國立中山大學 管理學院 國際高階經營碩士學程碩士在職專班 碩士論文
Impact of the Implementation of QS-9000 on Customer Satisfaction
in Taiwan’s Auto-parts Manufacturing Industry
探討臺灣汽車零件製造業實施 QS-9000 品保系統
與客戶滿意度之關係
研究生:楊森鴻 撰
指導教授:周泰華博士
中華民國 九十二年六月
中文致謝詞 i
中文致謝詞
隨著時間邁入 2003 年,我在國立中山大學國際高階經營碩士學程也將逐漸
進入終點。對我個人而言,離開學校已經超過 20 年了,如果中山沒有提供 IEMBA
這個學程,自己也不可能有這個機會再接觸到管理這方面的專業知識。我們生長
在這個劇變的時代。全球化,知識經濟等等理論不斷被提出,在在都推翻了以前
既有的概念,如果不求新知,很容易就被潮流淹沒。
本論文的完成,首先要感謝指導教授周泰華博士,他淵博的學識及耐心的指
導,尤其在關鍵時刻的引導,使得撰寫過程遇到瓶頸時,都能否極泰來。當然口
試委員李清潭博士,郭倉義博士的指導及高見,使得本篇論文也增色不少。
在論文訪談時,一些認識或不認識的朋友的大力協助,使得個案公司的資料
能順利取得,實在令我永生難忘。他們包括我在 IEMBA 2 同學敦揚科技趙處長瑞
君兄,金利公司總經理室特助楊日竹經理,瑞興發公司林焜瑞專員,繼茂公司品
保部陳志慶副理,他們的熱心協助實在令人難忘。
2002 年底正逢服務公司全力開發 253 Ministick 及推行 QS9000 品保系統認證
的緊要關頭,但我在臺灣博士電子公司品保處的部門秘書吳惠娟小姐,仍不厭其
煩替我整理圖表,中文報告的繕打等等額外的工作,對我完成碩士課程也發揮莫
大的助力,在此也一併致上十二萬分的謝意。
也要感謝內人林照娟女士,在這二年沒有個人時間也沒有家庭時間的充電學
習過程中,如果沒有她的諒解及全力照顧家庭,是不能使我順利完成學業。在人
生的道路上能有這一段再充電的生命歷程,實在是既豐富且又充滿無限的感恩,
讓人永遠的懷念。
最後要感謝中山管院副院長徐守德博士及全體授課的老師,和 IEMBA 2 的
全體同學,及我在博士電子公司品保處的蔡和良課長,如果沒有大家互相的扶
持,鼓勵和幫忙,這段路會走的更艱辛!謝謝你們!
臺灣博士電子公司品保處處長 楊森鴻 于西子灣 國立中山大學 2003 年 6 月
Acknowledgement ii
Acknowledgement
“Tempus Fugit”, the time is approaching fast that my graduate study,
International Executive MBA program at National Sun Yat-sen University will be coming to an end. I graduated from National Central University more than twenty years ago. If NSYSU had not provided this IEMBA program, I might not have had the opportunity to return to campus to further my studies in the management field. Over the past decade, globalization and economic knowledge concepts have been introduced to the industry, and past experiences and knowledge have fallen by the wayside. We live in a fast paced, fast changing, highly demanding and competitive global market environment. The train of economic change and knowledge is leaving the station, we better be on it or we will be left behind.
I would like to thank my advisor – Professor Tai-Hwa Chow for his patience and instruction for my thesis writing. His vast knowledge was a source of positive suggestions whenever I encountered a problem. My thanks also to Professor Lee, Chin-Tarn James and Professor Kuo, Tsuang Y. for their valuable contributions.
I also would like to thank my friends, Jeodie Chao - Marketing Director at Lite-On Automotive Corporation, Yang, Chu-Jih - Special assistant to GM at
Kenly Precision Industry Co., Ltd., Lin, Qen–Rei at Juei Hsing Hwa Industry
Co., Ltd. and Josef Chen - QA Deputy Manager at Geo Mao Rubber Industry
Co., Ltd. who graciously provided me with the information for this thesis when I conducted the case firms research.
In December 2002 my employer – CTS Components Taiwan dedicated themselves to two major projects: the 253 Minstick new product development
Acknowledgement iii and the QS-9000 certification project. Nevertheless, Joe Wu, my secretary, still managed to find the time to type the report, and draft all figures and charts.
Thank you for your assistance.
In the past two years, I spent all my weekends on campus. My dear wife
Chao-Chuan, added the extra burden to her shoulders, continued her care for the family and supported me in my further studies. To her I owe a debt of gratitude I cannot express in words. Life is short, but these past two years have re-charged and invigorated my career, and life on campus has given me many a good memory.
Finally, I would like to thank David S. Shyu - Vice dean of the College of
Management in NSYSU, all my IEMBA 2 classmates, and H. L. Tsai –
Supervisor at CTS Components Taiwan QA department. I would not have been so successful in reaching my goal were it not for their support. Thank you very much!
Yang, Shen-Hong (Austin), at NSYSU June 2003
Abstract iv
Impact of the Implementation of QS-9000 on Customer Satisfaction in Taiwan’s Auto-parts Manufacturing Industry
Student: Yang, Shen-Hong * Advisor: Prof. Tai-Hwa Chow, PhD
International Executive MBA, College of Management
National Sun Yat -Sen University, Kaohsiung, Taiwan, ROC
*Corresponding author:
Address: No 355 Lin Shen Road, Fang Shan City, Kaohsiung, Taiwan 830,
ROC
Tel: ..+886 -77252681, Fax: ..+886 -77138105; [email protected]
ABSTRACT
Taiwan’s auto industry began with Taiwan Yulon Motor Company in
1957, as well as with the development of the related auto parts and components industry. After more than four decades, most companies have developed flexible production skills that allow them to produce a comprehensive assortment of auto parts and components in small quantities that meet international quality standards.
The new wave of electronics manufacturing companies have devoted a large percentage of their resources to automotive products, either at their home base, or at their manufacturing facilities abroad. The QS-9000 Quality management system is a fundamental requirement for automotive parts suppliers. The main purpose of this thesis is to research the relationship between the implementation of QS-9000 and customer satisfaction. This
Abstract v study is focused on this inter-action from three perspectives: formulation, implementation and customer satisfaction. Key success factors such as; steering team, organization, target, criteria, documentation, training, standardization and auditing have been defined and studied for their effects on the QS-9000 management system implementation.
Developing and implementation quality system utilizing the criteria given in the ISO 9000 or QS-9000 quality system standard can achieve satisfying customer requirements. The successful implementation of a quality management system can contribute to the overall business efficiency of an organization, such as administration, accounting, engineering, marketing, maintenance and after-sales service.
The company shall develop the internal and external customer satisfaction indices to check the customer expectation on their service and product. Quality cost are the costs of putting thing right. The monitor for cost of quality can reduce the non-productivity hours and material scrap then achieves the continual improvement management philosophy.
In addition, the surveyed case firms disclosed that the QS-9000 standards indeed helped their organization to upgrade the efficiency and service quality of their operation and as such enhance their company’s image as well as customer satisfaction.
Key words: ISO 9000, QS-9000, TS 16949, formulation, key success factors,
customer satisfaction.
Table of Contents vi
Table of Contents
Chapter 1. Introduction ...... 1
1.1 Background ...... 1
1.1.1 The Taiwan Auto-parts Industry...... 2
1.2 The Research Purpose...... 4
1.3 The Research Process ...... 6
Chapter 2. Literature Review...... 8
2.1 ISO 9000 Quality Management System Standards ...... 8
2.1.1 Characteristics of ISO 9000 ...... 8
2.1.2 ISO 9000 Related Literature ...... 11
2.2 QS-9000 Quality Management System Standards...... 14
2.2.1 QS-9000 Related Literature ...... 15
2.2.2 Continual Improvement of the Quality Management System18
2.3 Customer Satisfaction ...... 23
2.3.1 Satisfaction Theory ...... 23
2.3.2 Terry G. Vavra Satisfaction Theory...... 28
2.3.3 The Manufacturing Industry Customer Satisfaction ...... 33
2.3.4 Summary of the Literature Review...... 37
Chapter 3. Research Design ...... 43
3.1 The Research Method...... 43
3.2 The Research Framework ...... 43
3.3 The Operational Definition for Key Success Factors ...... 45
3.4 Questionnaire Design...... 56
3.4.1 Contents of the Questionnaire ...... 57
Chapter 4. Case Firms Analysis ...... 59
Table of Contents vii
4.1 CTS Components Taiwan...... 59
4.2 Ge Mao Rubber Industry Co., Ltd...... 61
4.3 Juei Hsing Hwa Industry Co., Ltd...... 63
4.4 Kenly Precision Industry Co., Ltd...... 67
4.5 Yuan Cherng Co., Ltd...... 70
4.6 Lite-On Automotive Corporation ...... 72
4.7 The Summary of the Case Firms Analysis...... 75
Chapter 5. Data Analysis ...... 78
5.1 The Questionnaire Response...... 78
5.2 Overall Analysis for the Questionnaire ...... 78
5.2.1 Analysis for the Six Case Firms ...... 79
5.2.2 Group Analysis for the Questionnaire ...... 97
5.3 Impact Factors for QS-9000 Implementation...... 105
5.4 QS-9000 Implementation vs. Customer Satisfaction ...... 107
Chapter 6. Conclusions and Suggestion ...... 108
6.1 Conclusion...... 108
6.1.1 General Overview ...... 108
6.1.2 Research Findings ...... 109
6.2 Managerial Implication...... 112
6.3 Research Limitation...... 113
6.4 Further Research and Suggestions...... 114
References ...... 116
Appendix 1 ISO9000/QS-9000 Elements ...... 121
Appendix 2 English Questionnaire...... 140
Appendix 3 Chinese Questionnaire ...... 145
List of Figure viii
List of Figure
Figure 1-1 Research Process...... 7
Figure 2-1 Structure of ISO 9000 Series Standards...... 9
Figure 2-2 Quality Management Process Model...... 19
Figure 2-3 The Typical Structure for Quality System
Documentation Progression ...... 20
Figure 2-4 The Structure of the QS-9000 Quality System and Its Six Sub-systems ...... 22
Figure 2-5 QS-9000 Registration Process...... 27
Figure 2-6 A Model of Customer Satisfaction ...... 29
Figure 2-7 Customer Complaint Trend Chart...... 36
Figure 3-1 Research Framework...... 45
Figure 3-2 Organization Chart ...... 48
Figure 3-3 Tiers of the Targets...... 50
Figure 3-4 Japanese Job Concepts...... 54
Figure 5-1 Time Duration for the QS-9000 Project ...... 79
Figure 5-2 Steering Team Members ...... 80
Figure 5-3 Chairman of the Steering Team...... 80
Figure 5-4 Organization Change at the QS-9000 Formulation Stage ...... 81
Figure 5-5 Reporting System...... 81
Figure 5-6 Department Target...... 82
Figure 5-7 QS Information Disclosure Channel ...... 82
Figure 5-8 Previous Quality Activity...... 83
Figure 5-9 System Evaluation Frequencies at Formulation Stage...... 83
Figure 5-10 Authority for Quality Manual Approval ...... 84
List of Figure ix
Figure 5-11 Authority for Standard Operation Procedure Approval ...... 84
Figure 5-12 Execution of the Internal Audit...... 84
Figure 5-13 Internal Audit Frequency ...... 85
Figure 5-14 Training Course Material ...... 85
Figure 5-15 Understanding of the QS-9000 Documentation...... 86
Figure 5-16 Training ...... 87
Figure 5-17 Standardization Implementation Status ...... 88
Figure 5-18 Resistance to the QS-9000 System ...... 88
Figure 5-19 Steering Team ...... 89
Figure 5-20 Internal Audit ...... 90
Figure 5-21 Yield Improvement...... 90
Figure 5-22 Scrap Cost Reduction ...... 91
Figure 5-23 MRB Items Reduction ...... 91
Figure 5-24 Customer Complaints...... 92
Figure 5-25 Field Returns...... 92
Figure 5-26 On -Time Delivery Performance ...... 93
Figure 5-27 Customer Quality Rating ...... 93
Figure 5-28 Reduction of Premium Freight Cost ...... 94
Figure 5-29 Financial Performance ...... 94
Figure 5-30 Motivation for the QS-9000 Project ...... 95
Figure 5-31 Resistance to the QS Implementation ...... 96
Figure 5-32 Respondent Position ...... 96
Figure 5-33 Age of Respondent...... 97
Figure 5-34 Understanding the QS-9000 Documentation...... 98
Figure 5-35 Training ...... 98
List of Figure x
Figure 5-36 Standardization Implementation Status ...... 99
Figure 5-37 Resistance to the QS-9000 System ...... 99
Figure 5-38 Steering Team ...... 100
Figure 5-39 Internal Audit ...... 100
Figure 5-40 Product Yield Improvement ...... 101
Figure 5-41 Scrap Cost Reduction ...... 101
Figure 5-42 MRB Items Reduction ...... 102
Figure 5-43 Customer Complaint Reduction ...... 102
Figure 5-44 Field Returns Reduction...... 103
Figure 5-45 On-Time Delivery Performance ...... 103
Figure 5-46 Increasing Customer Quality Rating...... 104
Figure 5-47 Reduction of Premium Freight Cost ...... 104
Figure 5-48 Financial Performance ...... 105
List of Table xi
List of Table Table 2.1 Top 10 QS-9000 Certification Registrars...... 14
Table 2.2 Satisfaction Rating by Age and Gender ...... 30
Table 2.3 Satisfaction Rating by Sector and Socio-economic Status...... 31
Table 2.4 Supplier Scorecard ...... 40
Table 2.5 MRB Slip ...... 41
Table 2.6 8D Report...... 42
Table 4.1 Comparison List for Case Firms...... 77
Table 5.1 Delivery and Response of Mail Survey ...... 78
Table 5.2 QS-9000 Registration Date ...... 79
Table 6.1 Formulation Stage...... 110
Table 6.2 Outline of the QS-9000 Implementation...... 111
Table 6.3 Customer Satisfaction...... 111
Chapter 1 1
Chapter 1 Introduction
1.1 Background
What are the required conditions for an organization that intends, not only to survive in this fast changing, highly demanding and competitive global market environment, but also to become the leader of their industry?
The answer is that they must utilize their resources to construct a competitive advantage. A competitive advantage means that an organization provides a more efficient, better quality and better performing product or service compared with their competitors. Efficiency, quality, innovation and customer satisfaction are the four contributors to construct a company’s competitive advantage (Jones, Gareth R., Jennifer M. George, and Charles
W. L. Hill 2002). Before a quality product or service can be produced by an organization, it requires a quality management system to lead a continuous improvement program, and eventually to the company’s worldwide success.
In 1959 the American Army issued their first edition of MIL – Q9858 - standard for the military Industry. This standard had now been updated to
MIL – Q9858 A. The International Organization for Standardization (ISO) is based on the British Standard BS 5750 and MIL – Q9858 A and developed the ISO 9000 quality management system in 1987. Over the past two decades, ISO 9000 quality system has proven to be a good tool to introduce quality control and management in the industry. The ISO 9001/ ISO 9002 registered companies numbered 20,000 in Taiwan in 2001 (Lin, Ching -Te
2001).
Afterwards some industries started to develop their own quality system to give them a competitive edge in the market place. The QS-9000
Chapter 1 2 standard is a typical example. QS-9000 is the shorthand name for "Quality
System Requirements QS-9000." It is the common supplier quality standard for Daimler Chrysler Corporation, Ford Motor Company, and General Motors
Corporation. QS-9000 is based on the 1994 edition of ISO 9001. The basic
20 elements of which form their section I. But, it also contains additional requirements that are particular to the automotive industry, which form section II. The key players in the development of QS-9000 include: (1)
Supplier Quality Requirement Task Force, (2) International Automotive
Sector Group (IASG), (3) Automotive Industry Action Group (AIAG) and (4)
ASQ Automotive Division. QS-9000 applies to the suppliers of production materials, production and service parts, heat treatment, painting, plating and other finishing services.
The three big auto-makers spent about six years to merge their separate quality system standards; Chrysler – Suppliers Quality Assurance
Manual; Ford – Q-101 Quality System Standard; GM - Target for Excellence.
They issued their first edition of supplier quality system requirements in
September 1994. The second edition and third editions were issued on
February 1995 and March 1998 respectively. They also requested their suppliers to implement this system starting January 01, 1999.
1.1.1 The Taiwan Auto-parts Industry
Auto parts and components can be divided into those that are supplied directly to auto assembling companies by OEM factories and those that are supplied to the global after-service market. Product lines are extensive, and many different industries, including the metal, rubber, plastics,
Chapter 1 3 electronics, electrical machinery, glass, and paint industries, are involved.
Taiwan’s auto industry began with Taiwan Yulon Motor Company in
1957, as well as with the development of the related auto parts and components industry. After more than four decades, most companies have developed flexible production skills that allow them to produce a comprehensive assortment of auto parts and components in small quantities that meet international quality standards. This is a result of their reliance on a highly efficient central-satellite system that emerged over the past decade.
Typically, individual auto parts manufacturers specialize in the production of specific parts and components for later assembly in a central factory. This system permits a tremendous degree of flexibility in production and management strategies.
At present, there are about 2,000 auto parts makers on the island.
About 400 of these operations focus on the OEM market, while the rest concentrate more on the after-sales market. The actual capital of the industry currently exceeds US$5 billion. It is globally competitive, with auto and auto parts on the island enjoying an outstanding international reputation.
Most Taiwan makers have already earned SAE, CE, and European safety certifications. There are around 602 companies that have obtained the
QS-9000 certification by end of April 2002. In addition, Taiwan’s auto parts makers have installed automated production lines in order to meet the needs of today’s consumers and are, in fact, cooperating with some of the world’s leading auto companies to produce top-quality products at very competitive prices.
Taiwan-made auto parts and accessories are noted for their precision,
Chapter 1 4 durability and safety. The total value of auto parts exports exceeded
US$2.45 billion in 2001, with the after-sales parts accounting for the major portion of shipments abroad. The US has traditionally been Taiwan's largest customer for auto parts, purchasing about 38% of the island's exports in
2001. Other important markets included Hong Kong/Mainland China (6.5%),
Japan (6.1%), the Philippines (2.9%), and Canada (2.8%). Major export items included road wheels, body parts, tires, engine parts, bumpers, sealed lead acid batteries, rear-view mirrors, head lights and tail lights, radio-broadcast receivers, ignition wiring sets, brakes, and jacks.
Mainland China is seen as the auto market with the greatest potential in the year ahead. In fact, several auto and auto parts companies from Taiwan have already invested there, laying the groundwork for future expansion.
OEM business from the US and Japan has also grown rapidly in recent years. Among other things, Taiwan makers are planning to set up factories, offices, and warehouses in Detroit, as well as to send engineers there to strengthen OEM market share and performance (Lite-On Automotive, Inc. http//lite.auto.com.tw , May 2003).
1.2 The Research Purpose
QS-9000 defines the fundamental quality management system expectations of Chrysler, Ford, General Motors, Truck Manufacturers and other subscribing companies, for internal and external suppliers of production and service parts and materials. Over the past three decades, the industrial trend in Taiwan has transformed from an agriculture base to textile to the electronics industry. The next step in this trend will be for the industry
Chapter 1 5 to switch to higher entry barrier, technical extensive, and high return of investment industry. Given increasing GNP in most of Asia, the automobile is becoming increasingly the more popular transportation tool. The big three car makers are fully aware of this and have either increased their purchasing percentage of parts, or have established a production base in the Asian region.
The opening up of a potentially lucrative niche market of automotive related parts is the major driving force for most of Taiwanese manufacturing company to jump into the automotive parts field. Technical know-how, financial capacity and manpower availability are the three key factors for them to make a success of their venture if they decide to join this arena.
There are thousands of parts that make up a car, providing an excellent business opportunity for the Taiwanese industry. The QS-9000 quality system is the basic requirement to join this field. High quality service makes for satisfied customers, and that plays an important role for survival in this industry. Most Taiwanese firms are not used to being concerned about customer satisfaction or customer loyalty, so it may be a rather ambiguous situation when they start in this field.
The purpose of this research is as follows:
1. Discuss the ongoing implementation of the QS-9000
program in Taiwan’s automotive parts manufacturing industry.
2. Analyze the key success factors (KSF) required to
implement the QS-9000 management quality system in the industry.
3. Propose the strategies for implementation of the QS-9000
management quality system in the automotive parts manufacturing
Chapter 1 6
industry.
4. Investigate the relationship between the QS-9000
management systems and customer satisfaction.
1.3 The Research Process
The research topic for this thesis is To Study the impact of the implementation of the QS-9000 Quality Management System as it relates to customer satisfaction In Taiwan’s automotive parts manufacturing industry.
Because not much previous work has been done in this specific field, I have adopted both the qualitative and quantitative method for this study.
Three integrated approaches, i.e., secondary data analysis; personal interviews and a mail survey, are utilized to research the key factors for a successful QS-9000 quality management system implementation as it relates to customer satisfaction. Figure 1.1 illustrates the detailed research process for this dissertation. The remaining chapters of this dissertation are organized as follows:
Chapter 2 – provides a review of the significant literature relevant to this topic. It will also provide the source for generating the questionnaires that is used to justify the research on this topic.
Chapter 3 – describes the research methods, research framework, operational definition for key success factors and questionnaire design.
Chapter 4 – contains the case firms used in this research. A summary is made of the research findings after a personal interview with the quality supervisor/ manager of each case firm.
Chapter 5 – presents a comprehensive analysis of the research into the
Chapter 1 7 impact factors of the QS-9000 implementation upon the relationship between the QS-9000 quality management system and customer satisfaction. This analysis is based upon the response of the mail survey.
Chapter 6 – summarizes the result of the research findings, and suggests further research directions.
Background
Literature Review
QS-9000 Management
Personal Interview Research Design Mail Survey
Questionnaire Design
Case Analysis Data Analysis
Conclusion and Suggestion
Figure 1.1 Research Process
Chapter 2 8
Chapter 2 Literature Review
2.1 ISO 9000 Quality Management System Standards
The International Organization for Standard (ISO) was founded in
1947, which formed by 140 nations. The ISO 9000 standards were introduced to industry in 1987 that defined the guideline for manufacturing and servicing industry. Till December 2000, total number at 408,631 company located in 158 nations passed ISO 9000 certification. The newest
ISO 9000 edition was issued on December 15, 2000.
The ISO 9000 quality management certificate was brought to the attention of the industry during the past decade. Because the QS-9000 system is based on the structure of ISO 9000, the basic framework of the
ISO 9000 structure will be illustrated in this section. When an organization’s management system is certified by an independent third party and receives the ISO 9000 certificate, it means that the organization confirms to all the relevant standards and requirements. As a consequence both the organization itself and its customers have confidence in the supplied products or service, because the organization has proven to be in control of its operations.
2.1.1 Characteristics of ISO 9000
The core standards of the ISO 9000 family contain ISO 9000, ISO
9001, ISO 9002, ISO 9003 and ISO 9004 (Fig 2.1). Based on its business style, an organization can determine if its quality system needs to be certificated against ISO 9001, ISO 9002, or ISO 9003. There is no difference of quality ranking between these three-certificate standards. Following are
Chapter 2 9 the detailed content for each standard:
ISO 9001 sets out the requirements for an organization whose operation ranges all the way from research & development, purchasing production, to installation and servicing.
ISO 9002 sets out the requirements for an organization whose operation includes production, installation and servicing, but does not contain design activities in their operation. Because most of Taiwan’s companies is based on the OEM system, they prefer to go for the ISO 9002 quality system certification.
ISO 8402 Vocabulary
ISO 9000 Guidelines for application
ISO 9004 ISO 9001, 9002, 9003 (Internal management) (External Auditing) Quality management and ISO 9001- model for quality assurance in
quality system design, development, production, elements-Guidelines installation and servicing. ISO 9002- model for quality assurance in
production, installation and servicing. ISO 9003- model for quality assurance in final inspection and test.
Figure 2.1 Structure of ISO 9000 Series Standards Source: Wang, Zen-Rong
1999, p.13.
ISO 9003 sets out the requirements for an organization whose
Chapter 2 10 activities are concerned with inspection and testing methods to ensure that their final products or services meet with the specified requirements.
In December 2000, a new version of ISO 9000 was released. It essentially merges ISO 9001, ISO 9002, and ISO 9003 standards into a single standard, ISO 9001: 2000. After October 2002, only meeting the new standards can accredit organizations with no ISO 9000 certification.
Organizations that are already accredited need merely to modify their quality manuals to reflect the structure of the new standard.
The original ISO 9000 standards have often been criticized in the quality literature for omitting clauses that address customer satisfaction, continuous improvement, and top management support. ISO 9001: 2000 is intended to remedy such inherent weaknesses by focusing on four primary areas: management responsibility, resource management, product realization, measurement, analysis, and improvement. The first area, management responsibility, is intended to ensure that management is committed to continuous improvement by establishing quality objectives and policies, by determining and meeting customer expectations, and by providing the resources needed to achieve the desired quality objectives.
The second area, resource management, focuses on managing both human and physical factors that are part of the process. For example, this criterion ensures that: employees are adequately trained, training effectiveness is evaluated, and employees are provided with the tools, equipment, and facilities to perform their jobs. The third area, product realization, is a broad category that addresses issues such as supplier management, process design and control, product identification and traceability, and product
Chapter 2 11 preservation. The fourth area, measurement, analysis, and improvement, focuses on continuous quality improvement through data analysis, control of non-conforming products, and taking preventive and corrective actions.
2.1.2 ISO 9000 Related Literature
An organization implement ISO 9000 will operate its management activities on the basis of Plan, Do Check and Action. ISO 9000 gives more detailed description for those concepts: (1) say what you do; (2) do what you say; (3) show that you do it; and (4) review and improve it (Wang, Zen-Rong
1999). DuPont already developed a guide to quality registration called “ A
Road Map to ISO 9000 Registration” There are seven milestones on the roadmap to achieve the ISO 9000 certification (Wang, Zen-Rong 1999).
Following are the details for those seven milestones: (1) understand the standards, the elements within the standard, and how your organization’s quality management system can comply with those elements and the registration process itself; (2) organize all the current and needed documents, procedures and information; (3) develop an ISO 9000 internal audit system;
(4) select a suitable registrar; (5) conduct the internal audit; (6) implement the corrective actions for audit findings; and (7) register.
Lee, Hsu-Hwa (1994) disclosed her research result from the investigation for 162 firms that registered ISO 9000 at Bureau of Standards,
Metrology and Inspection, Ministry of Economics Affairs ROC in February
1993. She found that 70% of registered firms’ purpose for pursuing ISO 9000 certificate were: (1) upgrade company quality management system; (2) improve company capability and (3) follow market trend. Furthermore, she
Chapter 2 12 also concluded that those registered firms having significant advantages for human resources management, standardization and company image improvement. According to her report, ISO 9000 quality management system implementation has directly impact on company system and eventually improves the productivity.
Chu, Ho-Cheng (1996) disclosed his research result from the investigation for 763 firms that registered ISO 9000 at Bureau of Standards,
Metrology and Inspection, Ministry of Economics Affairs ROC till November
1995. He concluded that those registered firms having significant advantages on operation standardization; product quality improvement; employee’s morale improvement; and easy access for information. However, in the contrast, increase the productivity, reduce the operation cost and increase the sales order did not get much improvement after the ISO system implementation.
Huang, Fong-Hwei etal (1996) disclosed their research result for the manufacturing firms’ motivation on ISO 9000 implementation were: (1) upgrade company capability and standardization; (2) upgrade product quality;
(3) escalate company image; (4) enhance competition; (5) increase export.
In general, if the ISO 9000 system can be executed precisely, they can get significant advantages for product quality improvement, cost reduction and sales increasing.
Huang, Hsu-Hwei (2001) disclosed her research result from the investigation for 1668 firms that registered ISO 9000 at Bureau of Standards,
Metrology and Inspection, Ministry of Economics Affairs ROC till July 2000.
Her disclosed their research results for the manufacturing firms’ motivation
Chapter 2 13 on ISO 9000 implementation were: (1) escalate company image; (2) upgrade product quality; (3) market demand. After they received ISO 9000 certification, they have benefits from (1) escalate company image; (2) improve internal operation processes; and (3) improve product quality.
However, those firms did not get significant improvement for cost reduction and community relationship improvement.
The road to total quality management (TQM) has been thoroughly described by various authors and quality gurus. TQM models, such as those prescribed by Crosby (1979), Deming (1986), Juran and Gryna (1988), and the Baldrige Award (2000), share many common elements: to enhance customer satisfaction, improve market share, and reduce scrap and rework costs. The empirical studies actually posit a relationship between quality and profitability.
Anecdotal evidence suggests that some of the benefits attained through ISO 9000 certification include higher perceived quality, reduced product cycle time, improved customer satisfaction, better internal documentation, greater quality awareness by employees, and increased operational efficiency (Rajan and Tamimi 2003).
Warnack, Mark (2003) disclosed on his research report for many business improvement programs are prone to failure. This is partially the result of a failure to incorporate measures to ensure consistency and sustainability of the overall business improvement programs employed.
Linking such programs to the disciplines of an effectively administered ISO
9001 quality management system (QMS) can help organizations overcome these problems by: (1) creating a single point of reference for all continual
Chapter 2 14 improvement activities, (2) clearly defining the critical features of the business improvement program, and (3) using an established internal audit methodology that can be tailored to the specific needs of the business improvement program to ensure ongoing effectiveness of that particular program.
Some of the principles underlying a successful integration include the ideas that: (1) The Six Sigma program becomes its own venue for project related performance reviews. (2) Six Sigma projects are targeted at all types of processes. (3) The existing ISO 9001 internal audit program has been expanded to include not only audits of the administrative features of the Six
Sigma program, but also individual control phase and closed projects.
2.2 QS-9000 Quality Management System Standards
The QS-9000 quality management system was developed by the supplier quality demand team, which formed by Daimler Chrysler, Ford and
General Motors. The first edition of QS-9000 standard was issued on August
1994 that based on the basic framework of ISO 9001 standard. Before the first edition of QS-9000 standard issuing, there exist separate standard to evaluate the supplier quality management system. Their supplier quality system evaluation guideline are Daimler Chrysler’s Supplier Quality
Assurance Manual, Ford’s Q-101 Quality System Standard and GM’s NAO
Targets for Excellent. The second edition and third edition of QS-9000 standard was issued on February 1995, March 1998 respectively. Appendix
1 listed the requirements for QS-9000 quality management system.
Chapter 2 15
2.2.1 QS-9000 Related Literature
Liu, Piu-Fune (1997) conducted a interview with ten auto-parts manufacturing firms and consultant company that received QS-9000 certification till February 1997. She found that their motivations for pursuing
QS-9000 certification were based on the following purpose: (1) demand from the customers; (2) pressure from competitors; (3) follow the foreign and domestic related QS-9000 regulations; (4) intention to upgrade the existing quality management system. After implementation the QS-9000 quality management system, they agreed that it would have benefits for management system, standardization, cost improvement and production efficiency. However, those firms did not have significant improvement on the sales sector.
Ho, Zhu-Sam (2000) conducted research for Taiwanese firms that received QS-9000 certification, she found their top three benefits after implementation the QS-9000 quality management system were job working quality improvement, upgrade customer satisfaction and improve the on-time delivery performance. In the contrast, QS-9000 system Implementation did not have significant contributions to market share, productivity and sales improvement.
Pearch, Clyde (2001) posted in his report for QS-9000 characteristic; developed by the automotive industry to meet its special needs, QS-9000 is a far more challenging standard than its forerunner. It has up to 383 requirements ("shall statements") as opposed to up to 137 for ISO 9000. The fact that both companies had registered to QS-9000 testified to their recognition of the importance of quality. QS-9000 is not only challenging to
Chapter 2 16 implement and register to, it also poses a continuing challenge in that continuous improvement is one of the key requirements of the program. It's not enough to manage inventory effectively or process orders efficiently. A
QS-9000 company also must continually seek out ways of improving those processes.
Desatnick (2001) pointed out five issues that would impact QS-9000 quality management system implementation
1. Selection of the registrar – they always exist the discrepancy for the
auditor because not all of them have been trained properly for the
audit skill.
2. The internal auditor - because of the company internal auditor is a
part time job assignment, they may not be trained properly for the
audit skill. Also, they may have the problem to verify the corrective
actions during the audit findings.
3. Management responsibility – although the top management team in
the enterprise will resume the full responsibility for quality activities
but they will sacrifice product quality if it impacts the company wide
performance and achievement.
4. The quality system – an effective quality system shall contain the
following processes: (1) identification of processes; (2)
determination of process sequence and interaction; (3)
establishment of the criteria and methods necessary to support
processes; and (4) measurement. In case one process fail, it will
impact the whole system.
Hsui, I-Cheng (2001) conducted research for 113 QS-9000
Chapter 2 17 certification Taiwanese auto-parts and their related industry firms. He found their motivations for QS quality management system implementation were:
(1) top management request; (2) customer demand; (3) QS-9000 quality intention to unify internal quality system; (4) market trend; (5) competition; (6) new market development; (7) new customers development; and (8) audit company TQM execution performance. He also disclosed the achievements after QS-9000 implementation were: (1) clear department responsibility; (2) upgrade customer satisfaction; (3) increase he internal information system transmission and change.
According to the information that researched by Wu,Yann-Ming (2003)
, they have 22,772 firms around the world received QS-9000 certification by
April 2002. The total number for QS-9000 certification firms in this island is
602. The qualified registrars around the world is numbered 167 and
Underwriters Laboratories (UL) certificated firms is 1341 that is the top number one of QS certification registrar in the world. Table 2.1 is the top 10 registrars for QS-9000 certification.
According to the investigation that conducted by big three, they disclosed the advantages after implementation of QS-900 system were (1) improved quality; (2) improved efficiency; (3) improved on-time delivery performance; (4) improved company moral and (5) improved internal and external communication (Wu, Yann-Ming 2003).
Chapter 2 18
Table 2.1 Top 10 QS-9000 Certification Registrars Number Registrar Certificated Firms 1 UL 1341 2 ENTELA 1088 3 BSI-LONDON 878 4 PJR 777 5 DQS-GERMANY 768 6 TUV-COLOGNE 767 7 TUV-MUNICH 694 8 NSF 674 9 ABS-QE 572 10 AQSR 571 Source: Wu, Yann-Ming 2003, p.21.
2.2.2 Continual Improvement of the Quality Management System
The most important factor for making an organization survives in this increasingly turbulent world is to construct a continual improvement methodology into the daily activities of that organization. An organization shall establish a mechanism to transform the customer’s voice into specific requirements, and build those requirements into the product to eventually obtain customer satisfaction. It is management’s responsibility to utilize the resources to develop the product and the service. Figure 2.2 is a typical process model based on the quality management system. Supplier shall conduct a value added operation within their organization. Enterprise resource planning (ERP) is a good tool to conduct resource planning. Both the software and hardware are developed to meet the demand. Some company also pursue the Material Resources Planning (MRP II) world class
A certification. The Australia based company - Olive White is one of the
Chapter 2 19
best-known companies in the world to perform this certification. The
resources required include materials, machines, equipment, manpower and
other appropriate tools that will make a positive contribution to the activities
of a company.
CONTINUAL IMPROVEMENT OF THE
QUAILTY MANAGEMENT SYSTEM
Management C S C Responsibility a u R t u e i s q s s u f t i Resource Measurement, a t r Analysis, c o e Management Improvement t o m i m e o m e n n e t Input Product Output r s r Realization Product
Value adding activities Information flow
Model of a Process-Based Quality Management System
Figure 2.2 Quality Management Process Model
Source: Lin, Ching-Te 2001,p.18.
Chapter 2 20
Defines INTERNATIONAL STANDARDS International ISO 9000 Requirements
CUSTOMER REQUIREMENTS QS-9000 Defines Customer Production Part Approval Process Requirements
Company Specific Requirements
CUSTOMER REFERENCE MANUALS
Advanced Product Tier 1 Quality Planning & Defines Control Plan Quality Approach & Responsibility Manual Failure Mode and Effects Analysis
Standard Tier 2 Operation Defines Who, Measurement What, When Systems Analysis Procedures
Statistical Process Working Tier 3 Control Instructions Answers How
Tier 4 Record Prompts recording of information, e.q. : forms, tags, labels. Once recorded, the item may become a quality record Figure 2.3 The Typical Structure for Quality System Documentation
Progression, Source: Lin, Ching -Te 2001, p.23.
An organization shall develop its’ own documentation requirements based on the QS9000 quality system. They shall consist of four tiers of
Chapter 2 21 documents: quality manual, standard operating procedure, working instructions and records. Figure 2.3 is the typical structure for Quality system documentation progression.
The Quality Manual defines the overall company quality policy, scope, responsibility, organization and approach. It can be described as the shop window of quality. It is a very good management tool to make the employees be aware of their responsibilities within the company’s quality activities. It can become the addition to “sales aids” of a company, as it will outline the company policy for providing a product or service that satisfies their customers (Stebbing 1998).
Standard operation procedure defines the method, process and task that will be performed within an organization. The procedure describes what is to be done, by whom and how, when, where and why an activity is to be carried out. The personnel employee who is familiar with that specified operation shall perform the writing of the procedure. All the procedures can be filed together to form a standard procedure manual. Because the company quality system is subject to review, and conducts continuous improvements, the procedures become active or dynamic documents, so they require revision or amendment on a regular basis. The organization shall develop its own system to prevent the use of out of date procedures.
The job instruction defines the detailed job process that will be performed by the employee. The company know-how can be well organized and recorded by the job instruction. Also, the special process that requires giving the detailed instruction shall be well prepared by issuing job instruction.
Chapter 2 22
According to the above investigation and discussion, the QS-9000 quality system can be organized into six sub-systems. Figure 2.4 illustrates these six sub-systems and how they relate to ISO 9000 and the QS-9000 referenced elements.
4.1 Management
Responsibility
Customer Specified Quality Improvement Requirements II Planning
4.2 4.2 4.13 APQP* 4.14 Measurement Performance PPAP* FMEA*
QSA*
4.3 4.7 4.15 4.10 4.4 4.8 4.16 4.11 4.5 4.9 4.18 4.17 4.6 4.12 4.19 4.20
QSA* MSA* SPC*
* Core tool for QS-9000 Requirements Figure 2.4 The Structure of the QS-9000 Quality System and Its Six Sub-systems. Source: Lin, Ching-Te 2001, p.41.
Chapter 2 23
2.3 Customer Satisfaction
In the new edition of ISO 9000:2000, the eight principles of quality management have been included, and they are: (1) Customer focus,(2)
Leadership,(3) Involvement of people,(4) Process approach,(5) System approach to management,(6) Continual improvement, (7)Factual approach to decision making,(8) Mutually beneficial supplier relationship ( 林興龍
2001). It emphasizes on the two key subjects – knowing your customer and continual improvement. The “Customer focus” is treated as the first priority in the quality management system. The existence of an organization is based on its customers’ requirements, so the organization shall know customer demand, both at the present and in the future. The organization shall distribute this belief within their system and eventually exceed customers’ expectations.
2.3.1 Satisfaction Theory
Customer satisfaction (Yi 1991) has been defined in two basic ways: as either an outcome or as a process. The outcome way defines satisfaction as the end-state resulting from the consumption experience (Vavra 1997). It is an emotional response to the experience provided by, associated with particular products or services purchased, retail outlets, or even molar patterns of behavior such as shopping and buyers behavior, as well as the overall marketplace (Westbrook and Reilly 1983). The outcome of purchase and use resulting from the buyer’s comparison of the rewards and the costs of the purchase in relation to the anticipated consequence (Churchill and
Surprenant 1982). On the other hand, satisfaction can be considered as a
Chapter 2 24 process, which emphasizes the perceptual evaluative and psychological processes that contribute to the satisfaction.
Measuring customer attitudes is an important element in the quality movement in western countries that started in 1990. For instance, the USA
Malcolm Baldrige National Quality Award (1990), an annual reward given to
American companies, which have demonstrated high standards of business practice, includes seven categories on which companies are judged.
Among those factors, the most highly weighted one is “customer satisfaction”. Within these categories, companies are judged on their knowledge of customer requirements and expectations (Category 7.1), their determination of their customer satisfaction (Category 7.6), their ability to summarize satisfaction results (Category 7.7), and the results of comparisons to other companies (Category 7.8).
Taiwan also has a similar quality award, the National Quality Award.
