To: Subject: Altoona Corporation Computer Products Division Quality Improvement

The problems in the computer products division at Altoona Corporation stem from a combination of quantitative and qualitative issues. Quantitatively, there are two main issues: First, current yields (60-65%) with output at 40,000 5-inch disks will not meet the 1984 forecasted demand of 90,000 similar units. This demand, coming from increased personal and small business computer use, will have to be met if Altoona wishes to capture the available 30-35% market share their forecasts predict. Second, the two major problems involved in the coating process (dirt and pocking) have made the coating process itself inconsistent and unpredictable. At least half of all defects occur in the coating process. In 61 samples of 300 units, the mean defective rate for dirt was just under 5% and 3.5% for pocking. Quantitatively, there are also two main issues: First, the one attribute that is critical to quality in the eyes of the customer, visual inspection, varies too greatly. It has become a costly and frustrating quality measure for both customers and Altoona. Second, employee, specifically engineers’, time is being mismanaged and resulting in forgotten projects, needless wage expenditure, and difficulty with experimentation. Together, these four problems will be counteracted with a quality management system that utilizes and builds on the current SQC initiative where the goal of getting dirt defects to fewer than 4% can be realized. The quantitative issues referred to above will also be addressed with appropriate project design plans and stable operations. Altoona currently faces problems with standards of certain dimensions of quality. To isolate three of these dimensions individually is critical – especially to the success of the coating process. These dimensions are: