ÿ WindowsÔ

TM

An ISO/QS-9000

Virtual Factory on your desk

Guidebook
for
Instructors, Consultants
and
Self -directed Individuals

JKA, Inc.
273 Jefferson Road Princeton, NJ 08540
732.991.2256 Fx: 609.607.8527
Web: http://www.qmsprograms
e-mail: jka@qmsprograms.com

Copyright 1998 JKA, Inc. Princeton, NJ

Caution

This Guidebook contains explanations which, when read, could diminish the enjoyment of the CIM/Quality experience for some users. If you are the type of individual who likes to test yourself with the full challenge of a novel adventure like CIM/Quality, do so before reading this Guidebook. If you are teaching a course or giving a workshop, you should not give out the material in this Guidebook until the course/workshop is complete.

The Guidebook is primarily for those [quality managers, consultants, instructors, teachers, and self- directed students] who are already familiar with quality systems principles and are using CIM/Quality as a tool to communicate ideas and quality concepts to others [executive decision makers, clients, employees, trainees, students], or to gain additional insights for themselves.

How to Communicate Using CIM/Quality

Reader Profile

The communication situations we envision for readers of this Guidebook range from a one on one where a Director of Quality uses CIM/Quality simulation to help justify a capital request, to a one on many lecturer illustrating a quality concept to a large group of students. These "knowledge providers" are our prime Guidebook audience. Guidebook readers are expected to be familiar with the subject of quality and ba able to understand the workings of models within CIM/Quality.

Individuals can certainly use CIM/Quality and are expected to do so under the guidance of a facilitator/coach. As explained above in the "Caution", this Guidebook is not for these users. It reveals what should be fun and educational to discover for one's self with a properly trained facilitator/coach. Having discovered the models within CIM/Quality, you may want to pass your insights onto others. You can then look over the Guidebook without fear of being cheated of the fun of self discovery.

Equipment

Live demonstrations of CIM/Quality are best. These demonstrations require, at a minimum, MS Windows 3.1, 4MB of memory and 2 MB of storage. To use the animation option effectively requires a 486/66 with floating point hardware, or a faster PC.

One-on-few demonstrations can be carried out on a 14" screen, or bigger. For a larger audience, you will need some type of projection equipment. These range from detachable notebook screens that can be placed on top of an overhead projector, to very expensive dedicated projectors of exceptional quality. You can rent such equipment on a daily basis.

CIM/Quality produces spreadsheets and charts that can be converted into overhead foils. While not as interesting as a "live" demo, you can prepare a set of foils to illustrate points without the need for a computer at presentation time. Such foils can also be used in conjunction with a live demo to save time running through several scenarios.

You can run several sessions of CIM/Quality on a single machine, alternating the sessions to permit teams to compete. However, the best environment for team play is a workroom equipped with several computers.

Table of Contents

>Page Topic

2 Shortcut to Success

Everyone Can Succeed
But Not By Themselves
Run CIM/Quality Successfully

4 Introduction

Virtual Reality: Not Just a Game
Virtual Experience: A Great Teaching Tool
CIM/Quality: A Multi-Model Environment
Quality Requires a Multi-Model Representation
Surprise! Quality Is Not Simple

6 How CIM/Quality Can Help

Illustrating Quality Concepts
Reinforcing Your Points

8 A Planning Tool

The First Level: CIM/Quality
The Second Level: CIM/Quality Advanced

9 Suggested Exercises

No Quality... No Sales
Too Little...Too Late

Just Get The Certificate
Continuous Improvement, The Ultimate Solution

Stop Adding Value to Defectives
Cost Effective Inspection

Putting the Best Quality System Together
Sell Your Concepts

---

Shortcut to Success

Introduction

Virtual Reality: Not Just a Game

Simulation/Virtual Reality are well known teaching and planning tools effectively employed in areas ranging from rocket science to molecular biology. On a more understandable level, marketing "games" are extensively used in first rank business schools, such as at Carnegie Mellon, Harvard, MIT, and the University of Pennsylvania. These marketing models have proven to be effective and popular training tools.

