Philip “Phil” Crosby, Dr. W. Edwards Deming, and Joseph Juran, all made paramount and lasting contributions to the field of quality management. Each was truly phenomenal in his own right. Thanks to the knowledge shared by consultants W. Edward Deming and Joseph M. Juran, war-torn Japan improved their products and their processes. The Japanese became so proficient at quality management, their success was a catalyst for Western companies to adopt their philosophy and practices.
Dr. W. Edwards Deming gave us his the System of Profound Knowledge, the 14 Points for Management (or obligations), Prevention and Process Improvement, Chain Reaction for Quality Improvement, Common Cause and Special Cause Variation, The Seven Deadly Sins along with The Ten Dreadful Diseases, and he also made famous the Plan-Do-Check-Act (P-D-C-A) Cycle originated by his colleague Walter Shewhart.(See W. Edwards Deming)1
Joseph Juran gave us the Quality Control Handbook and the “Pareto principle” used by millions to separate the “Vital Few” from the “Trivial Many”, the Project-by-Project Approach, and the Juran Trilogy. His classic book, Managerial Breakthrough, first published in 1964, presented a more general theory of quality management. It was the first book to describe a step-by-step sequence for breakthrough improvement. This approach has contributed significantly to what is known as Lean Six Sigma. (See Joseph Juran) 2
Phil Crosby took a more pragmatic approach to quality. He created the phrase “Do it Right the First Time (DIRFT)”. Crosby primarily operated in the United States; Winter Park, Florida to be exact. He consistently focused on how quality, or the lack thereof, directly affects the bottom line. Crosby pioneered the use of Zero Defects at the Martin Company who, at the time, produced Pershing Missiles. He gave us the “Absolutes of Quality Management”, 14 Steps to Improvement, and the Four Pillars of Making Quality Certain. Additionally, Crosby advocated his Quality is Free belief and trademarked Price of Nonconformance. Companies who followed his methods including RCA, ITT, GE and the Sperry Company saw significant cost reductions in scrap, manpower, and rework coupled with record breaking throughput. His principles have been followed for many years before Lean Six Sigma. (See Philip Crosby)3
THE COST OF QUALITY
“If you can’t measure it, you can’t improve it.” So, how were the three modern quality frontrunners alike and how did they differ in terms measurement and, in particular, the cost of quality (COQ)? Deming focused measurement on statistical thinking and methods. The Crosby and Juran views were closer together regarding the monetary COQ. However, Crosby was the more direct of the two. He related quality costs to the bottom line and preventing defects to avoid the Price of Nonconformance. COQ has several different meanings. According to Crosby, prevention (i.e., DIRFT) is critical to avoiding the high cost of rework and lower productivity. On the other hand, COQ deals with losses associated with poor quality. Here we’re talking about expenses stemming from failing to provide a quality product or service.4
A dollar amount can be established for COQ. This figure is derived from the difference between the price of nonconformance (PONC) and the price of conformance (POC). PONC is the result of a lack of quality accounting for 20% to 35% of revenues. POC is the expense of doing things right – typically 3% to 4%. COQ is not a standard to be met. Rather, it is a flow. Managers should spend time identifying where it is occurring and address what makes it occur. Ibid.
While “quality is free” as Crosby said, low quality always has a price. Organizations will lose their competitive edge unless they involve quality professionals who can accurately identify costs and maximize profits.
A REAL WORLD EXAMPLE
Texas Nameplate Company manufactures and sells high quality nameplates, identification tags, nameplate tags, custom labels for high-pressure valves and equipment common in the aircraft and aerospace, automotive, electronics, government and military, marine and oil industries, along with its patented DIGITAL NAMEPLATE® process on equipment. The company offers chemical etching, screen-printing, and metalphoto-sensitive processes suitable for stainless steel, polycarbonate and polyester based material. The company is renowned for its expertise in providing “harsh-environment” metallic nameplates for products that operate in rugged locations or under extreme conditions.5
During the early 90’s, Texas Nameplate was asked by a prime customer, Lockheed Martin, to engage in statistical process control (SPC). Dale Crownover, President/CEO, began his quality journey by taking zero-defects classes from Phil Crosby Associates Quality College. Crownover would attend the training, return to the plant and implement what he was learning in school. At the time, the company was on the verge of bankruptcy and the situation was looking mighty grim. They implemented SPC side-by-side with continuous process improvement.
