Table Summary Illustrations Of Quantified Improvements Achieved

AMP. On-time shipments improved from 65% to 95%, and AMP products have nationwide availability within three days or less on 50% of AMP sales.

Asea, Brown, Boveri. Every improvement goal customers asked for—better delivery, quality responsiveness, and so on—was met.

Chrysler. New vehicles are now being developed in 33 months versus as long as 60 months 10 years ago.

Eaton. Increased sales per employee from $65,000 in 1983 to about $100,000 in 1992.

Fidelity. Handles 200,000 information calls in 4 telephone centers; 1,200 representatives handle 75,000 calls, and the balance is automated.

Ford. Use of 7.25 man-hours of labor per vehicle versus 15 man-hours in 1980; Ford Taurus bumper uses 10 parts compared to 100 parts on similar GM cars.

General Motors. New vehicles are now being developed in 34 months versus 48 months in the 1980s.

IBM Rochester. Defect rates per million are 32 times lower than four years ago and on some products exceed six sigma (3.4 defects per million).

Pratt & Whitney. Defect rate per million was cut in half; a tooling process was shortened from two months to two days; part lead times were reduced by 43%.

VF Corp. Market response system enables 97% in-stock rate for retail stores compared to 70% industry average.

NCR. Checkout terminal was designed in 22 months versus 44 months and contained 85% fewer parts than its predecessor.

AT&T. Redesign of telephone switch computer completed in 18 months versus 36 months; manufacturing defects reduced by 87%.

Deere & Co. Reduced cycle time of some of its products by 60%, saving 30% of usual development costs.

Source: C. Carl Pegels, Total Quality Management (Danvers, MA: Boyd & Fraser, 1995), p. 27.

• Develop the organization into manageable and focused units in order to improve performance.

• Utilize concurrent or simultaneous engineering.

• Encourage, support, and develop employee training and education programs.

• Improve timeliness of all operation cycles (minimize all cycle times).

• Focus on quality, productivity, and profitability.

• Focus on quality, timeliness, and flexibility.

Information about quality improvements is difficult to obtain from corporations. Most firms consider this information confidential and do not like to publish for fear of providing an advantage to their competitors. As a result, the information in Table 20-11 is sketchy. It is simply a snapshot of a limited number of quantitative performance improvements that were achieved by firms as part of their total quality management programs.

One noteworthy achievement is Ford's reduction in man-hours to build a vehicle from 15 to 7.25. Although this took 10 years to achieve, it is still a sterling example of productivity improvement. IBM Rochester, Minnesota's reduction in defects per million by a factor of 32 over a 4-year period is also noteworthy. And the ability of Chrysler and General Motors to reduce their design development times for new vehicles from 60 and 48 months to the current 33 and 34 months, respectively, is an achievement that indicates the return of competitiveness to the U.S. automobile industry.

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