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GOOD PRODUCTS BAD PRODUCTS
ESSENTIAL ELEMENTS TO ACHIEVING SUPERIOR QUALITY
By JAMES L. ADAMS
The McGraw-Hill Companies, Inc.Copyright © 2012James L. Adams
All rights reserved.
Products and Quality
What Is the Situation?
The perfect product would be a win for everyone: the makers would become personally fulfilled and wealthy, while the users would be forever grateful because their lives would be so improved. Distributors would be ecstatic because of the demand for the product, and the media would seize on it because of its obvious positive impact. The government would love the perfect product because the balance of payments would be improved, and environmental groups would respect it because it would not use limited resources or pollute the ecosphere.
Of course, there are no perfect products, but there have been some awfully good ones: the spring clothespin, the Volkswagen Beetle, the paper clip, the user interface developed initially by Xerox and further by Apple and Microsoft, the shovel, the DC-3, the Barcelona chair. What distinguishes these from similar products that were apparently not as good: the Pontiac Aztec, the first Apple laptop, the Chernobyl nuclear plant? Why do some products considered outstanding disappear? How do we explain products that are constantly criticized but seem to be eternal favorites, such as the Barbie doll, high-heeled shoes, and toy firearms?
Why do we accept the many day-to-day annoyances we live with? For example, why must we spend so much time playing nursemaid to our computer systems? They're supposed to serve us. Wouldn't it be nice if automobiles all had their gasoline filler caps in the same place and had clocks that did not require reading the owner's manual to reset them? Shouldn't it be possible to more easily open the packages that keep us from our new purchases? Why is it so difficult to find products that are consistent with the needs and desires of those who deviate from the norm, whether in physical dimensions and capability, intellectual interests and background, or sensitivity and taste? There are many people like me who find it difficult to leap agilely from low-slung chairs and who aren't happy campers when confined to a tourist-class seat on a long flight. These problems mostly have to do with the fit between products and the human user, but products also suffer from poor performance and overly high prices, unreliability, difficult maintenance, crude manufacturing, ugliness, ostentatiousness, unnecessary complexity, representation of people or places users don't like, and destruction of natural beauty and future health.
All products could be improved. You have evidence for this in your personal experience—after you have used a product for a while, you become critical of its specific details and can think of ways to make it better. The potential for product improvement can also be seen by watching products evolve—even though some stay constant for long periods (the straight pin) and others become worse ("classic" models of cars), most become better over time. This is not to say that all products are inherently bad—my grandparents would consider many products now on the market astonishing—it is just that they could be better. Since products are designed and produced by bright, educated, and well-meaning people, however, why aren't they better?
Looking at our history, it is easy to see why we are somewhat dazzled by the products of industry. We have only had anything approximating what we now call technology and science for about one ten-thousandth of our history. We have been farming, domesticating animals, living in villages, and developing tools for 30 times that period, but as a species, we have spent most of our history with a scarcity of food, shelter, and safety, to say nothing of transportation, medical care, and toys. Much of the world's population continues to live in this way.
In the past few hundred years, the miraculous things that we call industrial products have become available. As areas of the world grew richer and more populated, increasing amounts of resources were devoted to producing and consuming these products. These changes worried some people, such as the Luddites and members of the Arts and Crafts movement, but most considered these products wonderful. It is not surprising that we would develop an extreme fondness for things that fulfill our needs.
Since around 1900, industrial products have proliferated. China is a good present example of this process in action, or look at Orchard Road, the retail and entertainment center of Singapore. Any Walmart store in the United States just before Christmas also displays this phenomenon in maturity. But we do have related problems, including huge gaps in access to products between the rich and poor, weapons that can destroy unacceptable numbers of innocent people, an increasingly contaminated ecosphere, an ominously growing population, soaring expectations, and industrially produced products that should serve us better. Exponential growth, however, never continues forever, despite the hopes of some economists and the theories of Adam Smith, nor do empires, religions, companies, or values. Industrial products and the process that brings them to us will be as different (or more so) 100 years from now as they were 100 years ago.
Future Trends: Population Growth and "Taste"
Future trends in industrially produced products will obviously serve a society with different needs, as populations continue to grow (for a while at least). It can only be hoped that poor individuals will also continue to become wealthier. Will we increase the number of products we produce and consume forever? No—the finite nature of the Earth places limits on us, and it will be a long time before we build cars on the moon. Also, there is a tendency among individuals to become more discriminating about products. As we acquire more money, products, and experience, we are not as tempted to buy things simply because they are cheap or we want new toys. The very wealthy, for example, do not especially buy more products. If Bill Gates were to keep up with me in number of products per dollar of net worth, he would have to fill several thousand houses and yards.
