To: Boss
From: Tom
Date: July 5th 2016
Subject: Follow up from our meeting on costs
Boss I wanted to follow up with you and let you know where we are from our previous meeting in reducing our defective products, increasing our productivity by running an efficient manufacturing process and improving our image with our customers. Our division is focused on the three areas for cost quality and feel that we can improve these metrics that we have agreed upon. We will review the three focuses on appraisal, prevention and failure costs.
Our focus on appraisal costs within the organization has been directed towards inspecting the equipment on a daily basis. Though this takes a few minutes each day and delays us from firing up the equipment and manufacturing our product. It has given us the ability to ensure that we are using equipment that is working at it’s best. We will also review the raw materials to ensure that it is the highest quality. By doing this we have decided to purchase from other suppliers which has increased our cost a bit but are confident we are able to hit our quality standards.
Prevention costs have been focused on reducing our defects. Per our previous conversations to eliminate defective products we have really focused efforts in this area by putting in place training for our employees who are running the machines. The reason we are doing this because we did an analysis and found that multiple errors occurred due to the lack of training both with the equipment and with the employees. We spent a day in training while the equipment was being tuned up so we could take advantage of the downtime and we have found an increase in productivity because of the training which has occurred. Know that we will be reviewing and retraining employees on a quarterly basis.
Failure costs is an area that we believe we will see the most improvement and greatest