Quality Management

Introduction:
Automotive is among the leading sectors in the any economy in terms of production,
exports, employment and contribution to the exchequer. Its needs to reform its laws,
modernize machinery and scale up capacities to global level to exploit this opportunity.Apart
from the above factors, the application of management techniques in the business will bring
long term stability in the market and better company reputation. The paramount need for a
paradigm shift is essential for todays business scenario. Six sigma is such a management tool
is viewed as a systematic, scientific, statistical and smarter approach to create quality
innovation and total customer satisfaction. This paper emphasizes the six sigma concepts and
possible area of six sigma applications in automotive industry.
To build, keep and improve quality in a companys goods and services and
even to go further to develop the infrastructure of the quality in an
organization is a tough and difficult job that have to be done with a planned
and systematic approach in order to achieve the success. Quality and control
has a direct relationship with profitability. In order to satisfy the customers,
you need to improve the quality in the competitive market because it results
in the loyalty of the customers and consequently, it will lead to better market
clout and profitability.
Quality and control cover a broad area including customers, stakeholders,
leadership and strategic planning and many other subjects. Providing quality
in each subject needs different and specific strategy and plan related to the
subject. One of the strategies that are used widely in manufacturing and
service industries is Six Sigma. This strategy which is developed for the first
time by Motorola in 1981 became very popular among organizations around
the world.

Background of the issues/customers request

1. Improved Customer Loyalty

According to George Box "All models are wrong, however some models are
useful". We believe you will find this model (graphic) which starts with
customer satisfaction, customer loyalty and customer retention useful.
A large factor in determining the likelihood of success and profits in an
organization is customer satisfaction. When there is customer loyalty the
customer retention rate is high and business results tend to follow.

2. Customer Satisfaction

There exists an interaction between the desired results and customer

satisfaction, customer loyalty and customer retention. They may go by
other names such as patients, clients, buyers, etc. Without the customer
it is impossible for any business to sustain itself. Achieving the desired
results is frequently a result of customer actions. Any business without a
focus on customer satisfaction is at the mercy of the market. Without
loyal customers eventually a competitor will satisfy those desires and your
customer retention rate will decrease.

There are several levels of customers:

Dissatisfied customer--Looking for someone else to provide product

or service.
Satisfied customer---Open to the next better opportunity.
Loyal customer--Returns despite offers by the competition.
Dissatisfied customers are an interesting group. For every one that complains
there are at least 25 who do not. Dissatisfied customers by word of mouth will
tell eight to sixteen others about their dissatisfaction. With the web some are
now telling thousands. 91% of dissatisfied customers never purchase goods or
services from the company again. A prompt effort to resolve a dissatisfied
customer's issue will result in about 85% of them as repeat customers depending
upon the business, new customer sales may cost 4 to 100 times that of a sale to
an existing customer.
There has been less research on satisfied customers to determine what it takes
for a satisfied customer to change. Why take a chance on mere satisfaction?
Loyal customers don't leave even for an attractive offer elsewhere. At the very
minimum they will give you the opportunity to meet or beat the other offer.
Maintaining loyal customers is an integral part of any business.
One of the ways to help obtain loyal customers is by having products and
services that are so good that there is very little chance that the customer
requirements will not be met
Of course one of the difficulties is understanding the true customer
requirements. Even when you have the requirements in advance the customer
can and will change them without notice or excuse. Having a good recovery

process for a dissatisfied customer is a necessity.

When I found this it was attributed to Sam Walton founder of Wal-Mart.

A Customer

o A customer is the most important person in any business.

o A customer is not dependent upon us. We are dependent
upon him.
o A customer is not an interruption of our work. He is the sole
purpose of it.
o A customer does us a favor when he comes in. We aren't
doing him a favor by waiting on him.
o A customer is an essential part of our business--not an
outsider.
o A customer is not just money in the cash register. He is a
human being with
feelings and deserves to be treated with respect.
o A customer is a person who comes to us with his needs and
his wants. It
is our job to fill them.

A customer deserves the most courteous attention we can give him. He is

the lifeblood of this and every business. He pays your salary. Without him
we would have to close our doors. Don't ever forget it.

