ACSI Predicts Economic Growth
Based on Consumer Satisfaction
The American Customer Satisfaction
Index is projecting continued growth in consumer spending
based on results from the first quarter of 2004.
The ACSI increased to 74.4 on the index’s 100-point
scale in the first quarter of 2004, compared to 74 during
the fourth quarter of 2003, according to a recent report.
The ACSI projects growth in household spending based on
improved customer satisfaction, which historically fuels
further consumption. Much of the increase rests on the strength
of the services sector, although the report reveals that
wireless communications providers and the telecommunications
industry are relatively weak.
“This is a healthy increase in Americans’
satisfaction with their buying experiences and is the continuation
of a two-quarter upward movement,” says Claes Fornell,
who heads the index at the University of Michigan. “Positive
consumption experiences contribute to increased consumer
demand and stimulate household spending. Based on the economy’s
customer satisfaction performance in the first quarter,
we can expect a fairly strong increase in household spending.
Since consumer spending accounts for two-thirds of the Gross
Domestic Product, it is vital to economic growth.”
The ACSI has proved to have a stronger relationship with
subsequent quarterly consumer spending growth than household
income, debt, interest rates or consumer confidence. The
index bases its projections on 10 years of data demonstrating
a link between customers’ buying habits and their
propensity for future spending. For the first quarter of
2004, the ACSI forecast spending growth of 4.2 percent.
The revised figure from the Bureau of Economic Analysis
shows actual growth in the first quarter at 3.9 percent.
ACSI forecasts that second quarter consumer spending growth
will range between 3.9 percent and 4.4 percent, depending
on changes in the price of gasoline.
The service sector accounted for much of the overall increase
in the ACSI, offsetting a decline in the transportation/communications/utilities
sector. The report gave good marks to Hilton Hotels and
FedEx but confirmed that cable and satellite TV are doing
little to improve service. It also offered a wake-up call
for the major wireless service providers.
The index for cable and satellite TV remained unchanged
at 61, following a three-point drop in 2002. However, DIRECTV
and Echostar are well ahead of the industry’s performance,
with scores of 71. Comcast and Charter each increased one
index point to 56 but have dropped substantially since 2001,
when they scored 64 and 63, respectively.
Because of the growing importance of cellular telephone
service, the ACSI now measures both cell phone manufacturers
and wireless service providers. The wireless service industry
earned a 65 on the ACSI’s 100-point scale, nearly
10 points below the national average of all industries measured
and well behind traditional fixed-line phone service. Manufacturers
of cell phone equipment did slightly better at 69. The picture
revealed is one of weakness relative to most other types
of companies serving Americans.
“Wireless is an industry to watch,” says Jack
West, past president of the American Society for Quality.
“Now that we’re seeing how wireless stacks up
against other industries, it is disturbing that one of America’s
supposedly cutting-edge industries isn’t doing better.”
More traditional industries, such as newspapers and movie
studios--both of which have struggled in the index in recent
years--rose in the most recent poll. The newspaper industry
surged four points to 68, and the movie industry increased
two points to 73--still well short of its high of 77 in
“It’s interesting that we see a burst of strength
in some ‘old’ industries, such as newspapers
and movies, at the same time that we find out newer services
such as cell phones fall well short of customer expectations,”
says West. “Part of customers’ satisfaction
with wireless is simple network reliability, which is a
baseline requirement for companies in the business. With
all its convenience, wireless should be able to outperform
fixed-line phone service.”
and StatSoft Team Up
Caterpillar Inc. and StatSoft Inc. are collaborating to
develop and market software solutions for the modeling,
optimization and simulation of complex manufacturing processes.
The software will be based on the integration of Caterpillar’s
analytic processes with StatSoft’s STATISTICA enterprise
analytics software. StatSoft will market and support the
software package beginning late this year or early next
Caterpillar’s analytic processes are used to effectively
simulate, predict and optimize the outcome of complex manufacturing
The software solutions are expected to allow organizations
Simultaneously monitor large numbers of process parameters
Reduce time and expense by predicting likely failures before
they actually occur in final product testing
Perform effective root-cause analysis for determining causes
of quality or performance problems
Enable “what-if” analyses and optimization
“Caterpillar is recognized worldwide for designing
and manufacturing machines and engines,” says Mark
Pflederer, chief technology officer and vice president of
Caterpillar’s technical services division. “What
isn’t widely known is the tremendous amount of technology
coming from our research and development team that makes
those industry-leading products a reality. The alliance
with StatSoft is an example of adding value to Caterpillar’s
research accomplishments by commercializing selected technologies
for potential use in other industries.”
“This partnership will combine and leverage the
know-how of Caterpillar for creating and implementing efficient
and high- quality solutions for manufacturing and logistics
with StatSoft’s cutting-edge, open-architecture STATISTICA
enterprise software technologies and predictive analytics,”
says Thomas Hill, vice president of product development
ASQ Releases New Membership Model
In an effort to boost its membership
base, the American Society for Quality is rolling out a
new membership drive aimed at both the professional quality
community and the general public.
