Transit Research Program Sponsored by the Federal Transit Administration RESEARCH RESULTS DIGEST October 1994--Number 3

Subject Areas: VI Public Transit Responsible Staff Officer: Stephen J. Andrle

Total Quality in Public Transportation

A TCRP Digest on the progress of Project F-3, "Total in Public Transportation," prepared by MacDorman & Associates in association with the American Quality Group and the Spire Group. This is a two-phase project, which presents research on Total Quality Management (TQM) in the private and public sectors and in the U.S. public transportation industry. This Digest highlights the results of Phase I. The second phase involves the introduction of TQM at four transit systems and the development of training and educational materials on TQM for use by transit systems nationwide.

INTRODUCTION director of quality assurance, or the work supervisor. It can be defined, measured, and achieved, but such At the end of the 20th century, changes in achievement requires that quality is built into all demographic patterns and employee expectations, work processes and is understood and applied by all shifts in societal demands, increased competition and employees. Everyone is responsible for TQM, fiscal constraints, and the requirements of adopting especially ; all employees are new technologies have made many traditional involved in solving problems and improving practices obsolete. To meet these broad performance. challenges, growing numbers of American Like many so-called "new ideas," the have adopted the principles of Total Quality components of TQM are not all new. Rather, TQM is Management (TQM) to improve the responsiveness new because it embraces and enjoins many existing of their products and services. These adopted management and organizational philosophies. TQM principles have influenced system changes that may has its roots in many disciplines, including increase customer and employee satisfaction, reduce , industrial engineering, social psychology, costs, and improve . mathematical , and management science. The transit industry faces many of these same challenges. The principles of TQM appear to hold STUDY OBJECTIVES AND SCOPE promise as a way to improve transit service, increase ridership, and fulfill transit's broad social mission. The objectives of Project F-3 are to identify, However, to date, only a few agencies have evaluate, and recommend applications of potentially introduced innovative TQM-based practices. successful methods of implementing TQM in public transportation to increase ridership through improved WHAT IS TQM? customer satisfaction, to increase productivity, and to reduce costs. TQM is a management philosophy concerned The project is very timely and important because with people and work processes that focuses on it provides the public transportation industry the customer satisfaction and improves organizational opportunity to performance. TQM requires an enterprise to systematically energize, manage, coordinate, and · review the literature, principles, and improve all business activities in the interest of practices of TQM within and outside the public customers. transportation industry; TQM requires improvements throughout an · conduct, evaluate, and document pilot TQM to reduce waste and rework, to lower initiatives at public transportation agencies; costs, and to increase productivity. Quality is no · prepare informational materials on TQM for longer merely the province of service inspectors, the board members, managers, and union officials; ______TRANSPORTATION RESEARCH BOARD NATIONAL RESEARCH COUNCIL 2

· prepare user-friendly Fayol, a French mining engineer who goals. McGregor's studies and writings educational materials on TQM for headed a relatively large business (coal have been the vehicle of much work on public transportation agencies pursuing mine), developed the first rational "organizational development." TQM; and approach to the functional organization. · identify future research needs on TQM for public transportation. Frederick W.Taylor's famous Quality Management study of shoveling sand in a steel mill The results of this project will be focused on increasing individual labor documented in a final that will productivity in order to provide The concern for quality has a long present the Phase I research results and employees with a decent livelihood. and rich history, extending back to the Phase II pilot application results. Later, the husband-and-wife team of artisans and craftsmen, when master Other products from this project will Frank and Lillian Gilbreth conducted tradesmen inspected the work of include materials that may be used in studies of time and motion productivity apprentices to ensure quality the future by the pilot public that were intended to perfect business craftsmanship. The introduction of transportation agencies to continue behavior through testable work mass production at the beginning of the their TQM initiatives, and by other methods. 20th century was the dawn of a new public transportation agencies age. The high numbers of poorly made throughout the United States that wish In the early 1920s, Pierre S. and noninterchangeable parts, to pursue TQM. duPont followed by Alfred P. Sloan, breakdowns, and loss of sales because the CEO of General Motors of unreliable products forced , confronted the issue of the companies to make improvements. HISTORICAL PERSPECTIVE ON appropriate degree of centralization or MANAGEMENT decentralization of authority for Initially, quality management was decisions in large . Sloan a manufacturing concept intended to The history of management traces developed and implemented the ship nondefective products. It was the back more than two centuries to the organization principle of viewpoint of G.S. Radford that English economist Adam Smith. Smith, decentralization and systematic inspectors should examine, weigh, and and many other economists through the approaches to business objectives and measure each item prior to its leaving early years of the 20th century, focused strategic planning. the factory. Inspection, measurement, on and not on labor. Early and statistical analysis were the early economists did not consider Behavior in Organizations foundations of quality . management as a central issue in Mistakes were not necessarily business economics. Elton Mayo was the director of the prevented, but they were not shipped. famous Hawthorne studies (1927-1932) Inspection became an industrial safety J. B.Say, a French economist and and the founding father of the Human net. early follower of Adam Smith, stressed Relations movement--the first major the importance of the managerial task impact of social science on of making resources more productive. management thinking. He emphasized Quality Pioneers Another Frenchman, the Comte de that employees must first be understood Saint-Simon, foresaw the emergence of as people if they are to be understood organizations, the building of social as organization members. His work Quality management advanced, structures within organizations and, in stressed the importance of an adequate largely, through the writings and particular, the management of tasks. communications system, particularly teachings of so-called Quality Pioneers from employees to management. or TQM gurus. The pioneers focused Organizations and the Management on quantitative techniques and methods of Work Douglas McGregor is best known to control the quality of manufactured for his discourse of Theory X and products. From its beginnings at Bell It was not until large-scale Theory Y approaches to management. Laboratories, TQM evolved and organizations began to emerge in the Theory X was cast as the traditional developed while the most renowned early 1870s that the structure, view of management direction and pioneers created and promoted the management, and behavior of control. Conversely, Theory Y philosophy. Five of the more notable organizations became the subject of addresses the integration of individual proponents and leaders of TQM are discussion, debate, and writings. Henri and organizational briefly introduced below:

These Digests are issued in the interest of providing an early awareness of the research results emanating from projects in the TCRP. By making these results known as they are developed, it is hoped that the potential users of the research findings will be encouraged toward their early implementation Persons wanting to pursue the project subject matter in greater depth may do so through contact with the Cooperative Research Programs Staff, Transportation Research Board, 2101 Constitution Ave., N.W., Washington, DC 20418 3

· W. Edwards Deming is best The rising interest in TQM has Regardless of the differences and known for his "Fourteen Points," a made publishing and consulting in similarities among the TQM gurus, broad set of simple but profound quality management a growth industry. organizations considering the pursuit of quality principles; the "Seven Deadly Appendix A contains a bibliography TQM need not adopt the philosophy of Diseases," common obstacles to quality and reference guide, which includes a single expert nor should they rethink improvement; and the "Plan, Do Check, many of the more significant books and the entire field and build their own Act (PDCA) cycle," a systematic articles on TQM. The bibliography is philosophy from the ground up. approach to problem solving. These organized into nine categories to assist Clearly, there is a middle ground, concepts are well documented in his public transportation managers and where each organization can draw on writings. others interested in learning about the perspectives of different TQM TQM: general, and proponents and tailor their initiative to , measurement best serve the needs and priorities of · Joseph Juran moved quality and benchmarking, process their customers and their organization. control forward to the idea of quality management, training and tools, assurance and introduced the concept employee empowerment and teams, of quality as a means for cost control. labor, customer service, and case TQM in Japan Dr. Juran wrote the Quality Control studies. A glossary of terms frequently Handbook, which has served as the used in the TQM literature and by its It is commonly believed that TQM bible in this field. In this book, he practitioners is presented in Appendix is a Japanese management philosophy. articulated that quality is not an B. It was, however, created by Americans, expense but an investment in following World War I, and adopted by profitability. Like Deming, Juran the Japanese after World War II, as helped bring TQM to Japan and later to Principles Espoused by Experts they rebuilt their industries. TQM has the United States. flourished in Japan since the early 1950s, evolving and changing While the various experts differ somewhat over time. · Kaoru Ishikawa led the with each other in specific areas, a movement in Japan to adapt the review of TQM principles espoused by Deming went to Japan in 1950, at teachings of the American quality experts identified the following areas of the request of the U.S. government, experts and synthesized these concepts general agreement: where the newly formed Japanese into his Company Wide Quality Control Union of Scientists and Engineers (CWQC), successfully championing the (JUSE) asked him to teach statistical integration of quality methods into · TQM is a fundamental change in how quality control to managers of all Japanese engineering and management most enterprises manage their business. industries. He declined royalties education curricula. These methods The change is difficult and takes time. offered by JUSE for the publication of have been used successfully for several his lecture notes and in gratitude, JUSE · Management must lead the total decades, and are an integral part of the named a newly announced prize for quality initiative. Japanese industrial culture. quality after him. Although apparently slow to take hold, the Deming Prize is · All employees must be involved in total quality management. now a distinguished and prestigious · Armand Feigenbaum advocated accomplishment. Among other expanding quality control beyond · Continuous quality improvement is a benefits, it is credited with stimulating inspectors to every employee and business imperative. the race for quality in Japan, as well as vendor. He believed that quality was the transfer of quality methods and too central to be delegated to an · Quality control and improvement technology. inspection corps because this was too apply throughout the organization. limited an approach. Rather, a total It was Japan's past reputation for · Ongoing education and training are poor product quality and the need to quality approach requires the essential for all employees. participation of all employees in the compete in the post-World War II organization as well as vendors that · Quality requires an environment of world marketplace that drove the supply the organization. teamwork, respect for the individual, trust, Japanese to implement total quality and professional growth. management concepts as the heart of · Philip B. Crosby espoused "zero their business planning. Since the defects" and the principle that quality is · Quality has a double benefit. It 1970s, Japan has been recognized as the conformance to requirements. increases customer satisfaction and the world leader for product and service revenue by improving the quality of While initially real, the costs of quality quality. Earlier than any other country, products and services; it reduces costs by Japanese companies used the disappear as the very real and improving the quality of processes. measurable benefits of quality emerge. knowledge 4 from Deming and Juran's teaching to year to support clients in their pursuit encourage outstanding performance build a quality revolution. of excellence and quality performance. and excellence in business and Awards have been developed to government. recognize organizations that have TQM in the United States achieved or are pursuing quality performance. TQM in the Public Sector World War II created a demand for products and heightened the · National Awards for Quality. Total quality management is now concern for product quality worldwide. The Malcolm Baldrige National being widely adopted by federal, state, Over time, new dimensions were added Quality Award (Baldrige Award) is and local governments. The primary to quality management, such as cost the most renowned award for quality catalyst for quality improvement in the reductions from less rework, improved in the United States. This award, public sector has been budget pressure, work processes to avoid defects, and established in 1987 by the Act of caused by rising costs and dwindling meeting customer requirements to keep Congress (the Malcolm Baldrige revenues. and increase market share. National Quality Improvement Act of 1987, Public Law 100-107), is · The Federal Government. TQM The increased number of designed to recognize companies in the federal government grew out inspectors and quality engineers in the that have successfully implemented of productivity programs that started United States resulted in the formation total quality management systems. at the Department of Defense in the of an academic and professional society The award is managed by the U.S. early 1970s. As a result of DOD's to further spread quality techniques and Department of Commerce's National early commitment to this effort, it technology. Formally established in Institute of Standards and remains one of the strongest 1945, this group was originally called Technology (NIST) and is proponents and provides one of the the Society for Quality Engineers; administered by the ASQC. best examples of TQM in the federal today it is called the American Society Following a rigorous examination government. of Quality Control (ASQC). Its efforts process, the award is presented In 1986, President Reagan signed have helped legitimize quality annually to a maximum of six an executive order to implement a management as an integral element of companies, representing government-wide productivity business and industry throughout the manufacturing, service, and small initiative under the direction of the United States and worldwide. In the business. of Management and Budget. past 20 years, other business After consultation with private associations and professional societies · The United States Senate sector leaders, this productivity that support quality have been formed. Productivity Award. This national effort evolved into total quality award also recognizes organizations management initiatives. It has only been since the late for improvements in business The Federal Quality Institute 1970s that TQM has come back to the efficiency and productivity. It is (FQI) was created by the Office of United States as a means to redirect presented yearly to companies that Management and Budget, in 1988, management practices and improve demonstrate increases in annual to inform and consult with performance. With the increasing productivity or make a contribution government agencies involved in concern for competition and global to a community's employment. Each TQM programs. It was also charged markets, TQM has moved from U.S. senator may present one with administration of the manufacturing, as its exclusive domain, productivity award per year. There President's Award for Quality and to many sectors of U.S. business and are no set criteria that a company Productivity and the Quality industry including services, research must meet in order to win. Improvement Prototype Award and development, and health care. (QIP) established in 1988. More recently, the public sector has · State and Local Awards for Early in his administration, adopted TQM as the basis for improved Quality. The success of the Baldrige President Clinton launched a 6- performance. Award has led to the creation of month National Performance similar awards for quality at the Review of all federal agencies, state and local levels. While awards headed by Vice President Gore. The TQM in the Private Sector for quality are predominantly made President announced: "Our goal is to to companies in the private sector, make the entire federal government In the past several years, there has half of the states currently offering both less expensive and more been a burgeoning interest in TQM awards have added a category for efficient, and to change the culture throughout the private sector in the nonprofit or government of our national bureaucracy away United States. New experts and organizations. Similar to the from complacency and entitlement recognized consulting firms emerge Baldrige Award, the intent of these toward initiative and empowerment. each awards is to both recognize and We 5

