Manufacturing Excellence: Old Dog, Same Tricks

June 30, 2010
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Everyone believes that process is a simple thing to manage and there is nothing more to learn about it. Our work environment inspires us to do what is needed. Our quality management systems document every process. We even complete our audits without any findings. Our corrective actions result in recurring problems. Finally, our management reviews are conducted formally without much improvement in performance. Why?

Surveys have shown that people tend to know what they are supposed to do because they are told, “This is your job.” About one-third of them know how well they do their job, and one in 20 knows how much he has improved in the past 12 months. Our performance standards are to identify “accept” vs. “reject.” Why?

I have researched process excellence and have concluded that there must be an assignable reason for our common failures. Something has to be wrong fundamentally, meaning that a business principle that has been taught to everyone for a long time must not be working well. The common underlying principle in my analysis turned out to be the PDCA (Plan, Do, Check and Act) principle.

First, the PDCA principle was a derivative of the Walter Shewhart’s principle, Out of Control Action Plan (OCAP). The OCAP principle was designed for product control as it was the latest discovery in work breakdown in order to deal with the evolving product complexity. This led to application of control charts for in-process controls in manufacturing.

Control charts are an abused and often misused device due to lack of understanding of its basic requirement that process must be in statistical control before deploying the control chart. So, the concept of statistical control was incorrectly understood or deployed. Subsequently, the OCAP transformed into PDCA.

Deming tried to modify it and called it PDSA (Plan, Do, Study, Act), with “check” being easier than “study.” At the time, PDCA, along with the sampling plans, gave U.S. manufacturers a competitive edge. However, as the competition started to evolve around the world, demand for better performance continued.

The use of “check” and incorrect use of control charts resulted in the use of specification limits for producing acceptable product. To make sure that the product is acceptable, the manufacturer must then verify the product or process performance against the specification limits, called lower and upper specification limits. Experience taught us that setting a process anywhere in the range is easier than achieving a specific value. This arbitrary process setting resulted in increased process variability in our manufacturing processes, increased inspection, testing or verification, higher rejects and field defects.

The poor performance necessitated some type of measure for corporate management so evolved the concept of Cost of Poor Quality and the formation of the quality department to ensure compliance to specifications, keep customers satisfied and manage the cost of poor quality. Fundamentally, something went wrong. In the current globally competitive economic environment, the concept of “acceptable” has become a curse.

Interestingly, to deal with the consequences of the PDCA deployment, root cause analysis, off-line quality, quality trilogy and variability reduction were developed. Most quality professionals know these principles but still have the same manufacturing quality problems. Dependence on inspection and testing has not decreased; instead it has become routine. This has made our products more expensive.

I have seen the quality field changing to a program of the year for many years. Luckily Six Sigma changed that and has survived for more than 20 years. Due to basic misunderstanding of the process management, even Six Sigma has not resulted in the expected breakthrough improvements in operations. Lean has been ingrained in our corporate culture. The poor quality and quality improvement have not helped business grow in general, but have helped in their demise. Why?

Interestingly, nobody looked into developing a new model for process management. Besides, we still resist change and are unwilling to learn, yet we expect excellence. Isn’t it the same insanity of expecting different results by doing the same thing over and over?

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