Profiting Through Quality Final

Profiting through Quality: Improving Right First Time

Learning from systematic and collaborative implementation of Quality Improvement Program in 10 apparel firms

Sustainable Economic Development

Published by :

Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH

German Technical Cooperation SME Financing and Development Project B-5/1, Safdarjung Enclave, New Delhi - 110 029, India Tel: +91 11 2671 5952 / 5826 Fax: +91 11 2616 6844 E-mail: [email protected], [email protected] Website: www.gtz.de

AuthorDr. Rajesh Bheda, Principal & CEORajesh Bheda Consulting

Responsible:

Amit Kumar

New Delhi, September 2009

Content 1. Background and Framework Condition 7

2. Cost of Poor Quality: an introduction 9

3. ProfitingthroughQuality:KeyResults 13

4. Case Studies: 17

4.1 ImprovedCoordinationbetweenmerchandisingandproductionteam 18

4.2 Interdepartmental team spirit and cooperation 20

4.3 ReductioninstainsinGarments 21

4.4 Improvement in subcontracted sewing quality 23

4.5 Improvement in sewing quality 24

4.6 Fabric inspection system 26

4.7 InternalCustomerfeedbackmechanism 28

5. QualityImprovementProgramme:PlanningandImplementationapproach 31

6. TechnicalTermsexplainedandputintocontext 35

AbbreviationsAQL Acceptable Quality Level

COQ Cost of Quality

DFID Department for International Development

DHU Defects per Hundred Units

GOI GovernmentofIndia

GTZ GermanTechnicalCooperation

KFW KreditanstaltfrWiederaufbau(ReconstructionCreditInstitute)

MSMEs Micro, Small and Medium Enterprises

OGTC OkhlaGarmentandTextilesCluster

PDCA PlanDoCheckAct

QIP Quality Improvement Program

RBC RajeshBhedaConsulting

SIDBI Small Industries Development Bank of India

SMEs Small and Medium Enterprises

SPC Statistical Process Control

SQC Statistical Quality Control

1. Background and Framework Condition

TheGovernmentofIndia(GOI),throughtheMinistryofFinance,isworkingwithamulti-donor

consortium to implement Small andMediumEnterprise Financing andDevelopment Proj-

ect.WorldBank,KFW,DFID,andGTZaretheparticipatingagencies.Theobjectiveofthe

Multi-DonorProjectistostrengthengrowthandcompetitivenessofmicro,smallandmedium

enterprises (MSMEs), by improving their access tomarket-oriented financial and business

development services.

GermanTechnicalCooperation(GTZ)isimplementingitsprogramoftechnicalassistancein

closecooperationwithSIDBIandApparelisoneofthesubsectorssupportedbyGTZ.Based

on theconsultativeandparticipatorydiscussionwithallstakeholdersanurgentneed to im-

proveproductivity,qualityandsystemsingarmentmanufacturingfactorieswasidentifiedas

keybottlenecktoenhanceitscompetitivenessandemploymentpotential.Inthefastchang-

ingglobalbusinessenvironment,wherethereisconstantpressureonleadtime&pricing,the

wayforwardforapparelMSMEsistoimproveefficiency,cutthecostbybetterquality,waste

reductionandothermeans.Howeverthenonconformingquality(defect)levelintheapparel

industryisquitehigh.

InordertodevelopadeeperunderstandingamongsttheapparelmanufacturingMSMEsand

appreciationregardingneedforundertakingtheimprovementmeasuresandthusreducing

repairandrejectioncostandattainingworldclassquality,GTZfacilitatedimplementationof

Quality Improvement Program (QIP)inselectapparelmanufacturingSMEsinNCRasapilotmeasure.QIPhasbeenimplementedinassociationwithOkhlaGarmentandTextilesCluster

(OGTC)byProf.RajeshBheda,CEORajeshBhedaConsulting.

7Profiting through Quality

2. Cost of Poor Quality: An Introduction

ThoughtheIndianapparelindustryhasmadeeffortstowardscontrollingtheoutgoingqualityofthemerchan-dise;therightfirsttimequality level invariousmanufacturingprocessesneedssubstantial improvement.TherepairandrejectionlevelsintheIndianapparelmanufacturingfirmsstillremainquitehighcomparedtobestpracticefirmsinAsiaincludingIndia.

Themajorityoftimeandeffortofthequalitypersonnelofapparelmanufacturersseemtobedevotedtoin-spectingthealreadyproducedmerchandisethanpreventingthedefectsfromarising.Thisphenomenoncanmainlybeattributedtothenon-understandingoftheCostofQualityorinsimplewordsnon-understandingoftheamountofmoneywastedduetopoorquality.

AccordingtoJosephJuran,aleadingGuruofQuality:

Cost of poor quality consists of those costs that would disappear if our products and processes were perfect.

Forthepurposeofbetterunderstandingandcontrol,thecostofqualityisclassifiedinfourcategoriesnamelyPreventionCost,AppraisalCost,InternalFailureCostandExternalFailureCost.

