Citation:    Industry Week, July 19, 1993 v242 n14 p53(1)

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Title:       A roadmap for success. (total quality management) (Column)

Authors:     Hiebler, Robert

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Subjects:    Total quality management_Planning
             Performance standards_Measurement

Reference #: A14109630

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Abstract: Total quality management will work if a company uses tools, such
          as benchmarking and goal-setting correctly. It is important to
          compare companies that are similar in size and product when
          benchmarking. Quality improvements should be implemented in
          gradual steps.

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Full Text COPYRIGHT Penton Publishing Inc. 1993

THE TOTAL-QUALITY MOVEMENT HAS truly arrived. We know this because
management consultants, who make their living by debunking conventional
wisdom, are taking potshots at it. These revisionists, who only a few years
ago were preaching the virtues of TQM, now argue that benchmarking and
other total-quality tools are not working, and in many cases hurt corporate
performance rather than improve it.

The revisionist thinking goes something like this: The successful
application of quality-improvement strategies such as benchmarking depends
on the company's initial performance level. While benchmarking is effective
for "high-performing" companies, it can frustrate the entire quality
program of a "low performer" by creating unreasonable goals.

This oversimplifies the problem. There are frequently high-, low-, and
medium-performing departments within the same company. More important,
companies do not fail at benchmarking because they are low performers;
rather, they have not learned enough about their business processes to
successfully employ quality-improvement techniques.

Any company will benefit from benchmarking if it has the ability to do
three things. First, clearly identify the area to be improved and the goal
to be achieved. Don't try to do too much at once. Prioritize. Second,
understand how the particular function is currently being performed. Third,
focus on the underlying practices and processes used to achieve better
results in the particular area to be improved.

Quality pioneer Motorola Corp., for instance, finds it a waste of time to
work with benchmarking partners that can't clearly explain how they perform
the processes they want to improve.

One recent "low performer" from a profitability standpoint that has
benefited from a quality improvement program is Chrysler Corp. In
developing its Dodge Viper sports car, Chrysler utilized efficient new
development techniques provided by benchmarking studies of Japanese.
industry. By establishing cross-functional lines of communication and
involving suppliers from the project's earliest stages, Chrysler cut $3
billion out of development costs and trimmed its normal product-development
cycle by a full year.

Companies that succeed at quality improvement programs do so by applying
the insights obtained through benchmarking, rather than by adopting the
precise practices utilized by their benchmarking partners.

At the heart of benchmarking is the concept of learning and sharing. By
sharing its own practices in a particular area with others, a company can
gain valuable insights that can be adapted to its own particular situation.
Traditionally, much of this sharing has been among companies within the
same industry.

Recently, however, more companies have begun to view benchmarking from the
perspective of continuous improvement rather than competitive comparison.
Many companies engaged in benchmarking have discovered that direct
competitors are not always likely to know the best way to perform a
particular function. Such "best practices" are more likely to reside in
other industries.

But parallel practices in different industries can prove to be difficult to
identify and evaluate. To do this effectively and efficiently, a common
reference system--a process language, if you will--has been needed.

Just such a system was recently developed by the American Productivity &
Quality Center (APQC) and other leading benchmarking companies. A new
common Process Classification Framework, developed by members of APQC's
International Benchmarking Clearinghouse, subdivides business activities
into a series of common processes, such as understanding markets and
customers, designing products and services, marketing and selling, and
invoicing and servicing customers. APQC hopes the new framework will be to
business processes what the Standard Industrial Classifications are for
business comparisons.

So revisionists take note. When applied with intelligence and discretion,
quality improvement tools, such as benchmarking, can and will improve the
performance of almost any company.

Robert Hiebeler is a partner with Arthur Andersen & Co., Chicago.