No matter the plant size, quality management systems measure up
By now you have seen the press espousing the millions of dollars contributed by quality efforts such as Lean and Six Sigma to the bottom line of large corporations. If you’re a small company, perhaps less than 2,000 or 3,000 employees, you may have wondered if these same quality techniques might do the same for your company? Well, the answer is yes, but… Smaller companies cannot ope...
By now you have seen the press espousing the millions of dollars contributed by quality efforts such as Lean and Six Sigma to the bottom line of large corporations. If you’re a small company, perhaps less than 2,000 or 3,000 employees, you may have wondered if these same quality techniques might do the same for your company? Well, the answer is yes, but…
Smaller companies cannot operationally function the same as larger corporations such as General Electric, DuPont or General Motors. You already know that. Working capital, resources and the daily demand to deliver to their customers consume the world of smaller companies.
Smaller companies must also take into account these same realities when initiating, designing and implementing their quality efforts. Unfortunately, almost all the literature and information speaks to how larger corporations have achieved their successes. You may be among some of the smaller companies who have tried to follow the large corporation approaches only to discover they didn’t work for your company.
Quality absolutely works in smaller companies. In fact, my guess is if you are one of these smaller companies, you are already doing many things to manage, control and improve the quality of your products and services. Like all companies and organizations, you would like to improve the quality of the products and services you provide. To understand how to do this, we must separate the science and tools of quality from the hype surrounding approaches used.
I will use Six Sigma as an example only because it is well known and has been extremely successful for many corporations. Like all quality approaches such as Lean, process reengineering, benchmarking or performance measurement, there are two parts to Six Sigma. One part is its organizational design; the other part is the quality science and tools it employs.
The science and tools used in Six Sigma are not new; many of them have been in place for many years. So, what makes Six Sigma work? Is it the design or the tools? It is both, but the design can be modified, keeping the essential elements of the corporate designs while modifying approaches that will not work in smaller companies.
The design of how a company supports its quality is called the quality management system — QMS for short. A QMS is comprised of the systems and processes the company uses to support its quality efforts such as its inspection processes, how it measures performance against requirements and any personnel dedicated to quality, etc.
Putting systems in place
An organized, documented and systematic QMS must be in place for any quality effort such as Six Sigma to succeed. The elements that must be part of that system include:
It must be supported and driven from the top of the company
Performance against customer and business requirements must drive the company toward improvement in the areas those requirements are not being met
Policies, procedures and work instructions must not only exist, but their compliance assessed and, when needed, acted on
Accountability for performance must be linked to individuals
Appropriate training, tools and support for the people in the system must be provided
The company’s employees must support and be committed to doing their very best work every day.
Please note I did not include Master Black Belts. All of the science and tools of quality can be used successfully in your company if you have a healthy QMS installed.
A few years back, I was training Six Sigma in a plant in the Southwest. The plant had about 300 employees, placing it in the very small size company category. Typically, Six Sigma training requires those being trained to have an improvement project they will complete as part of the training.
My rule-of-thumb is the expected return on investment for these projects is $50,000. One of the projects was to improve equipment downtime. The expected return was $100,000 annualized if downtime was improved by 50% — something the plant engineers felt was possible.
During the quality statistics training, we were learning about exponential distributions, which can be used to predict equipment failures by calculating the mean-time-between-failures statistic. With this understanding, maintenance and part replacement scheduling can be adjusted so that they happen prior to a failure, thus reducing downtime significantly.
This sounds great, but a review of the maintenance logs revealed the data required for performing the calculation had not been collected as part their maintenance program. This adjustment to their maintenance program was done Once sufficient data was captured, this change would provide them the ability to improve their maintenance schedule and reduce equipment downtime. MTBF is one quality tool used within the Lean Six Sigma Toolbox as part of Total Productive Maintenance referred to as TPM.
Another important part of quality is the ability to understand variation. As is the practice of most companies I visit, they treat me to a tour of the facility. During one such tour, I was observing a product line where the product was boxed. The box was then folded shut and transported to storage to await shipment. While I was observing the equipment folding and sealing, a box became jammed in the equipment, resulting in product on the floor and an expensive line shutdown.
I inquired how often this happened and was informed they had been having this issue for sometime and had failed to remedy it. The equipment manufacturer and plant engineers had been working on the problem. I asked if anyone had measured the thickness of the cardboard the boxes were made of. They had not.
We grabbed a number of boxes and measured them. We found there was slight variation among the boxes, but found a few in our sample where significant variation was present. A check of the supplier contract found that a specification with upper and lower limits had not been specified for cardboard thickness.
It was determined that the expected equipment variation plus the variation of the cardboard was the cause of the random equipment jams. Two quality concepts are part of this story. The first is understanding variation. This concept is the heart of Six Sigma and the purpose of statistical process control. The second is supplier quality management. An understanding of these might have prevented the problem — or at the very least helped remedy it sooner.
Programs such as Six Sigma and the use of the Six Sigma improvement process: define-measure-analyze-improve-control (DMAIC), will work in smaller companies just as it does in larger corporations. If you are a smaller company, focus on how your QMS should be designed in order to meet your company’s unique needs, and then use the science and tools of quality to improve your bottom line.
Jerry Mairani is the board chairman of the American Society for Quality and a past president of the society. He owns Sacramento Quality, a business performance improvement company. He has served as Beutler Corporation’s corporate quality director, where he was a Six Sigma Master Black Belt and designed and implemented Beutler’s quality management, training, development and safety programs. He retired following a 27-year career with Pacific Bell, where he served as the utility’s first regional quality director. Mairani serves on the board of directors for the California Council for Excellence, is a board member for the current California Awards for Performance Excellence, and is a member of the Sacramento Council for Business Excellence.