The Quality Process: Little Things Mean a Lot

By Townsend, Patrick L.; Gebhardt, Joan E. | Review of Business, Winter 1990 | Go to article overview

The Quality Process: Little Things Mean a Lot


Townsend, Patrick L., Gebhardt, Joan E., Review of Business


The Quality Process: Little Things Mean a Lot

Introduction

Incremental change as a way of improving the cost effectiveness and competitive position of businesses gained wide acceptance during the 1980s. Not surprisingly, the Japanese have a word for it: kaizen, and they have the world champion: Toyota. Each year, Toyota is the beneficiary of over 2,000,000 ideas for improvement from its employees. Their steady climb over the last decade to a near fantasy level of employee involvement is explained in part by the fact that 97 percent of the ideas are implemented, resulting in a rate of implemented-ideas-per-employee that is 6,500 times the average in the American automobile industry.

Toyota recognizes that only a handful of these 2,000,000 ideas have major impact by themselves, but believes that the cumulative effect of thousands upon thousands of small improvements ensures a company's future. Many leading American companies concur in this belief and promote evolutionary change through quality processes, the orderly accumulation of thousands of separate ideas for improvement, given continuity and cohesiveness by a single focus - quality.

A National Quality Award

On a national level, the Malcolm Baldrige National Quality Award was designed to encourage an awareness of quality and to publicize successful quality strategies. Managed by the National Institute of Standards and Technology (formerly the National Bureau of Standards) of the United States Department of Commerce, the award criteria serve as quality improvement guidelines by identifying quality issues: leadership, information and analysis, strategic quality planning, human resource utilization, quality assurance of products and services, quality results, and, above all, customer satisfaction. The program is administered by the Malcolm Baldrige National Quality Award Consortium, Inc., a joint effort of the American Society for Quality Control and the American Productivity and Quality Center.

The Malcolm Baldrige National Quality Award does not take into account macroeconomic and competitive issues that quality fails to address, e.g., trade barriers, "dumping" of foreign products, and fiscal policy. These issues are external to a company. The award affirms that it is possible to improve the competitive position of a product or service by addressing internal issues - even in the absence of a change in public policy.

There have been five winners of the Malcolm Baldrige National Quality Award since its inception in 1988. Xerox Corporation, a 1989 winner, beat off determined domestic and foreign competitors using the principles of continuous quality improvement. The result has been to reverse a loss in world market share. In the past six years, their Leadership Through Quality Program, the process by which Xerox is managed, has enabled Xerox to "... reduce manufacturing costs, increase product quality, trim the time required to bring new products to market, and build customer satisfaction," according to the November/December Association for Quality and Participation report [6]. Thousands of employee involvement teams from every level of the company have contributed.

The Negative Effects

While the idea that little things have an enormous positive effect has gained wide acceptance, businesses have been slower to grapple with the reality that little things can also have an immensely negative impact on a company's performance. There have been fundamental misapplications of the principles of continuous quality improvement with deleterious results, all of the avoidable. Examining what can go wrong is instructive.

A common misstep is to rely on packaged solutions. High pressure, short term programs that a company can purchase normally fail to establish the kind of management commitment needed for the long term. Most of these programs fall into two categories: smaller ones bought as a package for a set price (comes complete with forms, coffee cups, and T-shirts) and larger ones priced as a percentage of first year savings (as determined and projected at the end of the month-long program, not at the end of a year of actual implementation). …

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