Managing Quality: The Strategic and Competitive Edge

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9780029113806: Managing Quality: The Strategic and Competitive Edge

David A. Garvin rocked the foundations of U.S. manufacturing when his devastating indictment of American product quality first appeared in the Harvard Business Review in 1983 and subsequently in newspapers around the world. Garvin had analyzed a representative global industry -- room air conditioners, a product with basic, unchanging technological requirements -- and irrefutably documented American failure rates which were 500 to 1,000 times greater than those of Japanese competitors. Now, building on that shocking study, Garvin's new work combines theory and practice to show how a more sophisticated understanding of quality can lead U.S. companies to a strategic approach to quality management, which is necessary to compete in today's world marketplace.

This seminal work is essential reading for managers, particularly since widely held assumptions and a growing mythology about quality have not produced the expected revolution in U.S. quality performance -- with few products able to match the quality and reliability levels of their overseas competitors. Garvin begins with a superb review of quality history in this country and an incisive analysis of what Japan has done with the same concepts and ideas -- and done demonstratively better -- revealing the hard facts that prove quality is the best competitive weapon to dramatically increase profits and cut losses.

Here is the actual evidence relating quality to such variables as price, market share, advertising, cost, productivity, and profitability as hammered out by Garvin in a point-by-point comparison of quality management in U.S. and Japanese plants. His focused study of seven Japanese companies and eleven U.S. factories makes extraordinarily clear what the Japanese have done to better even the best U.S. companies. He looks to the underlying sources of superior quality and identifies both the practices long associated with excellence, such as reliability engineering and precise information systems, and those that have rarely appeared in the literature, such as limited bumping, order of assembly operations, and narrow product lines. Finally, he demonstrates with unmistakable bottom-line figures the all-important need for top managers to become involved in quality activities.

Garvin's credo throughout is, "If quality is to be managed, it must first be understood." In this landmark work, he provides that comprehensive and lucid understanding of quality in a way that can readily be transferred to a wide variety of industry environments. The result is a damning, yet enlightening analysis that specifically illustrates how America must improve product quality to win back lost markets and gain long-term competitive advantage.

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About the Author:

David A. Garvin teaches at the Harvard Business School and is a two-time winner of the annual McKinsey Award for the best Harvard Business Review article. He lectures widely on the management of quality to managers in both the private and public sectors.

Excerpt. © Reprinted by permission. All rights reserved.:

Chapter 1

History and Evolution

As a concept, quality has been with us for millennia. Only recently has it emerged as a formal management function. The discipline is still evolving. In its original form, it was reactive and inspection-oriented; today, quality-related activities have broadened and are seen as essential for strategic success. Once the exclusive province of manufacturing and operations departments, quality now embraces functions as diverse as purchasing, engineering, and marketing research, and commands the attention of chief executive officers.

How have these changes come about? Most modern approaches to quality have emerged gradually, arriving through steady evolution rather than dramatic breakthroughs. They are the product of a series of discoveries stretching back over a century. In the United States, these discoveries can be organized into four distinct "quality eras": inspection, statistical quality control, quality assurance, and strategic quality management. The first three are discussed in this chapter; the fourth, a more recent innovation, is reserved for Chapter 2.

THE RISE OF INSPECTION

In the eighteenth and nineteenth centuries, quality control as we know it today did not yet exist. Most manufacturing was performed by artisans and skilled craftsmen or by journeymen and apprentices who were supervised by masters at the trade. Goods were produced in small volumes; parts were matched to one another by hand, and after-the-fact inspection to ensure high quality was conducted informally, if at all. A well-performing product was viewed as the natural outgrowth of reliance on skilled tradesmen for all aspects of design, manufacturing, and service.

Formal inspection became necessary only with the rise of mass production and the need for interchangeable parts. As volumes increased, parts could no longer be fitted to one another by hand: The process required a large pool of skilled labor and was both costly and time-consuming. Prices were often beyond the reach of the average consumer, especially for machinery and equipment. Nor was the federal government able to purchase large quantities of high-quality firearms at low cost.

