Sunteți pe pagina 1din 36
De La Salle University Graduate School of Business In Partial Fulfillment of the Refresher Course

De La Salle University Graduate School of Business

In Partial Fulfillment of the Refresher Course Requirement in Operations Management, MSC512R

TERM PAPER ON THE Quality Management Audit of Simitomo Bakelite Philippines, Inc. (SB Flex Philippines)
TERM PAPER ON THE
Quality Management Audit of
Simitomo Bakelite Philippines, Inc.
(SB Flex Philippines)

Submitted to:

Professor Cesar Lim

By:

Frank G. Calucin

ID No. 10482768

16 March 2006

TABLE OF CONTENTS I. Introduction II. Company Background III. Bakelite - Phenolic Resin IV. Company

TABLE OF CONTENTS

I. Introduction

II. Company Background

III. Bakelite - Phenolic Resin

IV. Company Product Lines and Application

V. Business Process Flowchart of SB Flex Philippines, Inc.

VI. Business Process Description of SB Flex Philippines

VII. Selected Operational Audit Areas

VIII. Operational Audit Analysis based on what was learned in Operations Management

IX. ISO - International Organization for Standardization

X. Status of Philippine Standards and ISO Certificates

XI. (Total) Quality Management System

I. INTRODUCTION

I.

INTRODUCTION

This paper was written in conjunction with the assistance from the management of Sumitomo Bakelite Philippines, Inc. (SB Flex) of which a gap analysis was conducted with the company's existing system to determine what is required to comply with the requirements of the international standard ISO 9001: 2000, Quality Management System. This audit was conducted by Frank G. Calucin on behalf of Frank Calucin Consultancy and Training Services. The result of the quality system audit, which is summarized in this paper, was analyzed to ascertain how this is related with the topic on quality management, a topic in operations management.

II. COMPANY BACKGROUND

a topic in operations management. II. COMPANY BACKGROUND Company Outline - Sumitomo Bakelite Co. Ltd The

Company Outline - Sumitomo Bakelite Co. Ltd

The oldest known plastic is called phenolic resin. In 1907, Dr. Leo Hendrik Baekeland, a Belgian-American, succeeded in commercializing a phenolic resin, and named the product, Bakelite, and the name has since become the generic name for phenolic resins. The company's name originated with the achievement of Dr. Jokichi Takamine, a close friend of Dr. Baekeland who authorized to use the patent rights legally, which led to the establishment of Sankyo Co., Ltd. In 1911, Sankyo Co. Ltd. started manufacturing trial products in its plant is Shinagawa plant, where it pioneered the Japanese plastic industry.

The company started manufacturing bakelite in 1911 in Japan. In 1932, the bakelite department of Sankyo Co., Ltd. independently separated into Nippon Bakelite Co., Ltd. In 1955, Nippon Bakelite Co. Ltd merged with Sumitomo Kakozai Industries Ltd. forming a new company name, Sumitomo Bakelite Co. Ltd. As pioneer of plastics, the newly formed company developed new methods to make use of high technology and modern facilities in order to contribute to society's continual drive to realize a safe and comfortable living.

MANUFACTURING PLANTS : Akita Sumitomo Bakelite Co., Ltd.  Performs technological development and controls overall

MANUFACTURING PLANTS:

Akita Sumitomo Bakelite Co., Ltd.

Performs technological development and controls overall manufacturing

SB Flex Philippines, Inc. (SFP), First Philippine Industrial Park, Sto. Tomas, Batangas, Philippines

Completes the finishing stages of processes

Company Profile - Sumitomo Bakelite Flex Philippines, Inc.

SB Flex Philippines Inc. is located at Lot 6B, Phase 1A First Philippines Industrial Park in Sto. Tomas Batangas, Philippines. It was organized and duly incorporated on January 07, 1998. SFP is an export-oriented entity and under jurisdiction of Philippine Economic Zone Authority (PEZA). SB Flex Philippines a wholly owned subsidiary of Sumitomo Bakelite Co., Ltd. (SB) of Japan.

SFP (Sumitomo Flex Philippines) is engaged in the manufacturing of Flexible Printed Circuits (FPC) for Personal Computer (PC)’s peripheries. These products are distributed locally (constructive export) and directly exported to ASEAN countries and to Japan.

SB Flex Philippines has three major departments; 1) Administration Department, 2) Manufacturing Department and 3) Quality Department. Administration Department handles personnel, accounting, financing and general affairs. Manufacturing department is in charge of various aspects of production. Quality Department will manage product quality and standards.

III. BAKELITE - PHENOLIC RESIN

III.

BAKELITE - PHENOLIC RESIN

Around the turn of the century, the Belgian born scientist Dr. Leo Baekeland, working as an independent chemist, came upon the compound quite by accident. Anyone familiar with the newspaper printing business is aware of the Velox used as a proof; that was his first discovery. Velox was invented in 1899 and is still in use today. After selling the rights to this product to Eastman Kodak for three quarters of a million dollars, he started developing less flammable bowling alley floor shellac; bowling was becoming the latest rage in New York City. Dr. Baekeland soon realized that a resin that was both insoluble and infusible could have a much wider appeal when used as a molding compound. He obtained a patent and started the Bakelite Corporation around 1910.

At the time, it was known that phenol (commonly used as a disinfectant) reacted with formalin to create a new resinous substance, but extracting that substance in a stable, practical form proved to be a challenge. Researchers experimented extensively with different catalysts and with different heating timings, but no-one had found a forming technology for producing the new substance economicallynot, that is, until Dr. Baekeland’s compression molding technique overcame the problem.

Phenolic resin could be produced in a multitude of colors, commonly yellow, brown, butterscotch, green and red. Omitting the pigment could produce a transparent or translucent effect. The resin could be molded or cast, depending on variations in the formula. For molding, the formula was cooked until resinous, spread out in thin sheets to harden, then ground to a fine consistency. At this point, powdered fillers and pigment were added, to enable the resin to be molded and to add color.

