TheQualityTrilogy juran

8/6/2019 TheQualityTrilogy juran

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~~JURAN~ INSTITUTE


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A Universal Approach to Managing for. Quality

The Quality Trilogy

SEVERAL PREMISES HAVE LED me to concludethat our companies need to chart a newdirection in managing for quality. These premisesare as follows.1.There is a crisis in quality. The most obvi-ous outward evidence is the loss of sales to for-eign competition in quality and the huge costsof poor quality.2. The crisis will not go away in the foresee-able future. Competition in quality will go onand on. So will the impact of poor quality onsociety. In the industrialized countries, societylives behind protective quality dikes.3. Our traditional ways are not adequate todeal with the quality crisis. In a sense, our ad-herence to those traditional ways has helped tocreate the crisis.4. To deal with the crisis requires some majorbreaks with tradition. A new course must becharted.5. Charting a new course requires that we cre-ate a universal way of thinking about quality-away applicable to all functions and to all levelsin the hierarchy, from the chief executive offi-cer to the worker in the office or the factory.6. Charting a new course also requires exten-sive personal leadership and participation by up-per managers.7. An obstacle to participation by uppermanagers is their limited experience and train-ing in managing for quality. They have exten-sive experience in management of business and

finance but not in managing for quality.8. An essential element in meeting the qualitycrisis is to arm upper managers with experienceand training in how to manage for quality, andto do so on a time scale compatible with theprevailing sense of urgency.9. Charting a new course also requires that wedesign a basis for management of quality that can

byJ .M . Ju ran

readily be implanted into the company's strate-gic business planning, and that has minimal riskof rejection by the company's immune system.A company that wants to chart a new coursein managing for quality obviously should cre-ate an all-pervasive unity so that everyone willknow which is the new direction, and will bestimulated to go there. Creating such unity re-quires dealing with some powerful forces whichresist a unified approach. These forces are for themost part due to certain non-uniformities inher-ent in any company. These non-uniformitiesinclude: The multiple functions in the company: prod-uct development, manufacture, office opera-tions, etc. Each regards its function as somethingunique and special. The multiple levels in the company hierarchy,from the chief executive officer to the nonsuper-visory worker. These levels differ with respectto responsibility, prerequisite experience andtraining, etc. The multiple product lines: large and complexsystems, mass production, regulated products,etc. These product lines differ in their markets,technology, restraints, etc.Such inherent non-uniformities and the as-

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Figure 1.The Quality Trilogy

OR IG IN AL Z ON EO F Q UA UTY C ON TR OL----1

QUALITY PLANNING QUALITY CONTROL (DURING OPERATIONS)

IIII I_I J

SPORAD ICSPIKE

- - - - - - - - - - - - TIIIIQUALITYIMPROVEMEN

sociated beliefs in uniqueness are a reality in anycompany, and they constitute a serious obstacleto unity of direction. Such an obstacle can beovercome if we are able to find a universalthought process-a universal way of thinkingabout quality-which fits all functions, all lev-els, all product lines. That brings me to the con-cept of the "quality trilogy."(Let me add parenthetically that my colleaguesin Juran Institute have urged me to let them callit the "Juran Trilogy." Their reasons are purelymercenary. I have yielded to their wishes. In Ju-ran Institute we also need unity.)The underlying concept of the quality trilogyis that managing for quality consists of three ba-sic quality-oriented processes.

Quality planning. Quality control. Quality improvement.Each of these processes is universal; it is car-ried out by an unvarying sequence of activities.(A brief description of each of these sequencesappears in the box on p. 2l.) Furthermore, theseuniversal processes are interrelated in ways wecan depict on a simple diagram. (See Figure l.)THE STARTING POINT is quality planning-creating a process that will be able to meetestablished goals and do so under operating con-ditions. The subject matter of the planning canbe anything; an office process for producingdocuments; an engineering process for designingproducts; a factory process for producing goods;a service process for responding to customers' re-quests.Following the planning, the process is turnedover to the operating forces. Their responsibilityis to run the process at optimal effectiveness. Due

