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News Digest

This Month in News Digest

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ACSI Predicts Economic Growth Based on Consumer Satisfaction

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Caterpillar and StatSoft Team Up

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ASQ Releases New Membership Model

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Commerce Department Attempts to Reduce Standards-Related Red Tape

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Research Proves that Quality Cuts Costs

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Accreditation Groups Sign Memorandum of Understanding

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LED Technology Proves Useful in Color Calibration

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ISO Sets New Worker-Friendly Workplace Standard

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 1995.

“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.”

Caterpillar 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 year.

Caterpillar’s analytic processes are used to effectively simulate, predict and optimize the outcome of complex manufacturing processes.

The software solutions are expected to allow organizations to:

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 at StatSoft.

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 years.

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 sponsorships.

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.

Commerce Department Attempts to Reduce Standards-Related Red Tape

Although often overlooked, international standards can become obstacles to international trade.

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 technical regulations

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, www.standards.gov, www.regulations.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 standards-related issues.

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 sought.

Download a summary and excerpt of the study at www.best-in-class.com.

Accreditation Groups Sign Memorandum of Understanding

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 appropriate party
  • 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 accreditation community.

To download the MOU, visit www.iso.org.

LED 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 Standard

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.