They also have seven assessment categories for judgment, such as, leadership and company vision; innovation and management strategy; customer and market management; human resources and knowledge management; information strategy, application and management; process management, and operation performance. The evaluation on the customer and market management item is based on the review of the organization’s market orientation concept; how they understand the customer and market demand and then use those indices as a guideline to design, research and convey their product or service to the customer. Through this thinking strategy, the organization either can surpass the expectation of the existing customers and/or develop new customers to steer the future development of
Chapter 2 25 the organization.
The product or service that is offered to the customer is used to increase the added value for the customers, and to satisfy them. The organization shall listen to the customers voice, capture the market trend and develop their strategy. The multi-benefit management skill will be the new trend for the future market. The organization shall utilize information technology, data warehousing, and data mining skills to service their customers and thereby enhancing the customer relationship. The product
(service) and market strategy, customer and information management and customer relationship management are the three perspectives from which to assess an organization’s level of performance.
Understanding customers’ perceptions and their attitudes about an organization’s business will enhance the opportunity for the organization’s top management to make better business decisions. The organization will know their customer’s expectations, and their management team can determine whether they meet the customer requirements. To use customer’s perception and attitudes to evaluate the quality status of their products and services, and to incorporate it into a company wide continuous improvement program, customer satisfaction instruments must accurately measure these perspectives and attitudes. The one way to performance this measuring is through the use of questionnaires.
The use of customer satisfaction questionnaires seems the most appropriate for an organization in the service sector or non-manufacturing field. However, this thesis is focused on the manufacturing field, and so proper questionnaires were developed to research the relationship between
Chapter 2 26 the QS-9000 management quality system and customer satisfaction.
However, I also developed the internal and external customer satisfaction indices to measure customer satisfaction.
Chapter 2 27
The QS9000 Process
Customer SUPPLIER QU ALITY SYSTEM DEVELOP/MODIFY REQUIREMENT QUALITY MANUAL AND QS9000 PROCEDURES
CONTINUOUS IMPLEMENT/IMPROVE IMPROVEMENT QUALITY SYSTEMS
INTERNAL AUDIT & MANAGEMENT REVIEW
BUSINESS DECISION REGARDING QS9000 REGISTRATION
CONDUCT SELF DECIDE TO ASSESSMENT OBTAIN QS9000 N USING QSA REGISTRATION
YES
YES PROVIDE YES REGISTRATIO SUPPLIER REQUESTED N CITES ISO QS9000 REGISTED INFORMATION TO CUSTOMER N N
YES QUALITY N MANUAL OK YES N N PERFORMANCE REQUESTED ON-SITE N ISSUES EXIST INFORMATION VISIT OK REQUIRED
YES OPTIONAL YES
CONDUCT ON-SITE VISIT REPORT AND/OR SOURCING RECOMMENDATION
Quality System Requirements
Figure 2.5 QS-9000 Registration Process. Source:Lin, Ching-Te, 2001p.30.
Chapter 2 28
2.3.2 Terry G. Vavra Satisfaction Theory
A model is a suitable way to identify the key constructs of satisfaction.
With the established model, the data collection can be completed and the analysis can be directed more by intuition than being driven by hypothesized relationships. Vavra, Terry G. (1997) followed the Oliver (1980), Churchill and
Suprenant (1982) satisfaction theory to develop the Model of Customer
Satisfaction.
Chapter 2 29
Antecedents Satisfaction Process Consequences
Influencers Mediators
Desires Industry Demographics Structure and Life Cycle Personal Influencers Switching
Word of Mouth Barriers Expectations Loyalty
Structural Personal Channel Mediators Satisfaction Expertise Structure
Prior Confirmation/ Repurchase as either Experience Evolution of Disconfirmation Complaint
Technology Management Procedural Mediators
Nature of Perceived Relationship Persistence Performance Competition Management
Situational Influencers Advertising and Management of PR Evidence Ease of Evaluating
Figure 2.6 A Model of Customer Satisfaction
Source: Vavra, Terry G., Improving Your Measurement of
Customer Satisfaction, ASQ Quality press, 1997, p.37
Figure 2.6 is the model developed by Vavra, Terry G. in 1997. Vavra’s
model was divided into three stages; antecedents, the satisfaction process
and consequences. The mediators were identified in both the antecedents
Chapter 2 30 and consequences stages.
Antecedents – the prior experience will service as a “memory bank” for the product or previous service experience. Some factors can be identified because they may enhance the prior experience. These factors
(influences) are described in figure 2.6 in boxes beneath the antecedents, and are separated into personal influencers and situational influencers.
The personal influencers are related to customers’ characteristics, especially to demographics – age, income, education, and so on. The situational influencers contain the evolution of technology, the nature of competition, advertising and public relations. The product or service will become the pioneer in the market and dominate the fashion when they are promoted properly with a well-planned market strategy. The American Customer
Satisfaction Index (ACSI) reported that age and gender are two key factors for satisfaction rating. The following tables show the research result.
Table 2.2 Satisfaction Ratings by Age and Gender Gender Age Group Female Male 18 ~ 34 77 73 35 ~ 54 78 74 55 and over 84 80
Source: Vavra, Terry G., Improving Your Measuring of Customer Satisfaction,
1997, p. 38.
Chapter 2 31
Table 2.3 Satisfaction Ratings by Sector and Socio-economic Status Socioeconomic Status Industrial Sector Lower Middle Higher ACSI – national average 85 78 75 Manufacturing – Non-durables 86 83 79 Manufacturing – Durables 84 81 80 Transporation/Communicatuons/Utilities 83 77 72 Retail 79 74 69 Finance/Insurance 82 74 70 Services 80 76 74 Government/Public Administration 67 66 64
Source: Vavra, Terry G., Improving Your Measuring of Customer Satisfaction,
1997, p. 38.
The Satisfaction Process – the formation of the satisfaction process establishes a comparison of expectations with perceived performance.
Expectations –Varva, Terry G. (1997) defined it as the sum of beliefs about the levels of attributes possessed or offered by the product or service.
Expectations are affected by the prior experience.
Desires – expectations are future-oriented and are considered malleable. However, desires are considered as present-oriented and relatively stable. Vavra, Terry G. (1997) defined it as the evaluation of the desirability of an attribute, benefit, or outcome that is the extent to which the attribute, benefit, or outcome leads to the attainment of the customer’s values.
Performance – there are two types of performance: objective and perceived. Objective performance, conformance to the design specification, is not easily operationalized because perceptions of performance vary
Chapter 2 32 across customers. However, the perceived performance (the customer’s recognition of performance) is easily measured.
Ease of Evaluating – Anderson and Sullivan (1993) defined the ease of evaluating performance as a major factor to determine the satisfaction.
They found that the perceived performance will lean toward expectation when the product performance is difficult to evaluate.
Confirmation/Disconfirmation – The comparison between the product or service performance and its’ expectation is the evaluated point of the satisfaction process. This is described in detail in the “Confirmation
Disconfirmation process“. Olive (1980) developed a three-step process, which is defined as the Satisfaction Function. In the first step, the customer shall form an expectation prior to purchasing a product. In the second step, consumption of the product or service forms a level of perceived quality that is affected by expectations. Third step, the perceived performance may be reinforced, exceeded, or fall short of the expectations. If expectations are not met, rendered satisfaction decreases from the baseline level that was established by the expectations. However, if the expectations are met or exceeded, satisfaction increases and expectations for future purchases will be adjusted upward.
Consequences – According to the Vavra, Terry G. (1997) model, there exist structural mediators and procedural mediators between satisfaction and repurchase. The structural mediators include industry structure and life cycle, switching barriers and channel structure. When a customer is unhappy with the product or service, but if there exist very few competitors in this field, the customer is likely to be retained. At the same time, a very
Chapter 2 33 happy customer will also continue to buy, even though the channel member supplying him is quite inefficient. New industries are more effective at retaining moderately dissatisfied customers because of an early dependence established between products and customers in new categories.
Procedural mediators work less with structure (hardware) but more with the
“software” industry business. A moderately satisfied customer will continue to purchase a product that is sold by a very talented marketing manager
(intermediary) who maintains a good relationship with the customer.
2.3.3 The Manufacturing Industry Customer Satisfaction
For a manufacturing industry, it is very difficulty to send survey questionnaires at a certain time period and then ask your customers to fill out the questionnaires. Because each firm has a very compact manpower organization, they do not allow their manpower to perform non-productive activities. I actually developed questionnaires and asked the customers to fill it in and return them to us, but the feedback rate was not very encouraging. I even prepared a business letter and asked key customers to provide feedback on the acceptance rate of goods shipped to them, but this request also was met with little enthusiasm. After detailed research into the possible reasons for this attitude, the conclusion was that it might be caused by one or all of the following cases: Most firms do not expect the receiving department in to inspect the quality of the received goods, they expect the supplier to control the quality of all shipped goods, and not rely on the user to confirm the quality of the received parts. As a result, they are not set up to provide the measuring data for the quality of the received goods, unless they
Chapter 2 34 are used to doing this as part of their production process. As far as consumers of electronic parts are concerned, they do not intend to ask their suppliers to implement corrective actions if the product defect rate is below
100 ppm when used in their process. On the other hand, some customers may develop their own measuring method to evaluate the supplier’s performance. The major measuring index includes – product quality, cost, and service. Table 2.4 is a typical example of measuring a supplier’s quarterly and yearly quality performance.
Since customer surveys are not always a reliable method to measure satisfaction, so this study will be using internal customer satisfaction indices and external customer satisfaction indices to measure customer satisfaction.
Internal customer satisfaction indices may contain, but are not limited to the following three characteristics: (1) Production yield information; (2)
Internal scrap cost; (3) Material Review Board (MRB) Analysis.
Production yield information – this is referring to the percentage of the output of good parts divided by the total of parts that were input for production. Each company shall define their yield rate acceptance tolerance; the higher yield will represent a lower risk for customer to be exposed to a bad part.
Internal scrap costs – the cost for loss of parts during the manufacturing processes. This shall include both the standard shrinkage and the additional parts requests.
Material Review Board (MRB) Analysis – non-conformance material that is rejected by the QA shall be submitted to the MBR for final disposition.
The MRB team members are: Quality manager, Engineering manager and
Chapter 2 35
Production manager. From the MRB (Material review board) review records, we can determine the frequency of defective parts for the implementation of corrective action. Table 2.5 is one example of a MRB slip.
External customer satisfaction indices may contain, but are not limited to the following characteristics: (1) Customer complaints and corrective actions; (2) Field returns; (3) On-time delivery performance; (4) Returned
Material Authorization (RMA) analysis; (5) Customer quality ratings; and (6)
Premium freight cost.
Customer complaints and corrective actions – customer complaints can be recorded by items and plot a trend chart for reference. Figure 2.7 is one typical example of a complaint trend chart.
In addition, the corrective action report shall use the eight disciplines format (8 D report). This eight steps approach for corrective action provides a logical method from preliminary action to verify the implemented corrective actions. Table 2.6 is one example of an 8 D report.
Chapter 2 36
Item
30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 '98 2Q 3Q 4Q '99 2Q 3Q 4Q '00 2Q 3Q 4Q '01 2Q 3Q 4Q '02 2Q 3Q 4Q '03 2Q 3Q 4Q 1Q 1Q 1Q 1Q 1Q 1Q
Figure 2.7 Customer Complaint Trend Chart
Field returns – products that are rejected by the customer or called back from the market.
On-time delivery performance – according to the QS-9000 Quality
System requirement, the on-time performance shall be 100%. If it cannot be
100% then corrective actions are required for further improvement.
Returned Material Authorization – when the root cause is determined and confirms that it is the supplier’s responsibility, the customer may request the supplier to authorize a goods return. The QA manager is the appropriate person who performs the root cause investigation and gives the return authorization after he has verified the problem.
Customer quality ratings – if customers develop their own method to measure a supplier’s performance, that makes for a good indicator for the supplier’s quality performance.
Premium freight cost – this is the cost that relates to the reject product
Chapter 2 37 return and the replacement freight cost. The freight cost difference between air and sea shipment that was caused by the supplier delaying the shipment must be taken into consideration. This cost also can be used as a factor to determine the supplier quality performance.
2.3.4 Summary of the Literature Review
The core standards of the ISO 9000 family are contained in ISO 9000,
ISO 9001, ISO 9002, ISO 9003 and ISO 9004. An organization can determine its quality system to be certificated against ISO 9001, ISO 9002, or ISO 9003 based on their type and style of business. There is no difference of quality ranking between these three-certificate standards. The QS-9000 system is based on the structure of ISO 9000, and includes specific requirements by the big three automakers. When an organization’s management system is certified by an independent third party for the
QS-9000 certificate, that means the organization confirms to the relevant standards or requirements. Both the organization itself and their customers can then have confidence in their supplied products or service, because the organization is certified to be in control of the way it performs its operations.
Continuous improvement and customer satisfaction are the two key characteristics that shall be focused upon by the management team in an organization.
The customer specified-requirements are defined by the seven documents of QS-9000. An organization shall construct its quality management system by adding customer specified-requirements. The seven documents include : QS-9000 requirements; Production Part Approval
Chapter 2 38
Procedure; Advanced Product Quality Planning and Control Plan; Potential
Failure Mode and Effects Analysis; Statistical Process Control; Measuring
System Analysis; Quality System Assessment.
An organization shall develop four tiers of documents, they are:
Quality Manual, Standard Operation Procedures, Working Instructions, and
Records. All activities within the organization shall follow those established procedures and document them for future reference.
Customer satisfaction (Yi 1993) has been defined two basics ways: as either an outcome or as a process. The outcome way defines the characterized satisfaction as the end-state resulting from the consumption experience (Vavra 1997). This is an emotional response to the experience provided by, associated with particular products or service purchased, retail outlets, or even molar patterns of behavior such as shopping and buyer behavior, as well as the overall marketplace (Westbrook and Reilly 1983).
The outcome of purchase and use resulting from the buyer’s comparison of the rewards and the costs of the purchase in relation to the anticipated consequence (Churchill and Surprenant 1982). On the other hand satisfaction can be considered as a process, which emphasizes the perceptual evaluative and psychological processes that contribute to the satisfaction.
A model is a suitable way to identify the key constructs of satisfaction.
With the established model, the data collection can be completed and the analysis can be directed more by intuition than being driven by hypothesized relationships. Terry G. Vavra (1997) followed the Oliver (1980), Churchill and
Suprenant (1982) satisfaction theory to develop the Model of Customer
Chapter 2 39 satisfaction. Vavra’s model was divided into three stages; antecedents, the satisfaction process and consequences. The mediators were identified in both the antecedents and consequences stages.
Since customer surveys are not always a reliable method to measure satisfaction, so this study will be using internal customer satisfaction indices and external customer satisfaction indices to measure customer satisfaction.
Internal customer satisfaction indices may contain but are not limited to the following three characteristics: (1) Production yield information; (2)
Internal scrap cost; (3) Material Review Board (MRB) Analysis.
External customer satisfaction indices may contain but are not limited to the following characteristics: (1) Customer complaints and corrective actions; (2) Field returns; (3) On time delivery performance; (4) Returned
Material Authorization (RMA) analysis; (5) Customer quality ratings; and (6)
Premium freight cost.
Chapter 2 40
Table 2.4 Supplier Scorecard SUPPLIER SCORECARD CATEGORY : ELECTRICAL Quarter Last 12 Last Mos. Annual DATE : January 28, 2003 10/1/2002 - 1/1/2002 - 1/1/2001 - 12/31/2002 12/31/2002 12/31/2001 OVERALL QUALITY GRADE B B A
Incoming Lots Received 47 223 111 Inspection Lots Rejected 0 0 0 Incoming Defect Rate 0 0 0 (ppm) GRADE A A A
Supplier Caused Stock Sweeps 1 2 0 Stock Sweeps GRADE B C A
In Process Defects In Process Defect Rate 57 27 7 (ppm) Max. Acceptable Defect 8 8 8 Rate (ppm) GRADE C B A
End of Line Defects End of Line Defect Rate 2 3 7 (ppm) Max. Acceptable Defect 8 8 8 Rate (ppm) GRADE A A A
Corrective Action Corrective Actions Issued 1 2 0 Response On Time Response of 1 2 0 issued Corrective Action Report GRADE A A A
Delivery F F C
Customer Service A B B
Cost Improvement C C D
Value Analysis A C C
A.
Chapter 2 41
Table 2.5 MRB Slip Material Review Board
Date : Ref. No. : P / N : Product : Quantity : (零件) (成品) (數量) Supplier : Requested by : Approved by : (供應商) (申請者) (申請部門主管)
A. 問題點 :
B. 申請 MRB 的理由 :
以上由申請部門填寫
C. 初步評估 (製程工程師 )
D. MRB 決議 :
QA Manager : VR / SW Manager :
Engineering Manager :
矯正措施追蹤 (製程工程師 )
F-267B
Chapter 2 42
Table 2.6 8D Report To: ATTN: FROM : Ref. #: B/M #: “EIGHT DISCIPLINE PROBLEM REPORT” Date Opened: Rev. Date: Date Closed: Customer Name: Customer Part #: Component Name: Series: CAR #: RMA#: Written by:
1. CONCERN TITLE
2. CONCERN DESCRIPTION
3. CONTAINMENT ACTIONS
4. ROOT CAUSE
5. CORRECTIVE ACTIONS
6. VERIFY EFFECTIVENESS OF CORRECTIVE ACTIONS
7. PREVENTION OF RECURRENCE
8. 8D AUDIT
Chapter 3 43
Chapter 3 Research Design
3.1 The Research Method
Actually, the research topic for this thesis: “ The Impact of the
Implementation of QS-9000 on Customer Satisfaction In Taiwan’s Automotive
Parts Manufacturing Industry “, as of todate has seldom related research in this field, so it really belongs to the “ detective type” research. Because there are so many variables in detective type research which may require the spending of large amounts of resources, both the “ Quantitative method “ and
“ Qualitative method ” will be applied for this thesis. Qualitative method does not use the data but will conduct the detailed description on the research topic.
However, the purpose of the quantitative method is to disclose the research phenomenon, which will make an ideal type suggestion based on the collected data. The quantitative method will include conducting detailed interviews with small size case firms, but the data collected shall be processed systematically.
This thesis researches and collects the QS-9000 implementation experience from those firms that already received the QS-9000 certification.
3.2 The Research Framework
The main purpose of this thesis is to research the relationship between the implementation of QS-9000 and customer satisfaction. This study is focused on this inter-action from three perspectives: formulation, implementation and customer satisfaction. The research framework is outlined in figure 3.1 which clearly defines the elements for formulation, and the key success factors for implementation.
Three integrated approaches: secondary data analysis, personal
Chapter 3 44 interviews, and a mail survey would be utilized to determine the success factors for the QS-9000 implementation. Personal interviews were conducted with those firms that already received the QS-9000 certification. The personal interviews were carried out with the following six firms (1) CTS Components
Taiwan Co.,Ltd. (2) Ge Mao Rubber Industrial Co., Ltd. (3) Kenly Precision Co.,
Ltd. (4) Juei Hsing Hwa (JHH) Industrial Co., Ltd. (5) Yuan Cherng Co., Ltd. (6)
Lite-On Automotive Corporation. The Ge Mao Rubber Industrial, Kenly
Precision Co., and Yuan Cherng Co., are CTS suppliers and act as the downstream of supply chain. However, CTS Components Taiwan, Juie Hsing
Hwa Industrial Co., and Lite-On Automotive Corporation have the similar product that supply to automotive industry, so we organize them as the comparison group to perform the analysis.
This chapter will focus on the detailed description of the research framework, the operational definition for the key success factors, and on the questionnaire design for the research framework. The analysis of the questionnaire will be discussed in Chapter 5. Also, the text of the questionnaires is listed in Appendix.
