Buying on quality: how your suppliers measure up.

Buying on Quality How Your Suppliers Measure Up

Quality appears to be firmly enshrined as the watchword for manufacturing in the 1990s. In many quarters, it is becoming almost synonymous with productivity. Among companies that produce plastics resins and additives, it's coming to share equal rank with safety as top priority of the chemical industry.

The recognition is growing among plastics processors, their customers, and their suppliers that quality is an integral part of what they are selling. It has become an all-embracing concept that incorporates more than just product reliability and consistency, characterizing every facet of the relationship a supplier has with its customers, from the timeliness of deliveries and availability of technical service, to the accuracy of the paperwork in shipping and billing.

If such a "Total Quality Concept (TQC)"--also called Total Quality Management (TQM) or Total Quality Philosophy (TQP)--is to be a key criterion by which you select a supplier of raw materials or additives, then you'll need to be as fully informed on how to evaluate a supplier's quality program as you are on judging other aspects of its goods and services.

Materials and additive suppliers have always had some type of internal quality-assurance programs. But for most of them, serious involvement with modern statistical process and quality control (SPC, SQC) began only in the 1983-87 period, when Detroit's Big Three automakers began a drive to instill quality principles in their supplier base. Other demanding industries have also played the role of catalyst--e.g., disposable diaper manufacturers like Procter & Gamble and Kimberley-Clark provided the initial spark for implementation of SPC in color and additive concentrate manufacturing at firms such as Ampacet Corp. in Tarrytown, N.Y.

Almost any supplier today will proudly display its Corporate Quality Mission Statement, expressing its dedication to a Quality Improvement Program and similar high-sounding principles. But you'll want to go beyond that, no doubt. This article, based on on-site interviews with eight resin and additive suppliers who pride themselves on their approaches to "total quality," identifies key questions by which you may judge the extent to which a supplier really "has" quality or merely gives it lip service.

HOW DO THEY USE THOSE SPC

CHARTS?

Are they just to impress customers like you, or are they being used to improve the manufacturing process? Phillip D. Lunney, corporate statistician for Pittsburgh-based Mobay Corp., concedes that although his company began using SPC as early as 1983-84, under pressure from automotive customers, until 1986 its use was mainly to produce control charts when demanded by those customers. Since then, Lunney says, SPC has proven its value as a tool for cost control and improving the consistency of its products. In one case, Mobay's Dyes & Pigments Div. was experiencing severe difficulties in making acceptable lots of a particular maroon pigment. According to Lunney, the solution was found through "retrospective SPC on a raw material," correlating incoming q-c data on past lots with batches of finished product. "We learned a lot about what purity level of that ingredient was optimal for our process," says Lunney. Only then were they able to go back to their supplier and get the quality of material that allowed them to make a good product.

SPC can also be used by suppliers to solve problems for customers. A customer for a polyethylene crosslinking agent was forced to separate its production into two quality grades and wanted to eliminate this, if possible. Comparing dialkyl peroxide lot data with XLPE production results suggested to Catalyst Resources, Inc., Elyria, Ohio, that the problem was an effect of impurities. Catalyst Resources worked on its process to reduce both the average and variation range of impurity content. The initial range was 2.6-5.0% with an average of 3.8%. This was reduced to 0.711-0.879% with an average of 0.795%. At that level the customer was able to run 100% first-quality product, instead of only 20% as before.

Ampacet's director of manufacturing, Peter S. Ambler, says pellet-length variation used to be a major bone of contention with customers three years ago, and a cause of frequent reruns. "We first defined our goal for controlling this variable. Then we tracked and charted what we were doing in production and performed lab tests. Then we took our results out to the plant floor and got the operators involved. And since then pellet-length complaints have virtually disappeared and we do no re-passes for such problems." This contributed to a 10-15% improvement in Ampacet's throughput-to-saleable-product ratio, one of its main productivity indicators.

WHERE DO THEY USE SPC?

Yvonne W. Richardson, manager of the Quality Methods & Technology group at Quantum Chemical Corp.'s USI Div. in Rolling Meadows, Ill., says, "Customers have asked me, 'Show me your SPC in your lab.' I tell them SPC is not performed in the lab--let me take you into the plant to see where the quality comes from."

