Question

Cascade Seating Inc. is a large manufacturer of automobile seat covers. Jan Davis, the controller

just received a disturbing call from the plant manager, Dave Garcia. General Motors

had just downgraded Cascade from preferred supplier to backup supplier. GM cited the

inconsistent fit of the seat covers as the reason, and suggested to Dave that he read an article

“How Velcro Got Hooked on Quality.”9 GM had downgraded Velcro a few years back

in a similar fashion, but Velcro had managed to turn its quality around and was again a

successful preferred supplier to GM.

Jan and Dave immediately got a copy of the article GM had recommended and read it

several times through. Both were alarmed at how familiar the story sounded to Cascade

and the current situation. Two main points of the article really hit home. Velcro had a

quality program in place and thought it was doing well. “We’re in the same boat, Dave,”

Jan said. “We have a quality program which has been showing steady increases in quality

for the past two years. But if it’s working, then why are we being cited for poor quality

products?” “I don’t know, Jan, but I know there’s another similarity between Velcro and

us.” Dave went on, “One of GM’s big complaints with Velcro was that they were ‘inspecting

quality in’ rather than ‘manufacturing quality in.’We work it the same way. We have

15 people assigned to the Quality Control Department right now, and their main task is to

be sure that the product going out the door has been inspected. You’ll have to ask Ronald,

the supervisor over there, but I don’t see them out on the plant floor working with the production

workers, I mostly see them over by finished goods or in their offices.”

Jan called a meeting with Dave and the managers of Quality Control, Purchasing,

Customer Service, and Inventory Control. As the discussion developed, it became clear

that these managers had never met to discuss product quality. Jan listened to each of the

managers as they made excuses and pointed fingers at the other departments. “Gentlemen,”

she finally interrupted, “I don’t care about assigning any blame to anyone, and neither does

GM. The point here is to figure out where our quality problems lie, and what we can do

about them.” After that, discussion centered on the problems with quality.

After several hours, the managers concluded that the four main areas of quality problems

were in poor quality material, cutting of the material, sewing, or poor inspection. The

purchasing manager explained that he spends four hours each month preparing a quality

report on the suppliers and performs a yearly review of all suppliers, which takes about 40

hours to complete. Last year he found a new fabric supplier who helped to cut material

costs. However, the new supplier’s fabric quality was probably not as good as that of his

predecessor. As he spoke Jan jotted a note to herself to check the purchasing manager’s

performance evaluations to see if possibly he was part of the problem as well. She seemed

to remember that his evaluations were not very favorable, and that he had not been given a

raise above his $22,000 salary.

Dave was unhappy with the cutters and sewers in the plant. Last year the cost of

scrapped material was $147,900. Upon investigation he found that 63 percent of the cost

for scrapped material was from four cutting related reasons while the other 37 percent was

from sewing related reasons. He produced the following data from his files to support this

contention:

Reason for scrapping of material                                     Percentage of total

Cutter cut material incorrectly                                                       28

Cutting machine calibrations off                                                     16

Pattern was incorrect                                                                    10

Dull blades on the cutting machine                                                 9

Sewers sewed material incorrectly                                                  25

Sewing machine calibrations off                                                     12

Dave also told the group that when he discovered that the cutting and sewing machine

calibrations were incorrect on one of the machines, he had all the cutting and sewing machines

checked. This resulted in $5,500 in downtime costs for the cutting machines and $7,400 for

the sewing machines. Another $8,200 had been spent last year in rework by the sewers.

At this point the inventory control manager chimed in, “I kept records on the reason

for returns last year, and you must do something about your people, Dave. Poor seaming

by the sewers accounted for 31 percent of the $56,000 in rejected seat covers by the customer.

But the biggest reason for returns, 62 percent, were due to poor fit, most likely due

to your cutters not following the patterns correctly. Another 7 percent were due to defects

in the material. And don’t forget about the big shipment of material we returned in

October. Around $25,000, as I recall.”

Jan was starting to become very dismayed. How could there be quality reports that

showed steady increases and yet have all these problems? “Dave, what kind of training

takes place for the cutters and sewers?” she finally asked. “Well, cutters go through 40

hours of training, and sewers have 6 hours. We have 10 cutters, making $7.25 per hour

right now, and 36 sewers at $5.50 per hour. My training budget’s been cut back so many

times that I can’t afford to give them any more,” he replied. “That’s okay, Dave,” Jan said, “we’re just trying to figure out what our problems are right now, we’ll worry about costs

and how to solve them later.”

Jan next turned to Ronald Fanucci, the manager of the Quality Control Department.

He informed her that the quality-control procedures had been written four years ago and,

except for minor changes, had not been updated since. Further, the procedures had been

written primarily by the Quality Control Department with little input from production

supervisors. Jan was now quite disturbed. “So where are these 15 people in your department

during the day, Ron?” she asked. “Well, 3 are in incoming inspection, and there’s one

supervisor over there, and one is in with the pattern making. But the bulk of my staff is in

final inspection. I have 8 inspectors and one supervisor there.” Jan looked at the budget and

noted that the inspectors received $12,000 salary per year, the supervisors $18,000 per

year, and Ron made $31,000 per year.

As the meeting closed, Jan knew some real progress had been made in determining

where the quality problems were. She also knew that there would be a lot of hard work

ahead in solving those problems.

Required:

1. Prepare a fishbone diagram, similar to Exhibit 14, identifying the root causes of

Cascade Seating’s quality problems.

Answer 1

The fishbone diagram to identify the root causes of poor seat quality in GM cars and subsequent demotion of Cascade Seating from preferred supplier to a backup supplier is as below: