management to participate in some sessions leading todevelopment of a strategy for quality improvement in your company. This willaddress more long-term issues. At the end of the study, you will have seen themethods we use and the results we have gotten, and I will give you a set ofrecommendations for further action. At that point, we can discuss all thisagain. So, you have some options, and part of my job will be to give youinformation to use in selecting options." "That sounds fine. At the very least, you might discover some processimprovements that we can use. What do we do next?" "I would like to talk with a few of your managers and employees. If youwill introduce me to your VP of Manufacturing, I will start getting intodetails."

2.2 Walter Honcho, VP-Manufacturing Walter Honcho has been with Etcetera for tenyears. He was hired in his present position from a position as seniormanufacturing engineer. Walter is a mechanical engineer by education, and hasan MBA that he earned part-time while working several years ago. He is in hislate 40's, and appears to be in good physical condition. A potentiallysignificant fact is that Walter Honcho was responsible for the design of much ofEtcetera's production processes; he may take suggestions for improvement asimplied criticisms of his design. His office is down the hall from Irving Magnate's, nearer the productionarea. Irving Magnate introduces you to Walter Honcho in his office. It is clearfrom the introduction that Magnate and Honcho have discussed the purpose of thevisit. Magnate leaves, Honcho returns to his desk, and you take a seat acrossfrom him. Honcho begins by asking "How can I help you in your project?" "Well, I am in the initial data collection stage of the project. My teamwill be conducting a study on quality improvement over the next few weeks. Wewill be looking at your processes, procedures, and overall quality assessment. Our objective is to work with you to identify potential quality improvements inyour products. My starting point is to interview some key people, beginning withyou. What is your assessment of quality?" "I think our quality is pretty good. It wasn't always, but we have madesome good progress. Our production machinery is in good shape. Most of it wasdeveloped here, and we understand our processes well. As with most companies,we have had vendor problems and training problems. Our plant foreman and qualitymanager have worked with our people and our suppliers, and the results have beengood. In fact, I think our quality is among the best in our business." "Do you have any data on your quality history?" "Yes, I had John Loomer, our quality manager, put together a summary onboth defects and complaints. We inspect our product before packaging, and keeptrack of defects. Of course all defective items are replaced, so we areconfident that what we ship is good. Still, it is good to know where ourdefectives come from. Here is a table of defects found in final inspection,based on the last six months of operation. I think these numbers show that ourprocesses are working and our inspection is pretty good. I can tell you that,from my contacts with other companies in our business, our internal quality isvery good. It has improved quite a bit since I hired John; we had some problemsin assembly and engraving that have almost been completely eliminated." Honcho hands you a typewritten memo from Loomer. It contains two tables,one summarizing internal defects and another summarizing external complaints. "I notice that you also have some data on customer complaints. Have thesebeen improving as well?" "Yes, but not as much. Of course customers don't always look for the samethings that we do, and as our costs increased a little we found that customersgot a little more 'picky'. Still, we have improved there, especially in ourcounts and shipping dates. Our process related quality has been perceived asvery good by our customers, but we have had to work on shipping and delivery. I worked with Fred Doit, the plant foreman, on some production control problemsto help those problems." "I would appreciate having a copy of this, if I may." "You can keep that one." "Thank you. I appreciate the background I have gotten from you and Mr.Magnate, and with your permission I would like to continue my interviews. Youmentioned Mr. Doit and Mr. Loomer; I would certainly like to talk to them. Iwould also like to speak with some experienced line workers." "There are two people you should talk to. Edith Scriptus is a leadengraver. She supervises our custom product section, and has a very good workingknowledge of input processes in both plastics and metal. Our most experiencedpress operator is Jim Bob Twister. He has been with us for a long time, and has

the best knowledge of our press and die operations in the plant. I will callahead and tell them to expect you, if that would help." "Yes, it would. I would also like one additional favor. If you have anempty or idle office where I can leave my briefcase and work on notes withoutgetting in anyone's way, I would appreciate using it." "There is an empty conference room just down the hall. If you don't haveany more questions, I can take you there." "Thanks. I appreciate your time. I might need to clarify some pointslater, but you have helped a great deal already." Honcho takes you to the conference room and leaves you there. While he iscalling the remaining interview contacts, you take out a notebook to make somenotes on the interviews so far. In interviewing the top two people in theorganization, one objective was to assess the level of commitment andunderstanding about quality. Another was to try to determine just howknowledgeable they were about operational problems. These interviews may alsohelp guide the development of questions for other interviews. Finally, as amatter of courtesy, Magnate and Honcho should be informed of other interviews,and ideally would cooperate in identifying people to interview. Notes from these interviews, especially Magnate and Honcho, should be keptconfidential and secure. In a team project, not all team members will be privyto all aspects of the study.

Interview Notes: Irving MagnateIrving Magnate is committed to, but does not yet completely understand, theprocess of continuous improvement and the potential extent of cultural changenecessary for it to take place. He is fully supportive of the short-term study,and will support long-term actions if given convincing evidence of theirnecessity and likely success. Interview Notes: Walter HonchoWalter Honcho has an obsolete view of quality and quality control. He willrequire solid arguments before he will be receptive to process changes, since hehas an emotional attachment to the process as it is. It appears from the formof the summary quality statistics that he does not routinely receive updates onquality in this form. Accordingly, any statements of fact from him concerningquality will need independent verification. (An example is his statement aboutimprovement in quality.) His statement that process quality is good iscontradicted by the defect rate in print quality. An item for further study isthat the complaint statistics are not consistent with the defect rates.

Etcetera Internal Memorandum

DATE: yesterdayTO: Walter HonchoFROM: John LoomerSUBJECT: Quality SummaryBelow are summaries of customer complaints and internal defects for the past sixmonths. Complaints are per 10000 orders, and defect rates are per 1000 units. You will note the improvement we have made in shipping and delivery.

Complaints per 10000 orders Defects per 1000 units

Missing Ring 2 Assembly 2 Misplace Print 4 Print Qualities 13 Print Quality 23 Print Detail 4 Type Error 6 Edge Flaw 22 Rough Edge 3 Cosmetic 5 Excess Flash 13 Late Shipment 6 Bad Count 4

2.3 Fred Doit, Plant Foreman The plant foreman is the chief line worker atEtcetera. He manages and supervises all operations, and reports to WalterHoncho. Fred Doit has been with the company for several years. He has beentrained as a machinist and machine operator, and has a two-year degree from alocal tech school. While his theoretical knowledge of production problems mightbe slim, his working knowledge of the production system is excellent. You meetMr. Doit after calling for an appointment, and arranging to meet at theproduction floor entrance from the executive offices. While he has an office,Fred spends much of his time on the floor, and your interview will be conductedas he gives you a tour of the system. Fred provides you with safety glasses and a lab coat. He tells you thatthis is one of his daily tours of the facility, and he will combine his tour withan orientation, if you don't mind his stopping to talk with operators along thetour. You ask his permission to record the tour on your pocket recorder, and heagrees. (Since Fred is about to give you information about the basic operationof the system, you want to be sure not to miss any critical steps in theprocess.) The tour begins as you walk toward a material storage area. "We are starting at the beginning of the processes for both the plastic andmetal products. Both processes are mostly straight-line, with plastic on yourleft and metal on your right. The processes are similar except for the differentmaterials. We store plastic chips, plastic coloring, and coils of mild steel andbrass at this end; they are delivered in bulk from the receiving dock. Theplastic chips are the basic material for the plastic tags, and we add coloringaccording to customer order. These are measured into a molding machine, with adie set for the size and shape we are running. On the other side, we feed metalcoil into a press, where dies stamp out the metal tags." "Is there much difference between the metal and plastic tags?" "No, almost all of our products are standard size and shape, in bothplastic and metal. We keep die sets for all the standard products, and have tohave different sets for brass and steel. The machines are basically standard,except that we have modified the feed and output to fit our system. Plasticsfeed onto a conveyor into the trim machine, where we take off rough edges andsquare up the tag. It isn't really flashing, but we call it that. On the metalside, the tags come out in finished shape and size, and we send them through afinish operation, usually anodizing or just polishing. We used to have a problemwith metal tag damage on the conveyor, but we changed the belt material andspeed, and that cleared it up." "Are the cycle times about the same on both lines?" "Yes, they are pretty well balanced. Some finish operations take a littlelonger on the metal, but they are done in batches, while the plastics are one-at-a-time, so it balances out. After trimming, the plastics go into a stampingmachine. A die puts whatever symbol or standard text the customer ordered intothe plastic. On the other side the same thing happens to metal tags in a press. Some metal tags go into an ink-stamping machine instead." "The ink-stamping machine looks newer than the rest." "Yes, it is. Customers are ordering more metal tags with smooth surfaceand ink stamping, because we can put on more symbols at less cost. It is thesame as engraving plaques at a jeweler's or sporting goods store. More peoplebuy the smooth finish than the old-fashioned engraving. That is a pretty nicemachine. We can change the symbol or text in a matter of minutes, and it hastaken some load off the custom engraving section. That's the next stop. Standard tags go straight to assembly on conveyors our of the press or stamping,but custom jobs go to engraving. That is mostly plastic now." "That gives you cleaner operations, doesn't it?" "Much cleaner than when we had metal chips all over. It is a lot easierto clean up around a plastic engraver. Edith, here, has been around through allthese changes, and likes it a lot better now."

You stop to talk with Edith Scriptus, lead engraver. After she talks withDoit, you make an appointment to speak with her later. "All tags go through assembly. All we do here is attach a metal ring. Themachine is automatic, and the ringwire feeds off a coil, gets wrapped through thehole, and is cut off. Very little problem with this machine, but it misses a tagnow and then. Next stop is inspection. Hello, John." John Loomer is in the inspection area talking to an inspector. He is theQC manager, and has been told by Honcho that you want to talk to him. You makean appointment for a later meeting. "Last stop is packaging. We have standard packages for all tags, withlabels cut from the same order that started the batch. Most batches are shippedwithin 24 hours of packaging." "It seems to be a smoothly running system. Any peculiarities?" "It is smooth, but I won't say we can't run it better. We got rid ofhandling damage in the conveyors. The print quality suffers sometimes due toworn dies or a bad setup on the ink-stamp. The metal finish is pretty good, butthe plastic trim sometimes leaves rough edges, and we have not been able to geta handle on that. I have wondered if it might be in the material, but I haven'tbeen able to figure it out. Our vendors say nothing has changed, but then that'swhat I would expect them to say. Overall, things are running well, and weusually catch all the bad product at inspection." "Fred, thank you very much for the tour. It has been very informative. If you don't mind, I would like to get together with you again after I havetalked to some other folks, and had a chance to think a little. We might be ableto work on your material problem, too." You return to the conference room to change tapes, and make some notes onthe tour. You realize that you don't yet know enough to begin a thoroughanalysis, but there are hints. Two things to do based on this tour are to drawa flow diagram of the processes, and consider how to relate material to edgeproblems in trimming. After a short break, you walk to John Loomer's office.

2.4 John Loomer, QC Manager John Loomer has a BS in business, and has taken afew courses in statistics. He is a member of the American Society for QualityControl, and has attended a few ASQC workshops. He is a young man, and only hasa few years experience. Based on the Honcho interview, you assume that Loomerhas primary responsibility for quality and is limited only by his knowledge ofquality methodologies and processes. Major changes, however, will probably haveto come from Honcho or Magnate. One of your objectives will be to enlist Loomeras an ally in your project, since he could easily block recommended changes. Youbegin by trying to determine his state of knowledge and experience. "Mr. Loomer, I appreciate your seeing me. I assume that Mr. Honcho hastold you about my project. I want to assure you that I am not here to underminethe quality program you have installed. There may be recommended changes, butI would like to work with you on those recommendations." "I will admit I was a little concerned when I heard you were starting aproject with quality as its focus. On the other hand, I know there is more tobe done here. Why don't I bring you up to date on quality developments here atEtcetera?" "I would like to hear it." "Well, I was hired three years ago as QC Manager. That was my interest incollege, and in my first job I was able to expand it and attend some seminarsthat were very useful. Irv and Walter wanted to institute a formal qualityprogram, and hired me to do it. There was very little formal QC work at thattime. Since then, I have concentrated on two areas: inspection, and customercomplaints. I initiated a final inspection function, and hired and trained someinspectors. Until then, we had no idea of what our quality was. We found someproblems right away on metal tags, that we traced to conveyor damage. Sincethen, things are going well for the most part." "Mr. Honcho told me you screen 100% of your products." "Yes, and that was a help, too. We found some assembly problems and acouple of others that operator training took care of. I make a point that theoperators know that QC is there to improve the process, not get on somebody'scase." "How is your customer feedback?" "Improving. The final inspection eliminated some complaints, but someothers were due to shipping problems. Putting in a formal review of complaintshelped us find that and fix it." "How does your formal review work?" "The receiving department sends all returns to me, and marketing sends mecopies of complaint letters. We have a review committee of me, Edith Scriptus,and Fred Doit. We meet monthly and review returns and complaints, and then oneof us takes action, depending on the problem." "Is Mr. Honcho involved in the review?" "Not formally, but I report to him from time to time on quality status andactions. He prefers to leave it to me and Fred, unless the problem involvesother departments." "What is your overall assessment of quality here?" "It is improved, but there is more room for improvement. We have somepotential material problems with edges that have been a nuisance. We still gettoo many complaints about print quality, too. Based on things I have readlately, I wonder if we might be getting as much as we are going to get frominspection. I have mentioned doing some process studies, but Fred and Walter saythings are going pretty well, and they don't like to take productive time forexperiments. Still, we are the best in the business, and we mean to stay thatway." "Well, I need to think about what I have learned so far. I like your ideaabout running some experiments; maybe we can talk them into it. Thanks for yourhelp."