ASQ has seen its numbers decline in recent years, but
the new membership model is designed to show professionals
the value of joining ASQ. The living community model has
several tiers of membership, all designed to be flexible,
educational and provide networking services. The new model
is part of ASQ’s overall push to raise awareness about
the quality industry.
The new membership model was initiated at the request
of ASQ’s board of directors and is designed to provide
choice, flexibility, and open the doors of membership to
anyone interested in the practice and/or profession of quality.
Plans call for the model to be implemented in three phases,
beginning with phase one this year and continuing over three
The new membership categories for phase one are forum/division
and associated. Also offered are an enhanced regular membership,
which is based on ASQ’s current regular membership
type, and a student category. ASQ’s new regular membership
category includes fellow and senior grades. Phase one focuses
primarily on individual categories. Phase two will add more
benefits to these categories and will offer various options
for group, organization and corporation memberships and
The forum/division membership is intended to appeal to
individuals who have an interest in quality focused within
a specific industry or topic. Forum/division membership
provides benefit access primarily through an online environment,
although face-to-face and networking opportunities will
be available to further engage the member.
Benefits are based on research with current and prospective
members’ requests, as well as benchmarking against
other professional association offerings.
ASQ’s approach with sections as a local, geographic
presence for member participation is continued in the model,
given that sections are included in the regular and student
member categories. With an infusion of new members, local
section membership and activity can be embellished in the
new model. All membership levels offer the option to select
additional sections for $20 each. One forum/division of
the member’s choice is included in the new regular
membership. Forum/division memberships can be added to any
membership category for $10 each.
For more information, visit www.asq.org.
Department Attempts to Reduce Standards-Related Red Tape
Although often overlooked,
international standards can become obstacles to international
In an effort to combat the challenge, Commerce Secretary
Donald L. Evans has released a report offering suggestions
to reduce standards-related trade barriers and calling for
broader collaboration across government and with U.S. industry
to prevent technical obstacles that impede U.S. exports.
“Standards and related technical regulations affect
an estimated 80 percent of world trade,” says Evans.
“The recommendations in this report can improve how
we tackle standards-related issues that distort trade and
undermine our competitiveness.”
“In the face of intensifying global competition,
neither industry nor government can be complacent about
standards-related issues,” reiterates Under Secretary
for Technology, Phil Bond. “The Secretary’s
Standards Initiative emphasizes best practices, provides
critical education and training, expands our early warning
tools and creates greater collaboration between industry
and government. Collectively, these actions will go a long
way toward an effective rapid response system when standards
become trade barriers.”
The report, “Standards and Competitiveness--Coordinating
for Results,” contains more than 50 recommendations
and summarizes key industry standards issues in international
markets. These recommendations include:
Promoting World Standards Week
Creating a National Standards Award to recognize private-sector
organizations that have worked to address market access
problems related to standards, conformity assessment and
Developing a database of key organizations, contacts and
experts in standards, conformity assessment and related
issues, both in the United States and abroad
Formalizing training on standards development, conformity
assessment, relative trade agreements and interagency processes
to Department of Commerce staff
Collaborating with the American National Standards Institute
on the revision of its national standards strategy
Assembling existing standards-related resources on a single,
dedicated Web site with links to key resources such as www.export.gov,
and private-sector sites.
Much of the information contained in the report was gathered
from more than 200 industry associations and standards organizations
in 13 industry roundtables convened during the past year.
The report seeks to improve the efficiency and effectiveness
of the department’s standards-related programs and
policies. Its recommendations are intended to help the department
identify new opportunities and better ways to work with
the private sector and other U.S. government agencies on
In March 2003, Evans launched the Department of Commerce
Standards Initiative, an eight-point plan that responds
to industry concerns that divergent standards, redundant
testing and compliance procedures, and regulatory red tape
may become the greatest challenges to expanding exports.
The full report can be accessed at www.technology.gov.
Research Proves that Quality Cuts Costs
Most businesses save up to
10 percent of their annual revenues through quality initiatives,
according to a new study performed by research and consulting
firm Best Practices LLC.
“Lean, Six Sigma & TQM Project Success: Recent
Case Studies and Benchmarks,” offers outlines of companies’
recent improvement projects, complete with actual results
and descriptions of the lessons learned. For example, one
bank deployed a three-point plan designed to focus its efforts,
boost quality and generate results. The plan improved customer
satisfaction by 20 percent and added 2.3 million households
to its customer base.
In addition, a global pharmaceutical company was operating
at 50 percent of the manufacturer’s stated capacity
due to underperformance, unplanned downtime and rejects.
After applying variability reduction to its system over
a one-year period, the number of units manufactured each
day more than doubled.