Chapter 3 45
Formulation Implementation
Steering team Documentation
Organization Training Customer Financial Target Standardization Satisfaction performance
Criteria Auditing
Environmental Factors
Competition
Economic Prosperity
Figure 3.1 Research Framework
3.3 The Operational Definition for Key Success Factors
Steering Team : For any company-wide project or activity, the forming of a steering team is required because this team can perform the task across the different functional departments. The steering team can be defined as a task force consisting of team members assigned by the top management for the pursuit of a specific task for the benefit of the company. In most cases, the company’s top management executive assigns the team leader. After that the team leader, based upon his knowledge, experience and requirements picks
Chapter 3 46 the team members from different functional departments within the organization. However, the team leader needs to have adequate knowledge regarding the assigned task. This knowledge may be acquired through outside training or self-directed research. For instance, when it comes to the QS-9000 program, the team leader most likely will come from the quality control department; his current assignment may be the department head or he/she may be the company quality representative. The suggested team members should number less than 10 people, and they must come from the different functional departments. It is not necessary for the team members to be the head of each department, but the assigned person shall have the full responsibility to distribute the information within his department, and must have the full support from the department head. After the formation of the steering team, this task team shall then work out a plan of action to carry out their assignment. This plan shall clearly define the specified target, target date, review intervals and responsible persons.
Organization: An organization can be defined as a group of people who work together using a clearly defined procedure to achieve a common objective. The organizational structure, as it pertains to the quality management system, should be clearly established within the overall management system of the company, with the lines of authority and communication clearly defined (Lionel Stebbing 1998). The reporting system within an organization shall be properly defined to ensure that any quality system related issues can be fully understood by the company’s senior management.
The quality leader: The QA manager or QC manager shall have the
Chapter 3 47 authority and the responsibility for independent operation, and report directly to the General Manager. Also, the organization shall create a mechanism to report the quality performance in a defined time interval. The reporting items shall include both internal and external quality issues. The internal reporting items include: (1) non-productivity hours trend, (2) cost for poor quality, (3)
PPM (part per million) for product family, (4) key customers on-time delivery performance, (5) key customers quality performance. The external reporting items include: (1) customer complaint, (2) customer special request.
The Canadian Standard Z299 makes the following comments:
“In developing an organization and assigning responsibilities and authority, suppliers shall recognize that Quality Assurance Programs are interdisciplinary, and that they involve most of the organization. Many elements and activities at all levels in organizations need to be involved. Unless responsibilities for quality are fully acknowledgement and understood by all, including the top executives and the shop workers, full compliance with Standard Z299 cannot be achieved. Also persons assigned responsibilities for assurance of quality should be aware of, but free from, the pressure of cost and production, and be given the necessary authority to perform their roles effectively”.
The Norwegian Standard NS5801 states:
“The requirement that the quality department manager of the contractor shall have organizational freedom usually implies that it is an independent position within the organization, reporting directly to the senior management, without being charged with other quality influencing functions”.
Figure 3.2 is a typical (though not recommended) organization of a
“level 1” company showing the possible location of the person responsible for
Chapter 3 48
quality.
Managing
Director
Director of Quality Director Director Controller Marketing/ Assurance & Management Manufacturing Engineering Sales Manager Repr esentative
Tooling Room Product & Accounting Taipei Sales & Equipment Process Supervisor Maintenance Engineering Office Manager Manager Dept. Manager
Variable Mechanical Human H.K. Sales Resistor Design Resources Dept. Manager Manager Office Manager Manager
Switch New Product IS Manager China Plant Dept. Development Manager Manager Manager
Metal Dept. Manager
Injection Molding Dept. Manager
Material/ Production Control Dept Manager
Figure 3.2 Organization Chart
Target – A word similar with target is “Goal”. The first criterion for the
Chapter 3 49 target is that the target(s) must make you reach far above where you are now.
J. M. Juran (Richard S. Johnson & Lawrence E. Kazense, 1993) calls these target stretch targets. They are based on targets established on achievements that have already been accomplished by other organizations. By benchmarking these organizations, targets can be established that provide for performance improvements at a revolutionary pace.
Targets can be developed in at least three tiers. Refer to Figure 3.3 for the details. The first tier is the organization’s target, developed by the chief executive and his management team. These stretch targets are developed to get the quality of the organization on a competitive level. They are developed through a benchmarking process that makes the organization reach out for the future, and is put together with input from the targets of the department leaders.
These targets must form a part of the strategic, business, and training plans in order to become operational at every level of the organization.
The second tier includes the departmental level of the organization.
Those targets are based on two areas as well. Department targets are developed from the stretch targets of the organization and the team targets, and are presented by the work centers or quality teams.
An important concept for the organization management team is: no subordinate operation can have targets that are lower than the target of those of the company and its manager. However, the targets of the subordinates may exceed the target of the organization.
The third tier targets covers the section or work center. These targets are developed from the targets of those above them, plus the targets that are developed by them. The team target often will contain targets of individual
Chapter 3 50 team members in their composition.
Benchmarking information
Organizational stretch targets
Departmental stretch targets
Work center or section stretch targets
Figure 3.3 Tiers of the Targets Source: Richard S. Johnson & Lawrence E. Kazense, 1993
There are additional criteria for targets. The following criteria were developed over many years and are continually being updated (Richard S.
Johnson & Lawrence E. Kazense, 1993). Targets could be: (1) Written –
Chapter 3 51 written targets provide a standard that can readily communicate. They can be posted for ready reference and looked at for confirmation as you see them.
Unwritten targets are easily forgotten to the extend that maybe they never even existed. (2) Specific – specific targets focus on precise accomplishments, while generalities are vague and doomed to failure. (3) Understandable – they shall be expressed in clear, concise terms, using the simplest language possible. (4) Challenging – targets must stretch each employee so as to maintain excitement and motivation. (5) Realistic – targets must be realistic.
If we set the target unrealistically, employees will use it as an excuse when they miss them. (6) Job filling – targets must meet the needs of the organization. (7) Legitimate – targets must be the official policy of the organization. (8) Equitable – targets must be designed to offer all employees a fair shot at achieving them. Because of the relative success of meeting established targets it often is part of the standard for performance evaluation.
(9) Applicable – targets must meet or exceed the requirements of the organization. (10) Timely – targets must guide you to reach the point at which you must be on or before the time you must be there.
Criteria – criteria is the standard of judging. According to the requirements of QS-9000, there are many standards to judge by, and they are contributed by different departments within an organization. A typical example for criteria that is suitable for monitoring by each functional department are: monthly sales figure, 100% supplier and customer on time performance, inventory turns, cost of quality (as measured by percentage of gross sales), customer complaint items, company-wide monthly cost saving, efficiency, etc.
The criteria shall be defined at year-end, and the performance shall be
Chapter 3 52 monitored on a monthly basis. An action plan will be developed if the performance cannot reach the criteria. Continuous improvement is the ultimate target of an organization, so the criteria will be adjusted gradually.
Documentation – an effective quality system can be seen to be only as good as the documentation that controls it, and this documentation will, if produced in a systematic and consistent manner, formalize the system which, in term, should:
- Demonstrate a clear and concise statement to all employees
- Encourage consistency of action and uniformity of understanding
throughout the organization
- Convey the same message or instruction simultaneously to all
employees
- Facilitate effective management of any change or revision including
any updating and required approval
- Ensure continuity and reduce the learning curve when personnel
changes do take place
- Assist in the monitoring of the system
The documentation shall be well planned, simple, clear, concise, and well controlled. The organization shall consist of four tiers of documentation, they are quality manual, standard operation procedure, working instruction, and forms and record. The quality manual defines the policies, objectives and organizational structure, and summarizes the general quality practices of the company. The standard operation procedure defines what is to be done, by whom and how, when, where and why an activity is to be carried out. A working instruction defines the activity at each working station, and these
Chapter 3 53 documents are subordinate to standard operation procedures. Those instructions may be required for specific tasks, processes, testing and/or inspection activities. The forms and records include files, technical, inspection or testing data and all other documentation that will demonstrate the achievement of the quality system requirements.
Training – training is a systemic approach to using an established documented material in training employees. Before the execution of the training program, a standard operation procedure shall be developed that defines the training scope, the methods to be used, the interval and the personnel. In an organization, all functions that require acquired skills and which could be adversely affected by the lack of such skills shall be identified, categorized and documented. The human resource is the most precious asset of an organization. The training shall be undertaken utilizing in-house courses, by training schemes operated by a recognized third party or by a qualified lecturer within the organization.
For the QS-9000 quality system requirement, all employees shall be trained for the basic requirements of QS-9000. This portion relates to the twenty elements of ISO 9000. However, engineers and the management team are also required to be trained on the QS-9000 section II specified-requirements. This section II specified-requirements include the so called seven documents (volumes), which are: QS-9000 requirement,
Production part approval procedure, Advanced product quality planning and control plan, Potential failure mode and effects analysis, Measuring system analysis and quality system assessment.
Standardization – standardization is the major activity for shop floor
Chapter 3 54 improvement. It transfers the optimum process operation method into documented material. There are two major activities within an organization: maintenance and improvement (Masaaki Imai, 1986). Maintenance is referring to the activities for maintaining the existing techniques, management skill and standard operations procedures. However, improvement means revising or upgrading the existing standard operation procedure.
The maintenance function is to make sure that all employees follow the standard operation procedure (SOP) that are established within the organization. In aother words, the management team shall construct the policy, regulations and standard operation procedures as company wide operation guidelines. All company daily activities shall follow the established standard operation procedure (SOP). The management team shall focus on the improvement of the standardization. Figure 3.4 is a typical example for
“Japanese Job Concepts” for maintenance and improvement.
GM/Directors
Manager Improvement
Supervisor Maintenance
Operator
Figure 3.4 Japanese Job Concepts
The typical structure for quality system documentation progression as outlined in chapter 2 is an example of standardization. The Quality manual,
SOP and Working instruction are materials for standard operation guidelines.
Chapter 3 55
Auditing – the audit can be defined as an official examination and verification of accounts, processes, procedures, operations, techniques, and records (Richard S. Johnson & Lawrence E. Kazense, 1993). The official audit can detect the nonconformance area, and will then recommend the implementation of corrective action for further improvement. Even if a perfect quality environment were achievable, the audit would be desirable as a basis to prove success and provide recognition. In the real-world situations faced by all organizations, audits serve an extremely important purpose.
Audits are a review that determines the level to which the goals and objectives are achieved as outlined in procedures for processes and operations. Everyone within an organization shall be aware of the need for audits and the implementation of corrective actions after the findings of the audit and the subsequent recommendations. For a successful organization, official internal audits are required because it allows for problems to be detected, and decisions to be made for the implementation of corrective actions. Management actions, policies, and procedures must also be audited to determine their impact upon performance.
An organization shall develop a standard operation procedure to carry out internal audits. It shall define the audit frequency, team, standard, report format and corrective actions. When internal/external non-conformance or customer complaints occur, the planned audit frequency should be increased.
Audits are planned and performed in accordance with written procedures and checklists to ensure that all phases of the quality programs are included.
The audit team members are qualified to conduct the audit. They shall be independent from the audit departments and able to make impartial
Chapter 3 56 judgments and decisions.
Those doing the reporting shall be briefed on the importance of reporting both the commendable and the negative aspects of the operation discovered during their audits. One effective method of creating a report is the modular design with separate sections assigned to various audit team members. After the report section is completed, the team meets to determine agreement on each section. The following outlines are the typical items that should be included in a report: (1) executive summary, (2) department being audited, (3) employees being audited, (4) audit dates, (5) members of the audit team, (6) findings during the audit, (7) corrective action request (CARs), (8) distribution list, (9) follow-up actions taken.
A meeting may be required to report the audit result, and the official report shall be distributed to all management within the organization. The corrective action request is initiated and sent to the non-conformance department for corrective actions. The information resulting from the audit is fed back into the system, and results in additional training, work, and whatever is dictated by the success or the lack thereof, in the initial process.
3.4 Questionnaire Design
After completion the personal interviews, another approach to evaluate the key success factors of QS-9000 certificate was attempted through a mail survey for six firms. The survey instrument was designed to gather qualitative and quantitative data regarding formulation stage and implementation strategies. It also collected data that could be used to quantitatively assess impacts with descriptive and inferential statistics.
Chapter 3 57
3.4.1 Contents of the Questionnaire
The questionnaire was developed based on the research framework and questions discovered during the literature review and interviews with the case firms. The conclusion was made that the key success factors at the formulation stage and at the implementation stage, are the key characteristics for being successful in the QS-9000 program. This success eventually will result in customer satisfaction and good financial performance. The questionnaires were developed from the following success factors – documentation, training, standardization, and auditing. Furthermore, the key contributors to be successful at the formulation stage are – steering team, organization, target and criteria, so it is based on those factors that the questionnaires were developed.
1. The first part: questions relating to the QS-9000 formulation stage:
These questions contained a company profile, QS-9000 quality
system development time, steering team members and their leader,
quality management system representatives, organization, and
internal audit frequency and training material contents.
2. The second part: outline of the QS-9000 implementation
The questions developed were based on the key success factors.
The answers were arranged by “Five point ranking scale” (ranked
from very high to very low ), to collect the subjective idea of the
management team and employees on the aspects of policy,
organization, execution and cognition.
3. The third part: customer satisfaction after the QS-9000
implementation
Chapter 3 58
This portion of the questions was based on two perspectives –
internal customer satisfaction and external customer satisfaction.
The internal customer satisfaction questions refer to the cost of
quality, MRB items, customer complaints and field returns. The
on-time performance, supplier scorecard and premium cost are also
included in the questionnaires. The external customer satisfaction
related to issues such as new business, new customer and company-
wide cost savings.
4. The fourth part: QS-9000 implementation experience.
This portion included the motive for the QS-9000 program, difficulty of
implementation, and comments on the QS-9000 program in the
manufacturing industry.
5. The fifth part: personal data
This portion included demographic items, such as gender, age, job
position, department and number of employees in the company.
Chapter 4 59
Chapter 4 Case Firms Analysis
According to the theory of research methodology, there are different definitions for development approach and research method. The development approach is the criteria for selecting and utilizing data, while the research method is a means of gathering data. There are three methods of research design and data gathering: the non-experimental method, the quasi-experimental method and the experimental method. The non-experimental method includes the case method and the document method.
The quasi-experimental method includes the sample survey, survey interview, comparative method, field observation, and the test and panel method. The experimental method includes the control group design and the simulation and game theory.
In this chapter, a detailed analysis of those firms will be carried out, based on the company profile, purpose for their involvement with the QS-9000 program, and the result summary.
4.1 CTS Components Taiwan
4.1.1 Company Profile
CTS Corporation was founded 1896 as the Chicago Telephone Supply
Company for manufacturing telephones and switchboards. In the 1920s they began producing jacks, plugs, headphones, antenna switches and rheostats for home radios. The carbon composition variable resistors were developed in
1932, and they became the largest producer of variable resistors in the world.
In 1962 CTS was listed on the New York Stock Exchange. In 1967 they established their first offshore manufacturing facility in Kaohsiung Taiwan ROC.
Chapter 4 60
CTS Components Taiwan total employees number was 380 in 2003. The facility has an area of 122,360 square feet. The key products being manufactured are dipswitch, variable resistors and sensors. The sales in 2003 totaled $US 200 million.
4.1.2 The Purpose for the QS-9000 Project
Over the past 30 years, CTS Components Taiwan already developed a renowned reputation for its high quality of products in the dipswitch and variable resistor sector. The main portion of their original market for variable resistor products was located in North America, for light dimmers, instruments and industry manufacturers. Because of the strong competition in these markets, most North American manufacturing facilities were transferred to Far
Eastern countries. China already was the manufacturing base for most of the leading firms in the world, and some of the customers of CTS had also established their manufacturing capability over there and requested CTS to set up a supply capability from China. CTS Components Taiwan set up a manufacturing facility in Dongguan, China in 1998 to service customers that had located in mainland China.
Also, another SBU for the manufacturing of automotive sensor products realized the business opportunity in Asia, so they considered to set up a sensor manufacturing base in Asia to meet the market demand. The Asian countries have started to implement the strict environment regulation, so the carmakers were forced to improve their emission standards and upgrade the efficiency for the fuel combustion. So they created a niche market for themselves by developing the SE-TPS (small engine throttle position sensor)
Chapter 4 61 to replace the existing carburetor on motorcycles to service the Asian motorcycle market starting in 2002. Eventually, they extended their market and started to service the automotive field for those obsolete or redundant facilities that were being transferred to the CTS China facility. The QS-9000 quality management system was the basic system requirement to join the automotive market; plus they were under pressure from customers to be QS-9000 certified.
4.1.3 The Formulation and Implementation Stage
The company quality management representative organized a steering team, with team members being assigned from various functional departments.
Because CTS Taiwan had been certificated for ISO 9000 since 1995, they had already developed an adequate documents system to support the quality management system requirements. CTS Taiwan redefined the documents that were specified in the section II requirements of the QS-9000. They spent about one and half years, after the company top management announced the
QS project, to enable them to receive the QS-9000 certificate. CTS
Components Taiwan did not ask an outside consultant to pursuit the certificate, all required activities were planned and guided by the steering team that leaded by their Quality Director.
4.2 Ge Mao Rubber Industry Co., Ltd.
4.2.1 Company Profile
Ge Mao Rubber Industry Co., Ltd. is a professional rubber components manufacturer in Taiwan, and has been in existence since 1981. They are a
Chapter 4 62 well-known company that produces various types of seals to industrial specifications. Their products include: O-ring, X-ring, back-up ring, square-ring, diaphragm, packing, U-packing, and VA-seal. The markets they service are: automotive industry, hydraulics & pneumatics components, drinking water, and the OEM products. They provide a full range of materials, with over 100 compounds to meet their customers demand. Ge Mao headquarters & major manufacturing facilities are located in the Chang-Bin
Industrial Park, in Lukang, central Taiwan. The factory size is 17,190 square meters. The invested capital is US $ 7,000,000; the number of people employed: 228 in 2002.
4.2.2 The Purpose for the QS-9000 Project
When the company was established in 1981, they serviced customers in the local Taiwanese market. Because the Taiwanese market was not large enough to support continuous growth for the company, they decided to export their products worldwide so as to allow their business to expand. In addition they could create value-added products if they could penetrate the automotive field. There were two ways for them to reach these objectives: (1) continue to research for special materials and create products with a high built-in quality to service the market with stringent service conditions; (2) endeavor to receive the certificate of the quality management system and test facility. They received their ISO 9002 certificate in 1997, and their QS-9000 certificate in
1998. In the year 2000, they received the NSF certificate for drinking water as well as their test lab system CNLA certificate. Those achievements proved that both their products and their quality management system have reached
Chapter 4 63 world-class standards and are capable to service the automotive market.
4.2.3 The Formulation and Implementation Stage
The company vice president organized the steering team, and the team members were assigned from various departments. There were 8 team members. Ge Mao also reorganized the quality control department, so that the department head reported directly to the president. The assistant manager was assigned as the company quality representative. A document control center
(DCC) was established to handle the document issuing and processing activities, and became part of the quality control department. Because they had already established the ISO 9000 quality management system for over 5 years, and had accumulated adequate knowledge, they did not request the assistance of a consultant to upgrade the quality management system to
QS-9000.
Ge Mao expanded the standard operation procedure to 52 articles in order to fit the QS-9000 requirements. They also organized an audit team with members assigned from various functional departments to perform the internal audit. The company’s assistant manager is the leader of the internal audit team and works with the other members to complete an internal audit every six months. The customer satisfaction survey is conducted on an annual basis.
The customer service coordinators provide the window of opportunity to execute the customer satisfaction survey. However, the survey result is reviewed and reported to the senior management team by the head of the quality department.
Chapter 4 64
4.3 Juei Hsing Hwa (JHH) Industry Co., Ltd.
4.3.1 Company Profile
JHH Industry was established in Kaohsiung, Taiwan in 1959. They are a typical locally owned private company, but they constructed their company with a view of global service. The invested capital is US $ 40,000,000; they employed 200 people in 2002. The company business policy is: mutual trust, practical, and global view. The company JHH quality policy is – Strict adherence to standards and satisfy customer. The company management philosophy is as follows:
– Establish a reliable and stable enterprise for the customers and the
employees.
– Establish an enterprise with active, creative, and innovative spirit as well as
a unique character.
– Establish a special enterprising spirit that accepts the challenges from an
unknown and ever-changing world.
In 2002 JHH’s sales were US $ 10,500,000. They received their ISO
9002 certificate in 1995 and their QS-9000 certificate in 1999, both from TUV
Rheinland. Their main products are autobike parts, motor parts, plastics
parts, frame and die/jigs. They have another two companies within their
business group, they are – Jui Li Enterprise Co., Ltd. and Jui Li Edscha Co.,
Ltd. The main product line for the Jui Li Enterprise Co., is sheetmetal auto
parts such as hood, door, trunk lid, fender, and fuel tank as well as aircraft
parts. Jui Li Edscha Co., Ltd is a joint venture with the Edscha company from
Germany, and was established in 1997. The main products for Jui Li Edscha
are bodywork door checks, pedal systems and parking brake levers.
