100% Final Inspection is Not 100% Accurate

An “old school” view of quality control viewed inspection as the key to quality. One-hundred-percent inspection is commonly used to avoid shipping nonconforming product. Each of the items produced is measured and judged to be either conforming or nonconforming​. Find the defects and throw 'em out. Whatever survived the inspection process was, by default, high quality.

Visual inspection, especially 100% visual inspection, is used by many industries as part of their Quality or Risk Management programs. Sometimes, as the last resort, companies implement 100% inspection if the residual risk is deemed to be high.

Juran, one of the giants of Quality, has written that, based on his studies performed on Inspector accuracy, 100% inspection is about 87% effective. Juran gave the following formula to calculate the Accuracy of an Inspector.

Accuracy of inspector = percent of defects correctly identified = (d-k)/(d-k+b)

where   d = defects reported by the inspector

k = number of good units rejected by the inspector

d-k = true defects found by the inspector

b = defects missed by the inspector, as determined by check inspection

d-k+b = true defects originally in the product

This brings us to the next question, is 200% or 300% inspection effective?

From a pure probability standpoint, multiple inspections are indeed effective. For example, if we determine that 100% inspection is 85% effective (as an example), we can then calculate the probability of rejects being identified by at least one inspector.

P(rejects being identified by at least one inspector) = 1 – (1- e)^n

where   e = inspection effectiveness (85% in the example)

n = number of 100% inspections (3 in the example)

Thus, we can determine that the 300% inspection with an inspection effectiveness value of 85% is 99.7% effective. In other words, 300% inspection will still result in 0.3% of the bad product to be missed.

The number of rejects caught by 100% inspection can be found by the following calculation.

# of rejects caught = N * p * e

where   N = Lot size

p = % non-conforming product

e = inspection effectiveness

The least effective form of quality control is that of inspection by people, people are fallible and can often fail to observe problems especially if the work is repetitive and the shift is long. Consider the common exercise often used in demonstrating the weaknesses of 100% manual quality inspection. Count the number of F’s in the paragraph below:

THE NECESSITY OF TRAINING HANDS FOR FIRST-CLASS FARMS IN THE FATHERLY HANDLING OF FRIENDLY FARM LIVESTOCK IS FOREMOST IN THE MINDS OF FARM OWNERS. SINCE THE FOREFATHERS OF THE FARM OWNERS TRAINED THE FARM HANDS FOR THE FIRST-CLASS FARMS IN THE FATHERLY HANDLING OF FARM LIVESTOCK, THE OWNERS OF THE FARMS FEEL THEY SHOULD CARRY ON WITH THE FAMILY TRADITION OF TRAINING FARM HANDS IN THE FATHERLY HANDLING OF FARM STOCK BECAUSE THEY BELIEVE IT IS THE BASIS OF GOOD FUTURE FARMING.

How many did you get?

There are 48 f's, however most people will not get the right answer; their answers will vary between about 30 and 60 letter “f”s in the paragraph having missed letters or double counted.

W. Edwards Deming suggested that inspection is too little too late: "Cease reliance on mass inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place."

He didn't call for the elimination of inspection altogether, but rather for its reduction to the optimal level. Some inspection is always necessary and is an important tool for gathering data about what you are doing. But 100 percent inspection is seldom appropriate and is costly in both time and money. And most important, inspection cannot always catch problems that are inherent in the system itself.

Rafael Aguayo, author of Dr. Deming: The American Who Taught the Japanese About Quality, makes this point vividly in his book: "The disastrous explosion of the space shuttle Challenger was apparently due to the failure of rubber O rings. The rings in the Challenger were within specifications. No amount of inspection would have prevented them from being used. But the rings tended to fail in extreme cold. It was only a matter of time before a tragedy occurred. Inspection cannot improve the level of quality that is designed into the product."

Too much reliance on inspection also supports a "blame the worker" mentality that is antithetical to today's understanding of what drives quality improvement. The health care field is richly populated with individuals who are highly committed to doing the right thing for their patients, no matter what is required. But even extraordinary people cannot consistently rise above a system that is poorly designed.

