Reference no: EM131012223

Gordon Jenkins, recently appointed Statistical Process Control (SPC) Coordinator at Dynamic Seal had done some preliminary analyses of problems. He wanted to move ahead on SPC, and he had convinced his boss, Kevin Lynch that this was a good idea. It was clear to Gordon that SPC had many steps and that SPC was, itself, a part of a larger set of manufacturing issues. Kevin Lynch had set a meeting for February 28, 1984 to review these issues with a steering committee formed to oversee SPC implementation.

As Gordon Jenkins prepared for the meeting, he came up with the following tentative implementation schedule.

A. Education

B. Gather Data

C. Evaluate Machine Capability

D. Evaluate ProcessCapability

E. Troubleshoot

F. Identify Corrective Action

G. Make Corrections

H. Re-evaluate

I. Apply Statistical Process Control Gordon was hopeful that the steering committee would agree to this schedule and give him the mandate to go forth.

THE FEBRUARY 28, 1984 MEETING

Statistical Process Control had been discussed at Dynamic Seal for some time. In December of 1983, a steering committee was formed to oversee the implementation of SPC at Dynamic. Members of the committee were Messrs. Kevin Lynch; Jack Barry, the Manufacturing Manager; Gordon Jenkins, the SPC coordinator; Roger Towne, the Director of Quality Assurance; Scott Palmer, the Assistant Director of Quality Assurance; John Dors, the Manager of Manufacturing Engineering; and Alan Schneider, the manager of the United Aircraft cell. On the morning of February 28, these men met in the staff conference room to discuss the implementation of the SPC system at Dynamic. The opening comments were made by Kevin Lynch. "Gentlemen, I have called this meeting to discuss what I feel will be one of the most successful programs to be implemented at Dynamic Seal. You are all aware of the significant quality costs that are being incurred at Dynamic. I sincerely believe that Statistical Process Control can put an end to these costs. I have instructed Gordon Jenkins to implement the SPC system in the united cell area first. I have chosen the UA manufacturing area for several reasons (see Appendix A for a description of the United Aircraft cell). First, it is a self-contained, manageable work area. Second, even though United comprises 14 per- cent of Dynamic's sales, we have yet to show anything but a small profit. Third, I feel confident we will be receiving
another large order from United. I would now like to let Gordon Jenkins outline his implementation plans."

Gordon Jenkins then put up an overhead transparency with his points A through I, and he explained why this was his plan. The next person to speak was Roger Towne, the Director of Quality Assurance. "Kevin, I agree with you that our quality costs in United are out of sight. But, it is the same story everywhere at Dynamic. Instead of just implementing the SPC system in the united area, I think we should pick a particular machine type that produces the largest number of defects and apply Statistical Process Control to that particular machine type throughout the entire plant. In this way we could cure the largest number of defects in the shortest amount of time. Once you have set up control charts for a particular type of machine, such as a lathe, getting control charts for every other lathe should be relatively easy. I have had recent conversations with United and contrary to the letter we received, the implementation of the SPC system is not mandatory as long as our quality level remains high," Scott Palmer agreed with Roger Towne.

"Not only is SPC important to United, but I have heard rumors to the effect that Avco, Sorsky, and General Electric are all discussing the benefits of putting their manufacturing process under SPC. I feel it is only a matter of time before they approach us in the same manner as United. By implementing the SPC system throughout the plant, we could use that fact to competitive advantage." The next to speak was Jack Barry. "If SPC can eliminate rework and reduce lead-times, I am all for it. We need to get a handle on rework. I must spend one month out of every year just reworking defective parts. (In a subsequent cost analysis, this statement proved to be quite
accurate.) And this is just rework I know about. This rework and scrap plays havoc with my material control system. Every time one of my material handlers looks for a particular lot, it is either being inspected, waiting for inspection, or rejected. It is no wonder the end of each month is pure chaos." Scott Palmer directed these remarks to Jack Barry. "Jack, I appreciate the problems you are having getting your materials on time. But you are mistaken if you think SPC will make a significant difference. My inspectors are just plain overworked. Much of the work we do entails products that will ultimately be used for National Defense purposes. Meticulous records  need to be kept. Each lot needs to be inspected whether there are defects in it or not."