This mixture was then put through hot rollers which created large sheets of colored, hardened resin. These sheets were then ground into a very fine powder which was molded under high heat and pressure into the final product form. As a molded material the resin's drawback was the limited range of colors which could be created. For casting, the formula was modified slightly, enabling the resin to be poured into lead molds and then cured in ovens until it polymerized into a hard substance. The liquid resin could be tinted to any color or "marbelized" by mixing two colors together.

color or "marbelized" by mixing two colors together. Frank G. Calucin ID No. 10482768 - Operations
Bakelite was first manufactured in Japan in 1911. The impetus was efforts by Jokichi Takamine,

Bakelite was first manufactured in Japan in 1911. The impetus was efforts by Jokichi Takamine, a chemical scientist and close friend of Baekeland, to procure the Japanese

patent rights to Bakelite for the president of a certain pharmaceutical manufacturing

company.

Takamine is also known for isolating and manufacturing Takadiastase and

adrenaline.

This was the time at the beginning of the 20th century when electricity was first being put to practical use powering things like lights and telephones. But for electricity to be used efficiently, an effective insulating material was required, and the newly developed Bakelite proved to be just the thing for telephone mouthpieces and insulators, as well as sockets for electric lights. And so Dr. Baekeland’s invention became a common feature both in homes and industrial facilities alike.

Indeed, in recognition of the proven capabilities of the Japanese Bakelite operation, Dr. Baekeland provided half the capital for the establishment of a new company in 1932:

Nippon Bakelite Co., Ltd. The company’s products were widely recognized for their excellence, and the company increased its lineup, expanded its markets, and grew to produce some 80% of the entire national production of synthetic resins.

IV. COMPANY PRODUCT LINES AND APPLICATION

IV.

COMPANY PRODUCT LINES AND APPLICATION

FLEXIBLE PRINTED CIRCUIT BOARDS SUMILITE® TFP

Inside increasingly small machines, such as PCs and compact electronic devices like cell phones, 3 dimensional and space saving wiring, as well as wiring at bent and curved part via flexible PCBs, exhibit superior capabilities. Some examples of such services are bending durability, cell-phones, hinge design, impedance control design and cost reduction design.

design, impedance control design and cost reduction design. APPLICATIONS FOR MOBILE PHONES Widely used for PCs,

APPLICATIONS FOR MOBILE PHONES

Widely used for PCs, peripheral equipment and devices of PCs, HDDs, PDAs, optical memory storage devices like CDs-RW/DVDs, wiring and interconnections of cell-phones and LCDs . Highly durable in bending use of hinges, this is mainly used for cell phones and also for the hinge part of laptop personal computers.

PHOTOGRAPHS OF CELL-PHONE APPLICATIONS

personal computers. PHOTOGRAPHS OF CELL-PHONE APPLICATIONS Application as flex durable printed circuit board with
personal computers. PHOTOGRAPHS OF CELL-PHONE APPLICATIONS Application as flex durable printed circuit board with
personal computers. PHOTOGRAPHS OF CELL-PHONE APPLICATIONS Application as flex durable printed circuit board with

Application as flex durable printed circuit board with shield layer

Interconnecting parts of cell-phones and PCs in which high hinge bending property is required. Features

Interconnecting parts of cell-phones and PCs in which high hinge bending property is required.

Features 1. Superior in flexibility and bending property owing the use of silver paste as
Features
1.
Superior in flexibility and bending property owing the use of
silver paste as a shielding layer.
2.
Shielding effect is as high as that of copper foil.
3.
Outstanding cost performance.
Applications
1.
At the hinge parts of PCs and LCDs.
2.
Other shielding purposes in general.
Structure

Application on the use for optical storages

For use in frequently bending parts of optical pick-ups, these are thin and compliant FPC boards which also have strong bending durability. The product also demonstrates superior quality in friction drive parts with limited space such as optical pick-ups.

drive parts with limited space such as optical pick-ups. Frank G. Calucin ID No. 10482768 -
V. BUSINESS PROCESS FLOWCHART OF SB FLEX PHILIPPINES, INC. CUSTOMER PRODUCTION SUPPORT ORDER HANDLING PLANNING

V. BUSINESS PROCESS FLOWCHART OF SB FLEX PHILIPPINES, INC.

CUSTOMER

PRODUCTION SUPPORT
PRODUCTION SUPPORT
PRODUCTION
SUPPORT
PRODUCTION SUPPORT
OF SB FLEX PHILIPPINES, INC. CUSTOMER PRODUCTION SUPPORT ORDER HANDLING PLANNING CONTROL MATERIALS & FINISHED
ORDER HANDLING PLANNING CONTROL
ORDER
HANDLING
PLANNING
CONTROL
MATERIALS & FINISHED GOODS CONTROL
MATERIALS &
FINISHED
GOODS
CONTROL
PLANNING CONTROL MATERIALS & FINISHED GOODS CONTROL PRODUCTION DELIVERY TO CUSTOMER REVIEW AND IMPROVEMENT

PRODUCTION

DELIVERY TO

CUSTOMER

REVIEW AND IMPROVEMENT
REVIEW AND
IMPROVEMENT
VI. BUSINESS PROCESS DESCRIPTION OF SB FLEX PHILIPPINES

VI.

BUSINESS PROCESS DESCRIPTION OF SB FLEX PHILIPPINES

For the purpose of this paper, we will only be discussing the following processes as we want to be consistent with the topic, that is, quality management system with emphasis in operations: 1) Planning Control; 2) Production Process and 3) Production Support

Planning Control

Based on P.O. Monitoring Report and Purchase Order received from purchasing and import/export section, weekly production plan is generated, which contains the production requirements specifying the quantity to be produced per section.

Production time, manpower, machine availability, material needed and finished stocks are also considered in making a production plan. Production control is responsible for scheduling the quantity of models to be produced per section based on the delivery date of that model.

Production Process

Upon the receipt of the production schedule from Production Control Section, Production Engineers discusses the necessary information of the parts ordered by the customer to all Line Leaders of every process or sub-section. These sub-sections are Punching, Assembly, Electrical Testing, and Process Inspection.

Line Leaders of the said Sub-sections are responsible for assigning and monitoring of required job with their respective operators. Production Engineers are responsible in monitoring the productivity of every sub-section in order to accomplish and deliver the product on the required delivery date.

SB Flex had provided all documented procedures, work instructions, guidelines, inspection standards and product limit samples in order to control and maintain good quality of production. These documents define the proper manner of production and standard tolerances that conform to customer’s specification.

In addition to this, the company had established a Defect Monitoring Committee that controls non-conforming product during production process. In-process inspection of quality is conducted with a time interval of fifteen minutes to constrain the multiplying of non-conforming product.