intend to redesign, to reinvent, to remain sensitive to each of these economic, social, and political reinvigorate the entire national differences to be effective. forces: escalating industry costs; government." The Clinton greater competition for limited administration's commitment to public funds; fiscal conservatism at quality is further evidenced in Vice TQM IN THE PUBLIC the local, state, and national levels; President Gore's recently published TRANSPORTATION INDUSTRY continuing demand for clean, safe, The Gore Report on Reinventing on-time, affordable public Government: Creating a The public transportation industry transportation services; and Government that Works Better and has become interested and involved in increasing interest in accountability Costs Less. TQM only in the past several years. In of public services. a confidential Survey for Chief Numerous factors influence · State and Local Executive Officers: Total Quality public transportation performance. Government. Many states now Management in Public Transportation- These factors may be divided into have quality awards patterned after -conducted in June 1993 as part of this two categories--controllable and the private sector Baldrige Award. project--about 85 percent of the 172 noncontrollable. Controllable factors More recently, some states have respondents indicated they had heard of are those influenced by the decisions introduced quality programs aimed or knew about TQM. and actions of the public at rewarding or improving the transportation governing board, its performance of government One hundred three Chief executives, managers, and agencies. As with the federal Executive Officers (CEOs) or 60 employees. Uncontrollable factors government, budget pressure and percent of the respondents said that include both the environmental and constituents' demands for improved their organizations were involved in economic conditions in which public performance in the public sector TQM or other quality initiatives. Of the transportation agencies operate. have provided an impetus for TQM 103 transit organizations, only 17 (27 TQM focuses on the controllable in state and local government. percent) indicated they started their factors. Several notable examples of efforts more than 3 years ago. Figures 1 states and local communities that are and 2 illustrate the focus of these · Concern for People. A pursing and recognizing TQM in the initiatives. It is probable that the results report prepared by the American public sector currently include of this survey overstate national public Public Transit Association, Transit Arkansas, Florida, Kansas, transportation industry involvement 2000 Task Force stated "...we are Minnesota, and Oregon and the with TQM, since less than 30 percent bound by a traditional preoccupation cities of Madison, Wisconsin and of the CEOs (172 out of 590) with accommodating vehicles and Portland, Oregon. responded to the survey. (The survey inattention to accommodating instrument and the results are presented people....Public transportation is in the Interim and Final for this dominated by its human resource Problems with TQM in the Public project.) and human service character. The Sector performance and success of public transit hinges on how human factors Despite many similarities, the Concern for Performance and are managed. There are two public sector differs significantly from Customers dimensions of concern--riders and the private sector. Implementers of work force...." TQM in government face a number of Concern for performance and additional hurdles not found in the interest in customers are not new to the · Industry Leadership: private companies. These include a lack public transportation industry. As the Perspectives and Attitudes. One of of market incentives, a short-term operators of private businesses and the most interesting findings of the perspective caused by frequent political later public services, public recent Survey of Chief Executive changeovers, a highly centralized and transportation managers have sought to Officers, conducted in this project, layered structure, a separation of maximize ridership and revenues by was the generally high opinion held powers that requires negotiation and providing clean, safe, and reliable by CEOs of their organization's consensus building, conflicting needs service, while carefully managing public image and their belief that between various customer groups, and costs. things are going well. (See Figures 3 an emphasis on due process over and 4.) While this positive outlook efficiency.1 ·Concern for Productivity. Since is praiseworthy, opinion polls show the mid 1970s, public transportation that transit has only an average In short, the political process is agencies, local officials, state public image as judged by a national more complicated and contentious than governments, and the federal consumer survey conducted by The similar processes in the private sector, government have displayed Conference Board in 1990. From a and requires careful navigation. Public heightened interest in transit business perspective, things are not sector organizations pursuing TQM performance. This interest is the going particularly well must product of several 6

Figure 1. Responses to: Which organizational functions are involved in the quality initiatives?

Figure 2. Responses to: What types of performances are the quality initiatives to improve? 7

Figure 3. Responses to: Our public image is very positive.

Figure 4. Responses to: Thins in our organization seem to be going well. 8

in the U.S. transit industry. The overall conclusion of this to emulate excellent performance by According to the 1990 Nationwide second survey is that, while TQM is other organizations. (See Figures 9 Personal Transportation Survey, the new to the U.S. transit industry, many and 10.) industry, as a whole, continues to transit systems are interested in TQM lose travel market share even in the and have begun to implement quality Formalizing TQM requires more traditional transit arenas that programs. Transit systems are commitment, time, effort, and include female consumers and low interested in improved performance and resources. It appears it will be some income residents in urbanized areas. in increased customer satisfaction, time yet before significant nationwide particularly for external customers. improvements to performance and Information is being gathered by many customer satisfaction will be realized public transportation organizations based on the current status of TQM in Profile of Public Transportation through surveys to determine how they the U.S. transit industry. Quality Initiatives can improve performance and increase quality. Transit systems in the United TQM PRINCIPLES FOR THE States have a well-established interest The survey results, which are PUBLIC TRANSPORTATION in improving performance--reducing presented in more detail in the Interim INDUSTRY costs to increase efficiency, improving Report, indicate that, while transit vehicle maintenance to increase service system CEOs are involved in providing This section defines seven reliability, modifying bus schedules to vision and oversight for quality fundamental principles that provide increase on-time performance, programs, most other foundations for guidance for TQM implementation and improving marketing and TQM are not yet in place. For example: concludes with lessons of TQM success communications to increase customer and failure. TQM is a comprehensive, satisfaction. · Transit governing boards are not all-encompassing approach to actively involved in quality; neither management and requires a systematic are union leaders. Policy statements approach to long-term growth. These A number of U.S. public on quality have not been formulated principles should not be viewed transportation agencies made a and communicated. (See Figures 5 independently, but as vital components commitment to TQM in the late 1980s. and 6.) of a total quality plan. These systems include Madison Metro in Madison, Wisconsin; Port Authority · Quality coordinators or facilitators of Allegheny County in Pittsburgh, have generally not been designated Principle 1: Put Customers First Pennsylvania; and Ride-On in or hired by transit systems to Montgomery County, Maryland. The manage and support quality. efforts of these transit agencies to "Putting customers first" is the initiate TQM are presented as case · Transit employees are not yet basis for all quality management. TQM studies in the Interim and Final Reports sufficiently trained in tools and requires organizations to adopt the for this project. techniques for problem solving and belief that service and product quality conflict resolution. Consequently, should meet--if not exceed--customers' employee participation in quality expectations. All people and processes In September 1993, the improvement is largely unstructured, of an organization should be directed to researchers for this project sent a through individual ideas and meet this goal. Survey of Quality Initiatives and Efforts suggestions rather than through of Public Transportation Organizations well-trained functional and cross- The success of public to 103 public transit organizations. The functional teams that meet regularly. transportation depends on customer organizations surveyed were those that (See Figures 7 and 8.) satisfaction--attracting and retaining responded to the initial Survey for Chief customers to use or support its services. Executive Officers and stated that their · Transit employees are infrequently Indeed, if there are no customers, there transit system had "embarked on TQM rewarded through formal is no need for public transportation or other quality initiatives." The recognition and reward for services. Similar to many private sector primary objective of the survey was to contributing to quality improvement. services, public transportation has two obtain a greater appreciation for the types of customers: (1) consumers--the nature and extent of transit industry · The quality programs of the people who ride the service and (2) involvement in TQM and related survey respondents do not appear to stockholders--the general public who formal quality initiatives. The be very rigorous. Measurement of are tax-paying investors in the service. responses provide insight regarding the results is not integral to the pursuit current status of the quality movement of improvements, nor is By understanding and meeting in the U.S. transit industry. benchmarking customer expectations for service and 9

Figure 5. Responses to: Is there an agreement between labor and management regarding quality initiatives?

Figure 6. Responses to: Has a written quality policy been prepared and communicated? 10

Figure 7. Responses to: Identify the TQM tools and techniques employed in quality initiatives.

Figure 8. Responses to: How often do employee members of quality teams meet to work on quality issues? 11

Figure 9. Responses to: Does the organization measure or monitor the results of initiatives?

Figure 10. Responses to: Does the organization utilize benchmarking in quality initiatives? 12

product quality, an organization mail surveys, and telephone surveys to conducted surveys of area residents improves its performance. The effects solicit information on customer for about 5 years to identify the of successfully satisfying customers are expectations, their current levels of determinants of customer realized in at least three areas for transit satisfaction, and factors that may satisfaction. About 2,500 annual systems: influence people to use or not use riders and nonriders are asked to rate transit services. Market research should their degree of satisfaction with, and · Ridership Stability. By satisfying be conducted so that transit directors importance of, 26 public and delighting customers, customer and managers base their decisions transportation service attributes. loyalty and ridership will increase. It regarding customer priorities on facts, This process has identified the areas is less expensive to keep existing rather than assumptions. of performance most in need of customers than to attract new ones. improvement based on customer Front-line employees (i.e., vehicle priorities and satisfaction levels · New Riders. Transit systems can operators, telephone information associated with the 26 attributes. also attract new customers, resulting personnel, ticket agents) are also In 1991, the survey revealed that in increased market share. important resources for understanding customers were most satisfied with customer expectations. Through regular the safe operation of the buses, the · Cost Reduction. By directing contact with customers, front-line daytime safety of waiting for buses, processes and people toward employees are frequently better able to the politeness of drivers, and the meeting customer expectations, judge customers' reactions to service clarity of the timetables. Customers operational costs can be lowered and than senior management or third-party rated on-time performance, the waste eliminated because certain market researchers. To use this nighttime safety of waiting for and extraneous activities, such as information, organizations must open riding buses, and the mechanical bureaucratic policies and paperwork, their channels of communication so reliability of the buses as the most that are not essential to customers that front-line employees are able to important service attributes. The can be stopped. communicate effectively with greatest gaps between the ratings of managers who will organize follow-up customer expectations and Organizations should strive to action. perceptions were night-time safety, meet customer expectations in all work on-time performance, headways functions. Every possible interaction Responding to Customer between buses, and travel time to between the customer and the transit Expectations. Translating market work. These performance gaps system should be flawless and pleasant. research results and employee feedback provide opportunities to improve Using the service should be easy. It about customers' expectations into service and satisfy customers. should be accomplished in a timely actionable procedures is a challenge for manner and pleasant environment, with every organization. There is no set · Another public transportation front-line employees who are method that an organization can follow. organization reported that operator knowledgeable and helpful. This Every organization must adjust its own behavior makes a difference in the requires systems and processes behind culture, systems, and plans to willingness of current and the scenes that enable employees to successfully "put customers first." prospective customers to use public offer courteous, efficient, and effective transportation services. The survey service. Organizations must learn to make found, for example, that respondents meeting and exceeding customer would be encouraged to use public Knowing the Customer. Public expectations a priority in both their transportation when the driver is transportation agencies should use day-to-day activities and in their long helpful, pleasant, and courteous. market research to determine customer term-planning. This requires Specifically, it noted that passengers expectations and perceptions. They developing customer-focused appreciate drivers who wait for must first define their customers--who operational processes and, at a strategic passengers to be seated before are they, why do they use or not use the level, committing the resources that driving off from a stop and who help service, and what competitive position customers, and meeting their those with difficulty boarding. alternatives do they have. Next, transit expectations, as an asset to the agencies should determine what drives organization's financial well-being. customer satisfaction--what are customers' priorities, and how satisfied The following are noteworthy These and other similar efforts are are they with the transit services. examples of work that is currently on the cutting edge of performance being performed by U.S. transit improvement because they gather There are numerous methods to systems to research customer priorities: relevant and much needed customer- obtain vital information on customer driven information to improve the priorities from sample groups. · A large public transportation quality of public transportation Researchers use focus groups, system in the western United States services. interviews, has 13

