Talking Quality with the C Suite

In a guest post to ASQ's "A View from the Q" blog, Dr. Suresh Gettala, a director at ASQ India, discusses how quality professionals might effectively talk about quality to convince the C-suite about its role to drive and sustain a culture of quality. My 34 year experience in a global manufacturing company echoes and reinforces much of what Dr. Suresh suggests as the best ways for quality leaders to discuss the importance of quality with senior management.

First and foremost, the quality professional must be fluent in the language of management; that is, the language of money. The quality professional must be familiar with financial terms and measures of inventory, investment, and loss. Terms and concepts such as Balance Sheets, P&L, Assets, Liabilities, Gross Margin, Operating Income, Nonworking Capital, Internal Rate of Return (IRR), Payback Period, Return on Investment, Economic Profit, etc. The more comfortable and fluent the quality professional can become when discussing the financial impacts of quality to the business bottom line the stronger credibility he/she will have among the C-suite. Cost of Poor Quality is an important metric that quality professionals can use to educate the C-suite on quality costs.

• Appraisal costs include costs of inspection and testing. How many dollars could be saved by using the process approach to understand the root causes of product defects, and focus improvement efforts on improving the process and inputs rather than rely on after the fact product testing and inspection?
• Internal failures include rework, waste and scrap. What percentage of waste is "inherent" versus process? Process waste is usually much easier to reduce by addressing sporadic special causes whereas Inherent waste reduction may require fundamental changes in process or product design.
• External failures include customer complaints, warranty costs, and loss of customers. In today's world of highly connected, savvy consumers it is more critical than ever to not just satisfy your customer but to consistently delight your most valued customers. Touchpoints - customer interactions - are becoming a greater differentiator of quality perceptions. The power of social media and word of mouth marketing to influence customer purchasing decisions cannot be overlooked. The effective quality leader is able to quantify customer experience (CX) as a new measure of quality on the C-suite scorecard.

Every quality professional should also be conversant in Constraint Theory, Lean, and Six Sigma/TQM. Senior management is less interested in cost avoidance and other types of "soft" savings than it is in learning how to save "hard dollars". Theory of Constraints teaches us that the application of quality principles to reduce, subordinate or eliminate constraints to throughput are the best ways to save "hard dollars" other than reducing headcount. Lean principles teach us to abhor waste in all of its forms and manifestations, most notable work in-progress (WIP) and inventory (nonworking capital). Value Stream Maps are an invaluable tool to illustrate to everyone involved in the supply chain and to senior management how to see and quantify the piles of nonworking capital located throughout a product's value stream, from raw materials to WIP to finished goods.

One of the best, most effective, endeavors I had the pleasure of participating in my career was to bring Heero Hacquebord in to teach our senior leaders and executives about understanding variation. Heero designed and delivered a series of short modules titled, "Statistical Thinking for Leaders". This training was targeted specially to management and addressed many of the topics I shared above. The goal was to mitigate the tendency of 2-point comparisons and the subsequent all-too-common knee-jerk reaction of management tampering (treating common cause variation as special cause). Common cause variation reduction strategies are quite different from special cause.

Authentic, informed leadership is a critical input to build and sustain a culture of customer-focused, process-approach, systems-oriented quality management leading to organizational performance excellence.

A Day with the Future of Quality

In a guest blog to A View from the Q submitted by Edwin Garro, an ASQ Fellow and founding member of ASQ Section 6000, Costa Rica, Edwin shares his recent experience while visiting San Rafael de Poás Technical High School, in the mountains of Alajuela, Costa Rica where 15- and 16- year olds will graduate in 2017 with a technical degree in Quality and Productivity. Edwin asks whether similar programs exist elsewhere.

It has been my great pleasure to participate on the Program Improvement Advisory Committee for the Bachelor of Manufacturing Management degree offered at the University of Minnesota-Crookston. Though not a high school curriculum as per Edwin Garro's example, UMC's BMM degree program is tailored to employees of local manufacturers and includes a strong emphasis on quality principles, statistics and quality management. Per the UMC BMM program brochure the program "is designed to meet the needs of people already in the workplace and two-year graduates who want to continue their education to the bachelor's degree level with seamless integration of prior credits earned. The program is available for in-class instruction on campus, as well as through online education. The online education components of the program are delivered through asynchronous electronic communication technologies and self-directed learning." This is a unique quality management degree program specifically targeted to support area manufacturers and businesses located in rural northeast Minnesota and to help improve the marketability of UMC students.

