Creating a quality culture

Modern Casting, Nov, 1992 by David P. Kanicki, Tom Bex

Experts view quality as a major issue for U.S. firms in world trade and agree that organizational change is vital.

W. Edwards Deming once wrote that "Survival is not compulsory." What the renowned quality expert was referring to was that being in business does not carry the privilege of staying in business.

By not recognizing and meeting the needs of your customers and the marketplace, your survival as an organization is in jeopardy. As a manager, owner or operator, the decision is yours.

No issue plays a more important role in business survival today than quality in product and service. It's a message that has been driven home to U.S. manufacturing over and over during the last decade. And while many had to learn the hard way, it appears that the quality message has gotten through to American manufacturers.

This was the message at the AFS Foundry Executive Management Conference held last September in Colorado Springs, Colorado.

In his welcoming remarks, AFS President Ray Witt, founder and president of CMI International, said world-class business survivors have the capacity to see and act on the constant need for change in product, management skills and manufacturing technologies.

Journey toward Quality

Richard Buetow, senior vice president and director of quality at Motorola, Inc., Schaumburg, Illinois, delivered the Peter E. Rentschler Memorial Lecture at the annual conference.

"There is only one way for a company to sustain high quality and that is to institutionalize it," he said. "Live it every day as if your life depended on it--and not only on the production line. Make quality work in accounting, accounts receivable, shipping, work standards, materials handling.

"Make it part of everything that comes in and goes out of your plant, everything that affects customer satisfaction."

His words left no doubt about the depth and effectiveness of Motorola's commitment to quality.

Buetow is a veteran of 34 years with Motorola, whose sales in 1991 were $11.34 billion. Motorola is ranked 14th among U.S. companies in export sales and enjoys a worldwide reputation worldwide for the integrity of its products and services.

"In 1981, we set a goal that called for a tenfold improvement in quality in five years," Buetow said. "But subsequent benchmarking investigations proved that a much greater improvement was required. Six years later, the company set a new two-year goal to improve quality and service by a factor of 10 and be at least 100 times better by 1991. Our ultimate goal was to reach Six Sigma in 1992, which translates to three to four defects per million parts.

"Our ultimate corporate goal is zero defects. To put our current Six Sigma in perspective, Four Sigma is the average for the best companies in the world, and the airline industry's flight fatality rate is 6.3 Sigma or 0.43 ppm."

Lead, Teach, Audit

Motorola's methodology for quality improvement demanded a total quality measuring system, a way to assess product/service improvements and the establishment of reach-out goals. Six steps tracked the Sigma process gains:

* identify the work you do (product);

* identify for whom you work (customer);

* what do you need for your work, from whom do you get it (supplier);

* map the process (defects per unit of work equal one Sigma);

* make the process mistake-proof, eliminate delays;

* establish quality, cycle time measurement, improvement goals.

An intensive period of benchmarking was undertaken to help establish realistic goals, which were identified by auditing various manufacturing and support systems that paralleled Motorola's developing quality targets.

An education/training component provided 40 hours a year of training for all employees, including the company's CEO and president.

Cumulative savings from 1987-91 exceeded $2.2 billion, and earned Motorola an international reputation for quality and a substantially increased market share.

Benchmarking

Al Ware, Partners in Performance, recounted the remarkable Xerox experience with benchmarking that helped rescue the company. He said the giant in the copier field owned 90% of the market in the 1960s, but saw its commanding position whittled down to 17% within a decade. Xerox people were shocked and angry about the costly slide.

The result was a company/union partnership that attacked the problem with a strong quality focus based on an extensive benchmarking program. Several aspects of the Xerox operations stood out in relation to the company's strongest competitor.

For instance, Xerox's direct and indirect labor costs were twice as much and production supplies exceeded 9%. Assembly line rejects were 10 times greater than that of Xerox's principal competitor, lead time was twice as long and, worst of all, defects per 100 machines were a grim seven times more.

Xerox's unit manufacturing cost was equal to its competitors' selling price. Even with an 8% predicted growth, Xerox found that it would need 17% to stay even with its competitors.

Incredibly, it took Xerox seven years to respond but the company finally adopted a program of Leadership Through Quality (LTQ).