Principle 2: Manage and Improve In the planning and development documentation, to achieve customer Processes of processes, it is essential that satisfaction and improve operational members of all stages and subprocesses performance. As many TQM By improving operations--how be involved. This is called a cross- proponents say, "If you can't measure work activities are performed-- functional approach. Through a cross- it, you can't manage it. If you can't organizations can raise the quality of functional approach, public manage it, you can't improve it." their services, products, and delivery; transportation employees can view their Measures serve the dual role of increase productivity; improve responsibilities in the chain of events (1)setting the direction for operational efficiency; and eliminate that leads to service delivery while operational and strategic planning and waste. developing an understanding of the (2)providing feedback on whether needs and demands of their colleagues. organizational goals and objectives are Processes are then created or being achieved. Process Management Creates reorganized to meet customer Customer Satisfaction. A widely expectations, rather than having TQM has simultaneous goals of accepted TQM approach to employees complete tasks in their own customer satisfaction and improved understanding and improving areas, with little regard for the end operations. Consequently, measures operations is process management. results. critical for TQM are efficiency, Process management requires effectiveness, and quality. understanding how work is done, how Research shows that significant output or results are achieved, and how improvements in organizational ·Efficiency considers the resources value is provided to customers. It performance usually involve the efforts (e.g., labor, capital, overhead, provides a comprehensive, integrated of more than one functional activity or materials) necessary to produce method of analyzing operations and group. In cross-functional groups, output coupled with the quantity, focusing all work activities on employees learn the following: cost, and rate of productivity. satisfying customers. Efficiency measures are usually ·the many functions within the developed by dividing the quantity All employees in a public organization and how they of output by the cost or quantity of transportation system have customers contribute to the end result; resource input. Increases in cost, and suppliers, either inside or outside ·the relationship among functions because of inflationary factors, must the organization. Individuals and and how each affects customer be considered when assessing groups (i.e., suppliers) perform work satisfaction; efficiency. and pass on the results or information ·the many responsibilities of others to others (i.e., their customers) within within the organization, including ·Effectiveness is the quantity of or outside the organization. Everyone time demands, pressures, and products or services consumed per uses the output of their suppliers and potential failure points; and unit cost or resource to produce provides input to their customers. ·important information that other them at a given price and quality. Throughout all work processes--to the departments and employees may Effectiveness dimensions include delivery of service, the goal of public know regarding customer the consumption of services or transportation employees is to satisfy satisfaction and how it may best be products that are influenced by all customers and to add value to achieved. quality. processes. This requires building quality into work processes to avoid The development and ·Quality plays a major role in both defects and improve performance. implementation of process management efficiency and effectiveness because within the context of cross-functional of the multiplicity of dimensions it groups allows for and encourages adds to improving and achieving Cross-Functional Approach and problem prevention and continuous customer satisfaction and by Continuous Improvement. Public improvement at every stage of transit eliminating waste, rework, and transportation agencies are almost service delivery. A shift is made from defects. Critical dimensions of always organized into specialty areas using traditional quality inspection of quality include accuracy, reliability, such as scheduling, operations, end results to recognizing and security, responsiveness, courtesy, maintenance, , , preventing problems before the product competence, timeliness, appearance, and . This arrangement, or service is delivered. information, communication, and called functional organization, accessibility or ease of use. organizes employees into work groups requiring similar job knowledge and Principle 3: Manage by Fact Criteria for and Uses of skills. Unfortunately, the results of Measures. The following criteria functional work efforts alone are rarely TQM is a management philosophy should be used to successfully responsible for satisfying or exceeding that requires the use of facts and data, implement measures and ensure their customer expectations. such as market research and process acceptance by employees. 14

Otherwise, measurement will be There are two approaches to Public transportation agencies must viewed as "extra work" rather than as benchmarking: learn to process real-time information an enhancement to the TQM effort. to efficiently make decisions to Good measures are · Competitive benchmarking improve customer satisfaction. measures organizational Becoming managers of "public · Valid. Data are sampled by performance against competing mobility" instead of managers of public methods that are unquestionably organizations. Competitive transportation will, to a large extent, credible by all parties and are benchmarking tends to concentrate rely on developments in information unaffected by artificial on the relative performance of technology. manipulation. competitors using a select set of industry measures. Public transportation agencies · Complete. Measures adequately need to (1) import information gauge the activity rather than only · Process benchmarking identifies efficiently; (2) move information to the some aspect of the activity. and measures the best, i.e., world- right place in the organization where it class, practice for conducting a can be analyzed, digested, and acted · Manageable. Measures provide particular . Once upon; (3) make the necessary internal sufficient information on which to the best practice is identified, transformations to take account of new base management decisions. measured, and understood, it may be information; and (4) get feedback adapted and improved for on the impacts of its new responses. · Timely. Data and information application to another organization. should be collected and reported For example, L.L. Bean is often soon after the processes' actual benchmarked by companies in other occurrence. industries for its warehousing Principle 4: Cultivate Organizational capabilities. Learning · Visible. Measures should be Without learning, organizations openly tracked by those who There are a number of benefits to and their members repeat old behavior manage them. benchmarking that can help improve operations. For example, benchmarking and practices. Solving problems, changing procedures to meet · Inexpensive. Measures make use builds organizational awareness of the customers' changing needs, of data easily obtained or already best practices in a particular process; understanding the importance of collected for some other purpose. identifies the measure of excellence for a targeted process; enhances goal- satisfying customers, and designing or reengineering processes all require · Interpretable. Measures should setting and performance assessment; and challenges "business as usual" or learning that work can be performed in be easy to understand and readily "if it ain't broke, don't fix it" attitudes. different, better ways. comparable to other time periods or organizations. Information Technology. The Creating a learning environment increasing availability of sophisticated requires commitment from senior · Benchmarked. Comparable information technology has a profound management. Senior management measures from other organizations effect on business processes. Satellites, should set the example by continuing to are available and current. cellular telephones, modems, learn themselves, involving others in teleconferencing, and facsimiles are the learning process, and creating · Motivational. Measures should examples of recent improvements in policies and recognition programs that generate the desired balance information technology. Available encourage employees to develop new between competitive spirit and information technology for public ideas. All employees should be collaborative teamwork. transportation includes automatic encouraged to participate and should passenger counters, automatic vehicle feel their participation is valued. Benchmarking. Benchmarking is location systems, and passenger Because employees have operational a measurement-based method used in information systems. Using information experience, they often have the best TQM to make operational technology to support the real-time knowledge of where improvements improvements. It is defined as a activities of front-line employees and should be made. Further, employee process of measuring products, customers should be of primary interest involvement and participation is services, and practices against those of to public transportation agencies. essential to translate new ideas into competitors and "best-in-class" action. organizations, for the purpose of An important challenge to public improvement. Benchmarking is an transportation is to identify where There should be a plan that approach that goes outside of one's existing and near-developed incorporates learning into everyday organization to observe how information technology can improve activities. The following are elements outstanding organizations accomplish performance. of an organizational learning plan that certain activities. 15 help create a culture of knowledge Principle 5: Train, Empower, and managers to solve problems or grant generation, sharing, and development: Recognize Employees requests. Through empowerment, there are increased opportunities for Employees are a transit system's employees to make decisions in real · Solve problems systematically. most important asset. Their value must time, without having to go through the First, employees should understand be protected and enhanced. This means chain of command. the value of basing decisions on training employees to identify and data rather than assumptions. solve problems that cause customer There are many benefits to Simple statistical tools should be dissatisfaction; empowering employees empowerment. Empowerment provides used to organize and analyze data. to take actions to satisfy customers; and a sense of ownership and control over The use of data and analytic tools is recognizing employees for their efforts processes and job activities. Employees critical to detecting and preventing and contributions that improve feel a personal responsibility for problems. performance. meeting the expectations of their · Experiment. Experimentation is customers. Employees are motivated by essential for cultivating learning. Training. TQM starts and ends knowing they are entrusted to make the Experiments involve searching for with training. Employees must be right decisions. and testing new ideas. trained to work together as a team, Experimentation should be focused on meeting and exceeding Recognition. Recognition is a performed as part of a plan to customers' needs and expectations. powerful tool to reinforce and maintain achieve a desired end result, such There should be continual retraining to quality improvement. Ongoing as testing methods to improve meet ever-changing requirements for recognition increases employee customer satisfaction. the future, particularly with the involvement and helps employees feel · Learn from the past. increasing availability of sophisticated commitment to their work Organizations must learn to track information technology. environment. Recognition also their attempts at implementing new reinforces desired behaviors, builds ideas and evaluate their successes Training is not only important for self-esteem, nurtures trust and respect, or failures. From this information, basic job skills, but also important for says "thank you," renews enthusiasm, organizations can make future problem identification and problem affirms self-worth and value, decisions and create programs solving. Ongoing training creates a empowers, confirms quality values, and based on success and not repeat knowledgeable work force, which has celebrates success. failures. flexible skills and the ability to engage · Learn from others. This is an in multiple jobs. Management should Both individual employees and important element of TQM and consider the potential for increasing teams should be recognized for should be encouraged through the compensation as employees increase improving performance and increasing development of teams. Through their skills in multiple job activities. customer satisfaction. Organizations employees working together in with formal recognition programs build teams, knowledge is shared and Empowerment. Empowerment employee support and ownership in built upon throughout the means giving employees the authority quality improvement efforts. organization. Employees learn from to do what it takes to satisfy customers. one another based on their hands- Often, this means moving decision Principle 6: Improve Labor- on, operational experience and making closer to the front line of the Management Teamwork performance. Teamwork is organization, rather than keeping it essential in TQM for sharing ideas solely in the hands of management. Polarized positions--us versus and also for incorporating all work This requires a knowledgeable work them--have long characterized the functions' needs, requirements, force and an environment of trust, relationships between organized labor knowledge, and views into decision accountability, and support. and management in the U.S. public making and planning. transportation industry, as well as other Empowerment benefits customers. industries. Labor agreements and work · Transfer knowledge. Often, empowerment reduces the rules often overly define and limit Knowledge gained through amount of time required to solve a employee responsibilities and problem solving, experimentation, problem or grant a special request. In emphasize punishment for breaking and teamwork should be transferred traditional vertical organizations, such rules. In many transit agencies, more quickly and efficiently throughout as public transportation, decisions are attention is paid to the arbitration of the organization to educate all typically made by management. This grievances than working together to workers about the lessons learned. approach to decision making requires improve performance and satisfy front-line employees to consult their customers. 16

A continuous and lasting TQM culture and provide increased Leadership and TQM. program is not possible without the opportunity for everyone to satisfy Implementing TQM requires clear, involvement of employees. In customers. long-term leadership commitment. organizations with represented Leadership must believe that long-term employees, this means involvement by TQM requires cultural change and relationships with satisfied customers union officials in policy decision transformation of organizational rules are critical assets to the success of the making and participation by and attitudes. For many employees, organization. Leaders must incorporate represented employees to improve especially those who have worked in an this value into strategic planning and performance and satisfy customers. organization for many years, this new set customers as the top priority of all Employee teams with represented and approach may be difficult to adjust to employees. nonrepresented members must be or accept. Employees may be resistant concerned with the processes that focus to the change because they feel that the It is essential that customer on customer satisfaction. old way is better--it's worked in the satisfaction be incorporated in the past, why won't it work in the future?"- vision, mission, and value statements. Under the National Labor -"TQM is simply a fad," or "despite the These statements define strategic Relations Act (NLRA) law, labor- current enthusiasm, management will direction--what goals will be pursued management committees cannot not commit or follow-through." and how they will be accomplished. address grievances, labor disputes, rates Leaders will meet with resistance to The statements incorporate strategy of pay, hours of employment, or change on many different fronts along with operational techniques and conditions of work. These areas are the throughout the organization. activities that are essential to success. sole concern of formal labor They are written commitments that negotiations. To avoid conflicts with How Cultures Develop and establish a basis for quality planning, the National Labor Relations Board Change. Organizational cultures priority setting, and follow-up (NLRB), the following steps should be generally develop from three sources: feedback. taken: (1) the beliefs, values, and philosophy of the founders or early leaders; (2) Leadership is also responsible for · Establish a written policy that the learning experiences of group creating "customer-focused support clearly states TQM goals in terms of members as their organization evolves; systems" such as measurement, rewards quality enhancement and customer and (3) new beliefs, values, and and recognition for satisfying satisfaction. The policy should philosophy brought in by new members customers, and training on working expressly forbid teams from and leaders. The philosophies of with and achieving positive working on initiatives related to leaders are tested early and are often relationships with customers. These wages, rates of pay, hours of the root of success or failure. Even in and other programs will demonstrate to employment, or conditions of work. large, well-established organizations, employees that senior management is culture can often be traced to the committed to TQM. · Alert team leaders and facilitators beliefs and values of the founders and to avoid discussions related to early leaders. Leaders must demonstrate that designated topics. TQM is essential. By witnessing Leaders create organizational leaders acting as role-models, · Advise management personnel culture and then perpetuate the culture employees will be more apt to take who work with teams which topics by determining the criteria for initiative to meet or exceed customers' are appropriate and which are leadership and thus, who will or will expectations. This requires leaders to inappropriate. not be future leaders. Understanding an participate in education sessions and to organization's culture, its strengths and work with employees, demonstrating · Periodically audit and review weaknesses, is desirable for all that everyone is responsible for actual practices to make certain that employees, but is essential for "putting customers first." violations are not occurring. organization leaders. Importantly, leaders must Principle 7: Lead the Change in recognize the need to change their Organizational Culture organization culture, when warranted. LESSONS OF SUCCESS AND Next, they must get the members of FAILURE IN TQM The success of TQM is largely their organization to accept the need for determined by leadership and change and begin the often difficult organizational culture. Leaders must be transition process. Ultimately, leaders Much has been said and written committed to TQM to sustain a must provide a path and process for about TQM--both its success and longterm effort to improve cultural change and assure members of failure. This section summarizes performance. They must change the the organization that constructive TQM's current track record, based on organizational change is necessary and possible. the writings of management experts. 17

