CASE

Progressive Engine Division

It was 4 pm on a Thursday afternoon in November 2021, Seema Khan, Supply Chain Director for castings at Progressive Engine Corporation (Progressive) of Woodstock, Ontario, had just finished a telephone conversation with an upset supplier. It was the fifth call that Khan had received in response to a letter Progressive had sent out to the magnesium castings suppliers concerning a severe corrosion problem. All five (5) suppliers had told Khan that they could not adhere to the request without a significant increase in their costs. The Progressive Engine Division Progressive was a division of Progressive Products Corporation, a three-billion-dollar company that enjoyed a worldwide reputation for quality and innovation leadership in several product areas, including aviation, aerospace, and industrial. The company had been in operation for 40 years; the Progressive Engine division had built more than 50,000 gasoline engines for a wide variety of commercial, industrial, and military applications. Currently, the majority of Progressives sales were in the commercial and general aviation markets but the company had created a strategy to balance the revenues between the commercial, general aviation and military sales. The Corrosion Task Force In the summer of 2021, Progressive began receiving complaints from its customers concerning corrosion on gearboxes on the engines. The problem was significant and serious enough to warrant the attention of the Senior Vice President of Progressive, Ian Jamies. In order to resolve this problem and find a permanent solution, Jamies created a Corrosion Task Force, which immediately solicited input from Supply Quality Assurance Manufacturing Engineering Production Control Materials Magnesium Corrosion Task Circle (reliability Circle) o This task force was established in 2017 to deal with the general problem of magnesium corrosion as part of Progressives Reliability Circles Program. The task force met as required. The input solicited from this group was to suggest solutions to the corrosion problem, and make recommendations for implementing suggested changes to programs to eliminate or resolve the corrosion issue. The Task Force was under extreme pressure and Senior Vice President Jamies to take immediate steps to resolve the corrosion problem on Progressives products.

Corrosion Free Magnesium Castings The investigation by the Task Force determined that a large part of the corrosion problem was centred on the Tiger 550 engine and its magnesium castings. It also discovered that a significant proportion of the castings used in this engine were already corroded on receipt from Progressives suppliers. Rather than rejecting the corroded castings, Quality Assurance was processing them through for rework. The basis for this action was the need for parts to meet production schedules. It was believed that the delay that would be encountered by rejecting unacceptable castings would be more costly than the cost of reworking them internally by Quality Assurance. The Task Force decided this process of reworking by Quality Assurance was no longer acceptable, nor desirable and directed the Supply Chain Department to take immediate steps to ensure that Progressive received corrosion-free magnesium castings from its suppliers. As a first step in this direction, the supply department was further instructed to notify its castings suppliers of a previously issued Specification M4181 would require strict adherence and the cleaning and corrosion prevention procedure prescribed in the specification from Progressive would now be mandatory and was to be strictly adhered to.Failure to meet the specifications outlines would result in rejection of all unacceptable castings. Alternatively, in cases as determined by Progressive to reprocess unacceptable castings in lieu of rejection, the supplier would be debited for the cost of the reprocessing work involved. The responsibility of notifying the casting suppliers of this decision fell on Khan. Given the urgency of the situation and the political sensitivity of the issue, Khan thought it best to send a letter to the current magnesium castings suppliers immediately. Contents of the letter to suppliers is provided as Exhibit 1. Notification Corrosion Issue An intensive corrosion prevention program for magnesium castings has recently been undertaken by Progressive Engine Division of Progressive Products Corp. An integral part of this program is the assurance that castings are corrosion free upon receipt of shipment from all suppliers. This will require strict adherence to our previous Specification M4181; additionally, the following is required: Clean and Corrosion Prevention Procedures (Specification M4181): After penetrative inspection, follow heat treating, castings will be alkaline cleaned and hydrofluoric acid pickled After hydrofluoric acid pickle, castings to chrome pickle treatment, rinse and bake to try at 300 degrees Fahrenheit (tolerance of plus/minus 25 degrees Fahrenheit) Dip castings in Rust Oil 8220 B and package for shipment Package castings to ensure they do not come in contact with each other to eliminate rubbing away of protection The responsibility to deliver corrosion-free magnesium castings per the cast drawing, engineering blueprint or MOT is placed with you, the supplier. Failure to meet the requirements of the specification necessitates an immediate rework at Progressive Engine Division to stop the corrosion process that may ultimately scrap parts. The costs incurred by Progressive Engine Division for rework will be passed on to the supplier in the form of debit initiated by a Progressive Engine Inspection Report. The Inspection Report may also negatively affect your organizations supplier quality rating. Your support in this effort is imperative. Please forward the procedure for Specification M4181 to the appropriate personnel in your organization. Failure to communicate changes will not be accepted by Progressive Engine Division as reasoning for why adherence is not met. Questions regarding processing should be directed to Nestor Andres, Quality Assurance Engineer. Thank you, Seema Khan

kindly answer the following for the case study

1. Executive Summary

2. Issue Identification

3. Other Issues

4. Assumptions - identified and explained

5. Environmental Analysis - Internal and External

6. Recommendations

7. Final Recommendation

8. Implementation Timeline with Monitor & Control

9. Conclusion