Quality Management: Quality Leadership 100

September 1, 2006
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Dedicated employees and quality go hand-in-hand, according to the annual survey.

More and more companies, both large and small, have 100% of their employees dedicated to quality, according to the results of the annual Quality Leadership 100 survey. Not only are employees dedicated to quality, but one common aspect among the top five companies-Portec Flomaster, Microscan Systems Inc., Honda Manufacturing of Alabama, General Electric Co. and CNH America LLC-is dedicated employees. So dedicated are the employees at number-one ranked Portec, that the company's turnover rate is less than 3% with the majority of the employees clocking in more than 25 years of service with the company. Nate Betz, Portec's quality coordinator and chief QC inspector, says, "The workforce contributes to quality."

One way to engage and empower employees is through training. On average, most employees receive between one to four hours of training in quality per month, according to the survey. Companies that indicate that employees receive 10 or more hours of quality training per month generally indicate that quality has improved company profits and shareholder value by 80% or more.

Quality programs that employees take part in to improve the manufacturing process include continuous improvement, internal quality programs, Kaizen, lean manufacturing, preventive maintenance, problem solving and Six Sigma.

The majority of respondents indicated that their companies are registered to a quality system. The most cited standards include ISO 9001: 2000, ISO 13485, ISO 14000, ISO/TS 16949 and ISO 17025.



Survey Criteria

More than 800 manufacturers participating in the Quality Leadership 100 were surveyed on criteria such as scrap and rework as a percentage of sales, warranty costs as a percentage of sales, rejected parts per million shipped and contribution of quality to profitability and shareholder value.

Companies also were evaluated based on the number of quality programs in place; registration to various standards; percentage of employees dedicated to quality responsibilities; average number of hours monthly that employees receive quality training; and the role quality professionals play in the acquisition of test, measurement and inspection tools, software and services.

As an incentive for response, each survey contained a $1 bill.



1. Portec Flomaster

Canon City, CO

Portec Flomaster, manufacturer of power-turn conveyors, is no stranger to quality. Their first customer was American Airlines, and while American continues to be a customer today, they are not Portec's largest. Uses for Portec's conveyors include material handling, airport baggage handling, mail and parcel, manufacturing, retail, food processing, cement plant, fertilizer and salt plants. The global manufacturer's systems can move parts and products anywhere from small electronic components to refrigerators.

All of the approximately 125 employees are trained in quality and certified to Portec's own quality standard. The company's quality system is developed from the ISO 9000 standard and includes a detailed Quality Management System, operator certification, quality, safety and cell operation. Every two years employees must pass written tests and practical use applications to remain certified.

Employees go through an extensive training program when they start at Portec, but the training does not stop there. Several hours of training each month are devoted specifically to quality training. And it is paying off-scrap, rework and warranty costs are less than 1% of the company's total sales.

Training pays off in other ways too. Nate Betz, quality coordinator and chief QC inspector, says, "All employees have the responsibility and authority to stop product production flow right then and there." The process is then put on hold or repaired right on the spot, depending on the nature of the problem, thereby reducing quality problems.

Richard J. Alter, director of quality assurance and human resources, adds that employees are empowered to take direct ownership of the quality of their work. This not only encompasses full-time employees, but temporary employees as well.

Betz says that empowering the employees has had a positive effect on the company's goal to become lean because employees have a sense of ownership and responsibility toward the success of the business and continue to contribute to the quality process.

For more information, visit www.portec.com.



2. Microscan Systems Inc.

Renton, WA

Microscan System Inc.'s official motto is: "Microscan is committed to continuously improve processes, products and services to deliver solutions to meet or exceed Microscan's internal and external customers' expectations." Microscan has achieved worldwide recognition as an innovative developer of hands-free automated bar code scanners and decoders for automated systems.

Mike Mertel founded Microscan in 1982 when he designed the first barcode scanner incorporating solid-state miniature laser diodes. "The laser diode made it possible to build a robust, simple-to-use fixed mount bar code scanner for industrial applications," says Marjan Bruestle, quality engineer at Microscan. "As the company grew, it attracted the attention of a manufacturer of clinical analyzers requesting a miniature scanner that could be incorporated into its machines. This request led to the development of a line of small barcode scanners that were used industrywide."

The company facilities have grown from the original 1,200-square-feet to 36,000-square-feet and from six employees to more than 140 today. Microscan has developed a complete array of scanning products for a diverse base of industrial users. Current product offerings include laser scanners and optical readers for 1-D and 2-D symbols used in automated document handling, electronics, manufacturing, clinical diagnostic analysis, automatic tape libraries, and quality and process control tracking applications.

In 1996 Microscan achieved ISO 9001: 1994 certification. The standard was used as a template for writing procedures and designing processes that would allow the company to achieve the certification and establish a base line to build a strong quality program.

"The first thing you notice at Microscan is that the structure of the quality department is not the traditional quality for control or assurance," Bruestle says. "Quality personnel act as a supporting team. They help to train and develop the culture of total quality management. They help to identify improvement opportunities and collect correct data to make factual decisions."

