Six Sigma


Performance Improvement
H. James Harrington

It's Time to Change

There's no tomorrow if we don't change today.

Every time I'm interviewed by a reporter, I'm asked, "Where are the quality initiatives going?" The answer to this question must be closely aligned with how consumers' expectations are changing. Today, consumers want instantaneous gratification, the latest bells and whistles. They want the products and services they purchase customized to their requirements now. Windows 2000 is an ideal example. Consumers don't want it held back so that the programmers can get all of the bugs out of it. They want it now. Consumers expect a satisfactory level of quality but are willing to compromise on quality in order to obtain the latest technology and speed up delivery. E-mail is another good example. The quality of e-mail as a communication channel is low, but it gets the job done. It allows information to be transmitted in a matter of minutes, whereas it used to take days or even weeks. Customers want convenience more than anything else. Witness the popularity of organizations like Ebay.com, the online auction house, where consumers flock to hunt for the best prices.

 The old bricks-and-mortar businesses are giving way to electrons that fly through the air at the speed of light. Business-to-business, business-to-consumer, and business-to-employee commerce are taking the place of ordinary communication and distribution channels. This focus on delivery speed is making strange bedfellows of competitors, which are coming together to provide the consumer with the most advanced technologies faster.

 By 2010, almost 50 percent of U.S. taxpayers will be self-employed. Organizations will farm out any process at which they don't excel to organizations that do excel in the particular approach. Nike and Reebok no longer make shoes; the shoe manufacturing is contracted out to companies in Asia. Today, Nike and Reebok design and distribute shoes.

 The 21st century presents to the world a new business model that ISO 9000 is not prepared to address. For example, a software organization that has reached the Software Engineering Institute's compatibility maturity model Level 4 is in a much better position to provide quality software than is an organization that's certified to ISO 9001.

 Even today's information technology programs like e-commerce, SAP and MRP II are more effective at improving customer satisfaction than ISO 9000 or even total quality management programs. Business-to-employee commerce aligns employee's objectives with those of the organization better than quality circles do. Business-to-business commerce reduces cycle time more than just-in-time manufacturing does. The list goes on and on. E-commerce is fast becoming the preferred tool to capture customer satisfaction and loyalty and is projected to reduce operating cost by 13 percent by 2002. This trend is driven by enterprise relationship management applications that are directed at:

  Sales force automation

  Customer service and support

  Enterprise marketing automation


 It's time for quality professionals to refocus their attention from the more conventional, well-understood quality tools that drove the 20th century quality movement and embrace new 21st century drivers. It's time for our focus to shift away from statistical process control to e-commerce, from customer surveys to business-to-consumer commerce, and from certified suppliers to business-to-business commerce.

 The challenge of alliances, major dependency on subcontract workers and a continually expanding number of market channels all present new challenges and opportunities for the quality professional. The quality profession grew out of a manufacturing environment and still is based on traditional manufacturing operations, but manufacturing is actually only a small part of the U.S. gross national product.

 In the past, we have taken a manufacturing-based quality methodology and tried to adapt it to a service-based economy. As a result, we have brought along many of the no-value- and low-value-added paradigms. It isn't that approaches like statistics don't work in the service environment, rather, there are other approaches that have greater effects on improving the organization's performance. In many service organizations, implementing a modern project management software solution has more impact on quality and customer satisfaction than do SPC, supplier qualification, calibration recall systems and receiving inspection put together.

 It's time for us to set aside our current quality approaches and reengineer the quality methodology so that it places more value on knowledge than on manufactured products. This reengineering mission statement could read something like, "Design the optimum quality management system to support a service economy that exists in a virtual, paperless, e-commerce, service-oriented environment. All of the current quality methodologies should be challenged to ensure that they are the best-value approach for all of the organization's stakeholders."

 Would you like to work on this with me?

About the author

 H. James Harrington is a former principal at Ernst & Young, where he also served as its international quality advisor. He has written 12 books.

 Harrington is a past president and chairman of the board of both the American Society for Quality and the International Academy for Quality. E-mail him at jharrington@qualitydigest.com . Visit his Web site at www.hjharrington.com .

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