When a major new customer asked the Bay Area metal-parts firm to rush a shipment, the customer used an age-old lure: "They said they would pay us anything within reason," recalled Thomas H. Melohn, chief executive officer of American Tool & Die in San Leandro.
But if the inducement was an ancient one, the response Melohn gave the Los Angeles disk drive manufacturer was rather novel for American industry: He said no.
"They pressed me--but they were very understanding," explained the manager. "I would have loved the billing, the revenues. But if we 'ramped up' any faster, we could get rejects."
Melohn's firm rejects the idea of making rejects, demonstrating what some believe is a growing attitude within American industry. In response to competition from overseas and new pressures at home, U.S. companies are striving for quality as never before. Speakers preach the gospel to rapt audiences. New books are devoted to the subject. Quality is invoked as a cure-all for competitive ills, a productivity fix, even a way to boost profits.
FOR THE RECORD
Los Angeles Times Tuesday September 20, 1988 Home Edition Business Part 4 Page 2 Column 1 Financial Desk 1 inches; 21 words Type of Material: Correction
The name of North American Tool & Die in San Leandro, Calif., was incorrectly listed in a story in the Job Market supplement of Sunday's Business section.
"It's not a matter of growth," Melohn explained of the need to spark higher levels of quality and service. "In my judgment, it's a matter of survival."
And it is not a matter to be taken lightly, according to management experts. Permanent quality gains often require an employer to shatter deeply ingrained attitudes within its work force. Proposed improvements may meet with skepticism or even outright resistance from the middle ranks, unless managers convince workers that priorities have changed.
For all the luster quality has as an ideal, the episode at American Tool & Die shows that in the real world, it can entail temporary sacrifices that many companies are not yet willing to make.
"It's very, very easy to embrace the idea of quality," notes David A. Garvin, an associate professor at Harvard Business School and author of a recent book on the subject. "It's very difficult to carry it off over a sustained period."
It may even be difficult to pull off at all. Consider the experience of General Motors, which in 1986 began a $300-million project to modernize a Chevrolet plant in Wilmington, Del. Painfully conscious of the gains achieved by its highly regarded Japanese rivals, GM instructed workers to stop the assembly line whenever they needed to fix a problem. GM even installed special switches for that purpose.
But middle managers at the auto plant, conditioned to believe, "You stop the line and we break your arm," made no secret of their disapproval when workers exercised their new option, according to Garvin who visited the factory. "After 40 years of running a plant like that, people aren't going to believe that management is serious," he said.
It required months of determined efforts before senior managers were able to convince their lower-level counterparts that GM sincerely wanted its workers to halt the line when necessary. "The big problem is not so much at the top and not so much at the bottom, but in conveying the message to the middle ranks," Garvin said.
Part of the problem is just figuring out what the message should be. Is quality something intangible that the consumer feels? Is it a scientific measurement of how closely a product measures up to factory specifications? Is it service rendered? Broadly speaking, it is all of those things.
According to Karl Albrecht, a San Diego-based management consultant, quality is gauged at critical "moments of truth," such as when a potential car buyer first steps foot in a dealership or when a factory calls a supplier with a question. "If there's a screw-up in any one of these moments of truth, the customer is dissatisfied," he said.
Some managers say the way to ensure quality is in the hiring process--making sure that only people with high standards are brought into the organization in the first place. "We have found that good people don't want to make scrap, rejects," Melohn maintained. "They're proud of their work."
Others aim their comments higher up the ladder. The burden, they maintain, belongs not with much-maligned middle managers but rather with top executives who must convey their commitment to quality to the entire organization.
"I think middle managers are often dumped on," said C. Jackson Grayson, who launched the American Productivity Center in Houston 12 years ago--and in July changed its name to the American Productivity & Quality Center. "One minute it's 'quality,' and another minute it's, 'Get the product out the door.' The signals come out of the executive offices."
Even those executives intent on sending the right signals can stumble across various obstacles in their pursuit of quality.