Several surveys have been done on why customers do not give a business
repeat business. Reasons given by customers for not returning for repeat
business:

Moved
Other Friendships
Competition
Dissatisfaction
Employee Attitude

3%
5%
9%
14%
68%

These surveys would indicate that in addition to the technical training and
job skill training provided to employees, some effort aimed at customer
satisfaction and employee attitude is appropriate. Remember these may
not be the people normally thought as "Sales People". For example
Managers, Supervisors, Secretaries, Accounts Payable, Engineers,
Accountants, Designers, Machine Operators, Security, Truck Drivers,
Loading Dock, etc. if not helping to cultivate Loyal Customers are hurting
your customer
retention. 68% of lost customers are due to one cause, employee
attitude!
In order to know how you are doing in this area there must be some
measurement. Data indicate that less than 4% of dissatisfied customers
ever bother to lodge a complaint. Most just take their business elsewhere.
Test this on yourself. The next time you get less than what you consider
ideal at a store, business supplier, restaurant, movie theatre, hotel, or any
other business what do you do?
Cultivating the customer relationship is key in achieving the desired
business results. A passive system that depends upon your customers to
inform you without effort on your part is not likely to yield the information
necessary to improve customer retention.

Main body of the report

a) Six sigma
Using DMAIC model, the practice was done in one of best restaurants of
Taiwan which was founded in the early 1970s. The aim was to use 6s in order

to decrease the cost of operations, improve the financial status and satisfy
the customers more. The process started as follows:
Define stage: Firstly, the supporter of this plan selected a Black Belt and
developed a 6s team. In this phase, three approaches were going to be
reached: determining the aim of project, operating plan objective and
estimation of the hard savings of the plan. Customers complaint chart
showed that 32 percent of complaints were for shrinkage of 32G Small
Custard Bun. Therefore, the goal of project was set on reducing the
shrinkage rate. Besides, the chart of shrinkage showed that in 11 months,
the average defect rate of shrinkage was 0.405 percent which was the
project baseline so the goal was set to achieve the defect rate of 0.141
percent at the end of project.
Measure stage: The team prepared the factors that had effects on
shrinkage defective. Figure 2 shows the fish bone diagram of shrinkage
defective.
Then nine potential factors like dough color, number of times the dough
sheet is rolled, temperature of stuffing and production shift were selected.
Analyze stage: In this stage, through using statistical analysis, the
factors that had effect on the shrinkage were analyzed. It was determined
that factors that seemed effective on this process were steaming time,
shift, size of input ice water and diversity in the color of dough.
Improve stage: A plan for finding a best solution for shrinkage rate was
established and called Design of Experiment (DOE). In this plan, stuffing
temperature, dough rolling numbers, time of ferment, size of input ice
water and time of steaming were chosen in order to progress with a five
factors, two levels, 1/2 fraction (25-1) and two replicates factorial design.
Besides, there were some measurable factors that could be measured
through DOE but could not be controlled precisely. Different shrinkage rate
is one of examples of these.

Figure 2: Cause-and-effect Diagram of Shrinkage Defectives

Control stage: The stage before the control is Improve stage. It is very
important to keep the findings of previous steps D, M, A and I in the
improve step to control the process afterward precisely. In control stage,
under each category there would be some operations to do in order to
achieve the goal of this stage. For example, operators who were doing the
job should be trained and given certificate, the machines should have
periodical maintenance, the materials should be inspected and for SOP
(Standard Operation Procedure), the ferment time and temperature should
be set correctly. These steps were called Control Plan.
At the end of these stages, the result was decrease of shrinkage to 0.141
percent for the next six months.

1. Six Sigma in Service Industry: Applying 6s Principles in

Hospitals
In comparison to manipulation of 6s in manufacturing industry, the use of 6s
in service industry is somehow new and a bit different from manufacturing
process. However, for the CTQ (critical to quality) procedure, the aspects of
medical services in service industry are close to those in manufacturing
industry.