Is TQM Overrated? When Does TQM Fail? culture must be prepared and ready for change. Second, people must be The track record of TQM Companies have experienced a rewarded for new thinking and programs has been mixed, with many variety of specific problems with TQM encouraged to report bad news. Third, high-profile successes and an almost implementation. First, because TQM is TQM must have a strong champion equal number of failures. According to a unifying philosophy that transforms who is willing and able to exert Thomas Hout, Vice President at the businesses, it sometimes results in leadership. Fourth, implementation Boston Consulting Group: "The internal debates over basic strategy. must be from the top down, with active majority of quality efforts fizzle out Furthermore, there are numerous TQM and sustained participation by senior early, or give some improvements but methods and implementation management. Fifth, every employee never fulfill their initial promise."2 approaches, some of which may be should be trained and involved. Sixth, incompatible. Finally, because senior organizations must continuously The Harvard Business Review managers may delegate quality improve their training programs, recently reported that, of 300 leadership, some organizations develop adding new and more sophisticated electronics companies surveyed, 73 internal TQM bureaucracies that are tools to employees' skills repertoires to percent had TQM efforts underway, but just as ineffective and insulated as other sustain momentum. Seventh, only 37 percent had achieved more than functional departments.5 organizations need to establish a proper a 10 percent reduction in product "balance of statistical and social skills." defects. McKinsey & Company, a Other possible reasons for failure Finally, people must be patient. consulting firm, found that two-thirds according to the American Quality Meaningful change takes time.8 of the quality programs at major Foundation include the following: are failing or stalled. "Americans react poorly to programs Another consulting firm, Arthur D. geared to perfection," "70 percent of PILOT TQM INITIATIVES Little, surveyed 500 executives and American workers are afraid to speak found that only 36 percent believed up with suggestions or to ask for Important objectives of Project F- TQM improved competitiveness.3 clarification," and "Americans prefer to 3 included identifying up to four transit jump into a project without heavy systems interested in initiating or While experts believe that TQM planning."6 advancing TQM and providing support principles are sound, many companies for their efforts. The four transit have simply not implemented the agencies should be diverse in size, concepts properly. According to When Does TQM Succeed? services provided, geographic location, Christopher Hart, President of the Spire and labor environment. By initiating Group and a former Harvard Business In 1993, Ernst & Young and the and subsequently evaluating TQM in School professor: American Quality Foundation these diverse transit settings, published the Best Practices Report, information and insights should be Twenty years ago, the data resulting from their ongoing gained that may benefit the U.S. transit processing function was being International Quality Study. They industry as a whole. taken to a new conceptual level found that three types of initiatives had under the label 'management a significant impact on successful Conducting the four pilot TQM information systems.' Did any companies back then spend performance: (1) process improvement, initiatives serves a number of purposes: millions of dollars developing (2) full deployment of strategic plans, systems that didn't work? Yes; and (3) supplier chain participation. · Provides an opportunity to apply horror stories abound. Does that Process improvement, as discussed and test TQM principles in public mean that the MIS concept was elsewhere in this digest, means transportation environments, which relegated to the scrap heap? No! changing the way things are done. to date have largely been applied in It means that MIS was a Deployment of strategy means the private sector or other parts of complicated, rapidly emerging everyone must understand and share field with tremendous the public sector. opportunities for learning--in the same vision. Supplier chain other words, many mistakes were participation means encouraging · Tailors TQM principles to better made--and learning over the suppliers to adopt TQM methods serve the needs and unique years has minimized problems. themselves, to ensure that the 'input' character of public transportation TQM is in the same situation as received will not cause problems.7 through field testing. MIS was twenty years ago. Quality is here to stay! It makes Brad Stratton, editor of Quality · Ensures the preparation of more sense for the customer; it makes Progress magazine, said that the sense for the company; it makes meaningful informational and sense for the employee, and it's following conditions are necessary for educational materials on TQM, the moral thing to do.4 a successful TQM program. First, the which corporate 18

will be useful to transit agencies that ·Labor agreement expiration Table 1 briefly describes the agencies, pursue TQM in the future. date. This project is not intended to highlighting these characteristics. compete for the attention of labor This digest briefly discusses the and management leadership during Once the pilot participants were selection of the pilot participants, collective bargaining. TQM initially selected, the research team scheduled a provides highlights of the four transit requires labor and management meeting with each of the four selected agencies, and reviews their interest in leadership to focus on the plans and transit agencies, and requested that TQM at the outset of the pilot future events associated with quality each meeting be attended by, at least, initiatives. efforts. The pilot initiatives are, in the CEO, the chair of the governing themselves, difficult to successfully board, and the president(s) of the local launch. Therefore, collective labor union(s). The purpose of each Identification of Candidate Public bargaining agreements of the pilot meeting was to provide a more in-depth Transportation Agencies participants could not expire presentation of the objectives and between February 1994 and June requirements of the pilot initiatives, The Survey of Chief Executive 1995. answer questions concerning Officers, which included 590 public participation, and permit withdrawal transportation systems throughout the The Project Panel requested that from participation by any party. United States, served as the primary transit agencies with fewer than 50 Following these meetings, all four basis for identifying four candidate vehicles operating in peak periods not transit agencies made a year-long transit agencies for the TQM pilot be considered as pilot TQM candidates. commitment and agreed to the terms initiatives. In this confidential survey, This decision reduced the number of and requirements for participation in the CEOs were asked a number of candidate transit systems from 30 to 12. the pilot TQM initiatives. questions regarding their transit A public transportation organization system's environment, their general with less than 50 peak vehicles was interest in TQM, their efforts to pursue considered not sufficiently complex to excellence and quality, and their test and evaluate TQM. Initiation of the TQM Pilots interest in being a candidate for a TQM initiative under this project. The Project Panel requested that the CEOs of the 12 final candidate At the outset of the pilot activities, Of the 172 respondents to the transit agencies be interviewed by each of the four transit agencies was at survey, 30 public transportation telephone to better determine their a different stage in its thinking and agencies were identified as candidates interest in the project and their consideration of TQM. Senior using the following criteria: willingness and ability to commit the management at CTA had formulated time and resources required from ideas about changing its corporate participants. Questions were sent to philosophy to a customer-focused ·Labor-management relations. each CEO in advance of the telephone culture. Metro had been active, with "We have considerable trust and interviews. The responses from the good results, for about 2 years with its respect between labor and interviews were subsequently sent to visioning process and employee management." CEO responses to each Panel member for review and participation program. STA this statement were required to range selection of the four finalists. management was aware of TQM and from neutral to strongly agree. was learning about what it took to While TQM can render assistance in initiate its effort. PDRTA had no prior improving the trust and respect Four Pilot Participants involvement in quality programs. between labor and management, overcoming poor relations between The Project Panel selected the To provide a common point of the parties is not the principal focus following participants: the Chicago departure for the pilot activities, of the quality effort. Transit Authority (CTA)--one of the Leadership Workshops were held to largest rail and bus transit systems in introduce and discuss TQM, establish a ·Interest in participation. "I am the United States; the Pee Dee Regional foundation for the pilot activities, very interested in having our Transportation Authority (PDRTA)--a clarify roles and responsibilities, and organization participate in a TQM multicounty, mostly rural, southeastern prepare a draft TQM action plan for pilot program as described in your U.S. system, which largely provides each participating agency. The correspondence." CEO responses to paratransit services; the Southwest workshops, which each lasted from 1½ this statement were required to range Ohio Regional Transit Authority to 2 days, included presentations, group from highly to strongly agree. Since (Metro)--a mid-to-large-size bus discussions, and video tapes about TQM begins at the top, it was service in the mid-west; and the quality. Manuals were prepared and important that the CEO responded Spokane Transit Authority (STA)--a distributed to each participant, as a enthusiastically. mid-size, west-coast bus system. workshop guide. 19

Table 1 Public transportation agency participants in the TQM pilot initiatives 20

During the balance of this research ·Final report. This report will (1) ·Educational materials. A user- project, assistance will be provided to present the research results friendly TQM Guidebook for Public the participating transit systems to including the literature search, Transportation will be prepared that further develop and implement their investigation of TQM in the public expands on the informational pilot TQM initiatives; provide training and private sectors, and principles materials, including a TQM road to a designated quality coordinator or for TQM in public transportation; map, sample meeting agenda, facilitator at each system, as well as and (2) document the pilot TQM customer surveys, and additional members of quality improvement initiatives, including the selection of TQM resources. teams; support and guide each TQM participants, plan development, pilot to achieve its objectives; trouble training, facilitation, support, and shoot, as needed; and evaluate and evaluation of each effort. All final products will be available document the four pilot TQM through the TCRP in the fall of 1995. initiatives. ·Informational materials. These An Interim Phase I Research Report is materials will be designed for transit available at this time. To request a executives, union leadership, and copy, contact: RESEARCH RESULTS, board members to introduce TQM. DOCUMENTATION, AND A brochure and video tape are Ms. Dianne Schwager PRODUCTS currently being considered as the Project Manager media for presenting material, which Transportation Research Board A number of products resulting should help individuals responsible 2101 Constitution Avenue, N.W. from this project will serve different for public transportation Washington, DC 20418 audiences and meet different management and performance 202/334-2969 objectives. These products include the decide to further investigate or make following: a commitment to TQM.

Note: The Transportation Research Board, the National Research Council, the Federal Transit Administration (sponsor of the Transit Cooperative Research Program), and the Transit Development Corporation do not endorse products or manufacturers. or manufacturer names appear herein solely because they are considered essential to the object of this report. 21

NOTES

1. Mizaur, Don.

2. Hammonds, Keith and DeGeorge, Gail, "Where Did They Go Wrong," Business Week: Quality 1991, p. 34.

3. Schaaf, Dick, "Is Quality Dead?" Quality, May 1993.

4. Hart, Christopher. The Marriage Between TQM and Customer Satisfaction. Presented at the J.D. Power Customer Satisfaction Roundtable Conference, July 1993.

5. Hammonds and DeGeorge.

6. Ibid.

7. Schaaf, Dick.

8. Stratton, Brad, "What Makes It Take, What Makes It Break," Quality Progress, April 1990. This page left intentionally blank. 23

APPENDIX A BIBLIOGRAPHY

GENERAL

Crosby, P.B., Quality is Free: The Art of Making Quality Certain, New American Library, New York, NY (1979). The premise of Quality is Free is that doing things right the first time adds nothing to the cost of a product or service. Crosby tells how to manage quality so that it becomes a source of profit for your business. Case histories demonstrate how quality concepts have worked in actual business situations.

Deming, W.E., Out of the Crisis, MIT Center for Advanced Engineering Study, Cambridge, MA (1982). Dr. Deming shows the way "out of the crisis" with his famous 14 Points. This book teaches the transformation that is required for survival--a transformation that can only be accomplished by man. Dr. Deming encourages long-term commitment to new learning and new philosophy. He stresses new principles of training and leadership, the need for clear operational definitions, and common and special causes of improvement. "A company cannot buy its way into quality," he writes,--"it must be led into quality by top management."