Figure 2.1: Classification of Cost of Quality


Afirstof itskindstudy Cost of Quality in the Indian Apparel industry, supported by Ministry of Com-merce,Govt.ofIndia,carriedoutbyDrRajeshBhedabroughtoutsomestartlingrevelations.Thestudythatcovered61apparelmanufacturersfromimportantmanufacturinghubsofthecountry,establishedthat:

AverageCostofqualityamongtheparticipatingfactorieswas14.05%oftheirsalesturnover.Insomefactoriesthecostofqualitywasashighas30%ofsales.

Thestudyalsorevealedthatonaveragethecompaniesspentonly0.26%ofsalestowardsthePreven-tioncost.TheAppraisalcostwas3.31%ofsaleswhereastheInternalFailureCostwasthehighestat9.86%ofsales.

Figure 2.3- Distribution of cost of Quality in Indian Apparel Industry

Figure 2.2- Average Cost of Quality as a percent of sales in Indian Apparel industry

10 Profiting through Quality

ItwasconcludedthatthecostofqualityintheIndianapparelindustrywastoohightobeneglected.Therewas an urgent need for investment in prevention of defect generation, improvement in effectiveness of in-spection and testing in apparel industry.

Inthecurrentenvironmentwherethereisahighpressureforreducingthesellingpriceofexportapparel,reductioninCOQcouldplayasignificantroleinretainingthecompetitiveadvantagewhilemaintainingprofit-abilityoftheindustry.

The findings of this research and subsequent assessment ofCost ofQuality in fourmembers ofOkhlaGarmentandTextileClusterbyDr.RajeshBhedageneratedkeeninterestamongthememberfactoriestoembarkuponthejourneyofQualityImprovementProgram(QIP).ThesupportunderSMEFinancing&De-velopmentProjectimplementedbyGTZprovidedthemuchneededenvironmentforprojectinitiation.MoreinformationabouttheimplementationapproachoftheQIPisexplainedinchapter5.

Thestudyfurtherconcludedthatreducingthe CostofQualityfrom14%to6%ofsalescanimprovetheprofitabilityof

Indianapparelmanufacturersbyalmost50%.


3. ProfitingThroughQuality: Key Results of QIP Implementation

Theresultsoftheimplementationofqualityimprovementprogramhavebeenveryencouraging.Thefactoryteamswereveryexcitedabouttheirachievementsandvowedtocarryforwardtheimplementationtomarchonthepathofcontinualimprovement.Someofthekeyresultsoftheprogramareasstatedbelow:

3.1 Fall in Defect Rate

The Right first Time quality leveloftheparticipatingfactoriesimprovedsubstantially.ThereductioninthedefectratesattheEndofsewinglinesrangedfrom19.94%to78.6%withanaveragereductionof49.83%(fig3.1).Asalsocanbeseeninfigure3.2an3.3theimplementationofQIPresultedinsteepfallinthedefectratesamongtheparticipating factories.

Apart from sewing department, the participating factories also experienced steep fall in the defect rates in pattern making, cutting and finishing departments to the tune of 20% to 75%.

Inonefactorythemeasurementinaccuracyrateinpatternswentdownbyover75% InanotherfactoryCuttingauditfailureratewentdownfromabout20%to3%

Figure 3.1- Graph showing Decline in Defect rates in End-line inspection post implementation of QIP in Eight Different Factories


3.2 Payback Period

TheCostBenefitAnalysisshowedestimatedmonthlysavingsofaboveRs.75000toRs.225000dependingonscaleofoperationsandimprovementsachieved.Thishasresultedinimpressivepaybackperiodoftwotofivemonths.Insomecasestheprogrampaidbackduringtheimplementationperioditself.

Figure 3.2- Bar graph Showing Decline in DHU and Percent Defective over a period of 3 months

Figure 3.3- Trend chart showing decline in DHU and Percent Defective over a period of 1 month


3.3 Customer Feedback

InternationalcustomersofmanyparticipatingcompanieshaveappreciatedthesystemsintroducedthroughtheQIPandhaveupgradedthefactoryratingformallyorinformally.InonecasealeadingEuropeanretailerhasexemptedthefactoryfromthefinalinspectionbytheirqualityauditors.Somefactorieshavereportedthatnewcustomersappreciatedtheirqualitysystemandthusithelpedthemsecuringhighervaluebusiness.

3.4 Improved Subcontractors

Theimprovementsexperiencedarenotlimitedtotheparticipatingfactoriesalone.Inmanycasestheirsubcontractorshavealsobenefitedfromthebestpracticesoftheprogram.Inonecase,theaveragedefectratesofsevensubcontractmanufacturerswentdownby40.76%,Whilethehighestrateofdefectreductionwas71.32%.

3.5 Reduction in consumables and Environmental Impact

Oneoftheparticipatingfactorieshasreportedsubstantialreductioninchemicalconsumption(byover74%)asaresultofreductioninthestains.Thefactoryhadmanagedtobringdownthestainsbyabout67%(figure3.5)throughproblemsolvingapproachandimprovedhousekeeping.

