Business Management Articles
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NON-STOP IMPROVEMENT: QUALITY REDEFINED
Rene T. Domingo
If we are to use "quality" as the
battle cry of the revolution, then it must
be redefined so that it becomes a powerful
guide to action for everybody - from the chairman
of the board to the receptionist.
First, let's rid ourselves of some common
paradigms about quality. A paradigm is a mindset,
a fixed state of mind, that screens information
and ideas that reach our minds by accepting
those that conform with it and rejecting those
which don't. Paradigms, right or wrong, are
powerful in that they dictate, often subconsciously,
how we look at things and communicate with
others. Paradigms are not permanent, they
are replaceable - but only if you know that
you have them.
There are three erroneous paradigms on quality
Quality is conformance to specifications;
Quality is satisfying the customer; and,
Quality is what the inspector checks.
The first one is seriously limited in that
it is understood only be people in production
who deal directly with the product and try
to meet product specifications. It does not
appeal to the vast majority of employees and
managers whose main output or work is providing
service, information, reports and decisions.
The second mindset is also defective in that,
save for the salespeople, not everybody deals
directly with the paying or external customer,
unless we redefine "customer" to
include "internal" customers, or
users of one's output inside the company -
other employees, managers or departments.
The third paradigm is obviously self-defeating,
since it puts the quality burden on the policeman
at the end of the production line. It violates
the premise that quality is everybody's responsibility.
It also misleads employees into thinking that
quality is a mere checking or controlling
activity which is none of their business.
All three paradigms suffer from the underlying
assumption that quality is static - that once
quality is attained, it will stay forever,
and there is nothing else to do. Once specifications
are met, once customers are satisfied, once
the product passes inspection, then there
is nothing else to worry about. We can freeze
the status quo and simply repeat the ritual.
These common quality paradigms deter any further
improvement and innovation. The point is not
to satisfy customers, but to keep them satisfied
better than before, and better than others.
Quality means continuously delighting the
customer. The goal is not to be No. 1, but
to stay No.1, a far No. 1 from the No. 2.
We now shift paradigms. Quality is redefined
and reduced to a simple two-step process for
Doing the right things tight the first time;
Doing it better and better.
the First Time
Everybody has a job to do, and by doing that
job right the first time, every time, then
the company reaches the halfway point in the
quality journey. Doing it right the first
time requires tremendous self-discipline:
you do not give yourself a second chance to
redo whatever you intend to do.
What are the costs and consequences if everybody
does their job or task wrong the first time
in typical non-quality companies? If you have
500 employees making mistakes everyday, you
need at least another 500- the same people
or another batch- to correct and redo these
errors, if they are correctable at all. There
will be a lot of repair, rework, recycling,
rechecking, retyping and redoing of operations
that will compromise the ultimate product
quality, fray customer relations and waste
management's time in endless meetings and
The sad part is that the havoc is well hidden
from view and analysis, since the errors are
corrected the second time around, and have
bloated operating costs - materials, labor
and overhead - without leaving a trace. If
it was a manager who made the mistake , by
making the wrong decision, the adverse consequences
to the company are multiplied several times
since its effects may extend several years
into the future. If everybody will do their
jobs right the first time every time, then
they will contribute a large part in achieving
the quality revolution.
it right the first time" implies perfection
and the belief that an objective can be achieved.
There are two common paradigms or attitudes
that may block this quest for excellence in
Err is Human"
While this them may have good literary value,
it has no place in modern business. To err
is human, but to forgive is what customers
won't do. Whenever we, as customers, pay for
any product or service, we naturally expect
it to be 11% defect-free or 100% error-free
-not 90%, not 99%, but 100%. Customers demand
perfection, and accordingly the "inhumanness"
of sellers and producers to provide this.
But no customer would accept "humanness"
as an excuse for bad quality, or anything
less than perfect. Zero defect may demand
superhuman feats, but not inhuman efforts.
The idea of flawlessness is not something
new or unnatural. Perfection was the obsession
and expectation of skilled craftsmen, Renaissance
painters and space missions. It is just a
matter of adapting this objective in high-volume
manufacturing and service operations and making
zero defect the duty and desire of all employees.
do in fact practice perfectionism in our personal
lives especially when our personal assets
are involved. Every time we encash our personal
checks, receive our salaries or payments in
cash, or get our change, the teller or cashier
counts the money at least twice before our
very eyes, and yet we recount it after it's
handed to us. If only we can have this same
meticulousness when it comes to handling assets
of the company- showing concern as if they
were our very own .
We also bring to the company a bad habit we
acquired in school that runs counter to job
excellence: " To pass is the goal ".
For the vast majority of employees and managers,
getting a passing mark or 75% or C in school
might have been the target, the obsession.
Getting an above-average mark, say an 85%,
was optional and not worth aiming for unless
you wanted to cover up failures in other subjects.
Getting a 99% or 100%, the perfect mark, was
a dream, a matter of luck, and reserved only
for the deviants and insomniacs in class.
Anyway, we reasoned, with 75%, you get the
same diploma during graduation as the one
who got a 100% grade. The problem starts when
this attitude shows up after school - in our
jobs, in which the passing mark may be close
No company can survive and continue in business
with a 75% quality level or 25% defect rate.
In many industries, an 85%-90% level would
just make you break even. In the semiconductor
business, where quality is measured in defects
per million parts, 99% is a failure and the
passing mark is 99.99%- and this hurdle rate
is fast rising. Every percentage point away
from 100% quality means millions of dollars
lost in profits, unnecessary costs, and lost
sales and customers. And the higher the volume
of business and the higher the value of the
product, the higher these loses will be. Unless
everybody in the company casts away his schoolboy
disposition, the company's progress toward
quality will be seriously impaired.
