Manage-Wise

For organisational and individual health

Many people start a regimen of diet and exercise without a clear vision of what they want to accomplish. Those who want simply to “lose weight” almost invariably fail in the long term. Weight loss as a goal is shortsighted and will often fail to produce long-term benefits. Those who do succeed in becoming fit and those who succeed in quality programmes share the same approach: Always start with a clear understanding of the current situation and a clear vision of what you want to accomplish—good health for the individual or the company.

We know that to be successful, dieters must understand the causes of the weight problem. It’s not just a matter of eating too much; it’s why they eat too much. To be successful, they will need to explore the bad habits or causes of the weight problem. The dieters will need to take a new approach to their lifestyle that will require constant attention to all elements until the new, desired lifestyle becomes habitual.

How does quality fit into the Wall Street Diet? Like weight loss only, quality as a goal is shortsighted. Your quality programme has to become a part of the fabric of your company and be used to measure and improve your important business goals. It is important to choose the right quality tools for your company and partners. Too much spent on quality and its diminishing returns are almost as bad as not having enough focus on quality.

Adopting the Wall Street Diet allows a company and its partners to start with a clear vision that revolves around where the organisation is with respect to the following three fundamental requirements:

• The requirement for quality products/services that customers value
• The need to become more nimble to respond to market demands
• The need to become leaner to improve the business’s health and bottom line

One beauty of the Wall Street Diet is that these quality tools leverage, integrate, and measure the other disciplines—advanced supply chain management, lean enterprise, selective outsourcing, and more. The firm does not have to choose between one and another. In fact, the firm chooses all of them, and the quality programme helps you decide the order and the depth of the implementations.

Quality system

We have positioned quality within the Wall Street Diet to ensure that the right conditions are achieved and operating metrics are used to sustain the diet. This is similar to applying a dietary regimen to remove excess fat from a human body and then keeping it off. Quality should be used to make certain the customer receives what is needed, when it is needed, and at optimum costs and as a mechanism to guarantee the firm and its allies benefit from the effort.

The appropriate quality system is implemented with lean principles and a took kit of proven advanced supply chain techniques, including value stream mapping. Once the link is established between best business processes and the appropriate quality imperatives, members of the emerging value-managed enterprise can increase value for all supply chain constituents.

The most appropriate control system is then used to guarantee that the results of the operating system meet market and customer needs, differentative the firm and its business allies from competing networks, and prevent the kind of backsliding that is prevalent in fad diets.

History of the quality movement

Quality has been a business issue since the beginning of commerce. Over the years, the importance of quality has ebbed and flowed depending on market factors, and customers have been disappointed nearly as often as they have been pleased. During the 1950s, when product demand was at unprecedented highs, quality seemed to slip off the radar screen, and customers were often forced to accept whatever passed for a finished product.

Quality as a business imperative was really discovered in the United States in the 1970s, when quality expert W Edwards Deming was featured on a television special, ‘If Japan Can, Why Can’t We?’ This documentary showed how he had helped Japan achieve unusually high levels of quality. He immediately attracted national attention by using statistical process control (SPC) and the need to separate random variations from process variation within control limits as his dogma.

Another American quality specialist, Joseph Juran, further popularised the notion that quality was a key business issue, one that could differentiate a firm and its products. Juran’s emphasis was on finding breakthrough achievements on a project-by-project basis. He also emphasised the use of teams to find hidden values in operating systems. He cautioned against an obsession with statistics and technology. The focus must remain, he stressed, on finding new ways to achieve and sustain improved processing. He kept emphasising throughout his career that the rewards could be enormous if enough breakthroughs were discovered and implemented. He lamented most US management’s tolerance of slow and evolutionary progress with quality.

Yet another quality expert, Philip B Crosby, used an easy, effective style to introduce a terminology and a 14-step improvement process that would lead to superior results. His idea was that all quality should be oriented around “doing it right the first time”, and he embraced the axiom that the standard should be zero defects—all production made within established standards. Before Crosby, the general assumption was that guaranteeing quality had to come through inspection, to separate the bad parts from the good. Crosby insisted that doing things wrong made costs skyrocket. He attacked the idea of acceptable quality levels and insisted that following a rigid adherence to quality would not cost a firm any money; it would actually save money.

The quality movement had common elements even as the individual thought leaders emphasised different aspects. Most quality programmes include these factors:

• A focus on the system and its processes
• The importance of statistics and the critical role of controlling variation
• The importance of people—especially front-line workers—in building tea-ms and finding solutions
• A goal of delighting the customer through high quality
• A search for “root causes” and a focus on the vital few instead of the urgent many
• A belief that defects can and should be eliminated
• A focus on prevention instead of inspection

Most companies did not understand that quality has to become part of the corporate lifestyle, instead of a programme or process to be bolted on. The Wall Street Diet shows you how to change your corporate lifestyle and embed quality in everything you do.

The selected quality imperative should fit the needs of the customers, the realities of the market, and the firm’s ability to recover the costs.

In essence, Six Sigma is team-based problem solving aimed at reducing process variation through the use of statistical tools. The tactics and tools supporting this concept are primarily intended to improve quality of the product or service by reducing variation around the target value and focussing on activities that are truly important to customers. The firm must select an appropriate quality level that satisfies customer needs and allows the firm to operate profitably. This level becomes the appropriate sigma level.

Excerpt from ‘The Wall Street Diet: Making Your Business Lean and Healthy’ by Poirier, Bauer and Houser. Reproduced with permission © 2006, Tata McGraw-Hill Publishing Company Limited. Price: Rs 275. E-mail: vishwanath_mum@tatamcgraw-hill.com