The aim of this project which is done by Fings and Grant (2005) is to apply
first three stages of 6s that are Design, Measure and Analyze in the following
three processes:
1.
2.
3.
4.

Issues which are related to portability of insurance of the patients

Programs that are introduced in joint replacement
Procedures of releasing the patients from hospitals
Cancelling or rescheduling of patients who has transmitted to operating
room

These processes that are called patient care products are determined as low
touch and were selected through brainstorming of experts in healthcare and
6s.
However, because of the page limit, this paper will explore one of these
processes in order to make it concise and fruitful.

1.1.

Joint Replacement Program (JRP)

Within this procedure, there are some steps and protocols that should be
followed. These steps are initial, diagnosis and subsequent procedures. In
the first step, it is determined that the problem cannot be solved by drugs
because the body of the patient has already been defendant against
drugs. In the diagnosis stage, it is determined that the patient needs a hip
replacement surgery. And in subsequent step, some patients need revision
surgery. Here is the statistics on hip replacement surgery:

1% chance of death during this surgery

20% chance of revision after 15 years
10% chance of revision after 9 years
5% chance of revision after 7 years
54% of patients are cured and there is no need for revision

In figure 3, the improvement of process is shown in a fish bone diagram.

As it is clear, some solutions that can be used in order to avoid costly
revision surgery are follow-up procedures that should be done by
physicians, making an agreement on revision surgery before hip
replacement surgery and having better check-up evaluations.

Figure 3: Process Improvement for JRP

Besides, in the diagnosis stage, there is a possibility to take X-ray, MRI
scanning and blood test in order to avoid costly hip surgery revision.

Conclusion
It has been a long time that 6s is being used widely in industries to improve
the quality and reduce the costs. However, now it is more important to find
ways to enhance and extend the methodology of this system and implement
its strategies in all segments of industry. Moreover, it can be used in small
companies and even non-for-profit and public organizations since the
variability of its methodology depending on the nature of the organization
and quality management implementation of the organization allows this
strategy to be implemented in all types of organizations.
Furthermore, either used in manufacturing industry or service industry, the
scope of 6s is to reduce the cycle time and increase the satisfaction of the
customers while reducing the cost and improving the quality of product and
service simultaneously.

COMPANY BACKGROUND
HICOM Automotive Manufacturers (Malaysia) Sdn. Bhd. (HAMM)
previously known as Automotive Manufacturers (Malaysia) Sdn. Bhd. is a
subsidiary of DRB-HICOM Company for production and assembly of
automobiles. The companys headquarters is located in Pekan, Pahang,
Malaysia.

HICOM Automotive Manufacturers (Malaysia) Sdn. Bhd. Or in short,

HAMM was established in 1984. The automotive assembly plant occupies
143.7 acres in land size and being gazette as the National Automotive Hub
in Malaysia. Over 29 years in operation, HAMM had produced almost half a
million vehicles of various international marquees. Since the opening
plant, 13000 vehicles per year produced and more than 47000 complete
knockdown (CKD) kits are assembled for the local and surrounding
markets. With the vision to become the preferred assembler and using
strict global standards in quality, HAMM had become a well known and
trusted company in Malaysia.

HAMM has so far assembled more than 20 models including national

cars, Proton such as Proton Saga, Proton Satria and others. HAMM also
assembled renowned marquees like Mercedes-Benz C, E and S Class
passenger cars and Actros truck, Suzuki Swift and Fuso trucks. The new
addition was assembly of Volkswagen models which was commenced in
October 2011. Assembled Volkswagen models are like Passat, Jetta and
Polo.

In a joint venture with Mercedes-Benz Malaysia Sdn. Bhd. Since

2005, the Mercedes-Benz C-Class and E-Class are assembled. In 2006,
Mercedes-Benz S-Class were added. Now, cars prodeuced here at HAMM
are like Mercedes-Benz C and E Class, Actros truck, Fuso truck, Suzuki
Swift, and Volkswagen Jetta, Passat and Polo. Figure 2.1 below shows
these types of car.

Figure 2.1: a) Mercedes-Benz C, E and S Class, Actros truck and Fuso

truck.

