Reference no: EM132159083

A few months ago you were hired to be quality manager of Papyrus, Inc., a company making paper board and converting most of this board into a variety of products. While you have had prior experience in the chemical process industry and in quality, this is your first job in the paper industry.

With the help of the company controller, you have analyzed the various costs of quality, which run as follows:

                                                                                          Annual Loss

Dimensional rejections, product line A                            $ 816,000

Beater room defects                                                        480,000

Lack of adhesion, final products                                        354,000

Paper mill winding defects                                                 282,000

Dimensional rejections, product line B                                204,000

Subtotal for first five categories of loss                           2,136,000

Loss for remaining 192 kinds of defects                          4,224,000

                  Total                                                           $6,360,000

This total does not include field returns. Annual sales are about $90 million. While ‘responsibility for quality’ is up to the various production superintendents, no one is actively studying the causes of the major quality losses.

You have talked to each one of the eight production superintendents and the manufacturing manager. Most of them have given you a reaction as follows: “The present ratio of rejects in production is the result of years of experience in this business. Our management has recognized this by putting this level in to the cost standards. We are meeting our standards, which is what we are here for. We are always looking for improvement, but our present level is probably as good as we can do with the present machinery and the attitudes of the labor unions. You are new to this business, which is different and complicated. After you have enough experience, you will understand.”

Two of the superintendents had a somewhat different concept: “We could probably improve and cut that loss. However, we are too busy with meeting the schedules, keeping ups with customers, handling grievances, maintaining machinery and the like that we have no time to do creative work.”

To take the initiative to reduce these losses, you must enlist the cooperation of the manufacturing manager. Your own department consists solely of the test laboratory, the floor inspectors, and the final inspectors. You have no quality engineer nor budget for hiring one. What do you propose to do?