These pressures gave rise to what has been called the American system of manufacturing: the use of special-purpose machinery to produce interchangeable parts by following a preestablished sequence of operations. Most initial efforts were connected with the military's demand for armaments and were closely coordinated by the United States Ordnance Department, the national armory at Springfield, Massachusetts, and the Harpers Ferry Armory. In consumer products, the Singer Company, which manufactured sewing machines, and the McCormick Harvesting Company, which made farm equipment, later adopted the same techniques.

From a quality control standpoint, the key breakthrough was the development of a rational jig, fixture, and gauging system in the early 1800s. Jigs and fixtures are devices that position tools or hold parts while they are being worked on, keeping them fixed to the equipment so that machining operations can be performed accurately and precisely. Since every part that is worked on is held in place in exactly the same way -- all jigs and fixtures having been designed from a standard model of the product to be manufactured -- a high degree of interchangeability is assured. Nevertheless, parts may still deviate from one another: They may have been mounted improperly during machining, built from imperfect raw materials, or made on worn tooling. To minimize problems at final assembly, when parts are matched together for the first time, accurate inspection is required during the process of manufacture. A system of gauges is often used for that purpose; like jigs and fixtures, gauges are based on a standard model of the product to ensure uniformity.

By 1819, an elaborate gauging system was in place at the Springfield Armory. It gave inspection a new respectability, for activities that were previously conducted by eye were replaced by a more objective, verifiable process. Two inspectors using a gauge were much more likely to reach the same result than two who were relying on personal judgment alone.

As the American system of manufacturing matured, gauging became more refined, and inspection became even more important. In the early 1900s, Frederick W. Taylor, the father of "scientific management," gave the activity added legitimacy by singling it out as an assigned task for one of the eight functional bosses (foremen) required for effective shop management:

The inspector is responsible for the quality of the work, and both the workmen and the speed bosses [who see that the proper cutting tools are used, that the work is properly driven, and that cuts are started in the right part of the piece] must see that the work is finished to suit him. This man can, of course, do his work best if he is a master of the art of finishing work both well and quickly.

Inspection activities were linked more formally to quality control in 1922, with the publication of G. S. Radford's The Control of Quality in Manufacturing. For the first time, quality was viewed as a distinct management responsibility and as an independent function. The book even touched on a number of principles regarded as central to modern-day quality control: the need to get designers involved early in quality activities, the need for close coordination among the various departments affecting quality, and the association of quality improvement with increased output and lower costs. Its primary focus, however, was inspection. Nine of the book's twenty-three chapters were devoted to that subject alone. Topics included the purpose of inspection (to "exercise the duty of viewing the work closely and critically so as to ascertain the quality, detect the errors, and present them to the attention of the proper persons in such a way as to have the work brought up to standard");9 the evolution of inspection (from visual to dimensional checks); types of inspection (material, office, tool, and process); sampling methods (including 100 percent and random sampling, but without any statistical foundation); gauging techniques; and the organization of the inspection department. Throughout, the emphasis was on conformance and its link with inspection; according to Radford, the purchaser's "principal interest in quality [was] that evenness or uniformity which results when the manufacturer adheres to his established requirements."

Here matters stood for several years. Quality control was limited to inspection and to such narrow activities as counting, grading, and repair. Troubleshooting was considered beyond the reach of the average inspection department. In the next decade, however, the role of the quality professional would be redefined. The stimulus for change was research conducted at Bell Telephone Laboratories; the result was what is today called statistical quality control.

STATISTICAL QUALITY CONTROL

The year 1931 marked a watershed for the quality movement. W. A. Shewhart's Economic Control of Quality of Manufactured Product was published that year, giving the discipline a scientific footing for the first time. Much of modern-day quality control can be traced to that single volume. In it, Shewhart gave a precise and measurable definition of manufacturing control, developed powerful techniques for monitoring and evaluating day-to-day production, and suggested a variety of ways of improving quality.

Shewhart was in fact part of a larger group at Bell Telephone Laboratories that was investigating problems of quality. The group's research was prompted by the concerns of engineers at Western Electric, the manufacturing arm of the Bell System, who were seeking greater standardization and uniformity in the nationwide telephone network. Mo

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