Product Quality has entered conscious of Managers

Product quality has entered the consciousness of managers with a vengeance. It has become crystal clear that high quality products have a distinct advantage in the market place, that market share can be gained or lost over the quality issue. Therefore quality is a competitive priority. We have had formal quality control procedures were developed in this country beginning in the early 1930s and quality control organizations and procedures within companies have been common. Yet something important changed in the global competitive scene in the last ten years or so, and that something was unsurpassed Japanese product quality.

Reports of superior Japanese quality have appeared in the press almost daily during the 1980s. One study is based on there quality performance of nine American and seven Japanese manufacturers of home air conditioners. Table below summarizes the key results.

The broad findings of the study were as follows:

1. The failure rates of air conditioners made by the worst producers, which were all American were between 500 and 1000 times greater than those made by the best producers, which were all Japanese.
2. The average American manufacturer had 70 times as many defects on the assembly line as the average Japanese manufacturer and made 17 times as many service calls during the first year following sale.
3. The defect percentages of air conditioners produced by the worst Japanese manufacturers were less than half of those produced by the best American manufacturers.
4. Companies with the bets quality records also had the highest labor productivity.
5. The extra cost of making higher quality Japanese goods was about half the cost of fixing defective products made by American manufacturers.

The competitive quality and cost advantage of the Japanese home air conditioner products highlights the importance of this. If the air conditioners study results were an isolated case, there would be no overriding issue, but it is not. Ensuring high quality is a now recognized as being of the greatest significance in maintaining a strong competitive position.

Quality Characteristics of Nine American and Seven Japanese Home air Conditioner manufacturers’ products:

Assembly Line Defects>

Median Range

United States 63.5 7 – 165
Japan 0.95 0.15 – 3.0

Service calls>

Median Range

United States 10.5 5.30 – 26.2
Japan 0.6 0.04 – 2.0

The competitive pressure to produce high quality products has increased greatly in recent years, and Eli Goldratt has characterized the pace of the race by the rapid succession of terms we have adopted and rejected in trying to define what is meant by quality.

Yield – Up to about 1970, the attitude toward quality was reflected in the term “yield”. We focused on how many good parts were being produced – just toss out the bad ones. An acceptable level was thought to be 10%.

Scrap – During the 1970s we began to use the term “scrap” to focus on damaged material and that the level had decline below 10%.

Quality is Job 1 — By the 1980s, it appeared that even the previous levels were no longer competitive. So slogans like, ‘quality is Job 1, were coined to signal determination to reduce scrap below 1%.

Parts per Million – By 1985 the market’s perception of quality forced manufacturers toward “zero defects” and the Japanese introduced the intimidating terms, “parts per million” to indicate their resolve for quality output.

We will deal with the broader system for assuring that high quality is maintained, the choice of processes, the nature of control procedures for quality of products and services, the maintenance function, and the role of repair and preventive maintenance in ensuring high quality.

We try to control the reliability of productive system outputs. The quality and quantity are monitored in some way, and the results are compared with standards. Although we are generally interested in quality measures, changes in output quantity may also be symptomatic of reliability problems. The associated costs of quality and quantity control are derivatives of reliability. When the results are interpreted, we may conclude that the processes are out of adjustment or that something more fundamental is wrong, thus requiring machine repair or possible retraining in manual operations. If equipment actually breaks down, then the maintenance function is called. Information on output quality and quantity may also be used to form preventive maintenance programs designed to anticipate breakdowns. Thus, although other important interactions have their effects, quality assurance centers on quality control and equipment maintenance.