World Class Manufacturing (WCM) Checklist (graded)

Q1 Do you have a 99% or better level of customer service (on time in full (OTIF) or product availability)?

All objectives are subordinate to the requirement to ship what your customer expects, when expected, with all relevant paperwork complete. For make to stock companies the principle customer service measure is the percentage of orders received where stock is available at the time of receipt of the order, an out of stock item is normally only counted once in the time period under consideration. Out of stock items not ordered are not counted. Where you are supplying to a customer kanban, you must achieve better than 99% in line with the kanban agreement. For other companies the measure is the percentage on time in full (OTIF) delivered complete to the customer on the agreed / promised delivery date; agreed re-schedules are allowed.  If there are multiple lines or items on an order, one hit means all ordered item lines are delivered on time in full; if one line item is missed, this is a miss for the whole order.

Q2) Does everyone in the company know who the key customers are and what differentiates the company’s products and services from the competition?

Awareness of the strengths and weakness of the company’s product or service is a key factor in achieving the involvement of everyone in the company and improving employee satisfaction. It is not possible to achieve this objective without an employee induction process, current customer service challenges discussed at meetings (not just late orders) and information about customers readily available to all employees.

Q3 Do all staff who are in contact with customers have the authority and empowerment to resolve customer problems?

Managing the points of contact with your customers is the single most important company success factor. A company can only consider itself to be a world class manufacturing company if all its customers are confident that any problems they have will be speedily resolved and they will be kept fully informed, preferably by the person they initially contacted. It is very unlikely that any company that uses a remote call centre or layered telephone answering system could ever be considered world class in any business or industry.

Q4 Do kanbans control your supply chain?

Kanban control means that the authority to make or move an item is based on that item's usage unless there has been a properly approved and strictly limited deviation.

4b) It follows that the ability to reliably supply to customers under kanban control is crucially dependent on the control of internal manufacturing by kanbans, otherwise the final kanban control is at risk. Your speed of response will be much better when manufacture is controlled by kanban as, in addition to reducing lead times, kanban control can eliminate the scheduling, kitting and issuing processes. There may be some operations which need special controls but there is no problem with operating with a mixture of kanban control and work-to lists. If all parts produced by a work area can be kanban controlled, however, then there are fewer clashes of priority.

4c) The final element of kanban control is the supply of material from your suppliers. Ideally your suppliers should be given responsibility for maintaining a minimum stock level in your designated storage locations, often referred to supplier or vendor managed inventory (VMI). Alternatively your supplier will replenish stock as you have used it based on kanban signals such as an e-mail, fax, card or empty container. The kanban messages should be at least daily although the replenishment could be less frequent. You may have to educate any suppliers who are currently unable or unwilling to supply under kanban control.

Q5 Have you eliminated the central storage of direct material and is purchased material supplied to the point of use without routine inspection?

Moving material from one place to another adds cost but not value, so material should be delivered to the point of use wherever possible. The users of material should be responsible for the storage of that material, including any goods-in checks that cannot be carried out by the supplier. Users should also be able to check that replacement of stock is underway if stocks get too low. Ideally, the vendor should be responsible for delivery to the point of use (i.e. vendor managed inventory) and should be able to decide when to replenish material when this is practical (direct material is any material consumed in the manufacture of the product).

Only "approved" vendors can safely supply to the point of use (see Q11 below) There must be audits of quality and quantity of all supplies.

Q6 Have you laid out the majority of your machines and equipment so as to minimise the distance between sequential operations?

In the old days a company would lay out equipment according to its function. Thus four milling machines would be put next to each other. Functional layouts must increase the distance parts have to travel because work almost never passes between machines with the same function. You should always arrange machines and equipment in the sequence in which they will normally be used. Such a process based layout will sometimes decrease utilisation of equipment but the work in progress saving alone will more than pay for this in most cases, with additional savings in quality, costs and administration. The people who are responsible for work place layout, ideally the people who work in the area, have to take the trouble to think through the work flows before laying out the work place. The value of line-of-sight communication between sequential operations cannot be over-stressed.

Q7) Have you reduced or are you reducing the set-up time between products to the point when it is economical to make your product in the quantities required for customer shipments?

If at any stage of manufacture you produce in batch quantities that are larger than the shipment quantities required by your customers due to set-up time, there should be an active set-up time reduction group. Wherever possible, equipment should be dedicated to one product to eliminate the time and cost of changing from one part to the next. Where this is not possible or economic, set-up time must be kept as short as necessary to avoid the need to increasing lot sizes to gain "economies of scale". The old "economic lot size" calculation should be turned on its head to work out the "economic set-up time" for the lot sizes required by your customers. You should never impose, or need to impose, minimum batch sizes for your customers.

Wherever possible batch sizes should be the same throughout the process.

Q8) Have you an ongoing education and communication programme to inform existing employees and educate every new employee, whatever function he or she performs, in the world class manufacturing techniques you are using?

World class manufacturing is a programme of continuous change and change has to be carefully managed. It is important to take everyone along with the changes and so avoid the pockets of resistance that result from a lack of understanding of the changes and the reasons for them. It is also easy to forget new recruits who may have come from a traditional environment and so find some of the world class manufacturing ways of working difficult to understand.

Knowledge of the benefits of world class manufacturing are important for sales staff. The value of the ability to offer kanban delivery will be lost if your customers are not told about it.

There is no better way for people to become more aware of quality issues than for everyone to understand where their tasks fit into the business. Whilst it is desirable for the same person to routinely carry out the whole process it is not always practical but it is the appreciation of the whole process that is required. Cross-training (or multi-skilling) is also very important to meet the rapid changes that will often result from being more responsive to customers' needs. Multi-skilling can be expensive unless spread over a period, so it is acceptable to concentrate on your longer service personnel.

As many people as possible should have an awareness of the basic 7 tools of quality (process charts, Pareto (80/20) analysis, Ishikawa (cause and effect) diagrams, histograms, run diagrams, statistical process control and check sheets). When problems occur in a world class manufacturing environment they tend to affect everyone quickly. If everyone can help not just to solve the problems but find the root cause of the problem you turn this enforced problem solving to your advantage. The training must be backed up with the necessary support and authority, given appropriate safeguards, so that as soon as the solution to a problem is found it can be implemented without delay.

Q9) Do employees take the initiative to move to the point of need?

Employees taking the initiative is a recognition of the "thinking worker" and helps reduce the level of direct supervision required by a team. Employees should never be "kept busy" doing work that is not needed.

Q10 Is there is a programme in place to progressively reduce non value-adding costs?

A non value-adding cost is anything which adds cost but not value to the saleable product or services provided by the company to customers. Non value-adding costs are characterised by the 7 wastes of early or overproduction, waiting, transporting, inappropriate or unnecessary processing, unnecessary inventory, unnecessary motions and defects. All the wastes should be investigated from time to time and at least one under active investigation now by a team or task force. Every new product and process should be evaluated against the need to reduce waste. The decision to purchase or replace equipment must include all the factors that could increase waste, set-up time and reliability in particular, if world class manufacturing standard are to be achieved and maintained.

Q11) Is there a programme in place to reduce your supplier base to a small number of qualified suppliers integrated into your business?

The world class purchasing objective is a small supplier base of reliable companies working in partnership from the design stage, delivering frequently, in the quantities you need, directly to the point of use.

As it is not possible for one person to maintain a good relationship and understanding with more than about 50 supply companies, single source supply is necessary. With single sources you can get the genuine, invaluable involvement and commitment of your suppliers to your business.

Long term commitment to suppliers and single sourcing makes you as important as possible to your suppliers and allows suppliers to engage in a continuous reduction of costs using, for instance, value analysis techniques. Delivery to the point of use is not possible without single source supply.

There should be a systematic way to approve potential qualified suppliers based on their quality, costs, management, product development resources and financial health.

Performance measures in purchasing should be based on total acquisition costs not simply purchase price variance.

There should be significantly fewer direct material suppliers than last year and you should be working more closely with them. You should also have a higher proportion of approved suppliers.

Q12) Is there a culture of Total Quality?

There must be a culture of total quality throughout the business. Getting one person to do a job and then someone else to check it is not only wasteful but also de-motivating. Every person or team that has a job to do should be able to check that the job has been done correctly and should be given the training, equipment and responsibility for doing so. The role of quality control is to audit quality and feedback long term process control information. Only if very expensive equipment, a special environment and/or very specialist training is needed should a quality control department be involved with routine testing.

The principles of total quality should permeate all activities. Commercial departments are concerned about the quality of their forecasting process and monitor the accuracy of their forecasts in order to improve them. Stores monitor the accuracy of stock records, engineers the accuracy of the bills of material and so on.

There should not be an independent rework or rectification process which just legitimises faulty work. It should not be regarded as a punishment for people to put right their own defective work but part of the principle that people are expected to produce work that is correct first time.

Identifying and eliminating the cause of the faulty work must also be seen as part of the rectification process. The people in the best position to rectify the causes of faults are the people doing the work. Every fault found must be seen as an opportunity to improve the quality of the product, the basis of blame free quality control.

Q13) Do you audit the product and process quality inside the test limits?

You cannot get to parts per million quality levels if your quality checks only sort the good from the bad, the passes from the failures. Everyone involved with a task that can vary must check where the process is within the tolerance band and be able to take corrective action before defects occur. By this means, operators have an early warning of possible failures so enabling the processes to be fine tuned. The technique generally used is statistical process control.

No reason or excuse is good enough for failing to allocate the resources necessary to achieve customer returns measured in parts per million. The cost of your rejects to the customer is far more than just the cost of replacing faulty parts. The damage to your reputation of poor quality can never be repaired. This quality target applies also to mistakes in the shipping and packing departments, invoicing and even such things as order confirmation.

Q14) Does everyone have authority to "stop the line"?

If quality is crucial to your success, there is no better way to drive up the quality than to give all employees the authority to halt any job or process if they are unhappy about quality levels. An employee must always choose to stop a process rather than possibly create or even pass on a known or suspected defect. Anyone who finds a defect must always pass it back to the person who made it if possible, without the need to refer to management.

Q15) Have you 'foolproofed' critical jobs?

To reach parts per million quality standards, jobs have to be made foolproof. Foolproofing (called poka-yoke by the Japanese) means that either mistakes cannot be made or, if this is not possible, the equipment will automatically identify and/or stop when a reject part is produced. Foolproofing requires imagination and commitment to quality. There is no easy way to measure your degree of foolproofing except to ask yourself if the operations that could cause faulty products rely on human judgment.

Q16) Are the majority of people responsible for the maintenance of the equipment they use?

You cannot afford delivery schedules to be dependent on unreliable equipment. If it is not possible or practical to have duplicate equipment then you have to do as much as you can to avoid equipment failures. The users of equipment are the best people to carry out preventative maintenance because they are the first to know when their equipment is not performing properly and should also be the best people to know when it is fixed. It follows that if they can be trained in preventative as well as corrective maintenance, this will be the most cost effective way of reducing down time. Users of equipment should have a real sense of ownership. Some people will not be willing or suitable for such training but there should be a sufficient number of people in each group or team that are sufficiently experienced and committed. In a world class manufacturing environment the role of equipment maintenance should increasingly be to help and advise on equipment maintenance as well as auditing equipment reliability.

Unreliable equipment is one of the most popular reasons for "safety stock" or "safety time" which increases costs and lengthens lead times. You cannot solve maintenance problems and keep them solved unless you know where the problem areas are and then monitor the effects of any changes. There should be a routine report of downtime widely circulated as well as a downtime reduction teams set up if required.

Q17) Do you have an active policy to help keep work areas clean, tidy and uncluttered?

It has been shown time and again that tidy work areas reduce the frequency of errors and delays. World class companies have regular inspections of their work areas and continually look for ways to tidy up their processes. Housekeeping must be the responsibility of the people who work in the area. A clean and tidy workplace will also give people working in it a sense of pride. You could not imaging a world class company being a mess now could you?

The importance of a tidy workplace applies to administration as well as manufacturing areas.

Q18) Does the design of products include a consideration of the manufacturability of the product?

The design of all products and processes should include manufacturing considerations such as current equipment, suppliers, existing parts, subassemblies and ingredients. In many cases manufacturing, marketing and purchasing functions should be involved at the design stage to ensure, as far as possible, designs are manufacturable.

In most businesses it is impossible to optimise designs unless the suppliers of material or components are involved at the design stage of your products. Improvements to materials and components you are currently purchasing should be evaluated also to see if your end product can be improved so that you keep your products competitive.

A key element in design for manufacture is an evaluation of existing designs. Unless designers are aware of problems and changes required to current designs, future designs cannot benefit from the lessons learnt in the past. Self-inspection and rectification of your own mistakes is just as important in design areas as it is anywhere else.

Q19) Is there a culture of continuous improvement in customer service?

The one universal truth in all manufacturing companies is that customers are demanding higher and higher levels of service which include higher quality, faster response for make to stock companies and shorter lead times for configure to order, make to order or engineer to order companies. It is also true that in most industries suppliers are responding.

No matter how good you think your customer service is, it is vital that you ensure you are addressing the changing needs of your customers and the market place. You can be sure some or all of your competitors will be striving to exceed your current level of customer service. World class manufacturing companies are characterised by continuously improving their customer service. There should be an active customer service improvement group looking at all the tools and techniques available to be more responsive to customers. Significant lead time reductions, for instance, involves most functions in the company working together so will seldom happen spontaneously.

Improving customer service must also include reducing the time it takes to move from the start of a design to the first shipment of reliable product that meets the specification. This lead time to market must be monitored.

Improvements are rarely achieved unless there are performance measures in place. These customer service improvements must therefore be supported by relevant performance measures which are owned by senior managers, reviewed at least monthly and have realistic targets for improvement which are achieved.

Q20) Is there a mechanism to quickly and effectively receive and evaluate suggestions from all employees?

Everyone must feel that any ideas they have for the improvement of any task they perform or are familiar with will be welcome and resources made available to evaluate their ideas if necessary. A formal suggestion scheme is neither necessary nor sufficient to score on this point neither is a suggestions reward scheme. It is an attitude that encourages innovation and involvement of everyone which is important.  This attitude will result in a regular flow of implemented ideas from the majority of employees.