Most of the suppliers interviewed are instituting new procedures to permit plant operators to conduct in-process SPC testing, which gives them immediate information on whether the process is in control or not. The old way of doing things--in which samples are sent to the q-c lab, so that information gets back to the plant too late to be of use in controlling the process--is no longer adequate. Likewise, suppliers are concluding that inspecting finished product after it's made--when they can only sort good from bad--is no substitute for in-process testing that allows them to control the outcome. An example is Ampacet's plan to transfer testing for melt index and pellets/gram from the q-c lab to the individual machine operators.

Mobay's Lunney recalls a case where the Dyes & Pigments Div. saved $30,000/month in rework on a particular dyestuff, and cut time to fill an order from two weeks to 24 hr--with no capital addition--by implementing a simple in-process SPC test that could be done by the plant operator and that correlated well with product quality.

Spokesmen for Ampacet and Mobay note that they are using SPC even before a new product is brought into production, so that they already know what variables will affect quality and how to monitor that quality in manufacturing.

The real test of commitment to SPC, says Michael A. Grotke, manufacturing manager for Owens-Corning Fiberglas Corp.'s Resins & Coatings Div., Toledo, Ohio, will be having the confidence in one's methods to eliminate final-product q-c altogether in favor of inprocess testing that should reliably predict the quality of the end result.

HOW DOES QUALITY GET INTO THE

PRODUCT?

"You've got to look at more than just the quality you receive--you have to ask where it comes from," advises Howard G. Ostfield, quality manager for Mobay's Polyurethane Div. Is the quality built into the process, or is the supplier sorting quality into the final product? "You may be receiving 1000 lb of good product, but suppose the supplier has to make 5000 lb to find 1000 'good' pounds to send you?" asks Ostfield. "Who pays for the other 4000 lb? You do!" Phil Lunney adds, "You don't want to see an absolutely flat line of no variation in the quality of a product you receive. You'd rather see a tight, normal distribution around a target. No variation means the supplier is sorting or reworking his product to bring it up to standard. His process is not in control--and that virtually guarantees that you will get a bad lot sometime. Most quality problems today are because people rely on testing to inspect quality into the product."

HOW DO THEY RESPOND TO QUALITY

AUDITS & COMPLAINTS?

The frequency of customer quality audits appears to be growing exponentially--almost every other week for Mobay's Plastics & Rubber Div. alone, and virtually weekly at some one of Himont's plants. "Each year the number of audits doubles," claims Peter P. Hanik, Quantum's director of Applied Research & Technical Service. "It's now hundreds per year."

"It's a lot of work," admits Martin F. Donohue, plant engineer for Argus Div. of Witco Corp. in Brooklyn, N.Y., "but customer audits have helped us a lot--more than anything else--to figure out what had to be done."

"Audits are great," agrees Ampacet's manager of technical service, Eric J. Reger. "Some of the best information comes from customer audits. For example, they tipped us off to the importance of SPC on lab instruments."

Likewise, a supplier's attitude toward complaints is a useful indicator. At the Organic Peroxide Div. of Atochem North America, Inc. (formerly Lucidol Div. of Pennwalt Corp.) in Buffalo, N.Y., complaints are now dubbed "Quality Events"; at Mobay they're "Quality Improvement Requests." Mobay's William A. Baron, director of manufacturing for the Plastics & Rubber Div., advises, "If you really want to improve your quality you must encourage complaints. At the start, they'll go way up, as customers become more sensitive to quality issues. But they help educate you to your priorities."

Besides audits, "self-certification" by suppliers of their products' quality is another trend that can be regarded as either a burden or a boon for them. Himont executives expect most customers to demand self-certification within a few years. Eric Reger says the proportion of Ampacet's customers who demand self-certification has risen to 25% from 15% a year ago, and he expects it to be 100% within a couple of years.

Some firms, like Mobay and Owens-Corning Fiberglas, actively encourage this trend. Gary W. Tullis, technical manager at OCF's unsaturated polyester plant in Valparaiso, Ind., says, "We work to convince customers that it's hard enough for us to do a good job of testing--few of them can expected to do as goob a job." Adds plant manager Kevin Kerner, "We want customers to trust our SPC data so they won't spend three hours testing a shipment before they unload the truck. Somebody pays for that time."

Testing is also expensive--$50 to $60 for a simple chemical test on a urethane ingredient, says Mobay's Phil Lunney. Donald R. Norris, director of molding materials for Eagle-Picher Industries, Inc., Grabill, Ind., says that OCF's development of a more consistent automotive SMC resin has permitted a major reduction in incoming resin testing at his SMC plant. Previously, Eagle-Picher tested several properties on 100% of resin deliveries; now it only spot-checks one lot in six, except for confirming solids content and viscosity.

HOW DO THEY DEFINE QUALITY?

Perhaps one of the most important questions to ask at the outset is: who defines the quality of a product? And the reply had better be: You do! Almost every supplier interviewed put great emphasis on the importance of finding out what is important to the customer--"Fitness for Use"--before one can tailor a process and company organization to produce that result. The result, says Atochem's quality assurance coordinator, Gerald P. Franco, is "we're measuring things we didn't know we should two years ago. On one perester initiator, we used to measure four properties, now it's 11--each of them important to some customer."

Likewise, Quantum's Pete Hanik says gel content has become so important to producers of today's high-performance stretch films that he spent $1 million in the last two years on automated equipment for measuring gels, which have become a new SPC variable. He adds that dispersion quality was always the biggest source of complaints about filled compounds, but there was no good, objective measure of dispersion quality. Now, with the purchase of a new optical dispersion analyzer from Flow Vision Inc., Clifton, N.J., that, too, has become an SPC variable.

Ampacet's Reger adds that moisture content is becoming a standard spec for extrusion coating and cast film additives, and new color tolerances--[Delta]C and [Delta]H--have been added to the firm's Letters of Certification as potentially more sensitive measures than the traditional L, a, b and [Delta]E values.

Bill Baron recalls that as Mobay expanded its stable of polycarbonates from three broad flow ranges to nine narrower ones, it required a more sensitive measure of flow than melt index. By going to solution viscosity testing, along with many SPC-derived process improvements, the company narrowed its flow specs by half and reduced variability within those new specs by 50% between 1986 and '89. Baron believes his resin is now consistent enough that molders can use it to test the reproducibility of their machines (a paper on this topic was presented at the recent SPE ANTEC).

Not only are they willing to develop new specs, but suppliers are demonstrating a new attitude toward what constitutes conformance to thos specs. Says Terry K. Sprow, Resins & Coatings Div. technical manager for Owens-Corning, "Webelieve in targeting our process on one ideal value for a spec, rather than a specification range. It's no good to strive for consistency that's not at the ideal point." OCF is following the approach of Taguchi and others that a process is no good just because it's in spec--it has to be in control, too. "The theory is that there's more value in a product that's near the center of the target range than at its edges," explains OCF's Gary Tullis.

Atochem's Franco notes, "When we began to set specific targets for peroxide assay, rather than a minimum range, we got overnight reductions in variability." The essay spec for t-butyl perbenzoate, for example, is "98% minimum"; but now the target is 99%. As shown in the accompanying graphs, the range of variation has shrunk 20% since 1987, the standard deviation is one-third smaller, the average batch is 61% closer to the target, and Cpk has improved from 0.75 to 1.29. Similar improvements have been achieved in t-butyl peroctoate, BPO and MEKP, says Franco.

With the growing perception that quality is what satisfies the customer, Himont manager of quality assurance Stephen M. Howard notes that "when a customer complains, and we can show that the resin is in spec, it's no longer the end of the discussion. We look further. We may have to look at another property of the resin, or we may be able to help the customer improve his process rather than our product."

The Total Quality approach to business has led many suppliers to apply quality management--and even SPC charting--to non-manufacturing aspects of their business. Atochem's sales department has charted average time between sales calls on individual customers. Quantum charts turnaround time for its polymer laboratory to fulfill testing requests (see illustration). Mobay's purchasing department at one plant posted a chart of average time from order receipt to its entry into the purchasing computer, which helped speed order servicing significantly, says Phil Lunney. Several firms chart percentage of on-time or late shipments (see accompanying graph) and goods returned by customers.

