Elements of Quality Leadership

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AFS Transactions 2005 © American Foundry Society, Schaumburg, IL USA
Hoyt Memorial Lecture
Elements of Quality Leadership
T.J. Schorn
Enkei America, Inc., Columbus, Indiana
Copyright 2005 American Foundry Society
The author defends the proposition that quality leadership is the fundamental job of top management and is the most effective
strategy for competitiveness in global markets. Three elements compose effective quality leadership: effective shop floor
management, the intelligent use of tools and the maintenance of a service culture. Each of these elements is described under
“Leadership” and observations relating these three elements to the foundry are provided. This paper was prepared for the
annual Hoyt Memorial Lecture.
It is apparent today that defensive strategies against global competition do not work effectively. This is true for two reasons.
First, the defensive barrier, composed of legislative measures against imported products, is dependent on the political will of
our elected officials. This is particularly unreliable, unpredictable and extremely expensive to maintain. Second, defensive
strategies mask the real reasons for our lack of competitive products and prices; they permit our inefficiency and leadership
inadequacy to continue as we try to even the playing field through artificial barriers.
This is a criticism that may anger some. It is worth clarifying. To be sure, there is unfair and illegal “dumping” on the part of
some nations; it is impossible to condone this or to deny its negative impact on our industry. Legislative protection and the
enforcement of existing trade laws are important protections and they secure some expectation that countries and their
companies “play by the rules.” All stakeholders in our industry should support such efforts.
However, it is unfair to cry foul when imported products benefit from lower wage rates or relaxed environmental regulations
or other unique conditions that prevail in the country of manufacture. These variations are only different in scale from the
variability observed in the different parts of the USA. Compare the potential differences in labor rate and environmental
regulations between say, southern Illinois and southern California. The cost of living differences across our own country are
significant, as is the cost of labor and the availability of skilled labor. There is similarly a patchwork of local, state and
federal environmental regulations that in no way promotes a uniform severity level across our country. In short, the foundry
industry faces global competition, but it fundamentally represents the same factors inherent in domestic competition; they are
just exhibited at an increased magnitude.
The following text will examine the two key elements of quality leadership: “Quality” and “Leadership.”
Perhaps the word “quality” needs definition considering our natural tendency to think of quality as a word that solely relates
to product conformance. Making stuff according to the drawing and delivering it on time is certainly a part of quality, but it
by no means captures all that must be considered in the operation of a foundry. This broadened perspective is absolutely
necessary if one is to use quality as a means of becoming more competitive with rivals across town or across an ocean.
Beyond meeting customer requirements, quality contains at least three additional facets: cost, service and integrity.
Quality must be visible in the cost of manufacturing, support operations and delivery. While one may quibble with Crosby’s
famous premise that “quality is free,” it certainly costs less. The price of our products must be built on the customer’s
tolerance and sense of value. To remain in business, this price must be greater than the total cost to sell, produce and deliver.
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This appears fundamental business logic. Much crying and noise is made about price reductions from customers. This must
be anticipated and a reserve created through the continuous improvement of our operations. Waste reduction strategies must
be constantly implemented. It is frequently estimated that those manufacturing operations that do not systematically measure
quality costs waste at least 20% of sales on errors, scrap and other inefficiencies. Our cost of manufacturing is an expression
of our quality. This must be recognized; there is no room for whining about the customer. This is the job of manufacturing: to
produce product that the customer perceives as value (conformance and price).
Customers do not expect to merely obtain castings from a foundry, no matter how well priced and conforming. Customers
from time to time expect service, such as the following
Feedback to process or business questions
Interaction on orders, delivery timing, scheduling issues
Cooperation in joint problem solving and continuous improvement
New program development timelines, launch and tooling development updates
Technical information and validation/verification reports for mass production approval
Support with design changes
Suggestions for improvement
Cooperation on supplier quality initiatives
Foundries must recognize that castings are not their only product; they are firmly a service organization. If one does not
believe this, merely asking the customer about it will reveal the problem. There should be a constant flow of information
from the initial contact through to the completion of the job and beyond in order to make the customer feel that he is
receiving quality. Customer perceived value that translates to loyalty is well beyond mere product conformance, even at a
great price.
