Quality Management
A. BLANTON GODFREY

Those of us working in quality management are always fascinated with new developments.  One of the most interesting aspects of my job is keeping up with everything happening in quality. Most of us forget how few organizations need to know the latest and best; many organizations still struggle with the basics.

In the past few months, this point has been made clear to me five times. During a breakfast meeting, the president of a consumer products company looked at me and said, "You know what our No. 1 problem is? Delivering on time. Last year, we lost several major customers just because of late deliveries."

     In a meeting with an electronics company's top executives, the senior vice president for technology said his company's problem was process yields. He wanted to focus on improving first-pass yields. The president wanted to go further. He noticed too many problems in billing, purchasing, packaging and design to just focus on one area.

The president and CEO of another company saw things just as clearly. "What we need to do is find out exactly what our customers want and then deliver it," he told me. "We are losing too much business by not meeting our customers' expectations."

The quality management team of a leading medical products company stated that, in many locations, 100-percent inspection is the rule, not the exception. And in some locations, the rework levels are as high as 30 to 40 percent. They know the great cost savings these plants can achieve just by getting their key processes in control.

The president and CEO of a leading automotive products company, a heavy machinery manufacturer, was even more blunt: "What we need is an old-fashioned quality system that works."

In this day and age of parts-per-million quality goals, advanced tools and methods, automated inspection systems and hundreds of thousands of ISO 9000 certificates, how can so many companies struggle with the basics? There are several reasons that stand out.

First, many companies have been enjoying prosperity, selling all their products and expanding into new markets. So their priorities were new-product development, expansion, marketing and distribution. As long as margins were good, they had no reason to calculate the cost of poor quality or look for ways to improve operating efficiencies. With constantly growing markets, lost customers weren't a serious problem.

A related reason is that some organizations have never implemented a good quality system. Perhaps they didn't have a leadership team that could focus on what was needed, or they didn't have the knowledge to see what was missing. Perhaps their quality staff was weak and gave poor or limited advice. They may have received poor advice from outside consultants. They did what they knew to do, but it is far from what they actually need. Many of these organizations are now experiencing rapid change.

One of the best driving forces for change in U.S. companies is senior managers' movement. Many times, a new executive will come into an organization and immediately compare the new company's performance levels with the previous one's. The gaps are often quite clear, and the executive can create an action plan for quick results. Sometimes a manager is moved from one place inside the company to another. Again, the manager compares the new organization's performance with the old one's and sets out to achieve similar results. For consulting organizations, these companies make great clients. The senior leaders know exactly what they want and have a good idea of how to achieve it.

A problem that still exists in many organizations is that quality management has only been applied functionally. The manufacturing plants may be close to world-class, but they spend endless hours correcting design errors and implementing numerous engineering changes. Completed products are defect-free, but damages in shipment, late deliveries and incorrect installations create customer dissatisfaction. For many companies, the handoffs from design to manufacturing are still among their biggest challenges. For many other companies, the biggest challenge is matching what the salespeople promise the customers with what the company can actually deliver.

The last reason there is still so much to be done in the basics is that many companies still have a limited view of quality--little q rather than big Q. Quality is still thought to be limited to the company's goods and services. As long as they deliver what the customer wants, they feel they have a good system. They don't realize that inefficiencies in order entry, purchasing, human resources, inventory management, marketing and sales, distribution, capacity utilization, capital management and new-product development may leave them less competitive.

In many cases, the quality improvement opportunities in these  areas dwarf those in production or operations, but the organization focuses so much on the quality of goods and services that they forget to manage how much it costs to provide these goods and services.

Those of us working in quality should feel good. We won't run out of things to do for a long time--even if those things are just the quality basics.

About the author

A. Blanton Godfrey is chairman and CEO of Juran Institute Inc.

© 1999 Juran Institute. E-mail him at agodfrey@qualitydigest.com .