Inspections and Protecting Your Brand

You can only expect what you inspect. Presented by: Ben DeVito

© 2012 UL LLC

Trust but Verify

© Copyright Mad Magazine

2

Policy President Ronald Regan

1981 - 1989

“Trust, but verify”

is a form of advice given which recommends that while a source of information might be considered reliable, one should perform additional research to verify that such information is accurate, or trustworthy. — Russian Proverb

3

Agenda

Inspections: Then and Now What is an inspection? Why inspect? Types of Inspections An Inspection Program Wrap-up

4

Inspections: Then and Now

Inspections: Then and Now

Then … We manufactured in the U.S. – Bills of materials – Bills of labor We purchased materials and components in the U.S

We had sample rooms and inspections teams. We had a short supply chain … and we still had problems!

6

Inspections: Then and Now

Now … We manufacture anywhere but the U.S. – We purchase and pay for finished garments – We often work via agents who may have many factory relationships We may or may not have direct production experience. We rely on our trading partners to delivery quality goods on time. We have a longer and more complicated supply chain and we still have problems!

7

Inspections: Then and Now

It is common practice to employ inspection techniques. Why? 1. To check product quality against “standards” during critical points of production – To make adjustments in production – To make a decision on whether allow product to ship

2. To check on production in process against a production calendar.

3. Ascertain if production is being sub-contracted in contradiction to your company’s policy.

8

Inspections: Then and Now

Inspection Options

Whether you produce locally or overseas, you really only have three options to inspect your products. • Do not inspect at all (not practical) • Inspect 100% of our products (too expensive) • Use a statistical sampling plan (proven alternative)

9

What is an inspection?

Inspections

An inspection is a critical component of your total quality management system, not your sole quality program. – An effective inspection program should complement your quality process and support your supply chain. – Your supply chain delivers quality products on time

An inspection program is designed after you understand your goals and what you need to achieve from the inspection. 1. This will define your inspection program – goals and policies 2. Allows for sub-inspection programs to achieve short-term goals – problem solving 11

Inspections

Inspection The process of measuring, examining, testing, gauging or comparing the unit of product with the applicable requirements.

12

ANSI/ASQ Z1.4-2008 (Formerly Mil Std 105E)

This is a method of statistical sampling plan. Many of you are using this inspection method and are familiar with its application.

Common terms are: • Sampling Plan • Inspection Lot • Acceptance Quality Limit (AQL)

• A “Defect”

13

ANSI/ASQ Z1.4-2008 (Formerly Mil Std 105E) Less common terms, but ones you need to appreciate are: • Inspection by attributes • Producers Risk • Consumers Risk

• A “Defective”

14

Inspection Terms

Inspection – process of measuring, examining, testing, guaging or comparing the unit of product with the applicable requirements. Inspection by Attributes – inspection whereby the unit of product is classified as either defective or non-defective (pass or fail). Inspection Lot – collection of similar units of product offered for inspection and subject to a decision with respect to acceptance.

15

Inspection Terms (continued)

Random Sampling – selecting units/products for a sample size (n) so that any unit has an equal likeliness of being selected. A Defect – departure of a quality characteristic from its intended level to cause an associated product not to satisfy usage requirements. •

Note: a unit can have multiple defects, but no matter how many defects a product has it is counted only ONCE as a “defective”.

A Defective – departure of a quality characteristic from its intended level to cause an associated product not to satisfy specification requirements. Acceptance Quality Limit (AQL) – maximum percentage of defective units within a lot for the purpose of acceptance sampling. Defectives are permitted with an AQL. 16

Inspection Terms (continued)

Sample Size (n) – one or more units selected at random from a lot without regard for their quality. Single Sampling – inspection in which the decision to accept or reject a lot is based on the inspection results of a single sample lot. Producer’s Risk (Alpha Risk) – probability of rejecting a good lot and predefined based on the AQL and sample plan.

Consumer’s Risk (Beta Risk) – probability of accepting a bad lot and also predefined.

There is a built in bias to accept more bad lots than to reject good lots. 17

Why inspect?

Inspection Options

Whether you produce locally or overseas, you really only have three options to inspect your products. • Do not inspect at all (not practical) • Inspect 100% of our products (too expensive) • Use a statistical sampling plan (proven alternative)

19

Inspection Program Benefits

• Paying for only first quality product • Reduction of non-compliant products reaching your customers • Preventing defective products from being shipped from the manufacturer • Higher quality levels / Higher customer satisfaction • Reduction in product returns • A cost effective means to help ensure that products meet your quality standards prior to shipment (ROI)

20

Types of Inspections

Common Inspection Types

• Pre-production • Top of Production • In-line / In-process / During Production

• Pre-shipment / Final Random Inspection • Special

1. 100% Sort 2. Production Monitoring 3. Loading Inspection 22

An Inspection Program

ANSI/ASQ Z1.4-2008 OVERVIEW SAMPLING PLAN & ACCEPTANCE QUALITY LIMIT (AQL)

Defect Classification Defects are classified according to seriousness, and grouped into one or more of the following classes:

a)Critical Defect – could result in hazardous or unsafe conditions for individuals using the product as well as defects that violate legal requirements b)Major Defect – likely to result in failure, reduce the usability of the unit for its intended purposes, or make it un-saleable c)Minor Defect – NOT likely to reduce the usability of the unit for its intended purpose or the defect is a departure from established standards, but will have little bearing on the effective use of the unit

24

Required Information

• Inspection request form • Purchase order • Specification pack details – including style, construction details, and measurements with key points of measurement indicated

• Shade Bands • Reference sample • Packing details – including labeling information • Carton Markings 25

Apparel and Footwear Inspections Typically Include • Client proprietary requirements • Seams, stitching, and workmanship • Care label and hangtag requirements • Measurements • Color conformity / shading

• Presentation • Price ticket • Labeling, boxing and packaging requirements

26

Quality Inspection Program Benefits – Case Study 1 Challenge

Poor quality product shipping from Asia was causing an unacceptable amount of rework and inefficiencies at the U.S. distribution center, and creating approximately $400K / year in direct cost for rework.

Solution

Program was developed to analyze the rework at the distribution center, and connect the quality violations to the appropriate factory.

Inspections were then increased at the factories with most violations. Results

75% reduction in rework over two years.

27

Quality Inspection Program Benefits – Case Study 2 Challenge

Manufacturer selling to a major department store was give a “D” supplier rating by the retailers vendor scorecard system, thereby subjecting the manufacturer to additional QA scrutiny, and placing future orders at stake.

Solution

Although the manufacturer was conducting internal product inspections, an investigation revealed the “D” rating was primarily due to labeling, packing and carton marking problems – not bad product. Manufacturers inspection criteria was expanded to include specific checks for packing, ticketing, labeling and carton marking.

Results

Manufacturer earned a “B” rating within two business quarters.

28

Wrap Up

Key Take-Away’s

 An inspection program is an integral part of your total quality process but is not to be considered as the “catch all” program to prevent bad quality products from reaching your customer.  An inspection program should be applied strategically and tactically to minimize the cost and maximize the benefit.

30

Thank you …

We hope today’s presentation was informative and helpful.