QS-9000 Benchmarking

Issues in Quality Management
by Tom Pullizzi

The Big Three want a copy of your business plan or
Quality means never having to say you're sorry

Note: visit www.aiag.org, Automotive Industry Action Group.
Buy a copy of the Supplier 7 pack, $48.00, for a set of documents needed to launch your QS9000 program.

If you are interested in complying to QS9000, you should know that part of this standard asks you to have a business plan. It is in section 4.1.4. "The supplier shall utilize a formal, documented, comprehensive business plan."

Some of the things they say may be applicable are set in bold type in the rest of this article:

Market Related Issues
Suppose you are a nickel plater. You might want to figure out where your plating is going, automotive, aerospace, residential or industrial construction, electronics - Who is your market? Why would the Big Three want to know? It is a very selfish thing they are doing. They are concerned, when they get a supplier, that the supplier will be there next week, or next year. They are investing in you! They want you to think about how important automotive is to you. It is very important to them, and they want you to have a good business. A business that will be able to withstand changes in technology, economics, and to weather business cycles. Suppose you have 40% of your business in plating residential construction parts, and the bottom falls out of new construction sales.

Could your business withstand that? Can you run your line at 60% capacity? So having a business plan could save your business. You might decide, as a result of your business plan, that you want to diversify a bit. Maybe get some business in alloy plating, powder coating, vapor deposition, etc. What are your strengths and weaknesses when trying to diversify? (personnel, plant, financing, management skills and desire)

Financial Planning and Cost
How are you going to pay for all of this? Do you have any credit with the banks? It will be nice that you have a business plan when you go to see the loan officer.

Growth Projections
Tell us if you are going to grow, stay the same size, or downsize. The basis for your projections.

Plant/facilities plans
Start with a drawing of your plant. You can use it for other things, like evacuation plans. You probably have a drawing around. May I suggest you get all this stuff onto a computer. You won't want to keep drawing and typing this over and over.

Cost Objectives
Think of ways to reduce the cost of your product, and pass it on to your customer. It's very endearing, and means more business for you.

Human Resource development
Tell us what you are doing to improve this most important of resources. When you start documenting your processes, your people will have to be able to read and do math. Start with that. Train your people in what the customer expects, and needs. Delivery, packaging, continuous improvement.

R&D plans, projections, and projects with appropriate funding
The moment you have an idea, a new finishing line, another process, an improvement to a line, make a written note of it. Build on the idea in your notes, and work with your employees to make sure you are not missing anything. This section may have more to do with design planning, but it is useful even if you just want to make less spectacular changes, like changing from cyanide to acid zinc.

Projected Sales Figures
Quality objectives
Customer satisfaction plans
Key internal quality and operational performance measurables
Health, Safety and Environmental issues
Goals and plans should cover short-term and long term
Analyze competitive products
Benchmark inside and outside of the automotive industry and the supplier's commodity

Benchmarking is comparing your performance to the average of performance. Suppose we look at just plating thickness details, on-time delivery, and type of packaging. How does your plating thickness, delivery, and packaging compare to the average of finishing, delivery, and packaging of fasteners used by first tier automotive suppliers?

Example: What is the capability of your process in metal thickness applied to the parts? If the specification is 0.0002" nickel plate, you should have an idea of the variation around this value. How may parts have less than the minimum, and what is the standard deviation around the mean.
Example: What is your record of on-time delivery to your customer. 100%, 50%? How many times is your late delivery caused by your system, and how many times is it caused by poor communication, blunders, or problems in your customers system? (if you can turn parts around in 3 days, and your customer wants a special order in 1 day, how does that effect the delivery and quality of the rest of your production?)

What kind of packaging do you use? Old drums, new drums, bins, used cardboard boxes, sealed plastic bags?

Now you need to know what the norm is for first tier auto suppliers, and for other industries.

Example: fasteners for automotive might usually be delivered in metal totes supplied by the customer. Your customer might be sending you beat-up drums. Your customer is below the benchmark value.

Example: Electronic suppliers might typically ask for sealed 3 mil poly bags of between 5 and 10 pounds weight. You might still be using 2 mil poly bags packed in 30 lb. cardboard boxes. You are below the benchmark.

Determine current and future customer expectations
Use the benchmarking above to predict what you will have to do in the next year. (Since you have bothered to do all this work, you shall also keep written records. This is required under 4.1.3, Management Review.)

So having a business plan and a management system which trains employees to find problems means never having to say you're sorry. You won't have to say you are sorry that the containers are too heavy, or split when they were being unloaded, or were mismarked, or were not delivered on time. Because you have employees who were able to talk to you about those drums, or did something about the boxes that were bulging. Because you told your customer that everybody else is going to sealed poly bags, and you want to do the same thing. Your customer will appreciate the advice, and work with you on making that improvement. The customer now sees you as a partner instead of an antagonist; you are now the expert with the information needed to help them.

It is always nice to know more about finishing than your customer. Would you expect a stamping house to know less about stamping than you, a mere finisher?