Getting to the Heart of Quality Products

FORM Magazine, Nov. 1993

How One End User's Demand for Perfection
Shaped a Distributor's Quality Process

BY SHARON McLOONE

For Marudas Business Forms Co., Minneapolis, quality is the heart of the company's success in the forms industry. After implementing its own internal quality control system about two and a half years ago, the company won the confidence of the corporate purchasing department of Medtronic Inc., a $1.3 billion manufacturer of therapeutic medical devices such as pacemakers and heart valves. Marudas is the department's only certified distributor of business forms and is the exclusive supplier to Medtronic's pacemaker business. After a year long process to achieve certification, Marudas now supplies more than 20 different forms to Medtronic, eight of them certified by the pacemaker division, ordered several times a year in quantities from 2,500 to 50,000.

To prove to the medical manufacturing giant that Marudas had what it takes to meet Medtronic's own stringent quality certification process for suppliers, Marudas showed Medtronic how the forms distributor had a secure, functional internal quality control system that it had spent several years carefully crafting.

Crafting a Quality Control Process
About 1990, Marudas' management staff became aware of the rapidly growing trend of quality programs in the workplace, according to Marudas Sales Rep Mary Dierbeck, CFC. Magazines, newspapers and TV programs saturated businesses with new strategies to increase efficiency and revenue through quality control. The company knew that it had to jump on the quality bandwagon to stay competitive in the forms industry and to maintain and recruit Fortune 500 clients.

Marudas' quality program was conceived at the grassroots level by Sales Rep Ken Langehaug, CFC, and Dierbeck. The sales reps started by frequenting the library. They read about quality programs based in the U.S. and Japan. In addition, they studied the philosophies of quality gurus Phil Crosby and W. Edwards Deming. They found an excellent role model in a book on quality written by the Tennant Company, a Minneapolis-based maker of industrial floor maintenance equipment, according to Dierbeck. "We knew we had to make Marudas' salespeople aware that quality is important and we could educate the staff through what we found," says Dierbeck. At weekly sales meetings, the two sales reps gave 20 to 30-minute educational talks on what they had learned.

The next step was to put their findings on paper. One component of Marudas' quality process is to evaluate its vendors' services. The company developed the Supplier Partner Quality Program manual. It's a slim, GBC-bound manual that asks manufacturers to aid Marudas in reaching its goal of establishing and promoting an ongoing quality process. Also, the manual lists seven quality goals, including cooperation between Marudas and suppliers, responsibility of suppliers to conduct and document quality checks and supervision of product quality by all personnel to meet the customers' needs. Dierbeck and Langehaug, now the company's quality coordinators, as well as sales reps, drafted a letter and sent it to Marudas' 32 vendors asking for their cooperation in upholding a higher standard of quality. In the letter, the vendors were informed of Marudas' intent to evaluate their performance.

Implementing Quality Controls
Last fall, sales reps met with all vendors to discuss the quality process, including the supplier satisfaction rating form the company had developed as a scorecard to evaluate suppliers' performance. The form rates a variety of areas, including on-time deliveries, product knowledge, prompt call backs and ability to meet rush delivery needs. These categories, among others, are rated on a scale of one through five, with a total of 135 points available. Vendors are then ranked in order of sales volume from one to 32. (See graph on next page for a sample of one supplier's results).

Marudas' larger manufacturers have been very receptive to the new quality process, according to Dierbeck. Some of the smaller plants that had developed their own quality tracking form said they "didn't want to tie up their people with extra paperwork," she says. But Marudas has seen a lot of companies trying to improve on their quality process since the company announced the implementation of quality control.

Earlier this year, after the initial evaluation, employees met with eight of Marudas' highest volume manufacturers and re-evaluated them. The company plans to review all 32 again within the next couple of months, according to Dierbeck. "If they have not improved their performance, there is a chance that some of them will be let go," she says.

Fortifying the Quality Process
Marudas developed two additional forms to monitor manufacturer quality. One is the Quality Control Document, a 4-part unit set checklist to be filled out by the manufacturer to ensure that all phases of developing the product are carefully checked. The form includes spaces for the Marudas salesperson's name, as well as paper stock, number of parts and ink color. It also includes categories for order entry information, such as one reminding order entry personnel to suggest more economical paper and categories for proofs, press, bindery and shipping information. The white copy is returned to the Marudas salesperson, the canary copy is kept at the plant, the pink is for the end user and the gold is the file copy for Marudas. "When customers get a copy, we can ensure them that each stage of a product's production has been monitored and the product they are getting has been checked carefully," Dierbeck says.