Figure 2.1: b) Suzuki Swift.

Figure 2.1: c) Volkswagen Passat, Jetta and Polo.

Six Sigma Definition:

Six Sigma may be defined in several ways:
Tomkins defines Six Sigma to be a program aimed at the near-elimination of
defects from every product, process and transaction.
Harry defines Six Sigma to be a strategic initiative to boost profitability, increase
market share and improve customer satisfaction through statistical tools that can
lead to breakthrough quantum gains in quality.

The essence of Six Sigma is the integration of four elements (customer, process,

manpower and strategy) to provide management innovation. Six Sigma provides a

scientific and statistical basis for quality assessment for all processes through
measurement of quality levels. The Six Sigma method allows us to draw comparisons among
all processes, and tells how good a process is. Six sigma provides efficient manpower
cultivation and utilization.

Company Information

Information

Details

Company Registration

106864-D

No.
Year of Incorporation

1984

Paid-up Capital

RM51 Million

Equity Shares

HICOM Holdings Berhad

Total Land Area

143.7 acres
84,529 m2

Build-up Area
Maximum Capacity (2

30,000 Units / Year

shifts)
Manpower (as at Dec

1,883 employees

2012)
Production Shops
Current Activities

Body shop, Paint shop, Assembly shop, Tester line

HICOM Auto 1: Suzuki Operations Robotic

welding line, the first in East Coast Region
State of the art, German technology Paint

Shop.
HICOM Auto 2: Mercedes Benz Operations
Biggest in volume, Mercedes CKD plant (C,

E, S, Actros & Fuso)

HICOM Auto 3: Volkswagen Operations

BODY SHOP
Jigs, tools and machines must been check twice everyday, before and after work
whether they work properly or not. This to ensure that the jigs, tools and machines will not
cause problem to the unit when it used to do the assemble work. Table 3.1 shows the expected
condition of jigs, tools and machines before and after work.
Table 3.1: Expected condition of jigs, tools and machines
Before Work

Ensure jigs are in good condition

and cleaned.
Ensure clamps are opened before

putting parts.
Ensure all tools and machines are in
good condition, calibrated & not

expired.
Ensure gauges (e.g. temperature/

pressure gauges) are working fine.

Ensure required PPEs are worn

After Work

Ensure the jigs are cleaned.

Ensure clamps are closed if parts are

in jig.
Ensure all tools and machines are

kept at the designated areas.

Ensure power sources for

tools/machines are switched off.

Ensure no parts or materials (except
WIP) are placed on jigs & machines.

before working.

PAINT SHOP
Paint shop via the module and descriptions is by Mr. Jefri. Each paint shop process is
loading, pretreatment and Electrodeposiotion (PTED), ED sanding, Seam Sealant, Primer,
Moist Sand, Top coat, Final Quality Gate (FQG) and waxing. The Disciplinary Procedure
Policy (DTT), Safety and Health, Hicom Manufacturing System (ISO9001) and Environment
Quality. There are 5 departments in Hicom Automotive Manufacturers Malaysia (HAMM), a
Logistic (PC and CV), Body Shop (PC and CV), Paint Shop (all models), Assembly Shop

(PC and CV) and Finish Line (PC). PC is a passenger car and CV stand for commercial
vehicle. There are 2 plant in HICOM, the plant 1 (Volkswagen) and plant 2 (Mercedes Benz).
ASSEMBLY SHOP
The assembly shop via the module and descriptions by Mr. Hasni. The process
involve in assemble shop and to fulfill schedule that prepared by SV Mr Salahuddin at
assembly shop. There are 5 departments in Hicom Automotive Manufacturers Malaysia
(HAMM), a Logistic (PC and CV), Body Shop (PC and CV), Paint Shop (all models),
Assembly Shop (PC and CV) and Finish Line (PC). PC is a passenger car and CV stand for
commercial vehicle. All the processes involved in these departments roughly described to us
as early knowledge.There are 2 plant in HICOM, the plant 1 (Volkswagen) and plant 2
(Mercedes Benz).