IS THERE A FORMAL QUALITY ORGANIZATION?

Beyond the normal manufacturing quality-assurance or quality-control department, does the supplier have a top-to-bottom, company-wide quality-management structure? At Ampacet, that structure reports through the manufacturing organization. The Quality Committee includes the corporate manufacturing v.p., technical director, and technical service manager, as well as a plant manager and a technical superintendent from the firm's two U.S. compounding facilities. Also participating are the company purchasing director and an outside SPC consultant; and the marketing v.p. typically sits in on meetings as well.

What appears to be more common is a quality structure that cuts more broadly across functional lines. At Witco's Argus Div., the divisional SPC Committee organizational chart has at the top the divisional general manager, and below him the Management Committee, consisting of vice presidents of manufacturing and engineering, R&D, sales and marketing, and the director of management service. Next in line is the divisional SPC coordinator--a full-time job unto itself. Reporting to him are an SPC Audit Committee, with representatives of engineering and sales, and the SPC Quality Leaders at each of Argus' five plants. At many firms, including Argus, those plant-level quality coordinators wear another "hat"--lab manager, technical or q-c manager, or plant manager.

Having an independent, full-time quality authority reporting directly to top management is very important, according to Michael A. D'Onofrio, market specialist in Mobay Corp.'s Plastics and Rubber Div., Pittsburgh. In his firm, the quality reporting was formerly through the manufacturing department; now, quality is a totally independent function, which he believes results in more objective, unbiased judgment. Mobay's matrix-type quality organization is shown in the accompanying chart.

IS THERE FORMAL QUALITY TRAINING?

The first step in getting serious about quality improvement is usually when top management receives some training--perhaps by a knowledgeable customer--in the fundamental principles of such "quality gurus" as Deming, Juran, Crosby and Taguchi. For Quality to become a basic corporate orientation, it must start at the top of the organization chart. But it must also be extended down through all levels of the organization to the plant operator level, and horizontally through all departments.

The effort that some supplier firms have devoted to quality training is impressive. Quantum's USI Div., for example, has given from 8 to 20 hours of training in the basics of quality improvement and SPC to 4900 employees, plus 26 hours of advanced SPC training to 1500 employees, and 60 hours of quality management training to 550 managerial staff.

Atochem spent $85,000 on training services last year, not counting the man-hours lost from work. Gerry Franco itemizes over 10,000 hr of quality management training since 1986, including 2000 man-hr at the Crosby, Texas, plant alone, averaging out to over 24 hr per employee. All Atochem's more than 400 employees, even secretaries, receive quality training.

"We want to create an environment where quality is everybody's job," says Quantum's Hanik. Himont's Thomas P. Bragg, worldwide director of quality assurance, says one of his goals is to make sure that "every employee can relate his job function to satisfying specific customer needs."

A number of firms, such as Mobay, Himont, Atochem and Argus, show how they are trying to make quality an integral part of the corporate "culture" through quality newsletters, annual "SPC Day" occasions at the plant or corporate level, and award or recognition programs like Mobay's President's Achievement Award, given to plant or department Quality Improvement Teams for the best quality-improvement projects of the year.

ARE THERE FORMAL QUALITY PROCEDURES?

One of the most important functions of a supplier's quality organization is to standardize and document quality procedures and specifications. Test methods are one of the most critical areas to tackle. Himont, as a multinational supplier, has formed a steering committee on worldwide test standardization. And Quantum, which assembled its 13 plants and personnel from five different polyolefin producers (USI, Northern Petrochemical/Enron, Chemplex, ARCO, and Amoco) over a relatively short period, is also particularly sensitive to the need to standardize testing and other procedures. Quantum's Quality Methods & Technology group was established to harmonize everything from test methods and instrument calibration to procedures for rounding off numbers. Another function it oversees--one that's potentially critical to any multi-plant company--is the establishment of specifications for all of Quantum's resins and compounds, so that they could be made precisely the same at different facilities.

