Business Management Articles
/ Quality Management


by Rene T. Domingo

The need to survive in the competitive marketplace sparked the quality revolution going on in many corporations. That meant coming out with products of higher and higher quality, lower and lower cost, and faster and faster delivery. The product battle rightly and naturally shifted into a process battle in which competitors tried to come out with the leanest and meanest manufacturing systems using just-in-time (JIT), statistical process control (SPC), flexible manufacturing systems (FMS), and continuous process improvement (KAIZEN) principles to streamline operations. The battle was also fought in another threater: people. To win the quality war, companies tried to train and empower their employees using the concepts of total quality management (TQM), self-managing teams, QC circles, and suggestion box systems. In short, achieving quality products meant achieving quality process and quality people, the foundation and source of quality.

How then does a company know its score in the quality battle? Is it winning, gaining ground, stalling, or backsliding? How does one measure quality progress? It seems that after all is said and done in the name of quality, more is said than done. Ask any company known to be practicing total quality management (TQM) how it is faring in terms of quality, most likely it would give you the following reports and accomplishments: the number of QC circles or improvement teams it has, the number of quality prizes and awards the teams and the company have received nationally and internationally, and the number of suggestions employees have made. The company may even tell you that it has just been ISO 9000 certified and therefore has the "best" quality in the industry. Or it may share with you how it has managed its suppliers to deliver a la just-in-time.

The problem with these responses which focus on process and people it that they evade the real bottom line of the whole TQM exercise: coming out with better quality products. Has the number of customer complaints and returns drastically decreased? Has the number of defects, scrap, and wastage declined? Has quality cost - the cost of not doing the right thing right the first time - declined? Has rework rate gone done and rework operations diminished? Has the company cut down on delivery delays? Has it reduced customer order processing times? A company will usually avoid answering these quality questions or evade addressing these issues either because they have failed in bringing out improvements in these areas, or it simply does not monitor and measure these indicators of product quality. In short, it does not know or bother to know what is actually going in terms of real quality progress.

Progress and programs in process and people do not mean much if they do not improve the quality and delivery of the ultimate product. Customers care primarily about the quality of the product they buy. They do not see the company's process or people, and they will not give much importance to these if the company provides them with inferior products and bad service. A customer does not care how many QC circles a company has, or how many awards and ISO 9000 certification it received -- if it is often late in the delivery of the goods he orders, or if the company keeps increasing its prices because of high costs. Many so-called TQM companies place too much emphasis on superficial improvements in process and people management to the extent of forgetting the ultimate product quality and the customer himself. These companies cannot fool all the customers all the time through their policy of quality by publicity. Their days are numbered.

A common response to product quality questions often heard is "Our quality is world-class because we received no complaints from customers - all are satisfied." External quality or quality after the goods are sold to customers is not the only indicator of total quality. A traditional company that does a lot of inspection and sorting will naturally attain zero defect and complaints in the marketplace. But a real TQM company does not rely on inspection, but on prevention and improvement to achieve quality - in line with the TQM dictum "do it right the first time."

Very often, traditionally managed or mismanaged companies forget about the other dimension of product quality -- internal quality, or the quality of the product before it leaves the factory. This includes defects and scrap produced or discovered inside the factory; it also includes rework and recycling operation costs. Customers do not see internal quality, but if left unmanaged, this will increase the cost of production and eventually affect customers in terms of higher prices. Moreover, poor internal quality will necessitate an increase in inspection costs and inspectors to achieve perfect external quality.

The only way to describe product quality is by measuring both external and internal quality. While external quality is more important than internal quality, a company does not achieve total quality status until both are improved continuously, and both external and internal failures are reduced to a minimum if not zero. A company that does not monitor and improve internal quality by reducing rework, scrap, and factory defects is not a total quality company even if its external quality is perfect and customer complaint is zero. A total quality company constantly and continuously monitors and improves quality at all stages: purchasing, manufacturing, delivery, sales, customer site. Moreover, quality costs are measured for the whole company and by department, and reduced consistently. Companies which do not measure external and internal quality and quality costs, and show continuous improvements in these indicators cannot claim to be total quality companies in spite of the claims, awards, and certifications they have.


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