Automotive Quality - From "Fehler" (Failure) to Stow and Go Success

The recent post in View from the Q by Laurel-Nelson Rowe touched on a very interesting subject, namely the quality of design in automobiles.  Knowing that Chrysler is substantially and significantly owned by FIAT, I would have expected the presentation by Herr Klaus Busse to describe Fehler In Allen Teilen 

and be forced to resort to returning the Chrysler to FIX IT AGAIN TONY!

As someone interested in the American Automotive industry, I was especially impressed with the innovative vehicles from two automotive companies operating in the post-WW2 era: Tucker and Hudson.  The Tucker Corporation, led by the charismatic Preston Tucker, strove to create the safest and best performing vehicle available for commercial use. Unfortunately due to financial and political obstacles, the Tucker organization was ground into bankruptcy in favor of the status quo favoring the Big 3 automotive giants. The Tucker Torpedo remains a valuable collection item, and its innovative features were decades ahead of the comparative models from the Big 3.

The Hudson Hornet was the most successful NASCAR competitive vehicle in the 1950's, and inspired design innovations for racing, predating the "muscle car" era by a full generation.  This success was immortalized in the Pixar Disney movie, Cars, as the character "Doc Hudson", voiced by the late great Paul Newman.  Unfortunately, Hudson Motors was merged into a conglomerate known as American Motors, and the then CEO, a number-crunching financier named George Romney (father of Mitt Romney), shifted the focus of American Motors from  powerful vehicles like the Hudson Hornet to emphasize iconic models like the Nash Rambler, Gremlin, and Pacer, which were also immortalized in Pixar Disney's Cars 2 as the villainous LEMONS.  In a strange turn of events, the assets of American Motors were absorbed into Chrysler which still makes and markets the Jeep line of products.

But back to the question raised by our illustrious ASQ Managing Director,  What do you seek in the driving experiences of your future?  At Chrysler, which has been mocked and lampooned for its K-Car models and clunky Mini-Vans (courtesy of Lee Iacocca), the current commercials are emphasizing a design feature, "One Touch, Stow and Go".  This is a Visual Demo of One Touch Stow and Go which is available as part of Chrysler interiors that expands the possibilities and usability of the vehicle.  The simplicity of use, along with the increased versatility of the vans to alternately toggle between passengers and cargo reflects nothing short of design genius.  This is a differentiator for a family vehicle, and currently a premium feature which will prove itself so essential that within 5 years, a stow and go capability will be an essential requirement for new passenger vehicles of all shapes and sizes.

Redefining The Quality Function: From Inspection to Governance

In addressing the latest commentary on View From The Q , I will paraphrase President John F. Kennedy.

"Ask not what you can do beyond the Quality Function
    Ask what the Quality Function can be leveraged and engaged to perform"

I will respond by addressing three of Paul B's passages, and providing my own perspective.

1. "transform into profit centers"

If one refers to their Operations Management 101 textbooks, it is apparent that manufacturing was always intended as a profitable enterprise, and the intent of all manufacturing phases was to add value and transform inputs and materials, with skill and expertise, into something of higher value.

Consider this scenario of sequential value upgrades
- Start with $300,000 of Raw Materials (RM)
- Apply technology and expertise to modify the items into $500,000 of Work In Progress (WIP) goods
- Complete the internal processes and stages to realize $700,000 of Finished Goods (FG)
- Add the marketing and logistics to fulfill customer demand with $900,000 of Packaged and Shipped Products (PSP).

In our present world of rapidly competitive pricing and finite market demand, the best option for many organizations is to realize gains from internal efficiencies including:
- Optimization of yield from capital and labor time and materials
- Reduction of waste and unplanned delays
- Minimization of inventories (namely RM, WIP, FG, PSP).
- Predictability and certainty of outcomes
- Marketability from increased operational capacity, versatility and flexibility

These priorities align very closely with the Quality Function, which can apply the expected outcomes of Quality Management systems constructively towards the aspirations of "Smart Manufacturing".

