Indian manufacturing firms need to change their approach to quality. Let me start by taking the case of export quality tag. It is meant to convey the ”Best Quality”. The assumption here is the domestic market is not discriminating enough and can be sold sub-standard stuff; that export markets demand and deserve quality better than the domestic market. I pondered over this and began to realise there is a cultural bias within us giving rise to our attitude to quality. Quality is one of perception for us. What is bad for one is good enough for another. Our subjective nature predominates. There is also a popular misconception that Indian consumers are price conscious all the way and any increase in cost for quality sake is not on.
Defining Qualityis a complicated exercise. Most would agree it is an attribute. An attribute which makes a product or service fit for use and satisfies the customer expectations. The ISO quality guideline manuals tries to resolve to some extent the issue of differing perceptions. They define quality terminology elaborately leaving very little to imagination. However the creation of actual operating manuals are always left to the individual organisations. These operating manuals are supposed to be faithful in spirit to the ISO guidelines.
By 1992-93, about 50 companies mainly the large companies had obtained ISO-9000 certification. By 2010 more than thirty thousand ISO 9001 certificates have been issued in India. Most of the firms employ consultants to write out procedures and guide them in obtaining the certificate. Besides it is being said that there are more than fifty certifying bodies in India for all QMS (Quality management systems) related accreditation. The field has given rise to big employment potential. But the ground reality is not very encouraging.
Ask any experienced head of vendor selection department of a big company about QMS certification. Answer would be invariably, it serves at best only as the first filter. The actual selection is mostly with audits undertaken with the part production process. The run at rate, rejection analysis, FMEAs, past history are the key factors evaluated in this audit. It is very important to conceive metrics for constant review by top management for quality sustenance. The five metrics below will help. It highlights successes, gaps, and areas for improvement.
Metric 1: Yield
The First Pass Yield measured as the percentage of products produced that meet both quality and compliance standards without the need of re-run or re-work. A simplified definition of first pass yield is the number of units coming out of a process divided by the number of units going into that process over a specified period of time.
Metric 2: Scrap Rate
The simplest definition of scrap rate is that it measures the percentage of raw materials sent to production that never make it into the finished product.
Metric 3: Supplier Defect Rate
Supplier Defect Rate measures the percentage of materials or products received from suppliers that do not meet required quality or compliance specifications. Organizations operating in industries such as automotive are not only responsible for managing immediate supplier quality, but the responsibilities also extend to measure areas such as the supplier’s supplier quality.
Metric 4: Cost of poor quality and Supplier Chargebacks
Organizations need to have stringent norms for charging non-material costs such as late delivery and employee time, which in some cases might be more expensive than the material cost itself.
Metric 5: Customer Complaints
A simple way is to measure the number of customer complaints over 12 months. In addition to measuring just the number of customer complaints, organizations should also measure metrics such as number of customer complaints resolved, time taken to resolve a customer complaint, and also metrics related to measuring overall customer satisfaction.
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