September 26, 1991 EXTENSIONS OF REMARKS 24379 EXTENSIONS OF REMARKS QUALITY IN AMERICA engineering, business, and human resource use surveys and detailed records of customer curricula of the 1990s. We also wanted to pro­ complaints and customer retention. Overall vide a document that might stimulate seri­ customer satisfaction as measured in peri­ HON. NEWI' GINGRICH ous academic inquiry into the quality revo­ odic surveys by firms participating in the OF GEORGIA lution in American industry. GAO's study grew at an annual rate of 2.5 IN THE HOUSE OF REPRESENTATIVES THE GAO STUDY percent. Although this might seem modest, Thursday, September 26, 1991 GAO began its study by interviewing many it actually conforms with the overriding quality management experts from industry, Total Quality tenet of continuous improve­ Mr. GINGRICH. Mr. Speaker, I hope all my professional societies, universities, and gov­ ment. It is not difficult to envision how a 2- colleagues will take the time to read this arti­ ernment agencies. Ultimately, the GAO re­ to 3-percent rate of increase in customer sat­ cle and recognize the strong link that exists lied on criteria from the Malcolm Baldrige isfaction-if maintained-would begin to pay between quality and success in the workplace. Award, because many companies have used off in the marketplace within just a few these criteria to establish quantifiable meas­ years. [From National Productivity Review, In fact, this is just what the GAO found in Autumn 1991) ures of their performance. To gather data for its study, the GAO then conducted numerous its fourth major category of business per­ LET'S ELEVATE QUALITY ON OUR NATIONAL formance: finance and market share. Seven AGENDA interviews with twenty of the twenty-two Baldrige Award finalists for 1988 and 1989. of the nine companies for which data were (By Congressman Don Ritter) The GAO focused its study efforts on four available increased their return on assets at After more than three decades of near­ key operational areas that are common to an average annual rate of 1.3 percent. The abandonment by industry leaders, academe, all businesses: employee relations, operating GAO also noted that, in the few instances government, and the professions, the impor­ procedures, customer satisfaction, and finan­ where measures of profitab111ty did not in­ tance of "making things" is finally once cial performance. To determine the effect of crease, the profit decline was reversed. An­ again being appreciated by our society. Man­ total quality in each of these broad areas, other noticeable bottom-line improvement ufacturing is experiencing a comeback that the GAO analyzed data indicating the firms' that the GAO found was in market share, started in the 1980s, and quality improve­ performance on discrete measurable indica­ which increased at an average annual rate of ment has been our manufacturers' single tors. nearly 14 percent. Larger market share most important strategy. Indeed, quality as For example,in the area of employee rela­ means a larger customer base, which nor­ a revolution in work and managing work is tions, the GAO looked at (1) employee satis­ mally helps sustain firms through inevitable key to gaining a competitive edge in today's faction as typically measured by periodic economic downturns. global business environment. The main force company surveys; (2) attendance; (3) em­ In summing up, the GAO report has helped behind Japan's success has been its almost ployee turnover; (4) safety and health as substantiate what many of us who have been forty-year commitment to continuous im­ measured by lost work days due to occupa­ involved with quality over the last several provement and quality. Fine VCRs, compact tional causes; and (5) suggestions. The GAO years have intuitively understood. But it has discs, automobiles, and now high-definition found that companies participating in the gone an important step beyond confirming TV did not happen by dumb luck in Japan. study registered improvement in each of our intuitions. It has provided an objective Quality principles originating in America these employee-related areas after imple­ assessment of the potency of the quality phi­ and refined in Japan had a lot to do with it. menting formal total quality management losophy. It has given us ample statistical The perfect process spits out perfect prod­ (TQM) programs. There was a particularly evidence that a strategy built around the ucts and services. That is revolutionary! large improvement noted in the number of principles of TQM can contribute substan­ This notion has been substantiated by a re­ suggestions submitted by employees, which tially to a company's bottom line and long­ cently issued benchmark study from the increased at nearly a 17-percent compounded term competitiveness. General Accounting Office (GAO), "Manage­ rate of growth. SPREADING THE WORD ON QUALITY ment Practices-U.S. Companies