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476 Part 5: Controlling
had the lowest reliability of any automobile maker in the world. But a major commit-
ment from top management helped turn the company around. By paying more attention
to consumer preferences and using the other methods described later in this section,
Porsche shot to the top of global automobile reliability.24
Employee Involvement Employee involvement is another critical ingredient in

TQM. Virtually all successful quality-enhancement programs involve making the person
responsible for doing the job responsible for making sure it is done right.25 By definition,
then, employee involvement is a critical component in improving quality. Work teams,
discussed in Chapter 13, are common vehicles for increasing employee involvement.
Technology New forms of technology are also useful in TQM programs. Automation
and robots, for example, can often make products with higher precision and better
consistency than people. Investing in higher-grade machines capable of doing jobs
more precisely and reliably often improves quality. For example, Samsung has achieved
notable improvements in product quality by replacing many of its machines with new
equipment. Similarly, most U.S. auto and electronics firms make regular investments in
new technology to help boost quality.
Materials Another important part of TQM is improving the quality of the materials
that organizations use. Suppose that a company that assembles stereos buys chips and
circuits from another company. If the chips have a high failure rate, consumers will
return defective stereos to the company whose nameplate appears on them, not to the
company that made the chips. The stereo firm then loses in two ways: refunds to custo-
mers and a damaged reputation. As a result, many firms have increased the quality
requirements they impose on their suppliers as a way of improving the quality of their
own products.
Methods Improved methods can improve product and service quality. Methods are
operating systems used by the organization during the actual transformation process.
American Express Company, for example, has found ways to cut its approval time for
new credit cards from 22 to just 2 days. This results in improved service quality.
TQM Tools and Techniques

Beyond the strategic context of quality, managers can also rely on several specific tools
and techniques for improving quality. Among the most popular today are value-added
value-added analysis, benchmarking, outsourcing, reducing cycle times, ISO 9000:2000 and ISO
analysis 14000, statistical quality control (SQC), and Six Sigma.
The comprehensive
evaluation of all work Value-Added Analysis Value-added analysis is the comprehensive evaluation of all
activities, materials work activities, materials flows, and paperwork to determine the value that they add for
flows, and customers. Such an analysis often reveals wasteful or unnecessary activities that can be
paperwork to eliminated without jeopardizing customer service. For example, during a value-added
determine the value analysis, Hewlett-Packard determined that its contracts were unnecessarily long, confus-
that they add for ing, and hard to understand. The firm subsequently cut its standard contract form down
customers from 20 to 2 pages and experienced an 18 percent increase in its computer sales.
benchmarking
Benchmarking Benchmarking is the process of learning how other firms do things
The process of in an exceptionally high-quality manner. Some approaches to benchmarking are simple
learning how other and straightforward. For example, Canon routinely buys copiers made by other firms
firms do things in an and takes them apart to see how they work. This enables the firm to stay abreast of
exceptionally high- improvements and changes its competitors are using. When Ford was planning the
quality manner newest version of the Focus, it identified the 400 features that customers identified as
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476 Part 5: Controlling

Employee Involvement Employee involvement is another critical ingredient in

TQM Tools and Techniques

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