Quality as a Business Risk

• Quality is critical for companies to succeed in the international market.
• Customers want comprehensive quality, flexibility, good service, reliability, innovation, and environmental sustainability.

Quality as a Business Risk

• In 1996, poor product quality cost Opel AG 700 million DM in complaints, directly affecting profits.
• Publicly visible problems like fuel tank fires during refueling hurt the brand's image and market acceptance because it stems from internal cost-saving measures in construction and supply.
• A fatal accident in 1985 involving an Audi vehicle with automatic transmission created the impression in the U.S. that Audi vehicles were unsafe.
• There was no technical defect with the gear.
• A recall of 900,000 vehicles was conducted as a preventative measure against liability claims, however, Audi suffered in the American market for years.

Product Liability

• Liability for defective products is becoming increasingly important in the EU.
• Manufacturers are responsible with guarantees and burden of proof reversal.
• In the U.S., product liability cases can be very impactful to manufacturers.
• Massive claims could be made against manufacturers.

Incomplete Specifications

• The A-Class (elk test) from Mercedes, was an example of incomplete specifications.
• New development with no experience in front-wheel drive passenger cars
• The "elk avoidance test" was missing from the specifications.
• There was reduced development time
• There were tight cost specifications
• Caused uncertainty in driving simulations
• Shortened testing time and the application of an outdated rear axle was a cause of incomplete specification
• The rigid trailing arm design saves space but doesn't allow the rear wheels to steer when cornering, and the rear of the car can break out more easily.
• Incomplete specifications caused additional development costs.
• Change costs
• Refitting costs and refitting of delivered vehicles
• The additional equipment costs(ESP as standard) were estimated at 100 million/year
• There were additional marketing costs
• Lost profits by doing away with an optional extra
• Daimler stock dropped temporarily by up to 14%
• Total damages for the group estimated: 600 to 800 million.
• There was an estimated sales loss in 1998 - 20%
• It affected model policy
• ESP is standard for all models
• Annual production of 700,000 vehicles

Historical Considerations

• Quality assurance is an old concept, indicated by seals and trademarks.
• Guilds and professional associations ensured quality of goods and services in the Middle Ages.
• With industrialization in the 19th century, the idea of division of labor and increased productivity came to be through motion and time studies (Taylor, Ford).
• Workers performed few repetitive tasks, requiring less skill but more control, separating work execution from quality control.
• The manufacturer defines the market conditions and thus the quality.
• The customer had little opportunity to influence

Transitioning to Customer Markets

• Styling and quality determine purchasing decisions in saturated markets.
• The customer determines product specifications and considers public interests like environmental protection.
• External quality (product) and internal quality (manufacturing costs) are key to business efforts.

Quality Goals and Success Factors

• Goals include efficient performance, competitive edge, and customer loyalty.
• Success depends on policy, leadership, employee and customer focus, service quality and social responsibility.

Quality Control to Management

• Old strategy ensured a control system of testing at all phases of manufacturing.
• Quality assurance integrated systematic manufacturing processes
• Business insights confirmed that final inspections & rework were inefficient

Quality Influence Factors

• Quality depends on multiple factors
• All factors must meet requirements simultaneously.
• Failure in one factor can lead to insufficient quality.
• The necessary engagement of employees is indispensable for achieving desired corporate objectives with desired efficiency.

Human Factors

• Information gathering, processing, and analysis, high knowledge and technology requirements, increasing interdisciplinary tasks, rapid change in work techniques and tools, high complexity of tasks, constantly increasing performance requirements, cost and time pressure, globalization of work, intercultural division of labor, value change and high flexibility and availability.
• Meeting employee needs helps change and avoids resistance.

Machine Factors

• Not just energy conversion, but accuracy, stability, and maintenance are important.

Material Factors

• End product quality depends on the right material choice, considering suitability, reliability, manufacturability, and cost.

Method Factors

• Success depends on suitability for the task.

Measurability Factors

• Measuring and testing provide data to maintain and improve quality.

Assessment Factors

• Assessing determines the value using criteria like satisfaction, service and reliability.

Management Factors

• Management encompasses strategic and operational control, and coordination.

Environment (Milieu) Factors

• The environment affects measurement and manufacturing.
• Surrounding conditions involving communication, pollution, temperature, lighting and more.

Quality Control and Failure Management

• Quality Function Deployment (QFD) is a method to apply market and customer demands in every level of performance.

Quality Features

• Quality is meeting requirements.
• Only the customer decides.
• Requirements increase.

Kano Model

• Basic features must be fulfilled
• Performance characteristics lead to competitive advantages
• Features to inspire the consumer

Elements of Quality Assurance

• Quality Function Deployment(QFD)
• Kaizen/KVP
• Quality Improvement

Kaizen/KVP

• Continuous improvement needs consistent data tracking, future-oriented measures, and leadership.
• Q Management should strive for continuous improvement & elimination of losses, using a PDCA cycle in all areas.
• Key aspects include customer orientation, TQC, QC circles, suggestions, automation, and more.

FMEA (Failure Mode and Effects Analysis)

• It is created by FMEA teams, to ensure different views.
• Teams answer the questions "where can errors occur, how, what are the effects, and why".
• The system first must limit the errors, and describe the system, all processes, division of elements in groups.
• A failure analysis assigns potential errors to system elements that are seen as limited. and the most important result is the assessment to the people affected by the error.
• The failure risk include likelyhood, consequence, detection of the failure and an impact assessment.
• Should any of the factors be over the accepted level of 125, corrective action should be taken.
• The risk reduction target include avoidence of failiure, and optimization is done according Pareto principle, achieving 80% success.

Risk Analysis

• Risk analysis includes defining machine limits, identifying hazards, assessing risk.

Risk Assessment

• Risk assessment combines damage and probability.

Harmonized Standards are split into A,B, and C

• Type A-Norms regulate all aspects of Machine saftey.
• Type B-norms affect all types of safety measure
• Type C norms are Machine specific.

Quality Systems

• The importance of ISO 9000, it shows the minimum requirements.
• The document follows an 8 step process.
• The 4 main processes of an organizaton can use it.
• ISO-TS 16949, is for series production.

Total Quality Management

• Total Quality Management (TQM) is a management method that prioritizes quality and customer satisfaction, involving all members of an organization.
• It emphasizes cooperation, responsibility, and market orientation.

Balanced Scorecard

• Balanced Scorecard combines strategy and implementation, using traditional financial indicators and customer, process, and learning perspectives.
• Strategies must be converted to measurable indicators.

Six Sigma

• It systematically improves processes used analytic and stattistical methods.
• It uses a 5 phase model to improve processes to eliminate errors, improve resutls and in turn improvign systems.

The 5 Steps of the Six-Sigma are Define Measure Analyse Improve and Control

• All tools assist with problem solving processes, and continuous improvements.

Seven Quality Tools (Q7)

• Easy to use either individually or in teams, helping with solving issues
• Error capture is supported by the method, error cause, Pareto style diagram.

Error Collection

• Easily observe patterns of defects
• Data must eaisly be understood, and easily communicated.

Historgram

• It lets large datasets show a distribution.
• 50 - 100 entries are needed.

Quality Control Chart

• It continuously monitors a process and catches any defects.

Pareto Diagram

• It shows the ABC anaylsis, with 20 procent of causes giving rise to 80 procent of errors.

Diagram

• The correlation diagram illustrates potential effects.

Brainstorming

• It generates ideas

Cause-Effect Diagram

• It supports teams that address the causes of problems.