Sunday, November 23, 2014

Achieving Zero Defects in Today's Modular Home Factory

How much does poor quality cost today's modular home factory?

Quality defects have significant costs associated with them – some of the most obvious being money, time, resources, and lost reputation.

And programs to eliminate quality defects can be expensive and time consuming.

Do you insist on eliminating defects entirely no matter the cost?

Or, do you accept that a certain, albeit very small, percentage of defects is acceptable, and just accept the costs and learn to live with them?

One of the most influential ideas about this was the notion of "zero defects." This phrase was coined by Philip Crosby in his 1979 book titled, "Quality is Free."

His position was that where there are zero defects, there are no costs associated with issues of poor quality; and hence, quality becomes free.

Zero defects is a way of thinking and doing that reinforces the notion that defects are not acceptable, and that everyone should "do things right the first time" and “on time.”  The idea here is that with a philosophy of zero defects, you can increase profits both by eliminating the cost of failure and increasing revenues through increased customer satisfaction.

Tip:While this will probably be true, it may not be true in every case!

"Zero defects" is referred to as a philosophy, a mentality or a movement. It's not a program, nor does it have distinct steps to follow or rules to abide by. This is perhaps why zero defects can be so effective, because it means it's adaptable to any situation, business, profession or industry, especially the modular home industry.

The question that often comes up when zero defects is discussed, is whether or not zero defects is ever attainable. Essentially, does adopting a zero defect environment only set users up for failure?

Zero defects is NOT about being perfect. Zero defects is about changing your perspective. It does this by demanding that you:
  • Recognize the high cost of quality issues.
  • Continuously think of the places where flaws may be introduced.
  • Work proactively to address the flaws in your systems and processes, which allow defects to occur.
Zero defects is a standard. It is a measure against which any system, process, action, or outcome can be analyzed. When zero defects is the goal, every aspect of the business is subject to scrutiny in terms of whether it measures up.

When you think about it, we expect zero defects when we are talking about items or services that we use. If you buy a new 60” LED TV and your pixels start burning by the thousands, you demand satisfaction. When you take the car in for brake service, you expect that the mechanic will install the parts exactly as the manufacturer prescribes. No defect is an acceptable defect when it affects you personally.

So why then, is it so easy to accept that "defects happen" in the modular home process that effects the modular home builder’s customer? This is the interesting dichotomy that presents itself. Zero defects is one of the best ways to resolve the discord between what we expect for ourselves and what we can accept for others; between the modular factory and the builder.

However, if you fanatically follow a zero defects approach in areas which don't need it, you'll most likely be wasting resources. One of the most important of these resources is time, and this is where people are accused of time-destroying "perfectionism."

Adopting Zero Defects

There are no step-by-step instructions for achieving zero defects, and there is no magic combination of elements that will result in them. There are, however, some guidelines and techniques to use when you decide you are ready to embrace the zero defects concept.

Management must commit to zero defects. Zero defects requires a top down approach: The best-intentioned employees cannot provide zero defects if they are not given the tools to do so.

  • When you decide that zero defects is the approach you want to take, recognize that it likely represents a significant change to the way people do things.
  • Understand what your customers expect in terms of quality. Design systems that support zero defects where it matters, but don't over-design if the end-user just doesn't care.
  • Zero defects requires a proactive approach. If you wait for flaws to emerge you are too late.
  • Create quality improvement teams. Zero defects must be integrated with the corporate culture. Zero defects needs to be accepted as "the ways things are done around here".
  • To implement zero defects, you have to have strong systems in place.
  • Monitor your progress. Build mechanisms into your systems and methods of operating that provide continuous feedback. This allows you act quickly when flaws do occur.
  • Measure your quality efforts. It is important to express your progress in terms of the bottom line. Take baseline measurements so you understand the cost of defects in your organization, and can measure the benefits your achieving in eliminating them.
  • Build quality into your performance expectations. Encourage members of your team to think about how they can achieve zero defects, and reward them when they're successful.
  • Recognize that although zero defects is a destination, circumstances keep changing. Monitor, evaluate, and adapt in a continuous, never-ending cycle.

Things have moved on since 1979. Since then, there have been several waves of quality improvement which have taken things further, most recently resulting inSix Sigma  .

While zero defects is a useful idea, be aware that you may have to go much further nowadays if you want to your modular home factory to lead the market in terms of quality of delivery.


Anonymous said...

At last!!! A conversation that mod factory owners should embrace! While it won't happen tomorrow, market forces WILL align, and the factory that does not improve will be visiting the Dodo Bird in history. As a modular builder, I know what these poorly managed factories cost me with every delivery. And my money will migrate to the factories that cost me LESS.

Anonymous said...

Zero Defects will never be achieved until builders join together and push for this. Factories will never work toward it until it threatens their bottom lines.

SPeterson said...

ZERO DEFECTS will never ever be accomplished, simply because humans build these homes and because the cosmetic defect is very very subjective. Mistakes will be made. And adding more paperwork and more inspections and more documentation of training IS NOT THE ANSWER, although some regulatory agencies and think-tanks will tell you otherwise.

Quality is free, but zero defects is very difficult to get to, let alone maintain. I'm not saying it's impossible but it isn't easy and it doesn't happen in a Dream of Jeannie moment. It takes planning, time, more planning, more time and a complete and total buy-in from the top to the bottom to the top of the plant.

In my opinion, the trick is to identify and eliminate those "defects" that cost big bucks. Remember the old adage "$1 in the plant, $10 in the yard and $100 in the field"? Add "$1000 in the lawyer's pocket" and one can see the impact of just a single $100 savings. By eliminating the $100 mistakes, the manufacturer saves it and doesn't pass it on to the builder or homeowner.

Again, just my opinion, but the "on the floor and out the door" philosophy has to stop or the mobile home comparison and stigma will stay will us.

Great topic, Coach!