Consider the practice of many foreign sources of castings. Their distance and language limitations make it challenging for
them to compete in the service arena. A sales representative working out of an office in the USA is at quite a disadvantage in
this regard. Yet many foundries miss this opportunity to distinguish themselves in service. Customers will not call anyone a
quality supplier without responsiveness, an abiding relationship with sharing and strong technical support.
Loyalty among customers is the goal of a business. The firm that has so created a network of customers that trust their
products and their information is truly doing well. Trust is built through honesty and a commitment to fulfilling our promises.
It is built by sharing information that pertains to the legitimate interests of the customer. It means that negotiations and
discussions begin with the assumption of fair play and partnership. This is not pie-in-the-sky thinking. It is the basis of
integrity. The industry is familiar with the customers who do not honor this kind of integrity. But there are abundant
examples of situations where the assumption was made that the parties were at war before even getting started. This raises
defenses and sets the stage for obstacles and less-than-open confidence. This intangible may often be the real reason for
sourcing decisions. Purchasing often runs scared; they have a big program with lots of attention and screwing it up is
unthinkable. Who should be sourced? The company they have built a trust relationship with, who has honored their
commitments in the past, or one that has low-balled the price but with whom they have no relationship beyond paper?
Integrity is built eyeball to eyeball, with a firm handshake resulting in the promise getting accomplished. That is something
foreign competition is often ignorant about.
This job of quality is not the responsibility of the quality manager or plant chemist or some hired consultant/expert. This is
top management’s job. It is not merely the executive’s job to see that their organization obtains and delivers quality, but it is
their job to define quality for the organization in each of its four aspects (conformance, cost, service and integrity). This
paper was not written for practicing quality professionals, but for those that direct their factories and define roles and
responsibilities and have accountability for organizational performance. It is imperative that foundry executives stand up and
point the way and fight with (and for) quality. Only quality improvement is robust enough to truly maintain company
profitability and market share in our industry. There are perhaps other strategies in other industries, but to prevent castings
from remaining a commodity sold by the pound, action must be taken to refocus on delivering full-orbed quality. That means
the executive must understand the route to get there.
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Prescriptions for quality improvement are as numerous as there are consultants and seminars. Perhaps this number will never
be known and it isn’t beneficial to count it. It is merely a measure of man’s creativity in search of another dollar. After some
consideration and a long professional life, some key directions emerge from the pile of interesting ideas. These paths to
improvement lay hold of the full definition of quality and appear to have the abiding confidence of successful businesses
across a wide spectrum of industries. These three are no doubt not the only directions that could be listed, but they are
intended to be properly applicable for the foundry and ones that the author’s experience has proven in the test of real life.
Executives and plant managers must recognize the opportunities that lie at their feet in the shop. If it is true that the cost of
quality typically exceeds 20% of sales in a foundry, then over half of this waste is created in the shop. Waste reduction
strategies themselves abound and it has fostered a whole new way of thinking under the banner of “lean manufacturing.” This
is a thoroughly worthy topic to study. Identifying waste in the manufacturing operations, once the types are understood (see
figure 1) is almost exciting. Without ignoring the benefit of a thoroughgoing waste analysis, it appears to this author that the
core strategies to reduce waste and keep it away might be summarized in just three issues: removing junk, organizing on
sound principles and maintaining maintenance.
Removing Junk
While this heading might not qualify as a technical term, it is as good as any a place to start. Walking through a foundry, look
for the following kind of things:
Unneeded equipment and tools
Obsolete or very slow moving inventory
Molds and mold parts not planned to be used for the next week or month
Unneeded carts, pallets and material handling equipment
Garbage (boxes, broken pallets, sand, stuff)
Scrap parts or scrap cores
Things staged for jobs that aren’t going to be run
Old die coat, service items for molds
This kind of material (indeed, anything that will not be used that day) is in the way. It creates waste because people have to
move around it. It creates waste because it prevents organizing the truly necessary things. It creates waste as a result of
searching (in the rubble) for what is needed. People trip over it, have to move it around and these things get used
inadvertently (instead of the good stuff) from time to time. It is time to clean house and to do it regularly (because the stuff
keeps coming back, just like at home and in the garage).
