Quality Management

Introduction:

Automotive is among the leading sectors in the any economy in terms of production,exports, employment and contribution to the exchequer. Its needs to reform its laws,modernize machinery and scale up capacities to global level to exploit this opportunity.Apart from the above factors, the application of management techniques in the business will bring long term stability in the market and better company reputation. The paramount need for a paradigm shift is essential for today’s business scenario. Six sigma is such a management tool is viewed as a systematic, scientific, statistical and smarter approach to create quality innovation and total customer satisfaction. This paper emphasizes the six sigma concepts and possible area of six sigma applications in automotive industry.

To build, keep and improve quality in a company’s goods and services and even to go further to develop the infrastructure of the quality in an organization is a tough and difficult job that have to be done with a planned and systematic approach in order to achieve the success. Quality and control has a direct relationship with profitability. In order to satisfy the customers, you need to improve the quality in the competitive market because it results in the loyalty of the customers and consequently, it will lead to better market clout and profitability.

Quality and control cover a broad area including customers, stakeholders, leadership and strategic planning and many other subjects. Providing quality in each subject needs different and specific strategy and plan related to the subject. One of the strategies that are used widely in manufacturing and service industries is Six Sigma. This strategy which is developed for the first time by Motorola in 1981 became very popular among organizations around the world.

Background of the issues/customers request

1. Improved Customer Loyalty

According to George Box "All models are wrong, however some models are useful".  We believe you will find this model (graphic) which starts with customer satisfaction, customer loyalty and customer retention useful. 

A large factor in determining the likelihood of success and profits in an organization is customer satisfaction. When there is customer loyalty the customer retention rate is high and business results tend to follow.

2. Customer Satisfaction

There exists an interaction between the desired results and customer satisfaction, customer loyalty and customer retention. They may go by other names such as patients, clients, buyers, etc.  Without the customer it is impossible for any business to sustain itself.  Achieving the desired results is frequently a result of customer actions.  Any business without a focus on customer satisfaction is at the mercy of the market.  Without loyal customers eventually a competitor will satisfy those desires and your customer retention rate will decrease.

There are several levels of customers:

Dissatisfied customer--Looking for someone else to provide product or service.

Satisfied customer---Open to the next better opportunity.Loyal customer--Returns despite offers by the competition.

Dissatisfied customers are an interesting group. For every one that complains there are at least 25 who do not. Dissatisfied customers by word of mouth will tell eight to sixteen others about their dissatisfaction.  With the web some are now telling thousands. 91% of dissatisfied customers never purchase goods or services from the company again. A prompt effort to resolve a dissatisfied customer's issue will result in about 85% of them as repeat customers depending upon the business, new customer sales may cost 4 to 100 times that of a sale to an existing customer.

There has been less research on satisfied customers to determine what it takes for a satisfied customer to change.  Why take a chance on mere satisfaction?  Loyal customers don't leave even for an attractive offer elsewhere.  At the very minimum they will give you the opportunity to meet or beat the other offer.  Maintaining loyal customers is an integral part of any business.

One of the ways to help obtain loyal customers is by having products andservices that are so good that there is very little chance that the customer requirements will not be met

Of course one of the difficulties is understanding the true customer requirements. Even when you have the requirements in advance the customer can and will change them without notice or excuse.  Having a good recovery process for a dissatisfied customer is a necessity.

When I found this it was attributed to Sam Walton founder of Wal-Mart.

A Customer

o A customer is the most important person in any business.

o A customer is not dependent upon us.  We are dependent upon him.

o A customer is not an interruption of our work.  He is the sole purpose of it.

o A customer does us a favor when he comes in.  We aren't doing him a favor by waiting on him.

o A customer is an essential part of our business--not an outsider.  

o A customer is not just money in the cash register.  He is a human being withfeelings and deserves to be treated with respect.

o A customer is a person who comes to us with his needs and his wants.  Itis our job to fill them.

A customer deserves the most courteous attention we can give him.  He is the lifeblood of this and every business.  He pays your salary.  Without him we would have to close our doors.  Don't ever forget it.

Several surveys have been done on why customers do not give a businessrepeat business.  Reasons given by customers for not returning for repeatbusiness:

Moved      3%Other Friendships       5%Competition      9%Dissatisfaction  14%Employee Attitude  68%

These surveys would indicate that in addition to the technical training and job skill training provided to employees, some effort aimed at customer satisfaction and employee attitude is appropriate.  Remember these may not be the people normally thought as "Sales People".  For example Managers, Supervisors, Secretaries, Accounts Payable, Engineers, Accountants, Designers, Machine Operators, Security, Truck Drivers, Loading Dock, etc. if not helping to cultivate Loyal Customers are hurting your customerretention.  68% of lost customers are due to one cause, employee attitude!

In order to know how you are doing in this area there must be some measurement.  Data indicate that less than 4% of dissatisfied customers ever bother to lodge a complaint.  Most just take their business elsewhere. Test this on yourself.  The next time you get less than what you consider ideal at a store, business supplier, restaurant, movie theatre, hotel, or any other business what do you do?

Cultivating the customer relationship is key in achieving the desired business results. A passive system that depends upon your customers to inform you without effort on your part is not likely to yield the information necessary to improve customer retention. 

Main body of the report

a) Six sigma

Using DMAIC model, the practice was done in one of best restaurants of Taiwan which was founded in the early 1970s. The aim was to use 6s in order to decrease the cost of operations, improve the financial status and satisfy the customers more. The process started as follows:

Define stage: Firstly, the supporter of this plan selected a Black Belt and developed a 6s team. In this phase, three approaches were going to be reached: determining the aim of project, operating plan objective and estimation of the hard savings of the plan. Customers’ complaint chart showed that 32 percent of complaints were for shrinkage of 32G Small Custard Bun. Therefore, the goal of project was set on reducing the shrinkage rate. Besides, the chart of shrinkage showed that in 11 months, the average defect rate of shrinkage was 0.405 percent which was the project baseline so the goal was set to achieve the defect rate of 0.141 percent at the end of project.

Measure stage: The team prepared the factors that had effects on shrinkage defective. Figure 2 shows the fish bone diagram of shrinkage defective.

Then nine potential factors like dough color, number of times the dough sheet is rolled, temperature of stuffing and production shift were selected.

Analyze stage: In this stage, through using statistical analysis, the factors that had effect on the shrinkage were analyzed. It was determined that factors that seemed effective on this process were steaming time, shift, size of input ice water and diversity in the color of dough.

Improve stage: A plan for finding a best solution for shrinkage rate was established and called Design of Experiment (DOE). In this plan, stuffing temperature, dough rolling numbers, time of ferment, size of input ice water and time of steaming were chosen in order to progress with a “five factors, two levels, 1/2 fraction (25-1) and two replicates” factorial design. Besides, there were some measurable factors that could be measured through DOE but could not be controlled precisely. Different shrinkage rate is one of examples of these.

Figure 2: Cause-and-effect Diagram of Shrinkage Defectives

Control stage: The stage before the control is Improve stage. It is very important to keep the findings of previous steps D, M, A and I in the improve step to control the process afterward precisely. In control stage, under each category there would be some operations to do in order to achieve the goal of this stage. For example, operators who were doing the job should be trained and given certificate, the machines should have periodical maintenance, the materials should be inspected and for SOP (Standard Operation Procedure), the ferment time and temperature should be set correctly. These steps were called “Control Plan”.

At the end of these stages, the result was decrease of shrinkage to 0.141 percent for the next six months.

1. Six Sigma in Service Industry: Applying 6s Principles in

Hospitals

In comparison to manipulation of 6s in manufacturing industry, the use of 6s in service industry is somehow new and a bit different from manufacturing process. However, for the CTQ (critical to quality) procedure, the aspects of medical services in service industry are close to those in manufacturing industry.

