Specs and work quotas have a long history in manufacturing. While well-intentioned, we must stop and consider if there are negative effects of specs and work quotas.
Consider that a company that constantly seeks ways to improve its production process will be healthy. In the competitive market, if we wait for the customer to demand improved products we will fall behind. Aiming for spec limits or to achieve a quota is the same as setting a goal; once you reach it there is no reason to go further.
Let’s say your process produces 5% out of spec parts, and each part costs $10 to repair or rework. If monthly production is 1000 parts, the cost of rework is $500. You would probably let an engineer spend a few thousand dollars to improve this process.
Once the production falls within the spec limits, there is no need to spend money on improving the process under the traditional loss system. That is, until the competition starts selling parts with a tighter distribution. One reaction is narrowing the “internal” specs so you only ship out the parts that are equally good. However, this would increase reworks and associated costs.
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Now let’s look at a work quota system. Assume workers have a quota of 800 parts per shift. Suppose you dock them for each part short of the quota and give them a bonus for each part over the 800. The primary goal is to make 800+ parts, and all efforts are to increase production speed. Quality slows them down, so it falls by the wayside. In this situation, you’re not only encouraging poor quality work, you’re paying extra for it.
Any type of formal rules or requirements fosters the “how can I beat the system” type of thinking. Management tries to design rules that make personal goals mesh with company goals. This is fine until business conditions change and the rules no longer reflect the company’s needs. Raw material price and availability change, energy prices change, technology changes, customer demands change. As a result, strict systems of measuring work are less effective and often hinder productivity.
This content is adapted from Zontec’s The Book of Statistical Process Control. You can download a free copy here.