4 daily management process for reduce cost...

Journal of Mechanical Engineering and Technology (JMET), ISSN 2347-3924 (Print),

ISSN 2347-3932 (Online), Volume 1, Issue 1, July -December (2013)

45

DAILY MANAGEMENT PROCESS FOR REDUCE COST OF

QUALITY IN AUTOMOBILE INDUSTRY

S.N.Teli1,

Dr.V.S.Majali2,

Dr.U.M.Bhushi3,

Sunil Gaikwaid4

1Associate Professor & HOD -Mech. Engg. Dept., SCOE, Kharghar, Maharashtra, India

[Research Scholar GIT Belgaum -VTU, Belgaum, Karnataka] 2 Professor & HOD – Mech. Engg.Dept. , GIT, Belgaum, Karnataka, India 3Principal - Sahyadri College of Mangalore Engineering & Management,

Mangalore, Karnataka, India 4M.E. Student - SCOE, Kharghar, Maharashtra, India

ABSTRACT

The global automotive industry features intense competition, a sharp focus on cost,

and a regulatory oversight. There is an ongoing trend towards global sourcing and distributed

manufacturing/assembly operations. All of these factors are driving a need for an extensible

and flexible quality management system that automates field-level quality management tasks

and provides real-time visibility into all aspects of quality management across manufacturing

facilities and supplier locations around the world. In pursuit of breakthrough improvement

and innovation, organizations tend to give less importance to routine activities or Daily

Management. In the absence of a proper Daily Management system, the benefits derived

from break through improvements & innovations slowly losses its effectiveness.

All the activities that must be carried out routinely in each area in order to attain the

purpose of their job effectively and efficiently is termed as “Daily Management” Daily

Management is also called as Daily Routine Management or Routine Management. In a nut

shell Management of routine jobs at all levels is Daily Management. In process improvement

efforts, the concept of quality costs or cost of quality is a means to quantify the total cost of

quality-related efforts and deficiencies. COQ costs as the “price of conformance” – the

prevention and appraisal costs and the “price of non-conformance” – the failure costs. In

recent years, interest in cost of quality (COQ) system is increasing among Indian Automobile

industries. Cost of Quality (COQ) is the sum of the costs incurred by a company in

preventing poor quality, the costs incurred to ensure and evaluate that the quality

requirements are being met, and any other costs incurred as a result of poor quality being

produced. Poor quality is defined as non-value added activities, waste, errors or failure to

meet customer needs and requirements. These COQ costs can be broken down into the three

categories of prevention, appraisal and failure costs. The implementation of Daily

Management System and other quality initiatives necessary to reduce the cost of quality

JOURNAL OF MECHANICAL ENGINEERING AND

TECHNOLOGY (JMET)

ISSN 2347-3924 (Print)

ISSN 2347-3932 (Online)

Volume 1, Issue 1, July-December (2013), pp. 45-53

© IAEME: http://www.iaeme.com/JMET.asp

JMET © I A E M E

Journal of Mechanical Engineering and Technology (JMET)

ISSN 2347-3932 (Online), Volume 1, Issue 1, July

Key Words: Automobile Industry,

INTRODUCTION/BACKGROUND

The methods required for sustaining Daily Management are the following:

� Standardization – to provide consistency

� Training – to give the associate the needed skills

� Standard Audits – to assure the standards are followed

� Failure Analysis – to address deviations

� Solicit and act on ideas for improvement

� Communications – so everyone knows the business

1. DAILY MANAGEMENT ACTIVITIES AND SCOPE

This process is for all employees of all functions across the automotive sector.

Applicability of this guideline is for all employees of all functions across the Automotive

Sector.

2. PURPOSE OF DAILY MANAGEMENT PROCESS

Managing the routine jobs at all levels effectively and efficiently, with

and improve the present level of performance (i.e stability). The

& fig 3 depict the importance of Daily Management.

