The Century of Quality

by Joseph A. DeFeo,
president & chief executive officer,
Juran Institute, Wilton, CT
he 20th Century will be remembered
as the Century of Productivity, while
the 21st will come to be known as
the Century of QuaJjty. So predicts Dr.
Joseph M. Juran, father of the quality move­
ment. But exactly what will the Century of
QuaJjty look hke?
Let's begin answering these questions by
reviewing the drivers for quality as we see
them today. They fall into three general cat­
egories-over capacity of goods produced,
public policy, and e-commerce.
These drivers can be viewed as the third
wave in a time line of productivity. First'
came the industrial revolution, which fea­
tured high quality and high cost. Then
came mass production, a period ending
well past World War II, when there was
moderate quality and low cost. Now we
are in an era when quality is increasing
and cost is being lowered. This third era
itself has three stages: the first, focusing
on quality; the second, focusing on the
product process; and the third, focusing
on the uses of information.
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As programs like Six
Sigma become the
norm, tquality will
c.onthlue to im,proye
at eve.rYI 'I'evel in the
supply chain
Concentrating on E-Commerce
Businesses and consumers now have
easy and instant access to product infor­
mation. With price transparency the
norm, quality becomes the significant illf­
ference between products.
Moreover, e-commerce itself requires
super-fast, defect-free processes to make
it competitive. In the old economy, a dis­
satisfied supermarket shopper eventually
returns to the store because choices are
limited. But a frustrated online shopper
will immedjately log on to another site
and perhaps never again visit the first one.
Customer defection becomes instant and
may be permanent. E-commerce requires
perfection at the front end (order entry,
transfer of payments, data gathering) and
at the backend (supplier raw material
ordering, monitoring of shipping, distri­
bution).
By the year 2003, online B2B sales will
total $1.4 trillion, as projected by
International Data Corp., or even $3.9
trillion, according to Gartner Group, Web
exchanges will account for 53 percent of
all online business trade by 2004, predicts
Forrester Research, and equal 37 percent
over the total B2B market, says Gartner
Group. There are now close to 600 B2B
exchanges. For example, Alibaba.com, a
free site started in China, is said to have
registered 38,000 companies world-wide.
Freemarkets.com, which began as a metal
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and plastic parts site, is auctioning tax
preparation, temporary help, relocation,
and other services.
Internet searches will only get easier as
the Web HTML language is replaced by
Extensible Markup Language (XML)
software, which provides more precision
in identifying needs. The Internet will
become available on a broad range of
existing and new appliances. Over the
next five years, more than 80 percent of
new corporate e-business applications
will be designed for non-PC devices such
as wireless phones, predicts IBM's
Global Telecommunications division.
Businesses have made enormous
investments in infotech. Competitive
advantage will go to those that use the
information best.
A quality education
Increasing numbers of universities will
establish colleges of quality. Schools of
business and engineering will offer
degrees in quality management and create
required courses in quality. Business,
engineering, and science curricula will
include quality subjects. International
universities are leading in this area. Even
grade-level schools are incorporating into
their curricula the basic fundamentals of
quality, like stratification, prioritizing,
problem-solving, and planning.
With increased professionalism there
will be more certification. This is already
happening in engineering and it will hap­
pen in business as well. A national exam­
ination and a broad professional title will
parallel existing specialized certifications
like Certified Public Accountant and
Chartered Financial Analyst. Though
public policy issues will stimulate the
creation of these certifications, their
growth will come from the financial
rewards realized by certified individuals.
Witness the increased compensation
being enjoyed by employees certified as
Black Belts who were trained in Six
Sigma initiatives.
Plus, now that customers have tasted
quality, they want more. How else to
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explain the declining. American Customer
Satisfaction Index scores in the face of
increasing quality? Responding to in­
creased demands, businesses are shifting
theil: focus from satisfying customers to
exceeding their expectations.
Migration of quality
Once considered a manufacturing dis­
cipline, quality now affects every aspect
of life and will continue to expand its
reaches. Consider the kinds of organiza-
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tions that have won Baldrige awards or
sent representatives to Juran Institute's
annual quality conferences. They include
professional and scientific organizations,
school systems and universities, agricul­
ture, transportation companies, govern­
ment agencies and the military, to name
only a few.
Quality professionals also will broaden
their span of involvement. One major
change will be an increased role in
design, as business increasingly appreci-
ABOUT THE AUTHOR
Joseph A. DeFeo, president and chief exec­
utive officer of Juran Institute, Inc., Wilton, CT
is responsible fOr providing executives world­
wide With business solutions and organization­
al training to improve the effioiency and quality
of virtually every opetation perf0~med by a
company and its employees-including
design, manufacturing, inventory, delivery and
all transactional processes.
The principal business and management programs created and
implemented by DeFeo and his associates include Juran's Six
Sigma Breakthrough, Benchmarking Best Practioes Supply
Chain Optimization, Strategic Cost Improvement, Bal'anced
Scorecard and Strategic Deployment, Business Process
Improvement, Strategic Systems Integration, and Achieving
International Quality System Certification.
A regular guest speaker at events for The Conference Board,
The American Society for Quality, and Juran Institute's Annual
IMPRO Conference, DeFeo is also the author of several man­
agement articles inoluding "Strategic Deployrmertt," which
appears in the fifth edition of the Juran Quality Handbook.
DeFeo has served as an adjunct professor of Global
Competitive Quality Management at Central Conneoticut State
Urtiversity. He has a bachelor's degree in 'Industrial Education
fr.orn Central Oonnectlcut State College, and an MBA korn
Western Conneoticut State University.
j
ates the value of moving quality
upstream. Quality professionals will
become multi-faceted consultants, techni­
cians, trainers, safety officers, designers,
and customer liaison/salespeople, while
also involving themselves in purchasing,
engineering and public relations.
It isn't only the quality officer who is
leading the quality effort, however. In
many organizations, the prime mover is
the financial officer. Elsewhere it might
be the information officer or the human
resources officer. This happens primarily
in organizations where the quality officer
views his or her role as an authority in a
highly specialized aspect of quality.
Moreover, quality will become a func­
tion of every job title in every organiza­
tion. As the impOitance of employee qual­
ity performance grows, there will be more
emphasis on employee satisfaction.
Indeed, organizations will apply the same
fervor to creating employee satisfaction
as they do to customer satisfaction.
Training for employee skills development
also will continue to grow.
Quality will continue to improve at
every level in the supply chain as the var­
ious participants in the chain cooperate to
make . improvements. Volkswagen in
Brazil now requires suppliers to install
and test parts on the assembly line.
Variety Perkins, a diesel engine maker,
provides suppliers with daily measure­
ments of their performance. Honda of
America Manufacturing asks its suppliers
to provide detailed breakdowns of their
costs so it can compare them with those
of other suppliers and suggest improve­
ments. Johnson Controls helps each of its
key suppliers improve their productivity
by assigning an individual employee to
serve as a "champion" of each supplier.
Downstream improvements are being
made as well, as businesses develop cus­
tomer partnering programs to improve
packaging, shipping, and even product
development.
Quality also will continue to migrate
t/u'ough cross-industry learning programs in
fields as diverse as health care, law, and
education. Industry-university links, indi­
vidually and via groups, will make impor­
tant contributions as well.
Finally, quality also will migrate interna­
tionally. We will see Third World countries
make quantum leaps. NOith America will
continue to make the greatest gains in qual­
ity; it will be followed first by Asia, then
Mexico, then Europe where, currently, only
industJies in global markets, like telecom,
are quality pioneers.
Mexico is making extraordinary strides.
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One reason for this is the high respect its
universities enjoy, the large numbers of.
engineers they graduate and the strength of
university-private sector partnerships.
When I speak at a university-sponsored
function in the U.S., the audience is 100; in
Mexico, the audience numbers 1,000.
In every organization that focuses on
quality, Six Sigma will become the stan­
dard. The organizations that have made the
most improvements from quality in the past
will get the most value from Six Sigma.
Engineering-driven companies and busi­
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nesses in competitive industries will contin­
ue to be among the leaders. GE Capital's
experience has prompted fmancial compa­
nies to look into Six Sigma, though insur­
ance companies are lagging. The health
care industry has histOlically been slow to
adopt quality standards, but HMOs are·
exploring Six Sigma.
Quality's future
How far can quality go? Only a few
years ago, the idea of Six Sigma quality was
considered utopian. Now that it has become
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possible, we can aspire to an even higher
standard: Seven Sigma (1.2 defects per mil­
lion) and even Eight Sigma (0.5 defects per
million.) These standards are achievable,
given the gathering power of the drivers for
quality and continuing developments in
education and certification, intelligence
tools, increasing customer expectations, the
migration of quality to new areas, and the
commitment of senior management.
Dr. Juran has noted that quality will
improve only when there is proof of the
need for it. Today the proof is inescapable.
RAN
INSTITUTE
115 Old Ridgefield Road, P.O. Box 811, Wilton, CT 06897-0811
Tel: (203) 834-1700 Fax (203) 834-9891 www.juran.com
REPRINTED FROM QUALITY IN MANUFACTURING MAGAZINE, NOV.lDEC. 2000