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 Medieval Europe: craftsmen organized into unions called guilds in the late 13th century developed strict rules for product and service quality. Quality products carried inspection marks and often master craftsmen marks that served as proof of quality for customers.

 The industrial revolution gave birth to the factory system which, with its emphasis on productivity, started in Great Britain in the mid-1750s. American followed suit in the 1800s and later developed the Taylor System (scientific management). An inspection function was added to ensure quality before the products reached customers.

A Brief History of Quality (I)

 During World War II, quality became a critical and an important safety issue. The U.S. armed forces inspected virtually every unit produced to ensure that it met the standards. They soon realized that sampling inspection was a more feasible alternative to unit-by-unit inspection. The military standard, Mil-Std-105, was adopted for all contracts until late 1990s.

 After the war, America helped Japan rebuild and sent two quality experts: W. Edwards Deming and Joseph M. Juran. Japan took a new "total quality" approach, focusing on improving all organizational processes through the people who used them instead of inspecting products in the end of the manufacturing process. This was the beginning of the Total Quality Management or TQM.

A Brief History of Quality (II)

 A parachute rigger is a person who is trained or licensed to pack, maintain or repair parachutes.

 From the US Army job description MOS 92R: As a Parachute Rigger, you’ll ensure the safety of every paratrooper you work with. You’ll inspect, test, and pack parachutes, their extraction and release systems, and all the associated components of the parachute system. You’ll be responsible for the safety and repair of all parachute equipment before, during, and after an airdrop operation.

 Riggers are required to jump: "If I'm not willing to jump my own chute, why should any other soldier jump my chute?“

Parachute Rigger

The official motto of the U.S. Army parachute rigger is: "I will be sure always."

 Kaizen, aka continuous improvement: a long-term approach to work that systematically seeks to achieve small, incremental changes to improve efficiency and quality.

 People live by the mantra to “Get 1% better each day.”

 Pursuit of perfection examples: Japanese Metro Subway driver’s precision driving, Lexus cars, Seiko Spring Drive watch.

Meaning of Being Exact and the Pursuit of Excellence: Japan

The Metro runs like clockworks and is an example of how the Japanese train their employees for safety and high quality standards.

Japanese Subway System: Metro

Lexus (Toyota) challenged the luxury market…and succeeded!

Another Example of Japanese Quality Manufacturing

Seiko Spring Drive Seventy years of research & development and technological breakthroughs created this Seiko Spring Drive watch, breaking away from Swiss dominance in watch making.

 Just when you think that everything from Japan is good with their pursuit of perfection, think again!

 The Amagasaki rail crash in 2005, caused by driver rushing to make up the 90 seconds delay earlier.

 Remember the Takata airbag recall? Google it if you don’t.

However…

Recent Cheating Scandals  Kobe Steel:

nuclear plants, Airbus, Daimler

 Toray: carbon fiber to Boeing

 Mitsubishi Materials: supply to Japan military

 Nissan and Subaru

Why does Germany make so many quality products? Quality Products from Germany

 The quality and extent of their vocational training to prepare young people for skilled manufacturing jobs.

 99% of companies are family owned small and medium sized companies (mittlestand) for generations and focus on one tiny bit of business but do it on a world scale.

 Co-determination: the workers and management work together from bottom to board level.

 Germans strive for perfection and precision in all aspects of their lives and there is great emphasis on making sure that "the trains run on time."

 German people embrace the values of efficiency, thriftiness, hard work and industriousness.

The Secrets of German Quality

Germany’s Dual

Education System

 The German education system is much more geared to vocational training than many of its economic competitors

 The quality and extent of their vocational training to prepare young people for skilled manufacturing jobs

 The young men and women go through the (paid) apprenticeship system and learn that the goal is excellence

The Secrets of German Quality

 The Mittelstand commonly refers to small and medium- sized enterprises in German speaking countries, especially in Germany, Austria and Switzerland.

 Mittelstand firms are usually defined as enterprises with annual revenues of up to 50 million Euro and a maximum of 500 employees.

 Family ownership or family- like corporate culture with generational continuity

 Long-term focus  Investment into the

workforce  Lean hierarchies  Innovativeness  Customer focus  Social responsibility  Strong regional ties

The German Mittlestand

 They are companies that produce inconspicuous products and dominate in the markets they compete.

 Most of their products are used in the manufacturing process or subsumed by the end product therefore unknown to consumers.

Common characteristics according to Hermann Simon: • Combine strategic focus with geographic diversity. • Emphasize factors like customer value. • Blend technology and closeness to customers. • Rely on their own technical competence. • Create mutual interdependence between the company and

its employees.

Germany’s Hidden Champions

Germans Are Not Perfect!  Siemens: $1.3B bribes to gov’t

officials  VW: falsified

diesel emissions test, $25B recall in the U.S.

 Deutsche Bank: rigged interest- rate benchmarks

Discussion Questions Please research the following questions and provide evidence to support your answers. Everyone: Watch Steve Jobs’ interview on quality and relate our course materials to his discussions. Everyone: What does it mean to be exact in your everyday activities? Do you practice it? Why or why not? Everyone: Why did quality scandals happen in Japan/Germany? Everyone: What can we learn from the quality philosophy and practice of Japan and Germany? Is it something that can be duplicated in other countries/companies or is it deeply embedded in their cultures?

Group Discussion Be sure your group is ready to lead and/or discuss the following question in class, with research or facts-based evidence. We did not mention American quality. If you were to lecture on American quality, what would you characterize it? What makes American products good? Give at least two iconic examples that showcase genuine American quality. Be sure to provide references and evidence to back it up.