International Journal of Engineering Studies ISSN 0975- 6469 Volume 1, Number 3 (2009), pp. 149–160 © Research India Publications http://www.ripublication.com/ijes.htm Optimization of Cost by Using 7 QC Tools Nitin K. Mandavgade¹ and Santosh. B. Jaju² Department of Mechanical Engineering, G. H. Raisoni College of Engineering, CRPF Gate No.3, Digdoh Hills, Hingna Road, Nagpur 440016 (India). 1 E-mail: nitin_man@rediffmail.com and 2 E-mail: sbjaju@gmail.com Abstract Quality plays very important role in today’s highly competitive industrial environment. Quality leads to an improvement in productivity. By improving quality, the method of optimization reduces process operational costs and variation in product. Quality, productivity & cost of operation relatively depended to each other. The main goals of quality management are customer satisfaction by delivery of defect free products at quality cost. Controlled processes are the most important ways to reach this goal. The primary objective of quality control in any organization is to reduce the costs of its operation. If control efforts do not lead to any saving in costs or cost reduction then, in principle there is no need for quality control. However, in most control activities, cost saving are real and they remain a principle objective of quality control for most organizations. Keywords: Quality, quality control, cost optimization, inspection. Introduction to quality control Many companies in the world are gradually promoting quality as the central customer value and regard it as a key concept of company strategy in order to achieve the competitive edge. Quality improvement decisions are viewed as the catalyst for substantial technological developments being made in the manufacturing sector. Quality Costs are a measure of the costs specifically associated with the achievement or non-achievement of product or service quality –including all product or service requirements established by the company and its contract with customers and society. Measuring and reporting the quality cost is the first step in a quality management program. Quality costs allow us to identify the soft targets to which improvement efforts can be applied. 150 Nitin K. Mandavgade and Santosh. B. Jaju Three types of cost are generally associated with quality control: 1. Assignment costs. 2. Prevention costs. 3. Non-conformance costs. Assignment costs are the cost which an organization incurs in measuring quality characteristics to ensure that they conform to quality standards. This cost typically includes costs of inspection including labour , materials, and cost of approval or certification when organizations meet quality standards and so on. Prevention costs involve cost when organizations undertake measures to prevent poor quality of products or performance. Example of prevention cost would include the costs associated with quality planning, design and development of quality measurement instruments, quality training and so on. Finally non conformance costs also called failure costs occur when an organization fails to meet quality standards. This may be due to poor quality of labour, materials and overhead, i.e. expenses accumulated. Seven Quality Control Tools The various tools are used to check the quality of the product to define weather the product is a quality one or not and to take the further necessary actions to bring the process under control. • Check sheet • Pareto chart • Flow chart • Cause and effect diagram • Histogram • Scatter diagram • Control chart Check sheet The function of a check sheet is to present information in an efficient, graphical format. This may be accomplished with a simple listing of items. However, the utility of the check sheet may be significantly enhanced in some instances by incorporating a depiction of the system under analysis into the form. Pareto Chart Pareto charts are extremely useful because they can be used to identify those factors that have the greatest cumulative effect on the system and thus screen out the less significant factors in an analysis. Ideally, this allows the user to focus attention on a few important factors in a process. Optimization of Cost by Using 7 QC Tools 151 Figure 1: Pareto Chart. Flowchart Flowcharts are pictorial representations of a process. By breaking the process down into its constituent steps, flowcharts can be useful in identifying where errors are likely to be found in the system. In quality improvement work, flowcharts are particularly useful for displaying how a process currently functions or could ideally function. Figure 2: Flowchart. 152 Nitin K. Mandavgade and Santosh. B. Jaju Cause and Effect Diagram This diagram, also called an Ishikawa diagram (or fish bone diagram) is used to associate multiple possible causes with a single effect. Thus, given a particular effect, the diagram is constructed to identify and organize possible causes for it. Figure 3: Cause and effect Diagram. Causes in a cause & effect diagram are frequently arranged into four major categories. While these categories can be anything, given below: • Manpower, methods, materials, and machinery (recommended for manufacturing) • Equipment, policies, procedures, and people (recommended for administration and service). Histogram A histogram is a specialized type of bar chart. Individual data points are grouped together in classes, so that you can get an idea of how frequently data in each class occur in the data set. Histograms provide a simple, graphical view of accumulated data. Optimization of Cost by Using 7 QC Tools 153 Figure 4: Histogram. Scatter Diagram Scatter diagrams are graphical tools that attempt to depict the influence that one variable has on another. A common diagram of this type usually displays points representing the observed value of one variable corresponding to the value of another variable. Figure 5: Scatter Diagram. Control Chart The control chart is the fundamental tool of statistical process control as it indicates the range of variability that is built into a system (known as common cause variation). Thus, it helps determine whether or not a process is operating 154 Nitin K. Mandavgade and Santosh. B. Jaju consistently or if a special cause has occurred to change the process mean or variance. Problem: Optimization of cost by using 7 quality control tools. Step1:-Introduction to the problem In operation 67 of control valve cylinder head (as shown in Figure 6) of the diameter 15.840/15.862 mm was getting oversize. Figure 6: Control Valve Cylinder Head. Background of problem selection:- This problem was selected because in-house rejection was alarming and also product returned from the line at vendor (automotive industry in central India) was repeated time to time (refer figure 7 & 8). Total rejections in house are 10 units and product returned is 16 units. Figure 7: Line rejection. Critical area Line Rejection Trend Op67 Dia 15.840/15.862mm in CVCH 3 2 5 33 00000000 0 2 4 Months No of parts rejected month wise Nos 3253300000000 JULY AUG SEP OCT NOV DEC JAN Optimization of Cost by Using 7 QC Tools 155 Figure 8: In House rejections. Problem Selected:-Elimination of rejection due to diameter 15.840/15.862 mm which was getting oversize. Target: - Zero defects in diameter 15.840/15.862 mm of Operation 67. Step 2:- Observation Information regarding process and operation are observed. (1) Operation done on vertical milling machine. (2) All the tools are operated like 14.68 mm drill hole, mill to correct the axis & then reamer. (3) Rigid clamping fixture. (4) This is operated after the operation 50 done. In solid stage without putting on any machine. (5) Tool change frequency decided for every operation as discussed. (6) Coolant used for reaming is kerosene or solvent 2445. (7) Variable type gauging i.e. Air plug Gauge is used for in-process inspection of this reamed bore with 1 in 5 inspection frequency. Step 3:- Identification of Probable Causes:- Probable causes are identified and represented in the form of cause and effect diagram as shown in figure 9. In-House Rejection Trend Op67 Dia 15.840/15.862mm in CVCH 11 2 33 00 0 2 4 Months No of parts rejected month wise Nos 1123300 JULY AUG SEP OCT NOV DEC JAN 156 Nitin K. Mandavgade and Santosh. B. Jaju Figure 9: Identification of probable causes. Step 4: Brainstorming The most probable causes (Identified by cause and effect diagram and Brainstorming) Cause1: Insufficient knowledge of operator. Cause2: Hardness inconsistency in raw material. Cause3: Intermittent supply of coolant. Cause4: Tool run out not checked before putting on the machine & after the part detected oversize. Analysis done to test the validity of probable causes Cause1:Test1: Insufficient Knowledge of