Archive for September 2016

Counting The Cost of Quality: The Cost of Action 

Every decision has a cost.

Large or small there is a cost to every decision. Of course there is a sliding scale of the size of a decision and it’s relationship to the overall implications to the organization. Some costs are economic and some are not.  Deciding on a bathroom cleaner or brand of pencil to stock have fewer implications than a capital purchase or facility relocation.

This the first of three articles focused focused on quality and considerations when making improvements to an existing system or completely starting from scratch. Also the costs associated with these actions that have far reaching implications to product quality within a manufacturing environment. In this post we are focusing on the cost of action.

Here are a few point for consideration.

Management acts on quality improvement but there is usually a trigger. Triggers that cause management to act are either external or strategic. External triggers often come from customers who require improvement in quality either due to a complaint or issue. They are also driven by the customer’s desire to focus on a specific industry sector that demands higher quality standards. Strategic triggers are based on the company moving into a new industry sector which (like the customer) demands an enhanced quality or documentation of quality. Regardless of the trigger it all boils down to one thing: economics. Losing a key account or losing out on a new opportunity to grow the business in a new direction can greatly affect revenue which can affect the business partly in the short term but mainly in the long term.

Management not only needs to be fully committed to a new quality system, they need to be the champions of it. Often it is management that has a neutral or “wait and see” attitude. This can be damaging to the success of implementing a new quality system. Or the efforts to make permanent the change in culture. Employees are watching. When management waivers, employees often follow.

We will expand on the potential negative affects in part two: The Cost of Inaction.

Commitment includes attention to the following areas:

Employees need to be fully supported. In the form of solid two communication between management and employees. They need to understand the reasons behind the change or initiative. When communication breaks down so does the trust.

Employees also need appropriate training. The company needs to provide the funding for training (and re-training) for all workers directly (and indirectly) involved in quality.

Resources are critical to the success. These include measurement and in process monitoring tools for validating and monitoring production. Also access to applicable quality standards for your industry. These tools provide data necessary to feed back to management on the current state of the quality system.  And levels of improvement over time. One important point. Providing new measurement tools is an important first step but often they uncover the current state of the quality system. They do not improve it. Training in conjunction with the above tools can provide the information needed to make the changes needed to drive quality improvements. But looping back to management’s commitment, they need to drive the changes needed (and the speed of change) and support the organization as a whole.

Capital Costs are important over the life of a quality improvement initiative.  As information starts flowing on the current capability of the production system, it may become evident that production equipment over the long term is not capable of repeatable results of a higher quality level. Replacement production equipment or major upgrades to existing equipment will be necessary.

In summary, making a decision to improve quality comes at a cost. In the attitude of management and employees, a commitment to invest in the resources and the capital needed to make an improvement in product quality. There is also a cost of inaction which we will cover in part two. And the benefits? Part three will uncover the reasons why sticking it out to the end will be critical to the company’s survival in rapidly changing business conditions.

You Asked: “When should we automate?”

Automation is a big step most manufacturing companies consider at one point in time. There are a distinct advantages which include improved quality and more accurate piece to piece consistency.

This question to automate is frequently asked. Is there a trigger that pushes you to make a decision to invest in automation? Are there signs leading to that decision? We will address these topics in this post. First a short answer and following some points to consider.

The short answer is no. There are no defined rules to move you into automation. Every company and their business conditions are different. Some will move quicker to automate while others integrate automation much slower.  Volume per batch is less of a consideration. Annual production volume is a greater consideration.

There is a sliding scale to automation. In general, any production above manual hand tool processing can be considered automation. For a perspective on a migration path from manual to automated processing, consider Methods of Processing Wire Assemblies. For the basis of our discussion, we are focusing on the migration from semi automating processing of wire (measure, cut and strip using single or multi-stage bench top machines) to an automated work center.

Elements of wire processing automation

The most basic of processing automation is the measure, cut and strip of wire and crimp of terminals on one or both ends. But automation allows for other processing possibilities. Typical secondary processing options include:

  • Tin tipping of wire
  • Ultrasonic tipping of wire
  • Weather seal application.
  • Wire doubling.

small splice

Ultrasonic wire tipping

SSM_SSK_2_10

Weather Seal Application

Current or future processing should include an evaluation of processing wire leads using the above secondary processing. This makes justification easier to achieve and gives the company an indication of the scope of machine solution needed.

Set up time and job lot sizes.

In the past, automation was justified based on one or several large production runs. That was due to the time it took to change from one set up to the next. Pneumatic motions and bolted in production tooling gave way to programmable servo motors and quick change tooling bases. Therefore it is easier to run smaller lots with less machine down time than in the past.

With production rates in excess of 3,000 pieces per hour on short wire lengths, there still needs to be a reasonable lot size.  Providing a recommended lot size would not be useful as companies consider a range of minimum lot sizes. You just need to balance the set up time with the lot size and the acceptable number of set ups per day.

Labor Savings.

There is a potential for significant labor savings when moving to automation. But consider that the personnel that operate the automation systems need to be trained in the machine operations, the software and use of a micro processor communication interface. Also consider maintenance resources.

Conditions Triggering a move to Automation.

Typically there are two conditions that we see when companies migrate to automation.

  1. Business Growth. This is a slower movement towards the point where the decision to automate occurs. Available resources in capital funding, facility floor space space and the need to reduce direct labor content will converge to make a seamless decision to automate.
  2. New Contract. When the company receives a substantial contract for a specified duration, the decision is quicker.

Floor space can be a factor that speeds up or slows down the decision to automate. Limitation of floor space to accommodate the new machine installation can be an issue. Re-locating to a larger facility may be part of a larger business strategy that includes new automation investment. Often it is a balance between the distribution of labor, overall direct labor costs and the availability of floor space.

Summary.

As stated from the beginning, automation is a big step in any company large or small. Considering global annual production of wire assemblies that are processed is more important than large lot sizes due to the reduced set up time with newer technology processing machines. Redeployment of labor, training personnel in set up operation and maintenance are critical factors. Where a decision to automate is made from a new large volume contract, the duration of the contract is also an important factor.

When these elements are considered and in conjunction with good advice from outside sources, the migration to automation is a low risk proposition. WireProcess can provide the direction you need and the solutions required to fulfill your automation requirements. Connect Your Way to WireProcess.