"The bachelor of manufacturing management (B.M.M.) is a career-oriented program that prepares students to manage people and machines in a manufacturing environment. Graduates will be able to supervise a manufacturing process, manage human and mechanical resources within budgetary constraints, and assure product quality. Program outcomes:
1- play a growing role in their workplace, especially in supervision and management
2- contribute to manufacturing system technology and quality control
3- establish a quality control department and train staff to meet quality audits
4- develop grades and standards of quality
5- set up acceptance sampling and inspection procedures
6- prepare quality control charts and reports
7- control the movement of materials in the most efficient manner at the right time, to and from the correct place in the required quantity
8- do a safety audit through a comprehensive approach to problems of safety in the workplace, including meeting the OSHA standards."

Dr. Christo Robberts is the program director for the Quality Management program and the Manufacturing Management programs at the University of Minnesota Crookston. For more information please visit the University of Minnesota-Crookston webpage at http://www1.crk.umn.edu/academics/business/bmm/

Does Mission Matter?

While Vision, Leadership, Values and Principles are widely recognized for their importance to an organization's sustainability, effectiveness and excellence, incoming ASQ Board Chair, Pat Lalonde, asks whether mission matters to improving the quality culture.

The Criteria for Performance Excellence (Baldrige) defines Mission as, "Your organization’s overall function. The mission answers the question, “What is your organization attempting to accomplish?” The mission might define customers or markets served, distinctive or core competencies, or technologies used."

My experience in leading the ASQ Statistics Division (1999-2000 and 2001-2002), the Minnesota Section of ASQ (2011-2013), as well as my 34 years professional work experience reinforces the importance of an understood, well-deployed, consistent mission to developing the organization's strategic plan and then working the resulting business plans to achieve excellence. Whereas Vision is more aspirational, Mission provides clarity to the workforce and guides day-to-day decisions regarding business operations. Clarity of mission is critical in defining who you are and how or whether your value proposition differentiates you from the competition. A sound Mission - in concert with a well-articulated Vision - assists in the development of a strategic plan that addresses gaps between the Current State and the organization's desired Future State.

A consistently applied Mission, congruent with the organization's Values and Principles guides behaviors and decision-making in recognition of the organization's core competencies, strengths, challenges and opportunities regarding the selection of key suppliers and complementary business partners.

Of course, the organization's Mission must be considered and consistently applied by leadership, management and the workforce in order to be effective. I invite the reader to visit the MN ASQ Section website to learn how its leadership skillfully responded to member input and redefined its Mission and Vision as part of its strategic planning process, optimizing its value proposition(s) for the effective development and distribution of its products and services to its key markets and customer segments.

"Made in ___" vs. Country of Origin

In the latest post to the ASQ CEO Blog, A View from the Q, guest blogger and ASQ Managing Director Laurel Nelson-Rowe asks, "What does Made in ___" mean to you?" At a recent by invitation-only quality conference in Shenzhen, China, titled “Huawei Big Quality International Seminar", some common words and themes heard were feeling, emotion, patriotism, pride and competitiveness.

Prior to my retirement from a large multinational manufacturing company I served as both the Quality Manager and Country of Origin Coordinator for my business unit. I believe I bring a rather unique perspective to the matter of quality and Made in ___. Here in the United States, the terms Country of Origin and Made in USA are often incorrectly used interchangeably. Country of Origin (COO) is determined for purposes of trade; i.e. customs duties. The proper Country of Origin is determined based on where the "substantial transformation" activity occurs. For purposes of kits and multi-paks the "essential character" of the products also comes into play. It should be noted that the US Gov't has its own set of rules when purchasing certain commodities, whether for the military or government offices (GSA contracts). Many of these COO determinations are dictated by trade agreement acts (TAA) such as NAFTA, or by law (Buy American Act, Berry Amendment, etc.).

