TQM &

Six Sigma

LONGXI MACHINERY
WORKS
Group 3
Akshay Garg
Amit Kumar
Mahima Bansal
Dipayan Neogi
Sachit Arora
Shubham Aggarwal

LONGXI MACHINERY WORKS

Background

State owned enterprise (SOE) founded in 1957 and located in Zhangzhou, Fujijan in
China
Manufacture various single and multi-cylinder diesel engines primarily used in
agriculture sector
Serviced four customer groups : Tractor manufacturers, ancillary equipment
manufacturers, engine wholesalers and farmers
Expanded its product line to include several two and three cylinder models by
1980s
Began exporting to United states in addition to Africa, Latin America and Southeast
Asia

Currently, most popular multi-cylinder unit is SL2100 which could also be used in
other agricultural equipment
Received favorable feedback from US importers
Offered wide range of uses outside the agricultural equipment like front end loaders,
forklifts
Management predicted the sales of SL2100 to be 12000 units in 1997
Also, older multi-cylinder engine model S295 was viewed as having insufficient
power raising the prospects of SL2100
Management believed that SL2100 has the potential to replace SL295 throughout
the industry

CHANGCHAI: PRIMARY COMPETITOR

Changchou Diesel Engine works(Changchai ) became the worlds largest producer of

single-cylinder diesel engines in 1993
Its S195 model became ISO9002 certified in the same year
Operated mainly in domestic market ( 92%) via 275 service centers located in 26 prov
inces
Exports mainly in Southeast Asian countries of Indonesia, Vietnam and Thailand for a
small premium
80% of sales were to tractor and agricultural equipment manufacturers
Operated 33 separate engine production lines in 1995
Growth in last few years has been achieved through investment in joint ventures in thr
ee small domestic diesel engine manufacturers
Captured 23% of domestic market for single cylinder engines in 1995, aims for 30% b
y 2000

Despite having capacity of 60K units of multi-cylinder engines, sold only 3K in 1995
Plans to expand R&D in this area
Management also planned to double the capacity of their multi-cylinder production line
s to meet
the anticipated market demand
Capital necessary for this expansion was raised through a series of share offerings, in
itially in
1994 and then in 1996
Japans Kubota Corporation purchased stock worth US$ 25 million; expected future c
ooperation
in terms of technology transfer and market access
Competed primarily on the basis of offering high quality products at prices similar to or
less than
most of their competitors
By 1996, about 83% of its component requirements were outsourced

Diesel Engine Industry : China

Chinas agricultural machinery industry undergoing profound changes since 1978

Series of economic reforms were introduced to boost Chinas overall farm output via
incentives given to farmers to boost their traditional quotas
Led to the increased buying power in the rural sector
Resulted in rising demand for low cost diesel engines
Cooperative farms supported greater economies of scale and raised additional
demands for larger model engines
Sales of diesel powered agricultural machinery and vehicles is growing by 10%
annually since 1985
Manufacturers in this market competed on the basis of low cost production
Formation of cooperative farms made the market for multi-cylinder engines much
more promising

Production facilities
LONGXI

The works was splited between two areas, one for living and one for production
Employment has declined from 2300 at the beginning of this decade to current level
of approximately 1800
Two guiding slogans; Love longxi, Complete contribution and Market, Managemen
t, Quality, Profit
Recently Group processing centers had been acquired from foreign markets to
bolster companys component and manufacturing capabilities
Centers were capable of cutting, grinding and drilling engine parts along with rapidly
developing and testing engine components prototypes

 To reduce production cost, Longxi increasingly engaged in outsourcing or co

-production of its engine components
By 1996, 80% of Longxis engine components were manufactured externally
Location being a major concern for the vertical integration of the company
350 technical staff to manage facilities and 14 production lines
About 30% of staff had a title of Senior Engineer given by government to
individuals having 15 years of work experience
Goals were set at the beginning of each year for marketing, production,
profits and employee benefits
Action plans were developed in areas of technological improvements,
Quality improvements and new product orientation

Actual versus planned performance was analyzed every month by each department
Department results was reviewed bi-annually by senior management
Issues concerning quality and production planning were discussed on a weekly basis
Mr. Yang Bin Feng, Company's managing director was devoted to both country and
company
According to him, upgrading technology and quality processes were the challenges
over the next few years
Also, maintaining employee level was a critical task

Development of Quality management

Prior to 1978, Inspection Department accessed quality of components and engines

after they were produced
In 1977 , senior director from ministry learned the Japanese approach to TQM
Formalized training program was organized to share knowledge with selected state
owned enterprises
Managing director, Inspection department manager and an Inspection department
engineer attended the training
In 1978, longxi established Quality Management Department(QMD) consisting three
groups : Inspection, Measurement, and Management Groups
In practice, for the QMD to carry out its mandate to resolve quality issues,
production lines often needed to be shut down
Hence, inspection group was separated from the QMD; QMD known as office of TQM