Improve Companies use numerous indicators to help It is essential that we do everything we Performance through Quality Efforts." Al­ them determine the effect of their quality can to help promote and propagate the im­ most two years ago, twenty-nine congres­ programs on the quality and cost of their op­ portant lessons in quality that the GAO re­ sional colleagues and I asked the GAO to ex­ erations. These include reliability, timeli­ port has so well documented and defined. amine the impact of total quality manage­ ness of delivery, order-processing time, pro­ And we must recognize that the principles of ment programs on the performance of U.S. duction errors, product lead time, inventory the quality philosophy can be applied with Companies-focusing on things like produc­ turnover, quality costs, and cost savings. similar results in fields other than business tivity, profitability, market share, and other The GAO found significant improvement in and industry. To help elevate the concept of similar, tangible measures of how well they each of these areas for the companies stud­ quality on our national agenda and extend have done after implementing formal quality ied. Especially improved was "order-process­ the quality revolution, I recently introduced programs. ing time," which is the amount of time need­ an amendment to the American Technology We asked GAO to do the study because we ed to respond to a customer's request. The Preeminence Act that would create a Na­ wanted to replace single company average annual reduction in processing time tional Quality Council. The council would testimonials and anecdotes with facts. We was 12 percent. Not all companies inter­ consist of about twenty representatives from wanted an objective, credible appraisal of viewed by the GAO maintained records on industry, labor, education, government, and the effectiveness of quality as the strategy of the costs of quality; however, those that did other sectors of the U.S. economy. Federal choice for regaining our nation's competi­ found that they lowered such costs by 9 per­ government members of the council would tiveness. We wanted a documentation of the cent on an average annual basis. The costs of include representatives from the Federal quality revolution that would be accessible quality are those attributed to the costs of Quality Institute (FQI), the Department of to the public at large-not an expensive con­ failures and defects-that is, lost profits, re­ Defense (DOD) and National Institute of sultant's report out of reach to all but a few work, and scrap, as well as the costs of try­ Science and Technology (NIST). A fourth with highly specialized interests and suffi­ ing to avoid failures and defects (in other federal representative on the council would cient funds to purchase it. We wanted a doc­ words, the costs of inspection, testing, and be rotated every two years among various ci­ ument for the public record that could give training). vilian agencies. Among other things, the us hard numbers to use in developing legisla­ Another significant finding of the GAO council would set national goals and prior­ tion and formulating policy relating to study was that many companies have ities for quality in business, education, and quality's role in improving our competitive­ changed their traditional view that quality government; conduct a White House con­ ness. In addition, we wanted something for involves merely meeting technical specifica­ ference on quality in the American work­ the university community. Well aware of the tions. The new view is that quality is a mov­ place; and annually submit a report to the need in that community for quantification, ing target defined by the customer, and President and Congress on the nation's we wanted to feed this quantitative appetite firms must focus on meeting customer needs progress in meeting its quality goals. Of with data that could be analyzed and di­ and expectations. To determine how well course, the council would also help maintain gested and ultimately incorporated into the they are satisfying their customers, firms momentum for the quality revolution in • This "bullet" symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. 24380 EXTENSIONS OF REMARKS September 26, 1991 America by keeping the public eye focused The area most in need of prodding, how­ When in the course of human events, it be­ on the movement. ever, may well be education. It is ironic that comes necessary for one people to dissolve The proposed agenda and representation of while education is the sector that is slowest the political bands which have connected the National Quality Council underscore my to embrace the quality movement, it is the them with another, and to assume among conviction that quality principles need to be main supplier to all the sectors of the econ­ the powers of the earth, the separate and extended to areas of the U.S.