When organizations work to improve processes and systems, the opportunities for "defects" to occur are systematically reduced. Inspection then becomes useful as a means of gathering data to drive further quality improvement efforts, rather than a hunt for mistakes and those responsible for them.

Harold F. Dodge, principal architect of statistical quality control, has stated that “You cannot inspect quality into a product.” The feedback loop should be as small as possible for an inspection activity to be value adding. This feedback also has the benefit of improving the process since the operator is made aware of the issue almost immediately. The best case is to have poke-yoke or mistake proofing such that mistakes do not happen at all.

How Effective is Your Poka-Yoke?

Poka-yoke or mistake-proofing is the use of process design features to facilitate correct actions, prevent simple errors, or mitigate the negative impact of errors. It is essentially used to make the process easier. To assess how effective your solution is, you must look at three factors: the power of the mistake-proofing solution, whether it can be overridden, and if it is sustainable over time.

The first factor is to look at the mistake-proofing power.  The power of the mistake-proofing solution is a measure of how well the solution fulfills the ultimate objective of mistake-proofing: to make it impossible to make mistakes.  There are three tips for improving the power of the solution:

1. The first tip focuses on the trigger of the solution.  Using an automatic trigger (forced control or shutdown) instead of an operator dependent or discretionary one (warning or sensory alert) improves the power.
2. The second power rating tip focuses on the type of outcome.  The power of the solutions with prevention outcomes is significantly greater than those with detection outcomes.  When possible, focus on prevention, not detection, outcomes.
3. The third power rating tip involves the type of effect selected.  The power of the mistake-proofing solution becomes greater and greater as you move up the effects column. Forced control is usually better than a shutdown effect, shutdown is better than warning, and warning is better than sensory alert.

The second factor used to determine the effectiveness of a mistake-proofing solution is to assess how well it is defended against being overridden.  Solutions can be overridden if their trigger can be ignored, if a device can be disabled, or by a malicious act.

The third and final factor is to assess whether the solution is sustainable over time.  There are three questions to consider for assessing the sustainability of the solution:

1. Did the interim solution become "permanent?"  Many organizations fall into the trap of allowing an interim solution to become permanent.  However, interim solutions are like band-aids.  They are short-term fixes not intended to be robust.  To keep interim measures from becoming permanent solutions, identify the obstacles for developing or implementing permanent solutions, develop a time-based plan, and follow through.
2. Can practices regress back to the "old ways?" Fight off the urge to regress.  To help do this, sell the benefits of the "new" way and audit performance for compliance.
3. Are there service life issues? Make sure the right materials are selected.  If shelf life is a concern, use first-in, first-out inventory control.  Check frequently at first to make sure the solution is working effectively and as planned. Then use data to set the correct preventive maintenance frequency.

The effectiveness of a poka-yoke should be judged after the performance of the solution for a period of time.  Make sure the poka-yoke is delivery the results you expect.  If the solution is not effective, then try another solution by following the guidelines above.

Obeya - Introducing The Lean War Room Article

Projects are important for generating growth for organizations. Successful projects don’t just happen; they require hard work and collaboration from both project managers and team members to ensure all tasks are completed and goals are met, on time and on budget. However, many projects ultimately fail or are abandoned because the team does not work together to achieve shared goals. To avoid this unfortunate fate, project managers can find help with visual management and the Obeya room. Creating an Obeya room is akin to creating a “war room,” a command center that draws together leaders from across departments in an organization.

I recently authored this article “Obeya - Introducing The Lean War Room” for Quality Magazine which helps you understand the process behind the Obeya room, how to use the room efficiently, the benefits of one, and virtual Obeya Rooms.

You can learn more by reading the full article here:

https://www.qualitymag.com/articles/98010-obeya-introducing-the-lean-war-room

You Get What You Reward, Boeing’s Rewarding Safety and Quality Performance

We’ve all heard the phrase “what gets measured gets done” but I also believe “what gets rewarded gets done even quicker.”

Understanding how employee rewards and recognition impacts productivity, performance, and employee engagement has been the subject of many studies and experiments, ergo, the salient connection between human behavior and appreciation needs no introduction. We are wired to crave connection, support, and acceptance from those around us, due to which the need for effective employee recognition has been diligently emphasized by thought leadership.