The aim of this project which is done by Fings and Grant (2005) is to apply first three stages of 6s that are Design, Measure and Analyze in the following three processes:

1. Issues which are related to portability of insurance of the patients

2. Programs that are introduced in joint replacement

3. Procedures of releasing the patients from hospitals

4. Cancelling or rescheduling of patients who has transmitted to operating room

These processes that are called patient care products are determined as “low touch” and were selected through brainstorming of experts in healthcare and 6s.

However, because of the page limit, this paper will explore one of these processes in order to make it concise and fruitful.

1.1. Joint Replacement Program (JRP)

Within this procedure, there are some steps and protocols that should be followed. These steps are initial, diagnosis and subsequent procedures. In the first step, it is determined that the problem cannot be solved by drugs because the body of the patient has already been defendant against drugs. In the diagnosis stage, it is determined that the patient needs a hip replacement surgery. And in subsequent step, some patients need revision surgery. Here is the statistics on hip replacement surgery:

1% chance of death during this surgery

20% chance of revision after 15 years

10% chance of revision after 9 years

5% chance of revision after 7 years

54% of patients are cured and there is no need for revision

In figure 3, the improvement of process is shown in a fish bone diagram. As it is clear, some solutions that can be used in order to avoid costly revision surgery are follow-up procedures that should be done by physicians, making an agreement on revision surgery before hip replacement surgery and having better check-up evaluations.

Figure 3: Process Improvement for JRP

Besides, in the diagnosis stage, there is a possibility to take X-ray, MRI scanning and blood test in order to avoid costly hip surgery revision.

Conclusion

It has been a long time that 6s is being used widely in industries to improve the quality and reduce the costs. However, now it is more important to find ways to enhance and extend the methodology of this system and implement its strategies in all segments of industry. Moreover, it can be used in small companies and even non-for-profit and public organizations since the variability of its methodology depending on the nature of the organization and quality management implementation of the organization allows this strategy to be implemented in all types of organizations.

Furthermore, either used in manufacturing industry or service industry, the scope of 6s is to reduce the cycle time and increase the satisfaction of the customers while reducing the cost and improving the quality of product and service simultaneously.

COMPANY BACKGROUND

HICOM Automotive Manufacturers (Malaysia) Sdn. Bhd. (HAMM)

previously known as Automotive Manufacturers (Malaysia) Sdn. Bhd. is a

subsidiary of DRB-HICOM Company for production and assembly of

automobiles. The company’s headquarters is located in Pekan, Pahang,

Malaysia.

HICOM Automotive Manufacturers (Malaysia) Sdn. Bhd. Or in short,

HAMM was established in 1984. The automotive assembly plant occupies

143.7 acres in land size and being gazette as the National Automotive

Hub in Malaysia. Over 29 years in operation, HAMM had produced almost

half a million vehicles of various international marquees. Since the

opening plant, 13000 vehicles per year produced and more than 47000

complete knockdown (CKD) kits are assembled for the local and

surrounding markets. With the vision to become the preferred assembler

and using strict global standards in quality, HAMM had become a well

known and trusted company in Malaysia.

HAMM has so far assembled more than 20 models including national

cars, Proton such as Proton Saga, Proton Satria and others. HAMM also

assembled renowned marquees like Mercedes-Benz C, E and S Class

passenger cars and Actros truck, Suzuki Swift and Fuso trucks. The new

addition was assembly of Volkswagen models which was commenced in

October 2011. Assembled Volkswagen models are like Passat, Jetta and

Polo.

In a joint venture with Mercedes-Benz Malaysia Sdn. Bhd. Since

2005, the Mercedes-Benz C-Class and E-Class are assembled. In 2006,

Mercedes-Benz S-Class were added. Now, cars prodeuced here at HAMM

are like Mercedes-Benz C and E Class, Actros truck, Fuso truck, Suzuki

Swift, and Volkswagen Jetta, Passat and Polo. Figure 2.1 below shows

these types of car.

Figure 2.1: a) Mercedes-Benz C, E and S Class, Actros truck and Fuso

truck.

Figure 2.1: b) Suzuki Swift.