20 Qual ity Progress August 1986

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to deficiencies in the original planning, the proc-ess runs at a high level of chronic waste. Thatwaste has been planned into the process, in thesense that the planning process failed to plan itout. Because the waste is inherent in the proc-

ess, the operating forces are unable to get rid ofthe chronic waste. What they do instead is to car-ry out "quality control" -keep the waste fromgetting worse. If it does get worse (sporadicspike), a fire fighting team is brought in to de-termine the cause or causes of this abnormal var-iation. Once the causeis) has been determined,and corrective action is taken, the process againfalls into the zone defined by the "quality con-


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trol" limits.Figure 1 also shows that in due course the

chronic waste falls to a much lower level. Sucha reduction does not happen of its own accord.It results from purposeful action taken by uppermanagement to introduce a new managerialproce_ss into the system of managers'responsibilities-the quality improvement proc-ess. This quality improvement process is su-perimposed on the quality control process-aprocess implemented in addition to quality con-trol, not instead of it.WE CAN NOW elaborate the trilogy descrip-tions somewhat as follows.Process: Quality planning-the process forpreparing to meet quality goals.End result: A process capable of meeting qual-ity goals under operating conditions.Process: Quality control-the process for meet-ing quality goals during operations.End result: Conduct of operations in accordancewith the quality plan.Process: Quality improvement-the process forbreaking through to unprecedented levels ofperformance.End result: Conduct of operations at levels ofquality distinctly superior to plannedperformance.The trilogy is not entirely "new." If we look

sideways at how we manage finance, we noticesome interesting parallels, as shown in Figure 2.(Ihave often used the financial parallels to helpexplain the trilogy to upper managers. It doeshelp.)In recent seminars, I have been collecting up-

per managers' conclusions on their companies'performance relative to the basic processes of thetrilogy. The results are quite similar from oneseminar to another, and they can be summarizedas shown in Figure 3.These summarized data point to several con-

clusions.1. The managers are not happy with their

performance relative to quality planning.2. The managers rate their companies well

with respect to quality control, i.e., meeting theestablished goals. Note that since these goalshave traditionally been based mainly on pastperformance, the effect is mainly to perpetuatepast performance-the very performance whichis at the root of the quality crisis.3. The managers are decidedly unhappy withtheir performance relative to quality im-

provement.My own observations of company perform-

ance (during consultations) strongly confirm theabove self-assessment by company managers.During my visits to companies I have found arecurring pattern of priorities and assets devotedto the processes within the trilogy. This patternis shown in Figure 4.As Figure 4 shows, the prevailing priorities are

not consistent with the managers' self-assessmentof their own effectiveness. That assessment

would suggest that they should put the controlprocess on hold while increasing the emphasison quality planning and especially on quality im-provement.To elaborate on the need for raising the pri-

ority on quality improvement, let me presentseveral baffling case examples.1. Several years ago the executive vice presi-dent of a large multinational rubber companymade a round-the-world-trip with his chairman.They made the trip in order to visit their majorsubsidiaries with a view to securing inputs forstrategic business planning. They found muchsimilarity with respect to productivity, quality,etc., except for Japan. The Japanese companywas outperforming all others, and by a widemargin. Yet the Americans were completely mys-tified as to why. The Americans had toured theJapanese plant, and to the Americans' eyes the

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Japanese were using the same materials, equip-ment, processes, etc., as everyone else. Aftermuch discussion the reason emerged: The Japa-nese had been carrying out many, many qualityimprovement projects year after year. Throughthe resulting improvements they made more andbetter products from the same facilities. The keypoint relative to "ignorance" is that the Ameri-cans did not know what to look for.2. A foundry that made aluminum castings

had an identical experience. The foundry waslosing share of market to a Japanese competitor,

mainly for quality reasons. Arrangements weremade for a delegation of Americans to visit theJapanese factory. The delegation came awaycompletely mystified. The Japanese were usingthe same types of equipment and processes aswere used by the Americans. Yet the Japaneseresults in quality and productivity were clearlysuperior. To this day the Americans don't knowwhy.3. A few years ago I conducted research into

the yields of the processes that make large scaleintegrated circuits. To assure comparability, Iconcentrated on a single product type-the 16Krandom access memory (16KRAM). I found thatJapanese yields were two to three times the West-ern yields despite similarity in the basic process-es. It came as no surprise to me that the Japanesehave since become dominant in the market for64K RAMs and up.

