The Right Way of Implementing a Quality Control Plan

Quality control is a crucial process, manufacturers take to make sure customers only get products which are up to their standards and free from defects. If this process is not properly implemented, then it could ruin the company’s brand and eventually lose customers. The entire quality control plan is complex but, fortunately, there are tools which can make the quality control plan a lot easier to implement such as statistical process control monitors, predictive analytics manufacturing and other trackers which record statistics and production metrics. These tools assist quality control plan officers in identifying issues and solve them before products reach the consumers.

 

Common Mistakes in Quality Control Plan Implementation

The quality control plan is implemented at the end of the production process (before the products are taken out of the facility). A common error in the quality control plan implementation is when QA officers tend to get too excited for their company’s products wherein they are no longer keen in checking quality standards of products and may overlook certain issues such as packaging problems, product defects and a lot more. Another common issue in quality control plan implementation is the lack of documented guidelines for standards protocol. This factor can become a reason for manufacturing inconsistencies most especially when a production line is supervised by multiple QA officers.

2 levels of quality control:

1. The quality control plan should be proactive in monitoring the manufacturing process and help check for inconsistencies instead of simply waiting on the bottom end of the production line.
2. Quality control plan officers should have a routine of checking quality and design of all the products, so solutions can right away be applied in case problems arise.

Quality Control Plan Implementation

As mentioned above, the need to document a concrete quality control plan is the first step of quality control implementation. You must set standards your company expects to follow which include:

- Quality standards of each product
- Choosing a quality control method
- Setting the number of products to be tested
- Organizing a quality control team
- Reporting system for defects and issues

Once the following items are already set, you need to establish different procedures for products with issues or defects. Ask yourself whether you should reject defective products or will there be repair work involved to correct these products. You must also check your production line and look for aspects which you can improve on to avoid defects and issues on your products in the future.
Determining the right way towards quality control plan implementation and avoiding the usual mistakes is a good start for your quality control program. Getting a hand on the right tools and software will also be necessary for proper quality control implementation. If you have all the requirements covered, then it rests assured your products will be of the right standard once your customers are able to purchase them.

from
https://intrepidsourcing.com/the-right-way-of-implementing-a-quality-control-plan/

Product Costing Systems You Need to Know for Success in OEM

The product price will always be a determining factor whether the consumer buys a product or not. This is the reason why companies are very critical of their product costing system and make sure the prices they come up with, justify the quality of their products, including the demand of their products in the market today. Having a too expensive price would not translate success for the product while selling it a much cheaper price would also mean a loss for the company. Getting the right price through the established product costing system will solve this issue.

In our introductory blog series on product costing system, we gave you a basic overview on how to establish a product costing system for your company. We gave away the standard formula on how to calculate for product costs and identify components of a product costing system.  In this blog post, we look at different product costing systems used by manufacturing companies today and the specifications why they could be perfect for your OEM company.

Two of the most common product costing systems used in manufacturing companies are process costing and job order costing. These two product costing systems are very popular because they are based on records with actual or estimated values of the production cost that can easily be translated for product costing. The values out of these product costing systems can easily be adjusted later as part of the production planning and control. There are also other manufacturing companies who prefer to use a product costing system such as activity-based costing or backflush costing due to certain factors which cannot be covered by the first two product costing systems mentioned above.

 

Different Product Costing Systems

1. Job Order Costing

This product costing system is commonly used by manufacturers of unique products such as furniture, dressers, boats, and other customized items that aren’t mass produced or each unique to its own. Job order costing is computed by calculating the cost of a unit in a given order. Materials, labor, and overhead costs of each job are listed to find the total value of the order’s production cost then is adjusted for final price with added value for profit.

2. Process Costing

This product costing system is usually used by companies who are into mass production of similar products. Instead of calculating production costs per order, process costing calculates production costs per production process. Since materials, labor and overhead costs are constants for each product then it is easier for manufacturing companies to use this product costing system.

3. Backflush Product Costing System

Backflush costing is a product costing system perfect for companies utilizing the just-in-time (JIT) inventory system. In this scenario, inventories are only sent by clients to the manufacturing company when needed. The product costing system is much simpler with this production planning system because a lot of factors are eliminated in the process. The product costing system only focuses on labor and overhead costs after manufacturing the finished product upon receiving the inventory.

