Key to quality

Dhe management and controllability of production is increasingly coming to the fore and is becoming a central component of strategic decisions. To ensure economic efficiency and to control production, companies need efficient production controlling.

Raise quality potentials

Quality issues continue to gain in importance: Not only are manufacturers liable for property damage and personal injury under the Product Liability Act. Errors in the manufacturing process result in rework and rejects. This results in significant costs. If defective parts are used in larger assemblies, even consequential costs are possible. Defective products that are not recognized as such and delivered to customers have even more far-reaching consequences. In this way, companies risk annoying their customers or even losing them altogether as future buyers. This in turn can lead to additional scheduled inspection costs due to safety concerns.

When quality becomes a cost block

Quality-related costs are nothing new and form a not insignificant cost block that must be taken into account. Integrated production controlling, which raises the quality potential of today's companies and integrates it into production, can therefore be an important guarantor of economic success.

Key figures - the basis for control

Only with the use of proven methods and key figures does management obtain the necessary transparency to answer the important production management questions and to derive, evaluate and control the resulting production targets. However, in many companies it is still the case today that the control options in production either do not exist at all or are not adequate to guarantee a target-oriented working basis for production management. Consequently, no integration into the overall corporate management can take place.

Although the production area is ideally suited for controlling by means of key figures due to its mostly standardized and repetitive processes, there are some challenges to be overcome. Identifying suitable key figures, which vary from company to company, is one of these challenges. For example, the strategic and asset-structural importance of production, driven by technological progress, product variability and capital commitment, requires a careful and critical definition of controlling mechanisms and operational as well as financial key figures.

Similar to the general production ratios, the evaluation of production quality also seems simple at first glance. Particularly in non-project-driven industries and standardized series production, reject rates can be easily determined. Classical key figures such as reworking, shrinkage and, last but not least, rejects should be included in the key figure system. At

Quality-oriented controlling

However, the problem with this indicator category lies more in the correct interpretation. In order to reflect the actual quality level of the company including its costs, errors must be identified and the actual resulting costs determined. To do this, the company needs suitable processes. In addition to the data quality in operational systems, various technical, organizational, and human factors play a decisive role in the successful use of quality-oriented production controlling: 

• Structure of the processes
• Information needs for man and machine
• Software adaptation to organization 
• User training level
• Clear responsibilities for data
• Interest of the users
• User experience
• Implemented data quality strategy

Multidimensional approach through the Balanced Scorecard

Quality indicators should not only be considered unilaterally. The balanced scorecard offers a well-known approach for a multidimensional view. Here, the system of indicators is divided into freely definable perspectives - in theory, these are the financial, customer, process and development perspectives. This approach is intended to direct the management's field of vision to various relevant criteria and thus enable a balanced picture.

The principle of multidimensionality can also be applied when considering the quality aspect. For example, the reduction of the defect rate is a key figure of the process perspective, the reduction of the defect costs is a key figure of the financial perspective and the customer satisfaction regarding quality can be assigned to the customer perspective. Thus, by changing the perspective and using specific, quality-dependent key figures, it is possible to cover different aspects and build up a holistic production controlling.

Holistic picture for better controllability

This not only provides transparency and enables better controllability, but at the same time enables the connection to the higher-level strategic goals of the organization. However, the goal of quality-oriented production controlling must not only be to obtain suitable conclusions and, based on these, reaction options. Rather, errors in the production process and the associated costs should be avoided from the outset. In accordance with the principle of economic efficiency, this goal should be strived for with minimum costs.

What to bear in mind during implementation

Current problems as well as individual peculiarities of a company's production process must be taken into account when setting up production controlling. These acute problems have the primary attention of management, which wants a quick solution. Emerging problems can be multifaceted and have a great impact on the quality of a product or even the overall quality level. Regardless of whether it is a question of equipment, materials or personnel, all production factors influence the quality of a product. It is important to identify these short-term problems by means of a suitable production controlling tool and to create the necessary transparency and decision-making basis in order to be able to quickly avert the problems and avoid them in the future.

The different management levels in a company have different requirements regarding production controlling. Thus, the key figures used must vary. For example, a total scrap rate may be of interest to the production manager, but it does not enable targeted control in relation to the individual aggregates, bottleneck work, or the production process.

Observe different requirements

or to the individual product level. For this reason, it is necessary to break down or aggregate and adapt production controlling to the needs of the respective hierarchy levels through cascading.

Ideally, this is done in practice by means of a countercurrent process. At the top management level, the goals of corporate planning are broken down to the subordinate levels, where they are checked for feasibility and further specified. In parallel, defined key figures are reported bottom-up to the superordinate levels and checked for meaningfulness, expediency and target achievement. The combination of a top-down and bottom-up approach enables suggestions for improvement to flow into both the management level and production. Any deviations in individual sub-goals can be identified at an early stage and adjusted accordingly. Successful implementation of the corporate goals is thus ensured at every level of responsibility. For example, the financial goal, the reduction of defect costs, can be broken down to individual workstations or products and is recognizable and understandable at all hierarchical levels. Figure 1 symbolically shows the development process of the targets and key figures in the top-down or bottom-up procedure.

Quality standards and controlling

When you talk about quality, sooner or later you inevitably come across the DIN EN ISO 9000 standards. The ISO 9000 family deals with various aspects of quality management. The standards provide guidance and tools for companies to ensure that their products and services consistently meet customer requirements and that quality is continuously improved. They are thus the basis for a uniform understanding of process-oriented quality management systems. The ISO 9001 standard occupies a special position in this respect, as it forms the basis for the certification of organisational quality management systems.

Combining top-down and bottom-up

nents. The model of process-oriented quality management according to DIN EN ISO 9001:2008 forms the basis of the entire family of standards and consists of four main factors:

• management responsibility
• resource management
• Product realization
• Measurement, analysis and improvement

This principle is very similar to the basic idea of quality-oriented production controlling, which also enables the effective management of product realization through measurement, analysis and improvement.

TQM (Total Quality Management) as a continuation of the quality management standards ISO 9000, which integrates further stakeholders such as customers, partners, employees, investors and society, represents a holistic system of quality management. The transition from quality management to total quality management aims at the transition from product to company quality. This principle also has parallels to the basic idea of the Balanced Scorecard already mentioned, which is intended to provide a holistic picture of the company by integrating various perspectives.

Conclusion

An efficient, quality-oriented production controlling can be the right instrument to meet today's challenges in manufacturing companies. At the same time, it increases reaction speed and controllability. However, it also contains multiple dangers of a faulty implementation and offers room for different interpretations. Powerful key figures adapted to the needs of the organization

Integrating different perspectives

are to be identified and condensed or broken down across different hierarchy levels, from cost center and division managers to middle and top management, in an integrated top-down and bottom-up approach. Likewise, the key figures should be oriented to the strategically superordinate goals and, conversely, goals should be derived on the basis of the key figures.

After all, without a "doubt-free" database, neither the best controlling nor the most suitable key figures are meaningful. The use of a modern ERP system alone does not guarantee companies data quality. Only by taking the above-mentioned prerequisites into account is a high data quality and thus an optimal data basis given.