The Case of the Quality Crusader

George Mansfield poured himself another cup of coffee and walked down the hall to Pete Jameson’s office. He’d spent half the night agonizing over how to broach a problem with Pete, the general manager who had hired him a month ago to run Segal Electric’s quality operation as director of quality assurance. George had always thought that anything worth making was worth making right. That’s one reason he advocated generous warranty programs. He knew that if operations were running as they should, the company wouldn’t have to worry about warranty costs because there wouldn’t be any. His high standards had served him well at his last job, where he was perceived as a real comer and had been promoted several times. Segal was once the top manufacturer of high-quality electrical products, but for a combination of reasons its reputation had fallen steadily over the last few years. George welcomed the chance to help turn the company around. The hefty salary and direct reporting relationship to Pete Jameson had persuaded him that Segal was serious about regaining its position in the market. George was given much of the responsibility to help reach that goal. “Come on in, George, and have a seat,” Pete began. “So you’ve run into some trouble in the plant already. I told you this job would be tough. What’s the problem?” “There was a mix-up in the plant while I was gone last week. I think it might happen again, so I want to discuss it with you now.” “Of course, go ahead.” “Last week when I was at that quality seminar in Milwaukee, Gene Davis was overseeing the quality control team for me. Early in the week, they kept running into trouble with the 5051 fans. The end play of the fan blades on the shaft wasn’t right. They had to reject five pallets of fans. “Apparently there was a big rush order, so some people were pulled off other lines to assemble the fans. But nobody told them all the specs. So they were loading up as many thrust washers as they could fit on the shaft, and instead of getting ten-thousandths clearance, they got zero. There was no end play at all. “Following quality procedures, Gene red-tagged them and put them aside for rework, but then Sharon Morse got involved. She decided it would take too long to fix the fans, so she plugged the darn things in and ran them full speed to burn the washers down to the right clearance. Now, you and I both know that doing that pushes the spec strength of those washers.” “Well, in theory, yes. But I don’t know how much difference it really makes. Still, I get your point, George. That’s not the way it ought to be.” “No sir, as far as I’m concerned it isn’t. I guess Gene tried to talk to Sharon about it. He knows how I feel about quality, and he was trying to do what I would expect. But Sharon took charge of the situation. As production superintendent she outranks Gene, and he finally deferred to her. Well, don’t you know, those fans were shipped last Thursday.” “Have you discussed this with Sharon?” Pete asked. “No, I haven’t. Gene just told me about it yesterday. I’m perfectly willing to talk to her, but I want to make sure I’m right first. Doesn’t my department have the last word about what gets out the door?” “George, we’re like every other company. We’ve got production quotas, we’ve got budgets, we’ve got marketing plans. Sure, we want to make a good product, but we don’t want to lose our shirts doing it. Sounds to me like you and Sharon will have to work it out. I think you can handle it.” George was disappointed by Pete’s response. After all, in the job interview Pete assured him that Segal was serious about the renewed emphasis on quality. But it didn’t seem as if the idea had filtered down to the factory floor—where priorities are really set. The people in the plant were very loyal to Sharon. According to Gene Davis, they had often helped her patch up rejected products and rush them onto the shipping dock to help make quotas. George was anxious to confront her. Later that day when he saw her on the plant floor, he made a point of starting a conversation. He didn’t want to come on too strong, but he wanted to let her know he wasn’t happy about what had happened last week and that he didn’t want it to happen again. “Say, how did things go when I was gone?” he asked. “It was touch and go for a while there, but we managed to fill a couple of big, important orders.” “I understand you were short of assemblers.” “We’re always short of assemblers. But you’re right. Last week absenteeism was especially high, and we had to do a lot of juggling to meet our quotas. You know about the special promotions?” “I’ve heard of something, but no details.” “Sales is running a special seasonal promotion for both trade and retail. It’s in response to a new product that some competitor is coming out with. We’re trying to preempt that market share.” “Gene tells me we ran into some trouble with the 5051s.” “Yes, sales was leaning all over us for them. All I kept hearing all week was ‘Delivery! Delivery!’” “But some of the products were rejected?” “Well, the thrust washers were tight. But you know, if you run them tight for a little while, it frees them up just the right amount. You should have seen this place with all those fans running. It was quite a sight.” “But doesn’t running them tight like that burn the washers and stress the metal?” “Well, I’m not so sure about that.” George was annoyed by Sharon’s skepticism, especially since he felt sure of himself on technical matters. After all, he had been trained as an engineer. Sharon had started as a production worker and come up through the ranks. Despite the fact that George had been at Segal for only a month, he was sure Sharon didn’t understand the product as well as he did. “I don’t want to make a big deal of something that’s already happened, but it’s not such a good idea to burn the washers into spec. We should be putting the product together correctly in the first place.” “Oh boy, you won’t get any disagreement from me there. I had some people who started work on Monday and were on their own assembling parts that afternoon. I barely had time to show them where to hang their coats.” “Don’t new employees