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The QCD Factor

Managing The Basics To Make YOUR Business Success a Certainty.

By Ramli Abu Hassan

Note: Charts or drawings unavailable here-sorry

Contents:

Preface

Chapter 1:Introduction

Chapter 2:What’s QCD Factor means to the World Today!

Chapter 3:The Success of The QCD Factor –World Class Companies –Making  Business Success A Certainty.

Chapter 4:Understanding all about Q

Chapter 5:Understanding all about C

Chapter 6:Understanding all about D

Chapter 7: Executing Q with Certainty

Chapter 8: Executing C with Certainty

Chapter 9: Executing D with Certainty

Chapter 10:It’s all about understanding,executing and continual improvement of the QCD Factor that make YOUR Business Success a Certainty.Try It and Do It !

References

              “In the Name of Allah the Most Gracious the Most Merciful.”

                                                                             (Quran-Verse 1,Surah Al-Fatihah)

Preface

Why write a book on The QCD Factor when this subject is as old as the Ford Model T?By the way,Ford Model T celebrated her 100^th years “product roll out” anniversary in 2008.

QCD or simply Quality,Cost and Delivery as an evergreen subject especially for all line managers and anyone who’s duty is “to get the stuff out of the door with good quality,low cost and fast delivery to the customers.”

From this writer’s working experience of almost 20 years in the manufacturing of electronic components & banking industry and later his training and consulting work for almost 12 years plus (till today-2009)The QCD Factor is the best way to create certainty in producing Great Work with almost fool proof conditions where your customers will be fully satisfied.

Like all management ideas,tools and techniques it is all about EXECUTION!

Many Business Leaders quickly “jump the gun” to adopt new fads or ideas in the marketplace but like always these ideas later lose their “steam” and finally fade away just as fast as they are being introduced.Many of them failed because it was never really tested in the workplaces and marketplaces but was only “coined up” in the air-con offices with lots of theories but little success stories or case studies to show.The QCD Factor is not thought of in the air con offices but was thought of and written from many business success stories of entrepreneurs both the street smart and book smart types.The QCD Factor is a management story where many businesses were successful due to the adherence to this simple philosophy,methodology and “way of life” of doing business with certainty.The QCD Factor is all about execution and as reference to my first book “Revolusi Aksi” or Action Revolution ,written in the Malay language is all about getting it done after the mental stage or mental mode is developed or formed.Without action there will be no results just become a mental state or thoughts only.

President Franklin D.Roosevelt once remarked “there are many ways in which it can be helped,but it can never be helped merely by talking about it.We must act,and act quickly.”

So The QCD Factor is also about thinking good and later acting with great passion for better results and satisfaction of all stakeholders concerned.

Well,many of you may agree or choose to disagree with me on this aspect of learning or “picking up” all these new management thoughts and innovations.In the preceding chapters we shall discuss more on these areas of effectiveness of these new management techniques introduced these last 20 years ago.

The study of Quality,Cost and Delivery is the safest way to do,really!

When our Talents are thought about the importance of Quality,they will understand that our products and services must always conform to our customers’ requirements;Cost study will enable them to understand about producing products and services economically that enable companies to have a good competitive pricing in their marketplace and finally with Delivery knowledge our Talents will be able to know that having the quality products and services with the right costing will not complete the business transactions in full or successfully if the delivery is late and unreliable.

So,the study of this QCD Factor is a prerequisite to all new Managers,Executives and Workers at their respective workplaces as well as a refresher program for all existing Talents to ensure their mission of turning their organizations or companies to World Class Performances are reachable and doable.

Let’s hope some time will be spared by all readers concerned to really “dig deep” in this book by reading,sharing the pointers highlighted by this writer and most important of all to successfully,readily and with passion execute all the good ideas or pointers in your workplaces.Only then can Change Happen for the Better and Make Living at Your Workplace a Worthwhile Mission and Commitment.

“You Can Make The Difference If Only You Want To,Now!”

Regards,

Ramli Abu Hassan

Shah Alam,Selangor Darul Ehsan

Malaysia

First Book:Revolusi Aksi or Action Revolution published on 24^th March,2006.

Chapter 1:Introduction

As I am starting this early pages of my new book (the first one was titled “Revolusi Aksi-Action Revolution published in March,2006),

Like all nations of the world,Independence Day is a Great Day!This is the day,where you have become officially a free nation with your own laws,regulations and elected leaders to govern your own country.All Nations of the World aspire to be an Independent Country with the ability to be self sufficient,self govern and self responsible to her people and determining the economy,social,political and all aspects of living in a free country and free from all colonialism or dominations.

However,the scenario may not be a “rosy” or as good as one aspect of all nations that have achieved independence!Why is that so ?

A country that was once a colony will remain so if the country’s still practice exporting raw materials or resources to other nations and then buying them back in terms of manufactured goods or completed products.Being an independent nation is where in terms of the economic stand point,a nation is able to produce her natural resources like tin,rubber,palm oil,cocoa,coffee and others to manufactured products that are then “added value” to become manufactured products like tyres,tin cans,cooking oil,coffee powder and chocolate products where they can be exported to Buyers for a better price and profits.The ability to add value to one’s own raw materials is all depending on the Talents of one’s own country.If the Talents or people do not possess the competencies,skills and knowhow of the business processes it will become impossible to build a great business where countries like Malaysia can be a dominant force especially as an Exporter or Manufacturer of products that the World wants badly.

Talent Management is the “real” business of HR nowadays and the major concerns for most CEOs’ as far as managing their companies effectively and continually!Only with excellent Talent Management can a country or company access to the best brains,productivity outputs,quality work,cost efficient products and services and speedy delivery of outputs or products to customers everywhere.In fact with the Right Talent can a company grow,prosper and survive in this 21^st Century Globalization of business,networking and activities.

Many countries and companies in this world have done great things to acquire their talents both domestically and overseas so that they can achieve their business mission or Business Plans to satisfy all their stakeholders and more importantly to be able to survive in this ongoing business of the Global World or Planet Earth!

In pursuit of enabling their companies to be World Class,Business Leaders have opted to embark on many management ideas,techniques and philosophy.The number of management books being published monthly are by the hundreds and there are basically plenty to choose as far as the new “Management Fad” of the month is concerned.However the best way to start this journey of business excellence is best to subscribe to those management techniques that what have really worked than what is new but have no proven success or maybe just a theory of things that may work anyway!Maybe it’s better to get a right start then to start a journey with “unclear” or “God know’s where” we are heading to.At times the cost of the investment of a new “fad” can be very costly and the results are so marginally or not satisfying at all.It pays to adhere to the phrase “Follow the Basics” and then move on with your Continual Improvement process for better results and more satisfaction.

The QCD Factor is one of these “age old formula” that this writer wants to highlight as your Fool Proof formula or making Success a Certainty in your company or organization. Fool Proof or Poka Yoke is one of the techniques used to ensure safety is  made certain in the shopfloor or any kind of process that utilize machines or equipment.Fool Proof can also be established in other processes so that “nothing can go wrong” with the process due to all the factors or precautions laid out earlier.

With this QCD Factor as a guide in making our business success a certainty,hopefully all the elements or factors about Quality,Cost and Delivery will be understood better and with the right and timely execution of your work in your own respective business processes or workplaces,we can see many problems being solved and also many improvements being made.

This QCD Factor will also be explained with the elements of the 5Ps’ which Dr.Juran also onced emphasized in his Thoughts and Execution of the Quality Journey or Mission.

The 5Ps’ which I want to correlate with the QCD Factor are People,Product,Process,Patrons (Customers) and Promotions (Sales & Marketing)

All these 5 elements have their own importance and can impact the way we think,perform,learn and others that come along.So,this book will become very interesting in such a way that it is not me (the author’s thoughts or experiences only) but also you the readers who can also inject your very own thoughts and experiences that we together can enrich this subject of making the QCF Factor an important fool proof way of making our business success a certainty.

In this 21^st Century where the population comprising the new generations like Gen M (age below 18 years old),Gen Y (ages above 18 to 25 years old) and even Gen X (ages above 25 to 45 years old) there need to be conscious effort of learning this QCD Factor since the original or early teachings on QCD started in the Industrial Revolution and progress further after the World War 2 i.e.after 1945 onwards.This actually belong to the Generations of the Baby Boomers (ages above 45 to 65 years old) and all the surviving Senior Citizens (ages above 65 years old)The “clash of minds and passion” of these above generations must also be seriously taken note as each generation have their own likes and dislikes about what’s important in their lives.The Generation M people are all glued to their mobile devices and all infos or knowledge are best acquired through these mobile means otherwise they are not attracted or want to waste their time.So,if this QCD Factor need to be communicated or taught to them as important in our current worklife and living,we better find ways to make this learning available on their mobile gadgets or mode.That’s the great challenge if you are like this Writer (who is in the Gen of Baby Boomers!)

As mentioned earlier,the need to study and apply this QCD Factor is critical or important in our present world of this early years of the 21^st Century and like the past years of the 20^th Century many businesses benefited from this focus on QCD where their products and services were able to conform and satisfy their customers’ locally and globally,their products costing or pricing were made reasonable for mass production as well as small quantities and the delivery of their products and services all conform to the tolerable waiting time of their customers.This writer think the same customer requirements will still be around in the next 20 or 30 years unless the customers’ start to think differently as far as what they expect from their suppliers of goods and services.Until then this QCD factor must be learned and applied diligently to all our business processes and if they are followed as indicated,then with certainty businesses can still continue to enjoy the “harvest of their investments” whether it is the kind of businesses they are in or places of investments they are located.The QCD factor can worked at all these locations and conditions provided the Human Talents knows what is this QCD Factor and that’s what make all success a certainty.

Dr.Philip Crosby’s passion for making Quality Certain:

The great quality Guru,Dr.Crosby once emphasized the importance for businesses to make Quality Certain.In order to achieve that mission,Dr.Crosby reiterated the need for Business Leaders to embark on the Zero Defect Project continually.With making quality certain through application of Crosby’s Approach like his 4 Quality Absolutes and application of his Quality Management Process Maturity Grid as developed in 1994,we can ensure our quality have  a performance standard of Zero Defect and our measurement is by the price of nonconformance.There will be no reason for not doing things right and our system is focus on prevention.We can then conform to our customer’s requirements.This thoughts by Dr.Crosby can be read in his book “Quality is still Free!”

Chart showing Ramli’s Approach Towards Making A Quality Company.

Chapter 2:What’s QCD Factor means to the World Today! (and also tomorrow!)

The World’s Population is now above 6Billion people and growing but there are many Billions of people who live below the poverty line and many more are still earning below USD 1 a day.

The 2007 World’s Top Billionaires population as indicated in the World Famous Forbes  magazine comprised about almost 946 persons and their combined wealth is worthed about USD 3.5 Trillions.Their average net worth was USD 3.6 Billion.The World’s Richest Person in this 2007 Forbes Magazine was William Gates III at USD 56Billion net worth!As a matter of fact Bill Gates have been the richest person on earth since 1995 until 2007 (that’s 13^th year in a row!)

However the Richest Person in the World based on 2008 Latest Survey is now Warren Buffett worth something like over USD 60 Billion.

From this fact or data,looks like the world’s wealth need to de distributed to many more people of this world but how to do it,right and timely?

In business is all about making profits for products and services that are offered to the consumers.It is also about producing the quality products that continually conform to customer’s requirements.The pricing of the product or service is also an important criteria for customers’ response whether they can make a decision to buy or reject your products or services.The pricing can also ensure you get lots of sales or no sales at all.Next,the delivery or processing of one’s products or services to customers can also determine whether your products or services are acceptable to the customers’ requirements.Nobody likes to be kept waiting especially when they have to pay for the products and services so if you deliver late or your time of delivery is not acceptable to the customers then you will not succeed to build a great business or get the best profits.

Simply put,this is what I called THE QCD Factor.You must understand all these matters about Quality,Cost and Delivery.It is very simple to learn and execute but as always many organizations failed to understand and execute this QCD Factor to the best of results or satisfaction.

Based on my almost 17 years of working experience with Matsushita Malaysia,I have learned from Matsushita’s Business Philosophy (i.e.Matsushita Way of Doing Business) that one of the aim and functions of their workshop (working place) have three main focus areas,and they are:

1. Create the product quality which meets the designed quality standard.

Here,one of the aims of quality control in the workshop is to create quality.Thai is,to manufacture the products that have the quality which meets the quality standard given by the design section.Therefore it is important to check the quality standard and control the factors of quality i.e.manufacturing conditions such as men,machines,materials,parts and equipment.In order to achieve this,it is important to establish the operation standards that meet the quality standard,prepare the operation instructions and perform the current operations.

As Matsushita thought us,we must have these right basic attitude:

1. Have a strong quality consciousness
2. Perform the correct operations
3. Do not produce defectives
4. Assure quality through your work
5. Improve the quality of the work and the reliability of the products.

And for the actual methods,we must:

1. Establish the target for quality improvement
2. Propose the improvement for the design specifications
3. Improve the capability of creating process quality
4. Improve the inspection accuracy
5. Solve the problems which the manufacturing section is responsible for,and also problems which occur after shipment.

2. Reduce the Manufacturing Cost

In order to manufacture products of good quality at lower cost,it is necessary to reduce the manufacturing cost such as material cost,labour cost,etc..as much as possible.It is important to make efforts to perform the operations with less members more efficiently and to eliminate unreasonableness,waste and variations from the workshop.

