posted 27 November 1998 12:09 AM               

Date: Thu, 26 Nov 1998 01:50:15 -0500
From: Daniel W Lowry
Subject: Is Quality Dead?

TQM dead? Not according to a recent study of companies practicing TQM. An article reporting on the results of this study appeared in the Winter 1998 issue of "Tech Topics", a publication of the Georgia Tech Alumni Association. Here are a few excerpts from that article, entitled "The Real World; Hold the Epitaphs. Long-term study shows Total Quality Management is alive and well, thank you":

"Dr. Vinod Singhal, associate professor at Georgia Tech, and Dr. Kevin Hendricks, associate professor at the College of William and Mary, conducted an extensive study of companies practicing TQM. (.Their findings: It is no quick fix, but TQM pays off significantly.

"Hendricks and Singhal selected a group of 600 publicly traded companies. Composed of different sizes and drawn from different industries, the firms had a common denominator: all had won awards for effective implementation of TQM. By using award winners, Hendricks and Singhal could avoid biases connected with self-judging. And by using publicly traded companies, a greater wealth of objective data was readily available--without bias from self-reporting.

"To adjust for any impact the general economy or health of a particular industry might have had, a control group was constructed, similar to award winners in size and industry. Both groups were tracked over a five-year, pre-award and a five-year, post-award period. No differences were noted in the pre-award period, but considerable differences showed up in the post-award period.

"Compared to the control group, TQM award winners averaged a 44 percent higher stock price return, a 48 percent higher growth in operating income and a 37 percent higher growth in sales. Award winners also outperformed the control group with regard to operating margins, employee growth and growth in assets.

"Not only does Hendricks , and Singhal ,s study confirm that TQM is a good investment, but it also establishes benchmarks--when to expect gains and what kinds of gains to expect.

"'Paradigms are going to come and go. But managers should be careful about switching paradigms too quickly,' said Singhal. 'There is strong evidence TQM works--and pays off handsomely. But it takes time. You can ,t expect returns overnight.'"

A paper by Singhal and Hendricks documenting the conclusions from this study, entitled "Quality Awards and the Market Value of the Firm: An Empirical Investigation", was published in the March 1996 issue of "Management Science".

posted 03 December 1998 07:21 AM               

And my most famous question of all time, "why is an onion?"

Quality is a way of life.....you live it...it doesn't die, you do. You loose your drive and beliefs...then what? Are you dead?

posted 18 December 1998 02:20 PM               

Anyway, Is TQM dead? Nah.

Personally, I have always had trouble with the term 'TQM.' As Barb stated, "When we started calling it something meaningful for the task at hand, that is when it starts to take shape." The original post mentioned 600 companies studied. I wonder how many of those use the term 'TQM' when applied to their quality management systems. I would venture a guess that less than half. Regardless of the term used, I think that companies that employ a successful Quality Management System have many things in common. And of course, those that fail in the TQM effort missed one or more of the following thoughts. I humbly toss these out, in no particular order, as observations I have made regarding some successful (and not so) programs over this old warhorse's experience.

The Attributes of Successful Companies:

The companies realize that the Quality Management System is a process driven by the power of individuals and their ideas, regardless of their position within the organization. Each person must be willing to confront an intrinsic fear of failure, a fear that stems from the misconception that all failure is bad, rather than a part of the learning process. Improvement comes from all levels of the organization and ideas generated must be given the same consideration, regardless of the source. When it is accepted that efforts towards continuous improvement will sometimes fail, everyone learns.

With so many processes to examine, it is important to ask, "Where do I start" and "What is my role?" Successful companies will make this clear at the beginning of the undertaking. They will commit the time and resources required to the continuous improvement process and will not confuse short-term results with long-term goals. They will realize that employees need to understand that the Quality Management System is an on-going process, not with an end, and that resulting projects are significant.

Teams, not individuals, are developed to address specific areas of potential improvement. Each team has a mission statement, generates projects and tracks performance. Successful programs are implemented with due consideration to impact and planning. They do not heap the findings on a desk and say, "Here are the results. Do this!"

Successful projects, teams and employees are acknowledged. A common practice may be to place the names of contributors on plaques or the final project report presented to the company. Another may be an award banquet, although this is a double-edged sword and must be prepared with care. In public acknowledgements, recognize all or recognize none. The same applies to monetary awards. Half way is no way.

Management within the organization works hard, VERY hard, to maintain the focus of the continuous improvement efforts. The team mission statements are reviewed to ensure they are still applicable and appropriate. Management maintains a high profile on the efforts and every management level must be involved. When disagreements do arise, they are not allowed to become public spectacles and shouting matches for employees to witness and question. Facilitators and team leaders resolve conflicts in a manner suitable to all parties concerned.

Only when all members of the organization are dedicated to fulfilling its purpose and maintain continuous improvement does success arrive. All levels of the organization are involved and Senior Management participates in this involvement. And, Senior Managers are responsible and accountable for the organization's strategy, goals and objectives.

There is not an obsession with training. The purpose of the training is to provide employees with the knowledge and skills necessary to perform their work effectively and efficiently. Knowledge of methods and tools does not ensure that an organization improves. At the beginning of most improvement efforts, a common practice is to train large numbers of employees in quality control and/or SQC. However, mass training of employees in tools and skills that are not applicable to their responsibilities reduces the focus of the continuous improvement effort and wastes valuable resources. Training is required, but it is a focused and determined program.

