Quality Results Can Be Manufactured

Automotive Industries, July, 2001 by Ron Harbour

Quality and productivity are linked. Improving one usually improves the other.

Like nuts and bolts.

That's the answer I like to give when people ask me if there's a correlation between manufacturing performance and quality.

It's also a question that comes up a lot this time of year because of two key industry reports that deal with these very important subjects.

In May, J.D. Power and Associates published its Initial Quality Survey on new vehicles. Then in June, my company published The Harbour Report, our comprehensive guide to automotive manufacturing performance in North America.

At our press conference, people wanted to know the plant-by-plant and company-by-company productivity rankings, as well as our opinions about the systems and practices at the plants and companies on which we reported. They also wanted to know how our results related to the quality results announced by J.D. Power.

When it comes to quality, we respectfully defer to J.D. Power to define each company's performance. But at the same time, I believe the Power study and The Harbour Report are inextricably linked -- because productivity and quality improvement go hand in hand.

For example, one of the biggest stories in our report is General Motors Corp.'s across-the-board improvements in its assembly, stamping and powertrain operations. When asked to explain the 9.4 percent improvement in assembly, GM leaders cited manufacturing systems that were eliminating waste, taking cost out of the system and improving quality.

By GM'S own stringent standards, all of the company's assembly plants in North America will have 80 percent direct run rates by the end of the year. Those are world-class quality levels.

As manufacturing consultants, we look at all of the systems and processes that impact a manufacturer's total operation. We study everything from labor and equipment productivity to product and process engineering. And when we visit a plant, we want to see the key processes and support systems that improve a plant's productivity and often its quality performance as well.

Over the years, what we've seen are the companies that have made the biggest productivity improvements often have also seen big improvements in their quality numbers. And likewise, companies that are focusing hard on quality are more likely to see big improvements in productivity.

The two are so closely related because improving one aspect almost always improves the other. For example, companies that truly are working on quality are likely to be putting in manufacturing systems in which error-proofing and other quality procedures are implemented at every step of the production process. And the result is fewer hours for repair and rework.

Companies that focus on easier-to-manufacture designs often are getting the resulting benefit of higher quality products that can be produced with fewer resources and less capital. What's more, better process engineering and product design reduce the need for on-line inspections and quality control activities. There is less rework being done at the end of the process, as well as fewer repairs at the dealer level, which means lower warranty costs.

As a result, companies that are targeting their efforts at improving either their manufacturing operations or their quality numbers more often than not are reaping benefits on both fronts.

On the other hand, does low quality always equal low productivity? Not necessarily, because there are companies achieving strong quality levels without high productivity. But the companies that achieve high quality with high productivity are getting the best results at the lowest cost.

Improving manufacturing processes must be a key strategic initiative for any automotive manufacturer these days. Improving quality also must be at the top of a company's priority list.

By looking at improving both productivity and quality together, manufacturers can experience the best of both worlds.

RON HARBOUR is president of Harbour and Associates manufacturing consultants in Troy, Mich.