The Benefits of Process Quality in Engineering

Transcription

1 The Benefits of Process Quality in Engineering Presentation to American Railway Engineering and Maintenance-of-Way Association Annual Technical Conference Palmer House, Chicago, Illinois Wednesday, October 8, 2003 STANLEY J. McLAUGHLIN Vice President - Quality & Process Improvement Union Pacific Railroad Company

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3 Presentation Objectives: (1) Provide an Overview of Union Pacific s Total Quality Management System (TQMS) (2) Define What Quality Really Means at Union Pacific (3) Demonstrate How Union Pacific s Engineering Department Employs and Benefits from Quality Principles

4 Union Pacific Railroad Total Quality Management System (TQMS) Customer Requirements Define Customer Requirements Check Adjust Employee Development Planning & Control Business Processes Customer Satisfaction Plan Do Make a Plan Train & Engage Employees Use Consistent Processes Measure Customer Satisfaction and Business Results Improved Business Results

5 TQMS: Planning and Control Where do we want to go as a Company and are we getting there? Defining our Vision and Values Developing our Strategy Setting our Goals and Objectives Laying Out our Plans Establishing our Performance Measurements Reviewing our Progress Taking Timely Corrective Actions Planning & Control Employee Development Business Processes

6 TQMS: Business Processes Planning & Control Employee Development Business Processes How are we going to get there? Quality System Processes (QSPs) Work Procedures and Instructions Operating and Safety Rules Standards and Specifications

7 Business Processes: Simplified Key Company Processes Flow Chart Customer Invoice Requirements Planning & Control Employee Development Business Processes Strategic Planning Leadership Develop Strategic Plan Requirements Feedback Marketing Market Products Develop Bus. Plan Manage Bus Obj Operating Skills Safety Process Employees QSP 101 Manage Transportation Plan QSP 202 M of W Windows Execute Transportation Plan Finance Wages & Benefits Capital Budget Manage Financial Operations O.E. Budget ROI Stockholders

8 Business Processes: QSP 101 Transportation Plan Planning & Control Employee Development Business Processes Identify Customer Requirements Evaluate Customer Requirements & Modify Plan Sufficient Capacity? YES NO Develop T-Plan Changes Execute Plan NO Does Performance Meet Plan? YES NO Is Customer Satisfied? YES

9 Business Processes: QSP 202: Maintenance of Way Window Plan Planning & Control Employee Development Business Processes Identify Next Year s QSP 202 Projects Engineering & Transportation Inputs Improve & Update Process Develop Initial Plan & Perform Impact Assessment Review Plan Determine Impacts & Adjust Plan Perform Planning Process (Quarterly) Coordinate ALL M/W Work, (Swarm Curfew Areas) Service Units Input Ordinary Maintenance (within Planned Windows) Network Planning/ NCC Transportation Develops Train Level Plan Perform Reviews (Monthly, Weekly, Daily) T- Plan Changed Perform Annual Process Review

10 TQMS: Employee Development How do we engage and empower our employees to get us where we want to go? Employees Understand Objectives and Importance of Their Role Employees Have Training, Resources, and Authority to do the Job Right Employees are Listened to and Motivated to Perform Employees Contributions are Recognized, Valued, and Rewarded TEAMWORK is the Name of the Game! Planning & Control Employee Development Business Processes

11 TQMS: Summary We Believe World Class Companies Share These Total Quality Traits: Planning & Control Employee Development Business Processes (1) Unrelenting Customer Focus (2) Plan for the Future (3) Develop and Evolve Simple Robust Business Processes (4) Culture of Employee Satisfaction and Development (5) Measure What s Important & Benchmark Extensively (6) Achieve Outstanding Results (7) Endless Journey of Continuous Improvement NOTE: Union Pacific utilizes its annual Malcolm Baldrige National Quality Award application feedback report as our primary benchmark against world class Companies and our primary measure of organizational effectiveness.

12 What Quality Really Means at Union Pacific? Planning & Control Employee Development Business Processes Our definition of Quality is consistently meeting customer requirements at competitive costs. The Four Principles of Quality Management are: Teamwork Manage with Data Continuous Improvement (Plan Do Check Adjust) Customer Focus

13 How Do We Measure Quality? Union Pacific s Cost of Quality System which includes: Failure Costs (Internal & External) - How much money we waste when things go wrong or aren t accomplished efficiently. Examples: Personal Injuries, Derailments, Train Delays Control Costs (Prevention & Appraisal) - How much money we spend preventing failures or assuring conformance to quality standards. Examples: Capital Improvements, WILD, Hot Box Detectors

14 Cost of Quality 28.0% Failure Costs as a Percent of Revenue 24.9% 22.7% 21.8% 21.4% 18.4% 18.5% 15.9% 15.7% 13.8% 12.7% 15.4% 15.3% 13.9% 12.5% 11.3% 10.5% % 6.0% 5.0% '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 YTD '03 Goal '04 '05 '06

15 How Do We Analyze Failures and Effectively Address Root Causes of Problems? Difficulty Six Sigma High Just Do It! Six Step Problem Solving Process ROI Low Simple No Change Complex

16 Six-Step Problem Solving Process Step 1 Problem Identification Step 6 Evaluation Step 2 Analysis & Verification Step 5 Implementation Step 4 Solution Selection Step 3 Develop Alternative Solutions

17 Six Sigma DMAIC Process DEFINE Scope the Project CONTROL Monitor the Results MEASURE Validate the Measurements IMPROVE Implement the Solutions ANALYZE Identify the Root Causes

18 Six Sigma DMAIC Process DEFINE: Transportation Example - Sunset Route Train Performance Desired Distribution (little or no variation) Train Departs Train Arrives Actual Distribution (large variation) Number of Trains One Data Point Customer Specification Area of Pain to Customer (Failure Costs) Cycle Time

19 Six Sigma DMAIC Process MEASURE & ANALYZE: Transportation Example - Sunset Route Solution Tree Improve Sunset Route Performance CTQ =On Time Train Performance Process Variation Measurement Variation P / M>6 Day of the Week HP/TT Ratio Train Length Quantity of Times Passed by Premium Following Times Tonnage Mood s p>0.05 Mood s p>0.05 Mood s p>0.05 Mood s p>0.05 Mood s p>0.05 Mood s p>0.05 Dispatcher Shift to Dispatcher Shift Mood s p< 0.05 Median Red X Train Category to Train Category Quantity of Meets & Passes HOV p<0.05 Mood s p< 0.05 Mood s p< 0.05 Variability Red X Direction to Direction Mood s p< 0.05

20 Six Sigma DMAIC Process IMPROVE & CONTROL: Transportation Example - Sunset Route Control Chart Before After Transit Time Weekly Performance

21 Quality Service Cost of Quality Percent of Revenue Customer Satisfaction Percent Satisfied 15.3 Lower Failure Costs Higher Customer Satisfaction Goal Goal

22 Example: How Union Pacific s Engineering Department Employs and Benefits from Quality Principles BROKEN RAIL DERAILMENTS

23 All Derailments by Category Six Months 2003 All Incidents by Category Number of Incidents $140 Dollars All Costs by Category $120 $100 $80 $60 $40 $20 TRACK HUMAN OTHER CAR SIGNAL LOCO MO 03 $- TRACK HUMAN CAR OTHER LOCO SIGNAL MO 03

24 All Track Caused Derailments by Category Six Months Track Incidents by Cause Number of Incidents $60 Dollars Track Costs by Cause 800 $ $ $ $ $ $0 Wide Gauge Switch Defects Broken Rail Track Geometry Joint Bar Track Buckles Broken Rail Joint Bar Wide Gauge Track Geometry Switch Defects Track Buckles MO MO 2003

25 All Broken Rail Derailments by Cause Six Months 2003 Broken Rail Incidents Number of Incidents $25 Dollars Broken Rail Costs $ $ $ $5 10 TD/CF BB VSH HWOJ BHC HWIJ Other $0 TD/CF VSH BHC HW IJ BB HWOJ Other mos mos CODE DESCRIPTION CODE DESCRIPTION BB BROKEN BASE OF RAIL HWOJ HEAD/WEB SEPAR (OUTSIDE JOINT BAR LIMITS) BHC BOLT HOLE CRACK OR BREAK HWIJ HEAD/WEB SEPAR (WITHIN JOINT BAR LIMITS) TD/CF TRANSVERSE/COMPOUND FISSURE VSH VERTICAL SPLIT HEAD Other Includes: DF DETAIL FRACTURE FROM SHELLING OR HEAD CHECK BFW BROKEN WELD (FIELD) HSH HORIZONTAL SPLIT HEAD BPW BROKEN WELD (PLANT) PR PIPED RAIL

26 Engineering Example: BROKEN RAIL DERAILMENTS Example Problem Statement From 2000 through 2002, broken rails (primarily TDs) were the leading cause of derailment (highest total failure cost) on Union Pacific Railroad. Our goal is to reduce the number of broken rail derailments by 25% in 2003 through the reduction of TDs and other rail defects.

27 Engineering Example: BROKEN RAIL DERAILMENTS Analysis Scoped initial project on Primary Coal Route HAL and High Unit Train Volumes High Defect Rate Regular Grinding and Detector Car Schedules Reviewed 3 years detector car and service failure data Separated tangents and curves Looked at vintage rail and accumulated tonnage Focused on surface caused transverse detailed defects Root Cause High defect rail has reached its fatigue life

28 Engineering Example: BROKEN RAIL DERAILMENTS Alternative Solutions (1) Install new rail to remove defective rail. Replace with new HH premium rail to extend life. Prevention: HIGH Appraisal: LOW Cost: HIGH (2) Increase production grinding program to prevent and remove defects. Prevention: MED Appraisal: MED Cost: MED (3) Increase rail detector car test frequency, removing more defects prior to failure. Prevention: LOW Appraisal: MED Cost: LOW

29 Engineering Example: BROKEN RAIL DERAILMENTS Solution Implementation We implemented a combination of all three alternatives: Significantly increased detector car frequency on all primary routes to greatly reduce service failures Increased the rail grinding program on primary routes to extend rail life and remove surface defects (preventative rather than corrective focus) Adopted 141 LB HH Premium Rail as standard for all rail relays (tangents as well as curves) on all primary routes to increase the fatigue life of rail and to correct the root cause of the problem over time

30 Engineering Example: BROKEN RAIL DERAILMENTS Results Miles Service Failures New Rail Layed (100 Miles) Pass Miles Ground (10,000 Miles) Miles Rail Tested (100,000 Miles) Service Failures (1,000 Incidents)

31 Summary The Benefits of Process Quality in Engineering: Quality Focus invariably leads to sound engineering decisions. Quality Processes support a well run, efficient Engineering Organization. Quality Analysis results in the Best Solutions to problems. Quality Culture always comes out on top in the end!

32 Conclusions Engineering is no different than any other business function. To be successful you must: Maintain a strong customer focus (Internal ---> Transportation) Develop, deploy and improve sound management processes (Manage with data!) Contribute to the overall Company goals (Promote teamwork!) Promote Culture of Continuous Improvement (Be problem solvers!)