Behavior reinforced is behavior repeated. Behavior reward is repeated. This simple yet profound concept is at the root of more poor productivity, broken relationships, negative personnel issues and high costs of doing business than any other management principle.

Boeing has been in the news recently for a number of troubling safety and quality issues. Among the safety and quality issues of recent years have been two fatal crashes of the 737 Max jet due to a design flaw in the plane, numerous halts in deliveries due to quality control issues and, most recently, a door plug that blew off of a new 737 Max operated by Alaska Airlines in January of this year, leaving a gaping hole in the side of the plane.

The National Transportation Safety Board has determined that aircraft left a Boeing factory without the four bolts need to keep the door plug in place. It has yet to assess blame for the accident, but CEO Dave Calhoun has accepted responsibility for the incident.

The theme is a corporate culture that was once reflective of an engineering and product quality driven leadership to that of a financial and investment community culture of driving up share price and investor returns regardless of process control, pandemic or building supply network challenges.

In a Bloomberg, The Big Take in Business column titled: Boeing’s Legacy Vanished Into Thin Air. Saving It Will Take Years. (Paid subscription), the following was noted:

“Together, these point to a common problem: the company’s once-vaunted system for building its prized 737s has been badly damaged by worker turnover, supplier distress and the shortcomings lingering from the breakneck production last decade before the Max tragedies and the Covid freeze.”

This Bloomberg editorial further observes:

“At the same time that Boeing was reworking its supplier network, executives put greater focus on propping up the share price with the help of dividends and buybacks. Since 2011, the year the 737 Max was officially announced, Boeing has handed some $68 billion to shareholders in the form of dividends and stock buybacks, according to data compiled by Bloomberg, though it suspended the measures as its financial crisis deepened. Airbus, by comparison, has been much more conservative with its balance sheet, giving it greater resources to respond to the pandemic.”

After being rocked by years of quality and safety issues, Boeing is changing the bonus formula it uses to pay more than 100,000 nonunion employees. Instead of basing most of white-collar employees’ bonuses on financial results, bonuses will now be based mostly on safety and quality metrics.

The company has faced harsh criticism for a series of quality and safety issues in recent years, with many of those critics saying the company has shifted its focus in the last few decades to financial results at the cost of safety and quality in its aircraft. But those safety and quality problems have resulted in five years of operating losses topping $31.5 billion.

“It’s very, very important to drive the outcomes that we’re all committed to, and that’s to deliver a safe and quality product to our customer,” said Chief Operating Officer Stephanie Pope on Thursday in comments to employees announcing the new bonus formulas.

The troubled aircraft maker said 60% of the annual incentive score used to determine bonuses for employees of its commercial airplane unit will now be based on safety and quality metrics. It previously had 75% of that score based on financial results, with the other 25% based on operational metrics that included data beyond safety and quality readings.

Boeing said all employees will be required to complete training courses on product safety and quality management as a pre-condition to receiving any annual incentives.

A core principle of TPS is a system and process that depicts audio and visual systems that indicate a production process has been stopped because of a worker observing and flagging a quality control issue whenever they occur. To quote a Toyota descriptor: “Operators are equipped with the means of stopping production flow whenever they note anything suspicious. Jidoka prevents waste that would result from producing a series of defective items.”

The notion of Genchi Genbutsu (Go and see for yourself) compels production managers to dispatch themselves to where the problem was flagged and to produce timely resolution. It implies not penalizing the worker for calling attention to the problem, or risking a production shortfall, but rather triggering a collective effort toward resolving the problem as quickly as possible. That includes whatever engineering and technical resources that may be required.

The ongoing crisis has Boeing’s most senior management now compelling production workers to flag known production and quality problems. With the systemic changes to reward safety and quality it’s corporate culture can focus on producing each aircraft with the utmost quality and efficiency, and reward production and supply chain workers for their ingenuity and follow through. Such a culture rewards operational workers for significant quality and operational milestone achievements.

