Marketing Driving Quality Control

While it’s true that upper and lower boundaries for SPC charts can be set by using some measure of central tendency and typical variation, there are sometimes other factors that will be used to determine process control limits. At Dremel, a power tool company owned by Bosch Power Tools, we heavily monitor and control our manufacturing processes. Dremel makes a line of light-duty power tools aimed at the DIY homeowner and craft/hobbyists markets. Many of their applications necessitate some degree of tool precision (of cut width, straightness, depth, smoothness, etc.) and so our processes are designed to achieve that end. Specifically, our manufacturing process controls for the presence of runout (misalignment between the tool axis and the cutting surface) and tests to look for excessive misalignment.

The interesting thing about our particular operation, though, is that the upper boundary for acceptable misalignment is not a function of the standard deviation of our process. Sure, it can be defined that way, but the number itself wasn’t selected using a statistical model. Rather, it was a marketing driven decision. Our product marketing group did extensive consumer insight research to determine what level of precision mattered for the types of projects our customers undertake. After determining that they were happy so long as the tools were at least some level of precise, the team reworked the manufacturing operation around achieving those numbers.

Of course Dremel uses some of the SPC tools we discussed in class to control its operations. For example, we track the number of defects and percent defective. It’s just that SPC isn’t the only framework in controlling our manufacturing process. Marketing, logistics, and other business functions also get involved and have a stake in making sure the products get made a certain way and according to a certain procedure. The manufacturing unit has to be responsive on all those fronts.

The point of bringing all of this up is two-fold. First, I wanted to highlight that in industry, while many of the operations management tools discussed in class are used, they are not applied in a vacuum and might be modified for a firm’s unique needs. Second, I wanted to encourage thinking about areas where  business functions begin to overlap. Where disciplines begin to intermingle, we need to have some way of making decisions about which framework (or frameworks) ought to take precedent. We need to really understand the goal being pursued and select the most appropriate bits from marketing, finance, accounting, operations, etc., to maximize success.

Are there any instances from your experience where one discipline seemed to be calling the shots in another’s area of expertise? (Exs. Did marketing ever drive finance? Did operations ever affect accounting?)

Project Management in Construction: The Difference Between Profits and Losses

Project management tools like Gantt charts and precedence diagrams can mean the difference between high profits and painful losses for project-centric lines of business. During my time with a general contractor in the construction industry, these two tools played a central role in each project we undertook. From planning to ground breaking to final inspection, the documents were an anchor for organizing our activities. We referred to them daily to determine when to schedule sub-contractor (plumbers, electricians, HVAC installers, etc.) arrivals, as a reference tool for updating clients during site visits, and as guide for keeping track of the literally hundreds of activities that needed to happen in precise sequence to stay on schedule.

On Site

In construction, business is negotiated on a per-contract basis. Before groundbreaking, general contractors will examine a proposed project in concert with architects and engineers to develop a construction schedule, calculate expenses, and formulate a bid. The schedule is basically a detailed Gantt chart and precedence diagram. If the client likes the bid amount, they will award the contract and agree to make payment after certain milestones and upon completion. If everything goes to plan, the contractor can reap substantial profits. On the other hand, failure to meet deadlines on the contractor’s part will result in penalty fees and turn the project into a financial loss very quickly.

Once work begins, on-site superintendents use the finalized Gantt chart and precedence diagram to manage sub-contractors and schedule upcoming activities. As a superintendent it was my job to know when each task needed to be completed, to understand how each activity played into the overall project timing (were they on the critical path or was there slack time?), and to manage the site accordingly.

The Five Guys Project

I remember one day, while working on a Five Guys franchise project, when our company was in danger of missing a critical deadline. Even though the consequence of our delay wouldn’t become apparent for several weeks, we knew from our precedence diagram that some certain cement cutting was on the critical path and had to happen before going home that day. We stayed overnight to get it done because failure to do so threatened the whole job’s profitability. Our project management tools helped us see the problem, address it, and avoid a costly delay.

The point of saying this is to drive home the applicability and usefulness of the tools we’re learning about in class. Understanding how to develop and how to use them is absolutely critical in the construction industry.

In your experience, what are some projects, industries, or situations where project management tools have played a central role?