Beating Your Competition Through Quality

D. B. Owen

• Publisher: CRC Press
• Year: 2020
• Print ISBN: 9780824780654
• eBook ISBN: 9781000147353
• Topic: Business
• Subtopic: Operations
• Index: Business

This book describes how superior quality is attained and gives some of the basic techniques involved. It gives clear insight into the impact of variation on the future of the World and addresses the statistical problems.

1

Introduction

MANY COMPANIES, AND WHOLE INDUSTRIES, ARE FIGHTING FOR THEIR continued existence in the face of overwhelming competition, that often provides better quality than these companies are able to produce. These managers want to know how to achieve this better quality immediately. Unfortunately, the achievement of outstanding quality cannot occur overnight. It took the Japanese more than 20 years to reach their present preeminent position. So, what is it that the Japanese know that United States companies do not know? The Japanese took to heart the coaching of W. Edwards Deming, an American statistical scientist who went to Japan after World War II. The U.S. companies paid only token attention to what Deming and his colleagues were saying and are now paying the price for their inattention. The Japanese themselves also are being challenged by the nations of Korea, Taiwan, and others that have been watching and listening to what the Japanese have done. The rest of the world, including the United States and Canada, must follow suit or they will be forced to provide a lower standard of living for their people.

In recognition of the knowledge imparted to them by W. Edwards Deming, Japanese companies give the annual Deming Award to one of their industries that has achieved the most significant improvement in quality. Before World War II the label “Made in Japan” was often used as a synonym for poor quality. In the 1980s “Made in Japan” has become a symbol of quality. What is it that Deming and the other consultants taught the Japanese, and which the rest of the world wants to learn?

The fundamental idea that pervades all of this is the concept of variation and how to deal with it. First, we have to realize that everything that we make or do varies. Sometimes we have to have delicate measuring instruments to detect the variation, but it is always there. But, you say, didn’t they teach us in school that the speed of light, for instance, is constant? The speed of light may be constant, but our measuring instruments have given us differing values for the speed of light as the measurements have been refined. When we finally refine our measurements sufficiently, we may find that there is a small variation in the speed of light. The point is that we should be prepared to deal with variation, and generally speaking, we have not been trained to do so. More will be said about this in Chapter 4.

Throughout this book the language will be that of the manufacturing industries, because that is where most of the action has occurred. In fact, the techniques involved apply to all businesses, including the service industries. The companies that adopt these techniques first in the service industries will gain an almost insurmountable advantage over those that do not, just as the Japanese electronics manufacturers have done compared to the U.S. companies. The minimum time to bring enough of the people in a company on board to see some changes in quality with the new techniques is at least two years and may be as long as 20 years. Many companies will never catch up if they let the initiative in this area go to their competitors. Remember, it is over 30 years since the Japanese were first introduced to these techniques, and they have been refining them ever since. It is not a simple matter to apply the technique to a different company or industry, but it can be done and it will be done by those who will become the leaders in the next century.

In the United States, Canada, and many other nations of the world, alarms are being sounded and managers are being forced to make adjustments to the new type of competition. In the United States we see many instances of one-quarter to one-half of the work force devoting their time exclusively to fixing mistakes that have been made. Included in these percentages are the managers who spend most of their time trying to placate irate customers. The need to change so that we make the product right in the first place is evident for many American products. Many products need to be redesigned, statistical process control techniques installed, and workers given a measure of control over their lives and a sense of pride in what they do.

Another key element is that we must first determine whether the variability in a process is in control. The limits of control should be set by the process itself. If the process is not in control, then we must find the assignable causes for the lack of control and eliminate them. Once we have control, we compare the output of the process with the specifications (if any) or the goals we wish to attain and decide whether the process needs further tightening up. It is important to understand a fundamental point here. If the process is not in control, there is some possibility that the worker could be the culprit. However, if the process is in control, then management must do something to tighten the process up.

Even if all the specifications are met, it may be desirable to try to eliminate some of the causes of variation. There is the story of the transmissions for Ford cars: one lot was made in the United States and another lot was made in Japan. Both sets of transmissions met the specifications. They were tested over many months and the Japanese-made transmissions had much better repair records than those made in the United States. At the end of the test the transmissions were torn apart and carefully measured. The conclusion was that the Japanese-made transmissions had been manufactured much closer to target values than those made in the United States. The lesson to be learned is that just meeting specifications is not enough. We must constantly work toward reducing variability. There is also a rule of thumb that experienced quality control people often quote. Approximately 80% of the variation on most products may be traced to four to six causes, and the remaining 20% of variation may be due to many, many small causes. It is important to concentrate effort on the four to six important causes first and not spend critical time on the many trivial causes of variation. The biggest payoff comes with the few.

