Quality Companies Take Hit In Sagging Stock Market

Along with the rest of the stock market, the Quality Progress Q-100, a fictional index created to track companies that use quality tools and systems, fell sharply in the first quarter of 2001.

Q-100 stocks fell 11.22% for the quarter ending March 31, while the S&P 200 dropped 11.86%.

"The 10-year bull market ended. The stocks of quality managed companies were typically expensive, with high price to earnings ratios," says Craig Robinson, president of Robinson Capital Management, a Minnesota money management firm that created the Q-100. "We've learned that when an across the board downdraft occurs, the companies that get hit worst are the ones that are most expensive."

Robinson thinks companies that are well-managed, like those in the Q-100, will lead the way out of the current market. "These companies will look at what they did well in the past as the way to increase shareholder value. They'll swing back to quality and get tight with their customers and suppliers. This will help them recover," explains Robinson.

Long-term results
Longer term, the Q-100 fell 25.75% compared to a 21.68% increase for the S&P from March 31, 2000, to March 31, 2001. Since its inception on Sept. 30, 1998, the Q-100 has fared much better than the S&P, however--a 26.02% increase compared to 17.63%.

The illustration at the bottom of the page shows how an investment of $10,000 on Sept. 30, 1998, Dec. 31, 2000, or Dec. 31, 2001, would have fared in both the Q-100 and the S&P 500, looking at today's market.

Meanwhile, the National Institute of Standards and Technology (NIST) released its Baldrige Index, showing winners of the Malcolm Baldrige National Quality Award consistently outperform the S&P 500.

NIST's most recent statistics show the Baldrige group beating the S&P by 4.4 to 1. The Baldrige Index is a fictitious stock fund made up of publicly traded U.S. companies that received the award between 1990 and 1999.

In 2000, NIST invested a hypothetical $1,000 in each of the whole company winners --ADAC Laboratories, Eastman Chemical, Federal Express and Solectron (a two-time winner)--and another $1,000 in the S&P 500.

Robinson accounts for the differences between the Q-100 and the Baldrige Index results by the fact that the Q-100 is broad based, reflecting the weightings of the sector groups in the S&P 500, while the Baldrige index isn't balanced to the S&P. "Solectron's being counted double for its two wins makes the Baldrige Index heavily weighted to tech stocks," he said.

AQP Names Winners Of National Team Excellence Competition

The Association for Quality and Participation recently announced the winners of its 2000-2001 National Team Excellence Award competition.

First place went to the state account operations claims quality and productivity improvement team for Blue Cross Blue Shield of Florida Inc.

A problem solving/high performance team for Lucent Technologies won second place, and a hardware assembly kaizen team for Solectron Technology Inc. took third place.

Advanced Logistics Certificate Available Online and by Satellite Network

Massachusetts Institute of Technology's Advanced Educational Services is offering an advanced logistics certification program through the private satellite network of PBS's Business and Technology Network.

E-business 2001: Logistics will focus on two areas of e-business supply chain management: demand forecasting and inventory management. MIT Professor Larry Wein will use case studies to demonstrate real world logistics challenges.

The program is targeted for supply chain managers, systems planners, and logistics and operations professionals. Participants will receive a certificate of completion from MIT.

For additional information, visit www.ntu.edu

Professional Group To Tackle Shortage Of Engineering Students

The National Society of Professional Engineers (NSPE) has launched its "American Engineering Campaign" to heighten student awareness of engineering as a career.

According to NSPE, the number of students receiving a bachelor's degree in engineering declined by nearly 20% while the total number of bachelor's degrees went up by about the same percentage.

A recent survey by Louis Harris and Associates revealed that although most people respect engineers, they don't know what engineers actually do. Believing this lack of knowledge to be the reason for the declining numbers, NSPE is focusing its efforts on demystifying engineers' role in industry and promoting the opportunities available.

The campaign will include an engineering in the classroom program. For more information, visit The American Engineering Campaign site at www.virtualeducation.org/link_nspe.html

Monsanto Seeks ISO 9002 Certification for Seed Production Sites

Monsanto Co. announced in April that it was launching an enhancement to its seed quality program by pursuing ISO 9002 certification for all its commercial and foundation seed production sites and seed quality assurance laboratories.

The seed quality initiative appears to be part of Monsanto's response to concerns, particularly in Europe, about products developed through biotechnology.

The target date for completing the process in North America is the end of this year. Production sites in Europe, South America and Asia will complete full registration to ISO 9002 by the end of 2003.

Contract producers of soybean seed for Monsanto are also being encouraged to voluntarily complete their own ISO 9002 registration process. Monsanto says it will support these efforts and work with other seed companies that license Monsanto technology.

U.S. Statistics TAG To ISO/TC 69 Seeks New Members

The U. S. Technical Advisory Group (TAG) to ISO/ Technical Committee (TC) 69 on application of statistics is seeking to expand its national representation by attracting new members.

The mission of TC 69 is to standardize statistical terminology and symbols and the presentation, interpretation and statistical analysis of test and measurement results, product acceptance and inspection procedures. This standardization will be accomplished using sampling practices and statistical aspects of quality control related to international standards.

The TAG's focus is the development of the U.S. position regarding international standards on statistical methodologies. Its members also contribute to the development, review and adoption of international standards in cooperation with the other member countries of TC 69. The U.S. TAG is supported by ASQ.

Membership in the U.S. TAG is free and open to all qualified U.S. residents who can provide evidence of expertise in the related areas. Members are expected to review and comment on documents within their area of expertise, as well as vote on documents' suitability for adoption.

The review process is conducted via the Internet, so members must be familiar with this medium to the extent that they can receive e-mail with attached documents and respond in like manner. Attendance at the U.S. spring and fall meetings is desirable but not mandatory. There is one international meeting each year to which the TAG sends representatives.

Applications for membership are available from Erin Hogg, ASQ standards group coordinator, at 800-248-1946 (United States and Canada only) or ehogg@asq.org.  Questions can be directed to Carroll Croarkin, TAG 69 chair, 301-975-2839 or carroll.croarkin@nist.gov

Ineffective Data Management Said To Be Costing Millions

A study by PricewaterhouseCoopers found 75% of companies had experienced significant problems as a result of faulty data, while up to a third had been forced to delay or scrap new systems.

The Global Data Management Survey 2001 reveals that over the last two years companies have become increasingly reliant on electronic data to make decisions and implement processes. The results indicate less than half the companies polled have complete confidence in the quality of their own data and less than a fifth have confidence in data from other companies.

Other key findings include:

  • A third of businesses fail to bill or collect receivables as a result of poor data management.
  • Only four of 10 have documented, board approved data strategies.
  • Where strategies exist, they tend not to address true strategic issues but rather to consist of policies on privacy and security.

The survey interviewed 600 chief information officers, IT directors or equivalent executives in the Americas, Europe and Australasia regions at top 500, middle market and dot.com companies from various sectors.

Robot Competition Held at Pittsburgh Engineering Challenge

More than 500 middle school through university level students on 220 teams recently participated in the Robotics International/Society of Manufacturing Engineers' 15th annual student robotic challenge in Pittsburgh.

The students represented 55 schools in 10 states. There were 16 competition categories to complement classroom curricula and provide students with an opportunity to apply their knowledge to real world activities. Entries were required to be portable and easy to operate.

A team of 11 students from Newberg High School in Newberg, OR, won this year's top award with a jack-in-the-box pneumatic humanoid entry they designed, machined and built.

Work Begins on Improving Clinical Office Practices

Beginning this spring, about 40 health care organizations are working together to implement best available ideas for improving access and efficiency in clinical office practices.

The collaborative improvement effort was announced by the Institute for Healthcare Improvement as part of its Breakthrough Series. The focus will be:

  • Establishing open access systems that offer patients appointments with primary care providers on the same day they call.
  • Synchronizing patients, information and resources within the office to "do today's work today."
  • Optimizing the care team by expanding the role of nurses and nonclinician staff and reducing noncare tasks for physicians.
  • Instituting a master schedule process to maximize office efficiency.
  • Supplementing face-to-face doctor visits with alternative methods of care, such as telephone advice, triage, e-mail and group visits.

Attitude Study Says Consumers Want Clinical Quality Leaders

A study of consumer attitudes about the quality of health care in America conducted by by VHA Inc. reveals consumers would like more information about scientifically based treatment protocols hospitals and doctors should be using.

Furthermore, consumers would use information about protocol compliance rates to help them select providers. Consumers readily understand clearly presented concepts of evidence based medicine and system based measures for patient safety.

The study, "Consumer Demand for Clinical Quality: The Giant Awakens," examines the attitudes of more than 500 individuals who have experienced the health care system directly or indirectly with close relatives.

VHA is a nationwide network of more than 2,000 community owned health care organizations and their affiliates. The alliance comprises 27% of the nation's community hospitals.

For additional information, visit www.vha.com/news/default.html

The Institute of Environmental Sciences and Technology announced that ISO Draft International Standard 14644-7, Cleanrooms and associated controlled environments--Part 7: Separative enclosures (clean air hoods, glove boxes, isolators and minienvironments), is now available. For more information or to order the document, e-mail iest@iest.com or visit www.iest.org


Stat-a-Matrix Institute's Six Sigma training programs were selected a top product by the Society of Automotive Engineers' (SAE) Aero-space Engineering readers. This placed the programs among the 50 top scoring products chosen from a list of more than 1,000 products. Stat-a-Matrix is the only training provider selected.


Powerway.com from Powerway was chosen by Covisint to Web enable the automobile industry's advanced product quality planning process. Power-way.com is a business to business tool that enables manufacturers and their suppliers to work together across a multitier supply chain. It allows instantaneous communication and internaction in a secure environment.

As most users of mass media are aware, Bridgestone/Firestone recently started the largest advertising campaign in its history to reassure customers of the safety and quality of its tires. The national campaign responds to the negative publicity resulting from last year's massive recall of certain Firestone tires implicated in rollovers of Ford Explorers. It features John Lampe, president and CEO. In contrast, Ford Motor Co. reportedly will not mention safety in commercials for the redesigned 2002 Explorer.


The American Society for Training & Development (ASTD) says the average U.S. company is training more of its employees than ever before, more dollars are going to technical skills training than any other type of training, and e-learning is gaining momentum among large companies. The report is available free to ASTD members and can be purchased by nonmembers at 703-683-8100. For more information, visit www.astd.org


Best Practices LLC has updated its study of Six Sigma efforts and reports one company that gave Black Belt candidates four months of classroom and field training produced experts who averaged $1 million in annual savings for their organizations. For information, visit www.benchmarkingreports.com/pr/op72.htm.

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