4. Activity-Based Product Costing System

This product costing system is a complex version of the traditional one as several bases known as cost drivers would come into play. If the production planning and control involve several manufacturing processes then all these processes are put into consideration as separate bases with each one accumulating different costs.
There are a lot more product costing systems in the world of OEM but the ones mentioned above are most commonly used. You can choose one and modify it according to your company’s needs as part of your production planning management. Simply make sure your modified formula is just and fair for consumers to keep a decent foothold in the market.

from
https://intrepidsourcing.com/product-costing-systems-you-need-to-know-for-success-in-oem/

How to Measure the Effectiveness of a Manufacturing Production Line

The manufacturing and retail industry is globally competitive and OEM companies need to continuously aim for their top performance to keep in line with fellow competitors. They can only do this if their production line is well-enhanced to suit the demands of much smarter consumers in a market with constant changes. This is the reason why production line assessment is very instrumental to everything we do as a sourcing company as it will not only make work more efficient for our suppliers but it also helps improve service quality and the quality of our products.



We have already defined production line measures we follow in our company as discussed in the introductory blog series on production line assessment. The company makes sure the suppliers and manufacturers we are working with follow an optimized production process known as “Lean Operations” in the industry. Our intervention in the entire process is limited to show trust to our supplier/manufacturers but we are entirely hands-on when it comes to assessment to make sure we got all aspects of the production line covered.

Sourcing companies and supplier/manufacturers can save lots of time and money with the right production line approach. The efficiency achieved through an enhanced factory production line allows better returns with fewer handovers because of a well-assessed system. Productivity also gets maximized which means more units are produced at the least time required allowing the company to save money from salaries and get the most out of their employees. Production line assessment also detects possible issues to make sure products pass standards during the quality control process.

Production Line Assessment Tools

There are different tools available which help companies conduct production line assessment. Aside from technological equipment, these tools also come as methods and metrics which can enhance the productivity and reliability of the manufacturing production line. The most popular method practiced by OEM companies is Total Productive Maintenance (TPM) as a tool to maintain and improve the production line. This method has derived 2 standardized operations performance metrics: Overall Equipment Effectiveness (OEE) and Overall Resource Effectiveness (ORE). These metrics allow OEM companies to benchmark against competitors in a highly competitive industry.

1. Overall Equipment Effectiveness (OEE)

OEE is a standardized performance metric which identifies six major components as factors for ineffective production line performance which can affect its availability, performance and quality rate of the output. These components are (1) equipment failure (2) process failure (3) idle time (4) reduced speed (5) equipment defects and (6) reduced yields. The formula to calculate OEE is as follows;

Overall Equipment Effectiveness (OEE) = Availability (A) x Performance (P) x Quality (Q)
Availability (A) = Actual running time / Planned machine production time
Performance (P) = (Cycle time/unit x Actual Output) / Actual running time
Quality (Q) = (Total Production – Defect) / Total production
OEE helps indicate the difference between the initial and current performance of a system or manufacturing unit. This metric focuses on the performance and productivity of equipment used in the production process ignoring other factors such as labor and material usage.

2. Overall Resource Effectiveness (ORE)

ORE is basically the modified version of the OEE which is more useful to most OEM companies which don’t heavily rely on types of machinery and equipment for their production process. This metric identifies other components aside from the six considered by the OEE which are (1) readiness (2) availability of facility (3) changeover efficiency (4) availability of materials and (5) manpower availability. The formula to calculate ORE is as follows;

Overall Resource Effectiveness (ORE) = Readiness (R) x Availability of Facility (Af) x Changeover Efficiency (C) x Availability of Material (Am) x Availability of Manpower (Amp) x Performance (P) x Quality (Q)

Both metrics are proven to be effective to use in measuring a production line. However, the main factor you need to consider in picking a metric to use is to identify the type of losses which affect your production line performance. These losses can vary for production lines even if they are in the same industry.

The Importance of these Metrics as Tools

Measuring the effectiveness of a production line is important so you’d be able to assess all aspects of it. This process will help you determine which part of it needs improvement and which factor is doing you greatly. These metrics as tools will let you maximize your production line to its possible maximum effectivity for the benefit of your clients and company.

from
https://intrepidsourcing.com/how-to-measure-the-effectiveness-of-a-manufacturing-production-line/