Instructor’s Manual Abstracts
Issue 2 IM Abstract: Statistical Process Control at Hi-Tech Surfactants
Ravi Sharma; Fatih Yegul; and Jane Gravill
Case Overview
Hi-Tech Surfactants Ltd. (HTS), located in India, was a private limited company, operating as a supply chain partner (a contract manufacturer) of Hindustan Unilever Limited (HUL), the Indian subsidiary of Unilever, the global giant in the consumer products market. HTS manufactured and shipped assorted sizes of Wheel brand laundry detergent for fabric wash. HUL supplied the raw materials and sent production plans through the ERP (Enterprise Resource Planning) system – SAP. HUL also transferred the systems knowledge for the processes and the procedures for quality control.
Harsh Bhardwaj had led HTS since the early 90s, maintaining a growing relationship with HUL. His way of working was “being the best.” He invited his friend and a management consultant, Professor Ravi Sharma, to look at the operations with a fresh perspective.
HTS had a continuous process. Raw materials were mixed according to the recipe (blending formula) provided by HUL. Automatic packaging machines measured and sealed the detergent in pre-printed PVC film sachets. These were then packed in larger gunny bags and shipped to HUL depots. If HTS used more materials than the allowance limits set by HUL, they had to pay.
Sharma suggested that the process of measuring, filling, and sealing the sachets could offer a scope to improve quality and productivity and reduce material usage. He proposed using statistical process control (SPC) and related concepts of process capability, and target-oriented quality. He asked HTS to record the data on samples inspected during packaging.
Team members at HTS were satisfied with their current level of quality and productivity. They operated within norms set by HUL and received no complaints. A recent audit by SGS on behalf of HUL and the British Retail Consortium gave HTS an AA rating.
Bhardwaj was in a dilemma. He needed to decide whether to maintain the status quo or consider implementing a new statistical analysis program to control the packaging processes, and to conduct process capability assessments, as Sharma had proposed.
Learning Objectives
By working through this case, students should be able to
- Assess process capability to meet customer specifications.
- Apply the SPC formulae to assess whether the process is in control.
- Discuss the Taguchi concepts or target-oriented quality and loss to society.
- Recommend a decision regarding the implementation of an operations management tool.
Course Suitability
This case was developed and written for use in higher-level (third year or higher) courses in operations and supply chain management or quality management, for undergraduate degree or advanced diploma programs in business or engineering.
Within these courses, it would help to review and apply the topics of process mapping, SPC, process capability, Taguchi’s quality loss function (QLF), and sustainability in process design.
Recommended Reading
Taguchi, G. & Clausing, D. (1990). Robust quality. Harvard Business Review, 68(1): 65-75.
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