Since material cost and labour cost are increasing year after year,these cost increases should be absorbed by quality control activities.

And for the actual methods,we must:

1. Set the target for reducing the manufacturing cost
2. Improve the line-up of the product types with the cooperation of the staff
3. Propose design specification improvements
4. Improve the yield of the manufacturing process
5. Reduce the processing time for manufacture
6. Reduce the labour cost by using machines and jigs and by automation.
7. Improve the efficiency to reduce cost
8. Reduce the fixed expense for manufacture and other expenses.

3.Produce the specified number of products in time for the date of delivery.

It would be of no use if the products were not delivered in time and in full even though they are of better quality and of lower price.

In order to produce the specified number of products in time and in full for the date of delivery,it is important to understand the progress of production and to improve the orperating rate of the machines and equipment and the efficiency of the labour operation.It is also important to perform the manufacturing operation more easily and safely.

The workshop or your workplace is thus the most important work place to create quality balanced with cost and delivery,which satisfies the subsequent process and the customers.

For the actual methods to improve of the productive capability (delivery),we must:

1. Set the target of increase of the productive capability
2. Shorten the time required for production
3. Increase the equipment’s capabilities
4. Improve the workers’ capabilities
5. Propose design specification improvements
6. Increase the yield of the process.

QCD in the Financial World:

When I was working in Affin Bank Berhad (a locally incorporated Malaysian Bank which earlier originated from Pakistan under Habib Bank and later changed her name to Perwira Habib Bank then to Perwira Affin Bank and now just Affin Bank Berhad)this QCD Factor is very widely practiced since the Bank embarked on the TQM Journey in 1992.As most organizations at that time TQM was adopted mainly due to her Business Philosophy where Customers is the Focal Point and anything the company does must geared towards Total Satisfaction of the Customers concerned.

Like all practicing TQM based organization,the elements of QCD is critical and must be adhered to all the time.The Top Management have created the Quality Policy plus all the Mission and Vision of the company being displayed and communicated to all staff and stakeholders.The QCD elements are also being measured as far as performance are concerned.We measure the number of quality team based projects being registered and successfully completed,we measure number of suggestions being made,we measure cost savings of all units and departments as far as it relate to the areas of Cost of Quality and many others.Nowadays,these measurements are better defined as the company’s Key Results Areas (KRAs’) and everyone must focus towards their KRAs’ and all year end appraisals or also done half yearly are based on the final outcome of these KRAs’ concerned.

So,these QCD Factor have actually helped the Top Management to realize many tangible and intangible benefits like elimination of defects and errors of daily work.When you eliminate errors it also means you work right the first time and that makes productivity levels better where work is make certain with less or no mistakes and no wastes of time,delay,materials,stoppage,stresses and many others.

The QCD Factor like in the Banking industry need commitment and discipline in execution.Banking industry being a business to safeguard public funds must always practiced prudence,honesty and good management.

Like what happened recently (ie.sept,2008) the tragic “meltdown” of the investment based banks in US like Lehman Brothers,Merill Lynch and others have shown the vulnerability of these institutions to the practice of good corporate governance and conform to standard of execellence of doing their work and not taking it easy or giving loans to people who have bad credit backgrounds or paybacks history.As a result of these oversights,the sudden deterioration of these bad loans and mortgages especially in the housing industries have let to the excalation of bad debts and uncontrollable cash management where finally these Big Investment Banks have to sought for government bailouts and worst still bankruptcy.

Here the QCD Factor focus on Quality Leadership that understands what is good and no good for the business risks especially.Next,the Cost factor will determine them to only focus on what is manageable and what’s not.Cost of funds is critical to financial institutions so your fund size is pivotal to your business process,growth and stability.

The Delivery element will enable banks to ficus on providing all the products and services that are relevant to their customers and not that are unimportant or benefit a vital few.That’s why I said the QCD Factor can be applied in many aspects of management and it is a prerequisite of Good Management and..continue…..

Please send your thoughts what you think of these topics that relate to this QCD Factor:

• QCD in the Service Business:
  • The Broadband Business in Malaysia –ref Star Biz Week ed:21stMarch,2009

“Time dotcom Bhd Chief Executive Officer Encik Afzal Abdul Rahim says “it all boils down to three factors-cost,speed and quality – to drive broadband penetration”

In this statement above clearly shows the many Top Management of Malaysian companies realized that this QCD Factor is the fundamental knowledge and focus areas for any business improvement