Can the Present Make Up for the Past?
In the 1980s Ford made “Quality is Job 1” its primary advertising slogan. Ads, of course, are often a lot of puffery. In this case, as the quality community knew and as Larry Smith’s article “Back to the Future at Ford” (March 2005, p. 50) detailed, it was real. The hope was that Ford would serve as a shining example of how quality leads to competitive advantage. But no one has been able to make that case because the effort never paid off in high ratings for Ford’s cars and trucks.
Smith’s insider's insights provide part of the answer as to what went wrong—the change in top management and strategic direction in the mid to late 1990s. It remains a puzzle, though, why the intensive quality efforts in the 1980s did not show up in high quality rankings for Ford’s vehicles late in that decade and into the early 1990s. In fact, most of Ford’s models received poor rankings, and Ford sank into red ink in 1991 and 1992. No wonder the next senior management group shifted directions.
In the last few years, the quality problems at Ford have been acute. Sales are way off, and Ford’s finished goods inventory turnover has worsened sharply since 1998 as its lots fill up with unsold vehicles.
Maybe part of the answer is that, in the automotive industry at least, it takes many years for the quality equation to equal economic success, but only a few bad years to ruin the financials. However, I believe there is more to the story. Maybe no one knows why Ford's efforts in the 1980s did not pay off, but at this point the case study is incomplete and begs for more good information, especially from insiders like Larry Smith.
Schonberger & Associates
What About Ford’s Global8D Tool?
Larry Smith’s article was excellent. Sustaining basics will always be challenged as world markets build and then, inevitably, drop; good practice will always be threatened by expediency and memory loss.
One tool not mentioned in Smith’s article is Ford’s Global8D (G8D). It is the most systematic firefighting tool developed and should stand side by side with Six Sigma. In the long run, G8D is one excellent source of Six Sigma projects if used properly, because it asks teams, “What was wrong with the system that allowed this or similar problems to occur in the first place?”
I wonder what Smith thinks about the past, present and future value of G8D?
As I deliver TRIZ (a Russian acronym for theory of inventive problem solving) programs, I am still amazed by how much firefighting goes on in Western corporations, draining precious technical resources.
Buffalo Grove, IL
Author’s Response: Thank you for your comments. Ford G8D was established in the 1980s to provide a disciplined and systematic process for solving problems and preventing their recurrence. The result of combining the best practices of several methodologies, the eight steps are to:
- Prepare the process.
- Establish a team.
- Describe the problem.
- Develop an interim containment action.
- Define and verify root cause.
- Choose and verify permanent corrective actions.
- Prevent recurrence.
- Recognize team and individual contributions.
When used properly, G8D has tremendous value. It encourages teams to really define the root cause by carefully defining what the problem is and is not and asking, “Why, why, why?” It provides a high level organization of the problem solving activity and is a useful communication and corporate memory tool.
G8D is still used extensively with Ford suppliers. Although the methodology is also used inside Ford, many Ford teams are choosing to use the Six Sigma define, measure, analyze, improve, control (DMAIC) methodology in place of G8D. I suspect this trend will continue.
I believe G8D is best used in problem solving situations that deal with special causes, whereas DMAIC is the methodology of choice for addressing common cause problems.
Learning From The Past With Henry Ford
I enjoyed Larry Smith’s article, but had its time machine gone back even further, it would have found the company’s future in its distant past: the comprehensive lean enterprise system that would later be known as the Toyota production system.
Henry Ford’s My Life and Work (1922) explicitly describes just-in-time manufacturing and highlights the need for a reliable logistics system to suppress variation in material delivery times. The book also underscores the need for continuous improvement (kaizen), design for manufacturing, waste elimination and most other aspects of what we now call lean manufacturing. One of Ford’s principal success secrets was his ability to identify waste on sight and teach this skill throughout his organization. Ford also found innovative ways to avoid material waste; he most likely would have met ISO 14000 requirements in an era when he could have legally dumped into the river whatever wouldn’t go up the smokestack.
Henry Ford’s enterprises were responsible for making the United States the wealthiest and most powerful nation on earth while creating an upwardly mobile middle class. His lean enterprise system carried his company through the post World War I depression as if the economic downturn wasn’t there. The Ford Motor Co.’s fortunes declined only when it forgot its founder’s principles, which are every bit as relevant today as they were during the company’s rise to the pinnacle of manufacturing power.
WILLIAM A. LEVINSON
Levinson Productivity Systems P.C.
