Creating and Sustaining a Culture of Quality

Partner Report

August 2002

Creating & Sustaining a Culture of Quality B E N C H M A R K I N G

S T U D Y

Table of Contents Executive Summary ...........................................................................................................................................3 Methodology.......................................................................................................................................................4 Participant Demographics ................................................................................................................................5 Key Findings.......................................................................................................................................................7

Communication and Leadership..................................................................................................................7 Customer-focused Quality............................................................................................................................9 Measurement ................................................................................................................................................10 Training and Incentives ..............................................................................................................................12

Appendix 1: Partner Profiles ..........................................................................................................................14 Appendix 2: Detailed Questionnaire.............................................................................................................19 Appendix 3: Detailed Questionnaire Results...............................................................................................29

Creating and Sustaining a Culture of Quality

2002 American Productivity & Quality Center Page 3 of 50

EXECUTIVE SUMMARYThomas Slaninka, director of sector sourcing at Motorola, a known quality powerhouse, notes when talking about quality that the skilled use of simultaneous partnership and pressure elements to get desired results is not easily taught as it is more an art than a science.1 The results of this benchmarking study indicate that the 21 participating organizations have worked to master this art form through careful study and commitment. This report seeks to highlight findings in four key areas that are critical to creating and sustaining a culture of quality. The four areas are: 1. communication and leadership, 2. customer-focused quality, 3. measurement, and 4. training and incentives. When asked about the primary focus of partners quality initiatives, the response varied from manufacturing execution (33 percent), to customer satisfaction and value (29 percent), to no primary focus (19 percent). Despite this variation, a commitment to customers was evidenced throughout each partners response set. I most cases, organizations view quality as a competitive advantage and seek to communicate this position to customers and use the resulting feedback to sculpt better products and quality-related messages. Whether creating or sustaining a quality program, a solid communication plan that is effectively deployed forms the backbone of a quality culture. Anthony Clarke remarks, When a company leverages the links between management tools [through a communication plan], the transition from one [initiative or strategic objective] to another is smoother because employees can more easily understand where the company is headed.2 Organizations in this study support the idea of a structured communication plan populated with regularly scheduled meetings hosted by senior leaders to communicate quality messages. Evidence of the success of this strategy is demonstrated by the high levels of agreement with statements such as: A focus on quality is institutionalized as part of our organizational culture, and is not simply a product of

specific individuals or personalities; We maintain a sense of urgency about sustaining quality even in good financial times; and Organization leaders communicate to others that quality is a way of life, not simply another initiative or

program. Measurement, training, and incentives are three components integral to deploying the quality initiative and should be carefully woven into the communication strategy.

1 Porter, Anne Millen. "In some companies quality culture is tangible." Purchasing , Jan 16 , 1997, v122 , n1 , p51(2). 2 Clarke, Anthony J. Implementation can benefit from quality experience. Quality Progress, v33n11, Page: 67-74, Nov 2000.


4 2002 American Productivity & Quality Center

METHODOLOGY APQC uses a proprietary four-phased methodology to conduct benchmarking studies and best-practice transfer projects. This methodology is illustrated by the figure at the right. The Planning Phase was conducted in April 2002 and involved scoping the project and conducting secondary research to identify potential external best-practice partners. A list of potential topics and questions for both the detailed collection instrument and the site visit guide were also collected.

The Collection Phase was undertaken in April and May 2002. A significant number of leading companies were asked to participate in data collection, via a screening survey and subsequent detailed survey. The Benchmarking team sought data concerning both process and metric information focused on four key areas: communication and leadership, customer-focused quality, measurement, and training and incentives. Twenty-one companies submitted data for evaluation.

The Analysis Phase included identification of key opportunities for improvement based on gaps between internal and external partner performance. Opportunities were discussed at a knowledge transfer session (KTS) where key findings were reported in each of the study scope areas. The benchmarking team carefully and methodically discussed these findings and assessed each for its potential fit with their own organization.

APQCs Benchmarking Methodology



PARTICIPANT DEMOGRAPHICS Creating and sustaining a culture of quality is one of the key functions in successful businesses today. This was demonstrated by the significant interest in this benchmarking study during the screening phase as well as the high response to the request for more detailed information (as reported in this document). Organizations were selected for participation in this phase of this study based on successful indicators from the screening phase, secondary research, and phone interviews. Forty organizations were asked to complete the Detailed Questionnaire and the twenty-one organizations listed below did so successfully. These organizations represent a wide variety of industry areas and geographic regions as illustrated below.3

Partner Organizations Applied Materials Dell Americas Raytheon Air/Missile Defense APW Wyott Corporation Eastman Kodak Sanyo Electric Co. Bama Companies, Inc. Ford Power Products Siemens Medical Solutions Brooks PRI Automation Honeywell Swales Aerospace Clarke American Checks Instron Corporation Timex Corporation Dana Corp. - WIX Filtration Lord Corporation Unisys Deere and Company Maytag Xerox Geographic Locations Austin, TX Round Rock, TX Cary, NC Dallas, TX Dearborn, MI Beltsville, MD Chelmsford, MA Phoenix, AZ Tulsa, OK San Antonio, TX Canton, MA Middlebury, CT Dillon, SC Rochester, NY San Diego, CA Newton, IA Erie, PA Webster, NY Moline, IL Tewksbury, MA Gunma-ken, Japan Industry Groups Appliances (3) Industrial/electrical Automotive InfoImaging/Security printing (2) Computer equipment/technology (4) Medical/optical (2) Defense and aerospace (3) Transportation equipment (2) Engines for industrial use Wrist instruments Food and beverages A quick review of the company names and industries listed above shows that each organization provides a unique basis upon which to structure a program to create and sustain a quality-focus within an organization. While this diversity may seem disconcerting initially, careful analysis shows that this diversity provides many opportunities for learning and cross-fertilization. To establish a context for the balance of the report, the following section provides an aggregated overview of the background information provided by each partner.

Each of the participating organizations represents a manufacturing focus with multiple plants or facilities. Most have a primary focus of operations in North America and a number have a strong presence in other global markets. As noted above, the more commonly represented industries include computers/technology (20 percent), appliances (14 percent), and defense/aerospace (14 percent). Ninety-five percent of responding partners have some type of certification. A significant percentage (86 percent) hold ISO 9000 certification. 3 Further information about each organizations operations and financials can be found in Appendix 1.



Participating organization are nearly evenly divided between corporate groups and those representing specific business groups (52 percent and 48 percent respectively). The mean ratio of total FTEs (full-time equivalent employees) to quality FTEs is 82.4, and the median ratio is 36.5. The minimum and maximum ratios were 15.8 and 300 respectively. Just over half (57 percent) of the partners report a decentralized organizational structure for the quality function. However, one-third reports a centralized function. Examining cross-tabulations, the organizational structure does not appear to have a significant link to any of the other reported findings in this study.

The range for the total quality budget was significant. For the responding partner set of 15, the mean was $6.9 million with the median at $500,000. The maximum value reported was $80 million and the minimum budget $30,000 per year. When these values are expressed on a per-employee basis, the spread is considerably lessened: the median total quality budget per (total organization) FTE was $500, and the mean budget amount per FTE was $862. The median total quality budget per quality FTE was approximately $46K, compared to a mean quality budget per quality FTE of nearly $50K.



KEY FINDINGS The detailed questionnaire was released in May 2002. The collected responses to that survey were analyzed by APQC to prepare this report. The following areas (corresponding to the structure of the Detailed Questionnaire) are to be addressed in this section: communication and leadership, customer-focused quality, measurement, and training and incentives

Select questions are graphically or textually represented throughout the Key Findings. In the text, we reference charts by their figure numbers. To view the organizational comparison for each survey item, please consult Appendix 3.

Communication and Leadership Communication and leadership appears to form the core of any successful quality initiative or function. Using senior leaders to communicate consistent, well-honed messages in a timely manner appears to be a significant focus for each partner in this study. Moreover, a centralized repository of information fuels such efforts and enables the organization to aggregate information and communicate trends effectively and efficiently.