2. "highly automated and IT driven production"

This is not a visionary practice - it has actually been in effect for decades.  In my personal experience, I managed the quality system of a manufacturer over fifteen years ago which deployed an automated CNC (Computer Numerical Control) production system which automated several key manufacturing stages.  The system was structured to permit the automatic conversion of AutoCAD designs into the machine-readable code that permitted instant replication of the design to the applied materials.

Automation, software technologies, and innovative devices permit highly versatile operations with reduced setup times and increased consistencies, which aligns with the implicit promise of the "Smart Manufacturing" concept.  The disadvantage is that automation loses the subjective, expert touch of a skilled and experienced artisan, who can make personal modifications or customizations where needed.

When converting from manual processing to automated systems, the emphasis has to evolve from post-production inspection controls to early stages of design and deployment.  Because an incorrect design can be replicated indefinitely without correction, it is critical and essential to devote additional efforts to conducting and enforcing design reviews, document controls, change/release practices, and configuration management.

The sampling methods characteristic of Quality Engineering are not as readily applicable to software or integrated technology solutions.  Where traditional sampling specifies a target of deficient products per sample, automation would make the errors more uniform, so that outcomes are consistently incorrect and more difficult to distinguish.  Reviews of code and design provide a better value, and more effectively reveal errors when correction costs are relatively low.

In a fast-paced, automated manufacturing environment, it is tempting in the name of efficiency to disregard the interests and perspective of the customer or regulatory bodies.  To counteract this trend, the Quality Function must adopt and emerge as the advocate of Customer and Regulatory concerns, and ensure that "robotic" outcomes remain usable, compliant, and ultimately marketable.

The Quality Function already includes elements of Software Quality to address IT and Mobile devices.  Six Sigma and Quality Management courses have progressively integrated technology in order to remain relevant, and must continue this approach.  The competent Quality Manager should be prepared to demonstrate their versatility by being aware and proficient in the main elements of Software Quality.

3. "how to increase the value of quality in an organization"

At WCQI 2012 in Anaheim, I had the opportunity to present a controversial session entitled, "THE END OF QUALITY".  Using a linguistic trick where in English the word END can be interpreted both as a termination and a purpose, I structured my presentation to challenge the audience to release their prior impressions and reposition the purpose or "END" of the Quality Function as an Executive agent, emphasizing Executive priorities of Finance and Governance.  This extends from the passionate pursuits of the International Academy for Quality Governance Think Tank, and the ASQ Quality Management Division - Finance and Governance Committee which is actively working with the International Management Accountants organization to define a Body of Knowledge to ensure that Quality professionals can demonstrate proficiency in Financial competencies.

By embracing the concerns of Finance and Governance, the Quality Function raises its stature and profile, and strengthens its influence over the other areas within its domain (products, services, regulatory control, customer satisfaction, etc.).  Since all Quality Function tasks will be aligned with financial priorities (internal efficiencies, reduced cost to operate, premium product marketability) and governance objectives (emanating from the organization's mission, vision, goals, objectives, and expectations for monitoring and reporting), there will be fewer obstructions and less resistance.

ROUND UP

In order to realize the aspirations of Smart Manufacturing and permit our enterprises to achieve the desired gains from internal efficiencies, the Quality Function has to evolve from its traditional perceived roles emphasizing inspection and controls.  In addition to being a driving participant in superior design and internal collaboration, the Quality Function must adopt a more vigorous role as an advocate of Customer and Regulatory concerns.  By supporting the Executive concerns of Finance and Governance, the Quality Function is an essential component of Smart Manufacturing and Enterprise Success.

Cost of Poor Quality: Lessons Learned from a Massive Meat Recall

Residents of Western Canada are experiencing a massive recall of beef products due to the detection of unsafe levels of E. coli in meat packaged and distributed by XL Foods of Brooks, Alberta.

This recall has been publicized and is currently under investigation by the Canadian government.  Readers can view the process first-hand at XL Foods Inspection Report.  The company is known officially as "Establishment 38".


