A recent commitment to quality in the United States is reflected by the Malcolm Baldrige National Quality Award, referred to commonly as the Baldrige award or just “the Baldrige”. This award named after a former secretary of commerce, was created in 1987 to recognize businesses that have made outstanding contributions through their quality efforts. Separate awards are bestowed upon businesses in the areas of manufacturing, service, and small business. In the United States, it is the greatest honor of its type that an organization can receive.
Applicants are judged according to a series of criteria in seven major areas: leadership, effectiveness in collecting and analyzing information, planning, human resources utilization, management of process quality, quality and operational results, and customer focus and satisfaction. Applicants are screened on the basis of a written application and then inspected by a team of examiners who observe operations and interview employees and managers at all level. Past winners have included Motorola, Federal Express, Xerox Business Products and Systems Group, Solectron, and two AT&T divisions.
The emergence of the Baldrige award has developed a “language of quality” that has provided a general impetus for managers to encourage quality awareness and quality-improvement methods. Far more important than the handful of awards conferred each year is the overall impact of its existence. It is hard to imagine that the Baldrige process is disruptive to a company. The beauty of it is that it is a self-assessment experience, a self-education program that is wrapped around an award, rather than an award with elaborate criteria. Many companies that do not plan to apply for the award use the application guidelines to guide their own internal quality improvement programs and look to award winners as models. The Baldrige is a road map to help you improve quality. It helps you set values and show the cause and effect linkage between delivering quality service, satisfied customers, improved productivity and higher profits. Juran, who has defined TQM as consisting of “those actions needed to get to world class quality, has stated that the Baldrige criteria are the most complete list of what those actions are.
Time and Relationships:
We have emphasized how the work of management and managers revolves around time and relationships. Another way of explaining the TQM revolution is to say that it focuses attention on a new sense of time and relationships. Doing the job right the first time requires investing resources in understanding systems and enabling people to improve processes continuously. While you may be able to make a larger quantity of a product by focusing on how many can be produced per unit of time, TQM asks you to focus on increasing the quality of what is produced. The result of this different sense of time is usually a larger quantity and better quality.
This new sense of time goes hand in hand with a rethinking of what relationships are most important in organizations. First and foremost, the relationship with employees must be rethought. Employees, according to TQM, want responsibility, want to learn and improve, and want to demonstrate self-mastery and achievement. This is a far cry from treating employees as those who need to be helped and motivated to produce quality goods and services.
Motorola managers faced the challenge of losing market share because their quality did not match the quality of the competition. The electronics giant had already forfeited one market and was threatened in their last stronghold. The company responded by implementing the quality initiatives advocated by Deming Juran and others.
In 1992, Motorola reached a quality level of 5.7 Sigma. Although short of its Six Sigma target, Motorola’s results were nonetheless impressive. Sales per employee rose from $62,600 in 1986 to more than $111,000 in 1992. Defects per million fell from 6,000 in 1981 to 40 in 1992.Net cash from operations, sales, capital expenditures, and share price have all more than doubled. While some companies argue that quality costs too much, Motorola proved that quality can be profitable. The company has saved $1.5billion as a direct result of its quality commitment.
Customer quality expectations continue to rise. The world is converging on products that do not fail during their useful life. The quality director predicts that Motorola will target a defect rate of less than two per billion by the year 2001. We will have to think in terms of perfection even though we may not get there. And at Motorola as in other quality leaders, the ways of pursuing quality evolve and change. In 1993, Motorola established a new quality-related goal: reducing the cycle time for everything the company does by a factor of ten over the next five years.