Optimization of Cost by Using 7 QC Tools docx

The main goals of quality management are customer satisfaction by delivery of defect free products at quality cost.. The primary objective of quality control in any organization is to re

Nitin K Mandavgade¹ and Santosh B Jaju²

Department of Mechanical Engineering, G H Raisoni College of Engineering, CRPF Gate No.3, Digdoh Hills, Hingna Road, Nagpur 440016 (India)

1

E-mail: nitin_man@rediffmail.com and 2E-mail: sbjaju@gmail.com

Abstract

Quality plays very important role in today’s highly competitive industrial environment Quality leads to an improvement in productivity By improving quality, the method of optimization reduces process operational costs and variation in product Quality, productivity & cost of operation relatively depended to each other The main goals of quality management are customer satisfaction by delivery of defect free products at quality cost Controlled processes are the most important ways to reach this goal The primary objective of quality control in any organization is to reduce the costs of its operation If control efforts do not lead to any saving in costs or cost reduction then, in principle there is no need for quality control However, in most control activities, cost saving are real and they remain a principle objective of quality control for most organizations

Keywords: Quality, quality control, cost optimization, inspection

Introduction to quality control

Many companies in the world are gradually promoting quality as the central customer value and regard it as a key concept of company strategy in order to achieve the

competitive edge Quality improvement decisions are viewed as the catalyst for

substantial technological developments being made in the manufacturing sector Quality Costs are a measure of the costs specifically associated with the achievement

or non-achievement of product or service quality –including all product or service requirements established by the company and its contract with customers and society Measuring and reporting the quality cost is the first step in a quality management program Quality costs allow us to identify the soft targets to which improvement efforts can be applied

Three types of cost are generally associated with quality control:

1 Assignment costs

2 Prevention costs

3 Non-conformance costs

Assignment costs are the cost which an organization incurs in measuring quality characteristics to ensure that they conform to quality standards This cost typically includes costs of inspection including labour , materials, and cost of approval or certification when organizations meet quality standards and so on Prevention costs involve cost when organizations undertake measures to prevent poor quality of products or performance Example of prevention cost would include the costs associated with quality planning, design and development of quality measurement instruments, quality training and so on Finally non conformance costs also called failure costs occur when an organization fails to meet quality standards This may be due to poor quality of labour, materials and overhead, i.e expenses accumulated

Seven Quality Control Tools

The various tools are used to check the quality of the product to define weather the product is a quality one or not and to take the further necessary actions to bring the process under control

• Check sheet

• Pareto chart

• Flow chart

• Cause and effect diagram

• Histogram

• Scatter diagram

• Control chart

Check sheet

The function of a check sheet is to present information in an efficient, graphical format This may be accomplished with a simple listing of items However, the utility

of the check sheet may be significantly enhanced in some instances by incorporating a depiction of the system under analysis into the form

Pareto Chart

Pareto charts are extremely useful because they can be used to identify those factors that have the greatest cumulative effect on the system and thus screen out the less significant factors in an analysis

Ideally, this allows the user to focus attention on a few important factors in a process

Figure 1: Pareto Chart

Flowchart

Flowcharts are pictorial representations of a process By breaking the process down into its constituent steps, flowcharts can be useful in identifying where errors are likely to be found in the system In quality improvement work, flowcharts are particularly useful for displaying how a process currently functions or could ideally function

Figure 2: Flowchart

Cause and Effect Diagram

This diagram, also called an Ishikawa diagram (or fish bone diagram) is used to associate multiple possible causes with a single effect Thus, given a particular effect, the diagram is constructed to identify and organize possible causes for it

Figure 3: Cause and effect Diagram

Causes in a cause & effect diagram are frequently arranged into four major categories While these categories can be anything, given below:

• Manpower, methods, materials, and machinery (recommended for manufacturing)

• Equipment, policies, procedures, and people (recommended for administration and service)

Histogram

A histogram is a specialized type of bar chart Individual data points are grouped together in classes, so that you can get an idea of how frequently data in each class occur in the data set Histograms provide a simple, graphical view of accumulated data

Figure 4: Histogram

Scatter Diagram

Scatter diagrams are graphical tools that attempt to depict the influence that one variable has on another A common diagram of this type usually displays points representing the observed value of one variable corresponding to the value of another variable

