Lesson 9:

Making Quality Products Technical Aspects of Designing and Making

Yellow means, it is written in the ppt.

3keys that manufacturers can use to improve production quality

1. Create a Culture of Quality

2. Track and Reduce the Cost-of-Quality

3. Leverage Emerging Technology

First we have here the Create a Culture of Quality

1. Creating a culture of quality is a great way to set the stage for improvements to your manufacturing
processes. While this is no small task, there are serious benefits to the journey. To start off, we
recommend that you define what quality means to your organization.

“You need to define what quality means, define quality goals, disseminate these objectives, measure
group and individual performance and then reward those who are making it happen.” –this is according
to Jeffrey Ray, Director of Operations and Quality, Strategic Missile & Defense Systems, Boeing Defense,
Space & Security

The second key that we have is the Track and Reduce the Cost-of-Quality

To help you get started, though, lets first define exactly what is included in the cost of quality. Define the
Cost-of-Quality The cost-of-quality (CoQ) consists of two components: the cost-of-conformance (CoC)
and the cost-of-poorquality (CoPQ). These components themselves also break down into several types
of costs.

Cost-of-Conformance (CoC)

The cost-of-conformance is the total cost of maintaining acceptable quality levels. It contains both
prevention and appraisal costs. Prevention costs typically consist of the type of costs below. Though this
can vary by industry and company size.

 Customer-related activities – such as meeting with customers to discuss new product specifications or
to discuss a customer request to implement new QMS procedures.

 Supplier-related activities – such as sending quality personnel to a potential supplier’s facility to

 Manufacturing support – such as QA supervisor for managing QA business.

 Quality Technical Training – such as sending quality control technicians to become certified as internal
auditors.

While appraisal costs include the cost associated with:

 Quality Control – such as inspection of incoming materials, work-in-process, and finished goods

 Product and Process Testing

 Test and Inspection Equipment

 Internal and Supplier Audits

 QMS certification costs.

Cost-of Poor-Quality (CoPQ) The cost-of-poor-quality (CoPQ) is a popular and highly effective key
performance indicator for manufacturers to monitor. It can be defined as the total cost of failing to
maintain acceptable quality levels. These are the costs of internal and external failure.

 Internal failure costs include the cost of scrap and rework. This information should be readily available
through your company’s accounting or ERP systems. Evocon provides further detail by providing input
for this information by tracking the OEE quality of your production.

 External failure costs are difficult to know. They include things such as the cost of damaged reputation
in the marketplace and the loss of all future revenue for customers. Despite this difficulty, we
recommend thinking about external failures in terms of “quality escapes”. Quality escapes can come in
two varieties: High-profile and low-profile.

o High profile escapes are defects that are reported by the end customer. You really should treat these
almost as if someone were fatally injured.

o Low profile escapes are less serious. They are defects that are caught after the manufacturing, but
before the end customer interacts with the product. For example, someone in your warehouse or
reseller could notice and report a defect. A best practice that we have seen is to assign a value of say
$15k to high profile escapes, and $1.5k to low profile escapes. These costs will then be “charged” to
CoPQ when they occur. By assigning these values to escapes, you can now monitor and track the CoPQ
in financial terms. This can be very helpful in motivating improvement in both managers and line
operators because quality is now stated in terms that resonate with people. Use this motivation to build
process controls that limit the possibility of any internal or external escapes.

Track, monitor and continually reduce the CoQ

Once you understand CoQ, you need to implement methods that will allow you to collect the cost. With
the means to track and monitor cost, try setting up weekly and monthly manufacturing corrective action
meetings. These meetings should include key management, engineering, quality, and operational team
leaders. The purpose of these meetings is to review the different aspects of the CoQ, for example, the
quantity of internal and external failures. Then assign someone with the task of investigating each
occurrence. Further, have them perform root cause analysis and implement corrective and preventive
action. These simple steps have helped countless large multinational manufacturers in continually
improving production quality.

3. Leverage Emerging Technology

With the rise of the IIoT, manufacturers finally have at their disposal cost-effective solutions that go
further than ever before at connecting and bringing granular visibility to the supply chain. It is
imperative that manufacturers leverage this suite of emerging technologies. By harvesting the data that
the manufacturing processes generate, they can learn new ways to remain competitive. We are
admittedly a little biased in our recommendation here, but it isn’t without good reason. As you’ll see,
monitoring OEE can help guide your process improvement teams. And this is why we include it as our
third key to improving production quality.

Production monitoring and live OEE tracking OEE is the gold standard for understanding the
performance for any production plant, production unit, workshop, or individual station. Further,
monitoring OEE gives manufacturers visibility of exactly where to focus resources in the quest to
improve production quality.

What is OEE and How Does it Work. In general, though, this is where Evocon can be a great benefit to
you. By enabling your company to track OEE, not only do you get more visibility into your processes than
ever before, but you also gain the most effective way to focus your process improvement teams.

It works like this. After you have been tracking downtime and quality losses for a couple of months, you
can easily open Evocon reports to see a Pareto chart showing downtime reasons. Then it is a matter of
organizing a team or project to focus on the largest reasons for downtime. This is how you know for sure
that your limited process improvement resources are focused on the problems that, when solved, will
yield the most return and improve performance the most.