Quality Assurance

Specializing in making pro-featured power tools truly affordable, Ryobi Technologies Inc. - owned by Techtronic Industries Co. Ltd. of Hong Kong - has won supplier awards in multiple categories from The Home Depot in North America for six consecutive years. The company was also recognized in June 2006 by BusinessWeek as one of the top five emerging giants of the global manufacturing industry.

With its strong commitment to innovation and quality, Ryobi Technologies Inc. wanted to produce even better power tools and outdoor power equipment by enhancing collaboration between manufacturing and engineering departments.
But with headquarters in Hong Kong, manufacturing in China and engineers located in both China and the United States, Ryobi was challenged to identify trends and communicating quality issues overseas in a timely manner.

"Our best turn around time was four or five days to look at the same data," explains Tom Adams, data quality engineer at Ryobi Technologies Inc.

Equally important, the company also needed a more efficient way to track and report on returned products and warranty expenditures to drive product improvement.

"We didn't have an effective way to document the process," says Adams. "We were not able to quickly drill down and get the information that was necessary."

Once Ryobi was able to quantify in dollars how much money would be saved, management agreed to support the initiative of implementing new business intelligence (BI) and reporting systems.
 
Following a thorough selection process, Ryobi chose to implement Cognos 8 BI and Cognos ReportNet from Cognos, an IBM company.

With the help of a third party consultant, Ryobi quickly implemented its BI solution in October 2004 and had the system up and running by the end of the year. Since going live, Ryobi has standardized on Cognos for all of its reporting and business intelligence needs. The solution is integrated with Ryobi's multiple data sources, including Microsoft Access, mySAP and SAP BW. 
According to Adams, Ryobi "only took 10 days for implementation and had a working application that ran 10 reports."

Building Benefits
Post implementation, Ryobi has been able to increase visibility and collaboration across its engineering and quality departments, and drive product improvement. "Whether we're in China or the United States, we can now all see the same information, issues and causality. We can then come together with a common goal toward resolution of any problem," states Grady Hughes, director of quality assurance, North America Hardware Group, Ryobi.

By standardizing its reporting process, Ryobi has been able to improve report accuracy while saving time. "Ryobi is saving at least a week of one of our engineer's time every month," says Adams.

In addition, reports are also more professional and easier to read with information conveyed in graphs and charts. "Previously, reports were generated in several different formats, which were difficult to understand, and as a result, gain executive buy-in," explains Grady.

Using a drill down analysis, Ryobi can now also pinpoint issues with product quality and take subsequent steps to improve it. "We now get a report on the first 100 returned units of new products, which allows us to conduct instant analysis to determine where the defect lies, and we can apply that to our production," states David Young, quality engineer, Ryobi.
 
As a result of these process improvements, Ryobi's return rate for factory defects is less than 0.5 percent, which positively impacts the company's bottom line.

For example, after sales skyrocketed in 2005, Ryobi forecasted a 49 percent increase in warranty costs. The actual number came in 23 percent under projections, resulting in a savings of around 26 percent, based on returns analysis.

In 2006, it experienced another 17 percent reduction - a feat that Adams contributes to the new solution in addition to the hard work of Ryobi's marketing, engineering and quality department members of its Continuous Improvement Team.

Moving forward, Ryobi plans to expand the benefits achieved to other departments. What's more? Techtronic Industries Co. Ltd. is currently benchmarking Ryobi's approach to determine if the solution will work throughout some of its divisions and companies to drive product improvement and extend savings.