10 PPM or Lower at the Customer by 2010

P

pog451

#11
@ Jim - With all due respect to your experience, we are talking automotive here and 10PPm isnt an extreme level ;-) Telling GM, Ford, BMW VAG etc what we now think constitutes a failure is a strategy any automotive QAM needs to follow but it has limited value - As you say it mostly turns up documentation and/or communication issues. The discussion about what this is all "worth" is exactly where I am. The whole thing will, short term, have a negative ROI. If we can use it to leverage culture change (do I hear a "bingo" on anyones BS-Bingo scorecard yet?) it will still be worth doing, If my Boss wants it done whatever, its definitely worth doing :).

@ Bev - We are 16949/14001/18001 certified and believe me, in our industry 40PPM is middling good. We need to be better. Toyota Fieldbook is on my Amazon wishlist.

@ Geoff - Ive done some EFQM work and my experience leaves me ambivalent. I like the thinking, I dont like the practical implementation. It takes a special kind of corporate culture to implement even close to properly. What it certainly wont do is change our culture fast enough to drop 30PPM in three years. Five to ten, sure.

@ Kales - BPM looks like another of these "old wine, new skins" management theories and very close to Balanced Scorecard, but Ill take a closer look.

@ All - Thanks for the input so far, any more suggestions, keep em coming.

Andrew
 
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Helmut Jilling

Auditor / Consultant
#12
@ Jim - With all due respect to your experience, we are talking automotive here and 10PPm isnt an extreme level ;-) Telling GM, Ford, BMW VAG etc what we now think constitutes a failure is a strategy any automotive QAM needs to follow but it has limited value - As you say it mostly turns up documentation and/or communication issues. The discussion about what this is all "worth" is exactly where I am. The whole thing will, short term, have a negative ROI. If we can use it to leverage culture change (do I hear a "bingo" on anyones BS-Bingo scorecard yet?) it will still be worth doing, If my Boss wants it done whatever, its definitely worth doing :).

@ Bev - We are 16949/14001/18001 certified and believe me, in our industry 40PPM is middling good. We need to be better.
Andrew

I agree. Today, in automotive, 40ppm is no longer acceptable. It can cost $100,000's and even millions at a large company. And, while it is expensive to reduce, the performance improvements can more than pay for itself.

I think it would be good if it would be a longer goal - drop to 25ppm in 2 years, 15ppm in 4 and 10ppm in 5 or 6. That would provide the cost savings and maybe prevent the shorterm negative ROI.

I think you are on the right track. I will repeat my point, however. A process must be redesigned from the ground up to go from 40 to <10. Just working harder does not get you there.

Best Wishes for Success,

Helmut
 
D

Duke Okes

#13
I think you actually had your own answer in your original post. Each (program/product/niche) will need to be addressed individually. Basically a cost-benefit analysis ... inspection vs. new capital vs. process improvement techniques (mistake-proofing, six sigma). In effect, you are running several businesses (e.g., programs) and based on the life-cycle of each and how it fits into the overall business portfolio will dictate which approach will make more business sense. What would you do if you owned the business???
 

Jim Wynne

Staff member
Admin
#15
I agree. Today, in automotive, 40ppm is no longer acceptable. It can cost $100,000's and even millions at a large company. And, while it is expensive to reduce, the performance improvements can more than pay for itself.
Helmut, you know that I have an abiding respect for your experience and opinions, but this is a bit much. It's easy to throw out big numbers and broad generalizations, but where's the beef? In the case of a small company, a reduction of 30 PPM might take many years to show up on the bottom line, if it ever shows at all, and for a big company, 30 PPM is almost always going to be insignificant. For 100,000 parts produced, you're talking about four individuals at 40 PPM, and reducing that by three. There is almost never going to be enough money made to justify the cost. And if we take the full million, you're only talking about 30 parts, which by almost any yardstick I know of is insignificant. In fact, it practically defines insignificant. Of course there are exceptions, but they're relatively rare.
Add to this the fact that the PPM requirement almost always applies exclusively at the customer's dock, and you have a recipe for unnecessary sorting, which will never be 100% effective anyway.

What the automotive customers (and others, for that matter) need to concentrate on is something that almost never pay much attention to: supplier process control, and optimization of processes.

I think you are on the right track. I will repeat my point, however. A process must be redesigned from the ground up to go from 40 to <10. Just working harder does not get you there.
No, you just need to do better sorting, if it's possible.
 
G

Geoff Withnell

#16
Helmut, you know that I have an abiding respect for your experience and opinions, but this is a bit much. It's easy to throw out big numbers and broad generalizations, but where's the beef? In the case of a small company, a reduction of 30 PPM might take many years to show up on the bottom line, if it ever shows at all, and for a big company, 30 PPM is almost always going to be insignificant. For 100,000 parts produced, you're talking about four individuals at 40 PPM, and reducing that by three. There is almost never going to be enough money made to justify the cost. And if we take the full million, you're only talking about 30 parts, which by almost any yardstick I know of is insignificant. In fact, it practically defines insignificant. Of course there are exceptions, but they're relatively rare.
Add to this the fact that the PPM requirement almost always applies exclusively at the customer's dock, and you have a recipe for unnecessary sorting, which will never be 100% effective anyway.

