QUAL71004 Quality Management & Lean Techniques Case Study Assignment

Case Study Assignment

The case study (page 2) documents the results from interviews with the management and staff and the data collected with regard to the current situation at QBC.

1. (a) Comment on the attitudes held in the firm and how they can be holding the company back. (1 page)
   (b) Generate a Cost of Quality Report for the Quality Briefcase Company (QBC) from the information given in the case study using Excel. You will have to read the case study carefully to extract the data. State all assumptions made. Please be aware that some data included in the case study may not be relevant to the development of a Cost of Quality Report. You should complete the report on Excel and include basic formulae and comments.
   (c) Develop a quality improvement plan for the company based on a Pareto analysis of the Quality Cost Report. (1-2 pages)

2. Research a case study concerned with quality cost reporting in an industry/sector you are familiar with. Do a Google search or you can access the MTU Library through Canvas. Do a summary of one case study of your choice relating it back to the QBC company. (1-2 pages).

Please state the full reference for the paper in the heading.

Case Study – Quality Briefcase Company

The Quality Briefcase Company is an international company producing briefcases and luggage aimed at the high-end market. Sales are €9 million per annum. Average sales price of case is €150.00

Don Wilton – President

• Profit is only one percent of sales.
• Things are falling apart along with the cases.
• Returns are climbing.
• Field service staff is growing.
• The supplier didn’t heat treat the latches and they are brittle.
  We are losing our quality image.

There are problems from recalls – A batch of 1000 cases had to be recalled for destruction. Returns take 30 minutes each to take apart and put back together. We have had around 2000 returns this year. I think that its up 10% from last year. We had to sell the wholesalers replacements at half cost to keep them sweet.

I blame the Quality manager. Henry hasn’t a clue. He doesn’t communicate with anyone.

Those field service guys should be sacked.

We are owed €200000 -overdue accounts- this costs us 16% internally. We have hired a debt collection agency which charges us 30% on each account collected.

Mary Pond- New Product Development

• Should be working on new products but we are bogged down in quality problems of existing products
• Big problem is quality
• Used to be able to deal with everyone, now have to write it down.
• It is hard to tell someone how good something has to be.
• Negotiate yields with our internal supplier.
• Short of development money.
• 1 of my development engineers is solely involved trying to solve problems. I have 3 product engineers altogether.

Susan Allerton – Planning

• We plan manufacturing resources, schedules and so on. There are 4 of us. We use SAP. The schedules are constantly undermined by quality issues. It’s going backwards all the time.
  Hard to find an up to date plan using 2 people to continually update.
• Don’t know what to put in the new quality section.
• Nobody trained me on Quality costing. What’s that all about anyway? Surely that’s the quality manager’s job. No one talks to anyone around here.

Bill Downs – Manufacturing

• All I ever hear about is quality problems.
• Our cases cost €50 to make including materials. There is a 20% profit margin.
• 15% of all our staff are in rework, i.e., 3 people permanently working on rework
• To fix recalls we hire temporary staff at €10 per hour
• We get back 20 cases a day, about half of them are scrapped out. Each case is costing around €10 postage and packing each way to and from the customer. We pay for it. I don’t think it’s even worth paying for cases to be returned.
• Matching up the leather is the biggest problem.
  Brittleness and plating are smaller problems.
• Structural integrity of the case is down to the quality of the wood we use.

Henry Russian – Quality and Devlin from Finance

• The Cost of Quality is 4.4% of sales.
• We have 40 quality personnel altogether including 30 Inspectors.
  The rest are quality engineers (5) and quality planners (3), 2 supervisors and 1 manager
• No one listens to us. I think all our problems go back to poor design. Those designers haven’t a clue what’s going on on the ground level here. They are in their plush offices far removed from the factory floor. I am looking for a new job (hush hush).

Stephen Templeton – Field Service

• Hardly any new problems, the same things are still going wrong
• We have 10 staff in the field visiting customers keeping cases operating. I suppose they are fed up dealing with complaints all the time.
• We get back broken, crushed, twisted, gouged cases – all within the warranty period of 12 months.
• I am working on a form to improve the reporting of defects from the field service engineers.
  The information is just not getting through.

Joanie Allison – leather matcher

• I need new tooling for my lines.
• What do they expect me to do about it?

Howard – Purchasing

• Nobody writes anything down so you can understand it.
• We haven’t had a single thing rejected back to the supplier.

John – Marketing

• We make the same mistakes over and over.
• Field service people take the customers side and just fight fires.
• The manufacturing people here tell me they are working on it.
• 45% of orders have to be rewritten, which ties up at half a salespersons time at any one time, one third of the sales people are new hires with new hires undergoing a 3 week sales training course before being assigned a new territory. We have 6 sales people in total (technically) when they are not leaving us!

Additional information:

40 hour working week
Hourly rate for operators is €10
Interest rate 10%
Overhead rate 250%
Salesmen -€40,000 pa
Planners- 20,000 pa
Field Service engineers – €40,000 pa
Quality Planners -€25,000 pa
Quality Engineers -€40,000 pa
Inspectors -€19,000 pa
Development engineers €40,000 pa
Supervisor – €15,000 pa.

Further Instructions

1. References/Citation and Layout (5 marks)
2. The word count should be between 2000 and 2500 words – excluding cover page and list of references.
3. Deadline is up on Canvas, assignment to be submitted through Canvas Turnitin which is in the Assignments folder. The assignment will be reviewed through Turnitin.

Please cut and paste the following marking scheme to the cover sheet of the report: