First Device Firm to Win Baldrige Award Finds Profit in Quality 2520

An MD&DI January 1997 Feature Article

Part II: TQM STRIKE TEAMS

The adoption of TQM was a voluntary extension of the company's search forquality, and it has since become the cornerstone of the company's efforts toimprove. As implemented by ADAC, TQM has four basic building blocks--continuousimprovement, mutual learning, total participation, and focus on customers.Continuous improvement became the focal point of ADAC's quality program--anobjective that, if achieved, would boost the company to ever new levels ofquality. The question was, how could this be achieved in a company with morethan 700 employees?

The key was to demonstrate clearly that the quality program being implementedhad the backing of executives at the highest level of ADAC, says Mosbarger. "Whenthe CEO is involved, it makes the process real--and that trickles down to allof us and into all of our organizations. Without having the executive team buyinto the process, it will not work."

Lowe and the other top executives at the company decided to demonstrate theirsupport for the quality system by using two other building blocks of the TQMsystem--mutual learning and total participation. Employees were initiated to TQMin two-day seminars that not only taught the basic techniques of this managementapproach, but also explained the tools and language that would be used. "Havingeveryone speaking a common language transcends departments; it allows you tounderstand where people are coming from," says Mosbarger.

With this common understanding established, ADAC executives began creating teamscharged with specific quality missions. In the early days of ADAC's pursuit ofquality, teams benchmarked different techniques and processes for improvingquality, building them into ADAC's own TQM system. They examined writtenmaterials and visited other companies, some of which had won the Baldrige awardin the past. "We benchmarked and stole ideas shamelessly and adopted theminto our culture," says Mosbarger.

In early 1994, ADAC was able to expand its quality mission to helping othercompanies. It cofounded the West Coast chapter of the Center for QualityManagement, a consortium headquartered in Cambridge, MA, that shares experiencesand practices coming out of TQM. The idea behind the center was to mutuallyimprove and contribute to the collective success of the member companies, whichinclude Hewlett-Packard (Palo Alto, CA),National Semiconductor (Santa Clara, CA),Read-Rite Corp. (Milpitas, CA),and Solectron (Milpitas), which had been a recipient of the Baldrige award in1991.

ADAC also expanded its use of teams to include fixing the problems uncoveredduring company self-assessments. The teams describe their progress at companymeetings. Progress is defined by executives as iterative improvements inthe vital areas that must be improved in order for the company to be successful,such as product malfunctions in the first 30 days after installation,unacceptable customer satisfaction scores obtained during surveys, inventoryshortages, or supplier rejects. The areas needing improvement are examined andsolutions are proposed along with a consensus on how those solutions will beimplemented. The company has established a variable bonus program calledPartners in Excellence, in which those involved in problem-solving teams arerewarded financially.

QUALITY METRICS

Critical to this process is measuring the vital areas and defining them bymetrics, so that problems can be characterized and the effects of remedialefforts judged. "The people providing metrics typically include staff whohave some ownership over a process, such as a lead inspector," says KevinThorne, ADAC's director of materials. "But there are some exceptions; forexample, the master scheduler who reports on the performance of the organizationin terms of mass production stability. This metric shows how well we as acompany are able to forecast our customers' needs. It is nothing the schedulerspecifically controls, but he is a focal point for the collection of data andwill present those data."

According to Mosbarger, "Setting ever higher levels for these metrics notonly encourages stability, but lays the groundwork for steady improvement. Ihave never seen a metric continue to go in the wrong direction when someonemeasures it weekly and reports on it at meetings, because if a metric starts togo out of control, we quickly react and keep trying corrective actions until itturns around."

He continues, "Those corrective actions are based on trend analysis andinvestigations into the root causes of the problems. Proposals are based on harddata, not intuition. People are required to go get the data and report on them.That leads you in the right direction and helps build consensus, because factsare facts and you can't dispute them. When you stop accepting opinion, groupsreach consensus faster and more effectively."

Part III
Part I