22 Qual ity Progres s August 1986

4. My final example relates to the steel indus-try. The managers of American steel companiesreport that their cost of poor quality (just for fac-tory processes) runs at about 10-15% of sales.Some of these steel companies have business con-nections with Japanese steel companies, and therespective managers exchange visits. Duringthese visits the Americans learn that in Japanesesteel mills, which use comparable equipment andprocesses, the cost of poor quality runs at about1-2% of sales. Again the American managersdon't know why. Some of them don't even be-lieve the Japanese figures.My own explanation isthat the Japanese, since

the early 1950s, have undertaken to improvequality at a pace far greater than that of theWest. The slopes of those two lines (Figure 5) arean index of the rate of improvement. That rateis in turn dependent on the number of qualityimprovement projects completed. (A project isa problem scheduled for solution.) My estimateis that in terms of numbers of improvementprojects completed, the Japanese pace has beenexceeding that of the West by an order of mag-nitude, year after year.It seems clear that we must change our priori-

ties with regard to the three quality processes.This change in priorities represents a new course.Underlying this new course is the quality trilo-gy. As a universal way of thinking about qual-ity, the trilogy offers a unified approach formultiple purposes. Let us look at two of thesepurposes: training in managing for quality, andstrategic quality planning.With respect to training, many of our compa-

nies have decided to break with tradition. In thepast, their training in managing for quality hasbeen limited to managers and engineers in thequality department. The break with tradition isto extend such training to all functions. Since thisis a sizeable undertaking, the companies have setup corporate task forces to plan the approach.These task forces have run into serious obsta-

cles due to those same systems of variables men-tioned earlier. It is hopeless to establishnumerous training courses in managing for qual-ity, each specially designed to fit specific func-tions, specific levels in the hierarchy, specificproduct lines, etc. Instead, the need is for auniversal training course that will apply to allaudiences, but with provision for plugging inspecial case examples as warranted. The trilogyconcept meets that need.The training courses then consist of fleshingout the three sequences of steps described in the

box on p. 21. Those sequences have been fieldtested and proven to be applicable to all func-tions, levels, and product lines.We have already seen that the trilogy parallels

our approach to strategic business planning. Ourcompanies are experienced in business planning;they are familiar and comfortable with the con-cepts of financial budgets, cost.control, and costreduction. We can take advantage of all that ex-perience by grafting the quality trilogy onto theexisting business planning structure. Such a graft


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reduces the risk that the implant will be rejectedby the company's immune system.The usual starting point is to set up a quality

planning council to formulate and coordinate theactivity companywide. The council membershipconsists of high ranking managers-corporateofficers. The chairman is usually the chief execu-tive officer or an executive vice president. Thefunctions of this council parallel closely the func-tions of the company's finance committee, butapply to quality instead of finance.The council prepares a written list of its

responsibilities. These typically involve the fol-lowing: Establish corporate quality policies. Establish corporate quality goals; review qual-ity goals of divisions and major functions. Establish corporate quality plans; review divi-sional and functional plans. Provide the infrastructure and resourcesneeded to carry out the plans. Review quality performance against plans andgoals. Revise the managerial merit rating system toreflect performance against quality goals.It is all quite logical, and some companies are

already securing gratifying benefits from goinginto strategic quality planning. However, othercompanies are failing to get results, and the mainreasons for these failures are becoming evident.They relate to some areas which I will now dis-cuss: goal setting; providing the infrastructure;providing resources; upper managementleadership.Setting goals. Goal setting has traditionally beenheavily based on past performance. This prac-tice has tended to perpetuate the sins of the past.Failure-prone designs were carried over into newmodels. Wasteful processes were not challengedif managers had met the budgets-budgets whichhad in turn assumed that the wastes were a fateto be endured.All this must change. Goals for parameters

that affect external customers must be based onmeeting competition in the marketplace. GoalsfOF parameters that affect internal customersmust be based on getting rid of the traditionalwastes.Infrastructure. Strategic quality planning re-quires an infrastructure to be set up. The natureof this is evident when we look sideways at theinfrastructure needed for strategic business plan-ning: a budgetary process; an accounting systemto evaluate performance; associated procedures,audits, etc.Much of this structure has long been in place

to serve various local needs: divisions, functions,factories, etc. This structure must now be sup-plemented to enable it to meet strategic qualityneeds as well. This is especially the case in largecorporations which traditionally have delegatedmatters of quality to the autonomous divisions.The quality crisis has caused some large corpo-rations to revise this delegation. They now re-quire corporate review of divisional qualitygoals, plans, and reports of performance. The