operator. Observation:-After interviewing the machine operator it was confirmed that they are having adequate operating and inspection knowledge. Also, there was standard operating procedure available near the machine which were regularly followed Result: In valid cause for the problem. Cause 2: Test 1: hardness less in rejected components Specification 179 to 229 BHN. Actual observation; 189,198,182,192,194. Also, hardness of 5 ok components were checked and it was observed that hardness was with in specification. Actual observation: 190,195,192,185,198. Result: In valid cause for the problem. Cause 3: Test 1: Intermittent supply of coolant Observation: To get the proper finish kerosene or solvent 2445 is applied continuously to the reamer to avoid the chip rubbing & proper cutting. Optimization of Cost by Using 7 QC Tools 157 Result: Invalid caused for the problem Since all most probable causes were found invalid, focus was shifted to other causes. Cause 4: Tool run out not checked before putting the tool on the machine. Observation: to know the reason for rejection, the tool was checked for the run out but found with in 10 microns. Result: Invalid cause for the problem. Why the rejected parts were oversize in between? For this we have checked the run out of the tool when the part was rejected. After analyzing the problem after deep studies that the raw material is grey cast iron. For machining of cast iron does not need any coolant, it may be cut in dry condition. As in our case also, the operation for drilling and hole milling kept as in dry cutting condition. As the property of the cast iron is to produce dust with small flakes of chip, such dust get fly off along with current air by the fans put in the shop floor & get accumulated every where. In-due course of time this dust get accumulated on the BT 40 taper of the tool holder & causes to have run out in the tool. As the tool run out increase the bore to become oversize. Result: Valid cause for the problem. Step 5:- counter measure: Short term: • Instruction was given to all the operators & the officials about the valid cause of the size for getting over size. • Part checking frequency was changed from 1in 5 to 100% in process inspection. Long term: • All the taper of the tools & the spindle to be clean after every 12 hours. • Air connection was given through the spindle to blow off the dust in the spindle taper for accumulating it. Step 6:- Implementation of countermeasure: All the action are implemented at once. Step 7:- Standardization: Standard operating procedure for operation 67 update. Standard operating procedure for operation 67 was revised by putting these important points. Step 8:- Direct benefit: Cost saving as no internal rejection for the same reason. Result: After implementation no Problem was observed from the last 3 months. 158 Nitin K. Mandavgade and Santosh. B. Jaju Cost analysis Raw Material i.e. casting is given by automotive industry from Approved Vendor M/S CASPRO LTD, Kolhapur. Costs- • Raw material Cost : Rs.248/piece. • Machining Cost : Rs.200/piece. • Total costs : Rs.448 /Piece. Various consumables costs for Operation 67- Tooling costs Description- Sr. No. Tools Materials Cots in Rs Life in parts Costs 1 Combination drill HSS 1200 4000 0.3 2 Milling cutter Carbide 1750 6000 0.29 3 Drill dia 14.5 mm Solid carbide 8500 30,000 0.28 4 Hole mill Solid carbide 8500 30,000 0.28 5 Grooving HSS 650 1000 0.65 6 Reaming Carbide 1250 20,000 0.0625 Total tooling costs/ piece 1.86 Tool holder cost: Rs. 3000 3000*6 (for above six operation) = Rs. 18,000 1.5 lakh is the life of the tool holder so the cost of tool holder per piece is 18000/150000= Rs. 0.12 /piece. lubricant cost:- SAE20W40 IS USED. 5 LIT. Tank per shift. Rs125/lit. 5*125 = Rs625/shift. 90 Parts are produced in one shift. 652/90 = Rs6.94/piece. Coolant cost: - Kerosene is used as coolant in order to improve the surface finish & to avoid the corrosion. 5 lit require per shift. Rs35/lit 35*5=Rs175/shift. 90 Parts are produced in one shift. 175/90=Rs.0.50/piece Cotton waste: It is approximately Rs0.10/piece [...]... 0.0149 1 0.0362 INTERVAL CU FREQ 15.8066 15.81 47 0 0 0.000400 15.81 47 15.8228 0 0 15.8228 15.8309 0 0 15.8602 15.8309 15.8390 0 0 15.8426 15.8390 15.8 471 8 8 0.0314 15.8 471 15.8552 37 45 15.8552 15.8633 1 46 15.8633 15. 871 4 2 48 15. 871 4 15. 879 5 0 48 15. 