From my experience, this will take time and extraordinary efforts. The question remains, what is the willingness of Boeing’s senior leadership? It would be tragic if the commercial aircraft industry faces a singular dominant global provider. Industries require vibrant competitors, especially those with upwards of ten years in order backlogs for new aircraft.

The Real Impact of Poor Quality

Quality affects a company in a variety of ways, from productivity and profitability to customer satisfaction and public perception. In addition, quality affects the overall operating costs of a company. Focusing on quality helps keep a company strong in all areas.

In this article I highlight three effects on how poor quality can affect your organization.

Influencing Customer Satisfaction

Quality has a direct bearing on customer satisfaction. If a company produces a quality product, satisfied customers will rank that company higher in surveys than companies that fail to provide quality products or services. In addition, dissatisfied customers are more vocal in their criticisms of a company with quality problems. Various websites will rank different companies according to customer satisfaction and quality products. Poor companies may get an initial sale of a product or service but it will not create repeat customers.

Causing Problems with Productivity

Poor quality costs a company a significant amount of money in terms of productivity problems. If a company uses low-quality parts, systems break down, regardless of any high-quality parts also used. Low-quality parts can cause mechanical breakdowns, as well as work slowdowns or even stoppages. If quality is not a proactive measure, employees will spend their time on inefficient process and fixing incidents on a regular basis. It is crucial to find out which processes are inefficient and how to improve them.

Impacting Company's Profitability

Poor quality can have a significant impact on a company’s profitability. While using less expensive parts and equipment might cut costs in the short term, the long-term effects might be far more expensive. This could also be a lack of quality in human, physical, financial or knowledge factors that are needed to perform business processes.

Good quality increases profitability. When employees are engaged in a work environment in which teamwork is emphasized and where quality products are the goal, the work environment flows more smoothly than one in which quality is an afterthought.

The Solution

Investing in proper quality control is key to reduce poor quality. Focusing on quality can help a business maintain a satisfied customer base. When focusing on quality, it must be a team effort, with everyone within the company committed to implementing any quality changes managers mandate.  Ultimately, the cost of working with an ineffective system are exponentially higher than the cost of working with a proper quality management platform.

Jidoka – Find an Issue, Stop and Fix It

There is no room for compromise in Lean when it comes to quality. We have to learn to build quality into our processes and design Lean processes based on right-first-time principles.

Building quality into our processes means not simply relying on perfectly trained individuals and teams who never make mistakes. Standard Operating Procedures may help people making errors, but it does not stop them.

We have to assume, just like in Murphy’s Law – that anything that can go wrong will go wrong … eventually. And by accepting this fact, the most important aspect of our processes is how well we design them to eliminate any potential errors from ever occurring.

Lean is about stopping and fixing issues when they go wrong: quickly and consistently, every time. It is about creating the proper workplace setup, to ensure that when things go wrong, we can identify them quickly.

Jidoka is an integral part of Lean principles that focuses on optimizing the flow of production processes. It plays a crucial role in helping organizations become more efficient and productive by reducing waste, enhancing quality, and increasing customer satisfaction. Jidoka is based on the idea that any defect should be detected immediately so the process can be stopped until the root cause of the problem is identified and corrected. This helps eliminate wasted time, resources, and energy from running defective parts through a production line.

The implementation of Jidoka relies on a mix of cultural concepts and Lean tools that are summarized below.

Developing a Jidoka mindset. Many people are trained to react to problems and to put in place quick fixes. The concept is to keep things running for as long as possible and work around problems as quickly as possible. A Jidoka mindset is different in that it says that, in the long run, efficiency will come from addressing the root cause of problems and that investing time in solving problems is a valuable investment.

Empowering staff to ‘stop the line’. Do your staff feel that they are empowered to say ‘stop’ when they see an unsafe act or a problem occurring? Many organizational cultures, through the words and actions of managers, disempower staff from stopping a process. Developing a culture where people feel that they are able to raise a real issue – and that far from being penalized they will actually be thanked for raising the issue – is very important in jidoka.

Installing andons. Andons are audible, or more commonly visual, signals that something has happened.  The aim is that andons quickly alert managerial and technical staff to a problem having arisen so that they can get to the source of the problem and begin to investigate it.

