1. More will be invested in employee training. Workers will be trained to detect
quality problems and empowered to make improvements. Workers will be al-
lowed a bonus of 10 percent of any cost savings produced by their suggested
improvements.
2. Two design engineers will be hired immediately, with expectations to hiring one
or two more within a year. These engineers will be in charge of redesigning
processes and products with the objective of improving quality. They will also be
given the responsibility of working with selected suppliers to help improve the
quality of their products and processes. Design engineers were considered a
strategic necessity
3. Implement a new process: evaluation and selection of suppliers. This new process
has the objective of selecting a group of suppliers that are willing and capable of
providing nondefective components.
4. Effective immediarely, the division will begin inspecting purchased components.
According to production, many of the quality problems are caused by defective
components purchased from outside suppliers. Incoming inspection was viewed
as a transitional activity. Once the division has developed a group of suppliers
capable of delivering nondefective components, this activity will be climinated.
5. Within three year, the goal is to products with a defect rate less than 0.10 percent. By reducing the defect rate to this level, marketing is confident that market share will increase by at least 50 percent (as a consequence of increased customer satisfaction). Products with better quality will help establish an improved product image and reputation, allowing the division to capture new customers and increase market share.
6. Accounting will be given the charge to install a quality information reporting system. Daily reports on operational quality data (e.g., percentage of defective units), weekly updates of trend graphs (posted throughout the division), and quarterly costs reports are the types of information required.
7. To help direct the improvements in quality activities, kaizen costing is to be implemented. For example, for the year 2003, rework costs, a kaizen standard of 6 percent of the selling price per unit was set fot rework costs, a 25 percent reduction
1. More will be invested in employee training. Workers will be trained to detect
quality problems and empowered to make improvements. Workers will be al-
lowed a bonus of 10 percent of any cost savings produced by their suggested
improvements.
2. Two design engineers will be hired immediately, with expectations to hiring one
or two more within a year. These engineers will be in charge of redesigning
processes and products with the objective of improving quality. They will also be
given the responsibility of working with selected suppliers to help improve the
quality of their products and processes. Design engineers were considered a
strategic necessity
3. Implement a new process: evaluation and selection of suppliers. This new process
has the objective of selecting a group of suppliers that are willing and capable of
providing nondefective components.
4. Effective immediarely, the division will begin inspecting purchased components.
According to production, many of the quality problems are caused by defective
components purchased from outside suppliers. Incoming inspection was viewed
as a transitional activity. Once the division has developed a group of suppliers
capable of delivering nondefective components, this activity will be climinated.
5. Within three year, the goal is to products with a defect rate less than 0.10 percent. By reducing the defect rate to this level, marketing is confident that market share will increase by at least 50 percent (as a consequence of increased customer satisfaction). Products with better quality will help establish an improved product image and reputation, allowing the division to capture new customers and increase market share.
6. Accounting will be given the charge to install a quality information reporting system. Daily reports on operational quality data (e.g., percentage of defective units), weekly updates of trend graphs (posted throughout the division), and quarterly costs reports are the types of information required.
7. To help direct the improvements in quality activities, kaizen costing is to be implemented. For example, for the year 2003, rework costs, a kaizen standard of 6 percent of the selling price per unit was set fot rework costs, a 25 percent reduction
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