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Article: Philips: Understanding the Cost of Non Quality in a High Tech Enterprise.

20 Jun 2006

Philips looks at the Cost of Non Quality

Best Practice Club Member Philips, held an open meeting at its Southampton site on 2 June 2006:

 Philips Logo

Philips Logo

The cost of non quality within a high tech enterprise can be quantified as 10% of annual sales or more, perhaps even a lot more!

This Seminar was an opportunity for business managers and professionals engaged in Business and Quality improvements to explore new opportunities and network with peers.

Members of the Club mixed with their peers from Philips as well as others to explore this key issue. The day was kicked off by Paul Morgan, Quality Director Philips UK who talked briefly about the need to improve Quality within most UK organisations and introduced the various speakers to address key aspects of the topic.

Tim Johnson, Business Unit Quality Manager at Philips Semiconductors, and Alec Reader, Sales and Marketing Director at Innos Ltd, then presented on the current approach to Quality improvement in both small and large enterprises today.

Tim explained how the value chain is changing for Philips and they have found their biggest opportunity is working more effectively with the other players in the value chain and understanding their added value. They have found themselves in the part of integrators and coordinators rather than, as previously, suppliers.

Alec and his team described the challenges of introducing formal quality control procedures into an SME in terms of both time of key resources and money. However he clearly explained the need for doing so and introduced the delegates to the Taguchi Loss Function that states: "regardless of specifications, departure from target value is a cost".

Bill Bellows:


The keynote speaker for the day was Bill Bellows, Associate Technical Fellow in the Enterprise Thinking Network as United Technologies: Pratt and Whitney's Rocketdyne business unit in Canoga Park. He is widely known for his efforts to provide insights to the advantages of thinking together, learning together, and working together.

Bill integrates the management theories and thinking of Dr Edward Deming, Dr Genichi Taguchi, Dr Edward de Bono and others to challenge the conventional management approach that prevails in industry today. In his session he explored how the theories of variation, system thinking and the Taguchi Loss Function can unlock new opportunities to transform enterprises.

The four main themes of Deming's last book, New Economy, were used as the core of Bill's session. They were:

Variation exists - get used to it!
Everything and everyone is connected
Understanding the pyschology is important
There is no substitute for knowledge - experience, without theory, is raw data that will not be understood

A most informative day with 84% of delegates feeling that the event had met their expectations with much praise for Bill's session

For more information about the In2:InThinking Network, Los Angeles, California email Bill Bellows

 Bill Bellows

Bill Bellows




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