Thefactoryalsoreportedreductionintheconsumptionofwater,fuelandelectricityduringQIPimplementa-tionleadingtomajorcostsavingsandmoreimportantly,reducingadverseimpactontheenvironment.Thisconsequentlyhasencouragedotherfactoriestoexplorethisopportunityarea.

3.6 Interdepartmental Team Spirit

Allparticipatingfactorieshavereportedimprovedinterdepartmentalteamspirit,communication,coordinationandoverallmotivationleveloftheworkforce.

Figure 3.4- Graphs Showing Reduction in Stains per hundred garment and reduction in cost of stain removing chemical after the implementation of QIP


3.7 Decision Making and Problem Solving

Thefactoryteamshavedevelopedgreaterconfidenceinfactbaseddecisionmakingandproblemsolvingability.Theyfurtherreportedimprovementintheirknowledgeandskillsandtheirabilitytoapplythesameintheirprocessestobringinimprovements.

3.8 Training

Duringtheprogramatotalof324personnelfromthe10participatingfactoriesbenefittedfromthetraining provided by Rajesh Bheda Consulting.Out of these participants 103 were managers,97 were supervisors from various departments and remaining 124 belonged to quality controller/ checkercategory.

In addition to this the factory team memberstrainedbyRBC,conductedseveraltrainingses-sionsfortheworkerstospreadtheawarenessofRightFirstTimeQualitytograssrootlevel.

Figure 3.5- A factory team training session


4. Case Studies

There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.

Henry Ford(1863-1947),Americanindustrialist

Thecollaborative journeyof implementationofQuality ImprovementProgramintheapparelmanufactur-ingMSMEshasbeentrulyrewardingforallthepartners,namelyGTZ,OkhlaGarmentandTextileCluster,participatingapparelmanufacturersandRajeshBhedaConsulting.ThoughthefocusoftheprogramwasonimprovingRightFirstTimeQualitylevelincoremanufacturingprocesseslikecutting,sewingandfinishing;andtheprogramresultedinsubstantialimprovementsintheseprocesses;theprogramalsoresultedinsig-nificantimprovementsinotherprocessesaswell.

Astheprogramwasimplementedinaflexiblemannertosuittheneedsofeachparticipatingfactory,widevarietyofprocessesandopportunityareasreceivedattentionofRBCconsultantsthusresultinginsizableimprovements.

OneofthemainobjectivesofthepilotimplementationoftheQIPwastocreateademoeffectaboutthevalueofusingconsultancyservicestoestablishQualitySystems.Thissectionofthepublicationaimsatsharingwiththewiderindustrycommunitysomeofthereal-lifecasestudiesemergingfromtheQIPimplementation.Thethemescoveredare:

1) Improvedcoordinationbetweenmerchandisingandproductionteam

2) Interdepartmentalteamspiritandcooperation

3) ReductioninstainsinGarments

4) Improvementinsubcontractedsewingquality

5) Improvementinsewingquality

6) Fabricinspectionsystem

7) InternalCustomerfeedbackmechanism.


4.1 Improved Coordination between Merchandising and Production Team

The Challenge

Thecommunicationandcoordinationbetweenthemerchandisingandthefactoryteamwasun-satisfactory.Duetothisthemutualtrustandcooperationwasalsolimited.

Thisleadtofrequentdelaysinordershipmentsandclientteamneededtoengageinextracommu-nicationwithbuyingagenciesforlastminutechangesorapprovals.Thefactoryalsoexperiencedhighrejectionrateandhadtodoexcessiveovertimetomeettheshipmentdates.

The Client

TheclientisoneofIndiasleadinggarmentexporthouses.ItscustomersincludereputedretailstoresintheUS,UK,Sweden,Holland,CanadaandAustralasia.Thecompanymanufactureshighfashionladiesapparel,rangingfromcasualoutfitstoformaleveningwear.AllthefactoriesofthecompanyareISO9000certified.

The Solution

Consultativesessionswereorganisedbetweenthefactoryteamandmerchandisingteam,toexplaintheinternalcustomersupplierrelationandtheneedforimprovedcoordinationandsynergisingthework-ingofbothentitieswithorganisationalobjectiveinfocus

Facilitatedeachfactoryteamtoidentifyfiveimprovementsintheworkingoftheirdepartmentandfoundoutimprovementexpectationsformtheirinternalcustomerdepartments

Figure4.1.1- Major Challenge and its effects


Based on these the factory teams initiated improvement projects to meet the internal customerexpectations.

Systematic problem solving efforts by the factory team under the guidance resulted in solving longpending issues, reduce defects and delays.

The Business Impact:

Theoverallrejectionrateofthegarmentshasgonedownbyalmost50%i.e.from4%tolessthan2%.Thishassizablepositiveimpactontheprofitabilityoftheorganisationapartfromseveralotherbenefits.

Other Benefits

TheQIPhasresultedinimprovedtrust,mutualunderstandingandcooperationbetweenthemerchandisingandfactoryteam.Frommostlyshortshipments,inlargecases,thefactoryhasstartedsendingshipmentswithexcessquantity.Theshipmentdelayshavegonedownsubstantially.Thishasledtoimprovedfactoryimageamongthecustomers.