As noted above, one best practice identified through this study is the use of an internal clearinghouse for internal quality metrics or process data. Ninety-five percent of partners report such a clearinghouse (see Figure 1). The fact that most organizations decentralize the quality function amplifies the importance of this finding. While it is important to allow for independence and customization of quality initiatives, a central repository for such data enables the organization to better manage the information, make strategic decisions, and sustain a quality-focused culture. External clearinghouses are not used to the same degree (52 percent of partners). This likely illustrates the need for unique or varied information based on a business units operational focus.

Partners rated the statement, Information on our product quality performance is shared with all employees fairly high (5.1) on the Likert scale as compared to other similar statements.4 An internal clearinghouse maintaining quality data helps enable this sharing of information and provides a consistent, clean source from which to pull information for written materials or presentations.

Communicating quality-related messages to internal and external constituents is a key part of senior leaders responsibility set. More often than not, these messages have similar themes but must be constructed to reflect the unique nature of the audience and generate the call to action desired.

Figure 2 on the following page charts the average effectiveness ratings for the use of various communication tools with employees, as well as the frequency with which these tools are engaged. As might be expected, the most effective tool for communicating quality-related messages to employees are face-to-face meetings (5.9 rating). Discussion forums were also rated highly (5.1). Inactive or push communication tools such as email, website updates, and newsletters all rated significantly lower on the Likert scale. One should also note that partners agreed that regardless of medium, quality-related communication tend to emphasize consistent themes (5.1 average rating).

4 See Question 13.

Figure 1

Percent of Partners with Quality Data Clearinghouses

52%

95%

0%

20%

40%

60%

80%

100%

External Clearinghouse Internal Clearinghouse



The frequency with which communication tools are used is also an important factor to consider. As Figure 2 illustrates, there does not appear to be one right answer. Instead, an organization should consider corporate culture and available forums when developing quality-related communication plans. Whether revising or designing a new communication plan, a number of insights may be noted. First, email was rated as one of the least effective and is used by the majority of partner organizations daily or weekly. This suggests that employees are likely inundated with messages related to quality that are not generally perceived as effective. One might consider reducing the frequency with which these messages are sent and watch for an increase in the effectiveness or hit rate with employees. Each organization is likely to have a sweet spot balancing frequency with effectiveness.

A second key take away from this table is that a significant percentage of partners use the highest rated tools on a monthly or quarterly basis. Face-to-face meetings are held on a monthly basis by 38 percent of partners and a quarterly basis by an additional 18 percent. Discussion forums are held monthly by 29 percent of partners and quarterly by 43 percent. This structured interaction allows senior leaders to demonstrate their commitment to quality as well as present new or updated information or trends.

The data reveal a correlation between the frequency of use of these communications tools and critical success factors. The more often they use these tools, the more they agree with the following critical success factors (overall agreement ratings in parentheses):

A focus on quality is institutionalized as part of our organizational culture, and is not simply a product of specific individuals or personalities (5.1);

We maintain a sense of urgency about sustaining quality even in good financial times (5.3); Organization leaders communicate to others that quality is a way of life, not simply another initiative or

program (5.6); and Organization leaders are directly involved in efforts to create and sustain a culture of quality (5.6). The second and third statements regarding maintaining a sense of urgency and quality as a way of life directly relate to the frequency of communications around quality. Quality becomes a way of life if it is consistently discussed and moves from another management initiative to a focus in both good times and in bad.

Finally, quality-related to messages to customers make up another key area of focus for most organization. Benchmarking findings show that 81 percent of partners rely on public relations activities to communicate these messages. Sixty-five percent of partners also rely on their website as a communications tool. The most effective means used for employees are used with customers by much smaller percentages: only 33 percent of partners use discussion forums and only five percent face-to-face meetings. This is not surprising given the limitations and lack of accessibility to customers on a wide scale. However, additional information in this area might provide insights and lead to demonstrable results for organizations seeing to develop or hone customer-focused quality initiatives.

Figure 2 Tool Avg.

Rating Daily Weekly Mthly Qtrly.

Newsletters 3.9 3 3 Web site 3.9 3 3 Email 4.1 3 3 Teleconference/ videoconference

4.4

Written reports/ summaries

4.4 3 Discussion forums 5.1 3 3 Face-to-face meetings 5.9 3 3 indicates greater than 20 percent of partners Effectiveness rating: 1=Not at all effective, 7=Very effective



Customer-focused Quality When asked to identify the primary or greatest area of focus for quality initiatives, nearly 30 percent of partners reported a focus on customer satisfaction and value. The only category that generated a greater response was manufacturing execution with 33 percent of partners responding accordingly. This focus on customers can therefore be considered a significant area of interest for manufacturing organizations today. Moreover, while organizations may not consider customer satisfaction their primary focus, results from this study show that it is considered and managed as a part of a large number of successful quality programs.

Customer-focused quality was addressed in this benchmarking study with three questions in mind: 1. Who talks to customers? 2. How do organizations talk to customers? 3. How do organizations use information from customers?

The first question provides insight into the level at which customer-input is valued within an organization. It ties closely with the critical success factor identified in the previous sectionorganization leaders are directly involved in efforts to create and sustain a culture of quality. Figure 3 to the right illustrates that three-quarters of the partners surveyed indicate that executives are involved in interacting with customers as a part of the quality program. An even larger percentage (91 percent) reports that senior management is involved in such initiatives.

While this study did not seek to understand the specific activities or breadth of communication at each level of the organization, attention was given to the areas upon which partners focused detailed customer analysis. Partners reported highly similar levels of importance for each of the topics presented: Who our customers are (5.8), What features customers require of our products

(5.7), How we can keep our customers satisfied (5.6), What our customers expect from our products in terms of quality (5.6), What our customers needs are (5.6), and How customers value our products versus competitors (5.5). Careful analysis of each of these areas in through secondary research and primary research at various levels of the organization appears to be a key component in successful organizations implementation of a customer-focused quality program.

It is interesting to note, however, that study partners do not uniformly believe that the customer is the only person qualified to specify what quality means. When asked, partners gave this statement an average rating of 4.5 on the 7-point Likert scale (the median values was 4). One may make the assertion based on this statement that secondary research or other sources of information are also critical pieces to the quality assessment. Consequently, organizations should not lose sight of the importance of integrating various pieces of data to develop strategy and assess performance.

The second question to be addressed relates to how organizations communicate with customers about quality. Public relations activities and organization websites are the most commonly used tools to communicate with customers (81 percent and 67 percent of partners respectively). Organizations also assessed the extent to which customers were involved in various business processes (see Figure 4). Product design and development and field-testing of products were used to the greatest extent.

Figure 3

Level of Customer Interaction

Senior Management (91%)

Executives (76%)

Plant Management (71%)

Salaried Employees (57%)

Front-line Management (62%)

Hourly Employees (19%)



The median value for each was a 6 as compared to the other business processes presented (marketing, customer service, performance measurement, quality control, and strategic planning) which ranged from 3 to 5. This indicates that while customer input and insights are gathered and considered highly important, customers are not typically directly involved in core business processes except as necessary for product development and testing.

An area for potential examination lies in the organizations that highly rated customer involvement in the non-development related areas. At least one organization rated each of the business processes a 7. Analysis of the effectiveness and outcomes of this involvement may provide insight and prove to be a best practice as organizations customer-focused quality initiatives evolve.

Finally, how organizations use customer-provided information forms the final link in this section. The succinct analysis is that organizations use the information provided by customers to address needs, expectations, and complaints. This highest rated statement regarding customer-focused quality was We communicate back with customers regarding our efforts to address their needs and complaints. It rated an average of 5.9 out of 7-points. The minimum value rated by any partner was a 4 indicating that all participants believe that this is important to some degree. A second statement, we ensure that our products meet customer needs in product quality (rated a 5.2) also supports action based on customer feedback.

Measurement Measurement is a critical piece of any successful initiative and is imperative throughout the quality function. This section seeks to provide insight on the types of measures undertaken most commonly by partners, the means to determine what measures are important, and the frequency at which they are reviewed within the organization.