Interview Notes: John LoomerMr. Loomer is right about reaching the limit of what inspection can do. Someprocess studies are required, and Loomer will probably be helpful. He isenthusiastic about learning more about quality, and can be expected to be aproponent of expanding the quality function. It is interesting that WalterHoncho has little to do with quality, leaving it all to Loomer and Doit.

2.5 Edith Scriptus, Lead Engraver Edith Scriptus has been with the company forseveral years. She has worked in all of the production sections, and is expertin most of them. While she has no line management responsibility outside thecustom engraving section, she is considered a valuable resource by Doit andLoomer. Her combination of experience and process knowledge is probably the bestin the company. Her interview takes place in the engraving work area. It beginsdifferently from the others when, in place of a greeting, she says, "So you'regoing to fix up the quality in this place. I wish somebody would!" "Is there a problem with quality here?" "Don't kid me. You hope there is a big problem, so you can earn a big fee. I hope you do earn it. It would be nice to see some things fixed that haveneeded it for a long time." "You make it sound like there are chronic problems." "There are. We have gotten by for a long time by patching things, but Idon't think we know enough to patch any more. If you can get Irv's attention andmake Honcho take some action, that would be a good start. I'm no quality expert,but I can tell when a system isn't running as well as it should. I can also tellwhen people run in circles without making any progress, especially if I am oneof them. We do too much of that." "What do you think of your quality systems?" "We do the best we can, but we don't do enough. John has done a lot ofgood, but he hasn't been around long enough to get to the deep problems. Hisinspection and training has helped; he found some problems and got them fixed. I'm afraid he is out of quick fixes, though. We're on top of our business rightnow, but if somebody starts beating us on quality and price, we could be introuble." "I've been told your quality is the best in your business." "It is, but look at what it costs! It's better than before John came, asfar as customers are concerned, but we work harder to get it. We used to run atabout 80% of capacity. After inspection started, we still ship the same numbers,but now we run at 95% of capacity. We can't grow because we spend more time atinspection and rework. Honcho hasn't figured that out yet." "It sounds like you and Mr. Honcho don't agree on some things." "I like Honcho, don't get me wrong. It's just that he is in love with hisequipment. It did a good job for a long time, but things have changed. We havenew products, new materials. That ink-stamper, for example. That new processtook a lot of load off my section, but it makes more rejects, and nobody knowswhy. Are you going to work on that?" "I might. My first step, though, is to do a study of the whole system andfind out where all the problems are. I would appreciate your help." "I'll be glad to help. I've worked here for a long time, and I plan toretire here. I might as well make life easier on myself while I do it." "Ms. Scriptus, you have been very frank with me, and I appreciate it. I'mgoing to think about what you have said, and I will probably need someinformation on your processes later. I hope we can work on some of those deeperproblems." "I'll be here." Interview Notes: Edith ScriptusEdith Scriptus is quite different from the others. She is outspoken and frank,and seems to have a good intuitive grasp on key problems. She will be a valuableresource on process problems.

2.6 Jim Bob Twister, Machine Operator Jim Bob Twister supervises operation ofthe presses and molding machines. He has been trained as a machinist, and hasworked with Honcho in design and fabrication of some of the custom machinery. It was his work on the conveyors that reduced handling problems shortly afterinspection began. His interview takes place in his shop near the metal presses. "Mr. Twister, thanks for setting aside some time for me. I suppose Mr.Honcho has told you about my quality study project." "Yes, he told me to give you some help. What exactly are you going to do?" "I don't know yet. Right now I just want to learn more about how thingswork and where people think the problems are. My objective is to work with allof you to find some ways to improve your quality. What is the biggest problemin your area?" "Well, the presses are working pretty well. Molding is my biggestheadache. We have these edge problems, and we can't get rid of them. It's nota major problem, but it makes some rework. I told Fred I think our plasticsupplier is throwing in some recycled stuff now and then." "How does that cause problems?" "I'm not sure how. But I know we have looked at practically every machineadjustment we can think of, and no matter what we do we get edge problems. Andit's not consistent. It seems to me that it must be the material." "How about on the metal side? Do you have much die wear?" "We have some, but we have a handle on it. I have a schedule for diereplacement, and as long as we stick to it, our quality is OK. I'm moreconcerned about the plastics." "Do you have time for some test runs?" "Sure. Just clear it with Fred, and let me know what you need." "Do you use SPC on your presses?" "No, not yet. I probably will, though, as soon as John gets around to it. I've been trained in SPC, and John wants to start a program. It might help." "How about the rest of your section? Have they been trained?" "No, just me. I don't think that will be a problem, though. They arepretty sharp fellows; they can pick it up." "Well, thanks for your time. I will be around for a few days, and I willprobably be back for some more help." Interview Notes: Jim Bob TwisterJim Bob Twister seems to have his section running well. If he is correct in hisdescription of edge problems, some experiments on molding will be necessary. Itwould be good to know how he went about checking machine adjustments and theireffect on edge flaws.

