ASQ Debuts Quarterly Quality Perception Index

ASQ is debuting a quarterly index of customer perceptions of quality after analyzing 10 years of data derived from the American Customer Satisfaction Index (ACSI). The ASQ Quality Index measures more than 200 corporations in 41 industries.

The first quarterly ASQ Quality Index reveals quality perceptions have declined 0.8% over the past decade, with 0.3% regarded as statistically significant. While product quality has been relatively stable, scoring 86.9 out of a possible 100 in 1994 and 86.3 in 2004, it is in the area of service quality the decline has been steep (80.3 in 1994 and 78.3 in 2004).

Tangible goods such as automobiles, soft drinks, food and beer were highly rated over the 10 years for which data were gathered, whereas airlines, restaurants and cellular phone service—all service industries—were rated lowest.

The life insurance industry realized the greatest gain over the last 10 years, with an increase of 2.7% in customer perceived quality. Hotels have one of the highest perceived quality scores for the service industry, 81.8. Customer perceptions of quality have risen 1.6% in the fast food industry, particularly among pizza chains.

Local and long-distance phone companies took the biggest hit in customer perceptions of quality, both declining an average of more than 9% over the last decade. Airlines, down a cumulative total of 5.8% in 10 years, were second only to the phone companies in decline. Even industry leader Southwest Airlines took a hit, declining 5.7%.

Perceived quality in the personal computer sector dropped 5.5% over the last decade, with Compaq, Hewlett-Packard and IBM seeing the largest declines, mostly in the area of service. Dell is the big winner in this category, with an increase in perceived quality of 4.4%.

In the automotive industry, perceived quality declined 2.1%, with European and Asian manufactured cars scoring higher than U.S. made cars. The Cinderella story of the auto industry is Hyundai, the only auto manufacturer to increase its perceived quality score significantly—7.6%—in the last 10 years.

For company scores and more information, go to http://www.asq.org/qualityindex/index.html and click on Facts & Figures at the right.

Latest ACSI

At the same time, the latest ACSI, which measures stores, supermarkets, gas stations, banks, insurance companies and e-commerce retailers in the fourth quarter of each year, saw its biggest decline since 1997.

After two years of steady increases, customer satisfaction with goods and services purchased in the United States stands at 73.5 for 2004, down from 74.3 in the fourth quarter of 2003.

Claes Fornell, director of the ACSI and professor at the Stephen M. Ross School of Business at the University of Michigan, thinks declining satisfaction may have a significant impact on the future health of the economy. Fornell says waning satisfaction with retail customer service, high gas prices and a glut of user traffic on e-commerce websites drove the deterioration in scores.

Customer satisfaction with retail gas outlets is at an all-time low of 70—down 7% from a year earlier. For retailers, 2004 was a challenging year. Kohl’s remains on top for the third straight year, and Publix leads supermarkets for the 10th straight year.

The customer satisfaction score for banks stands at 75, matching its highest level, which was achieved a year ago. But satisfaction for insurance dropped during the year to its all-time low—67.

The ACSI score for e-commerce is down 3% to 78.6 and declined in each of the measured categories: online retail, auction, travel and brokerage sites. Increased traffic to these sites has made it more difficult to service customers well, says Larry Freed, CEO of ForeSee Results, which is a corporate sponsor for the ACSI’s e-commerce and e-business measurements.

ASQ and CFI Group produce the ACSI in partnership with the University of Michigan business school. For company scores and more information about the ACSI, go to http://www.theacsi.org.


Conference Focuses On Redesigning Care Systems

More than 100 quality professionals in the healthcare industry networked and learned about continual improvement methodologies such as error proofing, systematic problem solving, balanced scorecards and the Baldrige criteria at ASQ’s Quality Institute for Healthcare Feb. 14-16 in New Orleans.

Co-sponsored by ASQ, the American Hospital Assn. and the American Society for Healthcare Risk Management, the conference featured keynote speeches by Brent James, M.D., executive director of the Institute on Health Care Delivery Research, Salt Lake City, on pay for performance; G. Richard Hastings, president and CEO of St. Luke’s Health System, Kansas City, MO, on his hospital’s journey to receiving a 2003 Malcolm Baldrige National Quality Award; and Don E. Detmer, M.D., president and CEO of the American Medical Informatics Assn., Bethesda, MD, on the impact of IT on healthcare quality improvement.

Other session topics included clinical microsystems, achieving performance excellence by focusing on the workforce, evidence based medicine, human factors and patient safety, and lessons from high reliability organizations.

