Partial's Not Enough
The business power of quality
comes from total management.

By Armand V. Feigenbaum
President and CEO, General Systems Co. Inc., Pittsfield,
Mass., and originator of Total Quality Control

A principal outcome of INDUSTRY WEEK's Census of Manufacturers is its confirmation of the business power of quality management when its management is total-not partial. Manufacturing organizations that have widely adopted Total Quality Management: (TQM) have some of the best quality performances among all plants across the full cross section of modern manufacturing covered in the census. This shows up in three fundamental metrics.

The first metric involves the high yields of these plants. The second is the equally important metric of the continuous improvements in these yields. Together they are the foundation for the customer-satisfaction leadership that is the lifeblood of the success for manufactured products in today's brutally competitive markets. The third fundamental metric is the very low scrap and rework costs of plants that have adopted total quality.

No similar correlations with these quality performances emerged in the INDUSTRY WEEK Census of Manufacturers when they were examined in relation to the installation of ISO 9000 or of QS 9000. Among the objectives of these certifications is the establishment of the visibility of plant quality assurances.

When General Systems Co. Inc. originated Total Quality Control, then developed and installed the management operating systems to implement it, the four keys to its business power were as clear then as they are now. The first key is that making quality better anywhere in an operation makes it better throughout the entire operation. The second key is that much higher quality drives much lower costs. The third key is the need for hands-on quality leadership that starts at the top and builds on the knowledge, skills, and attitudes of every employee with full workforce quality involvement. The final key is a clear and strong organization-wide total quality system as the foundation for making all this happen, and that helps drive effectiveness throughout the entire business.

The IW Census uncovered an additional positive result for companies that practice quality management . It is the positive correlation between degree of implementation of quality management and improvements in productivity, both in dollars of revenue and in percentage of productivity change. This confirms the favorable impact quality management has on the elimination of what we call the "hidden plant." This is the plant that exists to rework unsatisfactory material, parts, and products, and that, therefore, must maintain buffer stocks of certain kinds of protective inventory because of this, or to replace parts and products recalled from the field, or to retest and reinspect rejected units. There is no lower-cost nor more immediately available profit accelerator than leveraging quality management to convert this hidden plant to profitable output.

The most important of the quality metrics in INDUSTRY WEEK's Census is that of continuous improvement and the business powers of total quality management that it drives. This profitability connects the organization with the fundamental changes in quality itself that are taking place in today's global markets and that rapidly leave behind businesses whose quality programs aren't changing fast enough.