At Microscan, operators and assemblers are responsible for the quality of their work. Manufacturing engineers are responsible for developing mistake-proving methods to prevent errors and make the production process more user-friendly. Design engineers and product managers ensure the quality of a new design, and through a cross functional team, process capability is ensured. "Our customers are the ultimate point for validating the design of new products," Bruestle says. "Quality only acts a supporting force."

Training and Microscan management style have been the main tools for communicating the fact that quality is the responsibility of each individual. The company also uses an internal audit system as a good opportunity to stress quality programs and quality ownership. Microscan uses volunteer auditors to perform internal audits.

"Our quality policy posted throughout the company emphasizes the importance of internal and external customers," Bruestle says. "Our quality is the voice of customers. Our products are only as good as what our customers feel."

For more information, visit www.microscan.com.



3. Honda Manufacturing of Alabama

Lincoln, AL

Honda Manufacturing of Alabama (HMA) started production on Honda Odyssey minivans for the U.S. market in November 2001. A second assembly line was added in April 2004 to build Honda Pilots, and HMA now houses an engine plant for its vehicles. HMA currently employs approximately 4,500 associates.

After safety, quality is HMA's most important operating characteristic. "HMA tries to improve on a daily basis," says Kenneth Pyo, quality division manager of HMA. "From the president to the last associate hired, we are committed to continuously improving quality on a daily basis in every area of operations. This commitment is shown in overall quality management system with the HMA quality manual outlining much of quality role and responsibilities for management and employees. This manual is then broken down to the business operation and audited for compliance on an on-going basis. To confirm the effectiveness of the quality management system, we complete a daily review of quality issues."

HMA employees are taught from day one to accept no bad parts, build no bad parts and send no bad parts. This is covered in its orientation classes. Each operation standard includes key quality points that employees must understand and follow to guarantee quality in the most critical processes. Each employee is assigned to a trainer who will train the associates until they are ready for mass production.

Process manufacturing quality, introduced at the company's inception, contains defects in the areas they are created through constant monitoring and feedback of quality defects. Through the company's information department, employees receive feedback from both in-house inspection and from HMA's market--the dealers.

HMA has many quality confirmation capabilities. "We have 100% line-end inspection of the final vehicle where the dynamics of the cars are tested through a roll-and-brake tester," Pyo says. "Cars then go through a driving test outside the facility. Finally, the cars go through a water leak test to guarantee they will stay dry. HMA uses durability standpoints, an anechoic chamber with a four-wheel independent dyno and a thermal chamber to simulate temperatures ranging from -40 to 90 C."

HMA claims to be never completely satisfied with its quality level because there are always customers and competitors that demand improvement. Because of this drive, HMA continues to renovate its methods and improve its associates' capability to exceed customer expectations.

For more information, visit www.hondaalabama.com.



4. General Electric

Fairfield, CT

GE's motto is to "Go Big," and it is easy to see why. Today, GE comprises 11 technology, services and financial businesses with more than 300,000 employees in 160 countries around the world.

With such a large conglomerate, quality is essential. Starting with their Work-Out program in 1988, GE began focusing on better productivity and efficiency. In turn, Work-Out set the stage for Six Sigma.

Six Sigma at GE may call to mind the well-known Jack Welch, who served as GE chairman and CEO from 1981 to 2001, and spread the Six Sigma doctrine. Jeff Immelt, GE chairman and CEO, has led the company since September 7, 2001, and continues this dedication to quality.

At the company, there are three key elements of quality: customer, process and employee.

All employees are trained in the strategy, statistical tools and techniques of Six Sigma quality. Training courses are offered at various levels: quality overview seminars, team training, Master Black Belt, Black Belt and Green Belt training, and Design for Six Sigma training. This training is not cheap-each year the company invests more than $1 billion in employee learning and training.

The company has a winning formula, and the business world has noticed. Fortune Magazine named GE "America's Most Admired Company" and "Global Most Admired Company." GE ranked second in the Financial Times annual "World's Most Respected Companies" survey and again placed first for corporate governance. GE has been in the top five in these surveys for each of the past five years. Barron's, in its 2005 inaugural investor survey, also named the company "World's Most Respected."

The company continues to grow. In 2005, revenue increased 11% to $150 billion. Organic revenue growth was 8%. GE's long-term financial goals are: 8% organic revenue growth; greater than 10% annual earnings growth; operating cash flow growth exceeding earnings growth; and a return-on-average total capital exceeding 20%.

For more information, visit www.ge.com.