Conference attendees included physicians, nurses, healthcare administrators and other medical professionals, all now charged with continual improvement, patient safety and satisfaction, and error reduction in their organizations.


19 New Fellows Named

ASQ’s board of directors recently elected 19 new Fellows:

  • Inteaz Alli.
  • G. Dennis Beecroft.
  • Ronald Gary Berglund.
  • Dean L. Bottorf.
  • Ronald J. Bowen.
  • Barrett C. Craner.
  • John R. Dew.
  • Kent M. Ehley.
  • Milton Joseph Kowalewski Jr.
  • John I. McCool.
  • Daniel R. Rand.
  • Daniel E. Sniezek.
  • James E. Stuart.
  • Neil R. Ullman.
  • Francisco Paulo Uras.
  • John Frank Vandenbemden.
  • Cindy Pound Veenstra.
  • Michael G. Walmseky.
  • John E. “Jack” West.

The FACE of Quality

Name: Lou Ann Lathrop.

Residence: Brighton, MI.

Education: Master’s degree in electrical engineering, Marquette University, Milwaukee, with a General Motors (GM) fellowship.

Introduction to quality: First job at GM was managing a quality monitoring system and quality trend reporting at the Milwaukee Delco Electronics plant.

Current position: Engineering group manager for engine analysis, development and validation, engine vehicle validation and engine teardown, GM Powertrain.

ASQ activities: Senior Member; Automotive Division chair 2003-2004 and chair-elect 2004-2005; former assistant editor and editor of Automotive Excellence.

Other activities: Lifetime member of the Society of Women Engineers; University of Michigan Six Sigma Green Belt; teaches tae kwon do and aerobic kickboxing; holds a third-degree black belt and competes internationally in tae kwon do.

Personal: Has a 75-pound Labrador/Boxer mix named Brutus and a Black Labrador puppy named Lucky.

Favorite ways to relax: Running, tennis, gardening and travel.

Quality quote: Quality is the metric that is the test of management’s integrity. If your words say one thing about quality and your actions another, you’re sunk. When looking at the metrics of quality, delivery and cost, think of the analogy of body, mind and soul or physical, mental and spiritual. Delivery is the physical, cost is the mental and quality is the soul of the organization.


Long-Term Q-100 Gains Top S&P’s by More Than 10%

The Q-100 Index long-term performance continues to shine compared to the Standard & Poor’s (S&P) 500 (see chart). Since its inception Sept. 30, 1998, Q-100 gains were at more than 41% on Dec. 31, 2004, while the S&P showed 30%. Short-term, the percentages are closer: For the 12 months preceding Dec. 31, both indexes were near 11% in gains, while for the preceding quarter, both had gains of about 9%.

Companies new to the Q-100 are Noble, Williams, Allstate, Equity Office Properties, First Horizon, PNC Financial, State Street, Dominion Resources and Keyspan. Com-panies recently dropped from the list are Bank of America, BellSouth, Chevron Texaco, JP Morgan, MBNA, Lockheed Martin, Gillette, Hewlett-Packard and BankOne.

The Q-100’s scoring process was modified in 2004 from one that scored every company in the S&P at the same time, usually late in the calendar year, to one in which only companies in one or two major economic sectors are rescored at any given time.

“This change will allow us to improve the scoring criteria, making them more sector and industry group specific and thus more relevant,” explains Craig Robinson of Kopp Investment Advisors. Robinson founded the Q-100 with Mark Billeadeau when both were with Robinson Capital Management.

“We expect most of the changes in the Q-100 will occur as a result of this ongoing process improvement, combined with the changes Standard and Poor’s makes as it adds, deletes or shifts companies in the S&P 500,” Robinson adds. “Being dropped from the Q-100 listing does not necessarily mean a company’s quality has lessened, but can instead be based on contraction of its sector in the S&P 500.”

The Q-100 Index is a 100-stock subset of the S&P 500 designed to roughly match the capitalization and distribution of companies among the economic sectors and industries represented in the S&P 500 using companies with the highest relative composite quality scores.

The most recent Q-100 numbers were based on the following companies:


Members To Ballot on Society Bylaw Changes

Packets of proxy balloting materials related to the streamlining of ASQ bylaws were mailed to eligible voting members on March 11.

The proxy balloting results will be announced at the annual business meeting on May 15 preceding the World Conference on Quality and Im-provement, formerly the Annual Quality Congress, in Seattle. Completed proxies must be returned to ASQ by April 16.