Plant wide quality control systems were developed by office of TQM during 1980s
Conferred with Provincial Excellence in TQM by provincial government in 1986
Office of TQM divided into two parts due to overloaded responsibilities: the Quality
Management Department(QMD) and the Enterprise Management Office(EMO)
QMD became responsible for training of employees in quality management and
organizing all QC group activities
As part of Quality Improvement efforts, the quality reward system was implemented to
reward employees according to product quality in their department

The Method

Became cornerstone approach to TQM, a manual titled Management Methods to

Quality Improvement Activities; launched in 1994
Content structure is based on ISO9000
Methods included
o Guidelines governing the systematic changes in working routines
o Rules for establishing quality improvement targets
o Implementation of brainstorming techniques
o Instruction for activities like harnessing employee enthusiasm
o Ways to incorporate customer suggestions
o Described procedures for designing and using QC groups as a means for
achieving quality improvements

Became popular for resolving quality issues at Longxi

All QC group activities came under the ambit of QMD
QMD also responsible for recognizing the effort of individual members of QC group
and rewarding them according to their contribution
Some of the awards won by Longxi were:
o Provincial QC excellence award for stabilizing the engine painting process,1993
o Provincial QC excellence award for improved technology and new product,1994
o Ministry of Industry QC excellence award for increasing first test pass rates for
running engines,1996
There were still many areas which required technical support to achieve quality in all
aspects of production
Longxi had not received its ISO 9000 certification (unlike Changchai) as it needs
renewal each year and hence proves costly
Also, management wanted to produce quality products irrespective of the system
they follow

Quality Inspection

130 Quality inspectors for monitoring quality throughout the works

Self Inspection is followed by workers to ensure high quality production
Mutual Inspection allowed workers to check quality of parts received from the
upstream production to make sure they continue to work on good parts
Generally three types of quality inspection followed during production steps
1. Initial Inspection- after the first unit of each batch to check whether it
conforms to the specifications. After inspection, a plate would be given to
operators position to proceed further
2. Patrol Inspection- it was done twice during a shift to ensure production was
continuing according to the specifications
3. Completion Inspection- inspection performed before releasing the batch to
the next department

The Duo-Gear Shaft

Critical part used in the production of two-cylinder diesel engines

As quantities are considered small, longxi did not purchase sophisticated equipment
to automate DGS production
Manufactured by four basic set of operations:
1. Raw Material Preparation
2. Machining
3. Heat Treatment
4. Final machining
Production department initiated the production by scheduling movements of raw steel
rods from storage to sawing machines located in the same building
Sawing machines cut the rods into short lengths
After the operation, the material is transferred to machining department located 200m
away

Machining Department

Raw parts were stacked besides one of three lathes machines and operator would
sign a material receipt
Each operator could produce up to 350 DGS parts per month operating in a single
shift
Operation at lathe involved cutting the steel rod into three different diameters along
cylindrical axis
After cutting, material handler again moved the batch of DGS parts for drilling operation
For both the operations, inspections of all three types were performed from time to time
After approved in final inspection, the material handler moved the batch to the Thermal
Treatment Department, about 250m away

Thermal Treatment Department

Heat treatment was done to develop proper hardness after cutting and drilling operations
Since this operation produced toxic fumes, exhaust fans were installed in the department
Three workers were assigned during each of two daily shifts
The parts went through three furnaces maintained at different temperatures
1.
Pre heat furnace( 200-300C)- parts were subjected to this treatment for about 10
minutes and worker was expected to use his judgment to determine parts were
at the proper temperature
2.
Main furnace( 850C)-worker controlled the furnace temperature and heating
process via a button which also recorded the heating times and cycles data.
Current practice required operator to hold the parts for entire time
3.
Tempering furnace- before reaching the tempering furnace, the parts were
quenched in vat of water. This furnace was 10m away and electrically controlled
The parts were processed through series of vats for washing, then hot alkalized water to rem
ove contaminants, hot acid baths to prevent rust
Completion inspection to check hardness was done via specifically designed instruments
while some aspects were inspected manually

Return to Machining Department

Grinding operation was performed in two shifts, usually with one operator per shift
One surface of each part was ground to ensure precise alignment of the DGS with the
idle gear in the final assembly of the gear housing assembly
After initial and patrol inspections, the finished product was sent to inspection station for
the final inspection
Approved products were sent to warehouse and were given anti-rust treatment

QC Group-96020

Rapid approval of the Mr. Zhang Lins application to establish new QC group,
numbered 96020
Solicited support from the people of metallurgical division to have access to their exp
erience as he believed that much problem was related to metallurgical technique
being used in plant
Invited Mr. Chen, manager thermal treatment department to be the manager of QC
group
Formed the group of six members
The problem could be approached in the following manner:o Internal and external factor analysis for the lack of quality
o Focus on thermal treatment department as many processes were manually
operated and inspected
o Mandatory seminars and trainings for the workers to detect quality breach at
the earliest
o Hi-tech manufacturing and inspection machines

Thank You