2006 Quality Leadership 100

1. Portec Flomaster

Canon City, CO

2. Microscan Systems Inc.

Renton, WA

3. Honda Manufacturing

of Alabama

Lincoln, AL

4. General Electric Co.

Fairfield, CT

5. CNH America LLC

Lake Forest, IL

6. Mark Andy Inc.

St. Louis, MO

7. CDV Corp.

Rockford, IL

8. Cope Plastics

Godfrey, IL

9. Main Tool and Manufacturing Co.

Minneapolis, MN

10. Flex-Ability Concepts LLC

Edmond, OK

11. Winston Heat Treating

Dayton, OH

12. Midwest Acoust-A-Fiber

Delaware, OH

13. Assurance Manufacturing Inc.

Minneapolis, MN

14. Barco Stamping Co.

West Chicago, IL

15. Fanello Industries Inc.

Lavonia, GA

16. Lakeside Manufacturing Co.

Stevensville, MI

17. Pave Technology Co. Inc.

Dayton, OH

18. NRD LLC

Grand Island, NY

19. Sulzer Euroflamm U.S. Inc.

Dayton, OH

20. Calico Precision Molding LLC

Ft. Wayne, IN

21. Green Bay Drop Forge

Green Bay, WI

22. Oetiker Inc.

Marlette, MI

23. Jackburn Mfg. Inc.

Girard, PA

24. Federal-Mogul

Southfield, MI

25. Gripco

Products Inc.

North Ridgeville, OH

26. Nascote Industries

Nashville, IL

27. Paulo Products Co.

St. Louis, MO

28. Unicep

Packaging Inc.

Sandpoint, ID

29. Linamar Corp.

Guelph, ON

30. Ashley Ward Inc.

Mason, OH

31. GBF Enterprises Inc.

Santa Ana, CA

32. John Hassall Inc.

Westbury, NY

33. Kaiser Aluminum Engineered Products Corp.

London, ON

34. Lutco Inc.

Worcester, MA

35. Nucor Steel

Auburn Inc.

Auburn, NY

36. Precision Pattern Inc.

Wichita, KS

37. Precision Wire EDM

Service Inc.

Grand Rapids, MI

38. Clampco Products Inc.

Wadsworth, OH

39. Arrow Fabricated

Tubing Inc.

Garland, TX

40. Metrix Instrument Co.

Houston, TX

41. Air Cruisers

Belmar, NJ

42. Alpha EMS Corp.

Sunnyvale, CA

43. Bollinger Shipyards Inc.

Lockport, LA

44. NavCom Defense

Electronics Inc.

El Monte, CA

45. Affinia Under Vehicle Group, Brake Parts Inc.

McHenry, IL

46. Associated Rubber Co.

Tallapoosa, GA

47. Dixon Automatic Tool,

Rodix Inc.

Rockford, IL

48. Eaton Corp.

Cleveland, OH

49. Jarden Zinc Products

Greeneville, TN

50. Littlestown Foundry Inc.

Littlestown, PA

51. Medi-Flex Inc.

Leawood, KS

52. Molex

Downers Grove, IL

53. Norgren

Littleton, CO

54. Wieland Designs Inc.

Goshen, IN

55. Dura Automotive Systems

Rochester Hills, MI

56. PHD Inc.

Ft. Wayne, IN

57. Pericom Semiconductor Corp.

San Jose, CA

58. Cooper Industries

Houston, TX

59. Dynamic Corp.

Montmorenci, IN

60. Pemstar Inc.

Rochester, MN

61. Robert Bosch Corp.

Farmington Hills, MI

62. Thule Inc.

Franklin Park, IL

63. Automotive Safety Components International

San Diego, CA

64. Kondex Corp.

Lomira, WI

65. Moen Inc.

North Olmsted, OH

66. Delphi Automotive Systems

Troy, MI

67. Kaman Aerospace, Fuzing Div.

Orlando, FL

68. Quality Bolt & Screw Co.

Brecksville, OH

69. Penn Engineering

Danboro, PA

70. NSK Corp.

Ann Arbor, MI

71. Rockwell Collins

Cedar Rapids, IA

72. Dexter Axle Co.

Elkhart, IN

73. Ecliptek Corp.

Costa Mesa, CA

74. Mechmar Industries Inc.

Macedon, NY

75. Miller Precision

Industries

Ottoville, OH

76. Tutco Inc.

Cookeville, TN

77. Armin Molding Corp.

South Elgin, IL

78. Florida MicroElectronics

West Palm Beach, FL

79. Haldex, Hydraulic

Systems Div.

Rockford, IL

80. HCC Inc.

Mendota, IL

81. Schneider Electric

Palatine, IL

82. A-dec

Newberg, OR

83. Bison Gear and

Engineering Corp.

St. Charles, IL

84. Coilplus-Illinois Inc.

Plainfield, IL

85. Dart Controls Inc.

Zionsville, IN

86. E.J. Brooks Co.

Livingston, NJ

87. Mer-Mar Inc.

Hesperia, CA

88. Miami Valley Steel

Service Inc.

Piqua, OH

89. Mission Plastics Inc.

Ontario, CA

90. Precision Automation

Co. Inc.

Cherry Hill, NJ

91. Sercel

Houston, TX

92. Taber Bushnell Inc.

Minneapolis, MN

93. Vibro/Dynamics Corp.

Broadview, IL

94. Wendt USA Dunnington Div.

Royersford, PA

95. Whirlpool Corp.

Benton Harbor, MI

96. Zumtobel Lighting Inc.

Highland, NY

97. Aerodyne Controls Inc.

Ronkonkoma, NY

98. American Technical

Ceramics

Huntington Station, NY

99. Dynamic Air

Engineering Inc.

Santa Ana, CA

100. EI Microcircuits

Mankato, MN

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