Imai, M., Kaizen: The Key to Japan's Competitive Success, Random House, Inc., New York NY (1986). Kaizen means gradual, unending improvement, doing "little things" better; setting--and achieving--ever-higher standards. In this classic book, Imai Masaki describes how a process-oriented, customer-driven strategy of involving everyone (both managers and workers) in the continuous improvement of products and services will lead to improved quality and productivity.

Juran, J.M., Juran on Leadership for Quality: An Executive Handbook, The Free Press, New York, NY (1989). Juran lays out his famed "Juran Trilogy" on how to apply the familiar business concepts of "planning, controlling, and improving" to quality leadership. He gives criteria for selecting project-by-project improvements and for picking a team to carry them out. He also describes a realistic timetable for implementation and directs the formulation of an ongoing quality council.

Walton, M., The Deming Management Method, The Putnam Publishing Group, New York, NY (1986). In this book, Mary Walton describes how the Deming Method is used by firms and organizations from all over the industrial spectrum, including service industries and manufacturing. The six organizations featured are Florida Power & Light; Hospital Corporation of America; Tri-Cities, Tennessee; The United States Navy; Bridgestone (USA) Incorporated; and Globe Metallurgical Incorporated.

Additional Sources

Berry, T.H., Managing the Total Quality Transformation, McGraw-Hill Inc., New York, NY (1991).

Deming, W.E., The New Economics, MIT Center for Advanced Engineering Study, Cambridge, MA (1993).

Dobyns, L. and Crawford-Mason, C., Quality or Else: The Revolution in World Business, Houghton Mifflin Company, Boston, MA (1991).

Garvin, D.A., "Competing on the Eight Dimensions of Quality," Harvard Business Review, Cambridge, MA (Nov.-Dec. 1987), pp. 101- 109.

Grant, R.M., Shani, R., and K.R., "TQM's Challenge to Management Theory and Practice," Sloan Management Review, Cambridge, MA (Winter 1994), pp. 25-35.

Hart, C.W.L. and Bogan, C.E., The Baldrige: What it is, How it's Won, How to Use it to Improve Quality in Your Company, McGraw- Hill, Inc., New York, NY (1992).

Ishikawa, K., What is Total Quality Control? The Japanese Way, Prentice-Hall Inc., Englewood Cliffs, NJ (1985).

Juran, J.M., Juran on Planning for Quality, The Free Press, New York, NY (1988).

Kearns, D.T. and Nadler, D.A., Prophets in the Dark, Harper Business, New York, NY (1992).

Peters, T.J., Thriving on Chaos: Handbook for a Management Revolution, Alfred A. Knopf, New York, NY (1987).

Rosander, A.C., Applications of Quality Control in the Service Industries, Marcel Dekker, Inc., New York, NY (1985). 24

Teboul, J., Managing Quality Dynamics, Prentice Hall, Englewood Cliffs, NJ (1991).

Townsend, P.J., Commit to Quality, John Wiley & Sons Inc., New York, NY (1990).

LEADERSHIP AND ORGANIZATIONAL CULTURE

Block, P., Stewardship, Berrett-Koehler Publishers, San Francisco, CA (1993). Organizations that practice stewardship will succeed in their marketplace by choosing service over self-interest and by a far- reaching redistribution of power, purpose, and wealth. Without this, little real change will result. In place of the "managerial class system" the author says, we need to reintegrate the managing of work with the doing of work. Everybody manages and everybody does real work.

Belasco, J.A., Teaching the Elephant to Dance: The Manager's Guide to Empowering Change, Penguin Books, New York, NY (1991). This book gives every manager a step-by-step guide to making the impossible happen and is filled with illuminating case histories of companies large and small that have maneuvered out of stagnation to get back into the competitive mainstream. It shows how to devise new corporate vision and strategies, how to overcome inertia and inbred adherence to "how it has always been done," and how to make both management and labor trail-blazers rather than road-blockers to new standards of excellence.

Covey, S.R., Principle-Centered Leadership, Summit Books, Fort Worth, TX (1990). How do you transform the paradigms of people and organizations from reactive, control-centered management to proactive, empowerment-oriented leadership? While Deming's theory of total quality explains the "what" to do and gives a partial explanation of "why' it should be done, Covey supplies the missing "how-to-do-it." The Seven Habits are foundation principles that, when applied consistently in practice, become behaviors enabling fundamental transformations of individuals, relationships, and organizations.

Garvin, D.A., Managing Quality: The Strategic and Competitive Edge, The Free Press, New York, NY (1988). This critical yet enlightening analysis illustrates how America must improve quality to win back lost markets and gain long- term competitive advantage. Comparing quality management in Japanese and American plants producing the same products, Garvin provides the evidence relating to quality to such variables as process, productivity, and profitability. His focused study of 9 Japanese and 11 American factories makes clear what the Japanese have done better than even the best U.S. companies.

Schein, E.H., Organizational Culture and Leadership, Jossey-Bass Publishers, San Francisco, CA (1992). This second edition transforms the abstract concept of culture into a tool that managers and students have continually used to better understand the dynamics of organizations and change. The author presents critical new learnings and practices in the field. He defines culture--what it is, how it is created, how it evolves, and how it can be changed--and clearly demonstrates the crucial role leaders play in successfully applying the principles of culture to increase organizational effectiveness.

Senge, P.M., The Fifth Discipline: The Art and Practice of the Learning Organization, Doubleday, New York, NY (1990). Author Peter Senge presents a system of thinking and acting that, if followed correctly, can be the basis for reducing the "learning disabilities" in any organization. Senge illustrates his ideas, based on both research and practical experience, with compelling examples. With the help of stories, diagrams, and self-administered exercises, readers not only learn, they learn how to learn.

Additional Sources

Albrecht, K., The Creative Corporation, Dow Jones-Irwin, Homewood, IL (1987).

Albrecht, K., Service Within: Solving the Leadership Crisis, Business One Irwin, Homewood, IL (1990).

Belasco, J.A. and Stayer, R.C., Flight of the Buffalo: Soaring to Excellence, Learning to Let Employees Lead, Warner Books, New York, NY (1993).

Buzzell, R.D. and Gale, B.T., The PIMS Principles: Linking Strategy to Performance, The Free Press, New York, NY (1987).

Carlzon, J., Moments of Truth, Ballinger Publishing Co., Cambridge, MA (1987).

Covey, S.R., Seven Habits of Highly Effective People: Restoring the Character Ethic, Simon & Schuster, New York, NY (1989).

DePree, M., Leadership is an Art, Doubleday, New York, NY (1989).

Drucker, P., Managing for the Future: The 1990s and Beyond, Dutton, New York, NY (1992). 25

Ernst & Young Quality Improvement Consulting Group, Total Quality: An Executive's Guide for the 1990's, Dow Jones-Irwin, Homewood, IL (1990).

Hamel, G. and Prahalad, C.K., "Strategic Intent," Harvard Business Review, Cambridge, MA (May-June 1989).

Kotter, J.P., "What Leaders Really Do," Harvard Business Review, Cambridge, MA (May-June 1990).

Levering, R., A Great Place to Work, Random House, New York, NY (1988).

Peters, T.J. and Austin, N., A Passion for Excellence: The Leadership Difference, Random House, New York, NY (1985).

Prahalad, C.K. and Hamel, G., "The Core Competence of the Corporation," Harvard Business Review, Cambridge, MA (May-June 1990) pp. 79-91.

Saraph, J.V. and Sebastian, R.J., "Developing a Quality Culture," Quality Progress (Sept. 1993) pp. 73-78.

MEASUREMENT/BENCHMARKING

Camp, R.C., Benchmarking: The Search for Industry Best Practices that Lead to Superior Performance, American Society for Quality Control, Quality Press, Milwaukee, MI (1989). Find answers to the questions: What is benchmarking? How do I perform benchmarking? What are the results of successful applications? Case histories provide examples of actual benchmarking investigations from beginning to end.

Harrington, H.J., Poor-Quality Cost, Marcel Dekker, Inc., New York, NY (1987). This book explains poor-quality cost concepts and gives simple, step-by-step guidelines for the implementation of a poor- quality cost identification and reporting system. This work includes analyzed data collected from a vast number of corporations and disciplines and provides many examples of how poor-quality cost concepts are put into practice.

Zeithaml, V.A., Parasuraman, A., and Berry, L.L., Delivering Quality Service: Balancing Customer Perceptions and Expectations, The Free Press, New York, NY (1990). The authors' grounding model, which tracks the five attributes of quality service--reliability, empathy, assurance, responsiveness, and tangibles--goes right to the heart of the tendency to overpromise. By comparing customer perceptions with expectations, the model provides planning and marketing managers with a two-part measure of received quality that, for the first time, enables them to segment a market into groups with different service expectations.

Additional Sources

AT&T Cost-of-Quality Guideline, AT&T Quality Steering Committee, Indianapolis, IN (1990).

Juran, J.M. and Gryna, F.M., Juran's Quality Control Handbook, McGraw-Hill Book Company, New York, NY (1988).

Kaplan, R.S. and Norton, D.P., "The Balanced Scorecard--Measures that Drive Performance," Harvard Business Review, Cambridge, MA (Jan.-Feb. 1992), pp. 71-79.

Kaplan, R.S. and Norton, D.P., "Putting the Balanced Scorecard to Work," Harvard Business Review, Cambridge, MA (Sept.-Oct. 1993), pp. 134-147.

Leibfried, K.H.J and McNair, C.J., Benchmarking: A Tool for Continuous Improvement, Harper Collins Publishers, New York, NY (1992).

Meyer, C., "How the Right Measures Help Teams Excel," Harvard Business Review, Cambridge, MA (May-June 1994), pp. 95-103.

Schaffer, R.H. and Thompson, H.A., "Successful Change Programs Begin with Results," Harvard Business Review, Cambridge, MA (Jan.-Feb. 1992), pp. 80-89.

Talley, D.J., Total Quality Management: Performance and Cost Measures, American Society for Quality Control, Quality Press, Milwaukee, WI (1991). 26

PROCESS MANAGEMENT

Davenport, T.H., Process Innovation: Re-engineering Work Through Information Technology, Harvard Press, Cambridge, MA (1993). This book is breakthrough thinking on how to exploit the real potential of Information Technology (IT). Davenport offers a pathway for the serious general manager who must incorporate IT into his or her repertoire. Whereas traditional TQM techniques usually result in incremental improvement, re-engineering can bring about radical change to an organization.

Hammer, M. and Champy, J., Re-engineering the Corporation: A Manifesto for Business Revolution, Harper Business, New York, NY (1993). This book describes the principles behind a new and systematic approach to structuring and managing work. Written in clear, readable prose, the book describes the what, the why, and the how of business re-engineering.

Harrington, H.J., Business Process Improvement: The Breakthrough Strategy for Total Quality, Productivity, Competitiveness, McGraw-Hill, New York, NY (1991). Harrington offers a no-nonsense blueprint for restructuring our antiquated "business-as-usual" approach. The blueprint is not about automating processes that already don't work nor is it about importing some exotic Japanese management technique that only serves to further confuse everyone. It is about effecting a major change in the way we manage our organizations by applying new approaches to the business community as a whole, particularly service industries.

Process Quality Management & Improvement Guidelines, AT&T Quality Steering Committee, Indianapolis, IN (1988). This book describes a customer-focused, seven-step cycle for management, control and improvement of business processes. It illustrates process management concepts with images from Alice's Adventures in Wonderland.

Rummler, G.A. and Brache, A.P., Improving Performance: How to Manage the White Space on the Organization Chart, Jossey-Bass Publishers, San Francisco, CA (1990). Rummler and Brache provide a practical framework for understanding how various departments and functions in an organization interrelate and show how to manage this interaction to enhance the organization's effectiveness. Three avenues of approach for dealing with performance issues are explored: through organizational strategies, structures and management practices; through the processes used to get work done; and through individual jobs and employees.

Additional Sources

King, B., Hoshin Planning--The Developmental Approach, Goal/QPC (1989).

Sirkin, H. and Stalk, G., Jr., "Fix the Process, Not the Problem," Harvard Business Review, Cambridge, MA (July-Aug. 1990), pp. 1-8.

TRAINING AND TOOLS

American Quality Foundation and Ernst & Young, "The International Quality Study: Best Practices Report, An Analysis of Management Practices that Impact Performance," (1993). The IQS examined organizations in the automotive, banking, computer, and health care industries within four leading industrialized nations--Canada, Germany, Japan and the United States. This report focuses on "best practices"--those management practices that lead to the best results and identifies three management practices that have significant impact on performance.

