The objective of developing the habit of making annual quality improvements / cost reduction is based on the need to maintain our sales capacity and its associated costs at competitive levels.
After World War II, the Japanese decided to rebuild their industries to manufacture goods for civilian use, but they were unable to sell their products because their quality was not competitive. The Mikado Occupation Administration, led by General D. MacCarthur, invited W. Edwards Deming to deliver a series of seminars sponsored by the Union of Japanese Scientists and Engineers. During these courses, Japanese industrialists were exposed to the innovative ideas of a man who had played a key role in the production of weapons and support equipment.
Deming not only taught the Japanese the statistical techniques for quality control that have since become synonymous with his name, but also convinced them to adopt a whole new philosophy of management, a system that actively involved workers in the search for ways to improve the quality of what they produced. The salient aspect of their system was that the entire process should revolve around customer satisfaction.
From this, in 1950 the Japanese industry began to improve step by step in a hurry and without pause to such an extent that in 1970 the industry of the color television receivers produced in Japan, were recognized as the best product in the world, So much so that Matsushita acquired the QUANTUM plant in the US and began to introduce improvements such that it became the leader in quality / services in its range of business in that country:
Service Cost during the warranty period fell from $ 22M to $ 4M
Inspection staff on assembly lines and associated repair staff were reduced from 120 to 15 people.
What is the hidden cost?
When we talk about quality improvement we should also review the concept of control (Control is the process of detecting and correcting adverse changes).
Let's suppose that in the past our development has had around 10% of rejections. If this has happened for a long time it is easy to conclude: "we are not able to reduce 10% of defects". But we take every measure to make sure things don't get worse.
Inference: We only care every time a sporadic spike appears and take corrective action to correct the problem (like the firefighter)
Now, we are recognizing as standard 10% of defects; this is a chronic disease of the production line.
But what if we could reduce that 10% to 4% ?, We would get an indefinite profit !!.
Some managers are so busy with the goals for the year and putting out fires, it seems like they don't have time for anything else. Hence, they tolerate chronic losses and learn to live with them. As if that were not enough, they learn to "disconnect the alarm signals".
Let's see how the system works:
- The materials planner adds a multiplying factor in its consumption analysis of 1.10 in the materials requirement plan. Process Engineering has added an additional 10% of machine capacity utilization to process the extra requirement. The Operational Controller has added a 10% to the standard cost of the process, therefore the reports of real costs versus the standards will not show major differences. Quality Control issues reports of abnormal waste (as long as it exceeds that 10%).
Conclusion all areas have switched off the alarm «for what does not exceed 10%».
This is the parallel (hidden) factory that nobody sees but that consumes 10% of the company's total budget.
I would not want to disturb the reader / manager, since throughout my work experience I have seen up to 22% of wastage / loss accepted, based on the parental concept "we always did it that way".
«A reflection arises taking into account the years passed»
1950
A system is developed that actively involves workers in the search for ways to improve the quality of what they produce. The salient aspects of it is that the entire process should revolve around customer satisfaction.
1970
American companies begin to suffer the impact and lukewarmly begin to regain lost time.
2003
In the Argentine Republic, what percentage of companies has recognized the need to establish courses of action for competition and subsistence in this globalized world?
Synthesis:
- Japan becomes aware in 1950USA wakes up in the 70s after Japanese Companies begin to enter and expand in their own market. Argentina 2003. What do Entrepreneurs do?
What course of action to take?
How can we get these chronic problems out of "hiding"?
The best way is to quantify them in the language of money and present them as opportunities for improvement, based on:
- Order of magnitude Large taxpayers Modest prevention effort.
How to obtain the data? How to raise and obtain the attention of the company's senior management?
To obtain the data, it is necessary to have an effective and precise management planning and control system and, of course, ask yourself:
- Do I have an effective planning and control system? Do all staff adhere to it? Is it fed with real day-to-day data?
The answers are in each one, as well as the actions to face. Each of us can improve the performance of the organizations in which we operate. All that is required is the courage to face comfort and "get down to business."