Chapter 4 65
Their major customers are Kwang Yang Co., Ltd. (KYCO), China Motor
Co., Ltd. (Mitsubishi Taiwan), Formosa Automobile Corporation, Taiwan Vespa
Co., Ltd. (Piaggio Taiwan), Piaggio Italy, India Kinetic Engineering and India
Adeep Roloforms.
JHH believes that an excellent quality product depends primarily on
development of technique. JHH not only employs professional designers and
well-experienced die and toolmakers, but also utilizes CAD/CAM system, PS
copy milling machine to strictly control the entire manufacturing process. With
the up-to-date Japanese die-making techniques, and JHH’s precision
equipment and professionalism with which JHH manufactures dies/jigs for
local and overseas customers. JHH motto is “ Toward the Future with
Confidence”. Their business management ideology is reliability, assurance
and globalization. In order to survive in an ever changing society and fluid
economic environment, JHH enhances the employee’s professional ability to
meet the customers’ demand. Their aim is to enable their employees to grow
together with JHH, and obtain continuity in their business management.
4.3.2 The Purpose for the QS-9000 Project
JHH already serviced the marketplace for more than 40 years. When the company was established in 1959, they did not have stringent industry standards for their supplied parts, and their major customers were the local market, so they did not pursue any certificate at that time. When the
Taiwanese government encouraged local firms to upgrade the quality of their products and start to export their products, JHH moved their manufacturing facilities to its current site and increased the capital investment to US $
Chapter 4 66
40,000,000. In 1986, a new production line for producing motorcycle wheel gears was established in the new plant to satisfy the increasing demand of the motorcycle market. This investment increased the company sales up to US $
12,000,000 in 2000. Even after the global economic depression that followed the 911 disasters in 2001, the company sales still were US $ 10,500,000. A third party certificate for a quality management system is the global trend for customers to recognize a company brand and product reputation, so JHH decided to pursue the quality management system certificate of QS-9000, and upgrade the company’s global competitive position.
4.3.3 The Formulation and Implementation Stage
JHH started the QS-9000 project in 1998. They organized a steering team with 10 team members. Their general manager acted as the steering team chairman. They requested each functional department to set up a plan and define their target. The defined plan was reviewed on a monthly basis.
Their quality management system had been constructed to meet the ISO 9000 requirements, and QCC and TQC activities had been implemented already for more than five years, so they received their QS-9000 certificate within one year after the company announced the QS-9000 project.
They asked the Consulting firm – APEX International Management
Consulting Co., Ltd (華宇企管) to work with them on this project. They revised the QA manual and their standard operation procedure to fit the QS-9000 requirements. The general manager approved the QA manual, and the plant manager approved the standard operation procedure. The department managers were the team members for the internal audit which are set up to be
Chapter 4 67 conducted every 6 months. The audit findings are reported to the management team, and corrective actions are requested from that audited department for implementation.
APEX International Management Consulting Co., Ltd arranged the training programs for the employees. The training materials were based on the
QS-9000 general concept, and the seven books of QS-9000. They empowered the steering team to execute all QS-9000 activities, and standardization was their key success factor to receive the registration.
4.4 Kenly Precision Industrial Co., Ltd.
4.4.1 Company Profile
Kenly Precision Industrial Co., Ltd. is a professional stamping part manufacturer in Tao Yuan Hsien Taiwan, and has been so since 1969. The company’s capital investment is US $ 11.5 million (2000), with annual sales around US $ 11 million (2001). Their main products are: precise progressive dies, tooling parts & jigs, stamping parts, and assembly fixture. The production area is 7,768 square meters and they employ 176 employees.
They are a Japanese and Taiwanese joint venture company. Their principles of management are: (1) paying back to everyone’s need by the way the products are made; (2) service with a thankful heart and diligent morality.
They always teach their employees the following work attitude: business is a component of society, so we insist on strict execution, effective and economical management to make an excellent product and service, and to let a person lead a life of civilization and welfare. They also posted four slogans in the operation area for employees as a guideline in their daily operation.
Chapter 4 68
Those slogans are: (1) be methodical; (2) be involved in the operation; (3) be involved in quality improvement; (4) be involved in customer’s satisfaction.
Kenly quality policy is: “ Quality First “. “ Have the firm belief to make a product that meets the specification and quality level, and give the customer contented satisfactory service “. They emphasized that the spirit of working is: dealing with a problem on the job is strictly a matter of attitude, think things through and keep improving the situation constantly. Their rules of actions are:
(1) customer aspect: please smile and reply promptly and kindly; (2) working aspect: try your best to fulfill the task with a thankful heart; (3) colleague: show respect and be concerned about each other and politely greet each other at all times.
In September 1994, Kenly received the ISO 9002 certificate for manufacturing precise progressive die and precise stamping parts.
Furthermore, in September 2000, they received their certification for the
QS-9000 quality management system.
4.4.2 The Purpose for the QS-9000 Project
Kenly Precision Industrial Co., LTD. already was in the business of precise stamping parts and other tooling parts for approx. 35 years. They believed that automotive electronic parts would be the future trend of Taiwan’s industry. They upgraded their existing precise stamping parts experience to meet the automotive parts demand. As a first step, they constructed their quality management system to meet that standard. Because they already set up the ISO 9000 quality management system, it was more convenient for them to reach that requirement. After about one year effort, they received the
Chapter 4 69
QS-9000 certificate and jumped into the basic requirement for automotive parts producer.
4.4.3 The Formulation and Implementation Stage
Kenly Precision Industrial Co., Ltd. already had a very well designed organization, so they did not make any organizational changes when they started the QS-9000 project. The project manager was assigned to organize the steering team. A total of six team members were chosen from various departments to work on the QS9000 project. They asked the consulting firm –
APEX International Management Consulting Co., Ltd (華宇企管) to work with them on this project. The document control center came under the control of the Engineering department. According to project manager Kenly’s main purpose for pursuing the QS-9000 quality management system certificate was based on the following three reasons: (1) customer demand; (2) expand the business field to automotive related products; (3) upgrade the quality management system. Kenly Precision Industrial Co., Ltd. had worked with
APEX International Management Consulting Co., Ltd. on the ISO 9000 program, so they decided to also work together to pursuit their QS-9000 certificate. Kenly’s business management system is based on the target management principle (方針管理). They held their annual business plan meeting on October to define their company’s development policy so as to then develop a plan for each department. The internal customer-measuring index was: (1) scrap cost; (2) customer complaint; (3) yield rate. Kenly did not develop their accounting system to monitor the cost of quality, but they conduct
Chapter 4 70 an annual external customer satisfaction investigation that is initiated from the
General Manager’s office. The sales department will distribute the questionnaires to all existing customers, and an officer at the General
Manager’s office will review all returned questionnaires and ask the appropriate departments to implement any required actions. The Quality
Manager was transferred to Mainland China, so Kenly assigned the
Information System Manager as the company’s quality management system representative.
The QS-9000 quality management system will be upgrade to TS 16949 in 2006. The project manager believes that Kenly will implement this quality management system in the near future.
4.5 Yuan Cherng Co., Ltd.
4.5.1 Company Profile
Yuan Cherng Co., Ltd. is a producer of rubber products, plastic products, as well as metal and other materials, such as: O, U, V, X and square rings, oil seals, boots, bellows, reed valves, EGR control valves, packing, gaskets, bushings, anti-vibration rubber parts, weight rollers, tensioner adjusters, inlet pipes, chain tensioners etc. They have been manufacturing these products in
Taiwan since 1963. When the company was established in 1963, the registered capital was NT $ 6000 with 33 square meter of plant size. The product was an oil seal with the trademark “ YC “.
In 1970, the trademark was changed to “ KOK “ and the company’s registered capital was increased to NT $ 6,600,000 (US$ 190,000). In 1987, the mechanical division was granted the contract of being the number one
Chapter 4 71 plastics supplier to KYMCO (Kang Yang Motorcycles Company) for good performance in quality, lead-time and price. That same year, they became the
“Ship to Stock” subcontractor for KYMCO. In June 1994, they received the ISO
9002 certificate on behalf of BSI. In that same year, they invested US $
6,000,000 to found the KOK China management center and another US $
20,000,000 to purchase 44,623 square meter of land in the Chang-Bin
Industrial Park in Lukang in central Taiwan. In 1997, they received various awards for good performance for product quality, such as: KYMCO SQC
Quality Improvement Program and the Taiwan Yamaha Subcontractor Award.
In 1998, they received the first award of QCC by KYMCO and were given the
TPM 5S award by Taiwan Yamaha. Furthermore, they were certificated by
BSI and received the QS9000 certificate in 1999.
4.5.2 The Purpose for the QS-9000 Project
Yuan Cherng Co., Ltd. already was in the market for 40 years. When the company was established in 1963, they supplied parts to a local company for machine oil sealing. When Taiwan’s economy started to boom in 1970, most of the residents on the island started to use motorcycles as their method of transportation. This huge demand for motorcycles gave the opportunity to the
Japanese manufacturers to set up joint ventures in Taiwan. Yuan Cherng captured this opportunity and they upgraded their product to fit the requirements of the motorcycle market. Now, they play an important role for oil seal supplier in Taiwan and have become the key supplier to the motorcycle manufacturers. They became a partner with KYMKO and Taiwan Yamaha for seal parts and received various awards for their good performance on the
Chapter 4 72 supplied parts. Since a quality management system certificate is the trend and a basic requirement for any industry supplier, they intend to continue grow in the motorcycle market, so they registered for the QS-9000 certificate.
4.5.3 The Formulation and Implementation Stage
Their quality manager already reported directly to the general manager, so their organization did not have to make any change during the formulation stage. The company quality management representative was the QA manager, he organized the steering team and eight team members were assigned from various functional departments. They did not establish a document control center to issue and distribute documents within the company. Their department target was developed at year-end and reviewed on a quarterly basis.
They used a consultant – APEX International Management Consulting
Co., Ltd (華宇企管) to assist them with the implementation of the QS-9000 project. They conduct an annual customer satisfaction survey, and top management reviews the survey result. They also monitor the quality cost but it is not a completed set of report for COQ that includes appraisal, prevention, and internal and external cost. The QA manager organized the internal audit team that includes ten auditors from various departments. Four operation units are to be audited each month.
4.6 Lite-On Automotive Corporation
4.6.1 Company Profile
Lite-On Automotive Corporation was founded in 1979 and merged with the Lite-On Group in 1992. It has over twenty years of experience in designing
Chapter 4 73 and manufacturing electronic products for the OEM automotive industry. The company has established an outstanding reputation for quality and reliability with its customers, including a large number of noted international automotive companies. With support from the Lite-On Group, Lite-On Automotive
Corporation became the Taiwanese leader in the electronics and information technology products and appliances. Lite-On Automotive is able to offer a full range of automotive electronic accessories, such as vehicle security products, cruise control products, and automotive electronic controllers. In addition, the company is engaged in subcontract electronics manufacturing, including component SMT, component insertion, wave soldering, PCB assembly, and full range of functional testing.
Lite-On Automotive emphasizes strong R&D. With over 25 engineers with experience in vehicle security, cruise control technology and automotive electronic control modules, the company is able to continuously improve quality and reliability, and turn out truly innovative products. And, as a result of the use of modern CAD tools, such as PCAD, ORCAD, AutoCAD and
PRO/ENGINEER, it is able to reduce manufacturing times to a minimum.
Lite-On Automotive’s manufacturing capabilities are impressive as well, with all facilities equipped with state-of-the-art production and testing equipment.
The AP-500 Professional Electric Cruise Control unit and the
VS560/VS580 Vehicle Security System are two recent examples of the superior products that Lite-On Automotive turns out. The former is especially designed to fit today’s vehicles in which there is little or no vacuum available.
The unit can be equipped with various command modules, and it programs all parameters by itself using a new ”self-learning” technology. The latter product
Chapter 4 74 has 95% of all the alarm features found in the latest high-end alarm systems.
For instance, the PIN provides flexibility in feature selections. The VS560/580 also offers on-board immobilizer, chirp delete, remote tempo valet, and remote sensor by-pass, all of which can easily be selected by pressing the remote button.
Lite-On Automotive Corporation is Taiwan’s leading developer and manufacturer of high performance automotive products, and the company has also built up a strong presence in the international automotive product market.
They produce a wide range of product with competitive prices. Their high quality products with reliable services are delivered to enable commitment and total customer satisfaction. Their Corporate Mission is: To provide competitively priced products, quality, services and flexibility to meet our customers’ expectations while offering a fair return to our investors.
4.6.2 The Purpose for the QS-9000 Project
Lite-On Automotive Corporation was already active in the market for more than 20 years. They understood that large global competitors had set up manufacturing facilities, warehouses, R&D centers, as well as sales offices around the world, especially in those markets with great potential: such as
Mexico, Argentina and China. Those competitors had an impressive international reputation, advanced technologies, a good quality management system and strong service capabilities. To meet this challenge, Taiwan manufacturers needed to develop their capabilities for all those requirements.
Although the local producers could offer a wide range of products in relatively small volumes, a consistent product quality would be a major contributing
Chapter 4 75 element for success in the market. They already had set up a global sales network, had developed a strong customers relationship management and product development strategy, and in addition, they understood that a precise quality management system was going to be the foundation for their success.
4.6.3 The Formulation and Implementation Stage
Their quality department was on the tier one level of the company organization and the QA manager reports to the General Manager. As a result Lite-On Automotive Corporation did not have to make any organizational changes when they decided to implement the QS-9000 quality management system. The Quality Manager was assigned as the company quality management representative, he organized the steering team, and the team members were assigned from the various functional departments. Lite-On
Automotive Corporation asked assistance from APEX International
Management Consulting Co., Ltd (華宇企管) to pursuit the QS-9000 certificate.
APEX set up the milestone and target with the steering team, they also trained the employees for the requirements for the QS-9000 documentation. The company standard operation procedures was amended to fit the QS-9000 requirements.
Lite-On Automotive Corporation did not have the mechanism to monitor the cost of quality, but instead they focused on the scrap cost, product yield rate and customer complaints. The sales department conducts annual customer satisfaction surveys through the distribution of questionnaires.
Corrective actions will be implemented once they receive feedback from customer survey. That indicates dissatisfaction that may require to be
Chapter 4 76 addressed.
4.7 The Summary of the Case Firms Analysis
According to the survey for these six case firms, we can conclude that the successful implementation on QS-9000 quality management system were based on these four key success factors: (1) documentation; (2) training; (3) standardization; (4) auditing. All six firms were already certificated with the ISO
9000 quality management system before they upgraded to the QS-9000 quality management. Five firms – Ge Mao, JHH, Kenly, Yuan Cherng and
Lite-On used the services of APEX International Management Consulting Co.,
Ltd. (華宇企管) to assist them with the QS-9000 project. Although CTS
Components Taiwan did not ask outside consultant assistance, they did sent an engineer to attend the training course that was held by APEX International
Management Consulting Co., Ltd. It seems that APEX International
Management Consulting Co., Ltd. plays an important role in supporting the local Taiwanese manufacturing firms with the QS-9000 project.
All six case firms had executed customer satisfaction surveys, but most of them did not apply the internal and external customer satisfaction index to measure customer satisfaction. Some of the items that are listed under the cost of quality report can be used as the customer satisfaction index, but only CTS Components Taiwan utilized this mechanism to monitor the quality performance in terms of dollars. The cost of quality report includes four categories: (1) prevention costs; (2) appraisal costs; (3) internal failure costs;
(4) external failure cost. The internal failure costs contains – scrap, rework, sorting, incoming material disposition, corrective action evaluation and
Chapter 4 77 re-inspection. The external failure costs contains – customer complaint evaluation, returned goods rework and sorting, returned goods replacement/scrap, returned goods processing and legal/settlement costs.
Three of the case firms – CTS Components Taiwan, Kenly and Ge Mao had already established a manufacturing facility in Mainland China, and their
Taiwan team will share their ISO/QS-9000 implementation experience with their subsidiary.
Chapter 4 78
Table 4.1 Comparison List for Case Firms CTS T Ge Mao JHH Kenly Yuan Lite-On Cherng Since 1967 1981 1959 1969 1963 1975 Owner USA Taiwanese Taiwanese Taiwanese/ Taiwanese Taiwanese Japanese
Product Dip switch Rubber Motorcycle Stamping Rubber, Vehicle Variable components & car parts parts, tool plastic security, resistor parts products Cruise Sensor control Employee 380 228 200 176 634 300
Capital 15,000,000 7,000,000 40,000,000 11,500,000 19,000,000 16,000,000 US$
Annual 18,000,000 18,000,000 10,500,000 1,100,000 10,000,000 32,000,000 Sales US$ (2002) QS-9000 2003 1998 1999 2000 1998 1998 Certificated on Registrar ABS BSI TUV URS BSI SGS Body Rheinland
Consultant In-house APEX APEX APEX APEX APEX
Chapter 5 78
Chapter 5 Data Analysis
5.1 The Questionnaire Response
It is necessary when entering a new research area to conduct studies
that pertain to the exploration and concept-development steps of the theory
building process. A total of 39 survey questionnaires were sent to personnel of
six case firms, and a total of 33 usable responses were received, resulting in a
response rate of 85%. These response rates compare very favorably to many
mail surveys reported in the literature, and are shown in Table 5.1.
Table 5.1 Delivery and Response of Mail Survey Firm Delivery Response Response Rate CTS 6 6 100% Ge Mao 6 5 83% Juei Hsing Hwa 7 7 100% Kenly 7 7 100% Yuan Cherng 6 1* 16% Lite-On 7 7 100% Total 39 33 85%
* According to their company policy, they only agreed to reply one copy of the questionnaire. All respondents were asked to provide general information regarding the
QS-9000 quality management system at the formulation stage, the
implementation stage, customer satisfaction related issues, QS-9000
implementation experience and personal data.
5.2 Overall Analysis for the Questionnaire
The questionnaire contained five sections, and they were (I) Relating
questions with QS-9000 formulation stage (II) Outline of the QS-9000
Chapter 5 79 implementation (III) Customer satisfaction (IV) QS-9000 implementation experience (V) General information. The following analysis is based on the questionnaires returned from the respondents, with the focus on the highest percentage for each question.
5.2.1 Analysis for the Six Case Firms
Section I: Relating questions with QS-9000 formulation stage
Q1. Duration from project announcement until the QS-9000 certificate was received.
70% 60% 50% 40% 30% 20% 10% 0% 6 below 7~12 13~18 19~24 25 above Month
Figure 5.1 Time Duration for the QS-9000 Project
The survey indicated that 64% of the firms spent 7~12 months to implement the system before they received the QS-9000 certificate.
Q2. QS-9000 registration date.
Table 5.2 QS-9000 Registration Date Yuan CTST Ge Mao JHH Kenly Lite-on Cherng Registration TUV ABS BSI URS BSI SGS Body Rheinland Registrated 2003 1998 1999 2000 1998 1998 on Consultant In-house APEX APEX APEX APEX APEX
Chapter 5 80
Q3. What is the number of team members in the steering team?
60% 50%
40% 30% 20% 10% 0% Person 10 below 11~15 16~20 21~25 26~30 31 above
Figure 5.2 Steering Team Members
The survey indicated that 51% of the firms had a steering team with less than
10 team members.
Q4. Who acts as the chairman of the steering team?
80% 70% 60% 50% 40% 30% 20% 10% 0% GM Plant Eng. QA Other manager Manager manager
Figure 5.3 Chairman of the Steering Team
The survey indicated that in 67% of the firms the General Manager acted as the chairman of the steering team.
Q5. Did the company organization have to be changed because of the
QS-9000 system formulation stage?
Chapter 5 81
70% 60% 50% 40% 30% 20% 10% 0% No change Slighty change Overall change
Figure 5.4 Organization Change at the QS-9000 Formulation Stage
The survey indicated that 58% of the firms did not have to change their organization at the formulation stage.
Q6. What is the company’s quality reporting system?
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% GM Plant manager Eng. Director Other
Figure 5.5 Reporting System
The survey indicated that in 94% of the firms the QA manager reports directly to the General Manager.
Chapter 5 82
Q7. Who develops the department’s target?