Figure 4.1.2- Decline in the overall rejection rate post implementation of QIP

Figure 4.1.3- The benefits obtained by the factory from QIP


Outcomes Percentage

Reductionindefectrateinpatterns 75%

ReductionincuttingroomAuditFailure 85%

Reductionindefectrateatendlineinspection 66%

Reductioninoverallrejectionrate 50%

4.2. Interdepartmental Team Spirit and Cooperation

The Challenge

The different departments of the factory believed that in spite of their best efforts the quality problemswerenoteliminatedbecauseotherdepartmentsdidnotdotheirjobright.Thoughthefactory teamunderstood the importance of serving the ultimate customerwith desired quality,theylackedinternalcustomerorientation.Inmanycasestheyblamedinternalcustomersofbeinghabitualcomplainants.

Qualityandproduction teamssuspectedeachothers intentions.Thechallengewastobring inthe common goal of external customer satisfaction through company-wide internal customer satisfaction.

The Client

TheclientproducesvalueaddedladieswearfortheUSandEuropeanmarket.Thecompanyhasastrongproductdevelopmentteam.Mostofthebusinessoftheclientisdirectlyhandledwithinternationalretailers/importerswithoutinvolvementofbuyingagentsorlocalsourcingoffices.

The Solutions

AftertheinitialtrainingonthefundamentalconceptsofRightFirstTimequalityandtheutmostrelevanceoftheconcept,consultantsconductedaseriesofsessionsbetweeninternalcustomersupplierdepartmentstounderstandtheexpectationsoftheinternalcustomers.

This was followed by initiation of small improvement projects in each department with the aim of satisfyingtheinternalcustomerdepartment.30suchprojectswereinitiated.

TheprogressoftheseprojectswasregularlymonitoredanddiscussedduringtheQIPCoreTeammeetingon weekly basis.


20 out of the 30 project initiated were successfully completed during the implementation of theQuality ImprovementPrograminthecompany.Asaresultofsuccessfulimplementationoftheseprojectsandregularprogressreview,allthedepartmentsofthefactorydevelopedgreaterconfidenceandtrustinotherdepart-ments.Thisbroughtintransparency,greaterappreciationofissuesinvolved,andinter-departmentalteamworkandover aperiodof time the factory teamsdevelopedability to solveproblems through collective brainstorming and data based decision making. No doubt the factory was handsomely rewarded with reductioninrejectionratebyalmost50%resultinginsubstantialcostsavings.

Thekeyoutcomeswere:

Table 4.2.1- Key outcomes of the QIP implementation


4.3. Reduction in Stains on the garment

The Challenge

Alongsidetheproblemsofhighrepairlevelinsewingtheclientalsofacedsubstantiallyhighlevelofstainsinthegarments.Thismeantalotofadditionalworkinthefinishingdepartmenttoremovestains.Thisalsomeantexcessivecostofstainremovingchemicals.Thechallengewastofindoutthesourcesofthestains,establishtorootcausestotakepreventiveactions.

The Client

Theclient isanOkhlabasedmanufacturer,exportingtotheEuropeanMarket.Thecompanyismanagedbytheownerwiththehelpofexperiencedstaffinafamilylikemanner.Thecompanydealswithsmallorderquantitiesandhighstylevariation.Stitchingandembroideryistotallyoutsourced.

The Solutions

Thefinishingteamwastrainedindatacapturingtools likechecksheetstounderstandthefrequencyofstain relatedproblems.Thedatacollectedby thefinishing teamshowed thatevery100garmentsinspectedhadonanaverage46.13stains.

Thefactoryteamwasencouragedtouseproblemsolvingtechniquestounderstandtherootcausesofvariousdefectsfoundinthegarments.Suggestionswereinvitedformtheemployeesonhowtoprotectthegarmentsformstainsduringvariousprocesses

Theemployeesaswellassub-contractorsweresensitisedtotheproblemsofstains,theprecautionarymeasures were implemented and results were monitored on regular basis.

Figure 4.3.1- Graphs Showing Reduction in Stains per hundred garment and reduction in cost of stain removing chemical after the implementation of QIP


The Business Impact

Theprojectresultedinimpressiveimpactfortheclient

Stains per hundred garmentswent down by 63% from 46.13 to 17.02while the cost of stain removing chemicalgarmentreducedby74%fromRs.1.38toRs.0.5perpiece.

Mostimportantly,thereductioninstainbecameoneoftheimportantfactorscontributingtomorethandou-blingtheproductivityofthefinishingdepartment.

Costofpower,waterandfuelwentdownbyRs.2.00perpiece.

A strong foundation has been laid in these three months for working towards improvement

-Factory owner, Indigo Apparel

-----------------------------------------

Some of our long pending issues have been resolved as a result of Cause and Effect Analysis implementation.

- Fabric Store In charge, Indigo Apparel

-----------------------------------------

First time we have realized the importance of data for the work what had been accomplished and its usage in understanding the situation

of the merchandise

- Finishing floor in charge, Super Fashions


4.4. Improvement in subcontracted sewing Quality

TheChallenge

ThemanagementofthecompanywasthoughconvincedofthepossiblegainsfromQIP methodologyanditsvaluebutwasunsureabouttheprogramsimplementationinhighfashion,smallquantitymanufacturing.Sinceallstitchinginthisfactoryisoutsourced,thechallengewastoimprovethesubcontractorsthattheycouldandneededtoproducebetterqualityapparelwith-outexpectingincreaseinsewingcharges.

The Client

Theclient isanOkhlabasedmanufacturer,exportingtotheEuropeanMarket.Thecompanyismanagedbytheownerwiththehelpofexperiencedstaffinafamilylikemanner.Thecompanydealswithsmallorderquantitiesandhighstylevariation.Stitchingandembroidery is totallyoutsourced.The factoryworkswithabout15-20fabrication(stitching)units.

Solution

Aninteractivesessionwasorganizedwithsubcontractorstoexplaintothemtheimportanceofrightfirsttimequalityandunderstandthedifficultiesfacedbytheminachievingso.

Theywereexplainedwithsimpleexampleshowtheywillbeabletosavetimeandmoneybyproducingdefectfreegarmentsinthefirstattempt.

Thefactoryprovidedadetailedobjectivefeedbackonsewingqualitytosubcontractorsdetailingthetypeandfrequencyofdefectsgeneratedbythetailors.Thiswasusefulinexplainingthetailorsthespecificimprovementsneededintheirwork.

Business Impact

Theclientsawbreakthroughresultsintermsofreductionindefectratesinthegarmentsstitchedbythesubcontractors.Anaveragereductionindefectratesforsevenmainfabricatorswasreportedtobe40.76%.Ascanbeseeninthegraphthemaximumreductionwas71.32%whereasminimumreductionwas19.02%.

Figure 4.4.1- Drop in defect rate of seven fabricators over a period of 3 months


Figure 4.5.1- Reduction in DHU=78.06% and a reduction in Percentage Defective=79.96%

4.5. Improvement in Sewing Quality

The Challenge

Itwasobservedthatreworklevelatproductionfloorduetostitchingdefectswasquitehigh.Thisledtotimeandenergylossofproductionlineoperatorsandsupervisors.Furtherthefinishingdepartmenthadtodohighamountofsewingrelatedreworktocompletetheshipment

The Client

TheNCRbasedclientworkswith leading internationalnamessuchasReebok,MayDepartmentStores,Chicos,UrbanOutfittersandAnthropology.Theclientproducesknittedapparelformen,womenandkids.Theproductrangeinvolvesblouses,tops,skirts,Poloshirt,t-shirtandtrackpants.ThequalitysystemofthefactoryiscertifiedunderISO9001:2000.

Intervention

Aninteractivesessionfortheproductionandqualityteamwasconductedtoexplaintothemtheimpor-tanceofrightfirsttimequalityforhurdlefreeproduction.

RBCsend-lineinspectiondatacapturingformatwasintroducedtounderstandexistingdefectsandtheirfrequency.

Thestitchingoperatorswerealsoexplainedtheimportanceofrightfirsttimequalityandhowtheywillbeabletoimprovetheirearningbyeliminatingdefects.

Trainingsessionsondataanalysis,problemsolvinganddailymanagementwereconductedbyconsul-tantstoeliminatethedefectsfromtheroots.

RBCsQualityManagementInformationSystemwasinstalledtogeneratemanagementreporting.


Business Impact

Thedefectrateofthestitchingfloorcamedownby78.06%overthreemonthsperiod.

Asaresultof improvedsewingqualitythecompanydecidedtoeliminatequalityauditbeforesendingthemerchandisetofinishingdepartment.Thisresultedinredeploymentoffiveinspectionstaff.Needlesstosaytheprojectresultedinsubstantialcostsavingsforthefactory.

Weareenjoyingthelife-timeopportunityfromlearningthequalitymanagementsystems in workplace as well as in our personal life.

An end-line checker, Super Fashions

-----------------------------------------

Stitchingqualityhassubstantiallyimprovedthanearlier

-Finishing Manager, Super Fashion

-----------------------------------------

Iamgladtoseegoodresultsofsustainablereductionofalterationinstitchinginsuchhighpressuretime,Iamsurewewillperformbetterinthecomingtime

- Factory Manager, Super Fashions


4.6. Fabric Inspection System

TheChallenge

Thechallengewastointroduceafactbased,objectivefabricqualityinspectionsystemsoastocreatethebasisforfabricqualityimprovement.

Thecostoffabricconstitutesabout50%to60%ofthegarmentcost.ThepopularperceptionintheNorthIndian apparel industry is that theirbiggestproblemisdelay infabricdeliveryandpoororunpredictablequalityof thefabric.It isalsowidelyperceivedthatthefabricprocessorsandsuppliersarenottookeentoengageinqualityimprovementactionsanditisasellersmarket.

The Clients

ThiscaseintegratesexperiencesfromthreeparticipatingfactoriesofQIP.AllofthemproducerelativelysmallorderqualitiesmainlyfortheEuropeanmarket.Garmentsproducedbytheminvolvemultipleprocessesandfabrictypesvarysignificantly.