Brassard, M. and Ritter, D., The Memory Jogger II, GOAL/QPC (1994). Memory Jogger II is the successor book to The Memory Jogger first written and produced in 1985. It is an outstanding reference and guide to basic tools and techniques used by individuals and teams in identifying and solving problems. The book contains the basic Seven Quality Control Tools and the Seven Management and Planning Tools with excellent graphics and examples. The book also contains a complete case study that details Stop'N Go Pizza's using the Improvement Storyboard model.

Quality Manager's Handbook, AT&T Quality Steering Committee, Indianapolis, IN (1990). This manual is a road map for the quality manager. It examines the evolution of quality in the organization and recommends tools, references, and resources to help the quality professional support and sustain the organization in implementing a world- class quality system.

Additional Sources

American Quality Foundation and Ernst & Young, "The International Quality Study: The Definitive Study of the Best International Quality Management Practices," (1991). 27

Amsden, R.T., Butler, H.E., and Amsden, D.A., SPC Simplified: Practical Steps to Quality, Quality Resources (1989).

Scholtes, P.R. and other contributors, The Team Handbook, Joiner Associates (1988).

Wyckoff, D.D., "New Tools for Achieving Service Quality," The Cornell Hotel and Restaurant Administration Quarterly (Nov. 1984), pp. 7891.

EMPLOYEE EMPOWERMENT AND TEAMS

Block, P., The Empowered Manager: Positive Political Skills at Work, Jossey-Bass Publishers, San Francisco, CA (1987). Empowerment is not a set of techniques--it is a choice. Is this a business strategy you believe in? The promise of empowerment is that it will dramatically increase the sense of responsibility and ownership at every level of the organization, especially at the bottom where products and services are delivered and customers are served. "As you give employees more and more freedom," Block says, "expect a very mixed response. There is a part of us that does not want more autonomy, choice, or responsibility. We want to be taken care of." The goal of his book is to present a way of being political that balances the hope for transforming organizations with the risk in attempting change, in a realistic and helpful way.

Blanchard, K., Carew, D., and Parisi-Carew, E., The One-Minute Manager: Builds High Performance Teams, William Morrow and Company, Inc., New York, NY (1990). Benefit from learning how to develop through the four stages of team development. This book is essential for anyone who works with groups and wants to improve group effectiveness.

Lawler, E.E., III, High-Involvement Management: Participative Strategies for Improving Organizational Performance, Jossey-Bass Publishers, San Francisco, CA (1986). Lawler answers the important questions about participative management--quality circles, self-managing teams, job enrichment, gainsharing--including how each approach works, how much they raise quality and performance, which approach works best, the advantages and disadvantages of each, and how they are successfully implemented.

Zenger, J.H., Musselwhite, E., Hurson, K., and Perrin, C., Leading Teams: Mastering the New Role, Business One Irwin, Homewood, IL (1994). Implementing successful teams presents the challenge of training team members to take more responsibility for their work. But the greater challenge for managers and supervisors is preparing for their new role. The book is a comprehensive guide to the art of shared leadership--helping the team to perform activities that managers once performed alone.

Additional Sources

Belcher, J.G., Jr., "Employee Involvement Techniques," APQC Briefs, American Productivity & Quality Center, Brief 62 (Sept. 1987), 12 pp.

Byham, W.C. with Cox, J., Zapp! The Lightning of Empowerment: How to Improve Quality, Productivity, and Employee Satisfaction, Fawcett Columbia, New York, NY (1988).

Clark, S.A., Warren, K.D., and Greisinger, G., "Assessment of Quality of Work Life Programs for The Transit Industry," National Cooperative Transit Research & Development Program Report 5, Transportation Research Board, Washington, DC (1983).

Wellins, R.S., Byham, W.C., and Wilson, J.M., Empowered Teams: Creating Self-Directed Work Groups that Improve Quality, Productivity, and Participation, Jossey-Bass Publishers, San Francisco, CA (1991).

LABOR

Bluestone, B. and Bluestone, I., Negotiating the Future: A Labor Perspective on American Business, Basic Books, New York, NY (1992). This book describes labor-management experiments to show that Enterprise Compacts are not impractical utopias, but promising means for making firms more efficient and profitable, improving employment security and the quality of working life, and restoring America's competitive edge. The authors argue that America will continue to lag behind its competitors as long as corporate decision making is blocked by an outworn, adversarial system of labor-management relations that no longer serves the interests of workers, stockholders, and the nation.

Cohen-Rosenthal, E. and Burton, C.E., Mutual Gains: A Guide to Union-Management Cooperation, ILR Press, 2nd ed, rev., Ithaca, NY (1993). While quality efforts can be an excellent way to showcase how union-management cooperation, both parties should be vigilant to the real hazards, risks, and potential losses associated with them. The key to success is to position quality efforts solidly within the collective bargaining relationship on a foundation of union-management cooperation. A management and union can do almost 28

anything that they set out to do, when they summon their imaginations and are dedicated to having the highest-quality cooperation in order to provide the highest quality service.

Applebaum, E. and Batt, R., The New American Workplace: Transforming Work Systems in the United States, ILR Press, Ithaca, NY (1994). There are two basic routes that get you to a high-performance workplace. These authors review several decades of U.S. and international cases to identify two distinct and coherent models of high-performance work systems--what is referred to in the book as an American version of lean production and an American version of team production. The two systems produce similar results and improvements in performance. While the outcomes for companies may be similar, the outcomes for employees are apt to be quite different. The lean model is the one used predominately by U.S. employers: a centralized, top- down approach to employee relations which is reinforced by the criteria of the Baldrige Award. Only 15 percent of the Award formula deals in improvement in human resource development and management, just 2 percent with employee involvement, and 2.5 percent with morale.

Additional Sources

Cohen-Rosenthal, E. and Burton, C., "Improving Organizational Quality by Forging the Best Union-Management Relationship," National Productivity Review, Spring 1994.

Collective Bargaining Form, "Labor-Management Commitment: A Compact for Change," Bureau of Labor-Management Relations and Cooperative Program, U.S. Department of Labor, BLMR 141 (1991).

Rubenstein, S.P., "Democracy and Quality as an Integrated System," Quality Progress (Sept. 1993) pp. 51-55.

CUSTOMER SERVICE

Davidow, W.H. and Uttal, B., Total Customer Service: The Ultimate Weapon: A Six-Point Plan for Giving Your Business the Competitive Edge in the 1990s, Harper & Row Publishers, New York, NY (1989). Drawing on in-depth case histories of service leaders who have triumphed and of laggards who have lost, Davidow and Uttal have devised a six-point plan that any company--regardless of what business it is in--can utilize to secure a decisive competitive edge: devise a service strategy; get managers to behave like customer service fanatics; concentrate on motivating and training employees; design products and services that make good customer service possible; invest in service infrastructure; and constantly monitor achievement of customer service goals.

Hart, C.W.L., Extraordinary Guarantees: A New Way to Build Quality Throughout Your Company and Ensure Satisfaction for Your Customers, American Management Association, New York, NY (1993). In this innovative book, Hart describes the power of the extraordinary guarantee--one that does not merely limit a customer's risk but promises exceptional, uncompromising quality and customer satisfaction, and backs that promise with a payout intended to recapture the customer's good will and continued business. The book examines different types of guarantees and discusses their benefits from a marketing and an operational standpoint.

Heskett, J.L., Sasser, W.E., and Hart, C.W.L., Service Breakthroughs: Changing the Rules of the Game, The Free Press, New York, NY (1990). Based on five years of research in 14 service industries, Heskett, Sasser, and Hart show exactly what enables one or two companies in each industry to constantly set new standards for quality and value that force competitors to adapt or fail. At the heart of breakthrough performance, the authors contend, is a sometimes intuitive but thorough understanding of the "self- reinforcing service cycle" that replaces traditional management of "trade-offs." The "cycle" is a paradigm derived from the research results suggesting direct links between heightened customer satisfaction, increased customer retention, augmented sales and profit, improved quality and productivity, greater service value per unit cost, improved satisfaction of service providers, increased employee retention, and further heightened customer satisfaction.

Reichheld, F.E. and Sasser, W.E., Jr., "Zero Defections: Quality Comes to Services," Harvard Business Review, Cambridge, MA (Sept.- Oct. 1990), pp. 105-111. This article provides a compelling rationale for both guarantees and service recovery, by spelling out the hard costs of losing dissatisfied customers.

Additional Sources

Albrecht, K., At America's Service: How Corporations Can Revolutionize the Way They Treat Their Customers, Dow Jones-Irwin, Homewood, IL (1988). 29

Albrecht, K. and Zemke, R., Service America! Doing Business in the New Economy, Dow Jones-Irwin, Homewood, IL (1985).

Hart, C.W.L., "The Power of Unconditional Guarantees," Harvard Business Review, Cambridge, MA (July- Aug. 1988), pp. 54-62.

Hart, C.W.L., Heskett, J.L. and Sasser, W.E., Jr., "The Profitable Art of Service Recovery," Harvard Business Review, Cambridge, MA (July-Aug. 1990), pp. 148-156.

Heskett, J.L., Managing in the Service Economy, Harvard Business School Press, Cambridge, MA (1986).

Parasuraman, A., Berry, L.L., and Zeithaml, V.A., "Understanding Customer Expectations of Service," Sloan Management Review, Cambridge, MA (Spring 1991) pp.39-48.

CASE STUDIES IN QUALITY

European Conference of Ministers of Transport, Round Table 92: Marketing and Service Quality in Public Transport, Organisation for Economic Co-operation, Paris, France (1993). Faced with mounting deficits, public transport is in search of a new image. Above all, service quality must be adapted to customer needs. A whole range of possibilities exist to make public transport more appealing: more frequent and punctual service, better equipment, improved customer relations, electronic payment facilities and more convenient connections are just a few of these.

Papers and presentations that are provided in the book include case studies from Barcelona, Spain; Gothenburg, Sweden; Lyons, France; and Munich, Germany.

Peters, T.J. and Waterman, R.H., Jr., In Search of Excellence: Lessons from America's Best-Run Companies, Warner Books, New York, NY (1982). The authors studied 43 successful American companies and discovered that these companies shared eight basic principles of management that are readily transferable. The book illustrates with anecdotes and examples the experiences of these best-run companies to make them accessible and practical for readers to use.

Sasser, W.E., Hart, C.W.L., and Heskett, J.L., The Course: Cases and Readings, The Free Press, New York, NY (1991) This book can supplement Service Breakthroughs or be used on its own. The 37 case studies and 10 readings offer a multitude of breakthrough management thinking. Sasser, Hart, and Heskett explore how companies such as Club Med, Nordstrom, Florida Power & Light, UPS and many more rise above their competitors and become industry leaders. The authors carefully describe how breakthrough managers develop "counterintuitive" visions and how they define service.

Additional Sources

Hiam, A., Closing the Quality Gap: Lessons from America's Leading Companies, Prentice Hall, Englewood Cliffs, NJ (1992).

Harrington, H.J., The Improvement Process--How America's Leading Companies Improve Quality, McGraw-Hill, New York, NY (1987).

Kearns, D.T. and Nadler, D., Prophets in the Dark: How Xerox Reinvented Itself and Beat Back the Japanese, Harper Collins Publishers, New York, NY (1992).

Sasser, W.E., The Service Management Course, Free Press, New York, NY (1991).

Tiche, N., Control Your Destiny or Someone Else Will, Doubleday, New York, NY (1993).

United States General Office, Management Practices--U.S. Companies Improve Performance through Quality Efforts (GAO/NSIAD-91-190), Washington, DC (May 1991).

Walton, M., Deming Management at Work: Six Successful Companies that use the Quality Principles on the World-Famous W. Edward Deming. G.P. Putnam's Sons, New York, NY (1990).

