Supervisor] Cascade Seating Executive Summary Cascade Seating recently lost one of their most prime customers, General Motors, due to some appalling quality control practices. The company conducted a thorough inspection and realized that there were a number of faults within production practices and quality control methods. In addition, the machinery used for production was also not working at optimal levels. The company was facing downgrade by its major buyer which could affect its business in the future. This report has looked at some of the short comings in relation to the quality control procedures and recommendations have been provided in relation to short comings identified.
It has been noted that there are four main areas which require attention, which include material quality, cutting, sewing and inspection. Fish Bone Quality Costs by Category Prevention Assessment Internal Failure External Failure Total Material Inspection 22000 22000 Defects 3920 3920 Material Returned 25000 25000 Subtotal 50920 Sewing Sewers sewed material incorrectly 7400 36975 44375 Sewing machine calibrations off 17748 17748 Rework 8200 8200 Poor Seaming 17360 17360 Training 1188 1188 Subtotal 88871 Cutting Cutter cut machine incorrectly 5500 41412 46912 Cutting machine calibrations off 23664 23664 Pattern was incorrect 14790 14790 Dull blades on the cutting machine 13311 13311 Poor Fit 34720 34720 Training 2900 2900 Subtotal 136297 Quality Control Incoming Inspection 54000 54000 Pattern Making 12000 12000 Final Inspection 114000 114000 Managers Salary 31000 31000 Subtotal 211000 Total 487088 Quality Control Department The performance of the current quality control department is not up to the mark. Majority of the quality control department’s focus is on inspecting the final product.
The inspection department and pattern making were not given high priorities. This allowed mistakes to go unchecked within the production of seat covers. The analysis of the department’s performance saw that approximately nine officials were given the duty of inspecting the final product whereas there were two and one officials working for inspection and pattern making department. Evaluation of Current Cost Accounting The current cost accounting system has a number of short comings. From technical aspect, the cost accounting system should provide a company with data that aids it in its decision making process and helps understand what elements affect cost of the company.
This would require collection of date to be collected from different business units of an organization and then assimilation of data to generate useful information for decision making. From a behavioural point of view, it helps evaluate the characteristics of the business or its products or services that are most valued by a customer and provides employees incentives to reduce costs. The above discussed attributes are parts that are essential for a company’s cost accounting system and attributes that seem to be missing from the current cost accounting system (Harris, Datar and Foster 250-270).
Recommendations There are three areas of concern that need to be addressed for the company to ensure the current issues are resolved. Firstly the company has to reduce the amount of material that is being lost to scrap. Secondly the focus of the inspection department must be shifted towards the production processes to ensure that loss due to rework is reduced. Thirdly the company has to update its machines and their quality control procedures to ensure such an event does not occur in the future.
Work Cited Harris, John K., Srikant M. Datar and George Foster. Cost accounting: a managerial emphasis. Upper Saddle River: Prentice Hall, 2003. Print.