Auditing the Manufacturing Process

Proactively Prevent Costly Process Failures

The Problem

Manufacturers and service providers continue to suffer from

customer complaints, warranty claims and product recalls
resulting in high financial costs and damaged brand value.

GM agrees to pay $900M in ignition-switch scandal

Takata air-bag recalls will cost the company $2.5B. ...
Boeing 787 battery fires cost company more than $600M

Defects and errors are more expensive and more

likely than ever.

The cost of poor quality in manufacturing companies ranges from 5 percent to 35 percent
of sales. In service organizations, it ranges from 25 percent to 40 percent. - Institute of
Industrial Engineers

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The Price of Failure

Process-related failures represent the largest component of the cost of quality.

These failures are seen in a number of areas, including costs associated with:

Scrap from raw materials which have to be thrown away due to

process errors
Rework when work is re-done because it was completed improperly
the first time
Warranty costs the defects identified post-delivery, often by end
customers
Maintenance errors due to acceleration of equipment failures or
calibration issues due to maintenance mistakes
Inspection costs the cost of resources conducting and managing
inspection activities
Nonconformances failures which can lead to regulatory penalties,
voluntary and involuntary recalls, losses due to de-certifications, etc.
Loss of brand value the damage failures can inflict on a brand, often
reducing pricing power and customer loyalty
Opportunity costs representing growth missed due to capacity
expended correcting errors

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The Cause: Process Failures

Most quality systems are reactive and unable to locate

breakdowns in process until its too late.

GMs CEO Mary Barra pledged to hold ourselves

accountable and improve our processes

Takatas public report focused on the broken safety culture

and identified multiple process weaknesses

Boeings battery supplier needed to review its cell

manufacturing process and ensure that employees were
properly trained
Quality systems must focus on process to prevent failures from
happening in the first place.

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Reduce Unplanned Process Variations

The surest way to reduce variation is to verify that approved

processes are followed.

Process audits verify that employees are performing tasks

consistently and according to defined work standards. They can
even be used to assess the adequacy of the standards
themselves....

A robust verification examines all parts of a process, including the

resources (equipment, materials, and people), the environment,
the methods followed, and the measurements collected to ensure
process performance and compliance.

Without the verifications from process auditing, even the best

operators deviate from standards and work methods
fluctuate, leading to quality issues.

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Layered Process Audits Ensure Consistency

Layered Process Audits (LPA) are a key tool in addressing quality issues.
Key members from all major process areas participate, and the audits
have the following characteristics:

Usually short checklists, 5-10 questions taking no more than 10-15

minutes to complete
Written such that any layer of management can conduct them,
without needing detailed subject matter expertise
Involve multiple levels of management from the production floor to
the executive suite
Varying Frequency First layer conducts daily audits, and others do
weekly or monthly
Management rotates review areas to maximize engagement and
audit integrity

Effective quality management programs can reduce (cost of quality) substantially, thus
making a direct contribution to profits. - Aberdeen Research
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LPA vs. Standard Audit Programs

LPA programs offer a number of advantages over traditional audit

programs and techniques.

More proactive than most traditional, sample-oriented approaches

Engage management at all levels - demonstrating commitment to
quality and compliance programs
Put more, varying eyes on processes, making it both less likely for
failures to go unnoticed, and harder to self-pass or buddy pass
issues
Foster a culture of quality and keep everyone more informed about
how things are supposed to work even in the face of constant
change

As with standard audits, however, using paper and Excel or even

traditional systems to support these activities can add overhead
without clear benefit.

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Solution: A LPA Platform
Successful LPA programs require an easy to learn, easy to implement
and easy to use system that provides real-time visibility.
Paper and Excel
Inexpensive, inefficient,
Deploy Inconsistent adoption
Manual, time-consuming
Capture collection, inaccurate,
unsearchable data
High effort, stale content,
Report poor visibility
Traditional Quality
Software
Slow and expensive, managed
by IT, decentralized
Requires extensive training,
siloed data creates blind spots,
limited data types
Typically static, reactive focus,
new reports are difficult to build
LPA Platform
Cloud-based, rapid deployment
throughout the enterprise
Easy to learn, uses existing
mobile devices, complete
coverage including visual and
location content
Real-time interactive dashboards
drive immediate action; new
reports are easy to define and
build
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Introducing

Beacon is a world-class system that can handle virtually any assessment,

from 5S to safety, from training to LPA, while virtually eliminating the
overhead and significantly enhancing the benefits of these activities.

Rapid Time-to-Value.
Cloud-based platform means new Modern, intuitive interface requires
customers launch within weeks and less training, allowing faster
implementation risk is eliminated. adoption.

Real-Time Insights.
Real-time dashboards with drill-down
reporting provide actionable insights
into current results and corrective
actions.

High-Quality Data.
Easy-to-use mobile interface with
sophisticated data integrity safeguards
leads to the consistent collection of
timely, accurate, and complete data
from everyone in the organization.
Powerful scheduling capability
ensures complete coverage for
quality initiatives and reduces
administrative time by up to 85%.
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Summary - Key Takeaways

Faster cycle times mean more defects are making it out the door, where
the costs to correct are much higher.
Traditional audits are reactive, focusing on specifications and sampling
while largely blind to process failures.
Layered process audits address these gaps, but they can create
overhead or fail to address check the box behaviors.
World-class LPA systems can virtually eliminate the overhead with LPA,
and secure the best overall results.
These LPA systems are extremely cost-effective, with payback periods in
weeks or months.
Using a successful LPA system can improve an organizations culture of
quality by focusing on verification and prevention.

Companies with superior quality can outperform companies with poor quality by two to
three times based on return on sales, and by up to five times based on sales growth.
Boston Consulting Group
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About Ease

Ease software has been successfully deployed

across a wide range of enterprise environments
worldwide wherever customer satisfaction and
2015 Gartner Cool Vendor
for Manufacturing
high product quality are critical to brand
Operations
strength.

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To download the full whitepaper or for
more information about LPA programs or
Beacon, visit us at www.easeinc.com or
email sales@easeinc.com.