Will "taste" change? Most assuredly. We have all gone to enough museums, read enough books, and studied enough history to know this. I have been fascinated over my 40 years at Stanford University to watch the frequent and radical changes in students' desires for products, starting with the anti-industry hippie days when students were listening to folk LPs, playing acoustic guitars, and wearing bell-bottoms and ending with today's students sporting shorts and athletic shoes while plugging into iPads and laptops, with cell phones in hand. In the interim, there has been continual movement.
Whatever the situation will be in the future, product quality will be essential to business success. Most products are produced by businesses interested in making money for their owners and growing. An essential part of these goals is retaining and motivating high-quality employees. Increasing product quality adds to the pride and satisfaction of employees as well as the reputation of the company. But one way to achieve short-term profits is to decrease expenses by shortening the time to market and lowering the cost of design and production. Another is to decrease expenditures on new product development and product improvement. Both of these will result in lower quality.
Since higher production means lower costs and higher profits, products are promoted by advertising and other means of hawking their advantages (whether real or imaginary) in order to increase demand. Such actions boost sales, but they may also result in disappointment if the products do not live up to their billing. Beyond these factors, we in the United States have a culture that venerates "more": bigger, faster, and cheaper. In the process, product quality can be, and often is, compromised. Rapid company growth does not always correlate with product quality.
Improved product quality, however, brings added value, increases competitive ability, does not necessarily add to cost, and leads to higher demand. There also seems to be a stable demand for high-quality products that are not cheap. For example, the Apple iPhone is a high-quality product as far as function and appearance is concerned (until the battery fails). At the time of this writing, the International Data Corporation (IDC) claimed that the iPhone had only 4 percent of the world cell phone market at the end of 2010, but it was apparently making 50 percent of the world's cell phone profit. Apple is fielding many products and services that fulfill the criteria for high quality, and at the time of this writing its gross corporate profit margin was hovering around 40 percent.
An Example of Quality Improvement
The late 1960s and '70s were a rude awakening for the United States in all sorts of ways. For me they were especially rude because I innocently moved from a job as an engineer at Caltech's Jet Propulsion Laboratory (JPL), happily designing lunar and planetary spacecraft, to my life as a professor in a university that was just about to (literally) burst into flames. But certainly, it was a time of questioning and increasing awareness. In the context of this book, it caused many people to become much more critical of technology, and therefore of products.
Before this time, people would often grumble about products that would fail, or that were unusually inconvenient, but seemed to accept product failures in return for their gifts. When I was a child, my grandfather complained about his Fordson tractor, which would overheat and occasionally threaten to kill him by rolling over backward. But he never seriously considered reverting to horses. My mother cursed her Easy Spindrier washing machine because the clothes would never arrange themselves symmetrically enough in the drying drum to prevent the machine from bouncing into things it shouldn't, but she never wanted to go back to a wringer. My first automobile was a 1941 Chevrolet Club Coupe, and although it would not have done very well on a skid pad, I loved it greatly.
Why shouldn't we in the United States have loved our products more unconditionally in the past? After all, they were U.S. products, and therefore, we assumed, the best in the world. Hadn't we in the United States brought the world the Model T, concentrated orange juice, and the atom bomb? Hadn't we built 300,000 airplanes during World War II? In fact, had not our industrially produced products played the major role in defeating unprecedented evil? If there were problems in the world, technology and its products were helping cure them, not add to them. Weren't there to be cars that converted to airplanes and unlimited free atomic energy in the future? Also, the growth of industry and mass production were the engines of capitalism, which brought us all jobs and money. We could all get richer and buy more and more products.
But I was at JPL because of Sputnik, which delivered a cruel message to the United States in 1957. The dreaded Soviet Union had successfully exploded both atomic and hydrogen bombs by then, but we had been first. Now they had done something that we had not. The result was the "Space Race," and since space was fascinating, the technology was exotic, and the country seemed to be uniformly behind beating the Soviet Union in this race, no matter what the cost, how could I not join the Jet Propulsion Laboratory (JPL), which had the leading role in the festivities? As we know, the United States closed the "space gap" and pulled ahead, but to our amazement, people began questioning whether the result was worth the cost. Shouldn't we be spending the money on such things as hunger, health, and equality? Shouldn't we clean up our act on Earth before we colonized the moon? The 1960s were happening, and social conscience was beginning to grow.
In the 1960s, environmentalism hit the front pages (Rachel Carson wrote Silent Spring in 1962) and we began to worry about the effects of technology and our capitalistic lifestyle upon the ecosphere. In fact, in the late 1960s we began to worry about all sorts of things that most of us had taken for granted, from ethnic and gender biases to abortion rights and social justice. The products of industry were not ignored, but there was relatively little impact upon industrial or government policy at that time.