ASQ members who opted to receive e-mail business communications from the Society received the materials viae-mail, while others received their packets in the mail with a postage-paid re-turn envelope.

Some amendments took effect at the board of directors meeting in February, while others are recommendations that now must be approved by the membership.

Those needing member approval include the plan to move some details from the bylaws into policies, changes in the composition and size of the board, a revised process for nominating board candidates, relaxed qualifications to serve on the board and a simplified process for members to bring items to the board for consideration.

Regular, Senior, Fellow and Honorary members and designated representatives of organizational members in good standing are eligible to vote. Enrolled students and associate and forum members are considered nonvoting members.

If you are eligible and have not received the e-mail or packet, contact 800-248-1946 or 414-272-8575. Copies of the proposed amendments and supporting documents can be viewed online from the members only homepage of the ASQ website.

Short Runs

THE 1,000TH BALDRIGE APPLICATION will be free. Since 1988, 999 applications have been submitted for the Malcolm Baldrige National Quality Award. To celebrate, the National Institute of Standards and Technology will waive the application fee for the first application it receives for the 2005 Baldrige Award, which will also be the 1,000th application. The application deadline is May 26. The criteria, application package and other material can be found at http://baldrige.nist.gov/index.html.

THE CARLSON SCHOOL OF MANAGEMENT at the University of Minnesota will host the American Statistical Assn.’s quality and productivity research conference May 17-20 in Minneapolis. There will be a preconference short course on data mining with application to healthcare. The conference focuses on statistics, quality and productivity. For more information, go to

THE 17TH ANNUAL QUEST FOR EXCELLENCE conference, featuring recent recipients of the Malcolm Baldrige National Quality Award, will be held April 10-13 in Washington, DC. Co-sponsors are ASQ and the American Society for Training & Development. To register, go to http://www.baldrige.nist.gov or call 800-248-1946 or 414-272-8575.

THE LEAPFROG GROUP has launched an initiative to provide incentives and rewards for high quality hospitals that demonstrate efficient use of resources. Leapfrog has drawn on measures endorsed by the National Quality Forum, including the identification of quality measures for five conditions. For more details, go to http://www.leapfroggroup.org/news/leapfrog_news/411345.

THE INSTITUTE FOR HEALTHCARE IMPROVEMENT (IHI) has made available materials related to what healthcare would look like if it aimed to be perfect. Information on IHI’s Pursuing Perfection initiative can be found at http://www.ihi.org.

THE INTERNATIONAL ORGANIZATION FOR STANDARDIZATION has launched an online survey to gather feedback to increase the value to small and mid-sized organizations of implementingan environmental management system based on ISO 14001. Available in 10 languages, the survey can be accessed at http://www.iso.org under the ISO 14000 section or at http://www.tc207.org.

THE NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY and the American National Standards Institute will co-sponsor a public forum on the U.S. standards strategy on April 15 at the U.S. Department of Commerce in Washington, DC. The workshop is free, but preregistration is required. To register, e-mail registration@ansi.org or call 212-642-4956.

THE FIFTH ANNUAL MEETING OF ENBIS (the European Network for Business and Industrial Statistics) will be held Sept. 14-16 in Newcastle, United Kingdom. For details, go to http://www.enbis.org/events.html.


Quality Press To Release 7 New Books

Quality Press will be releasing seven new books in the next few weeks:

  1. Insights to Performance Excellence 2005: An Inside Look at the 2005 Baldrige Criteria by Mark L. Blazey.
  2. The Manager’s Guide to Six Sigma in Healthcare: Practical Tips and Tools for Improvement by Robert Barry and Amy C. Smith.
  3. Statistical Engineering: An Algor-ithm for Reducing Variation in Manu-facturing Processes by Stefan Steiner and R. Jock MacKay.
  4. There Is Another Way! Launch a Baldrige-Based Quality Classroom by Margaret A. Byrnes with Jeanne C. Baxter.
  5. TS 16949: Insight From a Third-Party Auditor by Karen Welch.
  6. Lean Six Sigma for Healthcare: A Senior Leader Guide To Improving Cost and Throughput by Chip Caldwell, Jim Brexler and Tom Gillem.
  7. Process Quality Control, fourth edition, by Ellis R. Ott, Edward G. Schilling and Dean B. Neubauer.

To order go to http://qualitypress.asq.org.