Alan Schneider now addressed the impact SPC might have on the work force. "I am deeply concerned about the effect the implementation of the SPC program will have on my workers. As you are well aware, the UA production area is composed of a group of highly skilled albeit somewhat temperamental machinists. To them machining is as much an art as a science. They are the people who specify the feed rates, the machine speeds, and many of the tools used in an operation. I don't want to alienate them. Even though our relations with the union are cordial, we are inviting trouble if the union gets the impression management is on the witch hunt."

In closing the meeting, Kevin Lynch addressed his comments in particular to Gordon Jenkins and in general to all present. "I thank all of you for your salient comments. We certainly have many issues to address before we can fully implement the SPC system at Dynamic. Our next meeting will be held on Thursday, March 29, 1984 at 1:00 pm. At this next meeting, Gordon, it would certainly be helpful if you could provide us with a milestone chart detailing phases to be completed and supporting efforts. I am particularly interested in a way to measure the progress of the SPC program. Other areas that will need additional coverage are the implementation area, data gathering, data analysis, software, and identifying responsibilities that will be needed to support the SPC efforts. Of course, don't limit yourself to these areas. Feel free to make recommendations about any phase of our quality control system." After the February 28 meeting, Gordon Jenkins returned to his office to think about the SPC project. As the day went on he grew more and more pessimistic about the results of the meeting. It was clear that his goal of receiving a mandate to move forward was not accomplished.

Gordon spent the afternoon thinking about the meeting, SPC, and his future at Dynamic Seal. That evening he tried to talk it over with his wife, but found that he just couldn't explain the problem. The next day he closed his office door and left word not to be disturbed. On a blackboard, he listed all of the facets of the SPC project he found important. Gordon hoped that this process would clarify his understanding and form the basis of a heart-to-heart talk with Kevin Lynch. At the end of the day, the following were some of the items on his blackboard.

APPENDIX A: UNITED AIRCRAFT CELL

United Aircraft (UA) comprised 14 percent of Dynamic's sales and was one of its fastest growing customers. For this reason, Dynamic made the decision to set up a separate department of equipment and personnel dedicated to the manufacture and assembly of the 25 UA mainshaft seal assemblies (60-70 total parts). The equipment was located in a separate UA manufacturing manager (Alan  Schneider) and 18 highly skilled machinists. Each machinist was paid an hourly wage of approximately $13.

The 25 UA assemblies could be grouped according to 3 major characteristics. Those characteristics were length of the carbon seal (long or short); wall thickness (thick or thin); and number of slots used to hold the seal in place (3 or 4). In general, each seal assembly within a particular grouping went through a similar set of operations. The same operation could be done on any one of a number of machines depending upon the tolerances required and scheduling constraints. The principle measure of effectiveness of the UA cell was the ratio of direct labor costs to overhead. Direct labor costs consisted solely of the standard labor hours (not actual labor hours) it should have taken to complete a given amount of work. Overhead costs consisted of setup times, idle times, tooling expenses, and a percentage of the overhead created by support departments such as accounting, quality control, etc. Quality costs, due to the difficulty of attributing them to any particular machine or work center, were not used in the calculation of either direct labor or overhead. According to Alan Schneider, the UA cell manager: Rework costs are especially difficult to measure. I schedule the rework so as to not
disrupt my daily production. Besides, much of the rework is done by the original operator before the part gets to inspection. For example, if the operator sees that some of the parts he free produced are defected, he will immediately rework them before releasing the lot to the next operation. In the long run, it saves us time and a good deal of paperwork.

DISCUSSION QUESTIONS

1. What are the major steps Gordon Jenkins proposed for implementing SPC in his February 28, 1984 meeting?

2. Summarize the remarks made by Kevin Lynch, Scott Palmer, Roger Towne, Alan Schneider, and Jack Barry during the meeting.

3. Figures 1-3 and Tables 1-5 show various important information about United Aircraft Cell. How would you approach SPC  implementation?

4. Do you have any suggestions or additions to the list that Gordon had prepared at the end of the February 28th meeting? Discuss them in detail.