Zemke, R. and Schaff, D., The Service Edge: 101 Companies that Profit from Customer Care, New American Library, New York, NY (1989). 30

JOURNALS, PERIODICALS, AND NEWSLETTERS

Commitment Plus Newsletter, monthly Quality and Productivity Management Association (QPMA) 300 Martingale Road, Suite 230 Schaumburg, IL 60173 (708) 619-2909

Journal for Quality and Participation Journal, six times/year Association for Quality and Participation (AQP) 801-B West 8th Street, Suite 501 Cincinnati, OH 45203-1601 (513) 381-1959

Quality Magazine, monthly Hitchcock Publishing Co. 191 S. Gary Avenue Carol Stream, IL 60188 (312) 655-1000

Quality Digest Magazine, monthly QCI International 1425 Vista Way Red Bluff, CA 96080 (916) 527-8875

Quality Progress Magazine, monthly American Society for Quality Control (ASQC) 310 West Wisconsin Avenue Milwaukee, WI 53203 (404) 272-8575

Additional

Continuous Journey Magazine, six times/year American Productivity & Quality Center 123 North Post Oak Lane, Suite 300 Houston, TX 77024-7797 (713) 681-4020

Government Productivity News Newsletter, 10 times/year P.O. Box 27435 Austin, TX 78755-0435

National Productivity Review Magazine, quarterly Executive Enterprises Co., Inc. 22 West 21st Street New York, New York 10010-6904 (800)332-8804; (212) 645-7880, ext. 208 31

Productivity Inc. Newsletter, monthly P.O. Box 3007 Cambridge, MA 02140 (617) 497-5146

Quality Assurance Bulletin Newsletter, semi-monthly National Forman's Institute 24 Rope Ferry Road Waterford, CT 06386 (203) 442-4365

The Letter Newsletter, monthly American Productivity & Quality Center 123 North Post Oak Lane, Suite 300 Houston, TX 77024-7797 (713) 681-4020

The Service Edge Newsletter, monthly Lakewood Publications 50 South Ninth Street Minneapolis, MN 55402 (800) 328-4329; (612) 333-0471

SOURCES FOR REFERENCE BOOKS

George Washington University Continuing Engineering Education Program School of Engineering and Applied Science Attn: Books and Videos. Washington, D.C. 20052 (800) 424-9773

Productivity Press Productivity, Inc. P.O. Box 3007 Cambridge, MA 02140 (800) 274-9911

Quality Press American Society for Quality Control (ASQC) 310 West Wisconsin Avenue Milwaukee, WI 53203 (800) 952-6587

PROFESSIONAL SOCIETIES

American Society for Quality Control (ASQC) 310 West Wisconsin Avenue Milwaukee, WI 53203 (414) 272-8575

Conferences, educational courses, seminars, The Quality Review magazine, and Quality Progress journal, book service, professional certification, technical divisions, and committees, and local chapters. 32

American Productivity & Quality Center (APQC) 123 North Post Oak Lane, Suite 300 Houston, TX 77024-7797 (713) 681-4020

Educational and advisory services to organizations in the private and public sectors, courses, case studies, research publications, The Letter newsletter, Continuous Journey magazine, resource guide, library, and consulting.

Quality and Productivity Management Association (QPMA) 300 Martingale Road, Suite 230 Schaumburg, IL 60173 (708) 619-2909

Network of North American quality and productivity coordinators, operating managers and staff managers, conferences, workshops, Commitment Plus newsletter, resources guide, and local chapters.

Association for Quality and Participation (AQP) 801-B West 8th Street, Suite 501 Cincinnati, OH 45203-1601 (513) 381-1959

Focus on quality circles, self-managing teams, union-management committees, and other aspects of employee involvement. Conferences, library and selected research service, Quality and Participation newsletter, resource guide, and local chapters. 33

APPENDIX B Glossary appraisal costs many ideas as possible within a given corrective action The costs associated with inspecting the time frame. The implementation of effective product to ensure that it meets the solutions that result in the elimination of customer's (either internal or external) catchball identified product, service, and process needs and requirements. In policy deployment, extensive problems. communication across management approach levels when setting annual objectives cost of poor quality One of the three evaluative dimensions The analogy to tossing a ball back and The overall financial loss to the business used in Baldrige scoring, "approach" forth emphasizes the nature of the due to quality problems; the cost of poor refers to the methods a company uses to interaction quality includes all costs of rework, lost achieve the purpose stated in the criteria. value and other forms of waste that Some specific components of the cause might be prevented through quality approach concept are the degree to which An established reason for the existence methods it is systematic, integrated, consistently of a defect. applied, and prevention-based. cost of quality common cause The sum of the cost of prevention, acceptable quality level (AQL) A source of variation in the process appraisal, and failure The key financial A concept used with sampling output that is inherent to the process and measurement tool that ties process procedures applied to arms-and- will affect all the individual results or control and process optimization into a ammunition suppliers during World War values of process output. total process-management effort. It can II, AQL is the poorest quality that a be used both as an indicator and a signal supplier can provide and still be companywide quality control (CWQC) for variation (more often, for patterns of considered "acceptable" or satisfactory. An expression used widely in Japan, variation), as well as a measure of The concept--that some errors or defects CWQC means the application of quality productivity and efficiency. are normal--is the antithesis of "zero principals to all processes in a company defects," which holds that the only and the involvement of all employees at cross-functional process allowable standard for quality is error- all levels in the quality-improvement A process spanning organizational free work. process. The concepts of continuous boundaries and involving work groups improvement and customer satisfaction and people who do not normally interact. audit are also embedded in the approach. An assessment to determine the extent to CWQC in the equivalent of "total quality cross-functional teams which certain standards or requirements management (TQM)" in the United Teams similar to quality teams but have been met, usually conducted States, where the term "management" has whose members are from several work independently of personnel responsible roughly the same meaning as the word units that interface with one another. for implementing the standards or "control" in Japan. These teams are particularly useful when requirements. work units are dependent upon one conjoint analysis another for materials, information, etc. Baldrige Award Also called "tradeoff analysis," conjoint See Malcolm Baldrige National Quality analysis is a method for providing a culture Award. quantitative measure of the relative A prevailing pattern of activities, importance of one product or service interactions, norms, sentiments, beliefs, benchmarking over another. In performing this type of attitudes, values, and products in an The practice of setting operating targets analysis, customers are asked to make organization. for a particular function by selecting the tradeoff judgments: Is one feature top performance levels, either within or desirable enough to sacrifice another? customer outside a company's own industry. In a Conjoint analysis is particularly useful in The recipient or beneficiary of the broader sense, benchmarking involves situations where customer preferences outputs of your work efforts or the searching around the world for new ideas are in conflict and where the problem is purchaser of your products and services. and best practices for the improvement to develop a compromise set of attributes May be either internal or external to the of processes, products, and services. organization, and must be satisfied with control the outputs of your work efforts. best of class (or best in class) A term applied to the management of When overall performance, in terms of processes indicating that quality customer expectations effectiveness, efficiency, and requirements, standards, or goals are Customer perceptions of the value they adaptability, is superior to all being met and that the output of the will receive from the purchase of a comparables. process is predictable. product or service. Customers form expectations by analyzing available brainstorming correction information, which may include A technique used by a group of people The totality of actions to minimize or experience, word-of-mouth, and for thought generation. The aim is to remove variations and their causes. advertising and sales promises. elicit as 34 customer, external deployment and estimate the need for additional parts The purchaser of a product or service. One of the evaluative dimensions used in or personnel Baldrige scoring, "deployment" refers to customer, internal the extent to which a company's feedback A downstream internal operation that approaches are applied in all relevant information from a customer about how depends on outputs or results of a given areas and activities For example, reward process output meets the needs of process, or an employee of the business and-recognition programs need to be process customers. who depends on these outputs or results. applied to all categories of employees, from hourly workers to top managers feedback loop customer satisfaction A system for communicating information The degree to which a customer's descriptors about the performance of processes, experience with a product or service Descriptors are relatively specific products, or services Feedback loops are meets customer expectations for that methods, organizational features, or essential for continuous improvement product or service. system/process characteristics that illustrate or help interpret each area to firefighting customer service process address in the application. Remedial approach to process problems, A business process related to selling, focusing on "fixing" rather than delivering, or otherwise supporting differentiation prevention primary products and services. The unique value of a product or service that distinguishes it from competing fishbone diagrams customer/supplier model products or services. A diagram that depicts the characteristics A representation of tasks and work flows of a problem or process and the factors in terms of a process, its customers, and effectiveness or root causes that contribute to them its suppliers, linked through information How closely an organization's output flows in the form of requirements and meets its goal and/or meets the force field analysis feedback. customer's requirements. A technique involving the identification of forces "for" and "against" a certain cycle time efficiency course of action. The nominal group The amount of time it takes to complete Production of required output at technique could be used in conjunction a particular task. Shortening the cycle perceived minimum cost. It is measured with force field analysis. The group times of critical functions within a by the ratio of the quantity of resources might prioritize the forces for and against company is usually a source of expected or planned to be consumed in by assessing their magnitude and competitive advantage and a key quality- meeting customer requirements to the probability of occurrence. The group improvement objective resources actually consumed. might then develop an action plan to minimize the forces against and Employee Involvement/Quality of Work maximize the forces for. data Life Information or a set of facts presented in Program for employee participation descriptive form There are two basic aimed at improving customer frequency distribution kinds of data: measured (also known as satisfaction, productivity, and employee Of a discrete variable is the count of the variable data) and counted (also known satisfaction. Union and management number of occurrences of individual as attribute data). work together to foster this program. values over a given range. Of a continuous variable is the count of cases defect empowerment that lie between certain predetermined Any state of nonconformance to Investment in employees of authority and limits over the range of values the requirements. responsibility for making decisions and variable may assume taking actions, particularly to satisfy Deming Prize customers and improve processes. functional administrative control In 1950, W.Edwards Deming was Empowerment requires that employees technique invited to Japan by the Union of be enabled through training, information, A tool designed to improve performance Japanese Scientists and Engineers resources, and advice. through a process combining time (JUSE) to lecture on the applicability of management and value engineering The using quality control in manufacturing external failure costs process involves breaking activities companies. The impact of Deming's The costs incurred when an external down into functions and establishing teaching was widespread and swift to customer receives a defective product. action teams to target and solve problems take root. In 1951, JUSE instituted the in each function. Deming Prize to honor Deming for his friendship and achievements in industrial failure mode and effect analysis (FMEA) quality control. Today, Japanese A technique for systematically reviewing functional organization companies wishing to improve the level the ways in which a process, product, or An organization responsible for one of of quality within their organization service can fail and the impact such the major organizational functions such compete for the Deming Prize, not only failures could have on customers, as marketing, sales, design, to achieve the honor and prestige of employees, or other processes. Using this manufacturing, and distribution. winning, but also the improvements that analysis, quality engineers can predict come from implementing his quality field-failure rates, design recovery principles. systems, 35