Interview Notes: GeneralThere is some diversity of opinion on quality status and potential problems. Scriptus and Loomer seem to be more in agreement with Magnate than with Honcho. Doit and Twister appear to want to help, and Loomer and Scriptus areenthusiastic. A common attitude (except for Honcho) is that quality needsimproving but no one knows where to start.

3. Analysis In this section, the class will go through a sequence of analyses designedto identify problems and then home in on solutions. This analysis is basedprimarily on processes, although human considerations can also come into play. Each sub-section below presents a quality tool related to the overall case. Eachtool is used to move a step closer to solutions.3.1 Finding the Problem Regardless of what you have been told about what theproblems are, independent problem identification is the first step. A fresh lookat the system by an outsider can reveal problems that people close to it cannotsee. If this analysis only confirms that assumed problems are real problems,then the analysis is still valuable, because it strengthens our beliefs based onfacts. Go back through the interviews and make a list of as many potentialproblems as you can find. Include potential non-process problems, such as humanresources and disagreements. For each problem that you list, give a briefdescription of it and a potential solution (if you can find one). After generating your list, go back to the Honcho interview and find thememo on quality from Loomer to Honcho. Perform a Pareto analysis on both setsof data, and draw what conclusions you can from them.3.2 Learning the Processes Knowledge of processes is one of the most difficultproblems for an outsider. Workers will make assumptions about your knowledge,and unconsciously overlook details that they might consider trivial. A good wayto learn a process is to develop a flowchart of it and give it to a knowledgeableworker to critique. Based on the interview with Doit (and any other information you can find),make a flowchart of the process flow. Identify on the flowchart any processesthat the interviews have indicated might have quality problems. Make a secondflowchart for the customer complaint process described by Loomer.3.3 What Causes What? A critical piece of quality engineering is thinking aboutcauses rather than symptoms. It appears that Etcetera pays a lot of attentionto symptoms (through inspection) rather than causes. This is part of EdithScriptus' frustration in that she knows there are deeper problems, but she doesnot see a way to get at them. Jim Bob Twister is already thinking about causesin wondering if vendor problems are causing edge flaws. You have arranged a meeting of Doit, Scriptus, Loomer, and Twister. Afterexplaining the importance of identifying causes, you lead them through anexercise of identifying potential causes. In this exercise, which is a sort ofbrainstorming exercise, your objective is to go beyond what they think they knowabout causes of problems. A list of potential causes will allow further study,without limiting the study by preconceived notions about quality problems. To structure the problem, you have limited the exercise to two areas. First, you note that print quality is a major source of customer complaints. Print quality problems occur in both metal and plastic tags. Examples of theseproblems are fuzzy printing, uneven printing, surface flaws, and scratches. (Other print related problems, such as typographical errors and misplaced symbolsfall into other categories in the Pareto analysis.) As a result of the firstexercise, the following outline of major and subsidiary causes are found: Plastic Die Wear Design Metal Die Wear Design Plastic Press Setup Maintenance Vibration

Metal Press Setup Maintenance Vibration Ink-Stamping Ink Flow Alignment Pressure Speed Handling Packaging Conveyor Inspection Material

The second exercise deals with edge flaws, the dominant defect based oninspection data. The list of causes for edge flaws is slightly different instructure: Material Base Specifications Base Variation Color Material Methods Mixing Pre-cure Period Speed Machines Molding Trimming Stamping Operators Supervision Morale Training

Based on the results of these exercises, develop cause and effect diagrams. Based on what you know so far, in data and from interviews, identify the mostlikely causes in each diagram.3.4 Learning from Data (Historical Variation) Once potential causes have beenidentified, it is time to look at data rather than continue to solicit opinions. Curing time in the molding operation has been identified as a potential cause ofedge flaws. If the plastic does not cure quickly enough, edges become brittleand fracture leaving the molding process. (Note that curing time is not aprocess variable. Rather, the molding machine cycle time is a process variablethat is set based on the expected curing time of standard material.) A test hasbeen devised in which a sample of plastic material is tested for cure time beforemolding. The batch is then tested for edge defects. Results of these tests for100 batches are on the following page. Twister and Doit have arranged the testruns, and Loomer has arranged their inspection. At this time we will consideronly the cure time results. Develop a histogram for this data, then list anddiscuss your conclusions from this histogram. A second test has been devised for the Ink-Stamp process. In this test,platen pressure is recorded from batch to batch and finished tags are inspected. You will see that platen pressure varies considerably; based on a suggestion byEdith Scriptus, it is varied randomly through typical values used in productionruns. Operators have some discretion for setting platen pressure, and differentoperators have preferred settings. Develop a histogram for platen pressure and

discuss what conclusions you can from it. Data for this test follows the curetime data.

