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Craig Cochran

Quality Insider

A Quality Lesson from Hopeulikit

Don’t get sloppy with nonconforming products

Published: Monday, March 12, 2007 - 22:00

Last year I had the good fortune of doing some consulting with B&C Specialty Products in Hopeulikit, Georgia. B&C does light manufacturing, primarily plastic molding and assembly, and they also distribute imported products produced by companies in the Far East. They have about 150 employees and by far are the biggest employer in Hopeulikit.
B&C was a perfect place to learn about managing and quality. Every day presented a new lesson. Usually the lessons were hard-learned, and those are the ones that really stick with you. B&C was gracious enough to allow me to interview their personnel about things that came up during my time there. Here is an interesting lesson: Don’t assume that everyone knows what nonconforming product looks like. The scenario is described by the people who actually lived it.

—Big Phil Fedorov, warehouse manager

“It happened again yesterday, just like it always does. Our quality guy, Paolo, came out here and started hassling everybody. This time it was about the way we maintained our area. His criticism was especially obnoxious, since we’re noted as being one of the best organized and clean departments in the company. The thing he was so bugged about were some boxes of returned goods that had come back from a customer. The boxes were dirty, scuffed, partially crushed and had been spray painted with the words “no good” in big black letters. The flaps of the boxes weren’t even sealed and someone has tossed some old food rappers inside along with the product. In other words, there was no mistaking what these boxes were: Bad product.

“Paolo marched up to us and said, ‘Why don’t these have hold tags on them, and why aren’t they in the hold cage?’ We just looked at him and laughed. The whole point of our nonconforming products process is to keep product from being used or shipped. These boxes of returns were already identified in such a way that there was no way they would be used or shipped. I mean, it was a no-brainer. There was no need to go through the trouble of creating hold tags, assigning a hold code, entering the status into the computer, and locking the returns in the hold cage. If I had nothing else to do, I might consider going through the motions, but I’m doing three jobs right now and the whole department is stretched thin. We don’t have time for nonsense. Paolo said we absolutely needed to follow the procedure, no exceptions. That’s what I hate about our management system: Mindless conformance. We’re all intelligent adults out here, but the system treats everybody like they are children.

“Just to get him out of our hair, we told Paolo we’d take care of the returned goods after we finished loading the trucks. Of course, we said it so he would leave, which he finally did after prowling around like an alley cat for a few minutes. Any time Paolo comes to our department it means extra work for us. People hate to see him coming.”

—Paolo Ferrari, manager of quality
“I tried to tell them. I was out there and saw those darned returned boxes, and I tried to explain to everyone why it was important we follow our procedure. I did everything but use sign language. Maybe I should have. The whole warehouse team acted like I was crazy. After I left the area, it’s obvious that they did nothing about those returned goods. They didn’t label or segregate them. You want to guess what happened? Less than 24 hours later, those exact boxes got loaded onto a truck and shipped to a customer. They got shipped, despite the so-called ‘obviousness’ of their condition. The product was obviously nonconforming to everyone, except the people who shipped them.

“When I told everyone in the warehouse what had happened, the universal reaction was, ‘That’s impossible!’ Well, I have the proof right here: Serial numbers, packing lists and this e-mail from the receiving department of Corley Industries. They said, and I quote, ‘Why did you morons send us those crushed boxes that had “no good” spray painted all over them?’ I’ve got to go over there later today and try to explain. That won’t be fun.

“The bottom line is that you can’t assume anything with nonconforming products. There’s no such thing as ‘so ugly everyone knows it’s bad.’ This is proof. The best thing you can do is develop a solid procedure for controlling nonconforming products and follow it 100 percent of the time. I guess I’m going to retrain the entire company on our procedure for nonconforming products. People don’t seem to understand the importance of this, but maybe this incident will be a learning experience. Anything less than full compliance is asking for a disaster. Speaking of disasters, I’m getting a page right now from Corley Industries. We shut them down for two hours and we’ll probably have to pay them a rather large claim, not to mention the loss of their confidence in us.”

