Dynamic Seal – Mba: Six Sigma / Operations Case Essay

Dynamic Seal, a precision parts manufacturer with a reputation for high quality, does not currently utilize a Statistical Process Control (SPC) system. However, United Airlines (UA), a major customer representing 14% of Dynamic Seal’s business, insists they implement an SPC system or loose United Airlines’ business. In addition Dynamic Seal do not have a sound preventative measure quality control system in place, preferring 100% inspection to cull bad quality, rather than building parts correctly from inception.

Goal: Reduce product variance and the need for rework by implementing a company-wide quality control system that includes an element of Statistical Process Control. A secondary goal is to reduce waste by focusing on Lean engineering processes. Competitive Environment: Dynamic Seal are a successful manufacturer of mechanical components for aerospace, marine and military application. Their products require precision engineering, and the company has built an excellent reputation based on “high quality, innovative engineering and close tolerance manufacturing.” The company makes use of expensive superalloy materials manufactured to extremely tight tolerances, with many products selling for $10,000 to $50,000.

A significant defective rate with such high cost materials / products will severely impact the company’s bottom line. The United Airlines production line operates under a separate department, with dedicated equipment and personnel. Dynamic Seal’s quality reputation is a result of highly skilled machinists and a 100% inspection policy. The company employs a workforce of approx. 400 people, in a 120,000 sq. ft. facility and has increased it’s sales ten-times over the last 10 years to $130 million. Key Facts:

1.Dynamic Seal does not have a company-wide Quality Management ethos. 2.There is a customer requirement to use SPC. 3.No SPC system is currently in place and equipment has not been tested for capability. 4.Quality is controlled by 35 quality inspectors and is not the responsibility of the workforce. 5.The Quality Control Dept. is overworked and underpaid – reports to the General Manager. 6.Machinists set informal equipment specifications, not the QC Dept. 7.The company operates a 100% inspection policy. 8.In-process inspection is infrequent, therefore origin of 25% of defective issues cannot be found. 9.Inspection and assignment of rework involves significant lag. 10.QC system generates significant volumes of paperwork: 80 defective reports (DMR) per week. 11.Product blueprints and Inspection Specs (IMS) often do not match and are not updated. 12.Initial defective rate documents (DMR) are often produced post-rework.

Analysis: Two sets of process data have been collected for initial analysis. Before specific SPC issues can be addressed the process and equipment should be assessed to see they meet the capability requirements laid out in the customer specs. The first process examined uses the Lablond Lathe machinery and requires a machined diameter of 7.7250, plus tight tolerances of + .0005 inches. A Process Capability Ratio (Cpk) analysis of the lathe’s data, results in a Cpk of .379 (exhibit A). A result of less than one indicates the machine is not capable of matching the tolerances laid out in the IMS spec.

Therefore the Lablond Lathe is not suitable to handle the process it is being used for. Before a more suitable machine is selected, the Lablond Lathe should be checked for calibration, as should the measuring equipment used. If all fall within calibration specs, new machinery should be selected that is capable of handling such tight tolerances. Solving machine capability issues is a low-hanging fruit method of quickly improving quality control. The second data set refers to the Cincinnati Milling Machine. Initial analysis indicates the machine is capable of meeting the required specs, so X-bar and R-bar run charts were constructed to visualize output performance against the IMS specs. Positions 8 to 10 on the R-bar chart (exhibit B) clearly indicate the process is out of control.

The X-bar chart (exhibit C) further supports this claim by showing the process is out of control at positions 9 and 10. Although a bigger concern is that all but one data point lies above the control line, indicating the process could be off-center and require recalibrating. As Dynamic Seal’s materials and production methods are so expensive, before machine recalibration occurs, a fish bone diagram should be used to trace the problem to its source. Alternative Options: There are four significant options open to Dynamic Seal. The can opt to do nothing and potentially lose the United Airlines contract, plus risk further losses as more customers begin to impose stricter quality control requirements.

They can implement a company-wide Quality Management system such as Six Sigma that incorporates SPC analysis. They can implement an SPC system on one type of machine throughout the manufacturing plant. Or they can implement a Quality Management / SPC system within the United Airlines production cell alone. Recommendation Short-term: To reduce project scope, I recommend initially focusing on the UA facility only. Once procedures have been tested and proven, they can be rolled out company-wide. Gordon Jenkins is a good person to head up the Quality Management program, as his initial plan (exhibit D) includes many elements of DMAIC and his review of the problems seems accurate.

However, he needs senior management backing (possibly a promotion) and further Six Sigma training, to combat negative views from Alan Schneider and Scott Palmer. Without the three of them on the same page, any new quality management system will fail. Initially Jenkins and the QC team needs to perform a UA Dept. X-ray, creating process-maps, checking equipment capability and taking base-line SPC data (exhibit E). Once data has been received a full DMAIC analysis using Histogram / Pareto charts should be done to identify the low-hanging fruit. Variance issues in the new SPC data can be tracked to their source using fishbone diagrams and House of Quality reviews. Equipment selection, process streamlining, reduction in paperwork and implementing work procedures are valid projects. Equipment settings and tool selection should be standardized, reducing the craftsmanship required.

The responsibility to monitor quality should be moved to the machinists. Having them fully involved in the process design, and giving them responsibility to manage their own quality would achieve machinist buy-in. In addition tight controls need to be placed around the production and updating of product specs, requiring improved communication and a sign-off system between the Sales, Engineering and Production Depts. Finally a measure of improvement is critical to the success of any quality management system. Improved SPC data will be part of that, but the company can also track rework labor hours, improvements in process throughput time, inventory reduction, and reduction in cost-of-goods as critical measures.

Recommendation Long-term: SPC by itself does not promote in-depth quality management, therefore long-term I recommend Dynamic Seal implement a company-wide Lean Six Sigma system, with SPC analysis. To set the right tone and get management buy-in, long-term implementation should begin with upper-management Six Sigma training, including the GM. A dedicated approach to quality management should infiltrate all aspects of the company, from engineering to administration, with the goal of promoting a quality-focused Kaizen culture. The current Quality Control Dept. should train as Six Sigma black belts and be mandated to train the workforce in Six Sigma techniques and to oversee on-going Six Sigma projects. Salary incentives should be implemented that reflect advancement in Lean Six Sigma training.

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