When problems do arise, they are treated as that, problems. The saying, "Every problem is an opportunity" does not exist in a successful company. Every problem is a problem that MUST be solved, period.

Decisions are made using facts and data, not hunches. "In God We Trust, All Others Bring Data" becomes a declaration that is strictly adhered to. After the change is implemented, data collection goes on to monitor the change and continuously improve the process. In some efforts, the common practice is to show an improved or changed process, say "Look what we did" and then ignore it and move on. Continuous improvement efforts go on, ahem, continuously.

Regardless of the basis of the Quality Management System, it is adhered to with an almost religious zeal. Whether ISO 9000, Deming, Crosby (not my choice, but that is another story), Juran or whoever or whatever combinations, develop a plan and stick to it. Setbacks and perceived lack of progress is not subjected to some knee-jerk change in direction just for change sake. This will destroy an improvement effort faster than any other single item.

All right, I have rambled long enough. Heaven knows I could add more, but I will leave that to the rest of the group.

Well? Whaddya think?

posted 18 December 1998 03:59 PM               

Don,

Good points all around and I wanted to add my two cents.

Fact-base decision-making. Great advice. Understand a process by gathering data (baseline data for comparative purposes or benchmarking), analyzing it, determine the inputs and the outputs before adjusting (don't tamper!).

Continuous improvement never ends. Deming's comments to the point of "forever" applies here (PDCA). I heard someone say the other day in our CI Steering Committee say "When does this process end?". Many surprised looks. "Never!" was the common answer although there was some discussion to the point of Justification and use of Pareto (80/20). I suggest that there is merit to this, but a savvy company may place opportunities on the back burner provided the system/process has good stability and that it will be periodically visited to determine its continued stability.

Organizational Patience of Management: Failure is bound to occur. Dust yourself off and get back into the game! Don't be put off by failure. Take these, as Don has put it, as "opportunities" for improvement (keep the positive focus). Success will come and become easier with practice and experience. What's to lose? Inefficiency? Still a positive result!

Final comment: Knowledge and Applied Knowledge. Which is greater? I think all of us would agree that knowing how to do something right, and knowing and doing it right produces different results.

posted 18 December 1998 06:37 PM               

My mailing address is Tullahoma. I actually live in the Center Grove Community (not a town at all). Which is about as good as living in Deltona, FL (twelve years that ended in 1996).

Anyway,

I am glad you responded and, more or less, felt good about what I had to contribute. Regarding your post, I hope you do not mind some humbly submitted follow-up.

ãFact-base decision-making.ä Yea, that has been a pet peeve of mine for a long time. Often (too often, I am afraid), I am presented with some reason to change so-and-so. Recently, I was presented this item. In the following case, I was asked to change work instruction to allow for retesting of failed units that failed during bad weather. I refused.

The company I am currently employed with manufactures devices that include, at the heart of the system, pressure sensing devices. It had long been suspected that the weather affected these devices, in particular, low pressure weather systems were suspected of contributing to high failure rates. This was brought to my attention and I asked, ãWhat is the number of failures when it is raining compared to sunny day?ä (paraphrased here, of course) The answer, of course, was that there was no data. When I collected and analyzed current data (Chi-Square, mainly), there was no significant difference between the systems. Another urban myth dispelled by data, but the myth itself surfaces, time to time, to this day.

ãContinuous improvement never ends. Deming's comments to the point of Îforeverâ applies here (PDCA).ä Yes, the Shewhart Cycle (Îwheelâ or whatever) is the heart of continuous improvement. Well said.

ãJustification and use of Pareto (80/20)ä It pains me now, and pains me still, that the Pareto analysis is considered a statistical technique (but that is, again, another story). When applied properly, Pareto is a powerful analysis tool, but NOT a statistical technique. At the beginning, the break-even it determined to be at the first four (made up number) of seven of the data series in question. After these four are dispensed, the remaining three become the break-even. The cycle continues. The analogy I use is mowing the lawn on the first day of Spring. You should clear your lawn prior to mowing. Finding the big objects is easy and removing them is also easy. But, when you find the big ones, how often do you continue to search for the smaller ones? You do not until your mower runs over them, then and only then, does searching for the smaller ones become worthwhile. Why not find and dispose of these when the larger ones are disposed. No one looks for them. That is the key to continuous improvement. The large and small must all go.

ãOrganizational Patience of Management:ä Stay the course once it is set. Failure to do so is fatal. I agree wholeheartedly with this section. Well said, again.

ãFinal comment: Knowledge and Applied Knowledgeä I have always held to the theory (mine) that ãKnowledge without wisdom is worse than ignorance alone.ä Doing things right is efficient. Doing the right things right is effective. Do you not agree? The WED listserve usually has threads on this subject at least twice a month. The next time I see an interesting one, I will post for review.

All for now. Any Thoughts?

Regards,
Don

------------------

posted 21 December 1998 10:36 AM               

I haven't looked up Tullahoma on the map yet so perhaps I should reserve my vote for later. As it appears to me, after posting Marc as the winner, that infact I did find Richmond. Closer to KC than I thought originally and also surrounded by many smaller...villages? I will browse the net to see if Tullahoma has bragging rights.

posted 21 December 1998 11:49 AM               

I spent 2 days in Richmond MO and believe me - the big motel is a brand spanking new Motel 6 or something. It is, to say the least, in the country.

posted 21 December 1998 11:52 AM               

I agree that the techniques you mentioned are great tools to explain statistical phenomenon in non-statistical terms. Good points all around.