It is certainly less expensive to launch a virtual rocket and see it "crash" for lack of fuel than to send off a real rocket and watch it shatter into hundreds of million-dollar pieces. Being able to "view" molecular interactions in 3-D can provide insights for chemists that simply cannot be duplicated by actual instruments.

Business executives invest [ resources and/or capital] in projects to obtain desired goals. Business school marketing games allow future executives to invest virtual dollars in plans to obtain objectives [e.g. market dominance]. A key advantage of these management games is any mistakes made result only in virtual bankruptcy and virtual loss of job.

Virtual Experience: A Great Teaching Tool

Experience is, of course, the best teacher, but virtual experience through computer modeling is a close second and a whole lot cheaper and faster. Computer models are excellent teaching devices for a number of reasons:

Students are interactively involved ,
Basic principles can be illustrated without confounding factors,
Real-time can often be significantly compressed,
The environment is controllable by the instructor,
Cost is low relative to the experience obtained.

CIM/Quality: A Multi-Model Environment

Quality professionals are faced with an environment wherein decisions they make are interrelated with a number of other factors [e.g. manufacturing processes, defect levels, customer acceptance]. Before the bottom line effects of these quality decisions can be realistically predicted these interrelations must be included. Hence modeling quality decisions requires a collection of interacting models.

CIM/Quality incorporates several models to simulate these relationships:

Process Model
Defect Model
Quality Model
Market Model
Accounting Model
Financial Model
Macro-Economic Model

The Process Model deals with the flow of materials from supplier to customer. The Defect Model introduces defects, arising from a variety of causes, at various stages in the material flow. The Quality Model superimposes a quality system, based on the ISO 9000 standard, on the resultant combination [Process + Defect Models] to yield a finished product at a certain level of quality. The Market Model reacts to the resultant product quality level, in comparison with the quality level of the competition, and migrates customers to or away from the Company's product. The Accounting Model measures the effects of these interactions on the performance of the Company in terms of sales and profitability. The Macro-Economic Model deals with labor rates, interest rates and the general state of the economy.

Quality Requires a Multi-Model Representation

The extensiveness of a simulation contributes to its realism and richness of detail. So one could justify the multi-model composition of CIM/Quality on that basis alone. However, it also appears that CIM/Quality is close to the minimum configuration required to represent the effects of quality decision making.

Can a decision making Quality Model exist without a process flow containing "defects"? For example, suppose there were no defects. Is there economic justification for any quality system components?. Suppose the marketplace provided no feedback, i.e. all material manufactured was purchased and used without returns, complaints, or customer migration caused by dissatisfaction. Would there be any reason to invest in a quality system?

One could argue that other measures of performance could be used in place of money, but that would require substituting an alternate model for the Accounting Model. Thus, at a minimum, it appears we need at lease five components to model decision making in the quality domain. [Performance of the Company in the financial marketplace is interesting and informative but not necessary.]

Surprise! Quality Is Not Simple

The foregoing might help explain why the quality area has proven resistant to quick solutions. [It might also help explain "Quality of the Month" programs, in which well intentioned but simplistic improvement attempts come and go on a disturbingly regular basis.] Quality-Business interactions are complex and subtle and cannot be successfully reduced to one simple formula. A quantitative model, such as CIM/Quality, can be useful in elucidating the mechanisms involved and illustrating the behavior exhibited.

The foregoing is also by way of illustrating that modeling quality is not a simple extension of the B school marketing models. When you couple complexity with relatively recent interest in quality and the availability of inexpensive high-powered computers, it should not be surprising that computer modeling of such an important domain as quality has only just now been undertaken.

How CIM/Quality Can Help

Illustrating Quality Concepts

CIM/Quality simulates the workings of an actual factory. You can illustrate many quality principles, e.g.:

Quality pays
Continuous improvement is key
Effective management of quality requires a formal system.

by simply running the Virtual Factory under different conditions. The different outcomes are there for everyone to compare.