Curing Time Test Results order curetime defects order curetime defects 1 31.6583 0 51 40.53732 3 2 29.7833 0 52 41.69992 3 3 31.8791 0 53 38.01712 2 4 33.9125 0 54 42.23068 4 5 34.4643 0 55 40.16485 2 6 25.1848 0 56 38.35171 2 7 37.76689 1 57 44.17493 4 8 39.21143 2 58 37.32931 1 9 41.34268 3 59 41.04428 3 10 39.54590 2 60 38.63444 2 11 29.5571 0 61 34.5628 0 12 32.5735 0 62 28.2506 1 13 29.4731 0 63 32.5956 0 14 25.3784 1 64 25.3439 2 15 25.0438 1 65 29.2058 0 16 24.0035 2 66 32.0702 0 17 25.4671 1 67 30.6983 0 18 34.8516 0 68 40.30540 3 19 30.1915 0 69 35.55970 0 20 31.6222 0 70 39.98265 2 21 46.25184 5 71 39.70007 2 22 34.71356 0 72 33.95910 0 23 41.41277 3 73 38.77365 1 24 44.63319 4 74 35.69885 0 25 35.44750 0 75 38.43070 2 26 38.83289 2 76 40.05451 3 27 33.0886 0 77 43.13634 4 28 31.6349 0 78 44.31927 5 29 34.55143 0 79 39.84285 2 30 33.8633 0 80 39.12542 2 31 35.18869 0 81 39.00292 2 32 42.31515 3 82 34.9124 0 33 43.43549 4 83 33.9059 0 34 37.36371 1 84 28.2279 0 35 38.85718 2 85 32.4671 0 36 39.25132 2 86 28.8737 1 37 37.05298 1 87 34.3862 0 38 42.47056 4 88 33.9296 0 39 35.90282 0 89 33.0424 0 40 38.21905 2 90 28.4006 1 41 38.57292 2 91 32.5994 0 42 39.06772 2 92 30.7381 0 43 32.2209 0 93 31.7863 0 44 33.202 0 94 34.0398 0 45 27.0305 1 95 35.7598 0 46 33.6397 0 96 42.37100 3 47 26.6306 2 97 30.206 0 48 42.79176 4 98 34.5604 0 49 38.38454 2 99 27.93 1 50 37.89885 1 100 30.8174 0 Ink-Stamp Pressure Test Results order pressure defects order pressure defects 1 54.61011 1 51 49.84772 0 2 48.18864 1 52 53.74094 0 3 46.67790 2 53 42.05643 7

4 55.69777 0 54 49.15719 0 5 46.71324 2 55 45.92712 4 6 50.87298 0 56 51.47415 0 7 48.07087 0 57 54.00929 0 8 52.70330 0 58 45.64028 3 9 48.27924 1 59 51.87687 0 10 50.64000 0 60 45.50864 3 11 53.51388 0 61 52.80480 0 12 52.53090 0 62 45.92553 3 13 52.23050 0 63 52.59476 0 14 43.71019 7 64 45.82347 2 15 58.21274 0 65 45.68842 2 16 52.43414 0 66 44.76260 3 17 62.47194 0 67 51.84920 0 18 47.53091 2 68 60.10677 0 19 51.36884 0 69 53.78403 0 20 55.83400 0 70 56.80717 0 21 49.51951 0 71 46.91672 3 22 55.51342 0 72 49.41763 0 23 46.38174 3 73 52.39437 1 24 51.78755 0 74 50.18450 0 25 53.66929 0 75 51.49381 0 26 55.69316 0 76 47.85005 1 27 50.46705 0 77 52.71594 0 28 55.86063 0 78 47.96361 2 29 47.46654 2 79 54.13159 0 30 54.58936 0 80 45.32825 3 31 58.38433 0 81 46.27780 3 32 57.38879 0 82 52.51733 0 33 43.47086 4 83 47.29948 2 34 51.76834 0 84 52.14801 0 35 51.56180 0 85 42.60228 6 36 44.87728 4 86 48.16064 1 37 49.79912 0 87 49.28328 0 38 45.44027 4 88 53.95466 0 39 52.17270 0 89 47.87085 1 40 51.50867 0 90 49.39820 0 41 52.96381 1 91 49.58192 0 42 47.12384 2 92 50.99383 0 43 47.47093 2 93 45.61200 3 44 46.16880 2 94 47.74353 3 45 53.97889 0 95 41.15958 8 46 53.41101 0 96 50.61908 0 47 52.48163 0 97 53.92124 0 48 48.51500 1 98 51.51060 0 49 48.91184 1 99 52.46713 0 50 49.18596 0 100 50.71842 03.5 Learning from Data (Historical Sequence) Histograms provide usefulinformation, but they hide the sequence of observations. Frequently, sequenceis more important than overall distribution. For example, a process which runsfor a week yielding observations below the mean, and then runs for a weekyielding observations above the mean, could have the same histogram as a processwith the same observations randomly sequenced. Construct run charts for the histogram data (cure time and platen pressure)and for the defects found in both experiments. Visually compare the defects runcharts with their respective process variables. What conclusions or subjectiveinferences can you make about the run charts and their comparisons? What

information does this give you about what should be done next?3.6 Learning from Data (Patterns and Correlation) You have begun looking forpatterns in histograms and run charts. Patterns of correlation may be found inrelating two variables. This is easily done through a scatter diagram. Construct scatter diagrams for defects vs cure time and for defects vs platenpressure. Look at both the overall patterns and the density of points in partsof the patterns. What subjective inferences can you make about patterns in thesescatter diagrams?3.7 Learning from Data (Process Stability) One of the most used tools of qualityis the control chart. This chart is used primarily to monitor a process andprovide signals when the process goes out of control. Using the data on thefollowing page, construct X-bar and R charts with limits calculated from thedata. This data came from cure tests on vendor supplied base material which wasknown to comply with material specifications. After developing your control charts, add points from the first 48observations in the cure test data. Describe your results.

Cure Time Subgroups order ct1 ct2 ct3 ct4 1 27.34667 27.50085 29.94412 28.21249 2 27.79695 26.15006 31.21295 31.33272 3 33.53255 29.32971 29.70460 31.05300 4 37.98409 32.26942 31.91741 29.44279 5 33.82722 30.32543 28.38117 33.70124 6 29.68356 29.56677 27.23077 34.00417 7 32.62640 26.32030 32.07892 36.17198 8 30.29575 30.52868 24.43315 26.85241 9 28.43856 30.48251 32.43083 30.76162 10 28.27790 33.94916 30.47406 28.87447 11 26.91885 27.66133 31.46936 29.66928 12 28.46547 28.29937 28.99441 31.14511 13 32.42677 26.10410 29.47718 37.20079 14 28.84273 30.51801 32.23614 30.47104 15 30.75136 32.99922 28.08452 26.19981 16 31.25754 24.29473 35.46477 28.41126 17 31.24921 28.57954 35.00865 31.23591 18 31.41554 35.80049 33.60909 27.82131 19 32.20230 32.02005 32.71018 29.37620 20 26.91603 29.77775 33.92696 33.78366 21 35.05322 32.93284 31.51641 27.73615 22 32.12483 29.32853 30.99709 31.39641 23 30.09172 32.43938 27.84725 30.70726 24 30.04835 27.23709 22.01801 28.69624 25 29.30273 30.83735 30.82735 31.90733

4. Short-term Improvement Plan At this point in the study you have maintained a primarily technical focus. For the purposes of this particular study, you have had two objectives. First,you need to learn the technical aspects of the process in order to begin processimprovement. Second, you need to provide a basis for convincing Irving Magnatethat additional work is needed, both technical and managerial. You should have documented potential process improvements at this point,and should also have identified other processes for further study. Thesetechnical and process items form the basis for a short-term improvement plan and,in this case, an interim report. 4.1 Conclusions from Data Develop an interim report based on observations, data,and analysis to this point. Your report should be based on fact and observation;where it contains opinions these should be identified as such. The report shouldbe clear to a person who is not expert in quality engineering, but it shouldcontain enough technical detail to support your conclusions. The report will tell the reader (in this case, Irving Magnate) what youhave done, what you have learned, and what you recommend. You should have twoprocesses for which you can recommend improvements. You should also recommendfurther study of other processes, based on data you have in this case study. Your recommendations in the report should deal with technical issues. (Managerial issues at this stage are better handled in person with Mr. Magnate.)4.2 Documenting Improved Processes There is one non-production process that youcan use to demonstrate a managerial quality tool. The complaint handling processhas been briefly described. Include in your report a recommendation forimprovements to the complaint process. Document your recommendation using adeployment flowchart.