Figure 5.World Competition in Quality

1950 1980 1990960 1970

new approach has required revision of the infra-structure.Resources. It takes resources to carry out plansand meet goals. To date, companies have exhibit-ed a selective response to this need. Let us lookat several areas that require such resources. Training. Here the response of companies hasgenerally been positive. Companies have in-vested heavily in training programs for specialareas such as quality awareness, statistical proc-ess control, and QC circles. To go into strategicquality planning will require extensive trainingin the trilogy-how to think about quality. Onecan hope the response will continue to bepositive. Measurement of quality. The quality crisis hasrequired a major change in the basis for goalsetting-the new basis requires measurement ofmarket quality on an unprecedented scale. Forexample, some companies now have a policythat new products may not go on-the market un-less their reliability is at least equal to that ofleading competitive products. Such a policy can-not be made effective unless resources areprovided to evaluate the reliability of compet-ing products.

BEYOND THE NEED to expand quality-orientedmarketing research, there are other aspectsof measurement which require resources: estab-lishing the scorekeeping associated with strate-gic quality planning (the quality equivalent ofthe financial profit statements, balance sheets,etc.): extending measures of quality to the non-manufacturing processes; and establishing meansfor evaluating the quality performance ofmanagers, and fitting these evaluations into themerit rating system. Quality improvement. Here we have somepuzzling contradictions. An emerging data basetells us that quality improvement projects pro-

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vide a higher return on investment than virtuallyany other investment activity. Yet many com-panies have not provided the needed resources.To be specific, that data base comes mainly

from the companies that have presented papersat the annual IMPRO conferences-conferenceson quality improvement. Those published papersand related unpublished information indicatethat in large organizations-sales of $1 billionor more-the average quality improvement proj-ect yields about $100,000 of cost reduction."The same data base indicates that to complete

a project requires from $5,000 to $20,000 inresources. These resources are needed to diag-nose the cause of the problem and to provide theremedy. The return on investment is obviouslyattractive. Nevertheless, many companies-toomany-have failed to provide the resources andhence have failed to get the results.To go into strategic quality planning will re-

quire companies to create, for the quality func-tion, a new role-a role similar to that of thefinancial controller. In all likelihood this new rolewill be assigned to the quality managers.In part this new role will involve assisting the

company managers to prepare the strategic qual-ity goals-the quality equivalent of the financialbudget. In addition the new role will involve es-tablishing the continuing means of reportingperformance against quality goals. This roleparallels the financial reporting role of the finan-cial controller.

Collateral with those two new responsibilitieswill be others, also of a broad business nature. Evaluation of competitive quality and oftrends in the marketplace. Design and introduction of needed revisionsin the trilogy of processes: quality planning,quality control, and quality improvement. Conduct of training to assist company person-nel in carrying out the necessary changes.For many quality managers such a new role

will involve a considerable shift in emphasis:from technology to business management; fromquality control and assurance to strategic qual-ity planning. But such is the wave of the future.Those quality managers who choose to acceptthat responsibility, if and when it comes, canlook forward to the experience of a lifetime.They will be participating fully in what will be-come the most important quality developmentof the century.

References1.Eighteen case examples are cited in "Charting the

Course," The Juran Report, Number 4 (Winter 1985).About the AuthorJ.M. Juran is chairman of Juran Institute, Inc., Wil-

ton, Conn. The Institute offers consulting and manage-ment training in quality. An ASQC HonoraryMember, Juran is the editor in chief of The QualityControl Handbook, author of Managerial Break-through, and co-author with Frank Gryna of QualityPlanning and Analysis.

This paper was presented at the ASQC 40th Annual Quality Congressin Anaheim, California, May 20, 1986.

C op yr ig ht 1 98 6 J ur an In stitu te , I nc ., 1 1 R iv er R oa d, W ilto n, cr 06897, USAReprinted with permission from Quality Progress. (August 1986 issue)

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