For example, Exercise 1 under Suggested Exercises runs the plant without any quality systems installed. All defects are shipped to customers who eventually become dissatisfied and move to competitors. After 24-28 months the company is bankrupt. Running the Virtual Factory as in Exercise 5 will have the stock price move from $6 on day one to around $12 in the 24th month. Quality certainly pays for FMC.

Exercise 2 has a complete quality system installed, but no investments are made to take corrective actions. The plant is overrun with systemic problems and ends up bankrupt. The point is made: you must continuously invest in improvements to eliminate root causes.

Since you are running a factory on a PC, you can illustrate any number of quality concepts by making the appropriate decisions and letting the scenario play out for itself. This is very useful for teachers, since general education and training courses are not concerned about conditions at a particular plant.

As a quality professional working in a specific company you are likely to hear: Well that's ok for FMC, but it doesn't apply to us. FMC does [fill in the blanks] while we [fill in the blanks]. Take heart. First you are able to show the quality principles you espouse apply to at least some companies. So you have gained credibility. Secondly, you can suggest that a simulation of your own plant be made [See the next section: A Planning Tool.]

Reinforcing Your Points

While situations may differ, good communications tools are always useful. Slide presentations are an example. Listed below are some situations where CIM/Quality can be effectively employed.

CIM/Quality can also be used by individuals, in a self-discovering manner, to understand how quality systems operate and how quality decisions affect the company's behavior. There are tutorials built into the software to guide the novice user through the steps necessary to play the game.

There is no requirement for an instructor. Both quality professionals and people with no quality background have been able to successfully operate CIM/Quality. However, a knowledgeable facilitator can add a great deal of focus to the lessons in CIM/Quality and is really a necessity for most of us.

A Planning Tool

Computer modeling is also used as an economical/feasible way of carrying out virtual experiments, such as traveling in space or conducting a war game, before committing actual dollars or soldiers. With the advent of low-cost/high-speed personal computers, computer modeling is now possible for a much wider range of applications.

Imagine being able to test your ideas about a quality system design before installing it in the plant. Just select the quality system components and try the arrangement out on your own PC. You can then make adjustments to arrive at the optimum system for your needs in a matter of hours. This is the planning potential of computer modeling for the quality area.

The First Level: CIM/Quality

While designed for a hands-on, teaching/workshop environment, CIM/Quality can also be used as a high level planning tool to help formulate an effective company quality strategy. For example, executives trying to establish an overall approach to quality can try different alternatives to discover a "better" approach. Or a VP of Quality may use CIM/Quality to illustrate the thinking behind a proposed quality system to other executives.

If you are 2,3 10 times away from the optimum, CIM/Quality lets you move closer, quickly. just change a few parameters, do some scaling [e.g. FMC does $25m/yr we do $50 so our gains will be approximately double.]and you've made the point. That puts you in a position to justify the next step. OK, suppose we only do as well as FMC? We're still going to save $1m/year. Certainly that's worth a more detailed study.

The Second Level: CIM/Quality Advanced

As a full-featured planning tool, CIM/Quality is limited. It is restricted in ability to adjust parameters to suit specific local conditions. For detailed planning activities, CIM/Quality Advanced is the modeling tool of choice. It offers the opportunity to set a large number of parameters so that site-specific situations can be more precisely modelled. [For example, all of the values that appear dimmed in CIM/Quality, (e.g. market share, inspection time, investment costs) are capable of being controlled by the user in CIM/Quality Advanced.] And it removes the response: Yeah that may be true for XYZ, but not for us, we're different.

The Advanced version has some applicability in the classroom when a specific industry or type of manufacturing facility needs to be considered. However, CIM/Quality is quite appropriate for covering/ illustrating general quality considerations.