The Solutions

Thefabricdepartmentteamwassensitisedtotheneedtohavefactualandobjectivedataonthefabricquality

Oncetheywereconvincedaboutthevalueofintroducinganinternationallyacceptablefabricinspectionprocedure,FourPointSystemoffabricinspectionwasintroducedintheparticipatingfactories

Figure 4.6.1- Benefits from effective use of fabric Quality performance data based on 4-point system


Figure 4.6.2-Satisfaction Level of Cutting department on account of fabric quality for 4 months

Afterintroductionofthesystem,fabricteamwastrainedinanalysingdeliveryandqualityperformanceofdifferent fabric suppliers/ processors

Thefactoriesstartedprovidingwrittenfeedbacktofabricvendorswiththeircomparativeperformance.

Thiscreatedasenseofcompetitionandpressureonthefabricsupplierstotakeactionstoimprovetheperformance.


Allthethreefactorieshavereportedgradualimprovementinfabricqualitysuppliedbyfabricvendorsandprocessors after the introduction of the system.One factory reported that the arguments with suppliersrelatingtothejustificationofdebitnotesincaseofthedefectivefabrichavecometoanendasaresultofdetailedinspectionreportswhichclearlystatesthetypeandfrequencyofthedefectsfoundinthefabricsperroll.Cuttingroomsofthesecompanieshavereportedreceivingofbetterfabriccomparedtopre-QIPdays.Thishelpedcompaniesreduceifnoteliminatefabricdefectsreachingsewingandfinishingdepartmentsandresultant wastage.


4.7. Internal customer feedback mechanism

The Challenge

ThoughthefactoryhadaverygoodperformanceatthestageofFinalQualityAuditsbytheircustomers,thefactorywasexperiencinghighinternalreworklevel.Themanagementwasconcernedabouttheresultantcostofqualityanddelays.Highinternalreworkalsoresultedinatendencyamongthestaffofpointingfingerswhenfacedwithproblems.Asaresult,conceptofcollectiveresponsibilityandapproachofworkingtogethertoachievecommongoalswaslow.Thechallengewastoestablishobjectivefeedbackmechanismbetweenthedepartmentsforreducingcommunicationgapandinitiatingtheprocessofcontinualimprovement.

The Client

Theclientisaleadingexporterworkingwithsomeofthefortune500retailers.Thefactoryproducesbaby,kidsandwomenswear.AcknowledgingthehighCostofQualityandunseenlossesincurredonaccountofit,theclientdecidedtoimplementQualityImprovementProgram.Thequalitysystemofthefactoryiscertifiedunder ISO 9001:2000.

Intervention

AftertheintroductorytrainingontheconceptsrelatedtoRightFirstTimequalityanddatabaseddecisionmaking,thefactoryteamwasintroducedtoRBCsmethodologyofinternalcustomeridentificationandun-derstandingtheirexpectations.

Oncethedepartmentalteamsagreedtoseekinternalcustomersatisfactionlevel,thefeedbackmechanismwas activated between internal customer and supplier departments.

Thefeedbackofinternalcustomerswasregularlyanalysedandcorrectiveactionsweretakenbythesupplierdepartments.Regularinterdepartmentalmeetingswereconductedtoreviewtheprogressmadeandissuesthatneededtobeaddressedonpriority.

Thefactorymanagementalsostartedreviewingthedailyfeedbacksummaryandencouragingtheprogressmadeaswellasprovidingguidancewhereeverneeded.

Business Impact

Introductionoffeedbackmechanismshashelpedeachdepartmenttogettimelyfeedbackontheirworkandidentifyareasfor improvementandavoidingrepetitionofmistakes.Incaseofcuttingdepartment,thead-versefeedbackreducedby50%.

Theimprovementactionsofdepartmentsresultedinhigherinternalcustomersatisfactionfurtherleadingtoimprovedinterdepartmentalcommunicationandunderstandingoftheissues.

Mutualunderstanding,respectandprofessionalappreciationofotherdepartmentshascreatedbetterwork-ing environment.


Commentsoffactoryteamoninitiatingthefeedbackmechanism:

Thishashelpedmesolvemanyofthequalityand production issues.

Factory Manager

-----------------------------------------

Wehavestartedwaitingeagerlytoknowourperformance

throughfeedbackmechanism.

Production Manager

-----------------------------------------

Wearesatisfiedthattheblamegamehasliterallydisappearedand wearehappierworkinginco-ordinationwithfabric

andstitchingdepartment

- Cutting Room In charge

-----------------------------------------

Ithasbecomeeasierforustoknowtheproblemfacedbyproduction duetothesystemoffeedbackregister

-Cutting QA, Radnik Exports

-----------------------------------------

Ifeelproudtoshowyoumyfeedbackregister. Wearebeingappreciatedforthegoodworkwearedoing.

