Gain a competitive edge with TQM.

Total Quality Management is arguably the single most important element of your company's future success. That's right, more important than equipment, more important than computers, and even more important than quality, delivery and price. As evidence, consider that the automakers--those casting users our industry looks to as harbingers of things to come--have mandated that all of their suppliers adopt at least the trappings of TQM, in the form of their QS9000 initiative.

Consider also that in TDC's work for the most successful foundries across our industry, we have found that they are only meaningfully different from their closest competitors in their approach to business management. In other words, what really differentiates competitors these days is their management technology, not their production technology. Put another way, TQM is your company's best bet for building a sustainable competitive advantage over its competitors.

TQM evolved, and is still evolving, from the work of many management gurus and industry leaders, as each has wrestled with the challenge of managing in today's complex world. While many TQM approaches exist, all of the new management technologies have the same essential goal: to eliminate non-value-adding business practices.

The cumulative effect of doing this well, as is now being proved by the industry's best companies and customers, is the elimination of product and service defects, quantum improvements in speed to market, dramatically lower costs, strong growth in profitability and enormous gains in customer satisfaction. Because the foundry process is the most complex in all of manufacturing, the benefits of a new management approach can be exponentially higher for our industry.

Statistical Process Control

The new management technologies have implications for every aspect of the business. The most widely known and most widely practiced technologies in our industry involve the tools and techniques of statistical process control (SPC). SPC, as practiced by most, is an extremely useful tool for eliminating variation in the production process. As such, SPC has played an important role in improving cast product quality.

In addition, SPC's success has highlighted the fact that isolated attempts at continuous improvement at the tactical level, no matter how successful, cannot result in a sustainable competitive advantage or in the dramatic achievements of those foundries that have embraced, from the top down, one form or another of the new management technologies.

Like so many things, a full understanding of the need for TQM and its scope begins with the customer. For years, customers have been demanding better quality, faster delivery and lower prices (especially the latter, according to most foundry managers that I know!).

While significant improvements have been made, most foundries continue to squeeze the most out of traditional business management concepts and practices rather than seeking completely new arid better ways. In the words of one of the wisest people I know, this amounts to "polishing the rotting apple when the customer really wants an orange and can buy one from your best competitor."

Advice for the New Year

So, for all those CEOs out there who made New Year's resolutions about achieving big improvements in their businesses' performance, I have a few words of advice:

1. Recognize that maybe, just maybe, you've squeezed about as much as you're going to get out of your traditional MRP/ scheduled manufacturing system and antiquated non-manufacturing processes; admit that it's possible that there might be a much better way. Consider that, if you don't, experience indicates that your company is all but guaranteed to suffer from improving competitors and ever more demanding customers, in the years ahead.

2. Once you've done this, and even before you've done it if that's your style, read "Competing in World Class Manufacturing--America's 21st Century Challenge." This very readable and practical book makes a strong case for TQM, goes on to describe the power of manufacturing as a competitive weapon and includes chapters on each of the functional areas where the new management technologies can have a major positive impact on business performance. The book was written in 1990by the folks at the National Center for Manufacturing Sciences. If you have questions about it, just call. I've read it twice!

3. Continue learning about TQM (especially from the experiences of others like your customers) and begin to implement new ideas as your comfort level allows. This is the essence of continuous improvement with the added twist that we're working on improvements at the strategic and management level rather than at the much more familiar and comfortable (for CEOs, at least!) tactical level.

Also, stay tuned to modern casting and "CEO Journal." We'll continue to explore various facets of the new management technologies in the months ahead.