The table in Figure 5 lists the metrics with a median rating of 5 or above (a 7 means critically important, while a 1 means not at all important). The average rating ranges from 4.5 to 5.5 on this 7-point scale. The variation can likely be attributed to the variety of organizations represented in this study as well as different focal points for their quality programs. Nearly half of the respondent pool report using leading indicators for less than 25 percent of the metrics tracked. A leading indicator illustrates progress against a process or behavior (such as the number of hours spent with customers, the number of process reworks). A lagging indicator indicates the outcome of an objective and indicates performance at the end of a period. Financial measures (such as year-end sales and market share) and customer satisfaction are lagging indicators. A more robust pool of leading indicators enables organization to respond more rapidly to potential issues or emerging trends. Fourteen percent of partners report that between 51 and 75 percent of their tracked metrics are leading indicators. Organizations

Figure 4

Figure 5

Metric Mean Median N Production flexibility 4.5 5 20Service call rates 4.8 5 19Throughput efficiency 4.9 5 20Production plan attainment 5.1 5 21Perfect order fulfillment percentage 5.1 6 20Finished product inventory turns 5.2 6 20Scrap/rework percentage 5.3 5 21Supplier defects 5.4 6 19First-pass quality yield 5.5 6 20

Extent of customer involvement in business processes(1=Not at all; 7=To a great extent)

3.1

3.8

4.4

4.7

5.2

5.5

3.9

1 2 3 4 5 6 7

Strategic planning

Quality control/quality assurance

Performance measurement

Marketing

Customer service

Product design/development

Field testing of products



may want to consider investigating this area more thoroughly by seeking out other organization using more diverse sets of metrics.

Organizations employ a variety of methods to determine which metrics are important to the organization, its strategic objectives, and customers. The most commonly used tools include customer satisfaction surveys (91 percent), external benchmarking (52 percent) and internal benchmarking (38 percent). Other tools employed by study participants include personal interviews, market research studies, critical to quality (CTQ) diagrams, and customer value analysis.

While the right answer never lies in one response or opportunity, a significant link was demonstrated between organizations that use external benchmarking to determine quality metrics and other critical success factors identified in this study. Figure 6 illustrates the average rating given to specific statements by partners segmented by those that conduct external benchmarking and those that do not. In short, those that benchmark see increased accountability, feel more confidant that they are measuring the right things, and are able to better analyze and communicate that data across the organization.

A corollary to the discussion above is that for the majority of partners in this study, employees are involved in development and analysis of metrics. Specifically, 67 percent of partners train employees in the development and use of metrics to strengthen decision-making. Eighty-six percent of partners ask employees to analyze metrics and identify areas for performance improvement using the resulting data.

The final piece to the measurement section relates to the frequency with which various functional groups review product quality data. As demonstrated in Figure 7, the most common cycle for sharing quality metrics is monthly. Sixty-seven percent of organizations report that senior management reviews quality figures on a monthly basis. Quality managers and plant managers often review information more frequently than other functional groups. Sales staff, customers, and the broader employee bases are often given quality-related information less frequently (quarterly or annually) as compared with other functional units. Given the information presented in the first section (Communication and Leadership) one may make the assumption that metric-based information is shared primarily through newsletters, discussion forums, face-to-face meetings, and web updates.

Figure 6

Figure 7 Functional Group Daily Weekly Monthly Qtrly Annly Senior management 3 Quality managers 3 3 Plant managers 3 3 Customer service managers 3 Sales staff 3 3 Marketing managers 3 3 Customers 3 3 Employees 3 3 3 indicates greater than 20 percent of partners

External Benchmarking for Qualty Metrics

6.1

5.0

5.6 5.7

3.22.82.8

3.8

0

1

2

3

4

5

6

7

Organization leaders are heldaccountable for performance in

product quality

Our data allow us to measure thecorrelation between our internal

quality process metrics andexternal measures of quality

Quality measurements are a high-priority item in regular staff

meetings

We confirm we are measuring theright metrics of customer

satisfaction with product quality

Ave

rrag

e R

atin

g

Benchmarking (N=9)

No Benchmarking (N=10)



Training and Incentives Training and incentives often provide the means for organizations to achieve success in a particular initiative or function. Consequently, they become an important area to review. As an example, many partners report that employees assist in developing normalized metricsdata on training may help a reader to understand how employees are able to do this, and incentives help to understand the motivating factors associated with their participation.

Partner organizations administer a variety of training programs that are likely linked with their strategic objectives and corporate cultures. ISO 9000, Six Sigma, Lean Manufacturing, and Total Quality Management (TQM) are all administered by more than fifty percent of partners. Similarly, there is not one predominant organizational structure demonstrated by partners for their quality training functions (see Figure 8). Just under one-third of the partner set has a quality training function that is centralized with all other training programs, and a second third of the sample has centralized oversight of training programs but decentralized implementation. The other response indicates a mix of centralization and decentralization depending on the training type or content. Only 12 percent of partners report that quality training is centralized apart from the other training activities. This indicates that most organizations see a link between existing resources in an organization development or training function, and attempt to capitalize on them rather than create a separate, independent entity. This perspective also allows quality to appear as a key, integrated part of the corporate structure.

The amount of training individuals receive related to quality is also a key consideration. In each organization, employees appear to be actively involved in quality initiatives along with other members of the management team. Figure 8 illustrates the number of hours per year that specific organizational groups spend on quality training per year. Each level of the organization appears to participate in at least some training (less than eight hours per year was the lowest category choice). Other salaried employees appear to get the most training (in number of hours) with 68 percent of partners providing more than eight hours per employee. The majority of partners provide quality training for 16 hours or less per employee per year, suggesting that it is not the quantity of training that is critical to the success of quality initiatives but rather the merit or quality of the programs.

Figure 8

Figure 8

Organization and Implementation of Quality Training Function

Centralized along with other training activities

32%

Decentralized19%

Centralized independent from other training

activities12%

Centralized oversight with decentralized

implementation31%

Other6%

Average Hours of Quality Training per Year

48%

38%

29%

48%

19%

24%

38%

19%

29%

34%

30%

29%

0% 20% 40% 60% 80% 100%

Senior management

Front line management

Other salaried employees

Hourly employees

< than 8 hours 8 to 15 hours > 16 hours



A notable finding is that only 38 percent of partners require quality training as a condition (either informal or formal) for advancement. For those organizations that do so, it is most commonly a requirement for salaried employees (88 percent), senior management (75 percent), and front line management (75 percent). Further examination reveals that organizations requiring quality training for advancement tend to be among the most decorated and prominent quality award winners in this study.

Performance incentives may be categorized as intrinsic or extrinsic. Intrinsic motivations are originated internally and are inherent in people. These are demonstrated when the task itself is experienced as appealing or rewarding. Extrinsic motivation on the other hand originates from the outside and is demonstrated when a task is seen as a means to a rewarding end. It would appear that for the majority of partners in this study, employees meet critical quality targets because they are intrinsically motivated rather than stimulated by a dangling carrot of extrinsic rewards. Less than half of the partners offer financial incentives such as cash, bonuses, or stock options, and only 19 percent report that employees are motivated to meet critical quality targets by other variable compensation. Sixty-seven percent of partners do rely on informal, manager-driven recognition to encourage employees, which often relies on their intrinsic motivations.



APPENDIX 1: PARTNER PROFILES This section is designed to provide a brief introduction to respondents from this study. Partners were selected based on criteria jointly developed by the study sponsor and APQC, specifically focusing on those companies with established reputations in recognition and awards.

The information provided is largely paraphrased from that found on the Hoovers online business database or corporate websites and is intended to provide a context for data as well as comparative background information on the overall company composition. Please refer to the individual companies websites for additional information.

Company Name Profile

Applied Materials is the world's largest maker of the complex equipment used in semiconductor production. Its products have a big share in most industry segments, including deposition (layering film on wafers), etching (removing portions of chip material to allow precise construction of circuits), and ion implantation (altering electrical characteristics of specific areas of silicon wafers). Applied also makes metrology and inspection equipment.

Applied Materials

Sales: $7,343 million Employees: 17,365

For over 60 years, APW Wyott has provided equipment solutions to the foodservice and retail industry. As a leader in the industry, APW Wyott boasts a complete line-up of solutions for equipment used on the counter top, inside the counter, or above the counter (Overhead Food Warmers!). In 2002 and beyond, APW Wyott continues to make advances in equipment powered by gas or electric energy. Our ongoing focus is to be the Premier Foodservice Equipment Manufacturer World Wide! Specifically, we have developed for our customers the highest quality solutions in 4 equipment areas: counter top equipment, equipment used in fabrication plans for restaurants or concession areas, equipment designed to cook and merchandise on the go foods, heavy duty ovens, cooking equipment, and deck ovens.