—Big Phil Fedorov, warehouse manager
“I can’t believe this happened, but it did. My suspicion is that someone on third shift was not paying attention. Even worse, it could have been deliberate sabotage. We’re conducting the investigation right now. At the very least, a written warning will be come out of this when we find the responsible parties. I don’t enjoy writing people up, but I’ll do whatever is necessary to keep problems from recurring.

Paolo came back out here, waving an e-mail from Corley Industries and asked us, ‘How are you going to prevent this from happening in the future?’ This situation was something that happens once every hundred years. It was a freak in the system. Every other variety of product is already tightly controlled, and our controls are lean and effective. For internal nonconforming product, we remove the barcode tag from the units. This serves two purposes: It lets everyone know that something is wrong with the product and it prevents anybody from doing anything with the product. You see, any time we transfer or ship product, we scan the barcode into the computer. No barcode, no movement. It’s a very simple and effective process.

“From now on, all returned goods will go directly into the hold cage. Someone stored all the Christmas decorations in there, but once we get the place cleaned out the cage will be usable for its original purpose. We’ll reinstate the discipline we should have had all along. And I’m going to let everyone know I’m not accepting failure. First violations on not following our procedure will be a written warning. A second violatoin will be immediate termination. That’s how serious I am.”

Guy Hockmeyer, director of sales and marketing
“I’m one of those old-fashioned salesmen. My motto is ‘Do whatever it takes to satisfy the customer.’ I came up through the ranks of the company and have personally worked at a number of the jobs out here. To this day, I’ll come out to production and lend a hand if they’re in a crunch. I’ve packed boxes, loaded trucks and driven forklifts. Nobody can say I’m afraid of getting my hands dirty. Just yesterday, I came out here to complete a rush order. The order was just a few items short and my customer needed the products now. I must have come out during a lunch break or departmental meeting, because nobody was around. Usually I get help when hand-picking partial orders, but I know the product well enough to do it solo if I have to. I selected some units that didn’t have the barcodes on them; that way, it wouldn’t mess up their computer inventory. Not many people would understand why that’s important. Removing a product without barcodes could completely unbalance the inventory in the computer and cause us to accept orders for products we don’t have.

“I boxed up the nonbarcoded products, created manual labels for them and wrote up a packing list by hand. Only an old war-horse like me would know how to do these things. Then I personally carried the product to the customer. That’s what you call customer service. Yes, it’s a little old fashioned, but I’m very old fashioned when it comes to taking care of the people who keep us in business.”

When handling nonconforming products, remember:

  • When it comes to controlling nonconforming product, Murphy’s Law prevails: If something can go wrong, it will.
  • Never assume that people know what nonconforming looks like; they probably don’t.
  • Error-proof your control of the nonconforming products process so that it’s impossible to use or deliver bad product.
  • Consistency is critical. Develop a solid nonconforming products procedure and follow it unwaveringly.
  • It’s usually more effective to treat mistakes as failures of the system, as opposed to personal failures that have culprits and assigned blame. If mistakes were made, identify and remove the conditions that enabled those mistakes.
  • Threats and punishment rarely constitute corrective action on the root causes of problems.
  • Going around the formal process to serve a customer often backfires. A better approach is to optimize the formal process so that it produces the desired results every time.


About The Author

Craig Cochran’s picture

Craig Cochran

Craig Cochran is a project manager with Georgia Tech’s Enterprise Innovation Institute. Cochran is the author of The Seven Lessons: Management Tools for Success; Problem Solving in Plain English; ISO 9001 in Plain English; Customer Satisfaction: Tools, Techniques, and Formulas for Success; The Continual Improvement Process: From Strategy to the Bottom Line; and Becoming a Customer-Focused Organization, all available from Paton Professional. His most recent book is ISO 9001:2015 in Plain English, also available from Paton Professional.