Executive Summary
The following analysis is focused on the case of Marlin Firearms Company – one of the recurring American gun manufacturers. However, during the last years, the quality of some of the firm’s products has dropped to an unacceptable level. As a result, Marlin Firearms began losing its market share to the other companies, and its revenues as well as the reputation have started to decrease. In order to find the cause of the problem and address it, a comprehensive analysis of the company’s quality management system has been conducted. During the study, it was defined that one of the primary causes for the quality drop was the relocation of the production in 2010. Moreover, the analysis has shown that the quality management process on Marlin Firearms is not a monolithic quality management system, but rather scattered unsystematic measures aimed at maintaining the product quality on a certain level.
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Therefore, it was decided to develop a new quality management system based on the requirements of ISO 9001 standard. The primary steps of the project include the formulation of goals and objectives of the quality management system, the formation of a complementary processes system, the development of normative documents, the training of the staff as well a the determination of the persons responsibility for the implementation of quality control processes. The estimated cost of the project is 128,000 dollars per year. It is expected that its implementation will improve the manageability of the company, increase the competitiveness and quality of products as well as reduce the costs and make the company consumer-oriented. In turn, this will allow the firm to reclaim the lost market share and restore its reputation.
Background Information
The following operations management problem is retrieved from the article by Robert Farago, from “The Truth about Guns” web periodical, published on June 7, 2014. In particular, it is focused on Marlin Firearms Company – one of the American gun manufacturers, located in Madison, North Carolina. The enterprise was founded by John M. Marlin in 1870 as a family business for the production of high-quality revolvers. In particular, its products were used by such people as Annie Oakley, nicknamed “Miss Sure Shot” and Tom Mix, who is well known as the first hero of cowboy movies. However, the company was not only engaged in the production of the firearms for the private use, such as revolvers and derringers, but also worked on the military contracts. In particular, after the death of the firm’s founder, John Marlin, in 1901, the business was taken over and diversified by his sons. In 1915, the company was purchased by New York Syndicate and was renamed as Marlin Rockwell Corporation. In the following years, it became one of the largest producers of machine guns in the world, supplying the firearms to the U.S. and its allies. In particular, Marlin was involved in the improvement and production of the one of the first mass-produced machine guns – Colt-Browning. After the war, the company has started producing firearms for sport, but this branch existed only until 1923, when it was sold on an auction. According to the stories, the auction was attended by several children, a dog and Frank Kenna, the lawyer, who purchased the firm by bidding only one hundred dollars. Ever since then, Marlin Firearms Company has been owned by the members of Kenna family, and was constant changed and improved to become one of the major players of the American firearms market as it is known nowadays.
Problem Description
During its more than a hundred-year history, Marlin Arms has been reputed as the producer of high-quality goods, which is supported by the fact that the company worked on the military contracts. However, for the last four years, namely, since 2010, the consumers have noticed that the quality of some of the firm’s products has dropped to an unacceptable level. For example, there have been reports on the stocks splitting in a half in a brand-new Marlin 1894 rifles, as well as a variety of the other defects in the end product. Moreover, it should be noted that Marlin guns offer the opportunity to modify them, i.e. the installation of custom stocks, barrels, and scopes. As a result, many companies that offer such services, namely Grizzly Custom Guns, have started charging the customers to rectify the factory defects and errors, which resulted in new complaints.
The quality issues have lead to the situation when Marlin Firearms, which is among the most recognized gun manufacturers in the U.S., began losing its market share to the other companies, namely Henry Rifles with its series of repeating guns . As a result, the revenues as well as the reputation of the enterprise have started to decrease. Moreover, by taking into account that Marlin Firearms produces lethal weapons, it is possible to state that the abovementioned quality issues may lead to injuries and even casualties during the hunt or on a firing range. All these facts serve as an evidence of an inefficient quality management system on the enterprise and contribute to the relevance of the described problem. Therefore, it is imperative to conduct its comprehensive analysis and define the ways to improve the current situation.
