Quality: A Management Process

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

It is important for all Indians, and most importantly 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.  One that is universally applicable.  Unless it is mastered, other efforts to improve competitiveness will avail us little.

New Management
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.

Customer Requirements
Now for a perspective.  Advances in technology have enabled vendors to supply goods and services in large volumes at low prices.  Simultaneously, the development of transport and distribution networks has made it possible to deliver these offerings anywhere.  Further, the growth of mass communication has increased people’s knowledge of product features.  Consequently, customers have become more discriminating about product quality.  It is also happening in India.

Until recently, when products were very difficult to procure, vendors were not particularly concerned about quality management.  They had little trouble in selling even poor quality offerings.  Quantity had an overriding influence on quality.  Quality control was more important for purchasers, because they could not always be sure they were buying good quality.

However, the picture has now changed.  Management which does not take quality seriously will no longer be viable.  They must abandon the idea that it is good enough to simply make products which conform to specifications received or to perform work according to given standards.  Instead, they must take positive steps to ferret out true customer requirements and develop better goods and services.

Success Stories
Dr Joseph M Juran is largely responsible for the very wide circulation in production circles of the Motorola - Matsushita/Quasar story.  In the mid-1970’s the Japanese electronics giant 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 and Dr Joseph M Juran had been preaching for twenty years.  They did not use a revolutionary new technology, nor a new workforce.  The key was intensive quality oriented management that brought with it the targeted increase in quality and simultaneous and concomited 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.

What is Quality?
In spite of frequent usage, quality is a concept that is not easily understood.  Dr Joseph M Juran, in his definitive Quality Control Handbook in 1952 defined quality as "fitness for use".  He amplified this concept by examining the multiplicity of uses and performance characteristics that are typical of most items.  Prof W Edwards Deming’s influential 1950 Tokyo lectures on statistical quality control repeatedly emphasized a focus on customer and the need for consistency.  Philip B Crosby puts it even more simply by stating that quality is "meeting requirements".

Efficient and consistent delivery of a quality product requires a clear and specific definition of "customer", "use" and "requirements".  To be specific about what quality is, in our teaching and consulting, we frequently have participants and clients go through the exercise of defining quality for such disparate items as a hotel stay, a ballpoint pen, and an automobile.  Such a quality definition exercise - regardless of the product or service - quickly identifies the multidimensional nature of quality, the difficulty of actually measuring quality, and the diversity of uses and users, that is, customers.  Quality is indeed fitness for use, broadly conceived.  Understanding this drives management closer to understanding its customer and raison d'être.

Multidimensionality
The multidimensionality of quality - product features and freedom from deficiencies - creates numerous opportunities for the company.  Product features satisfy customer needs.  Freedom from deficiencies reduce customer dissatisfaction.  The focus of product features is sales while that of freedom from deficiencies on costs.  Usually, higher quality costs more when we address product features.  In the case of freedom from deficiencies, higher quality cost 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 8,000 stay at the Taj Mahal Hotel; a Rs 3 Sharp pen to a $ 129 Montblanc; a Rs 200,000 Maruti car to a $ 40,000 BMW?  When we make such across class comparisons, the customer bases, the product uses, concepts of satisfaction and requirements may be quite different.  Quality across class is essentially a matter of product design.

Once a product class 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, product features or freedom from deficiencies, quality across class or within class, the approach to quality management is customer driven.

Prescription
To make a wise choice of strategy, upper management need to have adequate knowledge of managing for quality.  Managing for quality uses the same processes required to manage for finance: financial planning, financial control and financial improvement.  In the case of quality, they become quality planning, quality control and quality improvement.  The three processes interact with each other.

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 five years away from customer delight.