APW Wyott Corporation

Sales: NA Employees: NA

Based in Tulsa, Oklahoma, Bama produces a wide range of bakery and frozen dough products, including pies, cookies, pizza crust and biscuits for some of the world's largest restaurant chains and food suppliers. Bama is one of the largest manufacturers of pies and biscuits in the U.S., producing over 2 million biscuits and 1.5 million pies daily. Our products range from our famous Baked Apple pie to a delectable assortment of biscuits, frozen flavored dough, breads and other custom foodservice items.

Bama Companies

Sales: NA Employees: NA

Brooks-PRI (formerly Brooks Automation) is a top maker of equipment used to manufacture semiconductors, data storage devices, and flat-panel displays. Its products include wafer handling systems, vacuum transfer robots, ultraclean mini-environments, and factory automation software. Customers include Novellus (10% of sales), Lam Research, and Samsung Electronics. While the company has cut staff in response to a severe slump in the global chip industry, it has continued to expand its product line and international reach through acquisitions, crowned by the purchase of former rival PRI Automation that gave the company its current name.

Brooks-PRI

Sales: $381.7 million Employees: 1,900




Headquartered in San Antonio, Texas, Clarke American is a Customer Management Solutions company that provides checks and check-related services, contact center services and direct response marketing services to a growing portfolio of more than 4,000 financial institution partners. In addition to filling more than 50 million personalized check and deposit orders every year, Clarke American provides 24-hour service and handles more than 11 million calls annually. The companys 99.98 percent printing accuracy rate is unmatched in the industry, and delivery is quick most account holders receive their order within just a few days. Clarke American is a recipient of the 2001 Malcolm Baldrige National Quality Award in the manufacturing category and was honored by the Quality Texas Foundation as the sole recipient of the 2001 Texas Award for Performance Excellence.

Clarke American Checks, Inc.

Sales: NA Employees: 3,300

Although Dana Corporation doesn't make cars and trucks, it does manufacture the parts carmakers use to piece together new vehicles. Its core products include axles, brakes, and driveshafts, as well as engine, filtration, fluid-system, sealing, and structural products. The company also makes replacement parts for the automotive aftermarket. Customers include OEMs such as Ford and DaimlerChrysler and aftermarket retailers such as CARQUEST and AutoZone. Dana operates manufacturing, assembly, and distribution facilities in more than 30 countries, although the Americas account for 80% of its sales. Subsidiary Dana Credit Corporation (which Dana plans to sell) provides leasing and financing services.

Dana Corporation


Deere & Company is one of the world's two largest makers of farm equipment. Deere also is a leading producer of industrial, forestry, and lawn-care equipment. Its farm equipment includes tractors, tillers, harvesting machinery, and soil-preparation machinery. Deere's construction equipment includes backhoes and excavators. Deere also makes drivetrain components, diesel engines, chain saws, leaf and snowblowers. Farm equipment accounts for more than 45% of sales; Canada and the US account for more than 75% of sales.

Deere and Company


Touting a sales model that sidesteps middleman markups for lower prices, Dell, the world's #1 direct-sale computer vendor competes with Hewlett-Packard for the worldwide PC title. Led by founder Michael Dell -- who owns 12% of his creation and is the longest-tenured CEO of any major US computer company -- the company generates about three-quarters of its sales from desktop and notebook PCs. Its enterprise products include network servers, workstations, and storage systems. It also markets third-party software and peripherals. Despite its success in grabbing market share, Dell has felt the effects of a marketwide slump and responded with job cuts.

Dell Americas Manufacturing Quality





The inventor of the world-famous Brownie camera (1900), Kodak remains the world's #1 maker of photographic film (ahead of Fuji Photo Film), yet it has continued to devote resources to digital image media and other products for both amateur and professional photographers. Kodak makes film, paper, and processing equipment for professionals in the health care and entertainment industries, too. The company is courting new markets for its digital devices in the US as well as abroad, (non-US sales slightly exceed domestic trade). Trying to keep Fuji at arm's length, Kodak has cut jobs, pared costs, and sold operations such as its copier unit.

Eastman Kodak Company


Ford Motor began a manufacturing revolution with its mass production assembly lines in the early 1900s. Now the company is firmly entrenched in the status quo as the world's largest pickup truck maker and the #2 producer of cars and trucks, behind General Motors. It makes vehicles with such brands as Aston Martin, Ford, Jaguar, Lincoln, Mercury, and Volvo. Among its biggest successes are the Ford Taurus and F-Series pickup. Ford owns a controlling (33%) stake in Mazda and has purchased BMW's Land Rover SUV operations. The finance subsidiary, Ford Motor Credit, is the US's #1 auto finance company. It also owns Hertz, the world's #1 car-rental firm. The Ford family owns about 40% of the company's voting stock.

Established in 1947, Ford Power Products is a wholly owned subsidiary of the Ford Motor Company. Ford Power Products USA remains as such, while Ford Power Products Europe is a division of the Ford Motor Company. Recognized as a leading supplier of engines, transmissions and related components to industrial, marine and on-road original equipment manufacturers. FPP offers full engineering assistance, including installation advice, up until and beyond the final in-field launch. A high level of customer service is provided with the support of a global network of Distributors and Dealers. Ford Power Products is ISO 9001 certified (KPMG and VCA) and holds the Ford Q1 quality award.

Ford Power Product


Honeywell Aerospace, a business sector of Honeywell International, has primary offerings including aircraft engines and systems, aerospace electronics, and landing gear components. Honeywell Aerospace's engines and systems family encompasses turbofan and turboprop engines as well as hydraulic systems (flap controls, oil coolers) and pneumatic products (heat exchangers, thrust reversers, cabin pressure controls). Electronics products run the gamut from aircraft lighting systems and cockpit displays to flight recorders and ground proximity systems.

Honeywell Aerospace

Sales: $9,653 million Employees: NA

Instron makes instruments, systems, and software for testing the mechanical properties and performance of ceramics, composites, metals, plastics, rubber, and textiles. Instron's static systems measure the amount of continuous force needed to deform a material. Its dynamic systems simulate in-use conditions over time by stretching, compressing, and twisting materials and components such as automotive steering systems. Other products include durometers and structural and hardness testing systems. Instron's products are used in both industrial and research applications. Founded in 1946 by Harold Hindman and George Burr, the company is owned by Kirtland Capital Partners.

Instron Corp

Sales: $198 million Employees: 1,237




Lord Corporation is a leading maker of adhesives and coatings as well as vibration, noise, and motion control products. Its adhesive products are used by the automotive industry for rubber-to-metal bonding for engine mounts, bushings, and hoses, and for body panel assembly and weather stripping. Lord's adhesives also are used in circuit assembly. Motion and vibration products are used in aerospace (avionics mounts), automotive (engine mounts), and industrial applications. Noise control products are used to quiet the ride in commercial and business aircraft. Descendants of founder Hugh Lord control the company.

Lord mechanical products improve performance, reliability and comfort in a wide range of on- and off-road vehicles, rotary and fixed wing aircraft, recreational and marine products, rapid transit systems, and industrial and specialty applications. Around the world, on almost any equipment that involves motion, you'll find a Lord component. For unique vibration, shock, motion or noise control challenges, Lord has the expertise and experience to engineer the precise solution you need.

Lord Corporation


Maytag is the #3 US manufacturer of home appliances, after Whirlpool and GE. It sells washers, dryers, dishwashers, refrigerators, and cooking appliances under high-end brand names Maytag and Jenn-Air and lower-priced brands Magic Chef and Admiral. Maytag also makes Hoover vacuums and Dixie-Narco beverage vending machines. The company sells its products through national retailers, independent dealers, and distributors.

Maytag


Raytheon is the #4 US defense contractor, after Boeing, Lockheed Martin, and Northrop Grumman. The company's electronics division (45% of sales) makes missile systems (Patriot, Hawk, Tomahawk), radars, and reconnaissance, targeting, and navigation systems. Raytheon's command, control, and communication systems division makes radios, air traffic control systems and radars, and satellite communications systems. The company is trying to sell its Raytheon Aircraft unit, which makes turboprop aircraft and Beech and Hawker jets. Raytheon also offers commercial electronics products and services, but the US government (including foreign military sales) accounts for about 70% of sales.

Raytheon Air/Missile Defense Systems


SANYO Electric makes a variety of electric-based products. From electric bicycles to semiconductors and supermarket display freezers, SANYO manufactures products both innovative and prosaic. Besides all the audio/video equipment and home appliances, SANYO makes PCs, wireless phones, copiers, and other office equipment. The company, which has nearly 160 subsidiaries in more than 25 countries, also develops environment-friendly products such as solar cells, rechargeable batteries, and CFC-free refrigerators and air-conditioning units. Japan accounts for about 65% of sales.

Sanyo Electric





Siemens Medical Solutions is the medical products arm of German electronics giant Siemens AG. Led by US-based subsidiary Siemens Medical Systems, the group makes and markets a wide range of medical equipment, including magnetic resonance imaging (MRI) systems, radiation therapy equipment, and patient monitoring systems. Its Ultrasound unit, which includes subsidiary Acuson, produces imaging equipment for such fields as cardiology, gynecology, radiology, and urology. The company also offers information technology to doctors, hospitals, and clinics through Siemens Health Services. Siemens Hearing Instruments is a leading maker of hearing aids.

Siemens Medical Solutions


Swales Aerospace formerly purely an aerospace engineering services firm, Swales also designs and builds instruments, small spacecraft, and other aerospace products. The company is organized into three segments: Space Systems designs and makes spacecraft buses and major components of scientific instruments such as the EO-1 spacecraft; Aerospace Products makes aerospace products and subsystems, including heat pipes, capillary pump loops, loop heat pipes, deployable radiators, thermal louvers and blankets, and astronaut tools; and Engineering Services and Instruments supports Swales' service contracts with government agencies (NASA, Jet Propulsion Laboratory) and aerospace contractors. The company is employee-owned.

Swales Aerospace, Safety and Mission Assurance

Sales: $144 million Employees: 950

Timex, the US's largest watch producer, has expanded its lines from simple, low-cost watches to include high-tech tickers capable of paging or downloading computer data. Its sports watches have gone upscale and gadgety with lines such as Reef Gear and Ironman. (The brightness of its Indiglo watch helped a man lead a group of people down 34 flights of dark stairs after the first World Trade Center bombing in 1993.) Timex also makes watches for Nautica and Guess? under license. Founded in 1854 as Waterbury Clock, Timex is owned by Fred Olsen, whose father bought the company in 1942.

Timex Corporation


Unisys', which generates nearly three-fourths of sales from systems integration, consulting, outsourcing, and technology support services, is known for its long history of server and mainframe computing hardware. Unisys integrates its ClearPath family of Windows-based servers and software for financial, communications, publishing, and other niche market customers. The company has strategic partnerships with high-tech firms including Computer Associates, Microsoft, Oracle, and Dell. Unisys, which makes 57% of its sales to customers outside the US, is de-emphasizing its lower-margin hardware in favor of enterprise servers.

Unisys


Xerox is best known for its copiers, but it also makes printers, scanners, fax machines, software, and supplies, and provides consulting and outsourcing services. The company designs its products for home users, businesses, and high-volume publishers such as newspapers. Customers include Kinko's and Southern Company. Although it plans to expand its color printing offerings, the company still generates two-thirds of its revenue from black-and-white products. Customers outside the US account for nearly 45% of sales. Xerox, which has seen its sales and market share slip, has cut jobs and sold assets, including half of its stake in Fuji Xerox.

Xerox




APPENDIX 2: DETAILED QUESTIONNAIRE

Creating and Sustaining a Culture of Quality Benchmarking Detailed Questionnaire Purpose The primary objective of this survey is to gather detailed information on practices and processes in the area of creating and sustaining a culture of quality. This survey represents the second of three data collection efforts for the benchmarking study. It was preceded by a Screening Survey and will be followed by site visits by the benchmarking team to a select number of organizations.

Select organizations were invited to participate in the Detailed Data Collection phase after completing the Screening survey. Information collected in this phase will be used to uncover trends or key findings among successful partners. As with the screening survey, a blinded summary report of the detailed questionnaire findings will be sent to all participants.

Organizations demonstrating best practices may be asked to participate in site visits. In exchange, host organizations will be invited to network with the high-level sponsor team and be given the opportunity to pose questions and request information as well. All site visit partners will receive a detailed report of the consolidated findings. Organizations may decline to participate in any phase of this study and will receive information applicable only to their level of participation.

Instructions

This survey is designed to be easy to use. You may fill it out electronically or print it and complete it by hand. To fill it out electronically, you may navigate through the fields using the tab key or by clicking with your mouse. To select a check box, you may click in the box or use the x key to indicate your selection. To deselect a box, simply click it again or use the x key.

Please review each question carefully. If you do not know requested data with certainty, please provide your best estimates or perception. Any definition or clarification that is required in order to answer a question should be directed to Steve Wright at (713) 685-4651 or emailed to [email protected].

Thank you for taking the time from your schedule to work on this important initiative. In exchange for your completed survey, you will receive a complimentary copy of a summary report based on compiled survey results. Please return your completed survey to Steve Wright by July 31, 2002. Please fax it to 713-681-1179 or email to [email protected].

I. Background 1. For what organization or business unit are you reporting data in this survey? (For example, AT&T

(corporate), AT&T Wireless, or AT&T Broadband may represent distinct reporting units.)



2. What is the primary industry in which your organization operates?

Appliances Automotive Chemicals/allied products Computer equipment/technology Consumer packaged goods Defense Food and beverage

Industrial/electrical Medical/optical Petroleum refining/related industries Pharmaceutical Transportation equipment All other manufacturing: (Specify: ) Non-manufacturing: (Specify: )

3. How many total FTE (full-time equivalents) are employed in the organization in Question 1?

Approximately how many total FTE work in support of your efforts to create and sustain a quality culture?

Note: FTE refers to the total number of employees who would work as full-time equivalents (40 hours per week). For example, two part-time employees working half time each would equal one FTE. Likewise, a full-time employee who works 20 hours per week in support of this function and 20 hours per week in the service of another department/process would count as 0.5 FTE.

FTEs Organization-

wide FTEs in Support of Quality

Culture 4. What is the approximate total annual budget (for the current fiscal year) dedicated to creating and

sustaining a culture of quality across your organization?

US Dollars 5. Using the scale below, how important are the following supplier characteristics or capabilities to your

supplier or vendor selection process? (Please check all that apply.)

Criteria Not at all important Critically important

Ability to manage safety stock 1 2 3 4 5 6 7 Capacity 1 2 3 4 5 6 7 Cost 1 2 3 4 5 6 7 Early supplier involvement in design 1 2 3 4 5 6 7 Flexibility 1 2 3 4 5 6 7 Key performance indicators (KPIs) 1 2 3 4 5 6 7 On-time delivery 1 2 3 4 5 6 7 Prior relationship/past performance 1 2 3 4 5 6 7 Process capability 1 2 3 4 5 6 7 Quality / DPPM 1 2 3 4 5 6 7 Willingness to balance risk 1 2 3 4 5 6 7 Other (Specify: ) 1 2 3 4 5 6 7

6. Which of the following certifications does your organization currently hold? (Please check all that apply.)

ISO 9000 ISO 14000

QS 9000 Other (Specify: )



7. Overall, which of the following best captures the area of greatest focus for your quality initiatives? (Please check one only.)

Manufacturing execution Product design Supplier quality

Other (Specify: ) No particular area of focus

8. Which of the following best describes the structure of your quality function throughout your organization? (Please check one only.)