Figure 5: Scatter Diagram

Control Chart

The control chart is the fundamental tool of statistical process control as it indicates the range of variability that is built into a system (known as common cause variation) Thus, it helps determine whether or not a process is operating

consistently or if a special cause has occurred to change the process mean or variance

Problem: Optimization of cost by using 7 quality control tools

Step1:-Introduction to the problem

In operation 67 of control valve cylinder head (as shown in Figure 6) of the diameter 15.840/15.862 mm was getting oversize

Figure 6: Control Valve Cylinder Head

Background of problem selection:-

This problem was selected because in-house rejection was alarming and also

product returned from the line at vendor (automotive industry in central India) was

repeated time to time (refer figure 7 & 8) Total rejections in house are 10 units and

product returned is 16 units

Figure 7: Line rejection

Critical area

Line Rejection Trend Op67 Dia 15.840/15.862m m in CVCH

3

2

5

0 2 4

Months

Figure 8: In House rejections

Problem Selected:-Elimination of rejection due to diameter 15.840/15.862 mm

which was getting oversize

Target: - Zero defects in diameter 15.840/15.862 mm of Operation 67

Step 2:- Observation

Information regarding process and operation are observed

(1) Operation done on vertical milling machine

(2) All the tools are operated like 14.68 mm drill hole, mill to correct the axis & then reamer

(3) Rigid clamping fixture

(4) This is operated after the operation 50 done In solid stage without putting on any machine

(5) Tool change frequency decided for every operation as discussed

(6) Coolant used for reaming is kerosene or solvent 2445

(7) Variable type gauging i.e Air plug Gauge is used for in-process inspection of this reamed bore with 1 in 5 inspection frequency

Step 3:- Identification of Probable Causes:- Probable causes are identified and

represented in the form of cause and effect diagram as shown in figure 9

2

0

2

Months

Figure 9: Identification of probable causes

Step 4: Brainstorming

The most probable causes (Identified by cause and effect diagram and Brainstorming) Cause1: Insufficient knowledge of operator

Cause2: Hardness inconsistency in raw material

Cause3: Intermittent supply of coolant

Cause4: Tool run out not checked before putting on the machine & after the part detected oversize

Analysis done to test the validity of probable causes

Cause1:Test1: Insufficient Knowledge of operator

Observation:-After interviewing the machine operator it was confirmed that they are

having adequate operating and inspection knowledge

Also, there was standard operating procedure available near the machine which were regularly followed

Result: In valid cause for the problem

Cause 2: Test 1: hardness less in rejected components

Specification 179 to 229 BHN

Actual observation; 189,198,182,192,194

Also, hardness of 5 ok components were checked and it was observed that hardness was with in specification

Actual observation: 190,195,192,185,198

Result: In valid cause for the problem

Cause 3: Test 1: Intermittent supply of coolant

Observation: To get the proper finish kerosene or solvent 2445 is applied

continuously to the reamer to avoid the chip rubbing & proper cutting

but found with in 10 microns

Result: Invalid cause for the problem

Why the rejected parts were oversize in between?

For this we have checked the run out of the tool when the part was rejected After analyzing the problem after deep studies that the raw material is grey cast iron For machining of cast iron does not need any coolant, it may be cut in dry condition As in our case also, the operation for drilling and hole milling kept as in dry cutting condition As the property of the cast iron is to produce dust with small flakes of chip, such dust get fly off along with current air by the fans put in the shop floor & get accumulated every where In-due course of time this dust get accumulated on the BT

40 taper of the tool holder & causes to have run out in the tool As the tool run out increase the bore to become oversize

Result: Valid cause for the problem

Step 5:- counter measure:

Short term:

• Instruction was given to all the operators & the officials about the valid cause

of the size for getting over size

• Part checking frequency was changed from 1in 5 to 100% in process inspection

Long term:

• All the taper of the tools & the spindle to be clean after every 12 hours

• Air connection was given through the spindle to blow off the dust in the spindle taper for accumulating it

Step 6:- Implementation of countermeasure:

All the action are implemented at once

Step 7:- Standardization:

Standard operating procedure for operation 67 update Standard operating procedure for operation 67 was revised by putting these important points

