American managers boning up on how to produce higher quality
You need a new pair of garden shears. Money's a bit tight, and the shears will have to last, so you weigh potential purchases more carefully than you would have several years ago.
One pair has a good balance in your hand and looks well constructed. Another has been dip-painted: Drops are dried onto the handle. Both are the same price. Which do you choose?
On a somewhat broader scale, these decisions, repeated endlessly in the marketplace by consumers and company purchasing agents, illustrate why American businesses are cleaning up their act: In an era of tighter competition, the better-made shears sell best.
Increasingly, quality is the key to the marketplace.
''Customers are more demanding now than two years ago,'' notes Fred Parks, vice-president for quality at J.P. Stevens, the textilemaker, in Greenville, S.C. Reduced inventory, a measure chosen by many companies to cut costs during the recent recession, makes the quality of the parts used in assembly more critical. American businesses are ''finding out that quality is the key to market share and profitability,'' says Philip Crosby, founder of a quality-improvement firm that bears his name in Winter Park, Fla.
The renewed interest in quality in America is ''not just limited to manufacturing''; government and schools, too, are being scrutinized, notes Bill Mohr, a manufacturing manager deeply involved in ''quality circles'' at the Hewlett-Packard Company and a teacher of quality improvement at the University of Santa Clara. A quality circle is a group of employees who meet regularly to analyze problems involving a particular aspect of the company's business and present possible solutions to management.
For business, improved quality can mean a better bottom line. Many companies, for example, are now listening to ideas advanced by employees, ideas previously brushed aside or ignored. Specialists note that managements have begun accepting some of the responsibility for quality, instead of throwing the blame on bored assembly-line workers.
Mr. Crosby, whose consulting firm also licenses to the Japanese Management Association, agrees that management has been a major cause of problems of poor quality, since the employees do what they think management wants.
''There are two kinds of companies,'' Crosby notes, ''the kind that think the social structure is going to have to change'' - less regulation by government, protection from foreign competition - to boost productivity, and the ''kind that are working on quality.''
To date 6,000 executive officers of large and small American companies have taken short quality-management courses with Crosby's firm to learn how to save costs associated with poor quality - a savings Crosby and others estimate at 10 to 30 percent of sales.
Results of quality-improvement programs range from dramatic to modest, but all seemed to think the money and effort well spent. Mostek, a Texas-based semiconductor manufacturer, claims to have saved more than $20 million in 18 months as a result of the Crosby course and an extensive quality program. Productivity tripled, and cost of manufacturing dropped by two-thirds in 18 months, says Robert Donnelly, quality director at Mostek.
Not all results of the quality-management programs are quantifiable. ''Our measurement of this program is in attitudinal changes,'' says Mr. Parks. ''People are (more) aware that they make a contribution, (that) their job is important.''
As employees enjoy a higher quality of work life and a sense of ownership stemming from participative management, absenteeism typically drops, says Debra Owens, director of technical programs at the American Society for Quality Control in Milwaukee. Employees, too, having seen friends or relatives laid off from unprofitable companies, embrace quality programs now as a way of ensuring job security.
Customers of companies adding quality programs can benefit, too. ''Our customers (can) carry less inventory,'' says Ron Dunson, a quality specialist who works with Mr. Donnelly at Mostek. More reliable parts mean less capital is tied up in inventory, allowing lower costs.
''The benefits achieved were passed on to our customers in terms of extended warranties,'' says John Davis of the Minneapolis-based Tennant Company, which makes industrial floor-maintenance products.
Improvement in quality can be immediate, but usually it takes up to five years ''to make it part of the woodwork,'' Mr. Crosby says. If the better garden shears - or semiconductors - are chosen time and again by customers, the reason for improving quality is clear: Quality can improve profits.