Production Support: HUMAN RESOURCES SFP gives importance to a qualified and competent workforce to better

Production Support:

HUMAN RESOURCES

SFP gives importance to a qualified and competent workforce to better serve and satisfy its customers. Thus, it is one of the quality policies of the company to select new employees according to defined job specifications. SFP is also committed to continuously improve the knowledge and enhance skills of its workforce by establishing a system for evaluating the training needs of its employees. This training evaluation is integrated in the annual performance evaluation. Provision of training is divided into five categories:

a) Company Orientation and ISO Awareness Training;

b) On the job training for newly hired employees;

c) Continuous training when new product or equipment is introduced;

d) Internal and external training as identified during the annual training needs and analysis;

PURCHASING

Purchasing activity is initiated whenever purchase requisition form is forwarded to Purchasing/IMPEX Head with the approval of the General Manager to procure office supplies and capital expenditures other than raw materials and sub-materials. However, in the case of raw materials and sub-materials it begins with the receiving of purchase order from SBS and a monthly production target from ASB. Materials and services requested for purchase are then verified (for availability) in the Approved Suppliers List (ASL). If the requested material / service are not available in the ASL, Purchasing/IMPEX will source out for new suppliers.

A quotation is requested from the suppliers. The basis for selecting which supplier is to procure the material / service is Price (cheapest), Delivery (least lead-time) and Quality.

INSPECTION

All received WIP and Sub-materials are inspected prior turn over to the next process for the continuation and completion of process to produce a product. Random sampling using AQL standard is employed when conducting incoming inspection. Quantity of items inspected is therefore dependent on the level of inspection.

In case the WIP and Sub-materials are urgently needed for production, these are identified and

In case the WIP and Sub-materials are urgently needed for production, these are identified and recorded in order to permit immediate recall and replacement when non- conformity is detected during production process. To prevent a product reject before reaching the final inspection, process inspection is conducted on the semi-finished product. As a policy, all finished products are inspected before they are dispatched to the customer.

These inspections are verified against any of the following: quality plans, inspection standards, and procedures. Inspected products are identified in a variety of means to indicate its conformance of nonconformance. As a rule, all inspection conducted on materials, semi-finished products and finished products are recorded, reviewed and approved by respective personnel.

CONTROL OF NONCONFORMING PRODUCT

This system was established in order to prevent the usage and delivery of non- conforming products to customer. Production Engineers & QA Engineer have the authority for the disposition of nonconforming product using product limit sample and inspection standard. Disposition of nonconforming product is categorized either rework or scrap. In case the nonconforming product is identified, the operator segregates and records all the data on the respective forms to be used. Each sub-section has frequency of quality checking to avert the passing of defect to the next process.

CORRECTIVE AND PREVENTIVE MAINTENANCE

Preventive maintenance is one of the most important goals of the organization to increase productivity and reliability of machines to be conducted periodically by the Maintenance Engineer. The Management is committed to provide maintained facilities, tools, equipment and manuals to guarantee the efficiency and high quality of production.

All workers who are in-charge in every machine and equipment are responsible in conducting a daily periodic maintenance to preserve and maintain its performance ensuring the continuing process capability. Maintenance and Production Engineers are responsible in monitoring and updating the Preventive Maintenance Plan to ensure that all equipments are maintained accordingly. In case any major problem is encountered during the use of equipment, SB Flex will invite or call a qualified sub-contractor who will conduct corrective action for repair. The Maintenance Engineer/General Manager is responsible for the verification of the conducted repair.

VII. SELECTED OPERATIONAL AUDIT AREAS

VII.

SELECTED OPERATIONAL AUDIT AREAS

ORDER RECEIVING / PURCHASING

Documented system for receiving and reviewing the orders from the customers, whether from the mother company or from the sales agent of SB FLEX needs to be established.

A documented system for all purchasing activities including local and foreign vendors needs to be established.

The evaluation of suppliers for accreditation needs to be formally documented on criteria like product conformance to specifications through sample approval, terms and conditions, company profile against its financial stability and range of suppliers, and availability of delivery facilities. System for evaluating the suppliers which includes suppliers of materials, shipping services, brokers, hauling services, hand tools used for maintenance, spare parts, accessories, among others, when material is received should be established.

Documented system for conducting supplier quality audit, which includes the process, involved for conducting second party audits, availability of quality audit reports and/or quality records of previously demonstrated capability and performance of suppliers need to be established.

Presently there are no available trained and qualified personnel to conduct supplier quality audit. A formal training is required of designated individuals to enable them to conduct such audits.

Systems for recording acceptable suppliers, including maintenance and monitoring system for reviewing the performance of these suppliers need to be established.

All purchasing activities which includes preparation of purchase requisition; methodology for canvassing and selection process; purchase order preparation and approval; and processing of government permits needs to be formally documented. This should also include revisions made to purchase order and follow-ups need to be established.

All export activities and local deliveries needs to be defined and established. This should include all activities, which includes the preparation of paper work needed for exporting the product, scheduling of delivery and coordination with the brokers’ needs to be defined and documented.

A documented control system during planning and provision for delivery which includes: delivery schedule, review of truck availability, qualification of subcontracted truckers, liaison activities with SEZ and checks required before delivery needs to be established.

PRODUCTION PLANNING  A system for handling customer orders should be established which should include

PRODUCTION PLANNING

A system for handling customer orders should be established which should include the preparation and review of production and delivery schedules and material planning. The review and planning of delivery orders should be all encompassing to include material and finished goods stock availability as compared to the daily production activity, availability of machines (due to machine breakdowns) and manpower availability.

There should be a documented system for revising production schedules and coordination with the customer when the organization does not have the capability to meet the order delivery due to machine breakdowns or non-availability of materials.

Logistics on the availability of materials and finished goods should be established and defined in the quality system to ensure the organization’s capability to meet the order requirement.

A documented system for handling customer supplied materials needs to be established.

PRODUCTION/MATERIAL CONTROL, SHIPPING

Handling and storage of raw materials such as WIP, adhesive tape, carton boxes, spare parts and office supplies needs to be established and documented.

Location plan specifying the area where items can be located with consideration to proper segregation, protection from environmental conditions should be established and documented. The system should include the method of updating the plan when there are changes in the location of these items.

A documented control system for the receipt of local and imported materials needs to be formally established. This should include the inputting in the computer system, observance of minimum stock limits and monitoring system when material stock has reached its minimum stock level.

A controlled system for issuance of production materials needs to be established and documented. This should include the preparation and authorization of materials request and the process of updating the computer system for whatever materials were issued. A controlled system should be established for controlling the data inputted in the computer. System control should include what needs to be done when responsible individuals for approving material request and its issuance are not available.

System for handling and stacking of received materials needs to be established and documented. This should include the use of a First-In First-Out system, regular assessment on the condition of the materials against environmental conditions.

 The process and use of an appropriate method of identifying the materials against the

The process and use of an appropriate method of identifying the materials against the materials control system needs to be documented.

A documented system for receiving / transfer of finished goods from production to production control needs to be established. The system should also include the process of handling the finished goods from warehouse to delivery trucks.

Location plan specifying the area intended for final inspection, stocking and packaging with consideration of proper segregation, protection from environmental conditions such as temperature and humidity, insect infestation, etc. should be established and documented. The system should include the method of updating the plan when there are changes in the location of these items.

PRODUCTION

Manufacturing procedures are available, but detailed work instructions, and guidelines, defining the manner of production from retrieving and handling the materials to production area, setting up of electro-checking machines and packaging of finished product needs to be formally established.

The process of monitoring the product-output during all stages of production needs to be defined to ensure nonconforming product is prevented needs to be defined. The system should include the use of a monitoring sheet.

Current system whenever samples are taken in production of when and how much of the sample was taken needs to be recorded. The system should include the use of guidelines to accompany the process.

Documented system for controlling how nonconforming products during production process are handled needs to be defined.

Documented system for the disposition of nonconforming products when detected during manufacturing stage needs to be established. This should include the recording system of product nonconformity, authorization for its disposition and the corrective / preventive actions needed to prevent recurrence.

Changes or cancellation to production schedules from production planning needs to be identified, and the system for communicating and recording such changes needs to be defined and documented. This should include such activity as production constraints due to machine breakdown or non-availability of materials and its effect on the production commitments should be considered.

Qualification system for production staffs performing skilled operations where product quality is dependent on the production staff needs to be defined.

Product quality workmanship standards such as dimensions, flatness, appearance, etc. needs to be formally defined and documented as a quality specification.

Method of Identifying materials either through a unique reference number or some other method needs to be established and documented. This unique identification needs to be in place at all stages of the manufacturing process and should be evident physically in the production area.

 The process of handling, identification, packaging and provision of storing the finished goods pending

The process of handling, identification, packaging and provision of storing the finished goods pending shipment needs to be defined according to company standard and customer specification. This should include observance of stacking height to avoid damage.

System for conducting training to newly hired operators and their continuous training, including the maintenance of individual training records of operators, line leaders and engineers need to be established.

Documented system for controlling the environmental condition of the manufacturing area with details on the environmental constraints needs to be defined and established.

MAINTENANCE

Documentation on the manner of conducing preventive and corrective maintenance of manufacturing machines needs to be formally defined and documented. This should include activities relating to mechanical and electrical maintenance.

A documented system for controlling the approval of new machines or modification of existing machines needs to be formally established and defined.

Preparation of Preventive Maintenance Plan needs to be established and defined to ensure a continuous production operation.

Use of a machine history card, detailing the corrective and preventive maintenance performed on the machine needs to be established and defined.

Machine reference manuals used as an aid for conducting preventive and corrective maintenance should be available in the English language and needs to be controlled.

Methodology for requesting spare parts when conducting corrective and preventive maintenance needs to be defined and documented.

QUALITY ASSURANCE

Documented procedures, work instructions, quality plan and records defining the inspection and test activities during receiving, in-process and final inspection for all products, to satisfy the requirements of the standard should be established and defined. Although some procedures are available in draft stages, these have yet to be reviewed to satisfy the requirements of the standard.

Inspection standard stating the acceptable criteria and parameters for conducting inspection of all products should be established and documented.

Existing Defect Monitoring System for controlling the process inspection during manufacturing stage also needs to be reviewed.

Statistical applications for verifying the process capability of inspection activities needs to be defined and established.

The process of conducting one hundred percent inspection (100%) prior to delivery to the customer needs to be defined and documented.



The process of returning the finished goods to production when the result of QA’s 100% inspection is not as per the customer’s specification should be defined and documented.

All standards whether internationally, nationally or customer imposed to all company products including inspection; testing, packaging and methods of delivery should be available as reference.

Criteria for workmanship specifying in the clearest practical manner (e.g. written standards, customer samples or illustrations) needs to be established documented and controlled.

All inspection and measuring test equipment used for inspection and testing needs to be identified and calibrated.

A documented system such as the calibration plan for ensuring all inspection and test equipment is calibrated on a regular interval needs to be established.

A documented system on how inspection and test status of inspected materials and products are identified by suitable means should be addressed and defined. The system should include all manners of inspection from receiving of materials to final inspection of the product.

System for controlling nonconforming product during all stages of production and inspection activities will have to be defined and documented. The documented system should include controls required for identifying nonconforming product, its segregation and disposition.

Quarantine area for nonconforming product awaiting disposition for rework or scrap may have to be established.

The current system for segregating “Good” and “No Good” during process inspection needs improvement to satisfy the requirements of the standard.

There is a need to establish a documented system for review and disposition of nonconforming product such as rework and scrap.

A documented system for controlling the activities of the occurrence of defective material / product, which includes authority to give disposition / actions and the re- inspection activities of reworks, and records of inspection from rejection to rework to re-inspection activities, needs to be established.

VIII. OPERATIONAL AUDIT ANALYSIS BASED ON WHAT WAS LEARNED IN OPERATIONS MANAGEMENT ORDER RECEIVING /

VIII. OPERATIONAL AUDIT ANALYSIS BASED ON WHAT WAS LEARNED IN OPERATIONS MANAGEMENT

ORDER RECEIVING / PURCHASING

Based on the discrepancy details cited pertaining to the production specifically that of order receiving, purchasing and shipping, the following recommendations are suggested to drive down purchasing related costs. It is advantageous for the company to design and implement a comprehensive purchasing and supply management system into its current operations.

This would entail rethinking and redesigning their supply chain to help it attain cost savings and efficiency in this area. First is by reducing the number of suppliers by about 40-50% would be an ideal starting point. The rationale behind this is that we would want to reduce transaction and processing costs considerably by limiting the number of suppliers to about half of the existing number.

