ASQ Needs To Convert CEOs’ Mind-set
The project described in “What Do CEOs Think About Quality?” (Greg Weiler, May 2004, p. 52) is laudable. It proves that while quality is very much recognized, the number of people who use it is significantly below the number of people familiar with it.
Since awareness of the quality concept is no longer a major concern, ASQ and quality practitioners should devise ways to convert this mind-set into a desire to apply process improvement tactics and strategies. This mind-set could be acquired from case studies and constructive data exchanges. Academics could act as intermediaries in the process.
I wish I could be a party to such a movement, but living in a developing country leaves me with limited resources. Kudos to the team leader and members of the project.
LEODEGARDO M. PRUNA
Paniqui, Tarlac, Philippines
Tarlac State University, retired professor
Two Efforts To Increase Quality Application
I read the article “What Do CEOs Think About Quality?” and the full survey on ASQ’s website. I believe two specific efforts can increase application of quality methods:
- Serve quality practitioners by further developing methods and standards for quantitatively predicting and measuring the effects of quality initiatives on customer satisfaction, cost and delivery.
- Work with schools to introduce quality concepts and methods into the curriculum at universities and grade schools.
The first effort is short-term and word will spread through case study results, testimonials and peer-to-peer conversations, the three most successful communication techniques listed in the survey. The second is long-term and will instill an appreciation for working smarter in an audience of future organization leaders and decision makers. With only four ASQ student chapters listed in California and 49 around the world, there is a lot of room for improvement in a high leverage position.
I plan to pursue getting a chapter started at my local university, which emphasizes business and education. As I work to strengthen the understanding and application of quality principles and methods at my company, I will eagerly look for quantitative measurement tools and share what I learn or develop with my colleagues. If anyone wants to share his or her ideas or would like to discuss this, I would be happy to hear from you.
I am relatively new to ASQ and have slowly been researching the proper methods and approaches I should apply to my own responsibilities. I commend the members of the Society for their work in Six Sigma and emphasis on linking quality improvement to the bottom line.
I have also noticed the Koalaty Kid website and some of the work the Society is doing to benefit education. I see that as a critical investment in the future, and I will do my best to help that effort grow and prosper.
Santa Barbara, CA
Quality Needs More True Professionals
I read Greg Weiler’s article and found it interesting and to the point. The most significant thing in the article is the statement, “This survey might encourage us to look more closely at how we are defining what we do and what we might do to appear more professional.”
I have more than 35 years’ experience in the quality field and am often frustrated by the lack of professionalism that permeates the quality department. Too often it is staffed by the dregs of the organization in an attempt to man a department with nonthreatening people. I know many professional people who work in quality, and I know just as many people who damage the reputation of the rest due to their lack of training and knowledge of statistical tools.
CEO Survey Not Based On Sound Research
I was very disappointed by “What Do CEOs Think About Quality?” The first problem appears early in the article when Weiler states, “This will allow ASQ to create and focus materials to prove the economic case.” This statement indicates the results of the “research” were a foregone conclusion—that there is an economic case—and all we wanted to do was collect data to support that conclusion. This research bias comes through again with the statement, “They don’t match the answers we expected to receive when we created the survey.”
The second problem is what I perceive as a failure to separate two key aspects of quality: quality of conformance or doing it right the first time, which typically costs less, and quality of features or more capability, which typically costs more. This blending of questions yields undependable results.
I cannot extract any information from Figure 5. How can a scale of 1 to 5 start at 0? Besides that, I have no idea what is the central message of the chart. Also implied in this section is that risk taking is good for quality professionals, but I think the opposite is true.
There were no confidence intervals on the data, nor was there a rationale for the sample sizes. Weiler stated only, “We determined a survey of 600 top executives across these four markets would be sufficient.”
This article was a poor representation of the quality profession. After all, we are supposed to be the leaders in statistically sound research and fact based decision making.
Six Sigma Adventures
Glen Burnie, MD
Misattributions Are Common in Quality
The article “Learn To Talk Money” is an interesting exposition of the real need for quality professionals to be able to assess the impact of quality initiatives in financial terms. Unfortu-nately, the authors misattribute the insight that the language of “upper management is different from that of quality professionals” to Stephen George.
The actual source of this concept and the recommendation that quality professionals be bilingual and use the language of money when talking to upper management and the language of things when speaking to the operating forces is Joseph Juran. Yes, the same Joseph Juran whose 100th birthday this very issue of Quality Progress celebrates. There are numerous discussions on this issue, and indeed of finance and quality, in Juran’s many books, including Juran's Quality Control Handbook, fourth edition (McGraw-Hill, 1988, p. 4.15), and Juran on Planning for Quality (Free Press, 1988, p. 62).
This type of misattribution is regrettable, but it is not infrequent. Too many people pushing Six Sigma these days appear to be ignorant of or careless about citing the sources of the ideas they exploit. Read almost any book on Six Sigma and try to find a meaningful reference to or acknowledgment of our debt to such giants as Walter A. Shewhart, W. Edwards Deming, Kaoru Ishikawa or Juran. They aren’t there. The impression is all these wonderful ideas sprang fully developed from the minds of the Six Sigma gang.
It is ASQ’s responsibility to treasure our past and honor our pioneers, and I thank you for your wonderful acknowledgment of Joe Juran.
The Deming Center for Quality and Productivity
New York City, NY
Link Operational, Strategic Financial Metrics
Steven Hoisington and Elizabeth Menzer are right on the mark when they point out one of the key difficulties for quality managers is communicating to senior leadership using the appropriate financial language (“Learn To Talk Money,” May 2004, p. 44). All quality professionals would do well to obtain some basic business finance instruction.
The explanation of the cost of poor quality and the definitions of financial terms are helpful, but it is equally important for quality professionals to know how to link their operational metrics to the strategic financial metrics leadership is most concerned with.
One example of this is to understand the firm’s net investment in its operating cycle, or the amount of money it has invested in its operating activities. Simply stated, this is the sum of all inventories and accounts receivable less accounts payable for a specified period. It is commonly called the firm’s working capital requirement (WCR).
Among other things, WCR is the preproduction, work in progress and postproduction inventory costs that lean, just-in-time manufacturing, Six Sigma and other initiatives seek to reduce. It’s even possible to have a negative WCR, in which accounts receivable and inventories are kept very low and accounts payable is kept relatively high. When WCR, and thus capital, is reduced, the same net profit from operations yields a higher return on capital and a higher return on equity. This is one example of how quality professionals can communicate in terms that get the senior leaders’ attention.
ASQ Indianapolis section
Fort Wayne, IN
Errors in Income Statement, Balance Sheet
Thanks for the informative article “Learn To Talk Money.” All too often, we tend to develop our own insider language, an impediment to communicating with others in an organization. Being familiar with accounting and financial terms used in budgeting and the approval processes is vital to determining whether specific quality initiatives are economically justified.
The income statement on p. 47 should list EBIT (rhymes with “debit”) as “earnings before interest and taxes,” and it should appear on the line before the expense item “interest” rather than “finance cost.” Finance cost would logically include the cost of equity capital and debt capital. “Earnings before taxes” is EBT.
In the balance sheet on p. 46, the “long-term bank loan” should not appear under “current liabilities,” because that includes only debt payments that will be due in the next fiscal year and accounts for the current portion of long-term debt (the payments due in the next year). By convention, current liabilities are due within a year. Another section, called “long-term liabilities,” would include the noncurrent portion of long-term debt and capitalized leases.
Mississippi State University
Aren’t the Two Answers the Same?
In the May 2004 “What Is 3.4 per
Million?” column (p. 63), Joseph Voelkel states, “So,
does this mean if you answered (c) you would be correct? No. The
fraction that falls outside that range is actually 6.8 ppm. The
correct answer is (d) ‘none of the above.’ The actual
value of 3.4 ppm refers to the fraction that would fall either
above μ + 4.5σ or below
μ – 4.5σ.” Answer (c) is “the fraction that falls outside μ ± 4.5σ.”
I don’t understand why answer (c) is not
the same as the correct answer when Voelkel states, “The
actual value of 3.4 ppm refers to the fraction that would fall
μ + 4.5σ or below μ – 4.5σ.” Can you help me understand the
Author’s Response: Thanks for your inquiry. The answer is quite simple, but you
may have been confused by the way I said it. The explanation, in
a picture, can be seen in the adjacent figure. I hope this
answers your question.
John D. Hromi Center for Quality and Applied Statistics
Rochester Institute of Technology