3 P's of Quality
In typical company, we can conveniently find
three levels of quality which I call the 3
P’s of quality:
perfect product is one done right the first
time; once it leaves the production or assembly
line, it is sold to the customer as is, without
the slightest modification or adjustment.
A poor product is one that is of indisputably
bad quality- to be scrapped, rejected and
unsold. There is no recognition problem between
the poor and perfect products. They are the
black and white of quality.
The problem is the vast gray area- the passables
which may makeup 60% to 80% of production.
Having been produced incorrectly the first
time, these are corrected the second time
by rework or repair. Some companies euphemistically
refer to this operation as "finishing
or final touches" to hide the problem.
These retouched passables are then sold to
customers as perfectly "good" quality
merchandise. Worse, they may be even sold
as is, with the hope that the customers won't
mind, notice, or discover the imperfection.
Tolerating passables through management policies
creates the illusion that everything is fine
and there is no quality problem.
quality company will aim to produce only perfect
products, eliminate the passable category
and reclassify incorrectly produced items
as rejects. This change will be painful, and
the quality level will drop to its realistically
low level when perfect products are the ones
classified as of good quality. But such a
policy is necessary to expose problems and
solve them, so that the company can reach
quality excellence in the real sense - 100%
quality. Perfection will be the minimum and
only allowable level of quality. The same
policies should be applied to services provided
to customers or to other employees, serving
as our internal customers. In the end there
should only be three levels of quality:
Is Always a Next Time"
Another common attitude to drop is, "There
is always a next time." The belief that
the company or the customer will give you
a second chance, that your boss will forgive
you if it was your first mistake, that you
can always recover a recoup the losses in
the second try, predisposes one to make first-time
mistakes all the time and get away with them.
While it may be true that you may have a second
opportunity to try again, you have done damage
to the company, its customers and to your
record. The best way to achieve job excellence
is to have the self-discipline of not giving
yourself a second chance to correct your own
mistakes, and to burn the bridges behind so
there is no turning back.
In our private lives, we have made important
personal decisions with meticulous care and
preparation because there is no second chance,
or correction would be very difficult or exorbitant.
Getting married. Moving to a new house. Finding
a job. Getting a new car. Choosing your child's
school. We seldom make grave mistakes in these
decisions simply because we did not give ourselves
a second chance. If we similarly do and decide
things right the first time in our jobs, then
quality excellence is not impossible to achieve.
- Doing It Better and Better
Achieving job excellence in which everybody
in the company does his work right the first
time, every time is just the first, though
important, stage of the quality revolution.
This takes time and maybe even years. It takes
time to convince everybody that they are not
doing the right thing or that they are doing
the right things wrong. It takes some more
time to convince everybody how to do things
these tasks are accomplished, and everybody
has achieved job excellence, then the inevitable
happens: nobody complains about anything or
anyone anymore. Your boss, your customers,
and your stockholders seem to be expressing
satisfaction with their silence. Everybody
is then lulled into complacency and begins
to be content with the status quo, the way
things are and will be. Nobody wants to rock
the boat or make waves. The time is then ripe
for the next stage of the quality revolution
Kaizen is the process of non-stop improvement
of everything we do. Kaizen is a Japanese
term consisting of two characters- "kai"
meaning "change" and "zen"
meaning "good", thus together meaning
"improvement." Kaizen keeps everybody
awake, dynamic and fired-up. Everybody becomes
preoccupied with finding better and much better
ways of doing things - selling, producing,
communicating, managing, typing, sweeping,
etc. There is no acceptable best way.
Once a better way is developed or discovered,
it is employed or implemented and then the
cycle repeats- a much better way is searched
for. It is a movement that starts but does
not stop. It involves everybody from the CEO
to the lowest rank-and-file employee. It is
what makes quality companies, their employees
and managers beam with life and activity,
and project their sense of mission and purpose
to the outside world. Kaizen separates them
from mediocre and self-contented competitors.
A Kaizen motto, iconoclastic as it seems but
effective nevertheless, is: "If it works,
it's obsolete." In other words, if something
right is done right, there must be a way of
doing it better - maybe faster, maybe cheaper
, maybe simpler, maybe safer. The fact that
something works does not mean it can be safely
left alone and permanently incorporated into
the systems and procedures manual. Remember
that a competitor doing Kaizen may render
any method you employ obsolete, uneconomical,
ineffective or inadequate. What is important
in kaizen is not the destination, for there
is none, but the direction - forward and uphill.
It is a race that has a starting line but
no finish line; the aim is to be always ahead
of others or be in the lead pack and stay
there always. Kaizen is the driving force
that enabled Japanese companies to increase
productivity by orders of magnitude, and beat
their competitors in cost competitiveness.
With Kaizen, there is never a dull moment
in the company for anybody - everybody is
expected to work and think at the same time
all the time. All are expected to be a continuous
state of dissatisfaction with how they do
their work- even when nobody's complaining.
Kaizen also drives the quality company to
constantly develop newer and better products.
Its marketing motto is "If a product
sells, it's time to change it for a better
one". A quality company has a constant
stream of new products and ideas to replace
its current line which may have been copied
and improved by its competitors or rendered
obsolete by the customer or state of technology.
In consumer electronics, the product life
cycle can be as short as six months, such
that if a company does not have Kaizen power
in marketing and R&D, it will be driven
out of business by its competitors or customers.