The company had an enormously high scrap rate in the 15% to 18% of billing range or about $20,000 per month. Crownover told his people, “Look, if you will reduce the scrap rate, whatever we save, will be redistributed to all employees as profit sharing.” The employees accepted the challenge. A huge sense of employee ownership and commitment emerged. Due to the improvement efforts, the scrap rate was reduced to nearly 3.7%. True to his word; all the cost savings were returned to all employees across the board. The company directly benefited from reduced rework, an elevated pride in workmanship, increased customer loyalty, and increased sales.6
In light of SPC working for them, Texas Nameplate embraced total quality management which worked well for them as well. Next, along with more process improvements using quality tools they became ISO 9001certified. The ISO management system was an excellent fit with their continuous improvement approach. But the most significant contribution ISO made was in establishing a foundational structure for quality. The next challenge to face came with the Malcolm Baldrige National Quality Award. Crownover saw the award criteria as an opportunity to learn what could be implemented in Texas Nameplate to improve the company. Astoundingly, they went on to become the smallest company in history to win the award, and the first ever to win it twice! Additionally, Texas Nameplate is ISO 14001 certified and is an authorized label supplier of UL products.
Dale Crownover’s favorite quote is by athlete Kim Collins: Ibid.
“Strive for continuous improvement, instead of perfection.” 7
Kim Collins has been a sprinter for his country, St. Kitts and Nevis, at every Olympics competition since 1996 and he continues to score personal bests as recently as 2016.
CONCLUSION
“The only thing that is constant is change.” (Heraclitus, c. 500 BC) 8. When it comes to quality, the fundamentals seem to be ageless. Many different quality management approaches have emerged since the latter half of the 20th century. And, as the saying goes, “All roads lead to Rome.” Each organization chooses what works best for them; the path needed to achieve their goals. Bumps, setbacks and heartaches are sure to be met along the way. Some may use a specific set of tools, techniques or methods. Others may combine several different approaches into a hybrid of those strategies. Still others may elect to pursue ISO certification. Texas Nameplate Company rose from the brink of disaster to astonishing levels of achievement. They merged both old and new quality principles with a relentless can-do spirit; a guaranteed formula for success. In the future, we will focus more specifically on what the cost of quality is and what can be done to improve the organization’s bottom line.
It should be noted, any of the quality experts’ tools and practices could have been applied to lead Texas Nameplate’s road to success. Crosby’s teachings just happened to figure so prominently in the groundwork for their quality journey.■
REFERENCES
1 Dr. W. Edwards Deming, http://asq.org/about-asq/who-we-are/bio_deming.html
2 Joseph M. Juran, http://asq.org/about-asq/who-we-are/bio_juran.html
3 Philip Crosby, http://asq.org/about-asq/who-we-are/bio_crosby.html
4 Crosby, Philip (1984) Quality Without Tears: The Art of Hassle-Free Management
5 Texas Nameplate Company, http://www.nameplate.com/company/
6 Crownover, Dale, How to Stay Motivated on Your Lean Journey, GembaPodcast.com
7 www.azquotes.com
8 www.thedailyphilosopher.org
Bio:
Murray Gonzalez has been involved in quality management since 1990. He is a marketing manager with QualityWBT Center for Education providing online training for quality auditing, standards, and process improvement tools www.QualityWBT.com. Gonzalez holds a Master of Science in Psychology from University of West Florida with a specialization in Industrial-Organizational Psychology and an Organizational Development/Leadership certification from University of West Florida. Gonzalez is an ASQ Certified Biomedical Auditor and a Certified Six Sigma Green Belt. ©QualityWBT 2016.