3 Cs in Six Sigma Concept:

Change: Changing society
Customer: Power is shifted to customer and customer demand is high
Competition: Competition in quality and productivity

The pace of change during the last decade has been unprecedented, and the speed of
change in this new millennium is perhaps faster than ever before. Most notably, the power
has shifted from producer to customer. The producer-oriented industrial society is over, and
the customer-oriented information society has arrived. Competition in quality and
productivity has been ever-increasing. Second-rate quality goods cannot survive anymore in
the market.

Six Sigma Process Models:

Six sigma facilitated proactive approach through rigorous measurement. Some six sigma
models are given below. DMAIC is used to improve the existing process and DMADV is
used to employ the new products.
DMAIC (Define, Measure, Analyze, Improve, Control)
Define -Define the project goals and customer (internal and external) deliverables.
Measure - Measure the process to determine current performance

Analyze - Analyze and determine the root causes of the defects

Improve - Improve the process by eliminate defects
Control - Control future process performance
DMADV (Define, Measure, Analyze. Design, Verify)
Define - Define the project goals and customer (internal and external) deliverables
Measure - Measure and determine customer needs and specifications
Analyze -Analyze the process options to meet the customer needs
Design - Design (detailed) the process to meet the customer needs
Verify - Verify the design performance and ability to meet customer needs

Critical Success Factors of Six sigma:

PLAN LAYOUT

Figure 1.2: Plant of Automotive Industry

The system needed to achieve Six Sigma creates a culture characterized by:
Customer centricity
Financial results
Management engagement
Resource commitment
Execution infrastructure

Seven Steps for Six Sigma Introduction

When a company intends to introduce Six Sigma for its new management strategy, we
would like to recommend the following seven-step procedures:
1. Top-level management commitment for Six Sigma is first and foremost. Then organize
a Six Sigma team and set up the long-term Six Sigma vision for the company.
2. Start Six Sigma education for Champions first. Then start the education for White beltWBs, Green Belt-GBs, Black Belt-BBs and MBBs in sequence.
3. Choose the area in which Six Sigma will be first introduced.
4. Deploy Critical to Quality - CTQs for all processes concerned. The most important is
the companys deployment of big CTQy from the standpoint of customer satisfaction.
Appoint BBs as full-time project leaders and ask them to solve some important CTQ
problems.
5. Strengthen the infrastructure for Six Sigma, including measurement systems, statistical
process control (SPC), knowledge management (KM) and database management system
(DBMS).
6. Designate a Six Sigma day each month, and have the progress of Six Sigma reviewed
by top-level management.
7. Evaluate the companys Six Sigma performance from the customers viewpoint,
benchmark the best company in the world, and revise the Six Sigma roadmap if
necessary. Go to step 1 for further improvement.

Possible Areas in Automotive Industry for Six sigma application:

Body shop, Paint shop and Assembly shop have potential of applying Six
Sigma in following improvement projects:
1. Reducing rejections in shipments.

2. Improving first sample approval percentages while working with buyer

3. Improving supplier evaluation processes
4. Improving AQL performance in shipments.
5. Improving merchandiser performance
6. Reducing non conformances in audits by buyer
7. Improving processes at the source (including fabric purchase and inspection,
stitching, embroidery, packing and shipping) to reduce rejections at later stages.
8. Eliminating manufacturing errors/ defect
Convincing apparel executives to accept the process, other than as a selling tool, has beena
difficult task. About the only agreement reached is that every garment cannot be
manufactured to the perfect specification. However, the typical manufacturing plant is
producing apparel at about a 3 sigma level with 2.5 to 4 % defects. That is 4 defects per 100
not the 3.4 defects per 1,000,000 produced by a Six Sigma manufacturer. The gap is wide
enough that significant improvement can be made in any such plant. Two financial facts are
important to note. Historical studies have shown overall savings in the $10,000 to $20,000
range for an improvement of just one Sigma. Apparel managers are generally astounded by
the True Cost of Quality in their manufacturing facility. Typically, these costs are hidden in
overhead but include inspection and marking, sorting, transport, reinspection, supervisor
time, downstream operator repair, cleaning, and irregulars. Therefore, any improvement in
quality has a triple effect of reducing indirect labor, lowering total fabric cost, and improving
customer satisfaction. DuPont uses the program for its productivity and quality improvement
strategies. It considers Six Sigma a business-management process that concentrates on
eliminating defects from work processes. The company now has more than 4,000 completed
or inprocess Six Sigma projects. Other textile companies, such as Burlington Industries,
Collins and Aikman, and PGI have also started Six Sigma initiatives.