Jim, here is how it works in the automotive industry. We are dealing with volumes of thousands per day, so lets say that 100,000 parts is 4 months supply. So about once a month, GM finds a reject on the line (they don't do any reciving inspection to speak of) and stops the line. You are contacted and have to supply verified clean stock. Which means you either send folks to the assembly plant to screen the stock, or screen it at your plant and express ship it. You will be charged (at full loaded union rate) for any screening GM has to do. You will have to 100% screen all your parts for the defect found until you can convince GM Supplier Quality that you have implemented corrective action, or that it is just an isolated incident. If this is the samd reject as you had last month, the isolated incident explanation will not be accepted. If you cannot get out of the 100% screening ("level one containment") in a reasonable time, you will be placed in level 2 containment. This is a third party screening done after your screening paid for by guess who (hint: it's not GM). Is this unreasonable? Depends on your point of view. I was with a company where a defect we has was in the 1-2 parts per 100,000. GM used 8 per 4 door car (it was a door hinge component) and the defect jammed the automated machine for 3 hours down time. We figured out a way to eliminate it.
What the automotive customers (and others, for that matter) need to concentrate on is something that almost never pay much attention to: supplier process control, and optimization of processes.

Agreed, and the goal needs to be ZERO defects. Even 10/million may be too many in high volume automated production.
No, you just need to do better sorting, if it's possible.

Unfortunately, better sorting is not usually possible.

Geoff Withnell
 

Helmut Jilling

Auditor / Consultant
#17
Helmut, you know that I have an abiding respect for your experience and opinions, but this is a bit much. It's easy to throw out big numbers and broad generalizations, but where's the beef? In the case of a small company, a reduction of 30 PPM might take many years to show up on the bottom line, if it ever shows at all, and for a big company, 30 PPM is almost always going to be insignificant. For 100,000 parts produced, you're talking about four individuals at 40 PPM, and reducing that by three. There is almost never going to be enough money made to justify the cost. And if we take the full million, you're only talking about 30 parts, which by almost any yardstick I know of is insignificant. In fact, it practically defines insignificant. Of course there are exceptions, but they're relatively rare.
Add to this the fact that the PPM requirement almost always applies exclusively at the customer's dock, and you have a recipe for unnecessary sorting, which will never be 100% effective anyway.

What the automotive customers (and others, for that matter) need to concentrate on is something that almost never pay much attention to: supplier process control, and optimization of processes.



No, you just need to do better sorting, if it's possible.

Fair question. At a typical ISO company, I probably would even agree with you. Mathematically, your argument is sound, and is the way it should be done. Automotive does not always follow logic.

The basis for my comments are as follows. The OP represents a significant sized company, not a small company. Large companies frequently produce parts into the millions of units, so a 75% improvement can be hundreds or thousands or units or even incidents.

OE automotive customers are typically very punitive and do not regard 40 ppm as acceptable. The third party sorting process has become a full-bore industry. OE's shove excellent suppliers into that system at the drop of a hat. I have seen many companies with less than 10 ppm subjected to ongoing 3rd party sorting. I have seen costs in the $100,000's of thousands for this nonsense.

Whether we agree with them or not, the US and European automotive customers have made defects punitive and costly. They don't just try to reconcile the problem, they seem to want to punish.

Lastly, at a large company, it takes real system improvement to maintain 10ppm. You have to design "pharmaceutical quality" into the organization. It generally does not come from trying harder or sorting. A company that improves the core of its programs to perform at those levels will typically harvest many other performance and financial benefits as well.
 

Stijloor

Staff member
Super Moderator
#18
Helmut and Jim,

Great discussion! I am very impressed. While one can argue about the merits and costs of going from 40 ppm to 10 ppm, the big question still is (to quote Dr. W. Edwards Deming) "by what method?" The OP said: (Quote) "Our European president has decided to start a program "10/10", meaning that he wants to achieve 10PPM or lower at the customer by 2010 (we average around 40 at the moment)."
A great example of stating an expectation and not much thought given to how to accomplish this. I still keep "Out of the Crisis" handy. The more I (continue) to read this, the more I realize that not much has changed when the Master wrote his book in 1982.

What do you think?

Stijloor.
 
R

ralphsulser

#19
I wish I could post some current real world numbers about a low ppm and punishment, but we get beat up by automotive if there is one piece with anything that looks like it might cause a problem. The people using our parts are not cutting any slack. We have a low ppm, but what we need to satisfy this customer plant is Zero (0) ppm. Any ppm is not acceptable.
 

Stijloor

Staff member
Super Moderator
#20
I wish I could post some current real world numbers about a low ppm and punishment, but we get beat up by automotive if there is one piece with anything that looks like it might cause a problem. The people using our parts are not cutting any slack. We have a low ppm, but what we need to satisfy this customer plant is Zero (0) ppm. Any ppm is not acceptable.

Ralph,

You're absolutely right! I have a Client that has maintained a less then 5ppm (outgoing) quality level for the last 4 years. The Customer found one defective part. It was 100% sorting time! No "break" was given.

You almost wished that the same quality performance was expected from bridge builders and other infrastructure companies.....But that's another story.

Stijloor.
 
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