Chapter 8 Notes

Quality Control Principles

The three basic quality control principles in logistics are Accurate, On-Time, and Damage-Free handling of materials. Quality control is the process used to ensure that products meet or exceed customer expectations and are delivered to the customer on time and without damage.

Due to the financial impact that an error being shipped can have on the logistics environment, quality begins with the auditing function in the receiving process. There are 3 elements that improve production and reduce costs. Planning, Control, and Improvement.

Quality Planning
Planning is outlining a product that is capable of meeting quality requirements. It starts with identifying the target customer and determining what they need/want.
Quality Control
Requires some degree of statistical process control (SPC) in relation to the order processing function. The accuracy of the order-picking function is something that most distribution centers track. This is a good example because it is easy to see where mistakes are made and adjust accordingly.
Quality Improvement
This means to find a better method of meeting customer needs. Teaming with Human Resources (HR) to identify training needs that eliminate errors is just one example that can impact quality significantly.

Implementing a quality program, like all things, costs money. Some of these costs are; training for all employees, Auditing at various stages of the cycle, and extensive documentation/record keeping.

Companies are willing to incur these costs because the alternative cost (doing all the work over and re-shipping the product or even worse if it gets to its destination) is much greater. Not to mention the thought of losing a customer which in turn means losing money.

Quality improvement is everyone's everlasting responsibility in an organization. From the employee to the CEO. This section will introduce some of these, starting with:

Lean
Focus on efficiency, decreasing waste, and using new methods to decide what matters rather than using dated ideas and ways of doing this.
Based on eliminating waste, these wastes are
Transport or Movement that is unnecessary

Inventory that is not being used (linked to Just-In-Time Inventory)

Motion that is more than required to complete a task

Inactivity

Overproduction

Overprocessing

Defects

Six Sigma

A business management strategy originally developed by Motorola. It consists of a set of quality management tools that use a more statistical approach to reduce defects and maintain quality. This strategy is based on a system of problem-solving steps called DMAIC. This stands for Define, Measure, Analyze, Improve, and Control.

Total Quality Management

TQM is a system built around an effort to improve quality, to involve all in the organization, and to ensure customer satisfaction. This approach requires that the company find out what the customer wants and design the product to meet or exceed customer needs.

The concepts of TQM are things like:

Customer Focus

Committed Senior Management

Continual Process Improvement

Total Workforce

Partnering

Performance Measuring

International Organization for Standardization (ISO)

Many quality management systems are built to meet the standards of the International Organization for Standardization. This organization publishes the ISO 9000, a system of international standards that apply to the design and implementation of quality systems.

ISO quality standards are based on 8 quality management principles which are closely related to TQM Principles:

Customer Focus

Leadership

Workforce Involvement

Continuous Improvement

Systemic and Factual Approach to Decision-Making]

Symbiotic Supplier Relationships

The system involves the entire process

Frontline workers in supply chain logistics are essential to the success of any quality control program. The continual improvement principles previously discussed require direct input from workers who are performing the material handling functions. They must also be trained in the companies quality management system.

A quality audit is the systematic examination of a quality system carried out by an independent reviewer. It is an important part of any organization’s quality control and is a key element of ISO 9000.

The purpose of a quality audit is to provide assurance, through an independent review, that the processes follow the guidelines of the plan and that the plan in place is aligned with the standards set in ISO 9000.

Objectives of this Include

Evaluate how well the quality system conforms to the stated standards

Determine whether the quality systems meets its objectives

Verify that the quality continues to meet customer requirements

Identify opportunities for improvement and communicate those opportunities to appropriate personnel

Assure that products are safe and fit for use

Determine that Standard Operating Procedures (SOPs) are followed at all times

Ensure that frontline workers are knowledgeable about the process they are monitoring or performing

There are 3 types of quality audits, depending on who requests the audit. The types are:

Internal Audits
Someone within the company requests the audit. Conducted by someone in the company who is not directly involved with the process

External Audits

Someone outside the company requests an external audit. It can be performed by an organization requesting the audit or a third party. Usually focused on processes of importance to the customer.

Third-Party Audits

Also known as registrar audits, they are usually associated with a physical inventory process. The company’s auditing firm may send a representative into the plant to review inventory procedures and verify the results of an inventory.

Occasionally warehouses and distribution centers will receive goods that are later recalled by the manufacturer or are asked to put the product on hold until they can have someone inspect it before it is sent out.

Defective Products may be labeled or tagged according to company policy, these tagged materials then need to be separated from materials that do meet quality standards. They may be placed in a labeled bin, container, or section.

It is very important that documentation is kept on any non-conforming or damaged product so that an audit trail can be followed in the event that this problem occurs in the future.