80% 70% 60% 50% 40% 30% 20% 10% 0% Top management Dept. Consultant Company
Figure 5.6 Department Target
The survey indicated that 67% of department targets were developed by the department themselves.
Q8. Where did the company get their QS-9000 information?
other 8% Top management External source instruction 10% 33%
Consultant 27%
Magazine 12% Internet 0% Seminar 10%
Figure 5.7 QS Information Disclosure Channel
The survey indicated that 33% of the top management teams disclosed the
QS-9000 information to the employees. However, the external consultant also plays an important role in the distribution of this information.
Chapter 5 83
Q9. Quality activity prior to the QS-9000 quality system implementation.
Other No 3% 0% Annual audit QCC 19% 23%
MIS 8%
ISO9000 TQM/TQC 34% 13%
Figure 5.8 Previous Quality Activity
The survey indicated that 34% of the firms already had the ISO 9000 Quality system implemented before they started the QS-9000 project. However, an annual audit is the basic requirement for ISO 9000, so if we include having an annual audit into the consideration, then the total percentage will be 57%.
Q10. Evaluation of the internal implementation status.
60%
50%
40%
30%
20%
10%
0% Weekly review monthly review Quartely review Periodic review
Figure 5.9 System Evaluation Frequencies at Formulation Stage
The survey indicated that 48% of the firms conducted a monthly evaluation of the QS-9000 implementation status.
Chapter 5 84
Q11. Who approves the quality manual?
100%
80%
60%
40%
20%
0% Chairman GM QA manager Plant Other manager
Figure 5.10 Authority for Quality Manual Approval
The survey indicated that in 91% of the firms the QA manual was approved by the General Manager.
Q12. Who approves the standard operation procedure?
80% 70% 60% 50% 40% 30% 20% 10% 0% Chairman GM QA manager Plant Other manager
Figure 5.11 Authority for Standard Operation Procedure Approval
The survey indicated that in 76% of the firms the SOP was approved by GM.
Q13. Who performs the internal audit?
70% 60% 50% 40% 30% 20% 10% 0% Company GM Plant QA dept. Audit Rep. manager team
Chapter 5 85
Figure 5.12 Execution of the Internal Audit
The survey indicated that in 58% of the firms the internal audit was executed by the QA department.
Q14. What is the company’s internal audit frequency?
100% 80% 60% 40% 20% 0% Quarterly Bi-yearly Yearly
Figure 5.13 Internal Audit Frequency
The survey indicated that 79% of the firms conducted an internal audit every 6 months.
Q15. What is the material that was used in the QS-9000 training course?
70% 60% 50% 40% 30% 20% 10% 0% QS9000 7 QS9000 Concept Both Volumes
Figure 5.14 Training Course Material
The survey indicated that 64% of the firms’ QS-9000 training materials were the seven volumes of QS-9000 and the QS-9000 general concept.
Chapter 5 86
Q16. Did/do you use an external consultant for the QS-9000 project?
Five firms in this study used an external consultant for their QS-9000 project.
However, CTS Taiwan did not use an external consultant because their quality director had adequate knowledge of QS-9000, and he had been empowered to act as the leader on this project. Furthermore, he had served with that company for more than 15 years and he was familiar with all the operations.
Section II: Outline of the QS-9000 Implementation
From Q1 to Q6, the following questions were included in this questionnaire, such as (1) the QS-9000 concept (2) four tiers of documents (3) company quality policy (4) knowledge at the QS-9000 implementation step (5) QS-9000 elements (6) QS-9000 documentation.
All six questions were combined under the title "Understanding the
Documentation".
Q1~Q6 Understanding the Documentation
60% 50% 40% 30% 20% 10% 0% Very High Middle Low Very low high
Figure 5.15 Understanding of the QS-9000 Documentation
The survey indicated that 56% of the respondents had knowledge of the
QS-9000 implementation related concept that included the four tiers of documents and the QS-9000 elements.
Chapter 5 87
Q7, Q11, Q12 and Q14 were combined under the title "Training".
Q7. What was the deciding factor for an employee to attend the training course?
Q11. Did the organization provide adequate training for the management team?
Q12. Did the management team attend all the training courses?
Q13. Did all employees understand the QS-9000 seven volumes?
60% 50% 40% 30% 20% 10% 0% Very High Middle Low Very low high
Figure 5.16 Training
The survey indicated that only approx. 45% of the firms were able to successfully execute their training programs. It also showed that employees did not have an adequate knowledge about the establishment of the QS-9000 document.
Q8, Q9, Q10, Q13, Q15 and Q16 were combined under the title
"Standardization Implementation Status".
Q8: What was the impact on the current operation?
Q9: Did the employee become accustomed to the QS-9000 requirements?
Q10: Did the employee execute the SOP in a precise way?
Q13: Did the management team involve itself in the project execution and did it
Chapter 5 88 always provide support once a problem showed up?
Q15: Assess the differences between the QS-9000 system and the current
(previous) system.
Q16: Are the QS-9000 requirements followed to standardize the internal operation?
60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Very High Middle Low Very low high
Figure 5.17 Standardization Implementation Status
The survey indicated that only 57% of the firms had a good performance in implementing the standardization program. That meant that most of the top management team in these firms were still focused on their routines or their daily operation and did not pay close enough attention to the QS-9000 project.
Q17: Employee resistance to the QS-9000 system implementation.
60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
Figure 5.18 Resistance to the QS-9000 System
Chapter 5 89
The survey indicated that 48% of employees resisted the QS-9000 quality system implementation. However, if we included the “middle group”, the percentage would reach 78%. That means that any new system implementation will result in conflict and resistance within an organization, so we must always consider the “feelings” of the employees. The organization must provide a mutual communication channel between each level and ask for the involvement of the employees in the execution of any company-wide project.
Q18 and Q19 were combined under the title "Steering team".
Q18: Was the steering team empowered and did it have an adequate ability to execute the QS-9000 project?
Q19: Did the steering team have the power and the ability to arbitrate conflicts?
60%
50%
40%
30%
20%
10%
0% Very high High Middle Low Very low
Figure 5.19 Steering Team
The survey indicated that 60% of the firms had steering a team that was empowered and had the ability to arbitrate conflicts within the organization.
Q20 and Q21 were combined under the title "Internal audit".
Q20: Does your company have a mechanism to conduct an internal audit, and
Chapter 5 90 does it issue a CAR once it has found a non-conforming act or situation during their audit?
Q21: What is the status for the implementation of corrective actions for internal audit findings in your company?
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Very high High Middle Low Very low
Figure 5.20 Internal Audit
The survey indicated that only 54% of the respondents agreed that corrective actions were implemented properly from internal audit findings.
Section III: Customer Satisfaction
Q1: What is the result for product yield improvement?
70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
Figure 5.21 Yield Improvement
The survey indicated that only 58% respondents agreed that product yield has been improved significantly after the QS-9000 system implementation.
Chapter 5 91
Q2 and Q11 were combined under the title "Scrap cost reduction".
Q2: What is the possibility for reducing internal scrap cost?
Q11: What is the possibility for cost savings when the QS system is implemented successfully?
60%
50%
40%
30%
20%
10%
0% Very high High Middle Low Very low
Figure 5.22 Scrap Cost Reduction
The survey indicated that only 56% of the respondents agreed that scrap cost could be reduced significantly.
Q3 and Q12 were combined under the title "MRB".
Q3: What is the possibility for reducing customer complaints?
Q12: What is the possibility for precisely executing quality control?
70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
Figure 5.23 MRB Items Reduction
The survey indicated that 70% of the respondents agreed that MRB items could be reduced after the implementation of the QS-9000 system.
Chapter 5 92
Q4: The possibility to reduce customer complaints.
60%
50%
40%
30%
20%
10%
0% Very high High Middle Low Very low
Figure 5.24 Customer Complaints
The survey indicated that 60% of the respondents agreed that customer complaints could be reduced after the implementation of the QS-9000 system.
Q5 and Q7 were combined under the title "Field returns".
Q5: What is the possibility for reducing the field returns?
Q7: What is the possibility for reducing customer return items?
70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
Figure 5.25 Field Returns
The survey indicated that 64% of the respondents agreed that there was a higher possibility to reduce field returns after the implementation of the
QS-9000 system.
Q6: What is the result for on-time delivery performance?
Chapter 5 93
60%
50%
40%
30%
20%
10%
0% Very high High Middle Low Very low
Figure 5.26 On-time Delivery Performance
The survey indicated that only 49% of the respondents agreed that the on-time performance could be improved after the implementation of the QS-9000 system. However, if we include the “very high group”, and “middle group” the percentage can reach to 83%. So there is a good possibility to improve the on-time delivery performance after the implementation of the QS-9000 system.
Q8: Increase customer quality rating.
80% 70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
Figure 5.27 Customer Quality Rating
The survey indicated that more than 80% respondents agreed that the customer rating could be increased after the implementation of the QS-9000 system.
Q9: What is the possibility to reduce the premium freight cost?
Chapter 5 94
60%
50%
40%
30%
20%
10%
0% Very high High Middle Low Very low
Figure 5.28 Reduction of Premium Freight Cost
The survey indicated that around 60% of the respondents agreed that it there was a better possibility to reduce the premium freight cost after the QS-9000 system implementation.
Q10, Q13, Q14 and Q15: were combined under the title "Financial performance"
Q10: What is the possibility to upgrade the company image?
Q13. What is the possibility to consolidate the external customers?
Q14. What is the possibility to increase company sales?
Q15. What is the possibility to develop new customers?
80% 70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
Figure 5.29 Financial Performance
The survey indicated that more than 80% of the respondents agreed that a
Chapter 5 95 higher financial performance could be achieved after the implementation of the
QS-9000 system.
Section IV: QS-9000 Implementation Experience
Q1: What is the company’s major motivation for implementing the QS-9000 project – multiple choice.
System re- Meeting world construction trend customer Company 17% 12% demand demand 5% 19% Upgrade Upgrade operation service quality efficiency 14% 3% Increase Increase company competence image 16% 14%
Figure 5.30 Motivation for the QS-9000 Project
Analysis: customer demand at 19% is the major motivation for QS project.
However, to increase the competence, at 17%, also plays an important factor in implementing the QS project.
Q2: Resistance encountered at the implementation of the QS-9000 project.
Chapter 5 96
No support from top Budget shortage management 1% 1% No empowerment 2%
Huge organization 5% Lack of document compilation ability 5% Lack of support from employees 10%
Conflict between Lack of QS knowledge departments 26% 19%
Unenthusiastic Resource shortage employees 12% 19%
Figure 5.31 Resistance to the QS Implementation
Analysis: Lack of QS knowledge at 26% is the foremost contribution for any resistance toward the QS implementation. However lack of enthusiasm, simple dis-interest by the employees at 19% are also a major hurdle for the QS project to overcome.
Section IV: General Information
30 25 20 15
Person 10 5 0 Director Manager Supervisor Enginner Position
Figure 5.32 Respondent Position
Most of the questionnaires were answered by personnel at the managerial level, and reached 73%.
Chapter 5 97
20
15
10
Person 5
0 30 below 31-40 50 51-60 61 above Age
Figure 5.33 Age of Respondent
Most of the questionnaires were answered by managers between 31 to 50 years of age.
5.2.2 Group Analysis for the Questionnaire
Three firms – Ge Mao, Kenly, and Yuan Cherng are suppliers to CTS
Components Taiwan and the other two firms have a similar product service field as CTS. So we divided them into two groups for comparison analysis.
Group A included CTS, Jui Hsing Hwa and Lite-On, and group B included
Ge-Mao, Kenly and Yuan Cherng. The comparison analysis is based on section II – outline of the QS-9000 implementation, and on section III – customer satisfaction. Following are the details of the result of the analysis.
Section II: Outline of the QS-9000 Implementation
Q 1 ~ Q 6 Understanding the Documentation.
Chapter 5 98
70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.34 Understanding the QS-9000 Documentation
The survey indicated that group A firms have the higher QS documentation knowledge compared to group B, that is to say 65% vs. 45%, at the high level.
60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.35 Training
The survey indicated that the implementation-training program from group B has a higher performance than that of group A, 46% vs. 49% at the middle level.
Q8, Q9, Q10, Q13, Q14, Q15 and Q16 are combined together under the title
"Standardization implementation status".
Chapter 5 99
60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.36 Standardization Implementation Status
The survey indicated that 56% of group A and 34% of group B firms reached a middle level of performance regarding standardization implementation.
Q17 What is the employee resistance for QS-9000 system implementation?
80% 70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.37 Resistance to the QS-9000 System
The survey indicated that the group A firms had a low level of resistance to the
QS system by 45% of their employees, but the group B firms had 69% of their middle level employees resist the implementation of the QS system.
Q18 and Q19 are combined under the title "Steering team".
Chapter 5 100
60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.38 Steering Team
The survey indicated that group A firms had been empowered and had the ability to arbitrate conflicts, at a high level at 55% but the firms group B only were at 46%.
Q20 and Q21 were combined under the title "Internal audit".
50%
40%
30%
20%
10%
0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.39 Internal Audit
The two groups had the same probability of performing an internal audit.
Section III: Customer Satisfaction
Q1: Product yield improvement
Chapter 5 101
70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.40 Product Yield Improvement
The survey indicated that both the firms in group A and group B stated that product yield was improved, and at the high level it was 55% vs. 66% respectively.
Q2 and Q11 were combined under the title "Scrap cost reduction"
70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.41 Scrap Cost Reduction
The survey indicated that the firms in both groups could achieve scrap cost reduction to a middle level.
Q3 and Q12 were combined under the title "MRB".
Chapter 5 102
70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.42 MRB Items Reduction
The survey indicated that the firms in both groups had a high-level percentage, ability, 58% vs. 65%, to reduce MRB items after the implementation of the QS system.
Q4: What is the possibility to reduce customer complaints?
60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.43 Customer Complaint Reduction
The survey indicated that around 55% of the respondents agreed that customer complaints could be reduced after the QS implementation.
Chapter 5 103
Q5 and Q7 are combined under the title "Field return reduction".
70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.44 Field Returns Reduction
The survey indicated that 60% of the respondents agreed that there was a higher possibility to reduce field returns after the implementation of the
QS-9000 system.
Q6: What is the on-time delivery performance?
60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.45 On-time Delivery Performance
The survey indicated that 45% (group A) and 54% (group B) of the firms agreed that the on-time performance could be improved after the
Chapter 5 104 implementation of the QS-9000 system.
Q8: What is the possibility for increasing the customer quality rating?
100%
80%
60%
40%
20%
0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.46 Increasing Customer Quality Rating
The survey indicated that 65% (group A) and 92% (group B) of the firms had a high-level of confidence to increase customer rating after the implementation of the QS-9000 system.
Q9: What is the possibility to reduce premium freight cost?
60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.47 Reduction of Premium Freight Cost
The survey indicated that both groups had a 55% high-level confidence to reduce premium freight cost after QS system implementation.
Q10, Q13, Q14 & Q15 were combined under the title "Financial performance".
Chapter 5 105
80% 70% 60% 50% 40% 30% 20% 10% 0% Very high High Middle Low Very low
GroupA GroupB
Figure 5.48 Financial Performance
The survey indicated that the respondents, group A at 69% and group B at
75%, agreed that they could achieve a high-level of financial performance after the implementation of the QS-9000 system.
5.3 Impact factors for QS-9000 Implementation
From the literature review and the results of the survey questionnaires, we can conclude that the training course; standardization; employee resistance and the implementation of corrective action are the impact factors for the implementation of QS-9000.
The employee training is a systemic approach for using established documented materials. To comply with the primary QS-9000 system requirements, all employees shall be trained for the QS basic concept.
However, the engineers and the management team are required to attend a course on QS-9000 section II specified-requirements. The section II specified-requirements include seven documents. Those seven volumes are the advanced engineering knowledge that will be used as a product approval guideline. Time constraints and employee turn-over also affect the training
Chapter 5 106 performance. In total the six surveyed firms did not have good results for training. That meant that they did not adequately train their employees, and it also meant that the management teams did not well attend the training courses that were provided.
Standardization – the survey indicated that the six firms did not implement the standardization well. A possible cause might be that the existing systems could not readily be transformed or merged with the newly developed quality management system. Standardization plays an important role in consolidating a firm’s internal resources such as: man power, materials and process. Standardization can reduce the overlap portion between each functional department and improving the efficiency of the operation.
Employee resistance – prior to the implementation of any new system or policy, mutual communication within an organization is of the utmost importance. Effective communication can be defined as follows: On a peak performing team, everybody knows what is going on. There are no hidden agendas likely to sabotage the team’s efforts. Effective communication among individual team members calls for empathy, authenticity, and concreteness
(David L. Goetsch and Stanley B. Davis, 1997). Enhancing the mutual communication channel within an organization can substantially reduce the conflict of, and resistance to the new system implementation. One of the most fundamental elements of quality system implementation is the ongoing development of personnel. This means education, training and learning.
According to this study, through communication, personnel development, and employee encouragement, we can reduce employee resistance and eventually achieve the organization’s goal.
Chapter 5 107
Implementation of corrective actions – when it comes to the implementation of the internal quality system audit, we detected a gap between the existing system and the QS-9000 system requirements. Based on those findings, the departments responsible shall take actions to eliminate these differences. However, the survey also indicated that around 50% of the respondents agreed that the corrective action plan was not properly executed.
Therefore, an organization shall develop a mechanism that allows it to follow up on the status of implementation. That way it will have a better chance to achieve the required targets.
5.4 QS-9000 Implementation vs. Customer Satisfaction
From the analysis of the questionnaires, we found that the customer satisfaction indices achieved a very high score except for the scrap cost.
W. Edwards Deming and William W. Scherkenbach made a very positive comment regarding satisfying customers and company profits.
Profit in business comes from repeat customers, customers that boast about
your products and your service, and whom bring friends with them. Fully
allocated costs may well show that the profit in a transaction with a customer
that comes back voluntarily may be 10 times the profit realized from a customer
that responds to advertising and other persuasions.
The score for reduction of scrap cost was 42%. This is probably the result of most Taiwanese firms not measuring the cost of quality. So, the respondents may not even have an idea regarding the definition of scrap cost.
Nevertheless, the overall analysis indicated that a successful implementation can be achieved with a higher degree of customer satisfaction.
Chapter 6 108
Chapter 6 Conclusion and Suggestion
6.1 Conclusion
6.1.1 General Overview
The QS 9000 management quality system is a consistent and logical approach which, if implemented and practiced in daily activities with total support from top management, can lead to “ getting it right the first time – every time ”. It is the best way for convincing a management team that a documented system will result in benefits and prosperity for the company.
The continuous improvement and the meeting of the customers’ expectations are the two pillars that will be the support of the future growth of the company.
The world is changing rapidly, and we shall bear in mind that we must apply these changing philosophies in our daily activities. If a change of thinking were required, we would do well to bear in mind these words by the great statesman
Sir Winston Churchill (Lionel Stebbing, 1993):
“It is well said that there is nothing wrong in change if it is in the right direction. To improve is to change, so to be perfect is to have changed often.”
The main purpose of this thesis is to research the relationship between the implementation of QS-9000 and customer satisfaction. This study is focused on the inter-reaction from the following three perspectives: formulation, implementation and customer satisfaction. The research framework is outlined in figure 3.1 which clearly defines the elements for formulation and the key success factors for implementation. Also, six firms have been investigated for their formulation, implementation for QS-9000 quality management system.
Although all of those firms are local enterprises with a traditional product line, they have the mindset to ‘act locally but think globally’.
Chapter 6 109
There exist two scopes for supplier product qualification: (1) product performance evaluation; (2) quality management system evaluation. For product performance scope, we shall review and evaluate the product characteristics such as: (a) engineering specification; (b) reliability test data; (c) execute the application testing. For the quality management system evaluation, the suggested review elements contain: (a) company’s brochure; (b) company’s Quality Manual; (c) registered quality system; (d) organization.
Because of the great variety of knowledge required in industry, end users may be limited in their ability to execute a product qualification by performing an actual application testing. The quality management system requires the total integration and control of all elements within a particular area of operation, so that no-one element is subservient to the other. These elements cover such aspects as administration, finance, sales, marketing, design, procurement, manufacturing, quality assurance, installation and human resource planning.
