The Importance of QA
System in Supply Chain
Dr. Gavin K Y CHAU
Chairman of Hong Kong Quality Management Association
Widely Accepted QA System
„ TQM/ISO9000
„ Six Sigma
„ Malcolm Bridge National Quality Award
(MBNQA)
Basic Supply Chain
Definition of Supply Chain Management
„ Supply Chain
„
The steps and the firms that perform these
steps in the transformation of raw inputs into
finished products bought by customers.
„ Inbound Logistics
„
The delivery of goods and services that are
purchased from suppliers and/or their
distributors.
„ Outbound Logistics
„
The delivery of goods and services that are
sold to a firm’s customers and/or distributors.
Ultimate Goals
„ Achieve Competitive Advantage by delivering
value added products/services
„ Produce defect-free products/services to
meet customer requirement
„ Reduces costs
Customer Vs Supplier
„ Each entity in a supply chain is both a
supplier and customer relationship
Supplier
Company A
Customer
Supplier
Company B
Customer
Company C
Inbound Logistics
Supplier Quality Evaluation
1.
2.
3.
4.
Looking for Business
Secure Engineering Requirements
Prepare Samples
Qualify Samples
5.
6.
7.
8.
Prepare Proposal
Accept Proposal
Production
Inspection Approve
1. Look for Business
Supplier Quality Survey
„ The more formal quality survey consists of a visit to
the supplier’s facility by a team of observers from
departments such as Quality Control / Assurance,
Engineering, Manufacturing, and Purchasing.
„ Depending on the product involved, the activities
included in the quality control / assurance portion of
the survey can be chosen from the following list:
Supplier Quality Survey
„ Management:
„ Philosophy, quality policy, organization structure,
commitment to quality.
„ Design:
„ systems in use, caliber of specifications, orientation to
modern technique, attention to reliability, engineering
change control, development laboratories.
„ Manufacture:
„ Physical facilities, maintenance, special processes,
process capability, production capacity, caliber of
planning, lot identification, and traceability.
Supplier Quality Survey
„ Purchasing:
„ Specifications, vendor relations, procedures.
„ Quality Control / Assurance:
„ Organization structure, availability of quality control
and reliability engineers, quality planning (materials, inprocess, finished goods, packing, storage, shipping,
usage, field service), audit of adherence to plan.
„ Inspection and Test:
„ Laboratories, special tests, instruments, measurement
control.
Supplier Quality Survey
Data Systems:
„
Facilities, procedures, effective use of reports.
„ Personnel:
„
training, motivation.
„ Quality Results:
„
Performance attained, prestigious customers,
prestigious subcontractors.
2. Engineering Requirements
„ The engineer must obtain information to be sure that the
supplier has the capability to provide a product that meets all
fitness-for-use requirements
3. Prepare Samples and quality samples
„ Incoming inspection
„ Consists of a physical inspection of the product.
„ When the inspection occurs at the buyer’s plant, it
is called incoming inspection.
„ When the incoming inspection is conducted by the
buyer at the vendor’s plant, it is called source
inspection.
„ Incoming inspection on a product can vary from
100% inspection of all product to a simple identity
inspection.
Evaluating Delivered Samples
Type
Approach
Application
100%
inspection
Every item in a lot is evaluated for
all or some of the characteristics in
the specification.
Critical items where the cost of
inspection is justified by the cost of
risk of defectives.
Also, used to establish quality level
of new vendors.
Sampling
inspection
A sample of each lot is evaluated by
a predefined sampling plan and a
decision made to accept or reject the
lot.
Important items where the vendor
has established an adequate quality
record by the prior history of lots
submitted.
Identity
inspection
The product is examined to assure
that the vendor sent the correct
product.
No inspection of characteristics is
made.
Items of less importance where the
reliability of the vendor laboratory
has been established in addition to
the quality level of the product.
Uses of Supplier Quality Data
Supplier’s test data provide an opportunity to
eliminate incoming inspection. The process is:
„
„
Along with product shipments, the vendor
arranges to transmit test data.
The buyer performs a lot-by-lot incoming
inspection on the product and compares the test
data with the vendor’s test data to determine if the
vendor’s laboratory can be relied on.