Analysis of the Problem
The mechanism of quality management must ensure the effective implementation of the basic functions of quality management. Therefore, it is necessary to analyze the realization of quality management functions on the enterprise. The data can be obtained either by conducting a survey or an interview with the heads of the departments or by monitoring the consumer reaction to the finished products. In particular, as claimed by Marlin Firearms representative, as a result of poor management, in 2010, the production has been moved from North Haven to the plants of Ilion and Mayfield, which are operated by the other gun manufacturer, Remington. Therefore, it is possible to assume that since 2010, the process of quality control at the enterprise does not include:
- Forecasting of the market demand, technological level, and product quality;
- Planning to improve the quality of goods;
- The development and launch of the new products;
- The incentives and accountability for the achieved level of quality;
- Information support of the quality management;
- Technical and economic analysis of changes in product quality;
- Planning of financial security of quality control.
As a result, during the last years, namely since 2010, the number of defective products manufactured by the company has increased. The analysis of the company’s quality indicators has allowed revealing a significant issue in this field:
- The lack of a systematic approach to problem solving to improve the quality of products;
- The presence of defects after the certification of the goods;
- An increase in complaints about the quality of the products.
As a general trend, it is possible to assume that since 2010, the company does not conduct systematic work to improve and stabilize the quality of wares. In particular, the preventive actions, which are aimed at ensuring the stability of technological parameters, are of a sporadic nature. Therefore, the information about products with an unmatched quality is not properly taken into account and analyzed, leading to a distortion of the quality costs distribution. In some cases, such goods are identified before the end of the process, but are not recorded in any reports. Usually, the analysis of the nature of defects and their causes is reduced to conviction and fining the responsible staff. In turn, these measures not only do not encourage the prevention of inconsistencies by identifying them early in the production process, but also force the staff to conceal the fact of production of goods of inappropriate quality, which leads to their emergence on the American firearms market.
Therefore, the analysis has revealed that the process of quality management at the enterprise does not cover all the functions of quality management. In particular, there is a certain percentage of the defective goods during the production process. However, no analysis of the causes and nature of these defects is conducted. Judging by this fact, it is possible to conclude that the quality management process on Marlin Firearms is not a monolithic quality management system, but rather scattered unsystematic measures aimed at maintaining the product quality on a certain level. Therefore, the conducted analysis has revealed the continuing need to improve the quality management system of Marlin Firearms.
In general, it is possible to develop a set of recommendations for addressing the abovementioned issue. Following the decision to establish a system of quality management, it is important to review and improve all the elements of the production, management, and the other subsystems of the enterprise as the attempts to control the quality in isolation from the other aspects of the work are doomed to failure. However, it should be noted that Marlin Firearms should not set the obtaining a certificate of conformity as its primary goal. In this case, the most important objective is to ensure that the quality system will allow reducing the costs and improving the culture of production. Otherwise, the implementation of a quality system will be limited to the introduction of the mass of irrelevant documents that will only lead to bureaucracy.
In recent years, the certificate, which confirms that the quality management system meets the requirements of ISO 9001 standard has been added to the documents confirming the stability, reliability and availability of the company, such as financial statements or a strategic business plan, A proper implementation of this system will provide a number of advantages, including the improvement of company’s manageability, increasing the competitiveness and quality of products and services, reducing the costs, and making the firm customer-oriented. It should be noted that the efficient quality management system can be created without focusing on the requirements of ISO 9001. However, in order to certify the system, i.e. to receive a document proving that the processes carried out in the organization are effective and focus on the continuous improvement of product quality, the system must meet the requirements of this standard. Therefore, the process of creating a quality management system on the enterprise will be considered in the terms of the requirements of ISO 9001.