Although QS-9000 registration is not yet mainstream in Taiwan’s industries due to the high entry barrier in this field, it will become more popular when manufacturers upgrade their engineering capability. The six case firms in this thesis are not a tier one supplier to the big three, but their success in the implementation of the QS quality system did give them the good result for financial performance.
6.1.2 Research Findings
Our research findings disclosed that QS-9000 registration is a company wide activity and that it must get full support from top management, otherwise it will face a difficult situation when reaching the implementation stage. The
Chapter 6 110
following are a brief description of the findings of this research.
Table 6.1 Formulation Stage Item Finding Result 1 QS-9000 system implementation time frame 7 ~ 12 months 2 Use of outside consulting company 83% 3 Re-organization for QS-9000 system implementation Below 58% 4 Company quality reporting system 94% to GM 5 Department target is developed by the department 67% 6 QS information is disclosed by top management or 60% consultant 7 Existing ISO 9000 system and conducting of internal audit 57% prior to QS-9000 implementation 8 Execute weekly or monthly system review 76% 9 GM approves QA manual 76% 10 GM approves SOP manual 91% 11 QA dept. executes internal audit 58% 12 Internal audit frequency: every six months 79% 13 Training course material - QS concept & QS 7 volumes 64%
Our research findings disclosed that all firms required at least 6 months to implement the QS-9000 system. Furthermore, most firms used an external consulting firm to set up the QS system, and the general manager approved all
QS documents. The quality department acted as an important role for the QS system implementation, and the QA manager reported directly to the General
Manager. The top management teams and external consultant disclosed the
QS-9000 information to the employees, and the QA department executed an internal audit every six months. The QS concept and the QS seven documents were the training materials for the training course.
Chapter 6 111
Table 6.2 Outline of the QS-9000 Implementation Item Finding Result 1 Employees understand QS-9000 documentation - above 64% high level 2 Training course execution status - above high level 43% 3 Standardization implementation status - above high level 35% 4 Employees resistance to QS-9000 - above high level 52% 5 The steering team’s power and ability - above high level 60% 6 Corrective action plan execution status - above high level 54%
Our research findings showed that only 43% of the firms were able to successfully execute their training course. The firms only achieved 35% performance in implementing the standardization program above the high level.
The survey also indicated that around 50% of the respondents agreed that there was employee resistance to the QS-9000 system implementation. For the corrective actions execution, only 54% of the respondents agreed that those actions were executed properly.
Table 6.3 Customer Satisfaction Item Finding Result 1 Improvement of product yield - above high level 66% 2 Reduction of scrap cost - above high level 42% 3 Reduce MRB items - above high level 70% 4 Reduce customer complaint - above high level 60% 5 Field return reduction - above high level 70% 6 Increase customer rating - above high level 80% 7 Reduction of premium freight cost - above high level 60% 8 Good financial performance - above high level 80%
Chapter 6 112
The survey indicated that the respondents agreed that the product yield would be increased, and that the MRB items, customer complaints, field returns, and premium freight cost could be reduced significantly.
Our research results also showed that the main purpose for registering for the QS-9000 quality management system was to meet customer demand.
However, after the implementation of this system, they also could enhance customer service quality and improve product quality. In addition, the surveyed case firms agreed that the QS-9000 standards indeed helped their organization to upgrade the efficiency and service quality of their operation and as such enhance their company’s image as well as customer satisfaction.
During the implementation stage, they also encountered the following difficulties: (1) An attitude of resistance by the employees – some employees considered this program not to be their responsibility, as a result they did not have much enthusiasm for joining the required activities; (2) Lack of resources – most firms did not hire a full time manager to handle the QS-9000 program; the project manager from the current organization was mostly assigned; (3) Lack of knowledge - most firms did use a consultant, but they needed to accumulate the required knowledge by themselves.
6.2 Managerial Implication
The customer orientation and continual improvement are the two major measuring parameters for an enterprise. Satisfying customer requirements can be achieved by developing and implementation quality system utilizing the criteria given in the general quality system standard, such as the ISO 9000 or
QS-9000. The successful implementation of a quality management system can
Chapter 6 113
contribute to the overall business efficiency of an organization, such as administration, accounting, engineering, marketing, maintenance and after-sales service. Furthermore, a number of other objectives can be achieved after the system implementation, such as: (1) increase customer confidence; (2) enhance the company’s corporate image; (3) improve employee participation and moral; and (4) achieve good financial performance.
The company shall develop the internal and external customer satisfaction indices to check the customer expectation on their service and product. The suggested indices are listed in this thesis Chapter 2, section 2.3.3.
Quality cost are the costs of putting thing right. The monitor of cost of quality can reduce the non-productivity hours and material scrap.
When all the major activities have been identified, then the related procedures shall be developed to control those activities. Those documented standard operation procedures can be used as the guideline for internal operation. Also, the employees can follow those procedures to perform their daily activities.
6.3 Research Limitation
We only selected six case firms for this research, and they represented a minor percentage of the whole of the Taiwan auto-parts manufacturing industry, so our results will result in statistical errors by using such a small sample size to determine the group performance. Also, we did not have adequate time to conduct an overall investigation for the Taiwan auto-parts manufacturing industry, so there may be some discrepancy from the small sample size analysis. Some of the case firms did not wish to disclose company information
Chapter 6 114
such as: QS-9000 project budget, company financial result before/after QS implementation, customer satisfaction data etc., so our results were less than accurate when it comes to the collected information.
The surveyed six case firms are not “tier one” suppliers that directly supply products to the big three. Even though they already received their
QS-9000 certificate, there still is a degree of variation when they are compared to a tier one supplier. Also, we did not provide an incentive to the respondents of the questionnaire. So, the possibility exists that, they may not have fully understood some question, and just filled in a random answer, which also may result in a statistical error.
6.4 Further Research and Suggestions
According to the recent announcement by the big three, they requested their tier one suppliers to upgrade their current QS-9000 quality management system to the TS 16949 standard before 2006. Todate most Taiwanese auto-parts manufacturers still do not have adequate knowledge regarding the
TS 16949 requirements. So I recommend that those firms who prently are or wish to be tier one supplier of the big three, to act quickly and start their study of this requirement. This will ensure a successful system transformation from
QS-9000 to TS 16949. Because the TS 16949 requirements are accepted by the leading car manufactures around the world, suppliers can follow the same requirements to establish their quality system for providing their products to the automotive industry. Following is a brief description of TS 16949 that can provide a base reference for this newly released requirement:
The ISO/TS 16949 was jointly developed by the IATF members, and
Chapter 6 115
submitted to the International Organization for Standardization (ISO) for approval and publication. This document is a common Automotive Quality
System Requirements catalog based on ISO 9001:1994, AVSQ (Italian), EAQF
(French), QS-9000 (U.S.) and VDA6.1 (German) automotive catalogs. This document, coupled with customer-specific requirements defines quality system requirements for use in the automotive supply chain.
The IATF has developed a common registration scheme for supplier 3rd party registration to the ISO/TS 16949. The registration scheme includes third party auditor qualifications and common rules for consistent global registration.
Some of the benefits of the IATF registration scheme include:
• Improved product and process quality
• Additional confidence for global sourcing
• Reassignment of supplier resources to quality improvement
• Common Quality System approach in the supply chain for supplier
subcontractor development and consistency
• Reduction in multiple 3rd party registrations
The revised version of ISO/TS 16949 was published on April 2002, in accordance with the requirements for review of an ISO Technical Specification within three years. The transition from the current version of ISO/TS 16949 will align with the arrangements for introduction of ISO 9001:2000.
References 116
References:
英文部份 (English):
1. Automotive Industry Action Group, http://www.aiag.org, March 2003.
2. American Society of Quality, http://qs9000.asq.org, March 2003.
3. Barsky, Jonathan D., World Class Customer Satisfaction. Richard D.
IRWIN, INC., 1995.
4. "Baldrige National Quality Award Criteria for Performance Excellence." U.S.
Department of Commerce, National Institute of Standards and Technology,
2000.
5. Chrysler, Ford Motor and GM, Advanced Product Quality Planning (APQP)
and Control Plan, Automotive Industry Action Group, June 1994.
6. Chrysler, Ford Motor and GM, Measurement System Analysis (MSA),
Automotive Industry Action Group, June 1998.
7. Chrysler, Ford Motor and GM, Potential Failure Mode and Effects Analysis
(FMEA), Automotive Industry Action Group, July 2001.
8. Chrysler, Ford Motor and GM, Production Part Approval Process (PPAP),
Automotive Industry Action Group, August 2000.
9. Chrysler, Ford Motor and GM, Quality System Assessment (QSA),
Automotive Industry Action Group, August 1998.
10. Chrysler, Ford Motor and GM, Quality System Requirement, Automotive
Industry Action Group, October 1998.
11. Chrysler, Ford Motor and GM, Statistical Process Control (SPC),
Automotive Industry Action Group, March 1995.
12. Churchill, Gilbert A., Carol Suprenant, An Investigation into the
Determination of Customer Satisfaction, November 1982, pp. 491~ 504.
References 117
13. Crosby, P.B., Quality is Free: The Art of Making Quality Certain. New York:
New American Library. 1979.
14. Deming, W.E., Out of the Crisis. Cambridge, MA: MIT Center for Advanced
Engineering Study, 1986.
15. Desatnick, Robert L., “Does QS 9000 Really Protect the Customer?”, The
Journal for Quality & Participation, Association for Quality and Participation,
Spring, 2001, pp.46 ~48.
16. Goetsch, David L. and Stanley B. Davis, Introduction to Total Quality.
Upper Saddle River, New Jersey: Prentice-Hall, Inc. 1997.
17. Hayes, Bob E., Measuring Customer Satisfaction. Milwaukee, Wisconsin:
ASQ Quality Press, 1992.
18. Hunt, Keith H. Cambridge, MA: Marketing Science Institute. CS/D –
Overview and Future Research Direction. In Conceptualization and
Measuring of Customer Satisfaction and Dissatisfaction, 1977.
19. Hoesel, Roger van, New Multinational Enterprises From Korea and Taiwan.
New York: Routledge, 1999, pp. 50 ~ 51.
20. International Standard Organization, http://www.iso.ch, February 2003.
21. Jones, Gareth R., Jennifer M. George, & Charles W. L. Hill, Contemporary
Management 2nd ed. N. Y.: The McGraw-Hill Companies, Inc., 2002.
22. Johnson, Richard S. & Lawrence E. Kazense - TQM: The Mechanics of
Quality Processes. Milwaukee, Wisconsin: ASQ Quality Press, 1993, pp.
29 ~ 46.
23. Juran, J.M., and F.M. Gryna, Jr., eds. juran's Quality Control Handbook, 4th ed. New York:
McGraw-Hill, 1988.
References 118
24. Lin, Ching –Te, “Examination the Relationship between Quality
Management and Performance in the QS 9000 Quality System
Requirement” unpublished master’s thesis, University of South Australia,
2001.
25. Lite-On Automotive, Inc. http//lite.auto.com.tw , May 2003.
26. Lite-On Electronics, Inc. http://www.liteon.com.tw, June 2003.
27. Oliver, Richard L., “ A Cognitive Model of the Antecedents and
Consequences of Satisfaction Decisions”, Journal of Marketing Research.
17, November 1980, pp. 460 ~ 469.
28. Pearch, Clyde, “QS-9000 Drives Continuous Improvement for Chemical
Distributors”, Adhesives & Sealants Industry, Troy, August 2001.
29. Rajan, Murli & Nabil Tamimi “Payoff to ISO 9000 registration”, Journal of
Investing, New York: Spring 2003.
30. Stebbing, Lionel, Quality Assurance – The Route to Efficiency and
Competitiveness, N. Y. : Ellis Howwood, September 1998, pp. 71 ~ 72, pp.
97 ~ 99, p.193.
31. Vavra, Terry G., Improving Your Measuring of Customer Satisfaction.
Milwaukee, Wisconsin: ASQ Quality Press, 1997.
32. Wang, Zen-Rong, “Strategies for Implementation ISO Management
Systems in Taiwanese Government Organization” unpublished master’s
thesis, College of Public Affairs Management, National Sun Yat-sen
University, June 1999.
33. Warnack, Mark, “Continual Improvement Programs and ISO 9001:2000
Quality Progress”, Milwaukee, Wisconsin: ASQ Quality Press, March 2003.
34. Westbrook, Robert A., & Michael D. Reilly. Value – Percept Disparity: An
References 119
Alternative to the Disconfirmation of Expectations Theory of Consumer
Satisfaction. “ In Advance in Consumer Research. Richard P. Bagozzi, and
Alice M. Tybout (eds.) Ann Arbor, MI: Association for Consumer Research,
1983.
35. Yi, Youjae. “ A Critical Review of Consumer Satisfaction.“ In Zeithaml,
Valerie (ed.) Review of Marketing 1989, Chicago: American Marketing
Association, 1991.
中文部份 (Chinese):
1. 今井正明著,「改善」,台北︰長河出版社,1998 年 4 月
2. 丘和先,(Chu, Ho-Cheng),「資訊系統在 ISO 9000 品保制度下之實證研究︰
以製造業為例」,國立中正大學資訊管理研究所,碩士論文,1996 年 6 月
3. 李秀華,(Lee, Hsu-Hwa),「ISO9000 品保制度對台灣企業助益實證研究」,
國立中正大學企業管理研究所,碩士論文,1994 年 6 月
4. 何純嫻,(Ho, Zhu-Sam),「QS-9000 關鍵成功因素之實證研究」,國立成功
大學工業管理研究所,碩士論文,2000 年 6 月
5. 林興龍等著,「ISO 9001:2000 版實務與驗證指引」,台北︰SGS Taiwan
Ltd.,2001 年 5 月
6. 吳彥明,(Wu, Yann -Ming),「QS-9000 品質系統實施效益之研究」,國立
成功大學管理學院,碩士論文,2003 年 1 月
7. 張存金,「全面品質管理關鍵成功因素與我國業者推行全面品管現況之研
究」,國立中山大學企業管理研究所,碩士論文,1983 年 6 月
8. 許益詮,(Hsu, I-Cheng),「國內汽車及其相關產業導入 QS-9000 品質系統
之實證研究」,朝陽科技大學工業工程管理研究所,碩士論文,2001 年 6
月
References 120
9. 翁田山著,「品質經營實戰」,台北︰中華民國品質管制學會,1983 年 5 月
10. 董更生譯,「經營顧客心」,台北﹕天下文化,1983 年 4 月
11. 黃秀惠,(Huang, Hsu-Hwei),「台灣廠商申請 ISO 9000/14000 認證動機與實
施經驗之現況分析」,國立成功大學統計學研究所,碩士論文,2001 年 6
月
12. 黃峰蕙,鄭聰傑,(Huang, Fong-Hwei etal),「台灣中小企業推行 ISO9000 之
實證研究」,品質管制月刊第 34 卷,第 2 期,1998 年,pp. 42 ~ 48.
13. 劉碧芬,(Liu, Piu-Fune),「國內汽車零件導入 QS-9000 品保制度之探討性研
究」,東吳大學企業管理研究所,碩士論文,1997 年 6 月
14. 謝宗翰,「企業推行 ISO 9000 系列品保制度之過程模式探討」,國立中山
大學企業管理研究所,碩士論文,1983 年 6 月
Appendix1ISO/QS-9000 Elements 121
ISO 9000/QS-9000 Elements
Twenty elements are defined for the ISO 9001 quality system, 18 elements, for ISO 9002, and 12 elements for the ISO 9003 quality system.
Company management representatives shall be assigned to act as a coordinator between the organization and the accredited certification company. The candidate must have adequate knowledge of all operations within the organization, and must be able to report to the top management directly. A lead assessor training is required for the company representative before he performs the task. The 20 elements of ISO 9000 (AIAG 1998) are described in the following.
Management responsibility -- Element 4.1
4.1.1 Quality policy – The organization shall define its quality policy that relates to the organizational goal, the expectations and the needs of their customers. The quality policy shall be reviewed on an annual basis, and shall be distributed to all levels within the organization. The management team shall train all employees to understand the meaning of their organization’s quality policy.
4.1.2 Organization – The responsibility and authority of those persons who manage or perform a job affecting quality must be defined and documented. This particularly includes all personnel who have the authority to execute the following activities: a) Identify the root cause of a product or service problem, and implement
preventive and corrective actions. b) Control the further processing, delivery and installation of non-conforming
products until the unsatisfactory condition has been fixed.
Appendix1ISO/QS-9000 Elements 122 c) Work as a customer representative to address ISO 9000 or QS 9000
requirements.
4.1.3 Management review – the organization shall review its quality policy and system at defined intervals, normally on a yearly basis, to ensure its’ activities are performed in a proper manner and comply with ISO
9000/QS 9000 requirements.
4.1.4 Business plan – the organization shall hold a formal, company wide business plan meeting on an annual basis. They shall initiate the development of their plan on the basis of SWOT (Strength, Weakness,
Opportunity and Threat) analysis and strategy development, so as to define a functional plan for their departments and to be able to compete in the market. The business review document shall be a controlled document.
This plan may include the following items – market issues, financial plan, new product road map, cost reduction plan, human resources plan, quality objectives, production efficiency, and material plan etc. Each functional department shall develop their follow up work sheet and review it at defined intervals to ensure the activities are performed toward the trend of improvement.
4.1.5 Analysis and use company level data – the organization shall record the trend of the quality of their products, including the cost of quality, internal and external product PPM (part per million) performance, and customer complaint issues, on-time delivery performance, operation efficiency and key customers’ product performance trend.
4.1.6 Customer satisfaction – the organization shall define an index to measure customer satisfaction. The customer can be defined as an internal
Appendix1ISO/QS-9000 Elements 123 or an external customer. For external customers, the following index: product cost, responsiveness, product on-time delivery performance and product
PPM figures are the key indices to monitor customer satisfaction. An organization can define itself as the internal supplier, and so drive the company wide servicing philosophy of customer relationship. For manufacturing, all indirect departments are performing the role as suppliers to production. However, the production departments shall take full responsibility for customer satisfaction, for both internal customer – sales and production control as well as the external customers.
Quality System – Element 4.2
4.2.1 General – The organization shall establish and maintain a quality system to ensure that the product meets the defined requirements.
The organization requires to develop a “Quality Manual” covering the requirements of the internal operation procedures, and it shall cover all aspects of the ISO 9000/QS 9000 standard for quality systems.
4.2.2 Quality System Procedures – the organization shall develop the standard operation procedure to guide company operations. The standard operation procedure shall be integrated with the quality manual and the work instructions, to ensure that the operation conforms to the International
Standard.
4.2.3 Quality Planning – the organization shall define and document the following activities to ensure their operation will meet the specified requirements for products, service and contract:
4.2.3.1 Annual cost of quality (COQ) target
4.2.3.2 Updating of the quality control parameters, techniques and
Appendix1ISO/QS-9000 Elements 124 the development of new equipment.
4.2.3.3 New product validation and testing plan
4.2.3.4 Product reliability testing
4.2.3.5 Development or review of the control plan
4.2.4 Product approval process – the organization shall establish a procedure to verify and approve any newly developed products or any modified existing products. The engineering department shall process and record all changes, which shall fully comply with all requirements set forth in the Production Part Approval Procedure (APQP).
4.2.5 Continuous improvement – the organization shall implement a continuous improvement philosophy into their operation system. The main characteristics guiding the improvement direction are to be: cost of quality, non-productive time, operation efficiency, on-time delivery performance, customer complaint items, returns, and wrong shipments.
4.2.6 Facilities and tooling management – the organization shall use a multi-disciplinary method to achieve maximum output, operation balance, waste reduction, synchronous operation, minimum stock level and maximum inventory turnover. The organization shall develop a proper system to maintain and manage tooling and equipment.
Contract review – Element 4.3
The organization shall develop the mechanism to review the customer inquiry, samples submission, order confirmation to ensure all activities leading to the maximum satisfaction of the customer. The review data and all information must be documented and kept for traceability.
Appendix1ISO/QS-9000 Elements 125
Design control – Element 4.4
4.4.1 General – the organization shall establish procedures to verify the design of the product to ensure it will meet with the specified requirements.
4.4.2 Design and development planning – the following methods are some of the tools for this approach. Quality function deployment (QFD),
Design of experiment (DOE), Failure mode analysis (DFMEA, PFMEA),
Computer aided design (CAD), Computer aided engineering (CAE).
4.4.3 Organization and technical interfaces – organizational and technical interfaces between different groups which input into the design process shall be defined, and the necessary information shall be documented, transmitted, and regularly reviewed.
4.4.4 Design input – the organization shall identify and document the requirements relating to the product.
4.4.5 Design output – the design output should meet the design input requirements. The design output shall be generated from the following processes: cost estimation, product performance evaluation, market positioning, return of investment (ROI), and product life forecast.
4.4.6 Design review – the organization’s management team shall conduct a periodically review of the design progress and document the review records.
4.4.7 Design verification – during the design stage, design verification shall be conducted to ensure that the design output meets the design input requirements.
4.4.8 Design validation – the organization shall perform the design
Appendix1ISO/QS-9000 Elements 126 validation testing for the final product. The testing result shall compare with the original design input specification.
4.4.9 Design change – any design change shall get the organization’s management team approval before it is released for production. The organization shall establish procedure to guide the change process. The design change shall consider all aspects that may impact the system in which the product is to be used.
Document and data control – Element 4.5
4.5.1 General – the organization shall establish procedures to control the data and documents that are generated for the operation. All document and data can be in the form of hard copy or electronic media.
4.5.2 Document and data approval and issue – the document and data shall be reviewed and approved by authorized personal prior to issue.
The organization shall establish a master list as a document - control procedure in which the document number, revision, issue date or other related information is listed.
4.5.3 Document and data changes – any document and data change shall be reviewed and approved by the same authorized personnel that made the original approval.
Purchasing – Element 4.6
4.6.1 General -- the organization shall establish and maintain documented procedures to ensure that all purchased parts or materials conform to the specified requirements. All parts or materials shall come from approved vendors. Furthermore, those material and parts shall conform to government, safety and environmental regulations.
Appendix1ISO/QS-9000 Elements 127
The QA department shall establish an approved vendors list (AVL) as a purchasing guideline.
4.6.2 Evaluation of subcontractors – the organization shall develop a procedure to manage the performance of the subcontractors.
4.6.3 Purchasing data – the purchasing document shall include the detailed purchased parts specifications, part name, part number, quantity and other appropriate information. This purchasing document shall get approval prior to release.
4.6.4 Verification of purchased product – the organization shall establish a mechanism to verify the quality of the purchased product. A certificate of conformance and a supplier inspection report can be used as the evidence for this verification. Also, the executing inspections of incoming on purchased products is another approach for this activity.
Control of customer-supplied product – Element 4.7
A customer supplied part shall be considered as one of the incoming parts, and its’ quality shall be verified prior to release for further operation.
Production identification and traceability – Element 4.8
The organization shall establish and maintain documented procedures for identifying individual products or batches.
Process control – Element 4.9
The organization shall establish a procedure to ensure that all processes are carried out under controlled conditions. Controlled conditions shall include the following:
- Maintain order and cleanliness of the operation floor
- Establish a contingency plan
Appendix1ISO/QS-9000 Elements 128
- Develop a preventive maintenance program
Inspection and testing – Element 4.10
4.10.1 General – the organization shall establish and maintain a procedure of inspection and testing to verify specified requirements for the product are met. The organization can develop an incoming inspection procedure, an in-process inspection procedure and/or an outgoing inspection procedure for audit guideline.
4.10.2 Receiving inspection and testing – any incoming parts shall be verified as conforming to the specified requirements prior to being released for production. A certificate of conformance (COC) can be used as evidence to waive the inspection.
4.10.3 In-process inspection and testing – the organization shall use the proper tools, such as a statistical process control, mistake proofing
(Poka-Yoke) and a preventive program to prevent the occurrence of defects.
4.10.4 Final inspection and testing – the supplier shall carry out all final audits prior to being released for shipping. The audit PPM and acceptance rate shall be recorded for quality trend analysis. An out of the box audit can be performed after the final audit, and prior to shipping.
4.10.5 Inspection and test records – all quality audit records shall be maintained for traceability.
4.10.6 Supplier laboratory requirements – the laboratory shall have a procedure for receiving, handling, disposition of, and protection and disposal of test samples. Appropriate statistical techniques shall be used for data analysis.
Control of inspection, measuring and test equipment – Element
Appendix1ISO/QS-9000 Elements 129
4.11
4.11.1 General – the organization shall establish and maintain documented procedures to control, calibrate, and maintain inspection, measuring and test equipment, including test software. In house qualified personnel can be assigned to perform this task, and the reference standards must be traced back to the international standard. An outside independent laboratory can be used to carry out the calibration service. The operating instruction shall be issued as a calibration guideline. The gage R & R method is an approach for measuring equipment accuracy analysis.
Inspection and test status – Element 4.12
The product shall be identified by suitable means, such as QC slip, or tag, which indicate the conformance or nonconformance of the product after the inspection was performed.
Control of nonconforming product – Element 4.13
The suspected material or product shall be identified, and isolated as per the requirements as specified by the documented procedure. The review of suspected material or product shall be performed by a Material Review
Board (MRB). The Engineering manager, Quality manager and Production manager are the members of the MRB.
Corrective and preventive action – Element 4.14
The organization shall develop a procedure for implementing corrective and preventive action. A discipline problem solving method shall be used when either an internal or external quality impact is encountered.
The organization shall keep a record for the analysis report, which will be generated from the customer return.
Appendix1ISO/QS-9000 Elements 130
Handling, storage, packaging, preservation and delivery –
Element 4.15
The inventory shall be properly controlled, and measured at defined intervals. The packaging method shall be defined so as to prevent product damage during transportation. A system shall be defined to ensure that all shipped products are labeled according to the specified requirements. The
“on time performance” shall be monitored and reported to the management team. This will be one of the indices for customer satisfaction, so corrective actions shall be defined if it does not reach 100% performance. Considering that electronic communication is the trend; the organization shall establish the proper tools for this demand.
Control of quality records – Element 4.16
The organization shall establish and maintain documented procedures to define the collection, storage disposition and retention time for the quality records. The quality records can be in the form of hard copy or electronic media. Retention times of quality records shall be defined and recorded.
Internal quality audits – Element 4.17
The organization shall establish and maintain documented procedures to execute internal quality audits, which must be performed by qualified independent personnel.
Training – Element 4.18
The organization shall establish and maintain documented procedures to identify and provide the training for all employees performing activities affecting quality. The effectiveness of the training can be verified by
Appendix1ISO/QS-9000 Elements 131
a proper qualified test.
Servicing – Element 4.19
The organization shall establish and maintain documented
procedures for performing, verifying and reporting that the servicing meets
customer service specified requirements.
Statistical techniques – element 4.20
The organization shall determine it’s requirement for statistical
techniques in their operation. The in-process control shall apply the
statistical concept. Advanced statistical techniques, such as capability study
can be used for process analysis.
QS 9000 Quality Management System Standards
The Seven Documents for QS 9000
The following list describes the basic definitions and guidelines for those
documents.
1) QS-9000 Requirements - defines the supplier quality requirements. This
system focuses on the continuous improvement, emphasizing defect
product prevention and the reduction of product variation and waste in the
supply chain.
2) Production Part Approval Procedure – PPAP. - defines the
requirements for production part approval. Its purpose is to determine
whether the supplier understands the engineering design and specification
requirements of the customers. Also, the supplier process shall have the
capability to ensure that all products will be produced consistently, and
can meet the specified requirements.
Appendix1ISO/QS-9000 Elements 132
3) Advanced Product Quality Planning and Control Plan – APQP. -
provides guidelines designed to produce a product plan, which will support
the development of a product or service that will satisfy the customer.
4) Potential Failure Mode and Effects Analysis – FMEA. - can be defined
as a systematic group of activities that intend to: (1) recognize and
evaluate the potential failure of a product/process and the impacts of that
failure, (2) implement the actions that will eliminate or reduce the
occurrence of failure, (3) document the entire process. Design FMEA and
Process FMEA are two types of documents. The key factors for the
successful implementation for the FMEA program are timeliness. It shall
be a “before-the-event” action, not an “after-the-fact” activity. The FMEA
must be performed before a product or process failure mode has been
incorporated into the product or process.
5) Statistical Process Control – SPC. The process control system is a
feedback system. Statistical Process Control (SPC) is one type of
feedback system. The purpose of a process control system is to make
feasible decisions about the actions affecting the process. The process is
operated under statistical control when the variations source comes from
common causes. When the process still remains in statistical control and
does not have change, it will continue to make the same distribution of
“within specification” products.
6) Measuring System Analysis – MSA. An ideal measuring system will
produce only correct measurements each time it is used, and each
measuring system will always agree with the master standard. The quality
of a measuring system is determined by the statistical properties of the
Appendix1ISO/QS-9000 Elements 133
data it produces. The statistical properties of the data produced will
determine the accuracy and quality of that measuring system. The gage
repeatability & reproducibility (gage R & R) study is a typical method to
evaluate the accuracy of the measuring equipment.
7) Quality System Assessment – QSA. This is used to determine
conformance to the Quality System Requirements QS 9000. There are
three types of assessments, and they are: first party assessment – the
supplier executes the self-audit; second party assessment – the customer
executes the assessment for the supplier quality system; and third party
assessment – the certification body/registrar executes the assessment.
The assessment method is composed of three major phases: (1) Quality
System Documentation Review – review the Quality Manual to ensure it
meets the QS 9000 requirements. (2) On-site Audit – determine the
degree and effectiveness of the implementation of the quality system at
the supplier’s site. (3) Analysis and Report – review the findings from the
first two phases, then determine the conformance to QS 9000.
Customer-Specified Requirements
Customer specified requirements include Chrysler-Specific
Requirements; Ford-Specific Requirements; General Motors-Specific
Requirements and other OEM-Specified Requirements.
Chrysler-Specific Requirements – the following are the
requirements that specified by AIAG, Quality System Requirements QS-9000
Third Edition, p. 61 ~ p.64, October 1998.
- Third party Registration Requirements:
Appendix1ISO/QS-9000 Elements 134
Product Creation Process – Fig 2.3 is the typical process from the theme
& engineering design selection, program approval, first program vehicle
built, first pilot built, first production vehicle built and the theme of the
engineering design selection. The supplier shall develop a product as
per the Advanced Product Quality Planning Requirements (APQP).
- Special Characteristics Identified with Symbols – the supplier shall follow
Chrysler PS-7300 guidelines to identify special characteristics, such as
safety <S>, emission <E>, noise <N>, theft prevention <T> etc.
- Annual layout check – the supplier shall conduct an annual check for all
parts
- Product Verification/Design Validation – the supplier shall follow the
Chrysler requirements to perform a validation test.
- Internal Quality Audits – at least one time per year an audit shall be
executed by the supplier.
- Corrective Action Plan – in case a non-conformance product is found, the
supplier shall follow the “Chrysler 7-Step Corrective Action Process” to
issue the correction report. This report shall include a description of the
issue, root cause, short term and long term action, verification of the action
and the prevention plan. The eight disciple (8-D) report is a very common
report in the industry when customers encounter a defective product. The
8-D report contains the following eight steps to determine the root cause,
corrective action and verification for implemented actions. They are:
concern title; concern description; containment action; root cause;
corrective actions; verify effectiveness of corrective actions; prevention of
Appendix1ISO/QS-9000 Elements 135
recurrence and 8 D audit. This systemic problem solving method can help
the supplier to review the issue, and to implement actions properly.
Theme & First First Theme & Engineering Program Program Pilot First Engineering Major Design Selection Approval Vehicle Build Production Design Vehicle Build Milestones Build Selection
Planning & Planning & Program
Program Definition Definition
Product Design &
Development Product Process Design & Development Creation Production Verification & process Validation
Process Verification & Validation
Production
Feedback, Assessment & Corrective Action Product Assurance Concept Approval Program Pilot Launch Improvement Planning Selection Phase Vehicle Phase Phase Phase &/ or Phases Phase Phase Concept Selection Phase
Chrysler Product Creation Process
Source: AIAG Quality System Requirements QS-9000 3rd edition P.61, Oct.
1998
- Packaging, shipping and labeling – supplier shall follow Chrysler
requirements to identify the shipped product.
- Process Approval – before PPAP submission, the supplier process shall be
Appendix1ISO/QS-9000 Elements 136
reviewed through a Process Sign-Off (PSO).
- Control Plans – the supplier shall prepare the control plan for prototype,
pre-launch, and production phases.
- “Forever” Requirements-Extended enterprise TM – the supplier shall
pro-actively communicate with Chrysler for any material change, process
change and manufacturing location change.
- Electronic Communication (SPIN Connection) – the supplier shall establish
a Supplier Partner Information Network (SPIN) with Chrysler.
Ford-Specific Requirements – the following are the requirements as specified in AIAG, Quality System Requirements QS-9000 Third Edition,
October, 1998, p. 67 ~ p.70.
- Third party Registration Requirements.
- Control Item (▽) Parts – the control item parts are identified with inverted
delta (▽) preceding the part number. The control plan and FMEAs shall get
approval by Ford engineers.
- Annual Layout – the product characteristics shall be checked at least one
time per year.
- Set-up Verification – the supplier shall conduct a set-up verification for
critical characteristics.
- Control Item (▽) Fasteners – shall include the following items to the control
plan.
Material Analysis for Heat-treated Parts – test samples to determine the
chemical composition and quenched hardness.
Material Analysis for Non Heat-treated Parts – test samples to determine
the applicable physical properties and hardness.
Appendix1ISO/QS-9000 Elements 137
Lot Traceability – to keep the lot traceable.
- Heat Treating – the supplier who provides the heat-treating service shall
comply with the Ford Manufacturing Standard W-HTX and use the Heat
Treat System Survey Guidelines for process assessment.
- Process Changes and Design Changes for Supplier-Responsible
Designs – supplier shall follow the policy - “No change without prior
approval”.
- Supplier Notification of Control Item (▽) requirements – supplier shall
request revision for control item parts that have high degree of capability,
but must get Ford approval prior to the change implementation.
- Engineering Specification (ES) Test Performance Requirements – the ES
testing purpose is to ensure the design intent meets specification. The
supplier shall stop production and/or shipment upon ES test failure. A root
cause investigation and corrective actions for the ES test failure are
required.
- Prototype Part Quality Initiatives – when the supplier is sourced with
production for the prototype, the Percent Inspections Points with Safety
Tolerance (PIST) and Percent Indices which are Process Capable (PIPC),
may be required.
- QOS Assessment Guideline – the supplier shall use Ford methodology,
standardized tools and practices to manage their business and achieve an
ever-increasing customer satisfaction. Use Ford Assessment Form
(dated July 12, 1996).
- Advanced Product Quality Planning Status Reporting Guidelines, Ford
Automotive Operations – all Ford suppliers shall follow this guideline. It
Appendix1ISO/QS-9000 Elements 138
defines the expectation, role, responsibilities and metrics for APQP
elements.
- Run at rate – all production tooling shall run at full feeds and speeds,
utilizing all direct and indirect, personnel, and support systems.
- Supplier Laboratory Requirements and Calibration Services – supplier
laboratory Requirements (4.10.6) and Calibration Services (4.11.2.b.1) are
not applicable to Ford suppliers.
General Motors-Specific Requirements – the following are the requirements that are specified in the AIAG, Quality System Requirements
QS-9000 Third Edition, p.75 ~ p.79, October 1998.
- Third party Registration Requirements.
- GM Procedures and other requirements.
C4 Technology Program, GM – Supplier C4 Information, (GM1825)
Key Characteristics Designation System, (GM1805QN)
Supplier Submission of Material for Process Approval, (GP-4)
Supplier Quality Processes and Measurements Procedure, (GP-5),
(GM1746)
Component Verification & traceability Procedure (GP-7), (GM1730)
Continuous Improvement Procedure (GP8), (GM1747)
Run at Rate (GP-9), (GM1960)
Evaluation and Accreditation of Supplier Test Facilities, (GP-10), (GM1796)
Early Production Containment Procedure, (GP-12), (GM1920)
Traceability Identifier Requirements for Selected Components on
Passenger and Light Truck Vehicles – Traceability Identifier Requirements
(TIR15-300), (GM1820)
Appendix1ISO/QS-9000 Elements 139
Specifications for Part and Components Bar Codes ECV/VCVS (GM1737)
Procedure for Suppliers of Material for Pre-Prototype and Prototype
Sample Approval (GP-11), (GM1820)
Packaging and Identification Requirements for Production Parts, (GM1738)
Shipping/Parts Identification Label Standard, (GM1754)
Shipping and Delivery Performance Requirements, (GM1797)
- UPC Labeling for Commercial Service Applications.
- Layout Inspection and Functional Test.
- Customer Signature on Control Plan.
- Production Part Approval Process (PPAP)
- Electronic Communication – Element 4.15.6.3
- Shipment Notification System – Element 4.15.6.4
According to the above analysis, the following characteristics are the common critical requirements for the big three automakers.
- Third party registration
- Annual layout check
- Control plan
- Shipping identification
- Run at rate
- Continue improvement plan
- Process control and design control
Appendix 2 English questionnaire 140
Dear Ladies and Gentlemen:
The purpose of this questionnaire is to investigate the quality system development and implementation related issues when a company implements the QS-9000 project. We sincerely request your support to provide the precious experience to fulfill questionnaire and help us to accomplish the research requirement. Furthermore, this survey result will be used on the academic study only, and we will keep the survey result in a confidential manner.
Because we only distribute a small size of the questionnaire, and we believe that your contribution will make this research success, so your support to fill the attached questionnaire and return to us is highly appreciated. Thank you for your help!
National Sun Yat-sen University College of Management International Executive MBA Advisor:Tai-Hwa Chow PhD Student:Yang, Shen-Hong Cellular phone:0930812530 Please read each question and mark on the proper area accordingly.
Section I:Relating questions with QS-9000 formulation stage
1. Duration from project announcement until the QS-9000 certificate was received? □Below 6 months □6∼ 12months □18∼ 24months □More than 2 years 2. Your company certificate was received on year month 3. What is the team members in the steering team: □10□11-15□16-20□21-25□26-30□above 31 persons 4. Who acts as the chairman of the steering team? □GM□Plant manager□EN(manager), Director□QA(manager), director□ Other 5. Did the company organization have to be changed because of the QS-9000 system formulation stage? □No □Slightly change □Overall change 6. What is the company’s quality reporting system? □GM □Plant manager □Engineering Director □Other (specify) 7. Who develops the department’s target? □Top management □Department themselves □Consultant 8. Where did the company get their QS-9000 information? (multiple choice)
Appendix 2 English questionnaire 141
□Top management instruction □Seminar □Consultant □External source □Magazine □Internet □Other (specify) 9. Quality activity prior to the QS-9000 quality system implementation? (multiple choice) □None □TQM, TQC □QCC □Annual quality audit □MIS □6 sigma activity □ISO 9000 □Other (multiple choice) 10.Evaluation of the internal implementation status. □Weekly review □Monthly review □Quarterly review □Periodic review 11.Who approves the Quality Manual? □Chairman □GM □QA (QC) manager □Plant manager □Other (specify) 12.Who approves the SOP (Standard Operation Procedure)? □Chairman □GM □QA (QC) manager □Plant manager □Other (specify) 13.Who perform the internal audit? □Co., representative □GM □Plant manager □QA (QC) manager □Other (specify) 14.What is the company’s internal audit frequency? □Quarterly □Bi-yearly □Yearly 15.What is the material that was used in the QS-9000 training course? □QS-9000 7 volumes □General QS-9000 concept □Both □Other (specify) 16.Do you use external consultant for the QS-9000 project? □No, please describe the reason for self development.
□Yes, external consultant is: □China Productivity Center □Academic consultant □Private consultant company □Other, please specify If Q16 answer is “Yes”, please continue to answer this question. What is the criterion to choice the consultant? (multiple choice) □Professional □Assigned by top management □Provide adequate information □Performance and experience □Low cost □Their prior success experience □Other (specify)
Appendix 2 English questionnaire 142
Section II:Outline of the QS-9000 implementation Very high – V, High – H, Middle – M, Low – L, Very low – O Do you understand the following questions at QS-9000 implementation stage? V H M L O 1. Do you know QS-9000 concept and requirement? □ □ □ □ □ 2. Do you know QS four tiers of document?...... □ □ □ □ □ 3. Do you know your company quality policy?...... □ □ □ □ □ 4. Do you know QS implementation step?...... □ □ □ □ □ 5. Do you know the QS requirement that relating to your department Operation? ...... □ □ □ □ □ 6. Do you know how to compile the QS document? ...... □ □ □ □ □