Making Quality in America

In his New York Times column, Paul Krugman, spoke of a hint of the return of American manufacturing.  In this column Mr. Krugman mentioned that Michigan which had an unemployment rate of 14.1% in August 2009 is now experiencing the improved rate of 10.3%, and as Krugman noted “still above the national average, but nonetheless a huge improvement.” 

Krugman continues, “I don’t want to suggest that everything is wonderful about U.S. manufacturing. So far, the job gains are modest, and many new manufacturing jobs don’t offer good pay or benefits.”

It is one thing to make things, again.  It is entirely another thing to produce quality!

If American manufacturing (and its’ management) is to become anything it must become synonymous with quality; that is, if the U.S. is to recapture its’ economic leadership and the middle class its’ viability.  Neither of these will happen if U.S. corporations forsakes quality while holding the assumption that lower wages leads to profitability, job creation and a sustainable economy.

American manufacturing has been on the decline long before the 2008 financial crisis, which just kicked further down the road.  So getting back to managing as we’ve always been managing won’t cut it!  If American management continues its’ pursuit of profit at all costs, then the hint that American manufacturing is making a return will remain an illusion.

Today many corporations are playing with the concept of lean as a means to increase profit through the elimination of waste.  After all who doesn’t want to be the low cost producer!  Unfortunately, what is not understood is that the only way to enhance the viability of a business enterprise (yes a sustainable competitive advantage) is through a commitment to quality.

4 thoughts on “Making Quality in America

  1. To me me the message that Krugman is delivering is appallingly wrong and out of date if he is suggesting that high quality will some how give some competiitive advantage to US manufacturing

    What he should being saying is that if you are not delivering high quality porducts you have no right to be in business and you have no right to be in a job.

    A harsh message but that is the way the world is.

    In addition he should be saying that manufacturing needs to compete in totally new and novel ways.

    The nature of the importance of quality over the last 10 or 15 years has changed. a few years ago, supplying high quality products or services gave you competitive advanatge. Now it is simply an essential for keeping you in business

    Most consumers now treat high quality as a given. A standard expectation.

    Think of the following If your making widgets and your quality rate is measured in fractions of ppm and your competitor in a low cost country some where else in the world is making the same widget at the same level of quality but at lower costs. You have no quality advantage over your competitor. He or she has read the same books on quality as you have. They are delivering the same poduct quality but at lower cost.

    We have to look at the overall value of what we make or supply.

    It can be argued that quality is about value. Taguchi and his loss function for instance. In this case I am not refering to this notion of value.

    The traditional competive criteria were price, quality and delivery performance. Technology always having been in the equation. To me these 4 criteria are no longer suffcient, given that low cost countries are rapidly catching up.

    I work with Lean and Six Sigma, QFD etc, but We are falling into tremendously deep and dark hole if we think these tools are going to fix the problems we face on their own.

    We need to radically alter the equation of how we compete.

    I suggest We can do this by use of our creative ability and by innovation..

    Through the use of creativity and innovation we can radically increase the value of what we produce and in most cases radically decrease the cost.

    We need to apply creativity and innovation in all aspects of what we do. Whether it be in product design, or the processes by which we manufacture or in how we distribute and market products.

    We also need to create and innovate totally new products.

    I often use this example but If the music industry progessed at the same rate as the automobile industry we would be still be listening to music on wax discs or 78s at best.

    To rub it in a Detroit auto worker from 1910 would feel quite at home in even Detroit’s most modern plant of 2011. He would not require any additional training.

    Despite the fortune spent on CAD/ CAM / CAE in the last 30 years. Are the vehicles that are being produced now radically different from those of 40 or 50 years ago? How much better engineered are they ?.

    I believe the above is heart of the problem facing Manufacturing it is not just a question of quality.

  2. Creating and sustaining an environment wherein creativity and innovation can emerge is essential to being a quality focused organization. As Deming asserted, you will not have quality unless you are committed to and simultaneously engaged in each of the following:
    1. improvement of process
    2. improvement of product and service
    3. innovation of process
    4. innovation of product and service

  3. Dear Progressus

    My personal experience of the manufacturing world is that given the 4 points from Deming you list above I find most industry effort is currently on points 1 and 2. Points 3 and 4 get greatly ignored.

    What I find more worrying is that given Deming was developing his ideas around about the post WW2 era the quality standards that most of manufacturing and service sectors work to (ISO 9001 and in automotive TS 16949 and its earlier version QS 9000) have only recently in the past 10 to 15 years started to even reflect properly points I and 2.

    Even now there is no direct mention of points 3 and 4 in these quality standards or translation into requirments. Even more worryings to me is the way these quality standards are interpreted and implemented , they seem to some how stifle creativity and innovation rather than encourage it.

    When people in industry talk about quality, they are most often refeing to a very narrow definition of product or process quality. They are not refering to the wider concepts of Quality of Deming, Crosby et al. Of course there are many exceptions.

    My frustration is that certain definitions of quality and the quakity tools that we deploy are blinding us.

    Currently with quality and cost we tend to just to concentrate on the factory and the incoming supply chain,

    There is a much bigger problem concerning sales and marketing and distribution. Fristy we are failing to develop new markets and secondly the factory gate cost is very often insignificant compared with the retail price and distribution and marketing costs.. We try and save pennies and cents in the factory but are losing $ in the sales and distribution.

  4. If there is a commitment to quality, then there necessarily must be a commitment to a congruent change in business of business, a change in mindset. Otherwise viewing quality through the lens of traditional management produces a limited understanding that is altogether limiting, as your experience reflects. The producers of these quality standards (such as ISO9001 and 9000) use the same lens thus limiting understanding as well.

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