Marudas also developed the Customer Complaint/Rejection Notice, a 3-part unit set that is divided into two sections, one to be completed by Marudas and the other by the manufacturer responsible for the particular job. Marudas uses the form as a quality control device if Marudas and/or the end user have complaints. If Marudas notices a quality problem or gets a complaint from the end user, Marudas employees list the discrepancy on the form, detach one part and post it on a bulletin board in the Marudas office to keep the staff abreast of quality control issues. Marudas then sends the remaining parts to the vendor for a response with a sample of the incorrect form, if that is the problem, says Dierbeck.

The vendor explains the error on the form and includes the names of the press operator, collator operator and foreman responsible for the job, then sends the form back to Marudas President Phil Marudas. Dierbeck posts the vendor-completed form next to the part already hanging on the board so Marudas' staff can see the outcome. At the end of each month, Dierbeck files the complaint forms in folders kept on each manufacturer. At the manufacturer's quality review conducted by Marudas, complaints are discussed.

Nominating Marudas
Once Marudas had its quality process securely in place, it expressed an interest in becoming certified by Medtronic and showed the company's pacemaker division its quality manual and checklist. Although Marudas had been providing both internal and external forms for Medtronic, it could not achieve the division's certified vendor status until implementing its own quality control process. Marudas already had an excellent reputation for efficiency in providing Medtronic's maintenance/repair and operations (MRO) department with a large part of Medtronic's internal forms, according to Ann Tanko, Medtronic Senior Buyer/Planner.

In July '92, Tanko accompanied the MRO buyer and forms management coordinator on a quality survey trip to Marudas and Midwest Business Forms. She liked what she saw. "Only recently were printed materials even considered for certification," Tanko says. "It's not like making a widget where you need to check for faulty parts." She was impressed with Marudas' electronic data interchange (EDI) capabilities because Medtronic's pacemaker division is currently looking into EDI to streamline operations. According to Tanko, she felt confident nominating Marudas for certification. Marudas has been working with Medtronic for more than seven years. During that time Marudas has achieved 100 percent accuracy with Medtronic and it made sense to strengthen the relationship.

Achieving Certification
To become a certified supplier for the pacemaker division, a company must be selected by Medtronic's Supplier Development Team. There are two levels of certification granted by Medtronic. "Level One" is achieved by successful completion and demonstration of quality control and implementation of a quality improvement process. Level Two is earned by demonstrating process capability through statistics, in addition to meeting Level One requirements.

Medtronic's corporate purchasing division, which serves the pacemaker business, rates its suppliers monthly on accuracy of meeting specifications and adherence to the delivery schedule. Before certifying a supplier, Medtronic checks all of the forms delivered at its own inspection station. With Level One certification status, an audit is required on one in every eight lots, plus an annual on site inspection by Medtronic. Those suppliers who achieve Level Two do not require skip lot inspection, but are subject to the annual on site visit, according to Medtronic Principal Quality Engineer Bob Chiodin.

Once Marudas was selected, the company embarked on the certification process. Medtronic's quality engineers examined Marudas, including number of employees and the size and capabilities of its facility. With the aid of its 14-page supplier survey, Medtronic quality engineers looked at Marudas' financial stability, the internal quality control system and the quality control documents Marudas used for its manufacturers.

Certifying the Manufacturers
Once Marudas was deemed qualified for certification, the two companies visited two manufacturers-Northstar Business Forms, Minneapolis, and Midwest Business Forms, W. St. Paul. Marudas chose the manufacturers on the basis of the excellent work they had done for Marudas, according to Dierbeck. Both manufacturers had to pass Medtronic's certification process. Equipped with Medtronic's supplier survey, two of the company's quality engineers and Tanko spent about a half day at each of the plants, according to Chiodin. The Medtronic quality engineers spoke with the facilities' general managers and examined the manufacturers' internal quality documents and systems. Then they met with the press operators and asked them to conduct a test press run. The engineers asked the press operators how they verify requirements of Medtronic forms, examined how the forms were fed through the press and asked about the uniformity of materials. In addition, the manufacturers were asked how product errors were handled, including who reviews the situation to ensure problems will not recur, according to Chiodin.

The engineers checked "every facet of the manufacturers' operations," Chiodin says. This includes the manufacturing process, documentation control, storage, shipping and training. Medtronic offered suggestions for improvement in certain areas. Then, Medtronic's quality engineers reviewed form specifications with the two manufacturers and Marudas. In addition, Medtronic discussed the concerns of Medtronic's pacemaker facilities in Holland, Canada and Puerto Rico, which receive forms printed at the two Minnesota forms manufacturers.

Weaving Programs Together
Weaving four quality control systems together to create a fine tuned machine was not as difficult as it sounds, according to the managers of the companies. Northstar had an existing quality program in place, according to Bruce Rankin, Northstar's vice president of sales and marketing. The company modeled its quality philosophy primarily after Deming's approach, Rankin says. "No philosophy is a perfect fit, but his worked best with our business," he says. "We believe in Deming's philosophy that quality is a target that you never hit, but it's an ongoing, evolving process. You have to be careful not to get complacent." He adds that Medtronic was the largest company ever to audit Northstar's quality process, but not the first. His company also produces financial, negotiable documents that are processed in the banking system, requiring other end users to examine the quality of Northstar's work.

When Marudas presented its quality control checklist to Northstar, the manufacturer was able to easily assimilate it into its own program. Reporting requirements changed for both Northstar and Midwest with the introduction of Marudas' 4-part form. Now the manufacturers are required to have operators check off each phase of production throughout the entire plant. Shippers are also responsible because they must sign off on the product before sending it to the end user. Marudas' Dierbeck goes to the plants for final inspection on every job to ensure a quality product.

Both manufacturers found Medtronic's proactive involvement in the quality implementation process unusual compared to that of other end users, but managers say it was easy to accommodate Medtronic and Marudas' needs. Initially, there was additional time and paperwork with the new quality system. "We took extra time with Medtronic's orders, but the end result is just the opposite of spending a lot of time. Now we are more efficient and the effect is a definite plus," says Midwest's General Manager Ron Hamann.

"Manufacturers' philosophies have changed over the last few years," says Northstar's Rankin. "Before it was acceptable that if you made an error on a product you could redo it. Now we have reached a point where making errors is not acceptable." According to Dierbeck, "Since these documents are part of the pacemaker product package, they are FDA approved so all graphics must be correct and printed perfectly."

Midwest did not have a quality control system in place before Marudas asked that it use its quality checklist, according to Hamann. Midwest created its own quality process by merging its ideas with Marudas'. "Marudas raised our level of awareness about the importance of consistently producing quality products. Now we are looking at all of our accounts in a different way," Hamann says. Midwest developed a checklist that is used at different phases of production, including as many as 20 different items in each of the following categories: order/entry, prepress, press, collator, bindery and shipping. The categories include topics such as delivery date, proof needed, screens, paper weight and ink color (match sample or PMS). "There is a more positive environment and a stronger sense of pride among the employees," Midwest's Hamann says. "When they have to personally sign off on their part of the product, there is a new consciousness."

Celebrating a Quality Victory
In August '93, about a year after the initial certification nomination meeting between Medtronic and Marudas, Marudas and the two manufacturers were certified to Level One by Medtronic. Marudas and Medtronic celebrated with parties at each of the manufacturers' facilities. The companies received plaques that had a Medtronic pacemaker embedded in them. Medtronic displayed samples of its products and showed the manufacturers how the forms were used. "Overall, we are really pleased with how smooth the transition to certification has been," says Tanko.

Sharon McLoone is assistant editor of FORM magazine.

Medtronic Inc. at a Glance
Location: Minneapolis
Established: 1949
Primary Focus: Manufactures products and services prescribed by doctors "to treat and improve quality of life" for persons with heart and/or circulatory system disorders.
Primary Market: $4 billion worldwide
Key Products and Services: Cardiac pacemaker systems, heart valves, implantable neurological pain management systems
Revenue: $1.3 billion in fiscal 1993
Net earnings: $197.2 million
Research and Development: $133 million in fiscal 1993
Fortune 500 ranking: 313
Employees: 8,900 (full time equivalent)

Marudas Business Forms Co. at a Glance
Location: Minneapolis
Established: 1983
Primary Markets: Medical, airlines, insurance, publishing, manufacturing, hospitals
Key Products and Services: Custom forms, stock computer paper, pressure sensitive labels, advertising specialties, customized forms management
Revenue: $8.7 million
Employees: 30
CFCs: 7