Suggested Exercises

No Quality... No Sales

Exercise 1a: Crash and Burn

A good beginning exercise is to run CIM/Quality without installing any of the ISO/QS-9000 quality subsystems. Sales will gradually decline and warranty costs will grow as a percent of sales. The decline of sales will eventually change initial, short-term profit margins into losses. Accumulated losses erode the cash reserve of the Company leading to eventual bankruptcy after 24-28 months.

In addition to illustrating the importance of a quality system to the success of a company, this first exercise gives players an opportunity to become familiar with the basic operation of CIM/Quality. The tutorial tour of the animation screen is converted to actual events in the exercise. Users can explore reports, options, sales and profit curves, etc.

Underlying Explanation

Customers are the final inspectors; they inspect 100% of the product. When customers find defects, three quality costs are incurred by the Company:

A certain number of customers will return the product for warranty,
A certain number will, in future, switch to a competitor,
A certain number will tell some friends about their bad experience.

The likelihood of these events occurring depends on the nature of the product, the ease of returning the defective product, and the competitiveness of the market place.

For a product like the Kwik-Cut Saw Blade at a retail price of $200.00, the likelihood of a returning a defect when found is high to begin with because the price is significant. Mechanics who use the blades buy them on a repeat basis, so returning a bad blade to its point of purchase is very convenient. This combination of factors boosts the probability of the return of defective products to very nearly 100%. Therefore, no parametric control is needed for the warranty likelihood of Kwik-Cut Saw Blades.

The switching likelihood and the "word of mouth" effect has been combined into a single controllable parameter called the competitiveness of the marketplace (Main Menu bar [Parameters/Market]). Selecting the highest level of market competition accelerates the decline in sales, so a rapid outcome is effected. Lower levels simply prolong the agony of declining sales and accumulated losses.

CIM/Quality comes "out of the box" with the competitive parameter set at its highest value. This yields a high learning curve compression. However, some players complain that this is not typical of real life where market erosion is slower paced. If you chose to let teams operate at a lower value, bear in mind the simulation class times will be extended.

Points of Discussion/Practical Considerations

Some companies have sales growth despite lack of a quality system, so this point may arise in class discussions.

The most common situation in which sales do not decline, even though customers may be dissatisfied, is in a growing market. A high annual growth rate (e.g. 25%) easily masks a modest outward migration of dissatisfied customers (e.g. 2%). The effect of poor product quality in high growth cases is reduced profits and growth instead of outright bankruptcy. In the case of saw blades the market growth rate is zero, reflecting a stable market. This clearly exposes the effect of relative quality on market share.

Demonstrating the cost of lost customers in real life is not easy in a growth market. CIM/Quality has a market growth parameter [main menu Parameters|Market] which would permit such a demonstration with the Virtual Factory.. However, it is set to zero and "grayed out" so it cannot currently be changed by the user. Typically CIM/Quality is played by competing teams and it is desirable that all teams be playing with the same parametric settings.

The net flow of dissatisfied customers is relative. If your competition has higher field defect rates , your company will actually experience a net gain in sales. This is another case where it appears that quality has little or no effect on success in the marketplace.

Spending more on advertising than the competition creates a net inflow of sales by offsetting the outflow of customers due to poor quality with advertising dollars. This spending can, in the short run, overcome the net outflow from poorer relative quality. However, it is a marketing dictum that advertising a poor product is a proven recipe for going out of business quickly. Again, CIM/Quality has an advertising budget parameter [main menu Parameters|Market]. It is set to 10% and "grayed out" so it cannot be changed by the user for the reason mentioned above..

Too Little...Too late

Exercise 1b: Let's Not Rush Into It

Underlying Explanation

FMC is burdened with many systemic quality problems which become more serious the longer they are neglected. Each month a quality subsystem is not operating, the quality problems it addresses are not being dealt with. Installing the ISO subsystems over a year means that on average, only half are working during the first year. At the end of the first year, product quality has fallen behind the defect power curve and it is difficult or impossible to catch up.