Organizing on Sound Principles
Organizing a plant floor is the process of arranging the needed things to get the job done in such a way that the work can be
efficiently and safely performed. Putting frequently used tools near the worker and in a position that can be reached while the
job is being performed may not sound like rocket science and it isn’t. Unfortunately, the practice of fundamental disciplines
is often what distinguishes between the mediocre and the great teams, no matter whether manufacturing or football is being
There are three primary organizing principles that seem to be of greatest importance: flow, ergonomics and visual factory.
Products and information should move along a short path, with few intermediate waiting stops, in steps that are close together
physically and in time. In Japan, they speak of factories that “flow like a river.” By river, they do not use a word that
describes some meandering creek as we might in the USA. They intend it to be conceived as a wild torrent that comes down
from a mountain on a ceaseless push to the ocean. Lean Manufacturing concepts are very parallel to this thought. Visualizing
the flow (through process mapping or diagramming the movement of product or information on a factory floor layout
drawing) can be a real eye-opener. This kind of analysis can be performed on a big scale or for just a single operation.
Human factors of reach, attention span and lifting capability, along with an understanding of the negative impact of repetitive
motions must be part of the science that is used to design (or correct) processes on the shop floor. Organizing the factory with
the recognition that this must be an “organic environment” (a place where humans live and work) is a necessary part of good
factory design. This is not only great for morale and safety but for quality and cost too. If quality has a service component,
then it surely begins “at home.”
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Visual Factory
The visual factory is a phrase that conveys a way of thinking. This factory vision translates into many practical and
significant improvements to the shop floor. The concept is simple to grasp: make the shop floor a place that anyone who
walks in can tell exactly what is going on, where things are and how well things are going. Some elements of the visual
factory are described in figure 2. The references at the end of this paper provide a more complete description. As the name
implies, it is far better to see the visual factory than to hear about it.
Maintaining Maintenance
The repetition under this subhead is deliberate. The factory floor is subject to the unceasing law of entropy; things wear, they
break down, they get old and order turns to disorder. Much good has been written about total preventive maintenance (TPM)
and it is true. It is wise to incorporate the resources of the operators in the care and routine inspection of the machines,
equipment and tools that they use. After all, who knows a machine’s normal behavior (level of noise, vibration, even smell)
better than the man who operates it every day? Who is better equipped to identify an abrupt change?
Maintenance programs ought to be viewed in a similar way to the manner in which people take care of their own bodies.
They make use of emergency repair when they are injured (go to the emergency room, or perhaps only seek out a good hot
wrap for the back). They utilize a significant series of preventive maintenance operations at various intervals (shave and
shower daily, brush the teeth, exercise, get their hair cut, trim their nails, take vitamins etc.). People also perform predictive
maintenance (visit doctors to verify blood chemistry, blood pressure, have dental examinations, etc.). The older people get
the more focus is appropriate on predictive and diagnostic work. Machines, like people, have a rising risk of failure with age.
This is a basic reliability concept. A man would be considered foolish who never performed predictive and preventive
maintenance on his body; as he ages, such deliberate neglect would be evidence for suicidal tendencies. How shall one think
when maintenance practices are ignored or put off indefinitely on the factory floor?
By paying attention to the shop floor and grasping the power of these three avenues of improvement (junk removal,
organization and maintenance), many benefits accrue to the organization.
Consider the impact on employee attitude. They live in the “house” of the factory for 8 – 12 hours a day. Attention paid to
even small daily irritations, eyesores or frustrations is huge. It also shows that management cares about the conditions under
which they work. Work is a human to human interaction; workplaces are personalized. Creating an improved flow,
brightening up a dingy hallway, creating an information board that is kept up to date are significant statements about how we
value the humans in the company.
Organizing the work space, improving the flow and keeping it well maintained permits a more flexible and responsive
organization. It creates options. Supervisors find it is easier to spot problems when the unneeded stuff (the junk) is gone.
Clean factories see (and respond to) the oil leak before it ruins the bearings that brings big downtime and a missed delivery.
It is cheaper to run a clean shop than a filthy one in the long run. Maintenance has a short term cost and a long term,
preventive gain. It is quality assurance for equipment. Draw the analogy to the body again; dare anyone say there is no cost to
“saving money” by not going to doctors or dentists until one need emergency treatment?
Finally, evaluate the average customer’s perspective of the foundry industry. Do they see it as a smokestack industry – with
sand and crusty stuff on their shoes and soot in their nostrils? Customer perception of this industry – and any particular
foundry – is not based on a comparison between other foundries, but other places from which material is purchased. What
confidence is created in the customer when they enter the factory? The visual factory, with smooth flowing production and
well-maintained, clean machines presents a striking image that enhances customer loyalty and trust.
The accomplished car mechanic has a significant investment in his tool box. Many and varied are the tools, each with their
own use and peculiar skill in application. It is funny to think of a mechanic with only one or two tools in his tool chest no
matter how skilled he might be in their use. It is also amusing to consider a novice who has no concept of the use of a wrench
or voltmeter spending huge amounts of money on a well-equipped experts’ tool chest. He would have little hope of earning a
living as a mechanic until he was trained.
Somehow the humor – and the parallels to quality tools – gets missed in the efforts to operate factories and solve problems.
Like a problem with a car, a variety of tools must be employed to investigate the cause of a problem. Different tools are used
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to apply the remedy and remove the cause. What would we think if the mechanic only had access to a wrench and a vise grips
to respond to our suspected alternator problem?
There are many quality improvement tools, each suited to a particular purpose and function. There are hundreds of statistical
methods, scores of graphical techniques, and at least 20 different varieties of SPC. Quality management textbooks list
hundreds of different techniques. The mechanics who use quality tools are called quality engineers. The field is called quality
engineering. It is neglected, misapplied and misunderstood by many. Yet quality leadership demands that foundries have
expertise in the business of solving problems and improving our operations.
The intelligent use of quality tools is not merely an issue of training or education. Tool use is often impeded by uninformed
management attitudes. These can make the problems worse, or prevent the real problem (the root cause) from being
identified. For example, reliance on an expert in statistical process control, no matter how skilled or how successful he has
been in the past dealing with process performance issues, likely does not have the tools needed to address an inventory
management trouble, or an issue with product design. Success in the use of a tool does not warrant the unrestrained
application of these methods about the company.
Perhaps more common is the attitude that training in quality engineering tools is unneeded or can be obtained in a day-long
seminar. A skilled problem solver will require a substantial investment in education over a long period and it will need to be
coupled with specific opportunity to exercise his skills and gain experience and maturity. One can not expect this benefit
from an annual inoculation of a quick seminar or conference. The law of sowing and reaping applies here as elsewhere: we
get what we pay for and what we work for.
Arguably, there are three points to remember about the use of quality tools.
Tool Use Must Be Balanced
The right tool must be used for the right job. The range of tools available must be known in order to select the correct one.
The limitations of tools must be known. This is an investment in education and it is an attitude that welcomes careful problem
definition and tool selection. Foundries must refuse to become wrapped up in the fad program of the day and be
overwhelmed by it, only to become tired of it and then grab on to the next “wave” as it passes through.
Tool Use Must Be Competent
Skill in using any tool is necessary in order to achieve the right results and not hurt anyone. There are risks to ignorance, even
in the application of quality tools. Recommendations for change are cost drivers that must be evaluated. Missing the real
cause of a problem will inevitable result in its recurrence, another cost. If the problem is related to safety or the environment,
real physical harm might occur.
Tool Use Must Be Responsive
Many quality tools are analysis techniques. They provide clues to what is happening or what has happened. Few, if any tools
tell one what to do about a problem and no quality tool fixes the problem! Humans must still exercise creative thinking and
the will to act and follow up on good information. Tools in every arena multiply the input power of humans. But they require
input energy and a willingness to follow up. If there is no desire to do something to address a problem, it is a waste to
investigate it, identify and define it, measure it, monitor its progress or make elaborate schemes to eliminate it. Priority
problems must be attacked aggressively and completely to have a hope of improvement.
Using tools correctly will further a strategy of business success by quality leadership. It will enhance the effectiveness and
efficiency of solving problems, leading to product quality improvement and cost reduction by error reduction. By sowing
skills into the organization, a culture of confidence and strength forms. Pride in work and openness to new ideas is fostered.
The company is amenable to growth through change. Not every company can afford to have a squad of quality engineers.
Indeed, only large foundries could afford this level of on-site technical support. However, the skills of quality engineering
can be learned by foremen, managers and operators. It is surprising how many gifted “backyard mechanics” there are in
foundries. They did not think it unusual to have this expertise though they do not work at a car dealership or repair shop. So
too, the field of quality engineering can be mastered by those without the title and for the same reason: to save money.
It is interesting to reflect on the wide and ready access to quality engineering information in the USA. Chinese competitors or
those from third world countries do not have this ready access. It is important to use all of the resources available to the
foundry in such a competition.
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If it is true that customers buy on value, then of what value is product compared to products plus responsive, helpful service?
Surely the company that can deliver value-added services such as technical support, design and development assistance,
inventory monitoring, marketing help, etc. will command more customer loyalty. Making the customer comfortable with the
entire package is the goal, tailoring it to their specific needs.
This is well understood and customer service is frequently the primary job description for technical service representatives or
sales people. They have this responsibility since they come in contact with the customer directly and therefore must be
friendly. This is very good as far as it goes. Unfortunately it is not often realized that a sales group that attempts to be serviceminded cannot be truly successful without the support of a manufacturing and technical group that is service-minded as well.
The point is that every member of a company has a part in the value-chain and this chain ends at the customer. Service must
be part of the culture that links parts of that chain together. If not, the final results to the customer will be inconsistent and
uncertain. The enthusiasm will drain from such a company. The trust relationship we seek from our customers must exist
inside the company first. The care and loyalty we show one another within the company will leak out and happily
communicate it to our customers. Its opposite will also leak out, inflicting the customer with a sense that “I’ll believe it when
I see it.”
What is meant by internal service?
Some Examples Of Service Behavior
This author lost his lap-top power cord on an extended business trip. Coming home with just a day between trips, he asked
for help from IT, confessing that the cord had probably been left behind in some conference room or hotel along the way.
Rather than get chewed on for losing the cord, or being required to fill out paperwork (and hassled by paying for the lost
article) they simply focused on getting me up and running, which in this case meant swapping computers with someone else
(who wouldn’t need their lap top for the next day or two) while new cords came in. Two new cords were purchased, one for
the desk and one for the road to make it simpler and easier for me. No hassle, kind attitude, just service was provided.
This author then sent a thank you to the people in IT, specifically naming the people who had made these decisions and
interacted with me. This thank you praised their service focus. It was sent to IT people and their superiors and the head of the
organization, our COO.
The COO responded, praising the IT group and the author for bringing it up to everyone’s attention. This is one example of
Final inspection was struggling with understanding a particular visual requirement for a product in the author’s factory.
While visual appearance standards were available and training had been provided, fallout rates and the false alarm rate was
too high. The quality assurance person responsible for customer problems saw a problem in the making and voluntarily spent
several hours with the inspection group, inspecting with them and assisting them in understanding this standard. She then
reviewed the existing product that had been recently inspected, insuring that no customer issues would occur.
Again, the COO heard through the chain of command about this woman’s service to final inspection and her above and
beyond the call of duty effort to step in. He went to her friends, discovered her drink of choice was Diet Mountain Dew,
purchased two cans in the cafeteria, went to the office kitchen and got a silver tray and a towel. He then served her the drinks
at her desk in front of an amused (but educated once more) quality and engineering office.
These two stories illustrate several important points:
Part of a service culture is serving by recognizing and rewarding service.
Going out of the way to help is only part of service; doing it with the right attitude is everything.
Personal character is a prerequisite to service, but it can be encouraged by management.
Service culture makes the workplace somewhere you want to spend time; it can be fun.
A service culture is promoted by good communication; but it also promotes good communication. The two form a
virtuous cycle.
It should be noted that inside the company service-orientation spreads from the top down. Modeling this behavior and
praising it are important. This author’s company uses it as a documented factor in performance appraisal. What is measured
gets done, they say, and it seems true here as well.
