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A survey of productivity and quality issues in manufacturing: the state of the industry.

A Survey of Productivity and Quality Issues in Manufacturing: The State of The Industry

In mid-1990, we conducted a survey of 355 operations professionals who are members of the Institute of Industrial Engineers (IIE). We chose this sample because companies employing IIE members provide an excellent cross-section of industries and leading companies. Moreover, in the true sense of total quality programs, this broad base of operations professionals furnishes a perspective of organizational practices extending beyond the narrow confines of purely quality control activities, and are thus less subject to the potential distortions of limited or self-serving views. To ensure candid responses, steps were taken to make sure that neither the respondent nor the company were identified in the questionnaire.

Because of the range of topics included in the study, the questions were separated into two questionnaires. One of the two forms was randomly sent to the selected IIE members. Of the total 255 questionnaires returned, 196 responded to the first form and 159 to the second. An analysis of the common classification items included in the questionnaires revealed no significant differences in the industries, companies, or respondents in either of the forms. A similar analysis between early and late respondents provided similar findings. We can, as a consequence, presume that all responses are reasonably representative of the range of companies employing IIE members.

A number of surveys related to quality have been conducted in the recent past, but for the most part these reflect opinions and attitudes rather than actual quality management practices. We concede up front that there is a substantial concern with quality of U.S. products among consumers, executives, and employees. Research has shown this to be true.

Taking these concerns as given, our objective was to discover quality management practices - good and not-so-good - that are in use, and determine the strategic, marketing, and bottom-line impact of these practices. This report provides data on how the managers of U.S. companies perceive quality and customer value as strategic variables and how these are implemented within the company. A complete analysis of these relationships will be reported in future articles. However, a casual examination of the data reported here will suggest a number of prevailing practices and the extent to which they are currently in use.

First, there is the general conclusion that companies with higher market share and economic performance are also those that score well on the seven categories of commonly accepted good quality-management practices that we have identified. Additionally, there are dozens of specific relationships among the many variables explored in the responses. For example, do companies with higher perceived quality have better customer satisfaction? Do companies who rate customer service very important in company culture communicate this to employees. Is this practice associated with higher market share? Where cross-functional teams are utilized, is problem solving institutionalized? Do companies delivering high-value products realize benefits from their quality management programs? What is the relationship between the practice of good quality management and those companies with low perceived quality and value to the customer? And so on.

Two basic scales were used to determine respondents' perceived quality and value relative to their primary competitor and best-in-class in the industry. Depending on each individual's rating of his or her own company, the companies were classified as shown in the graphic on this page.

Table : Relative to Best-In-Class (BIC)
 Quality Value
117 Higher 117 Higher
 99 Equal to BIC 113 Equal to BIC
116 Lower 98 Lower

Relative to Direct Competitor (DC)
 Quality Value
122 Higher 127 Higher
113 Equal to DC 100 Equal to DC
 91 Lower 96 Lower

Almost without exception, the responses of the high-quality and high-value companies indicated a better understanding of good management practices as well as the use of these practices in the seven dimensions reported here. This, in turn, resulted in better market and economic performance. The actions and programs summarized next were characteristic of the high-quality and high-value companies.

They incorporated quality as a basis for distinctive differentiation in company strategy and top management displayed leadership in implementation.

Quality took precedence over volume as an objective and was an integral dimension of organizational culture. The concept of TQC was perceived as very important.

Information and control systems were in place and were integrated with operational systems. Problem-solving was institutionalized and supported with data collection and analysis. The cost of non-quality was computed and objectives set for reduction.

The quality focus was a part of human resource management and human resource utilization. Communications was a vehicle for involvement and employee participation was institutionalized through organization development and team or group involvement. Training was an ongoing process and a suggestion system was operational.

Quality assurance activities and organization reflected a major concern for quality. The concern was clearly defined, objectives were set, and audits were done. Quality was incorporated into life cycle management early in the process. Statistical process control was standard and supplier relationships were good.

Quality results emphasized the benefits of quality management programs. The components of such programs and the distribution of the responding firms along these dimensions are provided to help you structure and benchmark such programs for your company.

Dr. Joel Ross is senior professor of management at Florida Atlantic University in Boca Raton, Florida. He is the author of more than ten books and numerous articles on management topics, and has conducted management development programs for hundreds of companies around the world. This is his third article for Industrial Management. Dr. David Georgoff is professor of marketing at FAU. He has consulted with over 30 corporations and has written extensively. He is currently conducting research on the impact of quality management on economic and market performance.
COPYRIGHT 1991 Institute of Industrial Engineers, Inc. (IIE)
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Author:Ross, Joel; Georgoff, David
Publication:Industrial Management
Date:Jan 1, 1991
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