I was responsible for sourcing and managing contracts for fasteners for a Fortune 200 Aerospace company. I got a phone call from an angry executive who told me we almost missed revenue on shipping a multi million dollar end item on the last day of the quarter because of a defective fastener, They were able to create a workaround but wanted my assurance this would never happen again.
As I started digging in for the root cause I discovered a few facts:
- This was a $2.00 item which we purchased hundreds of each month
- It went into a multitude of different assemblies
- The grade was sufficient for almost all uses, however for this specific application there was no tolerance for defects
- The quality record indicated the item had zero defects over the last several years and therefore the supplier had delegated source inspection (No internal inspection was required due to the good quality history)
It made no sense! This was crazy! I decided to go to the Gemba, the place of work and started observing and talking to assembly workers on the impacted line.
I learned a few more facts:
- There used to be a GO/NO GO gauge for this specific application to test the conformity of the part
- A six sigma team had done a study 6 months back and seeing there where no historical quality issues with this part, decided to eliminate the critical gauge
So there was a safety net, which sorted out a higher grade of product for this specific application, and then the safety net was removed.
We had the gauge put back into service as a preventative measure. But why did we have a record of no defects when there was evidence of failures??
Further discussion with the workers revealed that when a non conforming part was found, it was simply thrown in the trash, thinking the cost of the part ($2.00) was less then the cost of processing a rejection. So the defect situation was masked.
This is a true situation which illustrates the value of accurate and timely information as input to our decision systems, not to mention the importance of going to the place of work to get the "rest of the story"