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Where would customers choose to buy their products? From this kind of service-oriented culture company. This service
culture is not uniquely American, but it is certainly with the reach of companies in the USA. This becomes a competitive
advantage to the American foundry when it is combined with close contact with the customer so that this feeling is
communicated close up. It is a competitive advantage when it is combined with the other elements of quality leadership
(since it builds on them and also supports them).
The advantages to living and working in a foundry where people greet you by name, they step up to help, they know what is
going on and feel part of a support group (no matter what their department or title) are huge, but not directly measurable. This
is part of the oil that facilitates the changes needed to better manage the shop floor and use tools more effectively. It is part of
the image that is necessary to convey customer confidence. It is the soul of why a company does good work consistently.
There are many facets to quality and the successful management of a business. No single paper or lecture can describe that
body of knowledge. Yet now, in the face of severe and sometimes unfair global purchasing pressure, it is important to look
for a defining vision that can guide one’s organization through this troubled time. Focusing the organization on quality
leadership is a clear path and a defining vision. Only the reader can judge if it is best for their organization.
Selling by quality may be risky; it does not have the immediate impact of lowering prices or adding product lines. The
process of renovation and remaking the company into a quality competitor is lengthy – truly a career-long journey.
Yet the long-term results are very promising. The journey, though long, will be far more pleasant. The financial performance
prospects are promising in the long term. The strategy serves as a hedge against future uncertainty because it is built on core
principles, not fads or “the latest thing.”
Competence in quality technology, properly applied to a well organized and disciplined shop floor is far preferable to the
alternatives offered to customers. Some offer a brute force approach to product at rock bottom price produced by
interchangeable workers who clock in and out while reading the “help wanted” section of their newspapers. Some import
product from people that neither they nor their customers know – and will perhaps never meet. Castings sold like corn or
soybeans may be cheap, but it is not comfortable for customers and there is no supplier loyalty.
Let’s create a world where customers can buy from their friends, with whom they have a long-standing relationship and a
comfort level that is founded on excellent product quality, technical support and responsiveness. Let’s help customers
understand quality and expect quality beyond the product dimension into cost, service and integrity. Let’s steward our
customers needs as if they were are own – since they are.
I wish to acknowledge Mr. Rick Merkel as my teacher and factory manager. His example of management with people,
products and programs continues to set true north for my business compass. The ideas in this paper and lecture have been
tested under his leadership and refined under his watch.
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Tajiri, M., Gotoh, F., Autonomous Maintenance in Seven Steps: Implementing TPM on the Shop Floor, p 328, Productivity
Press, Portland, OR (1999)
Vavra, T.G., Improving Your Measurement of Customer Satisfaction, p 490, ASQ Quality Press, Milwaukee, WI (1997)
West, J., “Quality Management Principles: Foundation of the ISO 9000:2000 Family,” Quality Progress, March (2000)
Paper 05-196(00).pdf, Page 9 of 9
AFS Transactions 2005 © American Foundry Society, Schaumburg, IL USA
The Classic Seven Wastes
1. Overproduction
2. Waiting time
3. Transportation
4. Unnecessary processing
5. Inventory
6. Motion
7. Product defects
Fig. 1. These are the seven classic wastes, taken from Imai (1986).
Often an eighth is added, namely the waste of human creativity or energy.
This addition reflects the need to utilize human resources effectively.
Imai would likely consider the seven wastes as indicators that human resources were also wasted.
Visual Factory Elements
Communication boards
Outlining/shadowing tool boards
Color coding pipes
Using color/lines to partition floor space into work zones, walkways, etc.
Sign board strategies for equipment, storage areas
Digital displays showing production units (actual and target in real time) on machines
or lines
Trouble cords and lights or alarms
Stop light-style lights for equipment operating condition
Plexiglas or wire cabinet fronts so contents can be seen
Min/max level lines for inventory
Standardized format inspection areas
Bold machine and line identification
Fig. 2. These are examples of the types of things found in the visual factory.
It is incorrect to assume that the mere presence of these elements is sufficient indication of a grasp of the strategy
however. There is an entire science behind the application of these methods.
See the references, particularly Suzaki (1993) and Galsworth (1997).