Question

Part 1: Identify a company of your choice which has implemented a Lean Production system, Six-Sigma or a Total Quality Management (TQM) system. Summarize in 2 paragraphs the key elements of their policy and explain their reasons for its adoption

Part 2: Identify and discuss 2 specific tools/techniques used in that company and how it help improve their quality and productivity within the company.

Answer 1

Ford is a company well known for its high quality. The company pledged to utilize innovative products and use Total Quality Management to accomplish the goal of Quality Is Job 1. Ford is ranked as one of the leading high-quality automakers, but Ford has come a long way in the last few decades.

There are four main factors behind Ford’s Six Sigma initiative. They are:

-Cost reduction. Ford’s old production processes were surprisingly costly. By introducing Six Sigma, Ford was no longer using resources that were not necessary.I

- Improving quality. Ford has always been known for their quality, but event their standards have slipped from time to time. While, for many companies, a 99% quality level is considered acceptable, this lets through a surprising amount of defects in the production, almost 20,000 instances of defect. According to Six Sigma, only 99.99966% (and up) is ideal. This percentage limits the number of defects per million to only seven. Hence, Ford made some great astonishing strides in quality improvement using Six Sigma.

- Poor customer satisfaction rates. Satisfying customer demand is as important to success as leveraging it. Many of these issues link to each another, as multiple instances of defect likely add up to a defective product. This will inevitably bring dissatisfaction in the customer which is why Ford chose to implement Six Sigma, to streamline its processes and improve production issues. All of this adds up to a more productive company and much happier customers.

- Lowering environmental impact by reducing solvent consumption- Six Sigma is a very green philosophy and Ford uses it to make some major changes in its environmental awareness. Ford’s consumption of vital resources proved costly in the long-term. But by committing to a green work culture with the help of Six Sigma, they reduced costs, increased quality and improved customer satisfaction.

Ford company has a balanced scorecard system. This system of evaluation provides reporting tools that provide monthly values against target figures, year-to-date/year-end values v/s target. The company follows a defined prioritization system using red/green/yellow identifications to measure the areas where improvement is most needed. Like, 1- Green: measures are on or above the target feature. 2- Yellow measures are below the target, but better than last year results. 3- Red metrics are simply under target. When such improvement opportunities were discovered, the problem resolution tools such as Six Sigma were implemented then by the company.

The lean six-sigma methodology adopted by Ford has five very important phases. These five are Define, Measure, Analyze, Improve and Control. The definition phase involves establishment of opportunities along with significant implications of the opportunities in terms of customer services and quality satisfaction. Any opportunity embraces an activity, which may further enhance the performance of Ford. The team at Ford began by defining project stakeholders using a suppliers, inputs, process, outputs, customers (SIPOC) analysis. This analysis has led to three groups—internal, external, and a mixed group that contained both internal and external customers. The mixed group included not only those customers who purchase the cars, but also internal customers i.e process owners, in this case the paint shop and the quality control group.

In the second, measurement of every activity to determine how the activity can be optimally executed was done. Several tools were used early in the measurement phase, Eg value-stream mapping serves as a visual tool to help the team understand the flow of material and the paint application process. Statistical measures help to filter, evaluate, and obtain strong data for the project. Cause-and-effect diagrams are useful for identifying the root causes of consumption and performance issues and brainstorming sessions are used to rate all potential causes.

The analysis phase involves investigation of opportunities in the effort to determine what can go wrong in the process of opportunity implementation, whereas issues of concern are identified in the analysis phase. E.g. The Six Sigma team conducts a 5 Why analysis, as well as test trials on six potential root causes.

Improvement, entailed fixing of the aspects of primary concern which may lead to defects and accumulation of waste such as work in progress, rejection of the already completed products due to variations beyond acceptable levels and re-working are analysed. Ford used a variety of tools to develop solutions/improvement actions to address the two likely root causes. Value-stream mapping and benchmarking activities have proved useful in the search or a manual solution to monitor the valve. while zeroing in on the robot issue, the team reviewed the value-stream map and discovered they could change the automatic process to a manual one for painting liftgates. Also, through research and discussions with suppliers, they came to know the plant could apply paint more efficiently by upgrading to an electrostatic paint application process.

Control performance is considered an important phase in the bid to stabilize the outputs. E.g.The new monitoring system and standard operating procedures provide a real-time view of paint consumption in detail for each of the paint booths. All of the plant’s standard operating procedures are a part of the plant’s
ISO 9001 compliant quality management system and are hence included in routine audits. This assures that paint consumption will remain within specifications.