Quality (Q) Cost (C) Delivery (D)

Rahul Laxman IyerASQ Certified Quality EngineerMesa AZ2 November 2015

Introduction

Q-C-D is a management approach originally developed to help companies within the automobile sector

Utilized to access different components of the production process

Used to provide accurate feedback in the form of facts and figures that help senior managers make logical and beneficial decisions

Aids in prioritization of tasks required

Focus of Lean Manufacturing

Benefits of Q-C-D

Straight forward method of measuring processes

Applicable to both simple and complicated business processes

Basis for comparing businesses & processes (Benchmarking)

Basis of Quality (Q)

Performance: ability to meet primary operating characteristics

Conformance: the degree to which a certain product meets the customers expectations

Special Features: additional features of a product or service

Aesthetics: the products looks, sound, feel, smell, or taste

Basis of Quality (Q)--continued

Durability: how long the product lasts before it has to be replaced

Reliability: the time until a product breaks down and has to be repaired, but not replaced

Serviceability: speed, courtesy, competence and ease of repair

Perceived quality: affected by the high price or the good aesthetics of a product

Basis of Quality (Q)--continued

Product components

The quality of a product depends almost entirely on the quality of the supplied materials

One cannot produce a high-quality end product from low-quality components

Consequences of poor quality

Business loss

Reduced Productivity

Increased Costs

Basis of Cost (C)

Four Types Of Manufacturing Costs

Raw materials

Direct Labor

Variable Overhead

Fixed Overhead

Cost Reduction

Reducing material costs

Adopting lean manufacturing

Upgrading machine technology

Implementing robot-based automation

Basis of Delivery (D)

Being On Time When Promised Per Contract

Not Being Late

Not Being Early

Increasing profitability with QCD

Seven measures used to increase profitability ( "QCD: measuring manufacturing performance" (PDF). http://nationalarchives.gov.uk

Not right first time (NRFT): Wasted resources, effort and time Cost of Poor Quality (COQ, COPQ)

Delivery schedule achievement (DSA): analyzes how well a supplier delivers what the customer wants and when they want it

People productivity (PP): The time it takes (in staff hours) to produce a good quality product

Overall equipment effectiveness (OEE): Measure of how well a company uses its equipment and staff (Availability, Performance, Quality)

Value added per person (VAPP): Measure of how well people are used to turn raw materials into finished goods (Output Value, Input Value, Number of Employees)

Floor space utilisation (FSU): Measures the sales revenue generated by a square meter of factory floor space

Increasing profitability with QCD: Calculations Illustrated

Increasing profitability with QCD: Calculations Illustrated - Continued

Quality (Q) Cost (C) Delivery (D)

Q-C-D is a management methodology that can be used for lean manufacturing and process improvement

Originated in automotive industry, but can be applied to virtually almost any industry

Emphasizes making decisions based upon data

A tool to improve business profitability