Step 8:- Direct benefit:

Cost saving as no internal rejection for the same reason

Result: After implementation no Problem was observed from the last 3 months

Cost analysis

Raw Material i.e casting is given by automotive industry from Approved Vendor M/S CASPRO LTD, Kolhapur

Costs-

• Raw material Cost : Rs.248/piece

• Machining Cost : Rs.200/piece

• Total costs : Rs.448 /Piece

Various consumables costs for Operation 67-

Tooling costs Description-

Sr

No

Rs

Life in parts

Costs

3 Drill dia 14.5 mm Solid carbide 8500 30,000 0.28

4 Hole mill Solid carbide 8500 30,000 0.28

Tool holder cost: Rs 3000

3000*6 (for above six operation) = Rs 18,000

1.5 lakh is the life of the tool holder so the cost of tool holder per piece is

18000/150000= Rs 0.12 /piece

lubricant cost:-

SAE20W40 IS USED

5 LIT Tank per shift

Rs125/lit

5*125 = Rs625/shift

90 Parts are produced in one shift

652/90 = Rs6.94/piece

Coolant cost: - Kerosene is used as coolant in order to improve the surface finish &

to avoid the corrosion

5 lit require per shift

Rs35/lit

35*5=Rs175/shift

90 Parts are produced in one shift

175/90=Rs.0.50/piece

Cotton waste: It is approximately Rs0.10/piece

for 26 days in one month So the money paid by the company for 1 day = 5000/26= Rs192/day.He inspect approximately 300 parts in 1 day

Cost for inspecting one piece = 192/300 = Rs0.64/piece

Machining Cost

Labour Cost

The salary paid to the labour (machine operator) is Rs3500/month.He works for 26 days in one month So the money paid y the company for 1 day = 3500/26= Rs134/day.He produce a 90 parts in 1 day Cost for producing one piece =

134/90=Rs.1.49/piece

Machine Depression Cost

Generally there is 10-15% depression cost, But machine are in maintained condition

so there is only 10% depression cost in 1 year

Cost of machine is Rs18 lakh If we consider for 5 years 180000/5 = Rs3.6lakh 180000-36000=RS 144000 in 5 years

For 1 year = 30,000/year

For 1 month =30,000/12=Rs 2500/month

For 1 day = 2500/26=Rs 96/day

For 1 part = 96/270parts in one day=Rs.0.35/piece

Total Cost Associated In Operation 67 =

All cost associated in tooling + all cost associated Inspection cost + machining cost + Raw material cost

Total cost=0.3+0.29+0.28+0.28+0.65+0.0062+0.12+6.95+0.5+0.10+2.16+2.00+0.64

+1.49+0.35+248 = Rs.264.116 / piece in op67

There are 3 to 4 Parts are rejected due to diameter 15.840/15.862mm over size in

1 month

Costs saved per month = 264.116 *4 = Rs 1056.46 /month

Cost saved per year = 1056.46*12 =Rs 12,677.57/ year

Conclusion

Quality leads to an improvement in productivity Quality, productivity & cost of operation relatively depended to each other The main goals of quality management are customer satisfaction by delivery of defect free products at quality cost In operation 67 of control valve cylinder head (as shown in Figure 6) of the diameter

15.840/15.862 mm was getting oversize We have studied the problems and actually solved the problem by using seven quality control tools which result in good amount

of saving in cost of product and overall reputation of the company get improved

References

[1] Company manual

[2] Chaddha, R., 1999, “Quality costs and financial performance: A pilot study,”

IE Journal, Vol XXVIII, No 5, pp19-25

[3] Jaju, S.B., Shrivastava, R.L., and Lakhe, R.R., 2003, “Performance Analysis through quality costs: a case study,” Industrial Engineering Journal, Vol XXXIII, No.6, June 2004, pp 15-20

[4] Jaju, S B., Lakhe, R R and Bhagade, S S., 2007, “Mathematical

Interrelationships among Quality Cost Categories for a Manufacturing Sector”

Industrial Engineering Journal, Vol XXXVI, No.3 March 2007 pp 32-41 [5] Juran J M., 1974, Quality Control Handbook, McGraw Hill, New York

