Did you know, the world’s largest printing products manufacturer has benefited from Total Quality Management just within a span of 5 years?
On July 29, 1975, the company entered into a consent decree with the regulatory commission to settle an anti-trust lawsuit against the company. Back then, the company had grown to control somewhat like 86% of the market on the basis of accumulating and licensing of patents. The marketing practices of the company had to be abandoned and their patents entered the public domain. The company had spent millions of dollars on product development through one of the research centers for introducing a few products and concentrated heavily on growth. As per the research, as the company grew bigger, engineering and designing departments became inefficient because of the increasing layers of procedures, management and controls.
By the year 1979, the failure of the company was about to take a strategic direction to account for the new market realities that allowed new competitors to consolidate their positions. In the beginning, the company was not much concerned with its competitors because they were making small, desk-size units and this company was making huge-output for central copying-locations. However, on the basis of research, the drop in return on their net assets in the year 1976 was from 25% to 5% in 1979 and within the ten years between 1974 and 1984, the market shares had fallen from 86% to 17% along with the revenues falling from $1.15-billion to $290-million. From this, it became clear that the business processes of the company had become outdated and the company had to fully reinvent itself.
The company under the leadership of its CEO remade itself from tip to toe with the help of – leadership through quality. Total Quality Management approach identified the performance gaps, namely that they had been comparing their output only with their own products and not with their competitor’s product outputs.
With the help of operational benchmarking, the defects per 100 products fell to a defect per thousand products. The number of their suppliers fell from 5000 to 300 because lately the company found out that their Japanese competitors usually had 1000 suppliers. There was a 13-times improvement in the proportion of their defective parts. There was around 40 % decrease in unscheduled maintenance, 27% drop in their service response time. By the year 1989, every employee of the company had received at least 28-hours of training for the problem-solving and quality improvement techniques. Also, the company invested more than 4 million man-hours and $125 million in training its employees about quality principles.
In the year 1989, the company received Baldrige Award for an outstanding return of their quality initiatives within the immediate period of 5-year from the foundation of quality, which was laid in the year 1979.
As you can see, the company has highly benefited through TQM (Total Quality Management) within the span of just 5 years. Any company that implements TQM, shall start seeing the benefits in their quality in a very short time. Quality plays a vital role in any organization and in any sector. Make sure you play that role well to come up with flying colors. As you can see, these concepts are being used successfully by large organizations since more than 5 decades. These concepts are timeless and relevant even today. So, have you started working towards quality management?
Compiled by Faber Priyal & Faber Mayuri