US Managers Focus On Boosting Quality
But changing corporate culture has been difficult
BOSTON — `TOTAL quality," the management technique that brought so much success to Japanese companies and acquired momentum over the 1980s in American business, is at a new juncture.
The pioneers of the quality revolution are passing the baton to a second wave of United States companies. What's not clear, however, is how broadly the business philosophy will take hold.
Several recent studies have knocked its efficacy as a management tool, suggesting that a third of businesses fail to make it work. But the blame, proponents contend, is due in large part to the quick-fix mentality of managers who ignore the need for major, long-term organizational change.
For the successful pioneers of quality management - an approach that emphasizes teamwork and constant improvement in operations - the results can be dramatic. Xerox, one of its earliest and best practitioners, had a shrinking market share in 1984 - down 35 percent and slipping - when it adopted TQM. It is now the world's leading manufacturer of copiers and even sells to Japan. Motorola has cut $700 million from its manufacturing costs in five years through total quality techniques.
Yusang Chang, a professor at Boston University, sees all players, big and small, being pulled along as some of the best-managed companies such as Proctor & Gamble, Zytec, and Milliken, demand higher quality standards of their suppliers.
"It's like a professional playing with a kid," says Professor Chang. "If the kid doesn't rapidly grow up to become another professional," he will be out of business.
Traditionally, defects were measured as parts per hundred or thousand. Now companies like Motorola are looking at mistakes per billion. To achieve those goals, suppliers have to meet the same standards.
CHANG cites Xerox and Ford, which have cut their number of suppliers by a factor of 10. Those who didn't come up to scratch were dropped, while the remaining suppliers have more business than before.
Some companies are finding TQM a hard nut to crack.
"It not only requires management's commitment but also its patience, and we don't tend to be a patient society," said Jerome Finnigan, an author of "The Race Without a Finish Line," a new tome about America's quest for total quality.
"In our fiscal policies and our investment policies, [we] are inclined to want to have breakthroughs all of the time, leapfrogs, great gains, big returns," says Mr. Finnigan, one of the designers of Xerox's transformation. TQM means continuous, incremental improvement.Even for companies that wholeheartedly adopt TQM, success is not assured. The Wallace Company, a Houston-based piping distributor, won the Malcolm Baldridge National Quality Award in 1990 - the country's highest prize for quality achievemen t. In 1991, it filed for Chapter 11. Finnigan says the management got so caught up in the Baldridge prize and its aftermath that they failed to see the firm's growing problems.
Wallace vice president Paul Birdsong contends that quality management actually saved the company from going completely under and blames its recent checkered history on the economic downturn and a loss of financing.
Florida Power and Light (FP&L) may also have lost sight of its customers in the pursuit of quality. In the late 1980s, the utility company set up an extensive program, with a 75-member quality department and 1,900 quality teams. It won Japan's Deming prize for quality in 1989. But customers noted only marginally improved service. The company has since scaled back, reducing its quality department to six and disbanding most of the teams. Michael Adams, corporate manager for quality at FP&L, says the cutbac k simply reflected the change from a developmental to a working stage. Winning Deming was just the beginning, he says.
Many firms have been honing their operations to meet the Baldridge criteria and win the award, Finnigan says, instead of "realizing that the award was created as an opportunity to evaluate yourself."
If TQM is just a slogan, it distracts people from their jobs and can end up hampering performance, Chang says.
In the end, success comes down to the need for an organization to have a compelling vision of what quality means.
"If you don't have a philosophy, even if you have the systems and processes, you don't have a hill of beans," says Jim Pitts of Digital Equipment Corporation.