"Made in USA" on the other hand is a product marking regulated by the Federal Trade Commission (FTC). The FTC has defined criteria that must be met in order for a manufacturer to claim "Made in USA" and also incorporate the image of a USA flag on the product packaging. The "Made in USA" claim requires that the total manufactured cost of the item must be "all or virtually all" United States content. This cost includes raw materials, components, sub-assemblies, packaging, equipment burden rates and labor. A product whose USA costs are assuredly less than nearly 100% USA (for example, product that is produced or assembled in the USA but with components sourced from outside the US) might not qualify for "Made in USA" labeling. In such instances the manufacturer should state that such product is "Made in the USA with globally sourced materials" (or similar language). Unfortunately, it is my experience that not every company applies the same reasonable basis / interpretation to the "virtually all" cost content requirement. Does "virtually all" mean 99%, 95%, 90%, 75%, anything greater than 50%? The State of California has an even tougher requirement for "Made in USA"... 100% (with few exceptions). This plurality of "Made in USA" definitions imposes significant supply chain administrative processes and cost to the manufacturer.

It is quite possible for a given product to have multiple Countries of Origin depending upon the rule being followed; for example, one determination for Normal Trade Relations (i.e. Customs) and another COO for Gov't purchases (i.e. Trade Agreements and specific commodities). It is also possible for a product to have COO = United States (based on substantial transformation location), but not qualify for "Made in USA" (based on cost).

Aside from the producer's technical aspects of properly determining Country of Origin and Made in ___ product  markings, there is the consumer's emotional element as referenced in the opening paragraph. Both perspectives are very real and very important to commerce. There is much debate on the value of free trade agreements, which I shall not delve into here, except to briefly present the economic theory of Comparative Advantage.  This theory, supported by empirical data, suggests that "where two countries capable of producing two commodities engage in the free market, then each country will increase its overall consumption by exporting the good for which it has a comparative advantage while importing the other good, provided that there exist differences in labor productivity between both countries" (source: Wikipedia). Over the long term, comparative advantage drives specialization and nurtures innovation. Arguments against the theory of comparative advantage cite the dangers of diminishing returns (i.e. productivity), and the pros & cons of diversification vs specialization.

From a quality perspective, today's consumer is very technically savvy and is able to shop via the internet to find the product they want at a price they are willing to pay. Word of Mouth advertising such as online ratings & reviews empower the savvy consumer to find the best overall experience regardless of the product's country of origin. If "Made in ___" is an important value proposition to you please be aware of the different interpretations of the minimum content requirement.

The Future of Quality

ASQ's 2015 Future of Quality report, titled "Quality Throughout", examines the changing role of quality. The 88-page report is a compilation of essays from experts in their fields from around the globe. In a guest post to the ASQ CEO's blog, Laurel Nelson-Rowe, ASQ Managing Director, asks for feedback from ASQ's Voices of Quality bloggers.

I have experienced many changes in the field of quality over my 35 year career. Today's quality professional must not only be proficient in the knowledge and application of quality principles, methods and tools to improve processes, products and services, the effective quality professional must never stop learning and experimenting.

The "indispensable" quality professional is fully aware of mega-trends, CEO challenges and emerging markets, and is able to successfully communicate/ translate/ faciltate those long-term opportunities into aligned business-focused strategies and tactics for increased customer satisfaction, competitiveness and sustainable growth.

The indispensable quality professional guides leadership in the rigorous evaluation of its business results and leadership performance against expectations, and is constantly benchmarking best practices - from within and outside its sector - for innovative and disruptive improvement of its key systems and process. The indispensable quality leader is trained and competent in ISO and other industry-specific quality standards, but must also be knowledgeable in the understanding and application of the  Baldrige Criteria (or other proven excellence frameworks such as the Deming Prize). Recognized winners and high-performing applicants of these national and local organizations are target-rich role model organizations with demonstrated best practices ripe for replication.

The indispensable quality professional recognizes the impact of social media and respects the influence of on-line word of mouth held by today's globally-connected, savvy consumer. Strengthening customer relations while learning how to listen and interact with the customer via social media will greatly enhance the organization's perceived value to the customer. Successfully implementing an effective social media engagement strategy is another important opportunity for today's quality leader.

Agility, adaptability and life-long learning are important attributes for today's and future quality leaders.

