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First Device Firm to Win Baldrige Award Finds Profit in Quality

An MD&DI January 1997 Feature Article


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

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

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

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

In early 1994, ADAC was able to expand its quality mission to helping other companies. It cofounded the West Coast chapter of the Center for Quality Management, a consortium headquartered in Cambridge, MA, that shares experiences and practices coming out of TQM. The idea behind the center was to mutually improve and contribute to the collective success of the member companies, which include 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 in 1991.

ADAC also expanded its use of teams to include fixing the problems uncovered during company self-assessments. The teams describe their progress at company meetings. Progress is defined by executives as iterative improvements in the 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, inventory shortages, or supplier rejects. The areas needing improvement are examined and solutions are proposed along with a consensus on how those solutions will be implemented. The company has established a variable bonus program called Partners in Excellence, in which those involved in problem-solving teams are rewarded financially.


Critical to this process is measuring the vital areas and defining them by metrics, so that problems can be characterized and the effects of remedial efforts judged. "The people providing metrics typically include staff who have some ownership over a process, such as a lead inspector," says Kevin Thorne, ADAC's director of materials. "But there are some exceptions; for example, the master scheduler who reports on the performance of the organization in terms of mass production stability. This metric shows how well we as a company are able to forecast our customers' needs. It is nothing the scheduler specifically controls, but he is a focal point for the collection of data and will present those data."

According to Mosbarger, "Setting ever higher levels for these metrics not only encourages stability, but lays the groundwork for steady improvement. I have never seen a metric continue to go in the wrong direction when someone measures it weekly and reports on it at meetings, because if a metric starts to go out of control, we quickly react and keep trying corrective actions until it turns around."

He continues, "Those corrective actions are based on trend analysis and investigations into the root causes of the problems. Proposals are based on hard data, 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 facts are facts and you can't dispute them. When you stop accepting opinion, groups reach consensus faster and more effectively."

Part III
Part I
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