Fig 1: Improvement by Breakthrough only

Daily Management

includes management of:

Hourly basis

Daily Job

Weekly Job

Monthly Job

seasonal Job

Yearly Job & etc

Journal of Mechanical Engineering and Technology (JMET), ISSN 2347-

, Volume 1, Issue 1, July -December (2013)

46

Industry, SDCA, PDCA, COQ

INTRODUCTION/BACKGROUND

The methods required for sustaining Daily Management are the following:

provide consistency

to give the associate the needed skills

to assure the standards are followed

to address deviations

Solicit and act on ideas for improvement

so everyone knows the business situation

DAILY MANAGEMENT ACTIVITIES AND SCOPE



Classification of Daily

Management activities

. PURPOSE OF DAILY MANAGEMENT PROCESS

Managing the routine jobs at all levels effectively and efficiently, with intent

and improve the present level of performance (i.e stability). The illustrations shown in fig 2

the importance of Daily Management.

Improvement by Breakthrough only Fig 2: Improvement by Breakthrough &

Daily Management

Daily

Management

activites

Maintain the

current level

Incremental

improvement from

current level

Scope of Daily

Management includes

Front Line operation

Supervisor Lab

Section Manager Job

Department to Top

Manager Job etc.

-3924 (Print),



intent to sustain

shown in fig 2

Improvement by Breakthrough &

Scope of Daily

Management includes

Front Line operation

Supervisor Lab

Section Manager Job

Department to Top

Manager Job etc.

Journal of Mechanical Engineering and Technology (JMET)

ISSN 2347-3932 (Online), Volume 1, Issue 1, July

3. CONTROL POINTS

Control Points are indicators used to measure progress in achievement of our objectives

decided by management. They are also called

Points are further classified into:

.

3.1 Result Measurables (Managing Points) Result Measurables indicates whether customer expectations are met or not; it shows

improvement only after the key processes are improved.

3.2 Process Measurables (Check Points) Process Measurables indicates the performance of the

performance of Result Measurables.

• The relationship between Result and Process Measurables could be of type: Effect

Cause & Objectives-Means. Refer F

Process Measurable as applied in Manufacturing and Sales area respectively.

• Criteria for selecting Measurable

business, Vital few & be actionable, easily accessible, understandable, agreed upon

and predictive in nature.

• Process Measurable should be measured more frequently than Result

give an early indication of course correction.

Fig 4: Control Points in Manufacturing

(Managing Points)

Journal of Mechanical Engineering and Technology (JMET), ISSN 2347-

, Volume 1, Issue 1, July -December (2013)

47

are indicators used to measure progress in achievement of our objectives

decided by management. They are also called Measure of Performance (MOP)

Points are further classified into:

Fig 3: Types of Control Points

Managing Points) indicates whether customer expectations are met or not; it shows

improvement only after the key processes are improved.

(Check Points) Process Measurables indicates the performance of the key processes; it predicts the

Measurables.

The relationship between Result and Process Measurables could be of type: Effect

Means. Refer Fig.4& Fig5 for further clarity on Result and

as applied in Manufacturing and Sales area respectively.

Measurable are that they should be important to manage our


should be measured more frequently than Result Measurable

give an early indication of course correction.

Control Points in Manufacturing Fig 5: Control Points in sales

Levels

Control Points

Ressult

Measurable

(Managing Points)

Process

Measurable

( Check Points)

-3924 (Print),

are indicators used to measure progress in achievement of our objectives

Measure of Performance (MOP) Control

indicates whether customer expectations are met or not; it shows

processes; it predicts the

The relationship between Result and Process Measurables could be of type: Effect-

for further clarity on Result and

as applied in Manufacturing and Sales area respectively.

are that they should be important to manage our


Measurable to

Control Points in sales Control



48

3.3 Control Levels They represent a standard used to judge whether a characteristics value of the control point is

in a controlled state or an uncontrolled state.

• This is the next step after Control Point is set, i.e to set the “Range” for the

Measurement. These ranges are called “Control Limits” or “Control Levels”.

• For those indicators that follow “Normal Distribution” such as physical and chemical

indicators, one can use Statistical Control Charts.