This can be established by setting criteria based on the companies via ISO certification standards and making them have to qualify for accreditation. We can also employ an AHP selection process for determining the most favorable supplier (The basis for selecting which supplier to procure the material / service is according to Price (cheapest), Delivery (least lead-time) and Quality.) But the firm should reconsider the price criteria when selecting suppliers because it should not compromise quality by just simply selecting the lowest bidder. Instead, as part of its PSM strategy, it should consider developing long term partnerships with its suppliers.

This strategy offers several advantages for the both the firm and its suppliers. (Borrowing form the JIT philosophy: Few suppliers, Long-term contract agreements, Steady supply rate, Frequent deliveries in small lots, Buyer helps suppliers meet quality (cross enterprise teams can coordinate processes between the company and the supplier to ensure quality as well as reduce costs and eliminate waste for the supplier).

Forming partnerships is a win-win situation for all parties involved as the purchaser (SBS) will

Forming partnerships is a win-win situation for all parties involved as the purchaser (SBS) will be assured of the quality of the products it purchases while reducing transaction costs and the suppliers are assured of steady demand and it will find ways to improve quality and eliminate waste because it is getting assistance in design from SBS. This partnership will result in creating a shared value within the supply chain between the purchaser and supplier. And working in partnership with members in the supply chain will allow for continuous improvement as members are working hand in hand and sharing information with each other to help improve processes, designs resulting in cost savings and reduction of waste. The current practice of sourcing out new suppliers in the event that materials or services are not available is inefficient and far costly to continue. The quotation based system also needs to be reevaluated and perhaps modified for efficiency reasons.

Once the supplier network has been reconfigured and setup, an efficient information system has to be established between the SBS its suppliers and even its customers. One viable option is to develop an e-procurement system to make the order taking and purchasing process more efficient and to help reduce transaction costs for both the firm and its suppliers. In this kind of system the flow of information is vital that is why part of the success of this strategy is developing strategic partnerships with trusted suppliers so that it is easier to share information within the supply chain.

Part of the order procurement system to be designed is to develop an efficient documentation system involving all of the purchases and shipments to be made since the company is dealing with both local and foreign vendors. (See info about paperless documentation for shipping below).

There is a current trend now that addresses the need for exporters to electronically convey all relevant information needed for a bill of lading to the relevant shipping company. The generated bill may then be made available over the internet by the shipping company to the exporter for their endorsement and subsequent use. The bill of lading is a core document in the overall set of documents used product exporters and is usually initiated with a written “forwarding” or “shipping” instruction faxed from the exporter to the chosen shipping line. Sending this instruction electronically and receiving the resulting bill of lading, also in electronic form, is a significant step towards reducing costs and achieving paperless trading.

The benefits of electronic information communication arise from minimizing data errors and decreasing the time

The benefits of electronic information communication arise from minimizing data errors and decreasing the time needed to transfer this data, hence significantly reducing documentation costs. This demonstrates how collaborative use of supply chain tools can enhance processes along supply chains reducing costs, improving business relationships, saving time and expanding sales.

The process is based on existing international documentation procedures and essentially replaced the present paper based communication with electronic methods. Thus it minimizes staff training and provides immediate and potential future supply chain benefits by all participants in international trading. The shipping bill of lading is a commercial document that is issued on behalf of the shipping line or carrier, describing the kind and quantity of goods being shipped from the shipper (consignor) to the importer (consignee), the ports of loading and discharge plus details of the carrying vessel. It is the written evidence of a contract for the carriage and delivery of certain goods with any marks and numbers, sent by sea. It usually comprises three parts - the original, one copy sent by mail to the consignee, and a third copy that is retained by the shipper. The bill is assignable and the assignee is entitled to the goods, subject to certain rights. The information contained in the bill originates from the exporter. Of the many international data transmission standards, the Electronic Data Interchange (EDI) is at present the most widely used in the sea freight industry. This supply chain management tool can be a tremendous advantage for SBS and its suppliers.

Another recommended strategy to implement is to outsource delivery of the products after manufacturing. This will allow SBS to focus on its core competency of manufacturing and divert assets and resources to other vital areas of the business and operations. This also helps lower inventory costs.

PRODUCTION PLANNING

“There should be a documented system for revising production schedules and coordination with the customer when the organization does not have the capability to meet the order delivery due to machine breakdowns or non-availability of materials.”

The company needs to improve efficiency by preventing machine breakdowns and eliminating shortages of materials based on the customer orders. A JIT systems philosophy is recommended to help address these concerns. SBS’ objective should be not simply developing a documentation system for revising production schedules as this is very costly for the firm in all aspects. First having breakdowns and supply shortages will disrupt production and will result in dissatisfied customers that SBS might end up losing.

With regards to planning for production based on customer orders, it can employ a mixed

With regards to planning for production based on customer orders, it can employ a mixed strategy for its aggregate production plan (a combination of the chase strategy and level strategy) and adjust the strategy accordingly depending on the forecasts of demand from its customers. Related to the strategy pertaining to developing partnerships with suppliers, SBS can make use of collaborative planning: sharing information and synchronizing production across the supply chain.

PRODUCTION/MATERIAL CONTROL, SHIPPING

SB Flex Philippines should give primary consideration to the accurate documentation not only of the manufactured flexible printed circuit boards but also of the materials coming from different suppliers and the unfinished goods. The inspection mechanism in all received WIP and sub-materials, prior to its turn-over to the next process, serve as a reliable system of recording the received materials and practically monitor the intake of materials, as well as the process itself of producing their product.

A comprehensive control system for the receipt of materials and the procurement of

request for said materials could be established and entered into the company’s computer system. Since observance of minimum stock limits should be strictly enforced, SFP can implement an extensive materials resource planning (MRP), not only with the procurement of raw materials but also with the release of materials within the company itself as it is needed in the production process. It is equally significant that SFP conducts regular assessment on the condition of the materials during its distribution so as to maintain quality in the production.

The Production Control Section of SFP may utilize Input/output (I/O) control reports

during the inspection to effectively monitor the progression of their production process and single out any manufacturing problems that the company may encounter. This I/O mechanism will enable SFP to regulate the flow of work and identify the immediate source

of any over-production and backlogs.

