Quality Magazine

From the Publisher: Quality Success and Failure

March 18, 2006

Will a company fail because of a lack of a robust quality system? Has it happened already? I recently had this question posed to me by a reader who was conducting research. My first reaction was, "Of course, the manufacturing landscape is littered with such companies. Let me name them for you." I couldn't.

Products have failed because of poor quality. Bridgestone/Firestone had some notorious problems with quality that led to the product failure of its tires. Most people and companies have experienced software failures, information technology failures, drug failures and food failures all traceable back to poor quality. But, has an entire manufacturing company gone out of business because of a poor quality program?

A search of the Internet turned up no evidence of companies that have failed solely because of poor quality. Many have had individual products fail because poor quality was a contributing factor. Some of these companies went out of business, but poor quality was only a contributing factor-poor marketing, economy, pricing, supply and customer service also contributed to their demise. Many companies have well-made products, but they didn't make it either. Does a good quality program, or absence of one, have an effect on company success?

Quality can make a company or product successful. Ask any Malcolm Baldrige Award winner whether quality made a difference in their success. "Quality is at the forefront of our minds at all times," says Sarah Stricker, quality control specialist at Diamond Electric Manufacturing (Eleanor, WV), the 2005 Quality Plant of the Year. In Diamond's case, good quality programs led to customer awards from the likes of Toyota Motor Co. and increased overall business that necessitated plant expansion.

The effect of a good quality program can be quantified. In September 2005, Quality Magazine recognized leading companies in quality. More than 750 U.S. manufacturers were rated on the basis of such criteria as scrap and rework as a percentage of sales, rejected parts per million shipped, warranty and repair as a percentage of sales, quality programs in place, number of employees with quality responsibilities, contribution of quality to shareholder value and profitability, registration to various standards and more.

But a good quality program can't be placed in a vacuum. It's not enough to build a better, more reliable product; a company has to support its investment in a quality program. Baldrige winners, Plant of the Year award winners, Leadership 100 companies and other companies noted for quality achievements do other things well-they anticipate and respond to the market, serve their customers well, develop and recognize employees, and invest in new technologies. The attention and attitude that comes with developing a good quality program is carried out in all other aspects of a company and its actions.

A good quality program is not the only guarantor of manufacturing success. But, I would suggest to the reader who contacted me that if he finds a company that failed because of a poor quality program, it failed in other aspects as well.

What is your experience? Do you know of entire companies that failed because of poor quality programs? Write me at williamst@bnpmedia.com.