Quality Steel

Individual assignment TMQU31

Prajwal Shankar
(prash968)

Contents
1. Introduction..........................................................................1
2. Organizational Structure........................................................1
3. Analysis of Quality Steel........................................................1
3.1
3.2

Procurement and Finance.....................................................................1

Production............................................................................................... 2

3.2.1

3.3
3.4

Data analysis.................................................................................................... 3

Quality Assurance.................................................................................. 6
Sales and Marketing..............................................................................7

4. Suggested improvements.......................................................7
5. Conclusion............................................................................. 8
References................................................................................ 9

Prajwal Shankar | TMQU 31

1. Introduction
Quality Steel are manufacturers of tool tips for lathes and milling machines who
represent a minor percentage of the market share. The majority of sales are towards
the Fantastic Mechanical products, which accounts for 78% of the total sales of the
company. There are a few other products with sum up the entire sales of their
company.
To gain higher footing in the market, the company has decide to focus on Quality as
their primary objective to attract more customers. This report assess the decisions
taken by the all the departments of the organizations with Statistical Quality control
aspects and how it individually can contribute to the ultimate goal of better
qualitative products by evaluating their strengths and weaknesses. Finally some
suggestions for improvement are provided based on analysis of data and proposed
theories in such cases.

2. Organizational Structure
The organization is divided into five departments, namely

Sales and Marketing

Procurement and Finance
Quality control
Quality Assurance
Production

3. Analysis of Quality Steel

Four factors based on departments which play major roles in contributing towards
the quality of the products manufactured by the organization are discussed in detail

3.1

Procurement and Finance

This is an integrated department between finance and procurement. The department

has 4 purchasers and the manager is also a financial controller. The trend followed to
choose suppliers for procurement are low cost and precision for delivery. The
organization chooses procure raw martials from a single customer and the customer
is evaluated quarterly. Whereas the financial controller evaluates the investment on
machinery.
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Prajwal Shankar | TMQU 31

With having a single provider of raw materials, it

eradicates the variation between deliveries which is a first step towards
elimination of defects.

The criteria on which the organization choses the suppliers have chances in
jeopardizing the quality of the process even before it reaches the production
line. The supplier is chosen based on low cost, but an initial quality check has
to be performed on the incoming raw material and this data should be
considered during evaluation of the supplier. This in an important step that
has to be incurred in the process. The precision of delivery is a valid criteria
and it should be well appreciated.

From Deming, a process based on cheap materials will lead to further

discrepancies and it is essential to cut down costs along the process and not at
individual places. This decision lies with the finance controller, the decisions
has to be further evaluated for clarity on criteria of procurement based on
production method, quality and process , and not just the price

Deeming says that a trust needs to be established with the suppliers and
having long-term agreements with suppliers keeps both parties on good terms.

3.2

Production

The department is also responsible for logistics and warehousing and of course the
production of parts. The department has two principally identical lines with a slogan
of zero defects as their motto. They have a completely through procedure of checking
each and every part that is produced with bonuses in terms of treats being handed out
for least defects among the produced products among the employees. In case of
defect the entire lot is quarantined until the root cause is determined by the quality
circle.

The procedure to check every part produced on the production line increase
quality costs but contributes limitedly to the cause and reason behind this
issue. This process can only record the defects of all the products, this is a good
method to record data on defects but quality checks should be performed on a
lot size as suggested by Deming and Montgomery.

Quality checks have to be implemented along the length of the process instead
of at the end of the process, this makes the process completely futile according
to Deming.

The slogan of zero defects tend to have a reverse effect on the process as it is
completely useless until an action plan is stated and the manager should lead
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Prajwal Shankar | TMQU 31

by example as a true leader in diminishing

defects rather than saying that there can be no
defects at all. These situations lead to counterproductive production lines in
the end.

Having a bonus system encourages the employees to concentrate on only their

part of the job and this process is only temporary as it does not contribute to
the main cause of decreasing defects to a minimum. This further leads to
rivalries between employees and disrupts the group dynamics of the
department. Deming suggests that removing working standards among peer
employees give way to highly productive results.

Periodic checks have to be carried out on the machinery to make sure that the
instruments have no part to play in the caused defects. The finance team have
to investigate this data to arrive at a decision to repair or completely replace
that machinery.

Quality circle is a group of managers from all their resprective departments

formed to determine the root cause of the defect. This is a fantastic initiative
to develop interdepartmental discussions and relationships. The root cause
analysis provides valuable data but, this has to be documented and should be
utilized to educate the employees.

Deeming insists that educating and encouraging employees provides a better

work environment and thus resulting in better results.

With production responsible for logistics and warehousing, measures have to

be taken to ensure that the work is not neglected and prioritized based on
requirement.