• For those indicators that do not always follow “Normal Distribution” such as

production amount, sales amount, etc one can identify the control limits based on

common sense. Past trend /Industrial benchmarks could be used to decide the Control

Levels. Control Levels can be unilateral / bilateral type.

• Criteria for selecting Control Levels are that they should be aggressive, yet attainable,

agreed upon, clearly benefiting our business, and flexible.

• Shown below are examples of Control Levels used for Result Measurables and

Process Measurables in a Manufacturing Plant.

Fig 6: Monitoring of Result Measurable Fig 7: Monitoring of Process Measurable

4. POLICY MANAGEMENT & DAILY MANAGEMENT

• Activities performed on the basis of cooperation of the whole business organization in

order to realize long term, middle term or short- term management plans and policies

effectively and efficiently comes under Policy Management.

• Breakthrough improvements are achieved by Policy Management, while continuous

improvements are achieved by Daily Management.

• In former, objectives are achieved through planned activities which are normally done

beyond the existing framework. While in latter, objectives are achieved through

standardization of activities and pursuing continuous improvement by identifying

abnormalities and taking appropriate measures to prevent its recurrence.

• Policy Management activities involves rotating Plan-Do-Check-Act (PDCA) till

performance is improved to a desired level. These activities then become part of Daily

Management so that they are standardized to sustain the performance in future by

rotating Standardize-Do-Check-Act (SDCA).



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• If some chronic problems are identified in Daily Management that needs to be

addressed on priority, then they are solved using structured problem solving tools

such as QC Story.

Refer Fig: 8 which depict the linkage between Policy Management and Daily

Management. Policy Deployment in Manufacturing is shown in Fig: 9 Objectives /

Deliverables are set at Sector level (i.e President Policy–CE Policy– Manufacturing

Head Policy), which gets cascaded to Plant Level and further to P.U Level.

Fig 8: Linkage between Policy Management Fig 9: Policy Deployment in Daily

Management Manufacturing

5. DAILY MANAGEMENT & POLICY MANAGEMENT WEIGHTAGE: AT

SENIOR MANAGEMENT LEVEL:

Both Daily Management and Policy Management are present. Weightage of Policy

Management is more, i.e they should standardize the activities and empower the people to

perform the “Daily Management” and should work much more on strategic issues. Apart

from that, they should also promote Daily Management amongst all levels of employees.

Fig 10: Weightage of “Management”

Both Daily Management and Policy Management are present. Weightage of Daily

Management is more, i.e they should more focus on Daily Management and also deploy

Organization’s vision and objectives.



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6. Abnormality Handling System: While monitoring the Control Point, any unusual

behavior other than which is normal must be captured. It covers both occurrence of non-

conformity and abnormal behavior of the process. Corrective actions to be taken once

abnormality occurs, irrespective whether it generates non-conformity or not If any

abnormalities are found, they are dealt as per the Abnormality Handling System shown in

Fig 11.

Fig 11: Abnormality Handling System

7. Elements of Daily Management: Steps involved in Daily Management are:

8. Daily Management in Manufacturing: Daily Management in Manufacturing is as

shown below.

Fig 12 : Daily Management Steps

Fig 13: Daily Management in Manufacturing



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9. POLICY DEPLOYMENT AND DAILY MANAGEMENT LINKAGE

Linkage between Policy Deployment and Daily Management is shown & how new

initiatives & improvement projects are identified is described below.

Fig 14: Linkage of Policy Management and Daily Management

10. VARIOUS INDICATORS ARE ILLUSTRATED BELOW

Types Indicators

Quality Warranty , User Plant PPM ,A-NOVA C , Global Demerit ,FRC,FBO,

Rejection PPM , Rework PPM

Productivity Equivalent Veh./man/year,effective working Time , Work content

Reduction , Manpower Reduction

Cost Variable cost(power, tools ,etc)/ eq. vehicle , fixed cost w.r.t. Budget ,

Cost saving due to improvements

Safety Reporable ,Non-reportable accidents , Accident free days , Near miss

cases , organ wise cases , safety Patrol rounds

Morale Training , Conflict resolution & meeting with top Management

Man of the month , absenteeism , i4 Team status , saving through

suggestions , kaizens , dormant & best team for i4 teams



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11. TYPICAL DISPLAY CHART FOR KEY INDICATORS MONITORING (DAILY

MANAGEMENT)

The monitoring and display of the key Quality indicators shall indicate Yearly, Monthly and

Daily trends.