Solving the root cause. Quick fixes are typically just that. Jidoka relies on the implementation of an immediate fix to stem the potential damage and on the longer-term fix that comes through root cause analysis.

Utilizing standard work. Having implemented the changes it is vital to document what has been done and to carry out any training required on the new process.

Selective automation. Selective automation is about investing in technology to detect – and more ideally prevent – errors arising wherever there is a business case to do so. This means wherever there is either a high probability that things will repeatedly go wrong, or where a problem arising has significant impact (such as the ability to cause harm), then it means investing in sensors and other systems to enable you to control the process and detect problems as early as possible.

By not fixing the problem as soon as it is identified increases the costs of fixing it later. It potentially allows the problem to get to the customer and kills causing even more damage to the business. And really importantly, in a culture of continuous improvement, we want to learn fast.

If the issue is not addressed immediately, we miss the opportunity to learn (kaizen) and when we finally do get around to fixing the issue, we might find we don’t just have one product that has failed but multiple products.

The sooner the problem is detected, the easier it is to fix and the smaller the impact.  Thus, one of the important parts of Lean is to be able to detect problems, raise them quickly, analyze and fix.

Quality Costs: A Guide to Managing Them

The business climate is becoming increasingly more competitive. With multiple options for consumers companies must stay competitive to survive. Many organizations consider improving quality as the best way to enhance customer satisfaction, to reduce manufacturing costs and to increase productivity. For this, the cost of quality (COQ) must be reduced.

The costs associated with making sure that your product is of good quality are called quality costs. It includes preventing, detecting, and fixing any issues with the product. It's crucial to ensure that your product meets the customer's expectations, which is not just a matter of making it look nicer.

As defined by Philip B. Crosby in his book Quality Is Free, the cost of quality has two main components: the cost of good quality (or the cost of conformance) and the cost of poor quality (or the cost of non-conformance).

Cost of Poor Quality

External failure costs are associated with deficiencies that are found after the customer receives the product. Also included are lost opportunities for sales revenue.

• Sales returns and allowances
• Replacing defective products
• Service level agreement penalties
• Complaint handling
• Field service labor and parts costs incurred due to warranty obligations
• Product recalls / Legal claims
• Lost customers and opportunities
• Downgrading
• Processing of customer complaints

Internal failure costs are the cost of deficiencies discovered before delivery that are associated with the failure to meet explicit requirements or implicit needs of customers. Also included are avoidable processes losses and inefficiencies that occur even when requirements and needs are met. Internal failure costs consist of: (1) the cost of failure to meet customer requirements and needs and (2) the cost of inefficient processes.

• In-process scrap and rework
• Troubleshooting and repairing
• Design changes
• Inventory required to support poor process yields and rejected lots
• Re-inspection / retest of reworked items

Cost of Good Quality

Appraisal costs are incurred to determine the degree of conformance to quality requirements.

• Test and inspection (receiving, in-process and final)
• Supplier acceptance sampling
• Product Audits
• Calibration

Prevention costs are incurred to keep failure and appraisal costs to a minimum.

• Quality planning
• Education and training
• Conducting design reviews
• Supplier reviews and selection
• Quality system audits
• Process planning and control
• Product modifications
• Equipment upgrades

The Total Quality Cost can be summarized as all investments in the prevention of defects, the testing of product to assure Quality, or the failure of a product to meet a customer requirement.

Many of the costs of quality are hidden and difficult to identify by formal measurement systems.

The iceberg model is very often used to illustrate this matter: Only a minority of the costs of poor and good quality are obvious – appear above the surface of the water. But there is a huge potential for reducing costs under the water. Identifying and improving these costs will significantly reduce the costs of doing business.

It is important for companies to understand what they need to do to reduce their overall cost of quality. This will help them improve their business processes and operations, which ultimately lead to better profitability.

The worst type of cost out of these four categories of the cost of poor quality is the external failure costs. Organizations should make their best effort to reduce the external failure cost.

Spending more on prevention and appraisal costs usually leads to a reduction in internal and external failure costs.