879 5 15.8 876 2 50 15.8 876 15.89 57 0 50 15.89 57 15.9038 0 50 8 - CHART 0.0000 A V G 15.8514 0.0149 2 3 4 5 6 7 8 9 10 2 - CHART MINIMUM DECIMAL VALUE M4.. .Optimization of Cost by Using 7 QC Tools 159 Cleaning Agents: solvent 2445 is used as coolant 10 lit require per day Rs 65/lit, Rs 650 /day, 650/300= Rs.2.16 /piece Inspection cost 1 Gauging Cost: It is approximately Rs2/piece 2 Inspector Cost: The salary paid to the inspector is Rs.5000/month.He works for 26 days in one month So the money paid by the company for 1 day =... 0.0100 2 U.C.L ={ 8390 15.8 471 15.8552 15.8633 15. 871 4 15. 879 5 15.8 876 15.89 57 0.01 0.0010 3 0 0.0001 4 1 2 0 NOS FREQ 5 0.04 8309 15.8390 15.8 471 15.8552 15.8633 15. 871 4 15. 879 5 15.8 876 D4 3. 270 NO OF PARTS ABOVE U.T.L = 0.0401 15.865 15.8602 15.86019 15.86 15.855 15.8426 15.8426 15.85 0.0314 0.0314 15.845 0.0000 0.0000 15.84 15.8514 15.8514 15.835 0.0149 0.0149 15.83 A2 2.560 NO .OF NON CONFORMING PART... & cost of operation relatively depended to each other The main goals of quality management are customer satisfaction by delivery of defect free products at quality cost In operation 67 of control valve cylinder head (as shown in Figure 6) of the diameter 160 Nitin K Mandavgade and Santosh B Jaju 15.840/15.862 mm was getting oversize We have studied the problems and actually solved the problem by using. .. depression cost in 1 year Cost of machine is Rs18 lakh If we consider for 5 years 180000/5 = Rs3.6lakh 180000-36000=RS 144000 in 5 years For 1 year = 30,000/year For 1 month =30,000/12=Rs 2500/month For 1 day = 2500/26=Rs 96/day For 1 part = 96/ 270 parts in one day=Rs.0.35/piece Total Cost Associated In Operation 67 = All cost associated in tooling + all cost associated Inspection cost + machining cost +... Inspection cost + machining cost + Raw material cost Total cost= 0.3+0.29+0.28+0.28+0.65+0.0062+0.12+6.95+0.5+0.10+2.16+2.00+0.64 +1.49+0.35+248 = Rs.264.116 / piece in op 67 There are 3 to 4 Parts are rejected due to diameter 15.840/15.862mm over size in 1 month Costs saved per month = 264.116 *4 = Rs 1056.46 /month Cost saved per year = 1056.46*12 =Rs 12, 677 . 57/ year Conclusion Quality leads to an improvement... using seven quality control tools which result in good amount of saving in cost of product and overall reputation of the company get improved References [1] [2] Company manual Chaddha, R., 1999, “Quality costs and financial performance: A pilot study,” IE Journal, Vol XXVIII, No 5, pp19-25 Jaju, S.B., Shrivastava, R.L., and Lakhe, R.R., 2003, “Performance Analysis through quality costs: a case study,” Industrial... 1 day Cost for inspecting one piece = 192/300 = Rs0.64/piece Machining Cost Labour Cost The salary paid to the labour (machine operator) is Rs3500/month.He works for 26 days in one month So the money paid y the company for 1 day = 3500/26= Rs134/day.He produce a 90 parts in 1 day Cost for producing one piece = 134/90=Rs.1.49/piece Machine Depression Cost Generally there is 10-15% depression cost, But... June 2004, pp 15-20 Jaju, S B., Lakhe, R R and Bhagade, S S., 20 07, “Mathematical Interrelationships among Quality Cost Categories for a Manufacturing Sector” Industrial Engineering Journal, Vol XXXVI, No.3 March 20 07 pp 32-41 Juran J M., 1 974 , Quality Control Handbook, McGraw Hill, New York Roden, S., and Dale, B.G., 2001, “Quality costing in a small engineering company: Issues and difficulties,”... L.COUNT: 0.001 15.840/ 15.862 OP 67 MACHINE: LTC 20 INSTRUMENT: OPERATION: NO .OF DECIMALS: AGROFAB MACHINERIES ( I ) PVT.LTD W119/120 M.I.D.C HINGNA RIOAD NGP SUPPLIER 3 D.C NO QTY 1000.0000 ALL DIMENSIONS ARE IN INCHES / MM MM 1 2 3 4 5 6 7 8 15.851 15.853 15.852 15.848 15.852 15.865 15.842 15.849 15.849 15.852 15.860 15.852 15.880 15.842 15.848 15.851 2 1.128 1.880 3. 270 15.851 15.852 15.852 15.880 . Journal of Engineering Studies ISSN 0 975 - 6469 Volume 1, Number 3 (2009), pp. 149–160 © Research India Publications http://www.ripublication.com/ijes.htm Optimization of Cost by Using 7 QC Tools. factors in a process. Optimization of Cost by Using 7 QC Tools 151 Figure 1: Pareto Chart. Flowchart Flowcharts are pictorial representations of a process. By breaking the process. simple, graphical view of accumulated data. Optimization of Cost by Using 7 QC Tools 153 Figure 4: Histogram. Scatter Diagram Scatter diagrams are graphical tools that attempt to