Business Needs Vs. Training Wants
I‘d like to commend Bill Stetar for his March 2005 article “Training: It’s Not Always the Answer” (p. 44) because it perfectly communicates and addresses the importance of identifying business needs vs. trainings wants. I have spent way too much time in HR training that later provided no direct business benefit. I hope this message falls on wanting ears because businesses need to hear.
Ben & Jerry’s Ice Cream
“Back To Basics” Is a Valuable Resource
Back To Basics” is one of the more valuable Quality Progress departments. Developing new and more effective ways to present basic quality tools to my co-workers can sometimes be a challenge.
Regarding “Corrective vs. Preventive
Action” (Russ Westcott, March 2005, p. 104), I have used the chart in Figure
1 to distinguish between the two during training sessions.
SOX and ISO 9001: A Little Too Far Too Soon?
SQ should be applauded for continuing to emphasize
the quality profession’s contribution in areas commonly thought to be outside
of quality. As William Stimson points out in “ISO 9000 and Sarbanes-Oxley”
(March 2005, p. 24), ISO 9001 is a useful model for achieving im-
provements in financial controls and reporting systems. Yet, ASQ needs to stay mindful of the fundamental differences between the Sarbanes-Oxley (SOX) change imperative and the product/service focus of ISO 9001.
When final SOX regulations were published last year, they took a narrow view of the definition of internal controls for purposes of SOX Section 404 certification. ISO 9001 and related standards are designed to bring some amount of standardization to product/service assurance in a global supply chain environment to ultimately better satisfy customer needs. The SOX rules on financial reporting and disclosures, on the other hand, are focused on the reliance of public investors on financial reports as a valid indicator of financial performance.
So, I take mild exception with Stimson’s implication that quality certifications are within the scope of SOX Section 404, internal controls certifications, and can cause executives to go to jail. SOX wasn’t intended to guarantee performance excellence, only truth in financial reporting so investors who make decisions based on financial performance can have greater confidence in its accuracy. And overt misrepresentations about quality management systems (QMS) likely could be actionable in shareholder derivative actions or enforcement by regulatory bodies.
ASQ has properly highlighted the link between SOX and QMS. As the article notes, financial performance is tied to decreased revenues and increased costs that attend quality issues. Going forward, there may be opportunities for the two audit systems to better foster organizational excellence by collaborating, but right now, given the immediate compliance challenges companies are facing, quality professionals might want to focus their contributions a little. Ideally, a SOX financial performance auditing integration would be a collaboration between financial and performance auditing professionals taking a systems approach to financial reporting and performance expectations. But the question is, are we there yet?
Colorado Division of Finance
Small Companies And Aerospace Standards
Thank you for highlighting Lee C. Bravener’s article “AS9003: An Aerospace Standard for the Little Guy” (March 2005, p. 39) in the QP Live e-mail update. The article illustrates an excellent change in path for registering small companies. I work with smaller companies that are very capable but don’t have the staff to support the administration of a full quality management system (QMS). A full QMS is not always the most cost effective way to meet the customers’ requirements.
East Aurora, NY
Suggested Reading For Standard Users
Will Stetar makes a useful contribution to understanding the importance of needs analysis and instructional design in addressing training problems. Some readers may be interested in the additional guidance found in ANSI/ISO/ASQ Q10015:2001: Quality Management— Guidelines for Training.
This international standard provides guidance that can help an organization identify and analyze training needs, design, plan and provide the training, evaluate outcomes and monitor and improve processes to achieve objectives. It emphasizes the contribution of training for continuous improvement and is intended to help organizations make their training a more effective and efficient investment.
ASQ Z1.11 Guidelines for the Application of ISO 9001 to Education and Training Institutions combines two systems begun early in the 20th century and developed since World War II. The first, the instructional system, has been used to design, develop, deliver and assess instruction in military, industrial and service organizations as well as in educational or training institutions. The second, the quality management system, has been used to ensure quality in many of these organizations.
In a growing number of other countries, educational or training institutions have registered their quality systems to ISO 9001. This guidance standard focuses on the generic quality system requirements of ISO 9001:2000.
F. CRAIG JOHNSON
Editor’s Note: Both titles mentioned are available from Quality Press at http://e-standards.asq.org.
The short description for “Back to the Future at Ford” on the March 2005 table of contents says the company saved $2 million using Six Sigma. Ford actually saved $2 billion by implementing Six Sigma.
The article named in reference 7 in “Training: It’s Not Always the Answer” by Bill Stetar (March 2005, p. 44) appears in the March 2000 issue of Advanced Manufacturing and not in January 2000.
In the 2004 Salary Survey, we mistakenly posted 2003 data in Tables C and D in Section 10 and Table C in Section 13. Corrected versions of both sections are posted online at www.asq.org/pub/qualityprogress.