Fig 15: Typical Display Chart for Key Indicators Monitoring (Daily Management)

Typical indicators monitored on a defined frequency to assess/measure the effectiveness of

Daily Management activities are:

• Percentage of Control Points which are within Control Levels.

• Number of abnormalities identified.

• Number of abnormalities for which corrective actions (PDCA rotations) were

undertaken.

• Percentage of Processes for which Daily Management practices are implemented.

12. CONCLUSION & RESULT

• Innovations/breakthroughs are brought about in any organization occasionally or

intermittently. There is a high jump in improvements. These high jump improvements

are incorporated in the new practices/systems/processes. Then, after one

innovation/breakthrough, there may be a lull. During this lull period and in absence of

daily management or continuous improvements, these dramatically improved

processes start degrading or deteriorating. And the processes become inefficient

/ineffective. Lots of advantages of innovation disappear or are lost.



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• This is where daily management comes in. It insists on daily performance and also,

daily improvements. It keeps on maintaining and further improving the processes. The

fall or degradation of processes is now just not possible. Therefore, daily management

is in fact a management imperative. You cannot do without it (you may occasionally

do without an innovation/breakthrough).

• It may not be as stunning or exciting as an innovation, effective daily management is

the foundation on which maximization of advantages due to innovation and company

viability firmly stay.

• Total COQ decreases over time for companies with Daily Management Process.

To successfully sustain any improvement or revitalization program, you need to “stay

the course” and the Daily Management system helps to make that happen. There are few

naturally born and dynamic leaders who can drive the transformation. The Daily

Management system provides guidance so that the average manager can perform well in

engaging the hearts and minds of all of the front-line workers.

REFERENCES

[1] Dennis C. Edwards, Total Asset Productivity Services, Inc. Performance Improvement

by “People Pulling Together, Striving for Excellence” Proceedings of IMECE2006

2006 ASME International Mechanical Engineering Congress and Exposition

November 5-10, 2006, Chicago, Illinois, US

[2] Akao, Yoji ed. 1991. Hoshin Kanri: Policy Deployment for Successful TQM.

Productivity Press Inc.

[3] AT&T. 1989. Process Quality Management and Improvement Guidelines.

[4] Fly, John, Vice-President of Internal Planning. 1994. Milliken Internal Document.

[5] Gillespie, Edward. January 28, 2002. Private communication.

[6] Harry, Mikel and Richard Schroeder. 2000. Six Sigma: The Breakthrough

Management Strategy Revolutionizing the World’s Top Corporations. New York:

Doubleday.

[7] Herman, John T. 1989. “Capability Index-Enough for Process Industries?” 1989

ASQC Quality Congress Transactions.

[8] Koura, Kozo. 1991. Hoshin Kanri. Cambridge, MA: Productivity Press, Inc.

[9] Matsushita, Konosuke. 1988. Talk to American Businessmen in Osaka, Japan.

[10] Petrovich, Michael. 1998. “Performance Analysis for Process Improvement” 1998

ASQ Congress Proceedings, Philadelphia, PA.

[11] Reichheld, Frederick F., and W. Earl Sasser, Jr. 1990. “Zero Defections: Quality

Comes to Customer Service.” Harvard Business Review (September/October): 105-

111.

[12] Suzaki, Kiyoshi. 1993. New Shop Floor Management: Empowering People for

Continuous Improvements, New York: Free Press.

[13] Welch, Cas and Pete Geissler. 1995. Applying Total Quality to Sales. Milwaukee:

ASQ Quality Press.

[14] Wheeler, Donald. 2000. Understanding Variation: The Key to Managing Chaos,

Second Edition. SPC Press.

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