- Cutting manager, Saivana Exports

-----------------------------------------

Themoraleandmotivationofmydepartmenthasincreased asgoodperformanceandimprovementisapplaudedbytheseniors

Floor Incharge, Radnik Exports


5. Q I P : Planning and ImplementationApproach

5.1 Planning:

Figure 5.1- Planning Approach of QIP


Figure 5.2- Quality Improvement Programme implementation Methodology

5.2 Implementation Methodology

GAP Analysis : Critical Step

GAPanalysiswascarriedouttoassessthecurrentsystemsandprocedures,understandthedefectlevelsandassessingthepreparednessoftheteamforQIP.BasedontheoutcomesofGAPanalysistheQIPimple-mentationplanisadaptedandfine-tunedtomeetthespecificneedoftheindividualfactory.

SomeofthekeyfindingsoftheGapanalysiswereasfollows:

- Extensiveinspectionswerenoteffectiveinstoppingthedefectivegarmentsfrommovingforwardtothenextprocesses.

- Therewasahighsuccessrateatbuyerqualityauditstagebutthiswasachievedafterhighre-worklevelinsewingandfinishingdepartments.

- Inmostcasesthedefectrelateddatawereunderreportedandnotanalysed.

- In some cases inspection did not give the clear picture as rework level related data were not available.

- Systematicproblemsolvingwasrarelypracticed.


Formation of Cross-functional team for QIP

Acrossfunctionalteamwasformedineachoftheparticipatingfactoryfortheplanning,implementationandreviewoftheQIP.

Training provided to key Team members

TrainingintheareasoffundamentalconceptsofQualityformedthemainbaseoftheQualityImprovementProgram.Thefactoryteamsareencouragedtoquestionthecurrentprocessesandseekbetteralternatives.Thespecifictrainingthemescoveredwere:CustomerFocus,RightFirstTimeQuality,PDCA,AQL,RawMa-terialInspectionSystems,SQC,CauseandEffectAnalysis,DataAnalysisandReportingSystemandotherneed based areas.

Figure 5.3: Components of the training provided to Key members


6. TechnicalTermsexplained andputintocontext

1. Appraisal Cost: Costincurredtodeterminethedegreeofconformancetoqualityrequirements(mea-suring,evaluatingorauditing).Example: Inspection, testing,processor serviceaudits, calibrationofmeasuring and test equipment.

2. DHU (Defects per Hundred Units): Theratioofnumberofdefectsperlotorsample,expressedasapercentage.

DHU=NumberofDefectsx100dividedbyNumberofUnits.

3. External Failure Cost: Costassociatedwithdefectsfoundafterthecustomerreceivestheproductorservice.Example:processingcustomercomplaint,customerreturn,warrantyclaim,productrecall.

4. GAP analysis: Gapanalysisisabusinessresourceassessmenttoolenablingacompanytocompareitsactualperformancewithitspotentialperformance.Atitscorearetwoquestions:Wherearewe?andWheredowewanttobe?

5. Internal Failure Cost: Costassociatedwithdefectsfoundbeforethecustomerreceivestheproductorservice.Example:Scrap,rework,re-inspection,re-testing,materialreview,materialdowngrades

6. Pareto analysis: Paretoanalysisisastatisticaltechniqueindecisionmakingthatisusedforselectionofalimitednumberoftasksthatproducesignificantoveralleffect.Thepurposeistohighlightthemostimportantamonga(typicallylarge)setoffactors.Inqualitycontrol,theParetochartoftenrepresentsthemostcommonsourcesofdefects,thehighestoccurringtypeofdefect,orthemostfrequentreasonsforcustomer complaints, etc.

7. Percent Defective:Theratioofdefectivepiecesperlotorsample,expressedasapercentage.

8. Prevention Cost:Costincurredtoprevent(keepfailureandappraisalcosttoaminimum)poorquality.Example:Newproductreview,qualityplanning,suppliersurveys,processreviews,qualityimprovementteams, education and training.

9. SPC (Statistical Process Control): Itisamethodofmonitoringaprocessthroughtheuseofcontrolcharts.Muchofitspowerliesintheabilitytomonitorbothprocesscentreanditsvariationaboutthatcentre.Bycollectingdatafromsamplesatvariouspointswithintheprocess,variationsintheprocessthatmayaffectthequalityoftheendproductorservicecanbedetectedandcorrected,thusreducingwasteaswellasthelikelihoodthatproblemswillbepassedontothecustomer.Withitsemphasisonearlydetectionandpreventionofproblems,SPChasadistinctadvantageoverqualitymethods,suchasinspection,thatapplyresourcestodetectingandcorrectingproblemsintheendproductorservice.


OGTCaclustercentricapproachisthefirstofitskindwithmissionexcellenceasitsmotto.Thoughthemembersarenothavingphysicalproximitybutareclearintheirmindsthatsuccesscanonlybeachieved through collective thinking and cooperation. Likeminded entrepreneurs got together andcreatedOGTCtoprimarilystrengtheneachmemberbycomplementingeachother,byidentifyingbestpractices,implementingintensivecollectivetrainingandadoptingoutoftheboxapproachandprovideinputsasathinktanktothegarmentindustry.