get any training? At my old company everyone was cross-trained so they could do at least a couple of different tasks. That way, people could be moved from one job to another.” “Do you know how big our training department is? Do you know what our turnover is? We’re lucky if we have one person who knows how to do the job. But you know, sometimes the problem is with the parts we get—not so much the ones we get from our shop but the ones we get through purchasing. I don’t know whether they’re mixing up part numbers or what, but those washers aren’t all the same.” “What makes you say that?” “When you put them on the fan shaft, you can tell. One fan has five washers and twenty-thousandths clearance. Another fan has five washers and five-thousandths clearance. If you ask me, they’re getting the cheapest washers they can find.” “Of course, if it’s just a slight variation, the assemblers can adjust for it when they’re putting the fan together,” George conceded. “Are you kidding? We can’t pull out a micrometer every time we throw a few thrust washers onto a shaft. We’d never get our orders out. The bill of material and assembly specs for a 5051 fan call for five thrust washers, so that’s what we use. Every once in a while a worker forgets that. Like last week, when we were in such a rush. Some of the people hadn’t worked on that line for months, so they were putting on five, six, seven of them—however many they could fit on the shaft. But normally it’s five washers. Look George, if you want to measure those washers, I’d be real happy. I’m all for anything that will help me meet my objectives.” “I’m not interested in measuring washers, but we should be checking that clearance before the fans get to final test. It would take just one second to make the adjustment during assembly, and you know how long it takes to pull the thing apart and remake it.” “It’s not that I don’t have a mind of my own, but I follow the process orders that come from engineering. That’s my job. I’m not going to arbitrarily change the procedure. Besides, five washers is usually right, so there’s really not a problem. Do you know we ship 95 % of our orders on time? We’re pretty proud of that record. Sales tells me that it’s our delivery performance that gets us business. I don’t want to mess with that.” The conversation with Sharon ended on a friendly note, but George knew he hadn’t won her over. He walked back to his office to decide what to do next. What’s the Way Out? William A. Golomski is president of W.A. Golomski & Associates, a Chicago-based international quality and productivity consulting group. Segal is in trouble. The company does not understand total quality control (the use of statistical concepts at all levels), and it lacks sound principles of leadership and team effort. Moreover, purchasing, sales, engineering, human resources, and general management simply do not understand their roles in quality. The situation in the case is common in companies whose CEO has a legal or accounting background. It occurs less often when the CEO has marketing or technical experience. No one at Segal understands variability. Statistical thinking is absent in both the production and quality functions. Practical statistical concepts are simple enough for those without a college degree to understand, yet no one at Segal has been trained to use them. George Mansfield is not a leader and lacks good judgment. There is no reason for him to have run off to a seminar after being on the job such a short time. And Mansfield failed to brief Gene Davis adequately, or to inform the rest of the organization that Davis was in charge while Mansfield was gone. Also, Mansfield does not think as broadly as he should. Warranty programs are usually designed by marketing with input from the reliability side of quality assurance. So while Mansfield may have an opinion on warranty strategy, his ideas are only one part of it. Often warranty claims are related not to operations but to design. (I know of a situation where 60 % of the problems in the manufacture and use of mechanical and electrical products were related to design.) Careful selection and training of employees—one of the best ways to prevent product problems—is not a priority at Segal. Senior management seems to use detection as the primary mode of control, but then only if it doesn’t get in the way of schedule. This is not a world-class quality company and it won’t survive. Ray J. Rogal is director of quality for the Ford Motor Company in Dearborn, Michigan. He implements quality policies and philosophies at Ford worldwide. Segal Electric’s loss of market share was at least partially due to its preoccupation with internal performance indicators as the absolute surrogate for the customer. This kept it from focusing on customers’ real needs in terms of quality, cost, and value. Apparently Pete Jameson believes that internal performance targets are foremost. When an issue arises involving the quality of products provided to customers, he immediately refers to quotas, budgets, and marketing plans. While these are important concerns, Pete’s failure to mention quality tells a lot about the culture at Segal and the way it views quality. Pete is all for quality until budgets and quotas are at risk. It’s no wonder that production personnel don’t emphasize quality when push comes to shove. An enlightened view of Segal Electric’s focus—a quality philosophy—might be, “To provide customers with products and services that meet customers’ expectations at a price that represents value.” A quality philosophy in itself does not change the way a company is managed. The quality philosophy must be an integral part of the culture and environment—and of how employees think about their jobs. It must be the basis on which every business decision is made. When consistently implemented throughout the company, the philosophy puts issues of budget and schedule performance into perspective. Such a philosophy would immediately raise a key question that went unasked in this case: “How will this product condition (motor and play and subsequent ‘run-in’) affect our customers?” This seems an incredible omission for a company that’s trying to regain market share. While the customer’s interest in on-time delivery apparently is well-known throughout the company, other matters of customer interest, like proper function and durability, seem to have escaped management’s attention. To refocus its definition of quality, Segal should consider these questions: How do we communicate customer needs and expectations to our production people? How should we educate and train employees in quality? What effect does the concept of variability have on incoming materials and the finished product in terms of consistency and customer satisfaction? How do we control the quality of our products (not quality control)? How do we continuously improve in order to better satisfy both current and potential customers? Keith Larson is general manager of the Eastern Operation for Barry Controls, a Watertown, Massachusetts manufacturer of shock vibration- and noise-control devices. The case depicts a problem that is all too familiar in industry today: lack of communication. This issue surfaces first in the way Pete Jameson communicates his commitment to quality down through the ranks. It shows up again among Jameson’s subordinates (namely, quality assurance, engineering, and manufacturing) when problems arise on the factory floor. Of course, words alone are not enough. As general manager, Jameson should be well aware that his actions must complement his verbal commitments. His response to George Mansfield about the defective fans illustrates his lack of total commitment to quality, and his subordinates will use that behavior as a guide in making their decisions. The lack of communication between departments is quite common in manufacturing organizations. There is always pressure, for multitudes of reasons, to push product shipments, and this can usually be done in a rational manner while maintaining high quality. When problems arise, engineering, quality, and manufacturing should join forces immediately and decide what to do. The solution may include a bill of material change, increased inspection points, or process changes. In most cases, engineering should take the lead in deciding corrective action and/or design refinements, and these actions should be implemented in a timely fashion. Doing so requires good, strong communication among departments. Communication is paramount to building a quality product and maintaining shipping schedules. At Segal, the process was changed without engineering even knowing about it, let alone approving it. Mansfield has every right to be disturbed by the way the situation was handled. He also has reason to be disappointed in Jameson’s response. Jameson’s desire for high quality has not been transmitted properly throughout the organization. All decisions made within the organization must reflect the importance of quality. Our actions usually dictate where our true commitments lie. Michael T. Cowhig is vice president of manufacturing at Gillette’s Personal Care Group, where he develops manufacturing strategy and product sourcing plans for both Europe and North America. Segal Electric’s attempt to restore its reputation for high quality and regain market share requires more than the addition of a highly paid quality assurance director. Hiring George Mansfield is a good first step, but unless everyone at Segal, from Pete Jameson on down, changes the approach to quality improvement, the effort will fail. Jameson’s policy of “quota first, quality second” sets the tone for the entire organization. Sharon Morse is getting a clear signal from the top that meeting quota is her primary objective. This damaging message must be changed by setting and measuring quotas on the basis of defect-free units only. But that one change is not enough. In fact, without corresponding changes in training, job definition, and purchasing policy, new quota standards will only increase conflict and frustration. Other changes should include training assemblers. They should be taught about product and about the fundamentals of quality. Also, purchasing should include the cost of rework and late delivery in the total cost of purchased parts. After all, if the washers had met the specs, the fans would have met both quality and delivery goals. Changing company practices will eventually enable Segal to use improved product quality as a strategic tool. But things are not going to improve overnight. The old quota system has no doubt been in place for some time now, and neither George Mansfield nor Pete Jameson can expect to legislate an attitude change. They will have to convince the organization that top management is committed to improving product quality through actions rather than words. Jameson should view the problem with the 5051 fans as an opportunity to demonstrate his commitment to quality improvement by taking action. And Mansfield, too, should see the 5051s as an opportunity. He should convince Jameson that improved quality does not require a trade-off in cost or customer service. Indeed, given the expenses associated with warranties, rework, and lead time, quality improvement actually lowers costs and improves customer service. At the Personal Care Group of the Gillette Company, production operators and inspectors make store checks to see firsthand how their efforts affect the product on the shelf. Quality is clearly a production department responsibility. On many of the lines, the operators and mechanics inspect the items. This practice cuts the time between quality checks and process adjustments and results in lower scrap and reject rates. Plant purchasing and quality control teams coordinate an aggressive “supplier quality process,” which includes vendor certification and recognition programs. Other teams composed of R&D and manufacturing representatives work on new product specifications to build quality into product and process designs before launch. The key to making all these efforts work, however, is top management commitment. At Gillette—as at Segal—quality improvement efforts succeed only when the direction is clear, consistent, and supported by the actions of top management.

The Case of the Quality Crusader

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