System + Passion + Persistence = Quality Revolution
Experts say that the cost of poor quality—including rework in the plant, warranty work, quality inspection, and sending back defective material—consumes 25 percent of people and assets in the average firm. Not at Tennant Company, which quality expert Phil Crosby says has one of the three best quality programs in the U.S. The $136 million, Minneapolis-based industrial floor maintenance firm has been pounding away at quality improvement
since 1978. Though its sales have increased, manufacturing rework time fell from 34,000 hours in 1980 to 9,000 in 1984. Overall "cost of poor quality" has been halved, from 16 percent to 8 percent of sales.
The Tennant story is one of incrementalism, persistence, and zeal. In 1978, executives wanted to pump life into their successful, but somewhat lethargic, firm. They concluded that quality improvement was the surest spur to productivity gains—a wonderful contrast to the all-too-commonly held belief that quality and cost must be traded off.
A steering committee of six executives initially focused on the dormant suggestion system. Hearts were in the right place, but the firm failed to catch fire. In 1979 the company stumbled upon Crosby's work and decided to make it their lodestar. The most engaging attribute of his program, Tennant found, was its systematic nature, which was not, however, overly technical.
Executives signed a quality pledge and mounted pilot projects. One multi-function team set out to improve quality in a walk-behind, automatic floor scrubber. Defects per machine reduced form 1.3 to 0.4 in just one year. Two other pilots mounted with major suppliers yielded dramatic improvements.
The process forged ahead in 1980. "Training was the key," claim executives. All supervisors were drilled in group problem solving skills. Tennant stridently distinguishes between its approach, where people from various functions form teams to solve specific problems, and quality circles that generally consist of natural work groups meeting regularly in search of problems to solve. A typical 1980 Tennant team consisted of people from the stockroom, order service, and the mail room; they increased the percentage of parts shipped on the day ordered from 15 percent to 72 percent!
In 1981 the company held its first Zero Defects Day at the Minneapolis Orchestra Hall, where all employees signed a quality pledge. That year a stepped-up supplier quality improvement thrust began with a seminar for top executives from 15 companies. One result: defective parts shipped to Tennant fell 40 percent in the next 36 months.
By 1983 cumulative results were so impressive that Tennant scored a marketing coup—the boldest warranty ever offered in its industry.
Each year, Tennant's Quality Steering Committee sets bolder goals, while the Recognition Committee and Zero Defects Day Planning Committee—parts of a quality organization that parallels the traditional structure—keep the momentum up. For instance, last year's Zero Defects Day featured 40 employee-manned Quality Improvement Booths, showing off specific success stories to several hundred top managers from supplier firms and 1,000 Tennant people.
Other stunningly successful quality improvement programs share several elements with Tennant. First is top-management time and persistence. Commitment is usually sorely tested when standard end-of-second-year doldrums set in.
Second is a clear system. Despite the debates over Crosby versus W. Edwards Deming (father of statistical process control) versus non-voluntary quality circles, it doesn't really much matter which system one chooses—as long as it features structure, intensive measurement, rigorous training in problem-solving techniques and is consistently applied. For instance, Toyota's chief weapon in achieving remarkable quality and productivity improvement is the homely suggestion system. In 1965, 39 percent of 9,000 employee suggestions (one per worker) were implemented; fifteen tenacious years later, 94 percent of 859,000 suggestions (19 per worker) were approved!
The third trait is constant stimulation. Awards, celebrations, measures, programs, and champions must be changed every year or so, though basic methodology should be kept intact.
Fourth, the program must not be limited to operations or manufacturing. Outsiders, such as suppliers and dealers, should be intimately involved. Inside the firm, all functions must get in on the action, from order entry to accounting.
Fifth, the successful quality improvement process, though dependent upon precise systems, is unfailingly people-centered, not machine based.
Finally, the drive for quality improvement yields cost reductions. Reducing the cost of poor quality principally involves achieving simplicity of procedure or design. For example, when Hewlett-Packard reduced personal computer parts from 450 to 150, quality soared—and costs plunged.
Most quality programs fizzle. A parade of visiting "gurus" spotlight a frenzied but futile search for a magic formula. Attending to the six elements that have made Tennant's program successful can make the difference in your organization.
(c) 1986 TPG Communications.
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