Column: Emerging Sectors: Measuring Quality In the Department of Defense

Abstract:[Abstract from article]

The Defense Finance and Accounting Service (DFAS) is the accounting arm of the DoD. The deputy secretary of defense directed the consolidation of the finance and accounting operations of the various military departments and defense agencies into a single business entity that charges fees for the services provided. In July 2000, Tom Bloom, its director, saw the need for DFAS to move to a customer focused, strategy based organization, structuring its efforts along business and product lines.

Cost of poor quality was the key to translating quality theory into concrete business practices. If DFAS disburses $1 billion a day and has an accuracy rate of 98%, then $20 million is disbursed each day inaccurately. Two of the team responsible for establishing the quality program developed a way of inserting data from otherwise uncomparable systems into a Cpk model. The result provides trend data, is linked to defects and thus to Six Sigma, and allows comparison of different …

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