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Problem Statement
LongXi Machinery Works is forecasting an increase in demand for its multi cylinder engines. This increase in demand offers the company the opportunity to deliver more powerful engines to a larger, scalable and more versatile product mix LongXi has identified that it is having quality control issues in manufacturing the Dual Gear Shaft (DGS), an important component of the multi cylinder engine,. In response the company is in the process of creating a new Quality Management Department to not only look at the quality concerns of this component, but also grow quality throughout LongXi Machinery Works.
Analysis Section
Currently LongXi has been using a modified Total Quality Management technique based on the structure of ISO 9000 called “The Method”. LongXi also has a quality reward system where employees are rewarded according to the quality of the product manufactured in their respective departments “The Method” and quality reward system includes guidelines and rules in approaching quality improvements, but relies heavily on inconsistent self and mutual quality inspections. This makes LongXi’s production much more labor intensive than Changchous a major competitor, and relies on older equipment and human judgment. LongXi outsources 80 percent of its engines components, but has resisted any vertical integration of key components including the DGS. They also have resisted the idea of a formal ISO 9000 certification as too costly and time intensive.
Longxi’s main competitor is Changchai Diesel Works. Changchai is also realizing the high demand in ...