Uses of Supplier Quality Data - Example
5. Prepare proposal and
6. Accept proposal
7. Production
„ Scoring system for each supplier
A c tiv ity
1. Q uality M anagem ent
2. Q uality P lanning
3. Inspection E quipm ent
4. C alibration
5. D raw ing C ontrol
6. C orrective A ction
7. H andling R ejects
8. S torage and S hipping
9. E nvirom ent
10. P ersonnel E xperience
R e c e iv in g In sp e c tio n
R X W
R
W
24
8
3
32
8
4
30
10
3
0
0
3
0
0
3
30
10
3
20
10
2
10
10
1
8
8
1
20
10
2
T o ta l =
174
M a n u fa c tu rin g
R
W
R X W
8
3
24
8
4
32
10
3
30
10
3
30
10
2
20
8
3
24
8
2
16
10
1
10
8
1
8
10
3
30
T o ta l =
224
F in a l In sp e c tio n
R
W
R X W
8
3
24
10
4
40
10
3
30
0
3
0
10
2
20
8
3
24
10
3
30
10
1
10
8
1
8
10
2
20
T o ta l =
206
R = rating; W = w eight
Interpretation of totals:
F ully approved: E ach of the three totals is 250.
A pproved: N one of the three totals is less than 200.
C onditionally approved: N o single total is less than 180.
U napproved: O ne or m ore of the totals is less than 180.
1 0 - T h e sp e c ific a c tiv ity is sa tisfa c to ry in
e v e ry re sp e c t (o r d o e s n o t a p p ly ).
8 - T h e a c tiv ity m e e ts m in im u m
re q u ire m e n ts b u t im p ro v e m e n ts c o u ld b e
m ade.
0 - T h e a c tiv ity is u n sa tisfa c to ry .
Use of Histogram Analysis on Supplier Data
Pareto Analysis
„ Supplier improvement programme can fail
because the vital few problems are not
identified and attacked.
„ The Pareto analysis can be used to identify
the problems in a number of forms:
1.
Analysis of losses (or defects, lot rejections, etc.)
by material number or part number. Such analysis
serves a useful purpose as applied to catalog
numbers involving substantial or frequent
purchases.
Pareto Analysis of Suppliers
Pareto Analysis of Incoming Inspection
900
100
700
80
600
60
500
400
40
300
200
20
100
Requirements
0
Ho
Count
Percent
Cum %
le
ze
Si
m
Di
rd
a
Bo
165
19.0
19.0
sio
en
ns
Co
n
110
12.7
31.7
fe
De
s
ct
Co
ld
Th
79
9.1
40.8
ne
i ck
ss
at
Pl
g
in
69
7.9
48.7
al
su
Vi
Co
66
7.6
56.3
ld
su
Vi
al
PT
H
s
ne
ick
h
T
61
7.0
63.4
s
61
7.0
70.4
h
Ot
er
257
29.6
100.0
0
Percent
Number of Defects
800
Quality Rating
„ Supplier performance is not limited to quality of product
delivered. It includes:
1. Delivery against schedule
2. Price
3. Other performance categories.
„ These multiple needs suggest that supplier rating should include
overall supplier performance rather than just product quality
performance.
„ Example:
„ Rate the three principle vendor performances in
accordance with the following plan:
Factor
Quality
Cost
Service
Unit of Measure
Percent of lots accepted
Low price / actual price
Percent of promises kept
Weight
40
35
25
Quality Rating-example
Using Supplier Ratings
„ to determine the share of future purchases
given to each supplier.
„ highlights the supplier to be dropped as
vendors.
8. Inspect and Approve
„ Statistical process control
„
Control Chart
Outbound Logistic
What is Six Sigma?
„ Six Sigma is a comprehensive and
flexible system for achieving, sustaining
and maximizing business success. It is
uniquely driven by close understanding
of customer needs, disciplined use of
facts, data and statistical analysis, with
diligent attention to managing,
improving and reinventing business
processes.
Six Sigma approach
• Identify the Customer’s Need
• Center around the Target
• Reduce Variation
• Reduce Defects
Six Sigma Framework
How to Operationalize Six Sigma:
Define
Measure
Analyze
• Translate CTQs to • Benchmark and
Key Metrics &
Baseline Processes
Drivers
• Identify CTQ &
(Critical to
• Understand Variation
Quality) Variables • Measure Key
Variables &
• Target Opportunities
Collect Data
• Map High Level
and Establish
Process
Improvement Goals
• Use Appropriate
Tools
• Map Detailed
Process by
Resource
• Define Charter
Improve
Control
• Fix Root Causes &
• Set up Control
Eliminate Bottlenecks Mechanisms
• Isolate the
“Vital Few” from the
“Trivial Many”
Sources of Variation
• Use of Brainstorming
and Action Workouts
• Monitor Variation
& Trends
• Take Action
End of Presentation
Q&A