ItisexpectedthatOGTCinitiativesinbuildingcompetitivenesswillcreateademoeffectfortheindustryandwillleadtooverallimprovementandnicheintheglobalarena.QualitymanagementthroughQIPisoneofthemanyinitiativesundertakenbyOGTC.

Thisprogrammehaslaidthefoundationforadvancedprogrammesinqualitymanagementsothatfirsttimerightandrighteverytimebecomesahabitandeventuallythecultureofthecompany.

Mr.R.C.KesarDirectorOGTCEmail [email protected]

RajeshBhedaConsulting(RBC)isaknowledgeorganizationfocusedonenhancingcompetitivenessofthefashionindustryorganisations.itfirmlybelievesthatperformanceoftheapparelmanufacturingorganisationscanbesignificantlyenhancedthroughoverallproductivityandqualityimprovement. RBChasbeenworkingcloselywithmanyleadingnationalandinternationalplayersintheapparelsec-torwiththepurposeofbringinginproductivityandqualityimprovementsforachievingbetterproduceandimprovedworkingconditionswhileretainingthecostcompetitiveness.

FoundedbyProf.RajeshBheda,anexpertonclothingmanufacturingmanagement,RBCiscommittedtomaketheindustryawareofitsimprovementpotentials,drawstrategiesforimprovementandguidetheminachievingthepotential

Dr.RajeshBhedaCEO,[email protected]

SIDBIistheprincipalfinancialinstitutionforthepromotion,financinganddevelopmentofindustryinthesmallscalesectorandtoco-ordinatethefunctionsoftheinstitutionsengagedinthepromotionandfinancingordevelopingindustryinthesmallscalesectorandformattersconnectedtherewithorincidentalthereto.

SIDBIistheimplementingagencyfortheSMEFinancing&DevelopmentProject.SIDBIhassetupaprojectmanagementdivisioninNewDelhichargedwithsmoothimplementationoftheproject.

Incorporatedin1978,AEPCistheofficialbodyofapparelexportersinIndiathatprovidesinvaluableassistancetoIndianexportersaswellasimporters/internationalbuyerswhochooseIndiaastheirpre-ferred sourcing destination for garments.

ForIndianexporters,AEPCisquiteliterallyaone-stopshopforinformation;advise,technicalguidance,workforceandmarketintelligence.Membershaveaccesstoupdatedtradestatistics,potentialmarkets,informationoninternationalfairsandassistanceinparticipatingatthesefairs.Italsoplaysalargerolein identifying new markets and leading trade delegations to various countries.

InrecentyearsAEPChasworkedtirelesslyinintegratingtheentireindustry-startingatthegrassrootleveloftrainingtheworkforceandsupplyingasteadystreamofmanpowertotheindustry;identifyingthebestcountriestosourcemachineryandotherinfrastructureandbrokeringseveralpathbreakingdealsforitsmembersandfinallyhelpingexporterstoshowcasetheirbestathomefairsaswellasbehighlyvisibleatinternationalfairstheworldover

IndiahasbeenapartnercountryofGermanDevelopmentCooperationfornearly50years.Foralmostallofthistime,GTZ-DeutscheGesellschaftfuerTechnischeZusammenarbeit(GTZ)GmbH-hasbeenactiveinIndiaonbehalfoftheGermanFederalMinistryforEconomicCooperationandDevelopment(BMZ).

Establishedin1975,GTZisorganisedasaprivatecompanyownedbytheGermanFederalGovern-ment.TheBMZisitsmajorclient.ThecompanyalsooperatesonbehalfofotherGermanMinistries,partner-countrygovernmentsandinternationalclientssuchastheEuropeanCommission,theUnitedNationsandtheWorldBank,aswellasonbehalfofprivateenterprises.Itprovidesviable,forward-looking solutions for political, economic, ecological and social development in a globalised world.

ToaddressIndiasdevelopmentprioritiesofsustainableandinclusivegrowth,GTZsjointeffortswiththepartnersinIndiacurrentlyfocusonthreeprioritysectors:Energy,SustainableEconomicDevelop-ment and Environmental policy, conservation and sustainable use of natural resources.

APPARel exPoRT PRomoTIon CounCIl(Sponsored by Govt. of India. Ministry of Texitles)Apparel House, Sec 44,Industrial Area, Gurgaon - 122003, Haryana.Tel: 91-124-2708000-3E-mail: [email protected]

SmAll InduSTRIeS develoPmenT bAnk oF IndIAProject Management DivisionVideocon Tower, Ground FloorE-1, Rani Jhansi Road, Jhandewalan ExtensionNew Delhi-110055Tel: 011 - 23682474-77E-mail: [email protected]

Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH

German Technical Cooperation SME Financing and Development Programme B-5/1, Safdarjung Enclave, New Delhi - 110 029, India Tel: +91 11 2671 5952 / 5826 Fax: +91 11 2616 6844 E-mail: [email protected], [email protected] Website: www.gtz.de

edge

com

mun

icat

ion@

gmai

l.com

Profiting Through Quality Final

Documents

Transcript of Profiting Through Quality Final