Points of Discussion/Practical Considerations

Underlying causes of defective products do not spontaneously disappear. They build up if left uncorrected. The compound effect is lost profits during the period of neglect, then overload of resources when the root causes are eventually addressed. Once a company gets behind the power curve, it's an endless round of fire drills, long days, dissatisfied customers and squeezed profits. Sound familiar?

There's an ecology fable where all the fish in a pond die if lily pads cover the pond. When to clear a pond of lily pads that double in growth each day and now, after 15 days of growth, occupy half the pond surface? Although this is a relatively simple problem, most people get it wrong by thinking they have another couple of weeks to eliminate the lily pads. The correct answer is the pond will be totally covered by day 16. How can we motivate people to act decisively? It usually is later that we think.

Some may argue that the pace at FMC is higher than one typically encounters and that is true. But the pace of business today is increasing at an accelerated rate. This questioning also offers an opportunity to promote simulation. If you first test out your plans in a Virtual Factory, you will be ready to go on day one in real life. And if you don't do so, your competitors will.

Just Get The Certificate

Exercise 2a:ISO Is a Cost of Doing Business

Some companies focus on getting a certified quality system, forgetting the real goal of having an effective quality system is to control and improve quality. Such an approach to quality can be more detrimental to the company than no quality system at all.

This fact can be illustrated by setting up Incoming and Final Inspection, Nonconformance Control, Supplier Ratings, Corrective Action [manual mode is suggested], and as many other subsystems as the quality budget allows before beginning the first period. There will be little or no money left to invest in Corrective Action for the first year. For this example, spend nothing on corrective actions even if some money is available.

Underlying Explanation

What becomes clear in controlling the quality function of the FMC Company (or any company for that matter) is that without investing in recommended corrective actions, overall quality deteriorates with time. Existing underlying problems continue to create defective materials, and new root causes crop up, accumulating a burden of defects that eventually overwhelms the company.

Points of Discussion/Practical Considerations

Attaining certification simply by installing all the required subsystems does not guaranty better quality. Critics of ISO/QS-9000 claim it doesn't mandate improved quality, it simply monitors quality. The same criticism can be made of Generally Accepted Accounting Practices (GAAP). When a certified public accounting firm puts its seal on an annual report it certifies the accuracy of the numbers (in compliance with GAAP), not that the company is profitable. Shareholders are expected to act in a manner to avoid companies which have losses and select companies with growth and profitability.

ISO 9000, in fact, goes further than GAAP. There is a Corrective Action subsystem required in ISO 9000. It may be formally argued that an ISO certified company does not have to invest in recommended corrective actions to become certified, but corrective action is highlighted in a manner that makes it highly unlikely that a company that does not make such investments will retain certification.

You might want to point out that FMC goes bankrupt faster with an ISO certified system than it did when it had no quality system.

Continuous Improvement, The Ultimate Solution

Exercise 2b: Get Quality Right

The importance of investing in corrective action recommendations can be illustrated by setting up the quality system as described in "Shortcut to Success. This leaves funds available in the quality budget to make investments in Corrective Action

Underlying Explanation

The long term quality goal of a company should be to continuously improve quality. ISO/QS-9000 compliant systems facilitate reaching this objective by creating a structure that reveals underlying causes of poor quality and provides a mechanism [corrective actions] for their permanent removal.

Points of Discussion/Practical Considerations

A key element in the FMC quality system is contained in the Nonconformance Control subsystem. Root causes are detected by tracking what types of defects repeat themselves and, when a certain number of repeats have accumulated, initiating a corrective action request for investigation.

The effectiveness of corrective action is accentuated by setting the CA batting average at 1000. This means that every suggested CA works, i.e. eliminates the root cause of the problem. Quite unrealistic in the real world.

Few ball players bat 1000. And most companies do not have such luck with corrective actions. You can try the same strategy of installing subsystems and investing in corrective actions at different batting averages (e.g. 500, 250 and 100).

The time it takes to fix a problem, once the corrective action investment is made, is immediate (initial default value). Again, quite unrealistic in the real world. You can set the Corrective Action Response Speed to lower levels, all other factors remaining the same, and report on the results

Stop Adding Value to Defectives

Exercise 3: Eliminate Defects Up-Front

Install only the Nonconformance Control subsystem and record the warranty cost (Main Menu bar [Reports/Cost of Quality]) at the end of the first month of operation. Note that defective material must be dispositioned before the cost appears on the Cost of Quality Report.

You can then restart (Main Menu bar [Options/Restart]), turning on Nonconformance and Incoming Inspection as in exercise 3. At the end of the month write down the sum of Warranty costs and Scrap costs. Does this cost differential continue for later time periods? Remember, sales in case 3 decrease, whereas in case 3a, they initially increase. Don't forget to normalize results as a percent of sales to compare apples with apples.

Underlying Explanation

The earlier you find and scrap a defective part, the lower the quality cost is. A study by GE of the electronics industry shows a factor of ten increase for each manufacturing step. Thus a defective chip costing $0.30 to replace at incoming inspection costs $300.00 to replace in the field.

For FMC, defect costs do not rise as dramatically as the GE study numbers, but the rise is still substantial. This can be illustrated by comparing scrap costs from initial inspection (^_$500,000/year) with the reduction in warranty costs resulting from the introduction of incoming inspection (^_$600,000) in the exercises 3 and 3a.

Points of Discussion/Practical Considerations

The amount of value added at each stage of manufacture will depend on the nature of the product, the manufacturing processes involved and the type of warranty arrangement that exists between supplier and customer. However, the concept is universal.

If you extend the time periods beyond the first, you will see a large gain (over $1 million) favoring scenario 3a over 3 in month two, and a gain of $300,000 in month three. Part is due to natural statistical variation incorporated in the model; and part is due to the timing of expense events. While all results show that early detection and removal is most economical, care should be taken in other situations to avoid drawing the wrong conclusions from what might be a statistical fluke.

Cost Effective Inspection

Exercise 4: Count the Ways to Reduce Inspections

Examine and try to explain the differences between a computer-based Incoming Inspection subsystem and a manually operated one. Try to work through a manual scheme for skip lot testing as outlined in ANSI/ASQC Z1.4 Section 8, remembering that records must be kept for each supplier. Extend this to skip individual characteristics, even though the entire lot may not qualify for skip status.

Try manually to work through the procedure to evaluate variables as outlined in ANSI/ASQC Z1.9.

Underlying Explanation

Some of the cost advantage associated with a computer-based solution is procedural efficiency: e.g. having the computer look up specs, look up test plans, look up drawings. However, most of the cost difference you see between manual and computer-based implementation of the Inspection subsystems is the result of fewer inspections resulting from:

Skip characteristic
Skip lot
Testing variables correctly

"Skip characteristic" means a history of test results for each characteristic for each source [supplier/process stage] for each component/product is maintained. These records are examined each time a lot of the component/product is presented for inspection and if a certain number of lots for that characteristic/source/product tested OK, the intensity [sample size] of testing is decreased, e.g. tightened to normal. Eventually, continued satisfactory testing moves the intensity to skip lot for the characteristic. This means the characteristic will only be tested, on average, e.g. every fifth lot. When all characteristics of a component/product are on skip lot status, the entire lot can be skipped.

Testing variables as variables, instead of as attributes, involves upwards of 25 separate operations, including calculating the lot average and standard deviation. Even with some background in statistics, it is difficult to get all the steps completed correctly by hand.

The calculations required to implement these three valid statistical techniques by computer is negligible. The exercises suggested will bear out that this is not the case with a manual solution.

These statistical techniques can be employed in the manual implementation but there is a labor cost associated with it. The labor savings from reduced testing is offset by the labor associated with the computations involved.

Points of Discussion/Practical Considerations

Based on the exercises in this section, you can judge if a fair estimate of these computations has been allowed for in the manually implemented Incoming Inspection subsystem. Perhaps a more important consideration is: can a person carry out the required computations without making a mistake?