Lesson 1: Analyze, Improve, and Control process outcomes

FINDING: Establishment 38 had monitoring measures in place but was not properly conducting trend analysis of the data it collected. The CFIA review found that the plant needs to improve its trend analysis and also stengthen its response measures when a higher than normal number of detections are made.

In this case, the company committed the infrastructure and expertise to generate the necessary scientific data, but was missing the will and capability to accurately recognize hazardous conditions requiring an appropriate response.  Given the advances in automation, this could have been automatically programmed with simple code.  Basic quality engineering practices specify the trend patterns that should prompt investigation into the processes.  This would have added a few hours of work per month for existing employees.

Lesson 2: Segregate non-conforming product from the noncompliant process

FINDING: In addition, the company's control measures for meat that tested positive for E. coli O157:H7 were not always being followed correctly. 

There is a food safety process known as "bracketing" which was specified but not adequately followed by XL foods to ensure protection from releasing contaminated product.  This quality concern reflects a process that was robustly designed but disregarded by the employees.  If this was an oversight, the training and competence of the workers is at issue, and requires correction to the knowledge base.  If this however was the result of employee defiance or management subterfuge, then there is an enterprise-wide issue with quality engagement that places product throughput priorities ahead of product safety and consumer protection. Given that XL Foods is a unionized environment, there are organizational risks that would contribute to deficient outcomes. A series of coaching and engagement seminars, kaizen sessions, or quality circles would effectively reinforce guiding principles and ensure that correct responses were applied and reinforced for deficient product.

Lesson 3: Monitor and control all physical, chemical, and biological hazards according to an approved mitigations and contingency plan

FINDING: The company's maintenance plan required updating in order to address minor sanitary issues, mostly related to the older age of the building. The CFIA detected issues related to adequate control of condensation and ventilation issues.

Hazard analysis was conducted and reflected in a robust maintenance plan.  A frequent occurrence is that maintenance, particularly preventive maintenance, is sacrificed as an accounting line item with the ethic, "if it ain't broke, don't fix it".  Even if the deficient maintenance practices did not create nor enhance the E Coli levels, the inclusion of this finding in the government inspection report reflects that overall confidence of quality and safety is diminished by less than ideal sanitary working conditions. Upgraded maintenance requires investment in capital and assets, along with tools and consumables, but the positive outcomes are realized in both objective terms (better compliance) and subjective impressions (pride, confidence)

The cost of abiding by these lessons could be measured in hundreds or even thousands of dollars, spent as appendages to existing processes and operations.  The tragedy is that the government inspectors' reports reveal that systems and practices were established by the company, but not fully followed by the employees.  In this sense, the investment in quality and safety management was not yielded, but treated as overhead or a "necessary evil cost of doing business".  Top management has to lead by example in following through in deed and word, to show the importance and priority of product safety and quality above all else.

The cost of neglecting and disregarding these lessons has resulted in the disparagement of XL Foods and the entire Canadian meat-packing industry as a safe and reliable provider of quality beef products.  The federal government has shut down operations of XL Foods, pending completion of legally mandated corrective actions and assurance of product safety and integrity.  The scrutiny and oversight needed for XL Foods until trust is fully regained will place a far greater financial burden on the organization than the initial cost of following the original program already in place.

Lesson 4: Hazards are ever-present and must be discovered and controlled internally to prevent the risk of external release and discovery.

In this specific case, E. Coli is present in all beef products.  There are multiple safeguards and contingencies at the disposal of providers, suppliers, and processors, to control E. Coli and ensure that it is limited to safe levels, however with each control comes a cost that must be borne by a party reluctant to absorb that burden from their portion of the returns.  By passing on the burden of responsibility, the risk of release is also passed on to its final destination - the customer.

In general, unless we as Quality professionals are vigilant and conscientious, the efforts of our labors may be rendered futile by an unanticipated hazard that could have otherwise been anticipated or detected at an earlier stage where controls or contingencies would have been easier and less expensive.  This is the underlying driver behind efforts to reduce the Cost of Poor Quality.  The adoption of robust systems, data analytics, and effective response measures is really a protection against the unwanted costs of government investigations, bad publicity, business shutdowns, and a destroyed industrial reputation.