The Defect Monitoring Committee must have a controlled system of recording and documenting the non-conforming products and come up with a defect-prevention checklist to particularly address the source of such non-conformity with the company and client’s standards. In effect, the process of inspection of quality effectively restricts the generation of non-conforming product.

The location plan of materials and finished goods should equally be considered with regards to

The location plan of materials and finished goods should equally be considered with regards to its inspection, proper segregation, and protection from environmental conditions, which may cause non-conformity to standards or its deterioration and overall affect its quality. A process layout for management of its facilities can be fitted out with particular emphasis on the inspection process being done by the company at every level of production in line with its commitment to quality. It allows flexibility to the production process and since SFP mainly manufactures customer-specified circuit boards, it is important that the inspection process be integrated to the layout to meet such standards or requirement.

Ultimately, SPF must establish a comprehensive production control from the time that the materials are shipped in the company up to the time that the finished products are packaged and ready for delivery or export to its clients. Furthermore, since SFP often procure to customized and client-specified products, it is important that they clearly control and check the status of the materials and the finished products.

MAINTENANCE

Corrective and preventive maintenance is important in every production/ manufacturing company in order to ensure good quality of goods. Well-conditioned machines and equipments help the production process to become more efficient and productive, resulting to low rate probability of crack-ups, disposals of non-conformities and danger to workers. Maintenance measures should be well defined and properly documented, as well as suitably instructed and delegated to employees/workers who will become responsible with these equipments and machineries. Monitoring shall be on a daily basis so as to identify inefficiencies on the earliest time possible and solve or conduct necessary remedies. A Preventive Maintenance Plan shall be developed and appropriately disseminated to all concerned individuals, making it company-wide, thus increasing awareness of the operation and maintenance of these equipments.

In the case of contingencies, SB Flex Philippines shall be prompt and responsible in communicating with the builders/manufacturers of these machines, those who can expertly repair and reprogram them. After which, regular check-ups should be performed until there is 100% guarantee of safe and efficient flow of machine operations. Otherwise, SB Flex’s Plant Manager/Engineer should prohibit and discontinue the use of said machine.

SBF Philippines’ Corrective and Preventive Maintenance Plan enables the company to produce higher quality of

SBF Philippines’ Corrective and Preventive Maintenance Plan enables the company to produce higher quality of goods, increases productivity and reliability of these equipments, and limits or if possible eliminates slack time in the process flow. In the long- run, it also reduces the equipments and machines’ depreciation value, thus adding more to these assets’ useful life.

QUALITY ASSURANCE

SB Flex Philippines Inc. started manufacturing Flexible Printed Circuits (FPC) for Personal Computer (PC)’s peripheries with a goal to provide customers with a high-quality product. Today, SFP (Sumitomo Flex Philippines) still follows the philosophy that every SFP employee has a responsibility for maintaining the high-quality of their products. Dedication to quality has been of the first importance in the operation of the company.

The Quality Assurance Department is responsible for total commitment to quality throughout the organization. They are responsible for implementing and improving this commitment. Also, all SFP employees are dedicated to serving the customer through quality in all aspects.

SFP manufacturing plant employees are responsible for assuring that the company’s quality standards are met. Extensive use of total quality methods contributes greatly to meeting these high standards.

Raw materials, processing, and packaging operations are frequently checked to assure that the production of Flexible Printed Circuits (FPC) are consistent with the customers specifications.

Many of SFP standards are even more stringent than those required by the customer. The Quality Assurance team regularly visits the plants to assure that proper procedures are being followed and that the materials being used meet customer’s specifications.

Quality Assurance Department is organized and authorized by the management. They have the overall responsibility for the organization and operation of the company. Quality Assurance works with the various departments within the company to ensure that quality procedures are implemented, understood, maintained and followed by company employees. All of them share in the responsibility to manage quality. The purpose of this is for them to identify and record quality problems. They can also initiate recommendations and provide solutions. In addition to this is to implement corrective actions to prevent future occurrences.

Finished goods are carefully checked, making sure they are within specifications. Samples are collected at several steps through the production process and are evaluated. Quality

control tests do not stop once the Flexible Printed Circuits (FPC) is packaged. Packages are

control tests do not stop once the Flexible Printed Circuits (FPC) is packaged. Packages are periodically collected and sent back to Quality Assurance for thorough analyses. Quality Assurance department evaluates the quality of products and implements the quality policies. They also serve in a problem-solving role.

The Quality Assurance Department performs several functions. In an auditing function, it helps ensure that the plants use the best technology available and produce uniformly standard products. The group also assists in analytical and technical problem solving by drawing from the collective expertise of the many SFP manufacturing locations. The department establishes the quality practices that are carried out by the manufacturing facilities.

Numerous techniques are used at SFP to continually assess the reliability of its quality systems. Since SFP feels strongly that quality must be an essential part of its products, each employee has a responsibility for maintaining quality. The goal of the Quality Assurance Department is for the continuous improvement in SFP’s process, products and services.

IX. ISO - INTERNATIONAL ORGANIZATION FOR STANDARDIZATION

In the beginning

Based in Geneva, Switzerland, ISO has been developing voluntary technical standards over almost all sectors of business, industry and technology since 1947.

With the exception of ISO 9000 and ISO 14000, the vast majority of ISO standards are highly specific. They are documented agreements containing technical specifications or other precise criteria to be used consistently as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes and services are fit for their purpose.

The World of ISO

The acronym ISO does not stand for International Standard Organization because the organization’s full name in English is International Organization for Standardization.

ISO is a non-governmental organization, which now sees its mission as the promotion of the

ISO is a non-governmental organization, which now sees its mission as the promotion of the development of standardization and related activities in the world with a view to facilitating the international exchange of goods and services, and to develop cooperation in the area of intellectual, scientific, technological and economic activity.

International Organization for Standardization was duly formed and began its official function on February 23, 1947, in Geneva, Switzerland. Initially, there were only 15 member countries including the USA, UK, Russia, France, Germany, Italy, Canada, Australia and Japan. Their purpose for establishing this organization is for them to have a common set of standards in manufacturing and communications.

Since its inception in 1947, this has now grown to 137 member countries. Since the original member countries speaks of different languages such as Russian, Italian, French and Nippon and English, it was from this situation that the member countries came up with a word that was common to all of them. The word was ‘ISOS”.