Figure 2.1: c) Volkswagen Passat, Jetta and Polo.

Six Sigma – Definition:

Six Sigma may be defined in several ways:Tomkins defines Six Sigma to be “a program aimed at the near-elimination ofdefects from every product, process and transaction.”Harry defines Six Sigma to be “a strategic initiative to boost profitability, increasemarket share and improve customer satisfaction through statistical tools that canlead to breakthrough quantum gains in quality.”

The essence of Six Sigma is the integration of four elements (customer, process,

manpower and strategy) to provide management innovation. Six Sigma provides ascientific and statistical basis for quality assessment for all processes throughmeasurement of quality levels. The Six Sigma method allows us to draw comparisons among all processes, and tells how good a process is. Six sigma provides efficient manpower cultivation and utilization.

Company Information

Information Details

Company Registration

No.106864-D

Year of Incorporation 1984

Paid-up Capital RM51 Million

Equity Shares HICOM Holdings Berhad

Total Land Area 143.7 acres

Build-up Area 84,529 m2

Maximum Capacity (2

shifts)30,000 Units / Year

Manpower (as at Dec

2012)1,883 employees

Production ShopsBody shop, Paint shop, Assembly shop, Tester

line

Current Activities HICOM Auto 1: Suzuki Operations Robotic

welding line, the first in East Coast Region

State of the art, German technology Paint

Shop.

HICOM Auto 2: Mercedes Benz Operations

Biggest in volume, Mercedes CKD plant (C,

E, S, Actros & Fuso)

HICOM Auto 3: Volkswagen Operations

BODY SHOP

Jigs, tools and machines must been check twice everyday, before and after work

whether they work properly or not. This to ensure that the jigs, tools and machines will not

cause problem to the unit when it used to do the assemble work. Table 3.1 shows the

expected condition of jigs, tools and machines before and after work.

Table 3.1: Expected condition of jigs, tools and machines

Before Work After Work

Ensure jigs are in good condition

and cleaned.

Ensure clamps are opened before

putting parts.

Ensure all tools and machines are in

good condition, calibrated & not

expired.

Ensure gauges (e.g. temperature/

pressure gauges) are working fine.

Ensure required PPEs are worn

before working.

Ensure the jigs are cleaned.

Ensure clamps are closed if parts are

in jig.

Ensure all tools and machines are

kept at the designated areas.

Ensure power sources for

tools/machines are switched off.

Ensure no parts or materials (except

WIP) are placed on jigs & machines.

PAINT SHOP

Paint shop via the module and descriptions is by Mr. Jefri. Each paint shop process is

loading, pretreatment and Electrodeposiotion (PTED), ED sanding, Seam Sealant, Primer,

Moist Sand, Top coat, Final Quality Gate (FQG) and waxing.  The Disciplinary Procedure

Policy (DTT), Safety and Health, Hicom Manufacturing System (ISO9001) and Environment

Quality. There are 5 departments in Hicom Automotive Manufacturers Malaysia (HAMM), a

Logistic (PC and CV), Body Shop (PC and CV), Paint Shop (all models), Assembly Shop

(PC and CV) and Finish Line (PC). PC is a passenger car and CV stand for commercial

vehicle. There are 2 plant in HICOM, the plant 1 (Volkswagen) and plant 2 (Mercedes Benz).

ASSEMBLY SHOP

The assembly shop via the module and descriptions by Mr. Hasni. The process

involve in assemble shop and to fulfill schedule that prepared by SV Mr Salahuddin at

assembly shop. There are 5 departments in Hicom Automotive Manufacturers Malaysia

(HAMM), a Logistic (PC and CV), Body Shop (PC and CV), Paint Shop (all models),

Assembly Shop (PC and CV) and Finish Line (PC). PC is a passenger car and CV stand for

commercial vehicle. All the processes involved in these departments roughly described to us

as early knowledge.There are 2 plant in HICOM, the plant 1 (Volkswagen) and plant 2

(Mercedes Benz).

