Business Management Articles / Quality Management

NON-STOP IMPROVEMENT: QUALITY REDEFINED

by 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 to purge:

1. Quality is conformance to specifications;
2. Quality is satisfying the customer; and,
3. 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 everybody:

1. Doing the right things tight the first time; and,
2. Doing it better and better.

Right 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 problem-solving.

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.

"Doing 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 our jobs:

"To 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.

We 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 to perfection.

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.

The 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:

1. perfect
2. passable
3. poor

A 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.

A 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:

1. quality
2. quality
3. quality.

"There 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.

Kaizen - 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 right.

Once 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.

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.