In order to build a quality management system in accordance with ISO 9001 standard, the company’s management should create the following elements of the system
- The document, which formulates the goals and objectives of the quality management system as well as the principles of their achievements (quality policy);
- The system of interrelated and complementary processes that corresponds to the abovementioned quality policy;
- Regulatory documents that describe and govern business processes of the quality management system;
- An efficient mechanism to implement the requirements provided by the regulatory framework;
- The well-trained staff of the organization;
- The persons responsible for the implementation of quality control processes.
During the formation of the mechanism of quality management on Marlin Firearms, it is advisable to use a common methodological approach for structuring of the complex economic systems. It involves the allocation of a number of general, special and providing subsystems. Among the general quality management subsystems, the mechanism must include the subsystem of forecasting and planning of the technical level and quality of the products, the quality control directly during the manufacturing process, accounting and analysis of changes in the level of quality, promotion and responsibility for them. Special subsystems should include standardization, product testing, as well as prevention of defects during the manufacturing, qualification and certification of products. The providing subsystems should maintain the systems of legal, information, logistical, metrological, organizational, technological and financial support of quality control.
Based on the analysis of problems of quality at Marlin Firearms, it is possible to identify the departments and officials responsible for the implementation of quality processes, form the coping strategies based on the principles of ISO 9001 and calculate their hypothetical cost:
The formulation of goals and objectives of the quality management system is to be done by the CEO of the company. It requires no additional costs, but, in this case, there is an increased burden on the managers;
The formation of a system of complementary processes is conducted by the CEO and the heads of departments and requires the introduction of electronic schemes for quality control. The cost of the software, including its installation and adaptation makes up 20 thousand dollars;
The development of normative documents is to be done by the hired quality manager with the salary of 6 thousand dollars per month or 72 thousand dollars per year;
The development of a mechanism for implementing the requirements of ISO 9001 is conducted by quality manager, CEO, and the heads of departments. In this case, the additional expenses include only the salary of the quality manager, which is already taken into account;
The training of the staff on the new standards and requirements for quality management is conducted by the personnel manager. The average cost of the training program, including seminars, is 36 thousand dollars per year;
The determination of the persons responsible for the implementation of quality control processes is conducted by the quality manager and CEO. It requires no additional costs, but, in this case, there is an increased burden on the managers.
The implementation time of the system is approximately one year. Therefore, its overall cost will be 128,000 dollars. The proper implementation of this system will provide a number of advantages:
- The improvement of the manageability of the company;
- An increase in competitiveness and quality of products;
- The reduction of costs;
- The orientation of the company on the consumer.
Finally, the system will comply with the new requirements of the enterprise due to the following reasons:
- The new system complies with ISO 9001, as it is designed with the use of basic principles of quality management;
- At the core of the system, there are the principles of ISO 9001 standard .
During the development of measures to improve the quality management system, a common methodological approach to structuring of the complex economic scheme was used.
As a result, the new quality management system will implement all the functions of the quality management, allowing Marlin Firearms to improve the quality of its products, reclaim the lost market share and restore its reputation.
Conclusion
The quality of products of the enterprise is an important factor of its activity in the market, as it provides the expansion of its segments, the prosperity of the enterprise, and profit growth. The international experience shows that the work to improve the quality is expediently carried out in the framework of the system management, which covers the entire product lifecycle – from design to consumption and disposal. The goods quality, including originality, technical level, the absence of defects in the performance, and reliability, is one of the most important means of competition, winning and retaining the market positions. Therefore, the Marlin Firearms should focus on providing high quality wares, establishing the control at all the stages of the production process.
It should be noted that quality management should be carried out systematically, i.e. Marlin Firearms must operate a quality management system, which is the organizational structure that clearly defines responsibilities, procedures, processes and resources needed for quality control. Moreover, the creation of quality system that complies with ISO 9001 should be linked to a much more general and continuous cycle for the restructuring of the entire corporate culture on the principles of the total quality management. This approach will ensure the maximum efficiency of the efforts and provide the company with a long-term strategic advantage over its competitors.
