Outsourcing and Quality

Photo: W. J. Latzko, Ph.D.
W. J. Latzko, Ph.D.
The recent recalls of products made in China underlines the need for an active program to assure the salability of goods and services when outsourcing. The only reason a company has to outsource the production of items, or the operation of a call center, or the production of a computer program is to reduce costs. Everyone knows that reduced costs increase profits. Or do they?

When outsourcing, one must not forget that the customer is interested in value. Value includes the price and the quality of the product or service. A product or service for which one has paid good money must be able to deliver what the supplier promised. Unfortunately, some use outsourcing to reduce costs without examining whether the quality is the same as that resulting from company employees.

Is the outsourcing supplier consistently delivering useable output that will delight the customer? Note the word “consistently.” The output of a supplier whether foreign or domestic is a process. Processes have variation inherent in their application. If this variation is within supportable limits the process is delivering the desired quality. If the outsourcing supplier delivers quality output at one time and not at others, costs increase. Just ask the folks at Mattel. Their China factories produced defective toys, causing expensive recalls. Not only did it cost out-of-pocket money but reputation as well. In an effort to restore their damaged good name, Matell’s Chairman and CEO has a message on the Internet (go to http://www.mattel.com/safety/us/) trying to restore consumer confidence—read not lose sales.

Unfortunately, many companies that outsource their products and services rely on inspection to maintain quality. In our profession, we know that reliance on inspection without process controls is not 100% effective and, therefore, not safe. Companies that outsource their work, would do well to employ professional people, who understand the issues of quality, and act on their advice. It is cheap insurance. Just ask Mattel.

Chair’s Message – Fall 2007

photo: Joe Paperman
Joe Paperman
On behalf of the officers and executive committee, I am delighted to welcome you to our active, vibrant community. I encourage you to explore all that we have to offer and see what makes the NY/NJ Metropolitan Section so special.

Please continue to visit our web site for future activities and to see the past activities our members, friends, and family have enjoyed.

I hope your experience with the NY/NJ Metropolitan Section will be challenging, enjoyable, and rewarding.

Again, welcome,

Joe Paperman
Chair,
NY/NJ Metropolitan Section ASQ

:chair@metro-asq.org

First Annual Walter Young Scholarship is Awarded to Supriya Mishra

The NY/NJ Metropolitan Section is extremely proud to announce a winner for its first Walter Young Scholarship Award. Miss Supriya Mishra, of Ossining High School has been selected as the 2007 for an award of $4,000. This year’s award ceremony was held at the spectacular Rainbow Room after a wonderful tour of NBC studios.

Photo: Supriya Mishra receives scholarship award
Supriya Mishra receives the 1st annual Walter Young Scholarship

The pictures shows left to right Suoriya Misgra, Andy Frohn (Scholarship Chair), satish Laroia (Awards Chair) and Walter Young.

The competition for this year’s award was tough but Mishra stood out, with an almost perfect GPA, extensive community involvement and impressive contributions in the field of medical research. She also participates in the High School Track Team, Marching Band and Tutoring Program. She has somehow also discovered an eighth day of the week to fit all those accomplishments in.

We wish her luck in all her future endeavors and also to next year’s competitors for the award. Go to the Scholarship application link for requirement information and program details.

Calendar of Events July 2007 thru June 2008

TIME

DATE

TOPIC

LOCATION

5:30pm-7: 30pm

8/10/07

Executive Committee Meeting

Spanish Tavern, Nwk

5:30pm-6: 30pm
6:30pm-8: 00pm

9/11/07

Executive Committee Meeting
 Membership Meeting

Mustang Harry’s

All Day

9/ 24 /07

Symposium on Deming’s Analytical Papers

Fordham University

All Day

9/29/07

“Golf Outing”  NY/NJ Metro Members Only

Meadows Golf Course

All Day

10/05/07

59th Annual Ellis Ott Quality Conference

Rutgers University

5:30pm-6: 30pm
6:30pm-8: 00pm

10/09/07

Executive Committee Meeting
 Membership Meeting

Spanish Tavern, Nwk

8:00am-1:00pm

10/22/07

Certification Exam
(CBA ,CHA, CMQ/OE, CMI, CQT ,CRE, SSBB, )

Fordham University

5:30pm-6: 30pm
6:30pm-8: 00pm

11/13/07

Executive Committee Meeting
Membership Meeting

The Brass Rail in Hoboken

8:00am-1:00pm

12/01/07

Certification Exam
CBA,CMQ/OE,CQI,CQT,SSBB,CHA, CRE

Fordham University

All Week

12/03-07/07

Deming Conference on Applied Statistics -Satish Laroia Lead

Tropicana Hotel

5:30pm-6: 30pm
6:30pm-8: 00pm

1/08/08

Executive Committee Meeting
 Membership Meeting

Spanish Tavern, Nwk

12:30 -3:30pm

02/02/08

New York Transit Museum  Guided Tour – Joe B. and Eric Lead

NY Transit Museum

6:00pm-9: 30pm

2/15/08

General Section Meeting and Spouse Night -“Wine Tasting”

Pasanella & Sons. 

8:00am-1:00pm

3/01/08

Certification Exam
CBA,CMQ/OE,CQI,CQT,SSBB,CHA, CRE

Fordham University

5:30pm-6: 30pm
6:30pm-8: 00pm

3/11/08

Executive Committee Meeting
 Membership Meeting

Seabra’s Rodizio,

6:00pm-8: 30pm

3/14/08

NJ Pharmaceutical Dinner Meeting

Spanish Tavern, Mountainside

5:30pm-6: 30pm
6:30pm-8: 00pm

4/08/08

Executive Committee Meeting
 Membership Meeting

Mustang Harry’s

5:30pm-6: 30pm
6:30pm-8: 00pm

5/13/08

Executive Committee Meeting
 Membership Meeting

Spanish Tavern, Nwk

All Week

5/05-5/07/08

ASQ   Annual World Conference on Quality and Improvement.  

Houston, Texas

8:00am-1:00pm

6/1/08

Certification Exam   
(CCT,CQA,CQE,CQIA,CQPA,SSGB, CSQE)

Fordham University

5:00pm-7: 30pm

6/10/08

Executive Committee Meeting
 Membership Meeting

Spanish Tavern, Nwk

Continue reading Calendar of Events July 2007 thru June 2008

Blame Quality Control

The situation

Photo: W. J. Latzko, Ph.D.
W. J. Latzko, Ph.D.
Recently the Wall Street Journal reported on an error that appears to have occurred in the Philadelphia Mint’s production of the new dollar coin. Of the 300 million coins produced by the mints, an estimated 50,000 coins did not have the edge-incised inscription, “In God We Trust”, “E Pluribus Unum”, the year and the mintmark.

“We take this matter seriously. We also consider quality control a high priority. The agency is looking into the matter to determine a possible cause in the manufacturing process”, was a statement from the mint. The Wall Street Journal carried this further by interviewing Mr. Ron Guth, president of Professional Coin Grading Service. Mr. Guth’s opinion was quoted in the Wall Street Journal that, “it appeared from the roughly 50 smooth-edged dollars he has authenticated that the problem had to do with quality control rather than mechanical error.

In my opinion, both Mr. Guth and the Wall Street Journal do not understand the function of quality control. They are falling into a common misconception that when a mistake occurs that it is the fault of the people known as “quality control”.

It is true that some companies call the production functions of checking work—and perhaps correcting it—”Quality Control”. That is NOT quality control in the technical sense. That is a production task called inspection or auditing. There are two issues with this method of assuring quality: (1) it is not failsafe since the auditors (appraisers) miss some bad work and (2) this guarantees that the escape rate of errors remains unchanged. Let us examine these two issues.

Finding all the defects (some call this a non-conformance).

There are two types of inspection: independent and dependent.

In independent inspection, one replicates the work and one compares the two outcomes. For example, many web sites require that you initially enter a password and they require that you enter it a second time. If the two entries agree, the system records the password. If they do not agree, the program generates an error message. Although safer than dependent inspection, in case of disagreement, one knows not which is correct and which is in error.

Dependent inspection requires a second look at the completed work. This is more difficult. By way of illustration take 30 seconds and count the letter S that appears in the following sentence: SHE SELLS SEASHELLS BY THE SEASHORE. It takes a lot to get the right number the first time. Did you see two, three or more? The correct answer is that eight of the letters appear in the sentence.

Dependent inspection is rarely 100% accurate in finding the non-conformance that exists in a mass of work. A more likely number is 80% non-conformances found. Inspection at the mint is of necessity dependent. Could a batch of coins been missed for the second process of inscribing the rim? Certainly, inspectors could miss such an event. Do not blame them. Blame the process that operated with inefficient controls.

The escape rate of errors

If inspection cannot guarantee 100% error free output, what is one to do? The answer lies in working on the process to make it error free. This requires management action and measurement. The measurement tool is the control chart invented by Dr. Walter Shewhart in the 1920’s. The word control was an unfortunate choice on the part of Dr. Shewhart since it implies a police activity. In fact, what he meant by the word was the ability to predict that a stable process will continue at its current level of quality as long as the process remains unchanged.

The finding and removing errors does not improve the process. Dr. W. Edwards Deming used the analogy of a fire. “If there is a fire (errors) in the building (process)”, he used to say, “and you put it out you have not improved the building.” (The writer inserted the parentheses.) Of course, one wants to save a building. It is far more economical to avoid the fire in the first place.

Inspection not only is expensive and less than 100% efficient, it lulls management into a false sense of security. True quality control uses failsafe processes and monitors these for conformance with a control chart.

If a problem happens, don’t blame quality control, blame the people in charge of the process who allowed it to happen, management. Are you listening Wall Street Journal?