Defect occur in lines production

No
.

Evaluation Criteria

Examples

Corrective Actions

1.

Surface crack.

Weld the cracked position of spot.

2.

Large gap.

Not allowed with screw connection

(the gap is removed by hammering the

3.

Hole local deepening on

two sheets.
Not allowed in the visual area (tin to be

the material surface in the

added and leveled by grinding).

area of the lens.

4.

Surface hook.

Not allowed on the assembly surface

(surface to be leveled by hammering).

5.

Welding remains.

Not allowed if encounter any danger

risks or in visible area (to be removed

6.

Measurement errors.

by grinding).
Relocate spot.

7.

Spot is missing.

Respot using spot welding gun.

8.

Open spot.

Respot using spot welding gun.

9.

Spot burnt.

Fill hole with MIG welding.

Defect for Spot Connection Category

Spot connection point can be divided into several categories to describe its properties
and function. This is due to their properties and functions are different to each other. Table
3.3 shows their name and its description.

Table 3.3: Spot connection category

Name

Description

Normal Point

Connection would fail due to overloading vehicle. The failure does not

(NP)
Control Point

necessarily damage the vehicle usage.

Connections that would fail due to overloading the vehicle and this failure does

(KP)

not necessarily damage the vehicles overall safety and does not nearly affect the
correct function of its specified safety details. The connections require a higher
control and machine maintenance.

Special Point

Connections that would fail due to overloading the vehicle and this failure could

(SP)

affect the specific safety details without affect the correct function or damaging
the overall safety of the vehicle. The connections require a higher control and

Adhesion

machine maintenance.
Occur when these spots are started due to manufacturing necessity in a station

Point (HP)

then completed in a following station of the welding process. In this concept

these points must be documented in the traveler sheet. Concerning control

Inaccessible

activities they are treated like KP and SP points.

These points present in:

Point (UP)

Three sheet welding

Thick sheet (over 1.8 mm)
External surface area
Inaccessible for chisel test
Coating area
Uncertain statement in chisel test or ultrasound test.

Stud Connection Defect

Table 3.4: Stud connection defect
No

Evaluation Criteria

.
1.

Stud missing.

Example

Corrective Actions
Replace missing stud and check
installation or device.

2.

Stud incorrectly

Straighten the stud if it is bent

placed.

approximately less than 50, otherwise

remove stud, clean surface and place new

3.

Stud damaged and

stud.
Check the tool and current, remove the

unclean (weld spatter

stud, clean surface and place new stud.

and thread damaged).

4.

Adhesion-weld gap

Remove the stud, clean surface & place

between stud and

new stud.

plate visible.
5.

Weld-bead protrudes

Check the tool and current, remove

too much.

projection if the subsequent assembly of

the parts is obstructed.

6.

Flange-distance for

Clarification whether sure assembly is

stud with large flange

possible, if necessary, removes the stud

and T-stud.

and places a new stud.

Tolerance:

h large-flange

0,1mm
h T-stud
0,2mm

Seven basic SQC tools used in Six Sigma process:

1. Cause and effect diagram
2. Check sheet
3. Control chart
4. Histogram
5. Pareto chart
6. Scatter diagram
7. Stratification
Conclusion:

Six sigma is a new strategic paradigm of management innovation for company survival in
this 21st century which implies three things such as statistical measurement, management
strategy and quality culture. Six Sigma with its 4S (systematic, scientific, statistical and
smarter) approaches provides flexibility in managing a business unit. Automotive industry
being a field dealing with lot of variations and defects in each process is the exact place for
six sigma application. The speedy implementation of the right method will make a significant
and successful difference in many of our companys futures.