3 C’s in Six Sigma Concept:

Change: Changing societyCustomer: Power is shifted to customer and customer demand is highCompetition: Competition in quality and productivity

The pace of change during the last decade has been unprecedented, and the speed of change in this new millennium is perhaps faster than ever before. Most notably, the power has shifted from producer to customer. The producer-oriented industrial society is over, and the customer-oriented information society has arrived. Competition in quality and productivity has been ever-increasing. Second-rate quality goods cannot survive anymore in the market.

Six Sigma Process Models:

Six sigma facilitated proactive approach through rigorous measurement. Some six sigma models are given below. DMAIC is used to improve the existing process and DMADV is used to employ the new products.

DMAIC (Define, Measure, Analyze, Improve, Control)

Define -Define the project goals and customer (internal and external) deliverables.Measure - Measure the process to determine current performanceAnalyze - Analyze and determine the root causes of the defects

Improve - Improve the process by eliminate defectsControl - Control future process performance

DMADV (Define, Measure, Analyze. Design, Verify)

Define - Define the project goals and customer (internal and external) deliverablesMeasure - Measure and determine customer needs and specificationsAnalyze -Analyze the process options to meet the customer needsDesign - Design (detailed) the process to meet the customer needsVerify - Verify the design performance and ability to meet customer needs

Critical Success Factors of Six sigma:

PLAN LAYOUT

Figure 1.2: Plant of Automotive Industry

The system needed to achieve Six Sigma creates a culture characterized by:

Customer centricityFinancial resultsManagement engagementResource commitment Execution infrastructure

Seven Steps for Six Sigma Introduction

When a company intends to introduce Six Sigma for its new management strategy, wewould like to recommend the following seven-step procedures:1. Top-level management commitment for Six Sigma is first and foremost. Then organizea Six Sigma team and set up the long-term Six Sigma vision for the company.2. Start Six Sigma education for Champions first. Then start the education for White belt-WBs, Green Belt-GBs, Black Belt-BBs and MBBs in sequence.3. Choose the area in which Six Sigma will be first introduced.4. Deploy Critical to Quality - CTQs for all processes concerned. The most important isthe company’s deployment of big CTQy from the standpoint of customer satisfaction.Appoint BBs as full-time project leaders and ask them to solve some important CTQproblems.5. Strengthen the infrastructure for Six Sigma, including measurement systems, statisticalprocess control (SPC), knowledge management (KM) and database management system(DBMS).6. Designate a Six Sigma day each month, and have the progress of Six Sigma reviewedby top-level management.7. Evaluate the company’s Six Sigma performance from the customers’ viewpoint,benchmark the best company in the world, and revise the Six Sigma roadmap ifnecessary. Go to step 1 for further improvement.

Possible Areas in Automotive Industry for Six sigma application:

Body shop, Paint shop and Assembly shop have potential of applying SixSigma in following improvement projects:1. Reducing rejections in shipments.

2. Improving first sample approval percentages while working with buyer3. Improving supplier evaluation processes4. Improving AQL performance in shipments.5. Improving merchandiser performance6. Reducing non conformances in audits by buyer7. Improving processes at the source (including fabric purchase and inspection,stitching, embroidery, packing and shipping) to reduce rejections at later stages.8. Eliminating manufacturing errors/ defect

Convincing apparel executives to accept the process, other than as a selling tool, has beena difficult task. About the only agreement reached is that every garment cannot be manufactured to the perfect specification. However, the typical manufacturing plant is producing apparel at about a 3 sigma level with 2.5 to 4 % defects. That is 4 defects per 100 not the 3.4 defects per 1,000,000 produced by a Six Sigma manufacturer. The gap is wide enough that significant improvement can be made in any such plant. Two financial facts are important to note. Historical studies have shown overall savings in the $10,000 to $20,000 range for an improvement of just one Sigma. Apparel managers are generally astounded by the “True Cost of Quality” in their manufacturing facility. Typically, these costs are hidden in overhead but include inspection and marking, sorting, transport, reinspection, supervisor time, downstream operator repair, cleaning, and irregulars. Therefore, any improvement in quality has a triple effect of reducing indirect labor, lowering total fabric cost, and improving customer satisfaction. DuPont uses the program for its productivity and quality improvement strategies. It considers Six Sigma a business-management process that concentrates on eliminating defects from work processes. The company now has more than 4,000 completed or inprocess Six Sigma projects. Other textile companies, such as Burlington Industries, Collins and Aikman, and PGI have also started Six Sigma initiatives.

Defect occur in lines production

No

.

Evaluation Criteria Examples Corrective Actions

1. Surface crack. Weld the cracked position of spot.

2. Large gap. Not allowed with screw connection (the

gap is removed by hammering the two

sheets.

3. Hole local deepening on

the material surface in the

area of the lens.

Not allowed in the visual area (tin to be

added and leveled by grinding).

4. Surface hook. Not allowed on the assembly surface

(surface to be leveled by hammering).

5. Welding remains. Not allowed if encounter any danger

risks or in visible area (to be removed

by grinding).

6. Measurement errors. Relocate spot.

7. Spot is missing. Respot using spot welding gun.

8. Open spot. Respot using spot welding gun.

9. Spot burnt. Fill hole with MIG welding.

Defect for Spot Connection Category

Spot connection point can be divided into several categories to describe its properties

and function. This is due to their properties and functions are different to each other. Table

3.3 shows their name and its description.

Table 3.3: Spot connection category

Name Description

Normal Point

(NP)

Connection would fail due to overloading vehicle. The failure does not

necessarily damage the vehicle usage.

Control Point

(KP)

Connections that would fail due to overloading the vehicle and this failure does

not necessarily damage the vehicle’s overall safety and does not nearly affect the

correct function of its specified safety details. The connections require a higher

control and machine maintenance.

Special Point

(SP)

Connections that would fail due to overloading the vehicle and this failure could

affect the specific safety details without affect the correct function or damaging

the overall safety of the vehicle. The connections require a higher control and

machine maintenance.

Adhesion

Point (HP)

Occur when these spots are started due to manufacturing necessity in a station

then completed in a following station of the welding process. In this concept

these points must be documented in the traveler sheet. Concerning control

activities they are treated like KP and SP points.

Inaccessible

Point (UP)

These points present in:

Three sheet welding

Thick sheet (over 1.8 mm)

External surface area

Inaccessible for chisel test

Coating area

Uncertain statement in chisel test or ultrasound test.

Stud Connection Defect

Table 3.4: Stud connection defect

No. Evaluation Criteria Example Corrective Actions

1. Stud missing. Replace missing stud and check

installation or device.

2. Stud incorrectly

placed.

Straighten the stud if it is bent

approximately less than 50, otherwise

remove stud, clean surface and place new

stud.

3. Stud damaged and

unclean (weld spatter

and thread damaged).

Check the tool and current, remove the

stud, clean surface and place new stud.

4. Adhesion-weld gap

between stud and

plate visible.

Remove the stud, clean surface & place

new stud.

5. Weld-bead protrudes

too much.

Check the tool and current, remove

projection if the subsequent assembly of

the parts is obstructed.

6. Flange-distance for

stud with large flange

and T-stud.

Tolerance:

h large-flange ±

0,1mm

h T-stud ±

0,2mm

Clarification whether sure assembly is

possible, if necessary, removes the stud

and places a new stud.

Seven basic SQC tools used in Six Sigma process:

1. Cause and effect diagram2. Check sheet

3. Control chart4. Histogram5. Pareto chart6. Scatter diagram7. Stratification

Conclusion:

Six sigma is a new strategic paradigm of management innovation for company survival in this 21st century which implies three things such as statistical measurement, management strategy and quality culture. Six Sigma with its 4S (systematic, scientific, statistical and smarter) approaches provides flexibility in managing a business unit. Automotive industry being a field dealing with lot of variations and defects in each process is the exact place for six sigma application. The speedy implementation of the right method will make a significant and successful difference in many of our company’s futures.