ISOS is a Greek word, which means EQUAL. It was from this Greek word where the words Isosceles” (two sides are equal), “Isometric” (equal in measurement) and “Isonomy(equality of laws of people before the law) were derived from. Later on, second “S” of ISOS was omitted, thus became ISO. With the worldwide use of ISO, this prevented the potential abundance of acronyms (for example: AISC, SSPC, AWS) by individual member countries based upon the literal translation of International Standard Organization in their own language.

Then, in 1987, came ISO 9000, followed nearly 10 years later by ISO 14000, which have brought ISO to the attention of a much wider business community. These are very different from the majority of ISO's highly specific standards.

Since then, the ISO 9000 standard had undergone two revisions, the second of which was an overhaul of the standard, now called ISO 9001: 2000 standards. ISO 14000 standards introduced in 1996 was revised in 2004 and to this date has remained unchanged.

ISO 9000 ISO 9000 is primarily concerned with "quality management". In the everyday context, like

ISO 9000

ISO 9000 is primarily concerned with "quality management". In the everyday context, like "beauty", everyone may have his or her idea of what "quality" is. But, in the ISO 9000 context, the standardized definition of quality refers to all those features of a product (or service) which are required by the customer.

"Quality management" means what the organization does to ensure that its products or services satisfy the customer's quality requirements and comply with any regulations applicable to those products or services.

In the case of ISO 9000, the efficient and effective management of processes is, for example, going to affect whether or not everything has been done to ensure that the product satisfies the customer's quality requirements. In the case of ISO 14000, the efficient and effective management of processes is going to affect whether or not everything has been done to ensure a product will have the least harmful impact on the environment, at any stage in its life cycle, either by pollution, or by depleting natural resources.

Please note that ISO 9000 is not a product standard. The management system standard state requirements for what the organization must do to manage processes influencing quality (ISO 9000).

The philosophy is that a quality management system requirement is generic. No matter what the organization is or does, if it wants to establish a quality management system, then such a system has a number of essential features which are spelled out in the relevant ISO 9001 standard.

Certification, Registration and Accreditation

ISO 9000 families contain a single "certification" standard. "Certification", "registration" and "accreditation" are three words that will certainly crop up on any company's journey in ISO 9000 certification process. Just what exactly does this mean?

According to the standardized definitions*, they are not quite the same thing. In the context of ISO 9001:2000, "certification" refers to the issuing of written assurance (the certificate) by an independent, external body that has audited an organization's management system and verified that it conforms to the requirements specified in the standard. "Registration" means that the auditing body then records the certification in its client register.

The organization's management system has therefore been both certified and registered. For practical purposes, in

The organization's management system has therefore been both certified and registered. For practical purposes, in the ISO 9001:2000 contexts, the difference between the two terms is not significant and both are acceptable for general use.

"Certification" seems to be the term most widely used worldwide, although registration (from which "registrar" as an alternative to registration/certification body) is often preferred in North America, and the two are also used interchangeably.

On the contrary, using "accreditation" as an interchangeable alternative for certification or registration is a mistake, because it means something different. In the ISO 9001:2000 context, accreditation refers to the formal recognition by a specialized body - an accreditation body - that a certification body is competent to carry out ISO 9001:2000 certification in specified business sectors. In simple terms, accreditation is like certification of the certification body. Certificates issued by accredited certification bodies - and known as "accredited certificates" - may be perceived on the market as having increased credibility.

Therefore, it is okay to state that your organization has been "certified" or "registered" (if, indeed, it has!), but inaccurate to state that it has been "accredited" (unless your organization is a certification/registration body).

your organization is a certification/registration body). Frank G. Calucin ID No. 10482768 - Operations Management,
Frank G. Calucin ID No. 10482768 - Operations Management, Page 28 of 35
Frank G. Calucin ID No. 10482768 - Operations Management, Page 28 of 35
Frank G. Calucin ID No. 10482768 - Operations Management, Page 29 of 35
Frank G. Calucin ID No. 10482768 - Operations Management, Page 29 of 35
Frank G. Calucin ID No. 10482768 - Operations Management, Page 29 of 35
Frank G. Calucin ID No. 10482768 - Operations Management, Page 30 of 35
Frank G. Calucin ID No. 10482768 - Operations Management, Page 30 of 35
X. STATUS OF PHILIPPINE STANDARDS AND ISO CERTIFICATES

X.

STATUS OF PHILIPPINE STANDARDS AND ISO CERTIFICATES

Introduction

The world is fast changing and it is important to highlight the emergence of globalized market both for products and services. Globalization has put pressure not only to developing countries but even to economies in transition. Together with globalization are development in regional cooperation and an increasing number of regional free trade agreements. These dramatic changes in world trade combined with increased global concerns for health, life and safety protection of the environment have affected the needs of consumers and have altered as well the regulatory and standards landscape. As tariff barriers fall coupled with rising awareness of quality and safety, the importance of standards and conformity assessment activities.

Status of Standardization in the Philippines

In 1964, Republic Act 4109 was passed creating the Bureau of Standards under the Department of Commerce and Industry. The Bureau then was charged with the establishment of standards for and inspection of all agricultural, forest, mineral and fish, industrial and all other products of the Philippines for which no standards have as yet been fixed by law.

Executive Order (EO) 133 issued in 1987, reorganized the Department of Trade and Industry and its attached agencies and reiterated the Bureau's mandate to establish standards for all products of the Philippines for which no standards exist. The same EO also renamed the Bureau into Bureau of Products Standards.

In 1992, Republic Act 7394, otherwise known as the Consumer Act of the Philippines, identified three government departments responsible for the development and implementation of standards for consumer products. The Department of Health (DOH) for drugs, cosmetics, medical devices and substances, Department of Agriculture (DA) for agriculture and agricultural related products and Department of Trade and Industry for other consumer products not covered by the two agencies.

There are standards activities in the other departments of governments, however in the absence of a body or office that does coordination these activities are not known or accounted for.

At the moment, most standardization activities are undertaken by government. Participation of the private sectors is quite limited. The potential of the private sector to assist in standardization work needs to be harnessed.