Statistical Quality control tools can be made use of, to have a better understanding of
the problem. This data should be evaluated by the board members and further action
should be taken based on the comments.
3.2.1 Data analysis
The data analyzed is that of the defects from both production lines. The data is
analyzed for normal distribution from the histogram, I-MR processes is used to check
if the process is under control or not and the EWMA chart to show if a trend can be
found from the data we have.

Histogram

From figure 1, the histogram depicts that both data values for production line 1 and 2
are normally distributed as the bell formation at the center of the columns is evident.
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Prajwal Shankar | TMQU 31

Figure 1: Histogram

I-MR Chart

The chart is plotted for both production lines as shown if figure 2 and 3. Production
line 1 is in control with more than a few moving range values on the lower control
limit and there are no visible trends either. Whereas in case for production line 2
there is one point out of the upper control limit and a few values lying on the lower
control limit.

Figure 2: I-MR chart for Production Line 1

Prajwal Shankar | TMQU 31

Figure 3: I-MR chart for Production Line 2

EWMA chart

There are no trends visible for production line 2 values in figure 5, but we can see an
upward trend for production lines 1 chart in figure 4, and it can be predicted that it
will soon be out of the control limits.

Figure 4: EWMA chart for Production Line 1

Prajwal Shankar | TMQU 31

Figure 5: EWMA chart for Production Line 1

The data provides another insight to the process that the trends differ for both
production lines and we may infer that there may be a problem for the first
production line as the defects are 28 in comparison to 21 in line 2 with having
identical production lines. This is a key data which has to be presented to the
financial team for further analysis.

3.3

Quality Assurance

This department is responsible the overall Quality Management System for the
organization. The main task of the department is to provide documentation regarding
the procedures that have to be followed in all cases and scenarios. This is done by
providing the Statement of Purpose (SOP) documents for each department. The QA
team is responsible for accessing all the other departments within the organization.

It is a good initiative to assign one individual responsible for providing the

SOPs for each department. This individual has to be aware of the processes
within that particular department to make implement the procedures to be
followed.

It is also an appreciable decision that only the manager of the QA team can
approve SOPs for the departments and the overall organization as this is not
something to be taken lightly.

Prajwal Shankar | TMQU 31

Documenting the data of defects for production

lines 1 and 2 has helped in analyzing the current
situation. The QA team should be responsible for documentation of these
tasks.

The pareto chart provided in the case is the result of good documentation and
usage of SQC tools to better perceive the problem. From the pareto chart, it is
looks to be that the most defects are from the product 86 ME. The reason
behind it is responsible for 78% of overall production and would therefore
have more defects when compared to the other products.

Developing a knowledge database of learnings from Root Cause Analysis

should be considered. These should be shared with employees as it may help
avoid further repetition of the same error.

3.4

Sales and Marketing

This department is responsible for putting the product on the market and
maintaining a good image foe Quality Steel among other competitors.

The team should meetup with current customers to find if there can be any
improvements in quality is desired and implement those changes in the
process.

Initiate marketing strategies by predicting the potential changes in the

economic situation in the market. This keeps the organization afloat and avoid
one of the seven disease put forth by Deming.

Even with the production responsible for logistics the sales team should be
held responsible for receiving confirmation form the customer on receiving the
shipment.

An important task would be to request for customer feedback, which would

provide the organization on how satisfied the customer is and how it can be
improved.

They should meet up with potential customers and identify their needs and
make sure that their needs align with the process in the organization.

4. Suggested improvements
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Listed below are a few areas in which there needs to be

improvements to improve the quality of the
organization based on theories of Deming and Montgomery.

Revise criteria for selecting suppliers and build long term relationships that
would benefit both parties.
Reduce cost by implementing process changes and not at only certain places
on the process.
Focus on process control rather than on inspection.
Conduct calibration of machinery to eradicate the errors that may be caused by
erratic instruments.
Implement quality checks along the process and not only at the end of the
process.
Minimize bonus systems for employees and insist on teamwork.
Encourage employees and the managers should lead by example rather than
sticking to slogans.
Conduct yearly appraisals to improve morale among employees and this
should be based on documented data alone.
Create a better communication system between departments for a better
understanding among managers.
Utilize statistical tools to find process defects and for prediction.

5. Conclusion
The case Quality Steel is accessed with a managerial point of view and with the data
provided. The strengths and weaknesses are discussed and finally some suggestions
on improvements are provided based on theories. Emphasis has to be provided on
process evolution rather than on local problems. Advance control tools can be further
implemented to guide the organization towards a better quality system.

Prajwal Shankar | TMQU 31

References
Quality Steel Inc.
Montgomery, D (2012), Statistical Quality Control: A Modern Introduction, 7 th
Edition International Student Version, John Wiley & Sons.
Deming, W.E., (1993), The New Economics, MIT Press.
Wiley college tutorials, http://www.wiley.com/college/sc/reid/chap6 (2016)

Prajwal Shankar | TMQU 31

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