5. Planning Lasting Improvements Solving technical quality problems and making process improvements alonedoes not constitute a quality program. Without a process in place designed tofoster continuous improvement, performance can begin to deteriorate almost assoon as improvements are made. Some companies engage in continuing cycle ofsolving technical quality problems, many of which need never have occurred. Planning lasting improvements consists of designing the quality program thatreaches all parts of the company, develops quality attitudes in workers andmanagement, and continually focuses attention on quality, in design, production,and performance. The remainder of this case deals with some techniques usefulin designing such a system.5.1 Identifying and Grouping Problems The affinity diagram is a good startingpoint for developing concepts. It is the only truly creative process among theSeven Management and Planning Tools. The affinity process is used to formrational groups of ideas, objects, problems, etc. It begins with a question orstatement that focuses the groups thoughts. The result is a grouping of thesewithin a pattern that arises from the information itself, guided by the groupmembers. As a first step in developing a long-term improvement plan, conduct anaffinity exercise. Your question for this exercise, related to the Etceteracase, is, "What are the important problems requiring attention in qualityimprovement?"5.2 Potential Actions and Their Relationships Once the affinity process hasstructured problems, we can begin to refine them. The interrelationship digraphis a tool to identify and display relationships between factors. Develop an IDto display quality improvement areas and actions. You may wish to use theresults of the affinity exercise as a starting point, and then brainstormadditional items.5.3 An Organized View of Improvement Areas and Actions The affinity diagram issomewhat tree-like in showing a hierarchy of ideas. The interrelationshipdigraph is not, but both contain similar information. Combine the results of theprevious two exercises into a tree diagram, showing a hierarchy of areas andactions to be taken.5.4 Setting Priorities An extension of the tree diagram is its use in settingpriorities using prioritization matrices. In this exercise, you will arrive ata ranking or priority scheme for the actions developed in previous exercises. Develop priorities using prioritization matrices and the tree diagram. You mightneed to modify the diagram slightly, or brainstorm more ideas before beginning.5.5 An Organized Look at Conceptual Data Matrix diagrams are commonly used toolsin presenting information of all kinds. Construct at least two different kindsof matrix diagrams using data from previous exercises. What conclusions can youdraw from these diagrams? What other data could be usefully presented this way?5.6 Documenting the Improvement Plan The results of the prioritization matricesexercise have given you a set of prioritized actions in an improvement plan. Younow need to document the process of implementation. One of the best ways todocument a new of highly revised process is the process decision program chart(PDPC). Develop a PDPC to guide implementation of a quality improvement plan,based on the exercises up to this point. Do not neglect the technical aspectsof quality improvement.5.7 Documenting the Process Flow In an earlier exercise, you developed a simpleflowchart for the process. Expand this into a process flow chart, from incomingmaterial to shipped product, and include improvements where you can identifythem. Use either blocks, as before, specialized symbols, or ANSI standardprocess flow symbols, and include a key to the symbols you use.5.8 A First Step in Strategic Planning Another way to develop a consensus forpriorities is the nominal group technique (NGT). It is more subjective thanprioritization matrices, but it is quicker than the sequence of steps leading up

to the matrix approach. The NGT method is described in the appendix. Conductan NGT exercise to determine priorities in quality improvement. As the questionused to focus the exercise, consider this: "What should be the actions taken toinitiate a program of continuous quality improvement at Etcetera?"5.9 Analysis Up to this point, most exercises have been conducted independently,although some depended on others for input. Your final report should includeresults of these exercises, and conclusions drawn from each exercise. Analysisof these results is an important task that is required before the report iscomplete. These results need to by synthesized into a coherent set ofrecommendations. There is no single best way to do this. You may find that someof the methodologies used in the exercises (such as matrix diagrams) are usefulin synthesizing and presenting conclusions. You may also find that another roundof group brainstorming or NGT can be used to reduce the possible recommendationsinto a manageable number, or an affinity exercise could be used to put therecommendations into groups. Your group's last task is to formulate overallconclusions and recommendations, compile supporting information (such as resultsof individual exercises), and integrate them into a final report.

7. References and Recommended ReadingBrassard, Michael, The Memory Jogger Plus, GOAL/QPC, Methuen, MA 1989

Cook, L. E., No Downtime: Six Steps to Industrial Problem Solving, Addison-Wesley, New York, 1991

Deming, W. Edwards, Out of the Crisis, MIT Press, Cambridge, MA 1986

Ishikawa, Kaoru, Guide to Quality Control, UNIPUB/Kraus International, WhitePlains, NY 1986

Juran, J. M. and F. M. Gryna (Editors), Quality Control Handbook, McGraw-Hill,New York, 1988

Juran, J. M. and F. M. Gryna, Quality Planning and Analysis, McGraw-Hill, NewYork, 1980

Scholtes, Peter R., The TEAM Handbook, Joiner Associates, Madison, WI 53705-0445

Sherkenbach, William W., The Deming Route to Quality and Productivity, ASQCQuality Press, Milwaukee, WI 1988

Tribus, Myron, Deployment Flow Charting, Quality & Productivity, Inc., LosAngeles, CA 90024

Walton, Mary, The Deming Management Method, Putnam Publishing, New York, 1986

http://deming.eng.clemson.edu/pub/tutorials/qctools/ie460.txt