Six Sigma Quality at Tires Inc.

Hunter Jordan, VP of Continuous Improvement at Tires Inc., was wondering how to explain the value of Six Sigma quality to the people within his organization. Tires Inc., a major manufacturer of tires in the United States, had five manufacturing facilities where tires were made and another 20 facilities for various components and material used in tires. Quality had always been emphasized at Tires Inc., but lately quality was a bigger issue because of recent fatal accidents and subsequent recalls involving tires made by other manufacturers due to tread separation. The other manufacturers said they do not know the cause of the problem, but are confident that whatever the problem, it is isolated to the tires being recalled. The reports to the National Highway Traffic Safety Administration allege treads peel off their casings, sometimes while the vehicles are traveling at high speeds. They believe many of the accidents occurred when tires were not properly inflated or maintained or repaired using plugs. Customers who keep tires properly inflated should significantly reduce any chance of tire failure. These tire problems had received significant coverage in the popular press and all manufacturers were under pressure to show they were working to ensure that problems did not arise in the future. The recalls were the second largest in U.S. history, trailing only a recall of 14.5 million tires in 1978. That recall nearly put that company into bankruptcy and led to the subsequent purchase by a competitor. Company officials would not estimate the cost of the latest recall, but admitted it would be "substantial."

Several lawsuits had been filed on behalf of the families of victims in these accidents and much of the discussion in these lawsuits was likely to involve the way these tires were built. Jordan wanted to push through a Six Sigma program and significantly improve the level of quality at Tires Inc., and she needed to build a solid case for it first.

Manufacturing Tires

While tire technology had made many advances over the decades from old-fashioned, inexpensive, bias-ply tires to todays steel-belted radials, the basic process of making tires had essentially remained unchanged and was shared by all manufacturers.

Rubber, the major component of tires, arrived in bales at the tire factory where it was mixed with chemicals and other ingredients. Each manufacturer had its own recipe for this process. Large blades in a machine broke down the raw rubber and mixed the chemicals, much like a kitchen mixer would. The rubber compound was then rolled into a milling machine where it was forced back and forth through a series of rollers to more thoroughly mix the chemicals added earlier.

Tread referred to the part of the tire that touched the road, while sidewall referred to the sides of the tire. Tread and sidewall rubber went through the same process but with a different chemical mix. After further processing, each type of rubber was extruded into a single continuous strip. These strips were put onto a conveyor system with the strips of tread rubber in the middle and the sidewall rubber on either side.

The long strips of tread and sidewall rubber were then sent through a coating apparatus that applied adhesive. After the strips had cooled, they were shrunk and cut to the exact size needed. While the rubber was cooling, strips of fabric, usually polyester, were coated with another rubber blend. These strips were used to make the body of the tire after the layering process began.

Another key component was the steel hoop for steel-belted radial tires. The hoop formed the backbone, or the metal skeleton, of the tire. The steel strands were aligned into a ribbon coated with rubber for adhesion and then formed into loops that were wrapped together.

With the ingredients prepared, the tire was assembled on a building drum. Radial tires started with a layer of synthetic gum rubber, called an inner liner, which sealed in air. This is why the tire did not need a tube. Next came the rubber-coated ply fabric, followed by two more layers to help further stiffen the tire. The material was then put into a tire-building machine, which shaped the tire to its near-final dimensions and made sure all the components were in proper position for the final molding. The tire was then inspected, where upon it was ready for curing.

During the curing process, the tire received its final shape and tread pattern. In a process called vulcanizing, the tire was put into a hot mold that engraved the tread pattern and sidewall markers. The tire was heated, or cured, at more than 300 degrees Fahrenheit for 12 to 25 minutes, depending on its size. When the curing was done, it was sent to a final finish area for another inspection. If there were any blemishes or outside flaws, the tire was rejected.

Adhesion flaws and other internal problems were not visible, so manufacturers randomly pulled tires from the production line and cut them apart to look for defects.

Quality Issues at Tires Inc.

Given the large number of steps in building a tire, errors tended to accumulate. As a result, even if each step produced only 1 percent defects, at the end of 20 steps only 81.2 percent of the product would be of good quality. Since each factory produced about 9,000 tires per hour, such a process would result in about 1,692 defective tires per hour. Thus, it was very important that each stage had a high level of quality, specially that this is a 24 hr manufacturing operation.

Another quality issue was related to the settings on various machines. Over time, these settings tended to vary because of wear and tear on the machines. In such a situation, a machine would produce defective product even if the machine had the correct setting. To detect such situations, Jordan implemented a statistical process control (SPC) program. At the extruder, the rubber for the XA-257 tires had thickness specifications of 88 mm 3.2 mm. Jordan and his staff had analyzed many samples of output from the extruder and determined that if the extruder settings were accurate, the output produced by the extruder had a thickness that was normally distributed with a mean of 88 mm and a standard deviation of 1.1 mm.

Assignment Questions

The questions are designed to help Hunter Jordan understand the current capability of the extrusion process and quantify the benefit that may be achieved if the extruder could be transformed to a Six Sigma process. The following questions must be answered in a Word document (you may use excel to calculate the answers). Answer the questions first, then write the Executive Summary.

Current State

The first two (2) questions relate to the process as it currently operates. This is referred to as the current state.

1. If the extruder setting is accurate,
   1. What is the value of Cp and Cpk of the process (1 decimal)?
   2. What proportion of the rubber extruded will be within specifications (2 decimal)?
   3. How many defective tires will be produced each hour (round to nearest unit)?
   4. What is the cost of the defective tires per day?
   5. Jordan has asked operators to take a sample of 16 sheets of rubber each hour from the extruder and measure the thickness of each sheet. Based on the average thickness of this sample, operators will decide whether the extrusion process is in control or not. Given that Jordan plans +/- Three Sigma control limits, what upper and lower control limits should she specify to the operators?
2. Impact of Process Variation Sigma Shift. If a bearing is worn out, the extruder produces a mean thickness of

89.8 mm when the setting is 88 mm. Under this condition

1. What is the value of Cp and Cpk of this process (2 decimals)?
2. What proportion of defective sheets will the extruder produce?
3. How many defective tires will be produced each hour (round to nearest unit)?
4. What is the cost of the defective tires per day?
5. What are the UCL and LCL?
6. If an operator discovers a sample outside the control limits what action should be taken?

Future State Six Sigma

Significant improvements and changes would be made to the process. The next two (2) questions relate to the process once it was operating with six sigma quality. This is referred to as the future state.

3. Now consider the case where extrusion is a Six Sigma process. In this case, the extruder output should have a standard deviation of 0.42 mm.
   1. What is the value of Cp and Cpk of the process (2 decimals)?
   2. What proportion of the rubber extruded will be within specifications in this case (2 decimals)?
   3. How many defective tires will be produced each hour (round to nearest unit)?
   4. What is the cost of the defective tires per day?
   5. Assuming that operators will continue to take samples of 16 sheets each hour to check if the process is in control, what control limits should Jordan set for the case when extrusion is a Six Sigma process?

4. Impact of Process Variation - Return to the case of the worn bearing in question 2 where extrusion produces a mean thickness of 89.8 mm when the setting is 88 mm.
   1. What is the Cp and Cpk of this process?
   2. Under this condition, what proportion of defective sheets (specs.) will the extruder produce (for the Six Sigma process)?
   3. What is the cost of the defective tires per day?
   4. Assuming the control limits in question 5, what is the probability that a sample taken from the extruder with the worn bearings will be out of control?
   5. On average, how many minutes are likely to go by before the worn bearing is detected?

This case has been adapted from the original Case from Kellog School of Management.