Ampacet's Reger suggests that customers ask their color/additive concentrate suppliers if they even have specs on all of their products--he suspects that many do not. For example, Ampacet typically specifies that a 20% antiblock concentrate must be 20 [+ or -] 0.5%. Reger also doubts whether "a lot of people think about instrument calibration." Each of the suppliers interviewed emphasized the importance of having documented procedures for frequency of recalibration of all test instruments with uniform standards. (Quantum's QMT group, for instance, sends standard color samples quarterly to its resin and compound plants for checks on color instrumentation.) These firms all maintain SPC control charts on the performance of their instruments, so they will know when they drift. "Our process can't be in control if the test to measure it, and the instrument to perform that test, aren't in control," says Reger.

Himont's Bragg says that close attention to testing "uncovered subtleties that even the instrument suppliers were unaware of." Each Himont plant runs a control sample on every melt indexer once a shift and keeps an SPC control chart on the results. The firm is starting to look at its customers' instrumentation, too, to uncover discrepancies in testing, and has produced an instructional videotape for customers on proper test procedure. Himont is also working on uniform data-reduction software for all its testing labs.

In order to confirm that these formalized quality procedures are followed, most suppliers' quality committees conduct periodic audits of each of their facilities, in some cases unannounced. Argus has a Quality Audit System Scoresheet with 72 questions, calling for numerical ratings on instrument use and maintenance, process-control procedures, raw-materials traceability, recordkeeping, order tracking, etc. The audit committee includes one representative from engineering and one from sales, as well as the division SPC coordinator.

DO THEY AUDIT THEIR SUPPLIERS?

For the same reason that your customers are "auditing" your quality, and you are doing likewise with your suppliers, the latter in turn should follow suit with their raw-materials and intermediates vendors. Most of them already are, though some of these programs are in their early stages. Where they're headed is indicated by Atochem's eight-page Supplier Quality Survey form, which solicits weighted numerical ratings for each vendor's quality-management philosophy, raw-material control, manufacturing process control, laboratory procedures control, packaging and shipping control, delivery, and invoicing.

Without control of one's raw-materials quality, it's unlikely that anyone can get complete control of final-product quality. Catalyst Resources offers an example of a dialkyl peroxide used as a melt-flow modifier for controlled-rheology (CR) polypropylene. After analyzing 12 months of production, including all raw materials and process variables, the company was able to reduce the standard deviation of product assay by 38%; however, controlling one intermediate produced 31% of that improvement, and optimizing process variables the remaining 7%.

Owens-Corning's Valparaiso unsaturated polyester plant keeps a control chart on the degree of difference between the vendor's data on each product shipment and their own q-c acceptance test data on the same lot. "You can identify a lot of problems right there," says plant technical manager Gary W. Tullis.

IS THERE A QUALITY PLAN?

A prime tenet of quality management holds that it is synonymous with a philosophy of continuous improvement. Says Gerry Franco of Atochem, "We need to look several years down the line--what will be perceived as good quality then?" Suppliers interviewed have three- and five-year corporate quality-improvement plans, and they also set annual numerical goals for quality achievement (such as an average Cpk target for a plant or a whole company). Sometimes those goals are set by top management, sometimes by plant operating personnel. Annual assessments within the company quality organization review progress toward those goals.

For example, the following seven quality goals were set by Argus' Brooklyn additives plant for 1990:

* "Determine and evaluate Cpk's on intermediates."

* "Review and update customer specifications."

* "Audit top suppliers for SPC program."

* "Retrain plant and lab personnel in SPC techniques."

* Evaluate analytical measurement error."

* "Have better documentation on plant and lab standard operating procedures."

* "Attend Design-of-Experiment course."

When you've asked all these questions, you might sum up by asking yourself whether a supplier's quality-improvement efforts are purely reactive--as they tend to be in the early stages--or have they become self-directed? Says Leo Bender, Elyria plant manager for Catalyst Resources, "We decided to look at all our customers to find who had the strictest requirements and produce everything to that spec. We found the greatest quality sensitivity among our polyethylene customers; now our attitude is, let's make everything that way."

You might also consider this thought from OCF's Gary Tullis: "All the SPC in the world makes no difference if you're not prepared to step up to the plate and make a commitment of capital, personnel, and time to solve quality problems."