In the United States, worry about product quality was to come a few years later, when some of our products and industries were first threatened and then displaced by those from other countries. The impressive success of Japan was a particularly large shock, since we had clearly beaten them in World War II and convinced ourselves that they were only capable of making cheap copies of our products.
In 1997, Charles O'Reilly and Michael Tushman wrote an excellent book entitled Winning Through Innovation: A Practical Guide to Leading Organizational Change and Renewal. In the book they listed the following industries in which the leaders (often U.S. companies) rapidly lost their market share through the 1970s, '80s, and '90s:
They also named the product class leaders they considered to have become victims to their own success (note the United States companies again), which are shown in the following list. All of them lost market share during this period. Some have recovered. Some have not.
IBM (personal computers)
Ampex (video recorders)
Winchester (disk drives)
U.S. Steel (steel)
Oticon (hearing aids)
Bank of America (financial)
Bausch and Lomb (vision)
Smith Corona (typewriters)
Fuji Xerox (copiers)
EMI (CT scanners)
This shake-up occurred initially in such resource-dependent industries as shipbuilding and steel. The initial reaction in the United States was bafflement, because we considered ourselves rich in resources, production skills, labor, and management and believed that our products were superior. Our rationalization on the success of our competition was that they were cheating through use of low wages, government-industry collusion, and unfair trade practices. However, we then began losing markets in higher value-added products (consumer electronics, automobiles, machine tools) and foreign products began to be seen as "better." Our trade balance suffered as we imported more and exported less. And now that many of these "overseas" companies are manufacturing in the United States, it is difficult to think that countries such as Japan were cheating through low wages and industry-government collusion. We had to accept the fact that they had simply moved ahead of us.
Finally admitting that something was amiss, the United States focused on improving one particular aspect of product quality—manufacturing quality, an area neglected after World War II that was particularly approachable by the technical and quantitative thinking of industry. The campaign to improve manufacturing quality has been remarkably successful, both in the United States and in other industrialized countries. The benefits have ranged from increased product reliability (100,000-mile automobile warranties), to cost reduction (remarkably reduced reject rates), to appearance improvement (fits and finishes).
I had the pleasure of watching this process in action in many companies, but particularly at Hewlett-Packard and Ford Motor Company. The CEOs of these two companies, John Young and Donald Petersen, put manufacturing quality improvement at the top of their priorities, and it trickled down to all levels of the companies. The programs resulted in astonishing improvements in the reliability of their products, cost savings, communication between different functions and disciplines, and pride among the employees. U.S. companies in fields such as automotive and electronics learned from companies like Toyota and were able to catch up with the Japanese. A major focus on the improvement of manufacturing quality was to decrease defects and part variability. These factors are key in improving any sort of process quality as focusing on small process details can lead to large improvements.
There were major changes in organizational structure and procedures that were instrumental in improving manufacturing quality, including the strengthening of functional interaction, particularly between designers and manufacturing people. The old approach of "throwing it over the wall," in which designers would complete the design and then ship it to manufacturing, was successfully suppressed, resulting in "design for manufacturing" and increased sensitivity to the manufacturing process. Although designers and manufacturing people lost the pleasure of blaming each other for product problems, the products benefited a great deal. Other benefits came from inaugurating stronger supply-chain management, which included exporting manufacturing quality approaches to vendors, just-in-time inventory, minimizing investment in backlogged parts and assemblies, and standardizing components and parts.
Responsibility for manufacturing quality was pushed down the organization due to the realization that the actual manufacturers not only knew more about the process than managers but also were the people looking after the quality of the work itself. This helped flatten organizations and create high-functioning teams. Total Quality Management (TQM), worker empowerment, motivation of and close work with suppliers, encouragement of creativity in the manufacturing process, and use of more sophisticated quantitative approaches to eliminate waste and improve output all became common. Companies also learned to design more flexible assembly lines and products that could be more easily manufactured.
Unfortunately, not all companies had such campaigns, and it is not clear that the effort has remained as strong in those who did. W. Edwards Deming and Joseph M. Juran, the original quality gurus who moved to Japan and inspired breakthrough efforts in increasing manufacturing quality there after their teachings had little response in the United States, taught that improving manufacturing quality was to be an ongoing goal. Unfortunately, I suspect that once the United States learned the new game, many U.S. manufacturers relaxed again. The effort spent on this "revolution" was immense, as was its success, but it did not broaden into a revolution in overall product quality. Manufacturing quality, and not necessarily overall quality, was the focus. Improving manufacturing quality was consistent with the quantitative approach preferred by managers and engineers in industry, so it was possible to use measurements and metrics to set specific goals, while overall quality, less susceptible to such tools, sometimes fell by the wayside.
Excerpted from GOOD PRODUCTS BAD PRODUCTS by JAMES L. ADAMS. Copyright © 2012 by James L. Adams. Excerpted by permission of The McGraw-Hill Companies, Inc..
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