gainsharing leadership nominal group technique A reward system that shares productivity Communicating a clear purpose and A tool for idea generation, problem gains between owners and employees vision and enabling and inspiring people solving, mission, and key result area Gainsharing is generally used to provide to develop commitment to help in definition, performance measure incentive for group efforts toward achieving that purpose. Leaders provide definition, goals/objectives definition. improvement. a strategy, clear expectations of others, support, personal involvement and normative performance measurement goal resolve, and reinforcement of values technique A statement of attainment/achievement needed to achieve the purpose. Incorporates structured group processes that one proposes to accomplish or attain so that work groups can design with an implication of sustained effort lessons learned measurement systems suited for their and energy directed to it over the long A phrase coined by Joseph Juran to own needs. This approach considers term. describe a structured approach to behavioral consequences of measurement analyzing past experience in an endeavor to foster acceptance of measurement guideline and applying the results of that analysis effort A suggested practice that is not to improving the quality of future efforts. mandatory in programs intended to comply with a standard. linkages interactions among the tasks in a process objective that determine how effectively the tasks A statement of the desired result to be hoshin planning coordinate, share information, and achieved within a specified time By See policy deployment. provide mutual support toward meeting definition, an objective always has an common process objectives. associated schedule. hypothesis An assertion made about the value of objectives some parameter of a population. Verifiable improvement targets for Malcolm Baldrige National Quality processes, suppliers, organizations, and Award people. indicators United States national quality award Measurable characteristics of products, recognizing companies for leadership in output services, and processes that best quality. The award is managed by the The specified end result. Required by the represent quality and customer National Institute of Standards and recipient. satisfaction. Technology, U.S. Department of Commerce. Award criteria also serve as outputs input the standard for the AT&T Chairman's Materials or information provided to Materials, energy, or information Quality Award and as a basis for self- others (internal or external customers). required to complete the activities evaluation of quality systems. necessary to produce a specified output (work product). Management by Objective (MBO) A business planning approach in which perceived quality internal failure costs each employee works with his or her A firm's market reputation for continuing The costs generated by defects found manager to set annual objectives excellence of products and services and within the enterprise prior to the product Employee performance is evaluated for customer satisfaction; the firm's good reaching the external customer. based on the extent to which objectives will among customers are met. just-in-time inventory management (JIT) pareto analysis Approach to achieving and maintaining mean time between failures (MTBF) A system of analysis based on the minimal in-process inventory. The The average time between successive principle that, in any phenomenon, approach includes application of Total failures of a given product. relatively few factors account for the Quality Control to eliminate quality majority of effects. Juran uses the phrase problems as in-process inventory is being measurement "vital few" to suggest that it is more reduced. The act or process of measuring to efficient and less costly to concentrate on compare results to requirements. A the most important sources or types of kaizen quantitative estimate of performance. failures, customers, and so on. A Japanese expression referring to continuous improvement in all phases of performance business. A term used both as an attribute of the natural work team work product itself and as a general key business process A group of people who work together on process characteristic. The broad Process designated by management as a regular basis, such as a manager and performance characteristics that are of critical to customer satisfaction, the people who report to him or her interest to management are quality competitive effectiveness, or the (effectiveness), cost (efficiency), and achievement of strategic goals. Key need schedule. Performance is the highly business processes are generally cross- A lack of something requisite, desired, or effective common measurement that functional, spanning major functional useful; a condition requiring provision or links the quality of the work product to organizations such as marketing, design, relief. Usually expressed by users or efficiency and productivity. manufacturing, and distribution. customers. 36 plan process control long-term process results rather than the A specified course of action designed to Activities undertaken to acquire and use actual results achieved. attain a stated objective. information during process execution to ensure--with a reasonable degree of productivity policy confidence--that the process will meet its Refers both to the efficiency of tasks or A statement of principles and beliefs, or requirements and that these requirements operations and to their effectiveness in a settled course, adopted to guide the will continue to reflect the needs of meeting the needs of other internal overall management of affairs in support process customers. operations; some productivity-related of a stated aim or goal. It is mostly measures include cost of poor quality related to fundamental conduct and and unit output costs. usually defines a general framework process flow analysis within which other business and A technique for identification and actions are carried out. analysis of key processes, and for areas A process executed over time, rather than and methods of possible improvement. It repeatedly. policy deployment is particularly useful for roadblock A discipline approach to business-wide removal. planning and implementation; involves setting long-term goals and annual process flow diagramming quality priorities, deploying priorities through A visual, systematic way of examining a The extent to which products and the management structure for refinement process by diagramming all its inputs, services produced conform to customer into detailed objectives, developing outputs, and activities requirements. Customers can be internal implementation plans, and tracking as well as external to the organizational regular progress and annual results. process improvement system (e.g., products or services may The set of activities employed to detect flow to the person at the next desk or population and remove common causes of variation work area rather than to people outside A large collection of items (product in order to improve process capability. of the immediate organization). The observations, data) about certain Process improvement leads to quality Federal Quality Institute defines quality characteristics of which conclusions and improvement. as meeting the customer requirements the decisions are to be made for purposes of first time every time. The Department of process assessment and quality process management Defense (DOD) defines quality as improvement. Activities aimed at process planning, conformance to a set of customer process control, identifying improvement requirements that , if met, result in a prevention opportunities, and initiating product that is fit for its intended use. Activities and practices aimed at improvement. Planning involves setting anticipating and removing sources of process requirements, characterizing the Quality Approach potential problems; for example, training process, establishing in-process and Overall strategy for managing quality in or supplier qualification. supplier requirements, and planning for an organization; "blueprint" for the control. organization's quality system. problem A question or situation proposed for process optimization solution. The result of not conforming to The major aspect of process management quality assurance (QA) requirements, which can create a that concerns itself with the efficiency A phase in the evolution of the quality potential task resulting from the and productivity of the process; that is, discipline, QA differed from statistical existence of defects. with economic factors. quality control, its predecessor, in that all functional groups, not just engineers and process owner workers on the shop floor, were involved A designated person within the process, in the quality effort. However, QA is process who has the authority to manage the more narrowly focused than its The system of tasks, work flows, process and responsibility for its overall successor, total quality management information flows, and other performance. (TQM), which emphasizes senior- interdependencies that produce some executive involvement, the management specific outputs or results. How work is process performance of quality for competitive advantage, and done, how outputs or results are A measure of how effectively and a strong customer orientation. achieved, and how value is provided to efficiently a process satisfies customer the business or customer. requirements quality circles A group of workers and their supervisors Process Quality Management and who voluntarily meet to identify and Improvement (PQMI) solve job-related problems. Structured process capability Seven-step methodology for process processes are used by the group to The ability of a process to meet operating management and continuous process accomplish their task. goals or internal- or external-customer improvement. requirements. "Capability" may differ from actual performance due to "special process review quality consultant causes"--conditions or events due purely An objective assessment of how well the A person with expertise in quality-related to chance and not the production system methodology has been applied to your methods and tools who advises both itself. process. Emphasizes the potential for business managers and quality teams. 37

Quality Council decide upon corrective actions, etc. roadblock identification analysis The senior management team in a Members are usually from the same A tool that focuses on identifying business unit or division acting in their work unit. roadblocks to performance improvement role of managing for quality. and/or problems that are causing the range group to be less productive than it could quality function deployment (QFD) The difference between the maximum be. This tool uses the nominal group A disciplined approach to solving quality and the minimum value of data in a technique to identify and prioritize problems before the design phase of a sample. performance roadblocks. Action teams product. The foundation of QFD is the are formed to analyze barriers and belief that products should be designed recognition develop proposals to remove roadblocks to reflect customer desires; therefore, Public or private acknowledgement-- The proposals are implemented, tracked, marketers, design engineers, and other than compensation or promotion-- and evaluated. manufacturing personnel must work of significant achievement or effort closely together from the beginning to root cause (cause-and-effect) analysis ensure a successful product. The recovery A deductive approach to analyzing approach involves finding out what The actions taken by an organization, problems by working backwards from features are important to customers, particularly its front-line employees, in the "effect" to the cause or causes. One ranking them in importance, identifying response to unexpected customer of so-called "Seven Quality Tools," root- conflicts, and translating them into problems such as an unusual request or cause analysis is often facilitated using a engineering specifications. the inconvenience caused by a canceled "fishbone diagram" in which all the airplane flight Less severe than a crises, inputs to the process are arrayed in visual Quality Improvement Cycle (QIC) recovery situations can result from an format like the bones of a fish. Eight-step methodology for error committed by the company or the implementing process improvements. customer or from an uncontrollable event sample like the weather. A finite number of items taken from a Quality Manager population Manager appointed to assist the Quality reengineering Council in managing for quality and also A method for systematically overhauling Scanlon committees to coordinate overall quality support for or revamping an entire process, Committees comprised of managers, the business. organization, or function. supervisors, and employees who work together to implement a philosophy of quality of working life reliability management/labor cooperation that is The extent to which the organizational The probability that a product entity will believed to enhance productivity. There culture provides employees with perform its specified function under are a number of principles and information, knowledge, authority, and specified conditions, without failure, for techniques involved, with employee rewards to enable them to perform safely a specified period of time participation being a major component. and effectively, be compensated equitably, and maintain a sense of human reliability engineering service dignity. A broad-based discipline for ensuring (Service offering) a process or operation better product performance by predicting directed at fulfilling a need or demand, quality professionals more accurately when and under what rather than delivering a physical product. Part- or full-time quality experts on conditions a product can fail. Based on Examples of service processes include quality methods and tools, who provide the results of such an analysis, engineers maintenance, , market quality consulting and training for an can improve designs, set operating limits research, and training. organization. Quality professionals work for equipment, and create backups in with both managers and teams. case of system failure. Reliability programs also incorporate feedback simulation quality system loops for analyzing product performance The technique of observing and Everything associated with in the field and, in particular, product manipulating an artificial mechanism implementation of the Quality Approach, failures (model) that represents a real world including responsibilities, plans, process that, for technical or economical activities, behaviors, and incentives. requirement reasons, is not suitable or available for A formal statement of need, and the direct experimentation. quality system audit expected manner in which it is met. Systematic assessment of the quality system against a standard such as the requirements simultaneous engineering (SE) Baldrige Award criteria or ISO 9000 What process should achieve in terms of Also known as concurrent engineering, series of standards. output characteristics, costs, timeliness; SE is a general approach to production in determined based on customer needs, which concept development, design, competitor performance, and overall manufacturing, and marketing are carried quality teams business direction or strategy. out in unison. In contrast to a linear, Also referred to as Performance Action sequential approach in which Teams or Quality Improvement Teams. reward communication between functions is They might be composed of volunteers Salary increases, bonuses, and poor and the production process is who meet regularly to review progress promotions given on the basis of marred by rework, scrap, poor quality, toward goal attainment, plan for changes, performance. and frustration, simultaneous engineering 38

maximizes communication, reduces statistical estimation errors, and shortens cycle times. The analysis of a sample parameter in A process of developing and maintaining order to predict the values of the a group of people who are working six-sigma corresponding population parameter toward a common goal. Team building A statistical way of measuring quality, usually focuses on one or more of the six-sigma is equivalent to 3.4 defects per statistical methods following objectives: (1) clarifying role million units of output--a virtually The application of the theory of expectations and obligations of team defect-free level of performance. The probability to problems of variation. members, (2) improving superior- ambitious, companywide goal of "six- There are two groups of statistical subordinate or peer relationships, (3) sigma quality" has been adopted, most methods. Basic statistical methods are improving problem solving, decision notably, by Motorola, a 1988 Baldrige relatively simple problem-solving tools making, resource utilization, or planning Award winner. and techniques, such as control charts, activities, (4) reducing conflict, and (5) capability analysis, data summarization improving organizational climate special cause and analysis, and statistical inference. An "abnormal" source of variation that Advanced statistical methods are more timeliness does not arise from the production sophisticated specialized techniques of The promptness with which quality process itself, but which is extraneous statistical analysis, such as the design of products and services are delivered, and unpredictable. experiments, regression and correlation relative to customer expectations. analysis, and the analyses of variance. specification total quality control (TQC) A document containing a detailed statistical quality control (SQC) An expression coined by Armand description or enumeration of particulars A relatively early development in the Feigenbaum, TQC involves the Formal description of a work product evolution of the quality discipline, SQC application of quality principles in all and the intended manner of providing it relies on statistical concepts and tools processes and at all levels of a company. (the provider's view of the work (e.g., sampling techniques) to control product). production quality. SQC techniques are total quality management (TQM) used in total quality management, TQM, as embodied in the Baldrige standard deviation although the emphasis in TQM is on criteria, represents the latest phase in the A parameter describing the spread of the "building quality in," rather than error evolution of the quality discipline. process output, denoted by the Greek detection. Distinctive features are a strong and letter sigma. The positive square root of pervasive customer orientation and a the variance. statistics view toward managing quality for The branch of applied mathematics that competitive advantage. The term "TQM" statistic describes and analyzes empirical is roughly equivalent to TQC and Any parameter that can be determined on observations for the purpose of CWQC in Japan, where the word the basis of the quantitative predicting certain events in order to "control" has the same connotations as characteristics of a sample. A descriptive make decisions in the face of uncertainty "management" in this country. statistic is a computed measure of some Statistics, in turn, are based on the theory property of a set of values, making of probability. The two together provide possible a definitive statement about the the abstraction for the mathematical transactional analysis meaning of the collected data. An model underlying the study of problems A process that helps people change to be inferential statistic indicates the involving uncertainty. more effective on the job and can also confidence that can be placed in any help organizations to change. The statement regarding its expected strategy process involves several exercises that accuracy, the range of its applicability, A broad course of action, chosen from a help identify organizational scripts and and the probability of its being true. number of alternatives, to accomplish a games that people may be playing. The Consequently, decisions can be based on stated goal of uncertainty results help point the way toward change. inferential statistics. stretch goal transfer to operations statistical process control (SPC) An ambitious, usually long-term quality An activity or series of activities in Based on the principle that no two units goal that requires extraordinary effort, which operating personnel are trained in of output of a process are likely to have innovation, and planning to achieve. the performance of a new manufacturing the exact same specifications, SPC or service-delivery process. involves the mathematical determination of acceptable limits of variation. Graphs subprocesses are used by workers to plot output The internal processes that make up a variables and visually determine when a process. value process is "in" or "out of" control. The extent to which a product or service meets a customer's needs or wants, which statistical control supplier can be measured (though not easily) in The status of a process from which all Source of material and/or information willingness to pay. Also, the benefit, or special causes of variation have been input to a process, which may be internal utility, a customer receives from a removed and only common causes or external to the company, organization, product or service. remain. Such a process is also said to be or group. stable. 39 variable A data item that takes on values within some range with a certain frequency or pattern. Variables may be discrete, that is, limited in value to integer quantities (e.g., the number of bolts produced in a manufacturing process). Discretevariables relate to attribute data. Variables may also be continuous, that is, measured to any desired degree of accuracy (e.g., the diameter of a shaft). Continuous variables relate to variables data. variance In quality management terminology, any nonconformance to specifications. In statistics, it is the square of the standard deviation. vision The desired future state of business. world-class Ranking among the best across all comparable products, services, or processes (not just direct competitors) in terms of critical performance or features zero defects An approach to quality improvement, based primarily on increasing worker motivation and attentiveness, in which the only acceptable quality standard is defect-free output or service execution.