As of December 31, 2004, there are 4,005 National Standards that have been developed and

As of December 31, 2004, there are 4,005 National Standards that have been developed and adopted by DOH, DA and DTI of which 91 standards cover products under mandatory product certification. The number of laboratories accredited, product, ISO 9000 and ISO 14000 certificates issued in the Philippines as against some ASEAN countries, the country ranks 3rd, of which Singapore ranks 1st and Indonesia, 2nd.

ranks 3rd, of which Singapore ranks 1st and Indonesia, 2nd. XI. (TOTAL) QUALITY MANAGEMENT SYSTEM Total

XI. (TOTAL) QUALITY MANAGEMENT SYSTEM

Total Quality Management (TQM), a buzzword phrase of the 1980's, has been killed and resurrected on a number of occasions. The concept and principles, though simple seem to be creeping back into existence by "bits and pieces" through the evolution of the ISO9001 Management Quality System standard. The latest changes in ISO 9001:2000 standards "Process Model" seem to complete the embodiment. TQM is the concept that quality can be managed and that it is a process.

By definition, TQM is a management philosophy that seeks to integrate all organizational functions (marketing, finance, design, engineering, and production, customer service, etc.) to focus on meeting customer needs and organizational objectives. TQM views an organization as a collection of processes. It maintains that organizations must strive to continuously improve these processes by incorporating the knowledge and experiences of workers. The simple objective of TQM is "Do the right things, right the first time, every time". TQM is infinitely variable and adaptable. Although originally applied to manufacturing operations, and for a number of years only used in that area, TQM is now becoming recognized as a generic management tool, just as applicable in service and public sector organizations.

Now, what is TQM really?

Total = Quality involves everyone and all activities in the company. Quality = Conformance to Requirements (Meeting Customer Requirements). Management = Quality can and must be managed.

TQM = A process for managing quality; it must be a continuous way of life;

TQM = A process for managing quality; it must be a continuous way of life; a philosophy of perpetual improvement in everything we do.

TQM Compared to ISO 9001

ISO 9000 is a Quality System Management Standard. TQM is a philosophy of perpetual improvement. The ISO Quality Standard sets in place a system to deploy policy and verifiable objectives. An ISO implementation is a basis for a Total Quality Management implementation. Where there is an ISO system, about 75 percent of the steps are in place for TQM. The requirements for TQM can be considered ISO plus. Another aspect relating to the ISO Standard is that the proposed changes for the next revision (1999) will contain customer satisfaction and measurement requirements. In short, implementing TQM is being proactive concerning quality rather than reactive.

TQM as a Foundation

TQM is the foundation for activities which include;

Meeting Customer Requirements

Reducing Development Cycle Times

Just In Time/Demand Flow Manufacturing

Improvement Teams

Reducing Product and Service Costs

Improving Administrative Systems Training

Ten Steps to Total Quality Management (TQM)

1. Pursue New Strategic Thinking

2. Know your Customers

3. Set True Customer Requirements

4. Concentrate on Prevention, Not Correction

5. Reduce Chronic Waste

6. Pursue a Continuous Improvement Strategy

7. Use Structured Methodology for Process Improvement

8. Reduce Variation

9. Use a Balanced Approach

10. Apply to All Functions

Principles of TQM

1. Quality can and must be managed.

2. Everyone has a customer and is a supplier.

3. Processes, not people are the problem.

4. Every employee is responsible for quality.

5. Problems must be prevented, not just fixed.

6. Quality must be measured.
6. Quality must be measured.

7. Quality improvements must be continuous.

8. The quality standard is defect free.

9. Goals are based on requirements, not negotiated.

10. Life cycle costs, not front end costs.

11. Management must be involved and lead.

12. Plan and organize for quality improvement.

and lead. 12. Plan and organize for quality improvement. Frank G. Calucin ID No. 10482768 -
  TQM Process Improvement and Problem Solving Sequence     PLAN DO CHECK ACTION (EMBED
 

TQM Process Improvement and Problem Solving Sequence

 
 

PLAN

DO

CHECK

ACTION (EMBED THE FIX INTO THE PROCESS FOR GOOD)

   

(IMPLEMENT THE

(OBSERVE THE

 

(PLAN A CHANGE)

CHANGE)

EFFECTS)

 

DEFINE

 

IDENTIFY

 

EVALUATE

MAKE

TEST

 

TAKE

THE

POSSIBLE

POSSIBLE

A

THE

PERMANENT

PROBLEM

CAUSES

CAUSES

CHANGE

CHANGE

ACTION

1.

Recognize that

6.

8.

Determine

10. Determine what

11. Determine what

12. Ensure the fix

what you are

"BRAINSTORM"

the

change would help

change worked

is

embedded in

doing is a

what is causing

relationship

(confirmation).

the process and

"PROCESS"

the problem.

between

Your

that the resulting

cause and

knowledge

Histograms

process is used.

2.

Identify the

7. Determine

effect

of the

Control

commodity

what past data shows.

o

Scatter

process

charts

Continue to

being processed.

diagrams

Scatter

- sampling

monitor the

- Process

o

Frequency

o

Regression

diagrams

Scatter

process to

Inference

distribution

analysis

Control

diagrams

ensure:

o

Pareto charts

Charts

3.

Define some

o

Control charts

9.

Determine

- sampling

A.

The problem is

measurable

- sampling

what the

Pareto

fixed for good.

characteristics of value to the commodity.

process is

doing now

analysis

and

o

Control

****Then make

 

charts

the change.

B.

The process is

4.

Describe the

- sampling

good enough

"PROCESS"

o

Process Flow

o

Control charts

Analysis's

- sampling

o

Flow charts

o

List of steps

****To ensure continuous improvement, return to step 5.

5.

Identify the

"Big" problem

o

Brainstorming

o

Checklists

 

o

Pareto analysis

References:

1. Sumitomo Bakelite Co. Ltd. Company
1. Sumitomo
Bakelite
Co.
Ltd.
Company

Outline,

accessed

on

August

27,

2005,

2. Bakelite: a revolutionary early plastic, Lloyd Fadem and Stephen Z. Fadem, http://www.deco-echoes.com/bakelite.html, accessed on August 27, 2005

3. Supporting industry with materials borne of human ingenuity, Sumitomo Bakelite Co. Ltd., http://www.sumitomo.gr.jp/english/history/origin/bakelite01.html, accessed on August 27, 2005

4. International Organization for Standardization, accessed on August 27, 2005

5. Philippines Standardization Strategy, 2004, Bureau of Product Standards, Department of Trade and Industry, accessed on August 27, 2005

6. TQM Tutorial, Dexter Hansen, accessed on August 27, 2005