Managing for Quality

How the Japanese have achieved mastery of quality is not a mystery or miracle.  The ‘secret’ is no secret at all.  Its key is not high technology or robots.  Nor is it government support.  It is the management process.

It is important for all Indians, and most important for Indians in influential and decision-making positions throughout industry, government, the communications media, Dalal Street and the universities to understand, appreciate and learn the basics of this new management process.  The approach is the most powerful methodology the world has seen for the creation of goods and services.  Unless it is mastered, other efforts to improve competitiveness will avail us little.

The new management process is complete.  It creates a focus on quality planning, quality control and quality improvement.  Quality planning establishes a customer driven standard, quality control maintains this standard, and quality improvement challenges the standard.

As is obvious, ‘quality’ is a necessity for customer acceptance.  Further, quality, productivity and worker satisfaction are mutually supportive.  There is much evidence that quality leads to the other two.  Managing for quality attacks chronic waste, thereby increasing productivity.  It also creates customer satisfaction or reduces customer dissatisfaction resulting in sales.  Increased sales and market share, in turn, lead to job security and worker satisfaction.

Success story
In the mid-seventies the Japanese electronics giant, Matsushita, bought out a colour TV plant that had formerly been run by Motorola.  Prior to coming under Japanese management, the Motorola factory had been running at a rate of 150 to 180 defects per 100 sets.  Three years later, the defect rate had dropped to 3 or 4 per 100 sets!  As a consequence, the cost of service calls dropped from $22 million to less than $4 million.  Also, the number of in-plant repair and service people was reduced from 120 to 15, and personnel turnover dropped from 30 per cent to 1 per cent per year.

All this happened with effort and investment, including modified product designs that were less prone to field failures, changes in manufacturing processes to make them less prone to defect generation, and more reliable defect free parts.  In short, Matsushita utilized many of the quality management principles that Prof W Edwards Deming had been preaching for 20 years.  The key was intensive quality oriented management that brought with it the targeted increase in quality and simultaneous and concomitant decreases in cost.

Equally interesting and, perhaps, even more important to us are some “all-Indian” success stories.  In their own ways Modi Xerox, Mukand, Mahindra and Mahindra (tractor division) have demonstrated the tremendous power of modern quality management.  In each of these Indian firms, there have been instances of quality oriented product and process redesign, of the use of quantitative and statistical methods of quality control, and very heavy participation in quality/productivity improvement by all levels of functions of management, as well as workforce.

The multidimensionality of quality - product features and freedom from deficiencies - creates numerous opportunities for the company.  Product features satisfy customer needs.  Freedom from deficiencies reduces customer dissatisfaction.  The focus of product features is sales while that of freedom from deficiencies is costs.  Usually, higher quality costs more when we address product features.  In the case of freedom from deficiencies, higher quality costs less.

Another important dimension to the subject is quality across class and quality within class.  What is the point when we compare a Rs 500 stay at Anand Ashram to a Rs 3,000 stay at the Taj Mahal Hotel?  When we make such comparisons, the customer bases, the product uses, and concepts of satisfaction and requirements may be quite different.

Once a product has been selected, the focus should shift to being best-in-class.  At this point, ‘fitness for use’ and ‘meeting requirements’ become the dominant considerations.  The emphasis is on nitty-gritty quality issues that revolve around quality within a class.  This provides a competitive edge.  Regardless of the focus, the approach to quality management is customer driven.

So where do we start?  Educate upper management on how to manage for quality.  Also, conduct a preliminary assessment to define the quality opportunity.  This opportunity has four dimensions; cost of poor quality; customer satisfaction; employee empowerment; quality assurance systems.  With this first step one would be only 5 years away from customer delight.