I am retiring from 3M Company after 34 wonderful years to begin my new career as a quality management consultant. I look forward to continued posts sharing my experiences and insights to the global quality community as an ASQ Voices of Quality blogger.

- Robert 'QualityBob' Mitchell

The Global Impact of (and Need for) Quality

In his February 2015 blog post, ASQ CEO Bill Troy shares ASQ's mission to increase the use and impact of quality in response to the diverse needs of the world, and asks if they are doing enough throughout the world to accomplish that mission?

I work for a multinational diversified manufacturer. 3M Company's strategic quality leadership team chose to become an Enterprise member of ASQ with the intentional decision to make ASQ's Body of Knowledge, community collaboration resources and global best practice sharing available to every one of 3M's 100,000 employees worldwide. 3M is global; ASQ is global. 3M's partnership with ASQ provides yet one more channel of individualized learning and leadership development.

3M's worldwide headquarters is located just east of St Paul, Minnesota, USA. The bulk of 3M's product designs have historically originated in the USA marketplace. 3M leadership has recognized that products developed in one country (e.g. United States) may not have an existing market in other cultures. Many new-to-the-world products might also require changes or modification in behavior before the product can realize its true potential. 3M has responded to the need for region-specific products by building design centers and customer innovation labs located in countries around the world. The role of the regional design center is to enable and promote product designs specific to the local market need and cultural norms.

Regardless where the the products are developed, fundamental quality principles are bedrock. The use of VOC with sound experimental design and statistical analysis is a requirement for effective and efficient product (and process) design, development and commercialization. Basic statistics, PDCA, lean, Six Sigma, SPC, root cause analysis, CAPA, and many other traditional quality tools and methods too numerous to cite here are universally applicable to assure continual improvement of products, processes and systems for operational excellence, customer satisfaction and profitable growth.

A growing area of quality focus and product development is around sustainability and social responsibility. ASQ and the quality discipline in general have a unique opportunity and responsibility to help organizations learn to innovate and replicate global best practices in sustainable product development, lean manufacturing practices, improved reliability and product life cycle management for the benefit of society and future generations.

Finding Inspiration from Quality Leaders

In his January 2014 blog post, ASQ CEO Bill Troy talks about his recent meeting with Paul O’Neill, a quality thought leader, 2013 Juran Medalist, former U.S. Secretary of the Treasury, and CEO of Alcoa from 1987 to 1999. Paul O'Neill is currently applying the principles of quality to fix the problems facing U.S. healthcare. Towards the end of his post, Bill Troy asks whose teachings on quality influenced you or inspired you?

Early in my professional quality career I had the great pleasure and unique opportunity to work for Galen Britz, a giant in 3M's storied culture of quality and a huge advocate for Deming's System of Profound Knowledge. Galen served as Quality Manager of several 3M business units and Chairman of 3M's Corporate Quality Council before retiring in 1999. Galen Britz was also my mentor. Galen is a kind, spiritual and gentle man, and my friend. I learned a great deal about authentic leadership from Galen. Another key figure in my 3M quality career is Thomas Pohlen who, I believe, was the quintessential statistical practitioner and prototypical Master Black Belt long before 3M formally adopted Six Sigma. Tom mentored and trained a considerable portion of 3M executives in statistical thinking during the 1990's. Galen Britz and Tom Pohlen were champions of "Statistical Thinking" in 3M and were instrumental in influencing 3M leadership to bring in Heero Hacquebord to teach and coach "Statistical Thinking for Leaders". This training enabled our leaders to pursue real, meaningful, continual improvement of our products and processes through the proper application of quality strategies and tools to separately address special cause, common cause, and structural variation.

My association with Galen Britz, Tom Pohlen and Heero Hacquebord seeded my interest and directly led to my many years of active membership and service in the ASQ Statistics Division. Participation in the ASQ Statistics Division afforded me the great privilege to meet and work with such notable Quality professionals and thought leaders as Stu Hunter, Lynne Hare, Roger Hoerl, Ron Snee, Davis Balestracci, and many others too numerous to call out, whom I am indebted for my understanding of and passion for customer-focused quality.

Today, my biggest thrill and greatest sense of accomplishment is guiding and coaching the development of my students, direct reports and mentees. I strive to create the same sense of joy, excitement and enthusiasm in learning, development and, of course, contribution to business and society.