Performance Improvement
H. JAMES HARRINGTON

Although Singaporean organizations have been using cost of quality approaches for more than 20 years, in late 1997 I became aware of an increased push to advance and standardize the     quality cost systems used throughout Singapore.

This resulted from the Singaporean government setting aside $40 million to assist Singaporean organizations in establishing quality cost systems. "The $40 million invested will help 1,000 organizations here keep their operations lean," says Minister Lim Hoon Heng.

   The Local Enterprise Technical Assistance Scheme is paying up to 90 percent of the consulting costs for one year and 40 percent for the next four years. Now that's investing tax dollars where they really pay back the country and its people.

Spearheading the effort to implement standard quality cost systems throughout Singapore is the Singapore Productivity and Standards Board. This organization has prepared a series of books and videos dedicated to the subject of quality cost, which they refer to as the cost of nonconformance. In addition, PSB has developed a cadre of consultants that will help industry implement the quality cost concepts.

"Poor-Quality Cost pilot projects were started in 1998 to examine the quality cost in six industries--plastic products, printing, hotel, garments, electrical and packaging--and will chalk up savings estimated at more than $12 billion a year," reported Singapore's The Straits Times, Oct. 9, 1998.

In January, I was the keynote speaker at a sold-out conference held at the Shangri-La Hotel in Singapore. The conference theme was "The Economics of Quality in Singapore." PSB hoped for 350 attendees, yet before the conference date, the available space was completely sold out, even though the selected room's capacity was 500. I was informed that there were individuals scalping tickets, which is a big difference from what I observed at the last ASQ Annual Quality Congress, the Annual AQP Conference and the European Organization for Quality Conference. As I wandered around the PSB conference talking with individuals, everyone was excited about using quality cost as a tool to reduce output costs and to direct improvement activities. I wish we all had the same enthusiasm for using quality cost to direct our organizations' improvement processes.

How do things like this happen? They don't happen by themselves. They require a well-organized, concentrated effort on the part of many individuals and an organization that focuses these efforts so that the right people agree and sponsor the project. That's what the PSB did, and that's what some U.S. organizations should be doing.

Quality is one of the cornerstones that the U.S. economy is built upon; at the same time, the government invests very little effort in helping U.S. companies excel in quality. We wonder why Singapore is rated year after year as one of the best countries in the world to have a business in, why 91 percent of the people in Singapore own their own homes, why Singapore's unemployment rate is running 1.7 percent. Maybe it's because their government proactively focuses its efforts on helping business become more competitive.

In the United States, we have groups lobbying for agricultural subsidies, oil depletion allowances and everyone's right to own an automatic weapon. But no one is lobbying for tax dollars to be devoted to improving the quality of U.S. products. Our trade imbalance with Japan worsens year after year: 1996--$47.6 billion; 1997--$56.1 billion; 1998--$58.2 billion.

We invest heavily in providing peacekeeping aid for Bosnia, and that is important. But just think of the progress we could make in quality if we spent the equivalent of what we spend helping Bosnia on supporting U.S. quality improvement initiatives. For example, the government could give a 10-percent tax discount to the 10 percent of organizations that have the highest customer satisfaction level in their industry, or they could establish a free benchmarking database that every organization is required to input data into. They could fund a chair in quality for every college and university. The list goes on and on.

But what is our government doing? Very little. They closed down the Federal Quality Institute, and they have been talking about stopping federal support for the Malcolm Baldrige National Quality Award even though it is primarily funded by businesses. Vice President Gore was put in charge of reinventing the U.S. government nearly six years ago, but the ineffectiveness of Congress and the House of Representatives can be easily observed by watching the two organizations in session.

Maybe it's time that some organizations step up to fill the void and start actively lobbying for true quality reform in our government, with the objective of getting federal, state and local support for quality improvement initiatives.

About the author

H. James Harrington is a principal at Ernst & Young and serves as its international quality advisor. E-mail him at jharrington@qualitydigest.com .