September 2005

Last month, I served up the first of a three-part series on managing quality. I defined quality as having little to do with the cost of a product but everything to do with "meeting the customer's expectations." I also indicated that it is necessary to define the customer's expectations in terms that will allow us to effectively manage quality. Finally, I emphasized the need to educate your employees on these requirements. This month, I will cover the goal of preventing defects as opposed to detecting defects.

Often, when conducting an operational audit for a client, I am told that the company has a very good quality control program. When asked to explain why the system is effective, the client will usually tell me about the number of inspectors they have. They seem to think that if they have enough inspectors, they will be able to manage quality well.

Quality inspection is designed to detect something that does not conform to the customer's expectations. Put differently, inspection is designed to identify defects or characteristics that do not meet product specifications. The goal of inspectio0n programs is to identify all instances of non-conformance so they can be fixed before the item is delivered to the customer. If a manufacturer is successful at this 100 percent of the time before shipping, it can comfortably guarantee that its customers will receive quality products.

The problem with this approach is that it makes sense only if you do not care about the ultimate cost of your product. Every time you discover a non-conformance issue [or a defect], you must engage in additional non-value-added (NVA) activities to rectify it. Depending on the defects, it can add up to a lot of additional handling, labor, material and machining costs.

Cost of Non-Conformance

We have discussed the issue of waste and NVA activities, and how they relate to lean manufacturing, in this column many times in the past. To review, any activity that does not add value to a product or service is considered waste and unduly adds to a product's cost. A lean manufacturer strives to eliminate all activities that add cost, but add no value.

When speaking to a group about lean manufacturing, I always bring up the issue of quality management and the associated costs. To illustrate, consider a company that makes solid wood cabinet doors. The company's management prides itself on the high quality of its cherry products and has inspectors strategically located throughout the manufacturing process to detect defects.

Betty, for example, is an inspector in the final assembly and sanding department. She recently found three cherry doors that she felt did not meet established quality standards. One door had a crack in a glue joint of a center panel, the second had a surface scratch and the third had poorly matched pieces of wood in the frame. Betty marked all three as defective for not being in compliance with customer requirements. The first panel was sent back to assembly to see if it could be repaired. Betty used a random orbital sander to remove the scratch from the second door. She routed the third door to the finishing department to try to even out the differences in the color of the frame rails.

Before reading any further, answer each of the questions in the yellow box.

Inspection is, in itself, a NVA activity and adds cost to the product. This is why inspectors are classified as indirect labor by accounting departments. Inspectors are an unnecessary cost of quality management and are not present in a lean manufacturing company. Furthermore, Betty's job would not be necessary if the company spent its resources on prevention instead of detection by Betty and her inspector colleagues.

Repairing the crack in the door panel is also a NVA activity. Here is where feathers usually start flying. In a group of 100 woodworkers, there will be 20 or so who think converting something that is not in conformance into something that is in conformance adds value. Stated another way, they think that taking something of poor quality and converting it into something that is quality adds value. This might sound logical, but it is seriously flawed. What I have just described is restoring value - not adding value.

If the door panel had been glued properly in the first place, none of the waste of inspection and repairs would have been necessary. So, I am sticking by my NVA answer.

Is sanding the scratch a value-added activity? No.

Is sap staining door frames that were poorly color matched at assembly a value-added activity? No.

In both cases, someone is spending time and materials to restore value to something that became diminished in quality during the manufacturing process. This becomes a cost of non-conformance to the customers' requirements that we discussed last month. Thus, I again state that restoring value is not the same thing as adding value. In a world-class company with effective quality management, there is no justification for a "restoration department."

Detecting Defects

Unfortunately, most small woodworking plants think of quality management in terms of detecting defects and fixing them before the product is shipped. This line of thinking is a waste of resources, because it assumes that some products are going to be made with defects. This assumption sets the stage for continually making products that will not meet the customers' expectations or the specifications that you developed to ensure a quality product. This old paradigm has become as obsolete as the manual typewriter.

Under this system of inspection, every production employee becomes his own inspector and watches closely to make sure that everything is done right the first time. When this is an integral part of a cabinet shop, it results in a quality kitchen cabinet.

Preventing Defects

Self-inspection goes a long way toward the elimination of fixed inspection stations and reduces the waste associated with reviewing parts or products after-the-fact. The new paradigm and the new focus of quality management of the past 40 years or more has been the prevention of all defects. This is the best way to eliminate the extra costs of non-conformance mentioned above and eliminating the need for dedicated quality inspectors. The average small woodworking plant might reject this as a silly goal that cannot be met. However, spending time properly jigging machinery and coupling that with a good preventive maintenance program will go a long way in preventing common defects.

Every value-added activity is vulnerable to Murphy's Law unless you do something proactive to prevent bad things from happening. When something does happen, you must prevent it from happening a second time. Thus, the process follows to identify the root cause of non-conformance and to remove that cause permanently so that it will not reoccur. After a year or so of adopting this attitude throughout your plant, your preventive efforts will completely replace your inspection efforts and result in fewer NVA activities, lower costs and higher profits.

Ben Franklin said, "An ounce of prevention is worth a pound of cure." No doubt Ben could have been a wood products quality management expert.

I will complete this three-part series next month by looking deeper into the relationship of quality management and continuous improvement.

Tom Dossenbach is managing director of Dossenbach Associates LLC, a Sanford, NC-based international consulting and research firm. Contact him at (919) 775-5017 or visit his Web site at www.dossenbach.com. The first installment of this 3-part series is available here.