Magazine article Management Today

The Heart of the Quality Matter

Magazine article Management Today

The Heart of the Quality Matter

Article excerpt

Improvement programmes that are conceived solely in terms of products and processes may achieve good results, says Robert Heller, but the gains won't have full value unless they are means to a strategic end

Management nostrums, like any consumer offering, have a product life-cycle. Notoriously, they blossom into worldwide popularity: mysteriously, they start losing their bloom - usually because they're overshadowed by the next exuberant growth.

Has this already happened to Total Quality Management? Even its seeming successor, business process re-engineering, is said to be drooping: books are already discussing the future beyond BPR. Yet total quality is by no means dead - the British Quality Foundation is gearing up for its second awards, and one of last year's winners, Rover Group, is plainly reaping the rewards of its long drive.

The key word is `long.' You can win quick and great benefits from TQM. But establishing a lasting culture takes several years. That sounds off-putting, especially to managers whose personal product life-cycle may not last that long. But the duration is misleading - because the improvements gained along the road, viewed simply as stand-alone, one-year advances, can be enormous.

As a turnround tool, TQM has great power - as a revisit to SGS-Thomson recently demonstrated. Go back to 1987, and the company seemed to be flying on a wing and a prayer. Formed by a Franco-Italian merger (a patently volatile combination), it was losing $200 million a year, well-nigh a quarter of turnover, from a semiconductor business that seemed hopelessly outgunned by the non-European competition.

Even in Europe, the company was outranked (nearly two-to-one) by the National Fairchild combination. It's now Europe's biggest, after annual compound growth of 17%. Turnover in 1994 rose by 30% for the second year running as the business improved on every parameter, from front-end yield to customer satisfaction. Without question, the management led by Pasquale Pistorio has been crucial to this spirited performance - but all its members pay tribute to TQM.

The scale of the quality activity sounds almost intimidating: 51 active programmes per 1,000 employees; 541 completed, and twice as many active or new; 7,594 people participating in teams and spending 42,271 hours on the process; three suggestions per employee per year. The measured savings from continuous improvement have exceeded $100 million: but that's almost irrelevant compared to the overall strength of the turnaround.

It's plainly passed beyond turnaround to the creation of new and powerful organic advance. …

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