quality councils to promote continual communication.
14 Repeat everything to illustrate that quality improvement is a never‐ending process.
Note that many of these steps are covered if the projects in the Six Sigma methodology are well executed.
1.2.3 Quality and Productivity
During and after World War II, America was under a lot of pressure to increase productivity. The managers of manufacturing companies in America believed that productivity and quality were not compatible, and their way to increase productivity was to hire more workers and put “quality” on the back burner. Japan and Germany were also coming out of the ashes of World War II. So, until 1960, America dominated the world with its productivity – but in 1948, Japanese companies started to follow the work that many pioneers such as Shewhart, Juran, and Deming practiced at Westinghouse. The managers of Japanese companies observed that improving quality not only make their products more attractive but also increased productivity. However, this observation did not sink into the minds of the managers of American companies: they continued working with the assumption that improving quality cost more and inhibited productivity and consequently would mean lower profits.
Deming's famous visit to Japan in (1950) brought about a quality revolution in Japan, and the country became a very dominant power of quality throughout the world. During his visit, he gave a seminar that was attended not only by engineers but also by all the top managers. He told the Japanese managers that “they had an obligation to the world to uphold the finest of management techniques.” He warned them against mistakenly allowing into Japanese companies the use of certain Western management practices, such as management by objective and performance standards, saying that “these practices are largely responsible for the failure of Western industry to remain competitive.” As Deming noted in his book Out of the Crisis, which resulted from his visit to Japan, the chain reaction shown in Figure 1.2 became engraved in Japan as the way of industrial life. This chain reaction was on the blackboard during every meeting he held with top management in Japan.
Furthermore, Deming noted that “Once management in Japan adopted the chain reaction, everyone there from 1950 onward had one common aim, namely, quality.” But as remarked earlier, this idea was not adopted by American management until at least the late 1980s. In the 1960s and 1970s, American companies continued to dominate in productivity, mainly by increasing their workforce. However, as a result of ignoring the quality scenario, America started to lose its dominance in terms of competitiveness and thus productivity. During this period, Germany and South Korea also became competitors with America. Ultimately, in the 1990s, American management started to work on quality; and as a result, America began to reemerge as a world‐class competitor.
The gurus and advocates for quality – Deming, Feigenbaum, Juran, and Crosby – were the most influential people in making the move from production and consumption to total quality control and management. According to Joseph A. DeFeo, president and CEO of the Juran Institute, “the costs of poor‐quality account for 15 to 30% of a company's overall costs.” When a company takes appropriate steps to improve its performance by reducing deficiencies in key areas (cycle time, warranty costs, scrap and rework, on‐time delivery, billing, and others), it reduces overall costs without eliminating essential services, functions, product features, and personnel increases as outlined by Goetsch and Davis (2006). Feigenbaum also said that up to 40% of the capacity of a plant is wasted through not getting it right the first time.
Figure 1.2 A chain reaction chart used by the Japanese companies in their top management meetings.
Furthermore, we note that often, flexibility in manufacturing can increase productivity without affecting quality. For example, the best Japanese automaker plants can send a minivan, pickup truck, or SUV down the same assembly line one after another without stopping the line to retool or reset. One Nissan plant can assemble five different models on one line. This flexibility obviously translates into productivity (Bloomberg Businessweek 2003).
1.3 Implementing Quality Improvement
Earlier in this chapter, we noted that the characteristic of quality improvement is not static; rather, it is an ongoing process. It becomes the responsibility of all management that all appropriate steps are taken to implement quality improvement. The first step by management, of course, should be to transform “business as usual” into an improved business by instilling quality into it. Deming's 14‐point philosophy is very helpful to achieve this goal:
1 Create constancy of purpose for improving products and services.
2 Adopt the new philosophy. That is, management must learn about the new economic age and challenges such as competitiveness, and take responsibility for informing and leading their business.
3 Cease dependence on inspections to achieve quality.
4 End the practice of awarding business based on price alone; instead, minimize total costs by working with a single supplier.
5 Constantly improve every process for planning, production, and service.
6 Institute training on the job.
7 Adopt and institute leadership.
8 Drive out fear.
9 Break down barriers between staff areas.
10 Eliminate slogans, exhortations, and targets for the workforce.
11 Eliminate numerical quotas for the workforce and numerical goals for management.
12 Remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system.
13 Institute a vigorous program of education and self‐improvement for everyone.
14 Put everybody in the company to work to accomplish the transformation.
This philosophy can be used in any organization to implement total quality management (TQM). For more details and examples, we refer you to Out of the Crisis (Deming 1986).
1.3.1 Outcomes of Quality Control
The outcomes of quality control are obvious. Some of these outcomes are the following:
The quality of the product or service will improve, which will make it more attractive and durable. Better quality will result in a higher percentage of the product meeting the specifications of the customer. Consequently, only a small percentage (or none) of the products will be rejected.
Since few or no products are rejected, fewer need rework, and consequently there are fewer delays in delivery. This makes the customer happy, and they are bound to buy the product again. All this adds up to more savings, and that results in a lower price for the product – which makes it more competitive.
Consequently, there will be better use of resources, such as manpower, raw material, machine hours, etc. All of these outcomes result in lower costs, better quality, higher productivity, and hence a larger market share.
1.3.2 Quality Control and Quality Improvement
Quality control helps an organization to create products that, simply put, are of better quality. Continuous quality improvement makes operators, engineers, and supervisors more focused on customer requirements, and consequently, they are less likely to make any “mistakes.”
1.3.2.1 Acceptance Sampling Plans
Quality