Should one reduce inspections? The consensus is yes. How does one go about it? Well, some companies simply do it by fiat; not really statistically defensible.

The logical approach is to reduce inspections based on experience. Characteristics that don't vary from one year to the next need not be inspected every time. Using the 80/20 rule, most problems come from 20% of the characteristics being tested. This leaves the majority of the characteristics in the clear.

Why not use experience based testing? This is certainly a topic worthy of discussion.

How does a good SPC program reduce inspections?

Putting the Best Quality System Together

Exercise 5: Competing With CIM/Quality

CIM/Quality captures the highest scores for accumulated profit (this is what you take home with you); and peak monthly sales (this is what you get plaques for). Both of these influence the compensation package of the Quality VP. Choose the goal in your group and let the games begin.

Underlying Explanation

CIM/Quality has sufficient complexity that it is not possible, even for its developers, to predict the best score, or the best way to get it. So you and your group members are on your own. Let us know how you make out. We maintain a register of high scores.

Points of Discussion/Practical Considerations

ISO 9000 presents a sufficiently well defined quality system to permit modeling. CIM/Quality picks a single implementation to illustrate several principles of an ISO-compliant quality system, perhaps the most important of which is that properly run, quality systems are an investment that has significant returns.

CIM/Quality has a limited number of parameters under user control. This is useful in a classroom situation, and it can be helpful for strategic planning purposes. However, for actual planning purpose, one needs a simulation package that can be readily adapted to individual plant circumstances. CIM/Quality ADVANCED and CIM/Quality PRO address such needs.

Sell Your Concepts

Exercise 6: Sell Quality...Sell Yourself

Develop three scenarios to present to people you want to influence:

No quality system for FMC [see Exercise 1],
An acceptable quality system implementation for FMC [see Exercise 2a],
A very favorable quality system implementation.for FMC [improve on 2a].

Underlying Explanation

Survival Aspects There is the basic question of company survival to address. FMC operates in a zero growth market which clarifies the competitive role of superior quality in the marketplace. A growth market hides the negative impact of poor quality on sales. But poor quality still puts the company at a disadvantage vis à vis its competitors because it has a drag on sales. This in turn has a direct, devaluating effect on the company's worth. Furthermore, company profits are reduced, making it more difficult to compete. Installation of key ISO 9000 subsystems helps assure survival by keeping bad products from reaching customers and continually improving quality.

Acceptable Is Not Bad There is considerable money involved in the overall cost of quality, running to 30% or more of gross factory sales. Knowledgeable planning can reduce that amount substantially. For a plant like FMC with a sales volume of $24 million, the savings can amount to several million dollars annually even if only an acceptable quality system is installed.

Optimum is Best With CIM/Quality you can justify a considerable amount of consulting time [or capital investment] by demonstrating how to optimize a quality system. In the first place, you can save the company from low profitability/lagging sales by installing an ISO 9000 compliant quality system. But your real contribution is to help the company get the best ISO 9000 solution as opposed to a mediocre one.

Getting the best solution involves trial and error using CIM/Quality. This requires hours, or even days to work out a really good solution. With the opportunity to save millions of dollars by using the best over the merely acceptable, the returns can be very worthwhile.

Points of Discussion/Practical Considerations

Try It Before you Buy It Astronauts don't blast off without first spending thousands of hours in simulators, testing every conceivable combination of events. Why would anyone think of putting in a quality system without first simulating it? There are millions of dollars involved and a job or two to boot.

From Concepts to the Concrete "Concepts are fine for FMC, but how about my plant/ company? How does this specifically relate to my company?"

CIM/Quality has a big brother, CIM/Quality ADVANCED, which lets you tailor dozens of parameters to suit the characteristics of your client companies. And if you need more, JKA offers five different levels, including a real live computer-based Quality Execution System, QMS/9000. QMS/9000 does in real life what the CIM/Quality computer based solution does in virtual reality.