The report also includes defect and cost reduction techniques,
typical scope and average duration of improvement projects,
the average annual dollar value contribution expected for
the productivity approach, average annual targeted savings
and revenue goals for productivity efforts.
“This research provides an invaluable perspective
on the current landscape of quality efforts,” says
Chris James, vice president of Best Practices. “Leading
global companies reveal their accrued experiences, metrics
and lessons learned.”
The survey is based on results from 84 companies and 15
case studies. The findings act as a primer to help companies
choose the best productivity approach based on the results
Download a summary and excerpt of the study at www.best-in-class.com.
Accreditation Groups Sign Memorandum of
The International Accreditation
Forum, the International Laboratory Accreditation Cooperation
and the International Organization for Standardization have
signed a Memorandum of Understanding to cooperate and mutually
assist one another on conformity assessment issues.
The MOU will consolidate practices that are largely implemented
by the three organizations and will enable ISO to better
manage and monitor the relationships of its various components
with the international accreditation community. It provides
an ongoing mechanism for technical cooperation between ISO
and international accreditors in order to contribute to
the development and subsequent implementation of ISO and
IEC standards and guides.
The MOU will be implemented through five main mechanisms:
Involvement of representatives in each other’s technical
work. As such, the normal liaison and observer rules and
procedures for input shall apply.
To achieve the identification, preliminary analysis, coordination
and division of responsibilities for dealing with issues,
the parties agree to join together and maintain a joint
working group that will act as a central clearinghouse.
The preparation, implementation and maintenance of mutually
agreed projects that:
- Establish and implement procedures to share, transfer
and enable the reso- lution of complaints by the most
- Recommend improvements in relevant international standards
and guides, implementation guidance and practice
- Investigate and provide feedback to the parties and
other relevant organizations
Attendance of ISO representatives at the IAF and ILAC general
assemblies and related technical meetings, and attendance
of IAF and ILAC representatives at the ISO/CASCO and other
plenary meetings, free from attendance fees
Adoption and annual review of a continuous three-year work
program of mutually agreed actions by the parties
The ISO Committee on Conformity Assessment will be the
primary body within ISO for the interface with the international
To download the MOU, visit www.iso.org.
Technology Proves Useful in Color Calibration
In the world of color measurement
calibration, technicians have typically run into problems
finding a specific wavelength for blue light. Because traditional
light sources such as incandescent lamps are thermal, a
blue thermal source would need to function at such a high
temperature that many components would melt.
To alleviate this predicament, the National Institute
of Standards and Technology has developed a “rainbow
source” that can be tuned across the entire visible
light spectrum, from red to blue light.
A lack of blue light sources introduces uncertainty when
calibrating instruments that measure the color of things
like bright stars or the open ocean. Knowing exact colors
is important because, for example, it allows scientists
to use remote satellites to judge the concentration of plant
life in the ocean--which, in turn, affects global climate.
The rainbow source utilizes advances in light-emitting
diodes of different colors. By mixing exact percentages
of LEDs at different wavelengths of visible light with the
desired brightness, the optical properties of the source
(such as the color) can be changed and tailored for a particular
application. The sources use commercial LEDs.
NIST researchers characterized these LEDs and developed
the packaging, electronics and software. In addition, the
tunable light source is portable--comprising a sphere of
30 cm in diameter that weighs about 5 lb. Battery-operated
versions have been developed for field applications.
The National Oceanic and Atmospheric Administration has
ordered a simplified version to reduce uncertainties in
calibrations of a satellite that measures ocean color, as
part of a program that monitors the carbon balance between
the ocean and atmosphere.
More details were presented at recent InterSociety Color
Council and Council for Optical Radiation Measurements meetings.
For more information, visit www.nist.gov.
ISO Sets New Worker-Friendly Workplace
A new International Organization
for Standardization standard on the design of work systems
is expected to benefit both workers and businesses by improving
health, safety and productivity as well as reducing cost.
ISO 6385:2004, Ergonomic Principles in the Design of Work
Systems, offers a route to improving the interface between
users and the components of their workstations--such as
tasks, equipment, workspace and environment--from the beginning
of the design process.
A work system, whether directly or indirectly, may contribute
to a host of mental and physical health problems, resulting
in increased absenteeism, poor timekeeping and high staff
turnover, all of which affect the productivity and efficiency
of organizations. To avoid these problems, it’s necessary
to fit workstations to specific users.
“ISO 6385 is relevant for all sectors, not only
heavy industry but in growing service industries and the
health sector,” says Wietske Eveleens, manager of
the working group that developed the new standard.
The new standard is intended for use by managers, ergonomists,
human resource project managers and designers involved in
the design of workstations.
ISO 6385:2004, which replaces ISO 6385:1981, has been
updated to include a description of the design process,
definitions of ergonomics and design principles. It also
includes an overview of the components involved in the design
of a work system and provides a framework for the design
of new or existing work systems, with a view toward facilitating
the work behavior and well-being of users from office staff
to assembly line workers.