Centralized Decentralized/dispersed throughout the organization Other (Specify: )

9. Using the scales below, how important are the following tools to improving your:

A. Quality in manufacturing execution?

Tools Not at all important Critically

importantFormalized Problem Resolution Processes 1 2 3 4 5 6 7 Formalized Root Cause Analysis Processes 1 2 3 4 5 6 7 Kaizen 1 2 3 4 5 6 7 Lean Manufacturing 1 2 3 4 5 6 7 Managing Daily Improvement 1 2 3 4 5 6 7 Process Failure Mode & Effects Analysis 1 2 3 4 5 6 7 Product inspection 1 2 3 4 5 6 7 Product testing 1 2 3 4 5 6 7 Production leveling/smoothing 1 2 3 4 5 6 7 Six Sigma 1 2 3 4 5 6 7 Total Productive Maintenance 1 2 3 4 5 6 7 Other (Specify: ) 1 2 3 4 5 6 7

B. Quality in product design?


importantCritical to Quality Flowdown 1 2 3 4 5 6 7 Design for Six Sigma 1 2 3 4 5 6 7 Design of Experiments 1 2 3 4 5 6 7 Early Manufacturing Involvement 1 2 3 4 5 6 7 Early Supplier Involvement 1 2 3 4 5 6 7 Quality Function Deployment 1 2 3 4 5 6 7 Tribal Knowledge 1 2 3 4 5 6 7 Voice of the Customer 1 2 3 4 5 6 7 Other (Specify: ) 1 2 3 4 5 6 7

C. Supplier quality?


importantCritical to Quality Flowdown 1 2 3 4 5 6 7 Defective materials review and disposition 1 2 3 4 5 6 7 Early Supplier Involvement 1 2 3 4 5 6 7




importantFormalized measurement and acceptance criteria 1 2 3 4 5 6 7

Internal testing capability 1 2 3 4 5 6 7 Process control/capability 1 2 3 4 5 6 7 Other (Specify: ) 1 2 3 4 5 6 7

II. Communication and Leadership 10. Do you maintain a central clearinghouse for disseminating information on quality (e.g., performance,

quality tools) that is:

A. Internal to the organization (e.g., internal metrics, processes)?

Yes No

B. External to the organization (e.g., information from customers, suppliers, distributors)?

Yes No

11. About how often do senior leaders at your organization use the following tools to communicate quality-related messages to employees?

Communication media Daily Weekly Monthly QuarterlyAnnuall

y Other Not used

Discussion forums Email Face-to-face meetings Newsletters Teleconference/videoconference

Videoconference Web site Written reports/summaries

12. Thinking about the tools employed by your organization to communicate quality-related messages to your employees, please rate the effectiveness of each in sustaining a culture of quality within your organization. (Use the scale provided. If a particular medium is not used, leave blank.)

Communication media Not at all effective Very effectiveDiscussion forums 1 2 3 4 5 6 7 Email 1 2 3 4 5 6 7 Face-to-face meetings 1 2 3 4 5 6 7 Newsletters 1 2 3 4 5 6 7 Teleconference/videoconference 1 2 3 4 5 6 7 Videoconference 1 2 3 4 5 6 7 Web site 1 2 3 4 5 6 7 Written reports/summaries 1 2 3 4 5 6 7



13. Using the scale below, to what extent do you agree with the following statements regarding your organizations communications and leadership around quality culture?

Statement Strongly Disagree Strongly Agree

Organization leaders communicate to others that quality is a way of life, not simply another initiative or program.

1 2 3 4 5 6 7

Our senior leaders set the direction for delivery of customer-focused quality. 1 2 3 4 5 6 7

Organization leaders are directly involved in efforts to create and sustain a culture of quality.

1 2 3 4 5 6 7

Organization leaders are held accountable for performance in product quality. 1 2 3 4 5 6 7

We maintain a sense of urgency about sustaining quality even in good financial times. 1 2 3 4 5 6 7

Our quality certification (e.g., ISO, QS) has contributed to our quality improvement efforts.

1 2 3 4 5 6 7

Quality is embedded in the front-end of our R&D/Product development processes (e.g., initial screening, preliminary market and technical assessments).

1 2 3 4 5 6 7

Quality-related communications tend to emphasize consistent themes regardless of medium.

1 2 3 4 5 6 7

Quality-related communications tend to emphasize consistent themes regardless of site/location.

1 2 3 4 5 6 7

A focus on quality is institutionalized as part of our organizational culture, and is not simply a product of specific individuals or personalities.

1 2 3 4 5 6 7

Information on our product quality performance is shared with all employees. 1 2 3 4 5 6 7

Information on our product quality performance is shared with alliance partners (e.g., suppliers, distributors).

1 2 3 4 5 6 7

14. What tools or media does your organization use to communicate quality-related messages to customers?

(Please check all that apply.)

Advertising (print or televised) Public Relations activities Direct Marketing Discussion forums Email

Focus groups Teleconference/videoconference Website Written reports/summaries Other: (Specify: )



III. Customer-Focused Quality 15. Which of the following methods do you use to gather customer information on your product quality and

your quality process? (Please check all that apply.)

Being your own customer Customer advisory panels Customer representatives Customer service feedback Customer site visits Customer specifications Focus groups

Observation of customers One-on-one interviews Product returns (reasons) Secondary sources Surveys Warranty/repair data Other: (Specify: )

16. In determining customers product needs and expectations, do you use a voice of the customer approach (involving detailed, in-depth, situational interviews that lead customers through a discussion of product needs or problems)?

Yes No

17. Using the scale below, to what extent are your customers involved with your business in the following processes?

Process Not at all To a great extent

Product design/development 1 2 3 4 5 6 7 Field testing of products 1 2 3 4 5 6 7 Marketing 1 2 3 4 5 6 7 Quality control/quality assurance 1 2 3 4 5 6 7 Strategic planning 1 2 3 4 5 6 7 Customer service 1 2 3 4 5 6 7 Performance measurement 1 2 3 4 5 6 7 Other (Specify ) 1 2 3 4 5 6 7

A. What incentives does your organization employ to encourage customer participation in the processes

listed above? (Please check all that apply.)

Small cash gifts (less than $50) Large cash gifts (more than $50) Gift certificates (company products) Gift certificates (non-company products)

Promotional merchandise Company products or services Other (Specify )

B. At what level of your organization does customer interaction (with the objective of obtaining

feedback on quality issues) occur?

Executives Senior management Plant management

Front-line management Salaried employees Hourly employees



18. Using the scale below, to what extent do you agree that your organization undertakes detailed analyses of the following questions?

Question Strongly Disagree Strongly Agree

Who our customers are 1 2 3 4 5 6 7 What our customers needs are 1 2 3 4 5 6 7 What features customers require of our products 1 2 3 4 5 6 7

What our customers expect from our products in terms of quality 1 2 3 4 5 6 7

How customers value our products vs. competitors 1 2 3 4 5 6 7

How we can keep our customers satisfied 1 2 3 4 5 6 7 19. To what extent do you agree with the following statements about the customer-focus of your quality

processes?

Statement Strongly Disagree Strongly Agree Our personnel are passionate customer advocates. 1 2 3 4 5 6 7

We ensure that our products meet customer needs in product quality. 1 2 3 4 5 6 7

At our organization, the belief is that the customer is the only person qualified to specify what quality means.

1 2 3 4 5 6 7

Information on our product quality performance is shared with customers. 1 2 3 4 5 6 7

We communicate back with customers regarding our efforts to address their needs and complaints.

1 2 3 4 5 6 7

Our organization seeks to understand product performance through our customers eyes. 1 2 3 4 5 6 7

IV. Measurement 20. What tools, if any, do you use to determine the most critical measures of customer-perceived product

quality? (Please check all that apply.)

Internal benchmarking External benchmarking Customer satisfaction surveys Customer value analysis

CTQ (Critical to Quality) diagrams Other: (Specify: ) None

21. Using the scale below, how important or critical are the following quality-related metrics to management

and decision making within your quality process?

Quality metric Not at all important Critically

importantCost of quality 1 2 3 4 5 6 7 Downtime percentage 1 2 3 4 5 6 7 Fill rates 1 2 3 4 5 6 7 Finished product inventory turns 1 2 3 4 5 6 7 First-pass quality yield 1 2 3 4 5 6 7 Perfect order fulfillment percentage 1 2 3 4 5 6 7 Production flexibility 1 2 3 4 5 6 7



Quality metric Not at all important Critically

importantProduction plan attainment 1 2 3 4 5 6 7 Returns and allowances percentage 1 2 3 4 5 6 7 Scrap/rework percentage 1 2 3 4 5 6 7 Service call rates 1 2 3 4 5 6 7 Supplier defects 1 2 3 4 5 6 7 Throughput efficiency 1 2 3 4 5 6 7 Other: (Specify: ) 1 2 3 4 5 6 7

22. Of the quality-related metrics tracked by your organization, approximately what percentage are considered leading indicators of performance as opposed to lagging indicators? A leading indicator illustrates progress against a process or behavior (such as the number of hours spent with customers, the number of process reworks). A lagging indicator indicates the outcome of an objective and indicates performance at the end of a period. Year-end sales, market share, and customer satisfaction are lagging indicators.