[6] Roden, S., and Dale, B.G., 2001, “Quality costing in a small engineering company: Issues and difficulties,” The TQM Magazine, Vol 13, No.6,

pp388-399

Appendix

0.001 LTC 20

3 D.C NO QTY 1000.0000

MM

15.851 15.853 15.852 15.848 15.852 15.865 15.842 15.849 1 1.123 2.560 3.270 15.849 15.852 15.860 15.852 15.880 15.842 15.848 15.851 2 1.128 1.880 3.270 15.851 15.852 15.852 15.880 15.851 15.853 15.866 15.853 3 1.693 1.020 2.570 15.849 15.852 15.852 15.842 15.853 15.850 15.840 15.851 4 2.059 0.730 2.230 15.842 15.853 15.852 15.849 15.852 15.848 15.842 15.853 5 2.326 0.590 2.110

15.851 15.853 15.86 15.88 15.88 15.865 15.866 15.853 Xmax.= 15.8800

15.842 15.852 15.852 15.842 15.851 15.842 15.84 15.849 Xmin.= 15.8400

0.009 0.001 0.008 0.038 0.029 0.023 0.026 0.004 = 0.01490 4 NOS.

15.8484 15.8524 15.8536 15.8542 15.8576 15.8516 15.8476 15.8514 = 15.8514 0 NOS.

0.0362 FREQ CU FREQ.

5 15.8066 15.8147 0 0 0.000400 15.8147 15.8228 0 0 15.8228 15.8309 0 0 15.86019 15.86019 15.8602 15.8602 15.8602 15.8602 15.86019 15.8602 15.8309 15.8390 0 0

15.8426 15.8426 15.8426 15.8426 15.8426 15.8426 15.8426 15.8426 15.8390 15.8471 8 8

0.0314 0.0314 0.0314 0.0314 0.0314 0.0314 0.0314 0.0314 15.8471 15.8552 37 45

0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 15.8552 15.8633 1 46

15.8514 15.8514 15.8514 15.8514 15.8514 15.8514 15.8514 15.8514 15.8633 15.8714 2 48

0.0149 0.0149 0.0149 0.0149 0.0149 0.0149 0.0149 0.0149 15.8714 15.8795 0 48

15.8795 15.8876 2 50 15.8876 15.8957 0 50

M4 VALUE 15.8957 15.9038 0 50

0 1 2

3 4

NO.OF DECIMALS:

L.T.L

0.00780

15.860191

U.T.L.

15.84 15.862

NO OF PARTS ABOVE U.T.L =

Interval = Selecting no of classes =

1.10000

Shift Of ' ' from 'D' =

STATISTICAL PROCESS CONTROL STUDY

AGROFAB MACHINERIES ( I ) PVT.LTD W119/120 M.I.D.C HINGNA RIOAD NGP L.COUNT:

APG

1.05000

U.C.L ={ +A2x } L.C.L ={ -A2x } U.C.L ={ x D4}

L.C.L ={ x D3}

15.84261 0.031439 0

0.0401 Specification Width(S) = 0.0221 INTERVAL

NO.OF NON CONFORMING PART =

ALL DIMENSIONS ARE IN INCHES / MM

15.8390 No of readings= 50.0000

PROCESS NEEDS CORRECTION ,Cp & Cpk SHOULD BE >=1.33

Cp=(S/6 σ )=

Cpk={1-K}xCp)=

INSTRUMENT:

SPECIFIC:

OPERATION:

.CYLINDER HEAD

50

MACHINE:

A 0051315D01

0.0001

4

Std.Dev." σ "=

SUPPLIER

15.8510

15.840/15.862

OP67

NOS.

0.0100 0.0010

MINIMUM DECIMAL VALUE 1.0000 0.1000

Index (K)={2 x (D- ) / S}=

0.008100

NO OF PARTS BELOW L.T.L =

8390 15.8471 15.8552 15.8633 15.8714 15.8795 15.8876 15.8957

8309 15.8390 15.8471 15.8552 15.8633 15.8714 15.8795 15.8876

HISTOGRAM

15.83 15.835 15.84 15.845 15.85 15.855 15.86 15.865

1 2 3 4 5 6 7 8 9 10

8 - CHART

A G

0 0.01 0.02 0.03 0.04

2 - CHART

R N G…