So how do you find out what the causes of variation are and which ones are contributing the most to the variation in the product? We will attempt to answer these questions in a general way in this book. Specific situations often require unique answers to these questions.

Since the mid-seventies many people have traveled to Japan and thought they found the reason for Japan’s resurgence after World War II, because there are many differences between the cultures of Japan and the United States. Among the differences noted were the cost of labor, the tax structure, the availability of capital from savings by the population, and so forth. However, what was overlooked and is still being overlooked is that historically most of these differences existed in varying degrees before World War II, when Japan’s quality was poor.

In the late 1980s a sweeping overhaul of management at the corporate level is underway. To keep up, top management must maintain a constant push for quality. If the push is not maintained by top management, the workers conclude that any effort is a sham. Also, the group that is most resistant to the quality push is middle managers. They have the feeling that it takes away from their authority. In fact, it changes the role they play by requiring that they spend more time in planning the work to be done and less time bossing people. Providing the appearance of quality is easy, but actually attaining quality is a long-term, difficult job. The cost of attaining quality may seem high at first, but the return on investment is greater than almost any other return a business can realize.

The people at the working level are usually eager to assume the responsibility for the quality of the items they produce. In many industries, inspectors are being eliminated, and the responsibility for inspecting the product has been given to the worker producing the product. Of course, there must be monetary recognition for the added work, but it has generally been found that total costs have declined with this system.

There has traditionally been a wall between the design engineer and the manufacturing engineer in many industries. Production of quality goods requires that the entire process—from design through manufacturing to field service—be treated as a single entity: i.e., a single integrated plan must be developed instead of separate plans for each of the stages. The goal is to satisfy the customer. Every stage has to consider the customer and what he expects from the product. This procedure of treating the whole system and not just the segments is called statistical process control, sometimes referred to as SPC. The word statistical comes into play because only sophisticated statistical analyses can sort out the maze of relationships involved.

New technology, including robotics, can have a big effect in the race for quality, but new technology is not the most important component. More important than technology is changing the management structure to insure that quality products be made. Quality improvement must be a formal part of the business plan. In many companies the annual performance review now includes a review by the director of quality for the company who certifies the extent to which the person involved practiced good quality in his job. More will be said about this aspect in Chapter 10.

2

The History of Competition from Japan

BEFORE WORLD WAR II, JAPAN WAS NOTED FOR PRODUCING SHODDY goods, and Japanese firms tried several subterfuges to keep the buyers of their goods from realizing their products were made in Japan. One Japanese company built a factory in a city named Usa and prominently marked its goods “MADE IN USA.” At that time the United States clearly led the world in quality of goods. It is generally not true that U.S. quality became poorer, but, in fact, quality from Japan became much, much better than it was.

How did this come about? Several consultants went to Japan from the United States right after World War II to help the country recover from the war. Among them were W. Edwards Deming and J. M. Juran. Both Deming and Juran are still conducting seminars (at the time this is being written, in June 1988) on what they taught the Japanese and what they learned from the Japanese in turn. The message taken to Japan was simply, “You must build quality goods, and these are the techniques that the United States has developed for doing this.” The techniques outlined are those of statistical science.

The field of statistical science has grown tremendously since the end of World War II, with many new techniques now being available. There is now (in June 1988) an encyclopedia with eight volumes already published, and more to come, devoted exclusively to short articles on statistical science, which at this writing contains over 5000 large printed pages. At the end of World War II only a few books were available to students of statistics. Most of this development has been in the United States and Canada, but U.S. and Canadian industry has only taken small advantage of this. This is because the managers have judged statistical science...

Table of contents

• Cover
• Half Title
• Title Page
• Dedication
• Copyright Page
• Preface
• Table of Contents
• 1. Introduction
• 2. The History of Competition from Japan
• 3. The Scientific Method
• 4. Understanding Variation
• 5. Determining Whether a Process Is in Control
• 6. Finding Assignable Causes
• 7. Process in Control: Tightening Up
• 8. The Search for Causes of Variation
• 9. Deming’s Funnel Experiment
• 10. Deming’s Bead Experiment
• 11. Management’s Responsibilities
• 12. Translation to Service Industries
• 13. Designing for Quality
• 14. Quality Control and Quality Assurance
• 15. Sources of Consultants and Employees
• 16. Notes for Further Reading
• Index