Less than 25 percent 26 percent to 50 percent

51 percent to 75 percent More than 75 percent

23. Approximately how often do the following groups review your product quality data?

Group Daily Weekly Monthly Quarterly Annually Other NeverSenior management Quality managers Plant managers Customer service managers

Sales staff Marketing managers Customers Employees

24. To what extent do you agree with the following statements about your measurement of customer-perceived quality?

Statement Strongly Disagree Strongly Agree

We confirm we are measuring the right metrics of customer satisfaction with product quality.

1 2 3 4 5 6 7

Results on product quality are communicated throughout our organization. 1 2 3 4 5 6 7

Quality performance data is disseminated to those in the organization who can act upon it. 1 2 3 4 5 6 7

We use broad measures of quality that can be employed throughout the organization (i.e., are not site-specific or process-specific).

1 2 3 4 5 6 7

Quality measurements are a high-priority item in regular staff meetings. 1 2 3 4 5 6 7

Our data allow us to measure the correlation between our internal quality process metrics and external measures of quality.

1 2 3 4 5 6 7



25. Are your employees trained to:

A. Develop normalized, effective quality metrics? Yes No

B. Analyze quality metric data for trends and potential issues? Yes No

C. Use quality metrics to strengthen decision-making throughout your organization? Yes No

D. Identify areas of opportunity for performance improvement using quality metrics? Yes No

V. Training and Incentives 26. What incentives, if any, do you use to encourage employees to meet critical quality targets? (Please check

all that apply.)

Financial incentives Non-financial awards Other variable compensation Informal manager-driven recognition

Honorary awards Other: (Specify: ) None

27. Is the achievement of quality goals by members of your organization typically celebrated publicly (e.g.,

through awards ceremonies, celebratory events)?

Yes No

28. Does your organization have an established, formal training office (site-specific or organization-wide) for training in quality processes?

Yes No

A. How is this training office (for quality-related areas) organized and implemented? (Please select only one.)

Centralized along with other training activities (planned and directed by a corporate function) Centralized independent from other training activities (planned and directed by a corporate

function) Centralized oversight (corporate with other training activities) but decentralized for

implementation Centralized oversight (corporate independent from other training) but decentralized for

implementation Decentralized (varies, but generally little or no corporate control) Other:

29. What is the approximate total annual budget (for the current fiscal year) for quality-related training at your organization?

US Dollars

30. What specific types of training are deployed within your organization? (Please check all that apply.)

None Baldrige ISO 9000 Kaizen Lean Manufacturing

Six Sigma Performance measurement Total Quality Management Other (Specify: )



31. What tools, if any, do you use to measure the effectiveness of your quality training? (Please check all that apply.)

Financial impact (ROI) Kirkpatricks Levels Pre- and post-training tests Input measures (number trained, frequency)

Output measures (number trained) Outcome measures (customer satisfaction) Other: (Specify: )

32. Is training in quality processes a necessary condition (either formal or informal) for advancement and promotion within your organization?

Yes No

A. For what types of positions? (Please check all that apply.)

Executives Senior management Plant management

Front-line management Salaried employees Hourly employees

33. At your organization, are the following types of employees required to be certified in their respective disciplines?

A. Design engineers Yes No

B. Quality engineers Yes No

C. Production/manufacturing engineers Yes No

34. Using the table below, approximately how many average hours of formal quality-related training are received

annually by each of the following groups (per FTE)?

Group Less than 8 hours 8 to 15 hours

16 to 23 hours

24 to 31 hours

32 to 40 hours

More than 40 hours

Senior management Front line management Other salaried employees Hourly employees

Thank you for your participation in this study. We look forward to providing you a blinded copy of the final report.



APPENDIX 3: DETAILED QUESTIONNAIRE RESULTS I. Background 1. For what organization or business unit are you reporting data in this survey? (For example, AT&T

(corporate), AT&T Wireless, or AT&T Broadband may represent distinct reporting units.)

Applied Materials Volume Manufacturing APW Corporate Brooks-PRI (Corporate) Clarke American Checks (Corporate) Dell Americas Operations Ford Industrial Honeywell - Engines & Systems Instron (Corporate) Kodak (Company) Lord Corporation, Mechanical Products

Division Maytag Corporation

Raytheon - Air/Missile Defense Systems SANYO Electric Co., Ltd. Home Appliances

Company Laundry & Cooking Appliance Division

Siemens Medical Solutions Corporate Quality Assurance

Swales Corp The Bama Companies Timex (Corporate) Unisys Supply Chain Operations Dana Corporation WIX Filtration Products

Division - Dillon, SC Worldwide Agricultural Equipment Division

of Deere & Company Xerox (Corporate)

2. What is the primary industry in which your organization operates?

Industry Percentage of Partners

Appliances 14% Computer equipment/technology 14% Medical/optical 10% Transportation equipment 10% Automotive 5% Defense 5% Food and beverage 5% Industrial/electrical 5% Aerospace 5% Defense and Aerospace 5% Engines for industrial use, non-transportation 5% InfoImaging 5% Security Printing 5% Semiconductor automation equipment 5% Wrist instruments 5%



3. How many total FTE (full-time equivalents) are employed in the organization in Question 1? Approximately how many total FTE work in support of your efforts to create and sustain a quality culture?

Response Mean Median Min. Max. Std.Dev. N

Total Organization FTE 11,019 2,000 94 76,000 23,197 19 Total Quality FTE 146 40 4 980 245 19 Organization FTE per Quality FTE 82.4 36.5 15.8 300.0 81.8 19

4. What is the approximate total annual budget (for the current fiscal year) dedicated to creating and sustaining a

culture of quality across your organization?


Total Annual Budget $6,874,000 $500,000 $30,000 $80,000,000 $20,417,150 15 Budget per FTE (Total) $862.20 $500.00 $11.11 $5,000.00 $1232.60 15

Budget per FTE (Quality) $49,845 $46,154 $250 $125,000 $44,924 15

5. Using the scale below, how important are the following supplier characteristics or capabilities to your supplier

or vendor selection process? (Please check all that apply.)


Key performance indicators (KPIs) 4.7 5 1 7 1.7 21 Ability to manage safety stock 4.9 5 1 7 1.5 21 Early supplier involvement in design 4.9 5 2 7 1.3 21 Willingness to balance risk 5.0 5 2 7 1.3 21 Process capability 5.2 6 1 7 1.7 21 Capacity 5.3 5 2 7 1.3 21 Prior relationship/past performance 5.4 5 4 7 1 21 Flexibility 5.5 6 2 7 1.4 21

Importance of supplier characteristics to selection process (1=Not at all important; 7=Critically important)

4.7

5.0

5.2

5.3

5.4

5.5

6.2

6.5

5.8

4.9

4.9

1 2 3 4 5 6 7

Key performance indicators (KPIs)

Ability to manage safety stock

Early supplier involvement indesign

Willingness to balance risk

Process capability

Capacity

Prior relationship/past performance

Flexibility

Quality / DPPM

Cost

On-time delivery




Quality / DPPM 5.8 6 4 7 1.2 21 Cost 6.2 7 3 7 1.1 21 On-time delivery 6.5 7 4 7 0.8 21

6. Which of the following certifications does your organization currently hold? (Please check all that apply.)

Certifications Percentage of Partners

ISO 9000 86% ISO 14000 24% QS 9000 10% Other 33% None/NA 5%

7. Overall, which of the following best captures the area of greatest focus for your quality initiatives? (Please check one only.)

Area of greatest focus for your quality initiative

Manufacturing execution33.3%

Customer satisfaction/value

28.6%

No particular area of focus (organization-wide)

19.0%

Product design14.3%

Supplier quality4.8%



8. Which of the following best describes the structure of your quality function throughout your organization? (Please check one only.)

9. Using the scales below, how important are the following tools to improving your:

A. Quality in manufacturing execution?


Production leveling/smoothing 3.7 4 1 7 1.6 21 Total Productive Maintenance 3.7 3 1 6 1.5 19 Kaizen 3.9 4 1 6 1.7 21 Six Sigma 4.4 5 1 7 2.1 20 Process Failure Mode & Effects A l i

4.4 4 1 7 1.8 21

Structure of quality function throughout organization

Decentralized/dispersed throughout organization

57.2%

Centralized33.3%

Other9.5%

Importance of tools to improving quality in manufacturing execution(1=Not at all important; 7=Critically important)

3.7

3.7

3.9

4.4

4.4

4.6

4.9

5.0

5.7

5.8

6.0

1 2 3 4 5 6 7

Production leveling/smoothing

Total Productive Maintenance

Kaizen

Process Failure Mode & EffectsAnalysis

Six Sigma

Lean Manufacturing

Managing Daily Improvement

Product inspection

Formalized Problem ResolutionProcesses

Formalized Root Cause AnalysisProcesses

Product testing



Analysis Lean Manufacturing 4.6 5 1 7 1.6 21 Managing Daily Improvement 4.9 5 1 7 1.4 21 Product inspection 5.0 5 3 7 1.2 21 Formalized Problem Resolution Processes 5.7 6 3 7 1.1 21

Formalized Root Cause Analysis Processes 5.8 6 3 7 1 21

Product testing 6 6 3 7 1 21

B. Quality in product design?


Design of Experiments 3.6 4 1 7 1.9 21 Design for Six Sigma 3.9 3 1 7 2.3 21 Quality Function Deployment 4.0 4 1 6 1.7 21 Critical to Quality Flowdown 4.1 4 1 7 2 21 Tribal Knowledge 4.8 5 1 7 1.4 20 Early Supplier Involvement 5.1 5 3 7 1.1 21 Early Manufacturing Involvement 5.6 6 3 7 1.2 21 Voice of the Customer 6.0 6 1 7 1.4 21

Importance of tools to improving product design quality(1=Not at all important; 7=Critically important)

3.6

3.9

4.0

4.1

4.8

5.1

5.6

6.0

1 2 3 4 5 6 7

Design of Experiments

Design for Six Sigma

Quality Function Deployment

Critical to Quality Flowdown

Tribal Knowledge

Early Supplier Involvement

Early Manufacturing Involvement

Voice of the Customer



C. Supplier quality?


Critical to Quality Flowdown 4.2 4 1 7 2.2 19

Early Supplier Involvement 5.5 6 4 7 1.1 21

Defective materials review and disposition 5.6 6 3 7 1.1 21

Internal testing capability 5.6 6 4 7 1.0 21

Process control/capability 5.9 6 4 7 0.9 21

Formalized measurement and acceptance criteria 6.1 6 2 7 1.2 21

II. Communication and Leadership 10. Do you maintain a central clearinghouse for disseminating information on quality (e.g., performance, quality

tools) that is:

A. Internal to the organization (e.g., internal metrics, processes)?

Response Percentage of Partners

Yes 95.2% No 4.8%

Importance of tools to improving supplier quality(1=Not at all important; 7=Critically important)

4.2

5.5

5.6

5.6

5.9

6.1

1 2 3 4 5 6 7

Critical to Quality Flowdown

Early Supplier Involvement

Defective materials review anddisposition

Internal testing capability

Process control/capability

Formalized measurement andacceptance criteria



B. External to the organization (e.g., information from customers, suppliers, distributors)?


Yes 52.4% No 42.9% NA 4.8%

11. About how often do senior leaders at your organization use the following tools to communicate quality-related messages to employees?

Communication media Daily Weekly Monthly Qtrly Annually Other NA Discussion forums 5% 14% 29% 43% 0% 5% 5% Email 24% 24% 19% 10% 0% 14% 10% Face-to-face meetings 14% 14% 38% 18% 5% 10% 0% Newsletters 0% 5% 38% 33% 5% 10% 0% Teleconference/ videoconference

5% 0% 5% 14% 10% 10% 57%

Web site 24% 10% 33% 14% 0% 10% 10% Written reports/summaries 5% 5% 38% 19% 0% 19% 14%

12. Thinking about the tools employed by your organization to communicate quality-related messages to your employees, please rate the effectiveness of each in sustaining a culture of quality within your organization. (Use the scale provided. If a particular medium is not used, leave blank.)

Effectiveness of communications tools in sustaining a quality culture(1=Not at all effective; 7=Very effective)

3.9

3.9

4.1

4.2

4.4

4.4

5.1

5.9

1 2 3 4 5 6 7

Newsletters

Web site

Email

Videoconference

Teleconference/videoconference

Written reports/summaries

Discussion forums

Face-to-face meetings




Newsletters 3.9 4 2 5 1.0 18

Web site 3.9 4 1 7 1.7 19

Email 4.1 4 2 7 1.3 20

Videoconference 4.2 4 4 5 0.4 10

Teleconference/videoconference 4.4 4 4 7 1.0 10

Written reports/summaries 4.4 4 1 7 1.5 18

Discussion forums 5.1 5 2 7 1.4 21

Face-to-face meetings 5.9 6 4 7 1.2 21

13. Using the scale below, to what extent do you agree with the following statements regarding your organizations communications and leadership around quality culture?


Information on our product quality performance is shared with alliance partners (e.g., suppliers, distributors)

4.0 4 1 6 1.7 21

Our quality certification (e.g., ISO, QS) has contributed to our quality improvement efforts

4.7 5 1 7 1.7 20

Quality-related communications tend to emphasize consistent themes regardless of site/location

4.8 5 2 7 1.7 21

Quality is embedded in the front-end of our R&D/Product development processes (e.g., initial screening, preliminary market and technical assessments)

4.9 5 2 7 1.4 21

Organization leaders are held accountable for performance in product quality 5.1 5 2 7 1.4 21

Quality-related communications tend to emphasize consistent themes regardless of medium

5.1 5 3 7 1.3 21

A focus on quality is institutionalized as part of our organizational culture, and is not simply a product of specific individuals or personalities

5.1 5 2 7 1.5 21

Information on our product quality performance is shared with all employees 5.1 5 2 7 1.5 21

We maintain a sense of urgency about sustaining quality even in good financial times

5.3 5 3 7 1.3 21




Our senior leaders set the direction for delivery of customer-focused quality 5.5 6 4 7 1.3 21

Organization leaders communicate to others that quality is a way of life, not simply another initiative or program

5.6 6 3 7 1.4 21

Organization leaders are directly involved in efforts to create and sustain a culture of quality

5.6 6 4 7 1.1 21

14. What tools or media does your organization use to communicate quality-related messages to customers?

(Please check all that apply.)

Tools/media used to communicate quality-related messages to customers

81%

67%

48%

43%

38%

33%

33%

33%

5%

5%

5%

5%

19%

0% 20% 40% 60% 80% 100%

Public Relations activities

Website

Advertising

Written reports/summaries

Email

Direct Marketing

Discussion forums

Focus groups

Teleconference/videoconference

Customer meetings

Face to face

Participation on quality teams

Sales force quality "outreach"



III. Customer-Focused Quality 15. Which of the following methods do you use to gather customer information on your product quality and your

quality process? (Please check all that apply.)

16. In determining customers product needs and expectations, do you use a voice of the customer approach (involving detailed, in-depth, situational interviews that lead customers through a discussion of product needs or problems)?


Yes 52% No 43% NA 5%

Methods used to gather customer information on product quality/quality process

91%

91%

86%

81%

71%

62%

48%

48%

43%

33%

5%

5%

76%

57%

57%

0% 20% 40% 60% 80% 100%

Customer site visits

Product returns (reasons)

Warranty/repair data

Customer service feedback (phone, forms, web)

Surveys

Customer specifications

One-on-one interviews

Customer representatives

Secondary sources (e.g., market research reports)

Focus groups

Observation of customers

Being your own customer

Customer advisory panels

Arrival quality reports

Benchmarking



17. Using the scale below, to what extent are your customers involved with your business in the following processes?


Strategic planning 3.1 3 1 6 1.4 20

Quality control/quality assurance 3.8 4 1 7 1.7 21

Performance measurement 3.9 4 1 7 1.8 21

Marketing 4.4 5 1 7 1.6 21

Customer service 4.7 5 1 7 1.7 21

Product design/development 5.2 6 2 7 1.4 21

Field testing of

Creating and Sustaining a Culture of Quality

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