1 CASE-Summer-20071 Impact of Quality on Productivity By T.A. Khan PEC-Impact of Quality on Productivity

CASE-Summer-2007CASE-Summer-2007 11

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Impact of Quality on Impact of Quality on ProductivityProductivity

By T.A. KhanBy T.A. Khan

PEC-Impact of Quality on ProductivityPEC-Impact of Quality on Productivity


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A Common PerceptionA Common Perception

Quality Productivity

Quality

ProductivityQuality

Productivity

4

3

2

1

0

-1

-2

-3

-4

4

3

2

1

0

-1

-2

-3

-4Trade off

A False Perception


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The following question arises –

Are productivity and quality related?

Are the two sides of the same coin?

Can you have both?

The answer of course is Yes.

The quality management can also improve productivity – the number of units produced from available recourses.

Effect of Quality Management on Productivity


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• Improving quality by reducing defects will increase good output and reduce inputs. In fact, virtually all aspects of quality improvement have a favourable impact on different measures of productivity – labour productivity and machine productivity.

• Improving product design and production processes, improving the quality of material and parts and improving job designs and work activity will increase productivity.



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Product Yield

It is a measure of output used as an indicator of productivity. It can be computed for the entire production process (or for one stage in the process) as follows:



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Yield = (total input) (%age good units) +(total input) (1 - %age good units) (%age reworked)


OR

Y = (I) (%age G) + (I) (1 - %age G) (%age R)

I = planned number of units of product started in the production process

G = Good units produced

R = Defective units that are successfully reworked


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*No scheduled

production

* Failures

* Setup

C Target Output

EActual Output

Total Operating timeA

vaila

bili

tyP

erf

orm

ance

Lost effectiveness

* Minor Stoppages

* Reduced Stoppages

Actual Output

Running time

D

B

Qualit

y

OEE = B/A X D/C X F/E Availability rate Performance rate Quality rate

A

* Scrap/

rework

* Startup losses

Good Output

F

Net Operatingtime


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Quality ---- ImprovementQuality ---- Improvement

Raw Material Raw Material Machine ConditionsMachine Conditions Process CapabilitiesProcess Capabilities Operators EducationOperators Education

KnowledgeKnowledge SkillsSkills AttitudeAttitude


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Raw MaterialsRaw Materials Tag Price Vs Total Cost of ownershipTag Price Vs Total Cost of ownership Supplier selectionSupplier selection supplier Evaluationsupplier Evaluation Communication with supplierCommunication with supplier supplier development and partnership.supplier development and partnership. Supplier Performance Measurement and Supplier Performance Measurement and

MonitoringMonitoring

•Supplier Relation Managements (SRM)•Quality Management Systems


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Machine ConditionsMachine Conditions Cleaning and LubricationCleaning and Lubrication Maintenance:Maintenance:

PlansPlans Standard Spare PartsStandard Spare Parts Condition MonitoringCondition Monitoring

Reduction in MTTR and Enhancement of Reduction in MTTR and Enhancement of MTBF.MTBF.

•Total Productive Maintenance•Reliability Centered Maintenance•5S--- Programs


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Process Capability AnalysisProcess Capability Analysis

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)( LSLUSLCp

IncapableCp

olTightContrCp

CapableCp

00.1

00.1

33.1


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Operators EducationOperators Education

KnowledgeKnowledge Total Quality ManagementTotal Quality Management Statistical Process Control ToolsStatistical Process Control Tools Product Quality AttributesProduct Quality Attributes

SkillsSkills Machine Operations (Settings & Timings)Machine Operations (Settings & Timings)

AttitudeAttitude Customer Requirements (Internal & External)Customer Requirements (Internal & External)

Connecting to the “Big Picture”Connecting to the “Big Picture”


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Documents

1 CASE-Summer-20071 Impact of Quality on Productivity By T.A. Khan PEC-Impact of Quality on Productivity