Importance Cost Of Quality In Manufacturing Industries
According to a study by Deloitte, India is expected to jump six ranks to No. 5 in the 2020 Predicted Manufacturing Competitiveness. A large part of the advantage is still India’s competitive labour costs. Contract workers in India are paid US$148 per month (Rs 10,000) compared to US$234 (Rs 16,000) in China. The Indian government has set an aggressive target of increasing the manufacturing share to 25% of GDP by 2025. For this to happen manufacturing quality is going to be a key differentiator in business. Companies need to invest a significant amount of time, money and effort towards delivering products and services that adhere to or exceed expected quality standards.
In the manufacturing industry, quality control is a process to measure product parameters against defined quality specifications and take requisite action if there are discrepancies. These specifications are determined through production standards and customer demands.
Quality control ensures that product delivery is consistent and acceptable. In the Indian manufacturing industry, quality control is primarily human capital intensive. With low penetration of automation as well as the low labour cost, manpower based quality control is still largely preferred.
How Is Quality Control Implemented?
Firstly the quality control process is documented and then implemented. There are various ways of executing a quality control program –
Total Quality Control- This is where each and every part and process is checked and certified. In other words 100% quality checking. This is obviously going to be quite tedious and expensive, not to mention literally impossible when we’re talking about high volume manufacturing like FMCG and small auto parts.
Sampling – When it is not possible to check each and every unit of output, samples of the product are selected and checked against quality parameters. Product quality is determined based on the results of checking the samples.
Control Charts – Product characteristics are plotted on charts. Abnormal points or patterns indicate non-conformance to quality standards. Patterns and trends are analyzed to understand if quality issues exist and the nature of the issues. Remedial measures are then undertaken to fix quality issues. Control charts can be used to evaluate product quality as well as process capability.
Defect Management
Once the defective parts are identified, they have to be handled appropriately. This can be done in various ways –
- Implement corrective measures to control the quality of the product.
- Handle rejected defective parts.
- Repair defective parts.
- Improve the manufacturing process to produce products as per quality specifications.
Human Factors in Quality Control
Manual quality control is usually done via visual inspection. Visual inspection involves human effort in different activities –
- Search for defects
- Finding of defects
- Recording of defects
- Classification of defects
- Documentation of a verdict on product quality
But human quality control is not completely objective. It is subjective. Different physical and physiological factors influence the ability of a person conducting quality control at different times. Factors such as age, gender, temperament, experience, knowledge, work conditions, colleagues, bosses, pressure, attitude, and work instructions can affect quality assessment by humans. Moreover, if multiple people conduct quality checks, the results can be different based on each person’s interpretation. The result is that there is no guarantee of accurate and objective evaluation.
Cost Of Quality
Cost of quality includes the costs incurred in ensuring that products adhere to quality specifications, remedial work and consequences of poor quality. They can be classified as –
Appraisal Costs – Costs involved in activities done for measurement and monitoring of quality. This includes costs incurred in testing and inspection.
Prevention Costs – Costs involved in setting up processes for quality control and quality assurance so that defects are avoided or minimized. It comprises of costs involved in employee training, evaluation of raw material, hiring the services of quality control consultants and bringing improvements in the manufacturing process.
Costs Incurred Due To Negligence of Quality – Products that do not conform to requisite quality parameters result in internal failure costs and external failure costs. Internal failure costs include expenditure on rework, managing delay in delivery, and retest. External failure costs include loss of goodwill, customer complaints, reduced revenue, and repair costs.
Most companies spend 10%-15% of their revenue on quality control. Companies have to implement quality control processes that are diligent and accurate and justify the amount spent. The long-term effect of the quality process and costs incurred on those should lead to competitive advantages for the organization.
Thinking Beyond Appraisal Costs
What can you do to ascertain consistent, objective and reliable quality control? You have to think beyond just the appraisal costs. Devise a quality control process that has little or zero human participation. Invest in quality control automation solutions to meet and exceed the high expectations of consumers for high-quality products at competitive costs. Companies have to integrate technology into their quality control solutions to reach their quality objectives.
Automated quality control solutions for the manufacturing process exist in different forms. For example, machine vision solutions can be used in different ways to check for quality in the manufacturing process. Advanced camera technology and vision-guided robotics can be used for tracking parts in the assembly line, tracking inventory in warehouses. Video mechanisms can be used to detect objects or check for dimensions in objects. AI-based systems can be used to verify surface quality and optical character recognition. Machine learning systems can be used to check for anomalies and aesthetic defects. These systems will evolve and learn by executing the testing process thus becoming more accurate.
Automated quality control solutions provide multiple benefits –
Efficiency – The quality control process becomes efficient with automation. Human resources can utilize their time to devise innovative solutions for process and product improvement.
Better ROI – Automating quality control processes involves higher upfront costs as compared to hiring human resources. But over a period of time, the automated solution will be used time and again thus justifying the cost. Furthermore, its accuracy and objectivity will prove to give a better ROI.
Standardization – The quality control process will be standardized. There will be no wasteful expenditure on inconsistency or transfer of knowledge to different employees. It can be reused in multiple instances.
Conclusion
Quality products and services are vital to maintain customer satisfaction and loyalty and earn goodwill in the market. Automated quality control solutions are an essential part of the manufacturing process to achieve the requisite quality goals. Manufacturing companies that implement them will derive multiple advantages. They will have the potential to be a cut above manufacturers who continue to rely on manual quality processes.
Cost of quality has to be thought of beyond appraisal costs. In some industries like steel rolling, the ROI of a quality inspection system can be realized in just one preventable malfunction of the machine. So Indian manufacturers need to have a more comprehensive ROI and payback budgeting system in order to invest in quality control automation which clearly is the need of the hour if India’s manufacturing targets need to be met.
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