Original Date: 07/21/2003
Revision Date: 01/18/2007
Best Practice : Cost of Quality Program
By using accurate data collection and trend analyses, Electric Boat Corporation, Quonset Point Facility effectively measures the cost of quality and assesses the effectiveness of corrective actions used in the reduction or elimination of defects.
Safety and quality are essential ingredients to build the most capable and safest nuclear submarines that an industry can produce. Accordingly, the cost of rework and repair (or cost of quality) has always been an industry topic of conversation. Shipyards commonly measured only one attribute at a time and calculated the number of rejections versus the total number of submittals. This effectively calculated the rejection rate, but omitted the hourly level for reworking and repairing defects. In 1998, Electric Boat Corporation, Quonset Point Facility (EBQP) initiated a Cost of Quality program to measure the overall performance versus quality.
Principal indicators of facility quality were identified and documented, as well as the best available rework estimate associated with each event type. Available data for these elements (e.g., welding rejections, customer concerns, out- of-tolerance reports, errors, or rejections) are gathered and compiled monthly. The standard rework estimates are then used to determine the cost of rework and repair. The cost of quality index is then established by dividing the cost of rework and repair by the total manufacturing labor cost expended that month at the facility. Standard rework estimates are also regularly assessed to ensure they are currently representative.
The available and calculated quality measures are reviewed monthly at the Corrective Action Board together with possible solutions to reduce or eliminate rejections. The associated metrics are also trended and graphed to show variations and the effects of corrective actions. This effort has been successful in maintaining EBQP’s cost of quality indexes below 1.5% for the past five years as shown in Figure 2-10.
The data enables EBQP to identify and quantify its quality problems. That, in turn, enables the company to effectively focus on and control the most expensive elements driving rejections. It should also be noted that this successful level has been maintained during a period of significant reductions in the quantity of submarine construction.
Figure 2-10. Quonset Point 5-Year Summary
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