ASQ News

FOUNDING MEMBER DIES Julio N. Berrettoni, a founding member of ASQ, died Feb. 11 at the age of 90. He had remained active in the Society as a Fellow. A statistics professor at Case Western Reserve University in Cleveland for 35 years, Berrettoni also was a consultant for numerous organizations, including Eveready Co., the Cleveland Clinic Foundation and Lubrizol.

TWO NEW NETWORKS LAUNCHED ASQ has launched two new internet discussion networks: one related to the Sarbanes-Oxley (SOX) financial reporting act and the other to the Community Good Works program. The SOX network is at http://www.asq.org/communities/sox/index.html, and good works is at http://www.asq.org/goodworks. The good works program is presenting two sessions during the World Conference on Quality and Improvement (formerly the Annual Quality Congress).

AUTO DIVISION AWARDS BANQUET The company with the most members in the Automotive Division will be announced at the division’s annual awards banquet June 14 in the Detroit area. Ann O’Neill of Ford will be the keynoter. For more information, go to http://www.asq.org/auto.

INTERNATIONAL NETWORKING The World Conference will include 16 networking sessions for its international attendees, many representing international member units, WorldPartners and international chapters. The international chapters, with members from 112 countries, will meet May 16.

INDIVIDUAL DUES REMAIN SAME The board of directors has approved a fiscal year 2006 dues structure that remains the same as 2005: $25 for students, $29 for forums, $69 for associates and $119 for regular, Senior and Fellow. The $10 rebate offered for certain renewals in 2005 will not continue, however.

SERVICE DIVISION CONFERENCE The Service Division will hold its annual Service Quality Conference on Oct. 17 and 18 in Atlanta. In addition to service, there will be a focus on healthcare quality topics. For information, go to http://www.asq.org/ed/conferences/sqc/2005/index.html.

INTERNATIONAL BOOK DISTRIBUTION Quality Press has entered into a relationship with American Technical Publishers (ATP), making ATP exclusive distributor of Quality Press titles in the United Kingdom, certain regions of Africa, Russia and the former Soviet republics, and the Middle East. For additional information, contact Melanie Wilhelm, Quality Press acquisitions coordinator, at

BIOMEDICAL DIVISION SCHOLARSHIP The Biomedical Division has established the William J. Feingold scholarship program to promote quality in the sector, provide related learning opportunities and promote consideration of the field as a career choice. The scholarship will be an annual award of $5,000 to an individual enrolled in an accredited university. Applications must be received by May 1 of each year. For details, go to http://www.asq.org/biomed.

BIOMED DISCUSSION GROUP EVENTS The Biomedical Division has planned two Northern California discussion group events: May 25 on internal auditing,
contact Victoria Brunmeier at 408-773-1015 or victoria@ new-approach.com or go to http://www.acteva.com/booking.cfm?binid=1&bevaID=78581; June 22 on meeting ISO 13485:2003 requirements for monitoring and measuring effectiveness, contact Jim Bischoff at 408-972-8852 or jbischof01@aol.com or go to http://www.acteva.com/booking.cfm?bnid=1&bevaID=78580.

CERT EXAM SIGNUP ONSITE All 12 ASQ certification exams will be given at the World Conference on Quality and Improvement May 16-18 in Seattle. Attendees can sign up onsite for all exams except the Six Sigma Black Belt.

PARTICIPATION AT QUALITY EXPO In addition to exhibiting and running a bookstore, ASQ will be offering seven courses during Quality Expo 2005 April 18-21 in Rosemont, IL. Quality Expo’s exhibits are related to inspection, test and measurement equipment, software and services. For additional information, go to http://www.quality.reedexpo.com/app/homepage.cfm?moduleid=42&appname=100170.

MORE TEAMS ADDED TO COMPETITION Four more organizations, in addition to those mentioned in last month’s issue of QP, are sending teams to participate in the in the Teamwork & Participation Forum’s live International Team Excellence Competition at the World Conference in Seattle. They are Boeing Commercial Airplanes, Galvak, Magnekon and Vitro Quimica. A total of 28 teams will be competing because several organizations are sending more than one team.

CALL FOR AUTHORS In addition to its regular portfolio of books related to such areas as auditing, statistics, Six Sigma, healthcare, education and quality standards, Quality Press is actively pursuing quality case studies and book proposals specifically related to service quality. For proposal guidelines, visit http://qualitypress.asq.org/author/acquisition.html or e-mail authors@asq.org.

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