Page 51 - The Handbook for Quality Management a Complete Guide to Operational Excellence

38 B u s i n e s s - I n t e g r a t e d Q u a l i t y S y s t e m s A p p r o a c h e s t o Q u a l i t y 39

How is this possible? After all, the normal business cycle rises and
falls periodically and a company that is adequately staffed for peak pro-
duction is overstaffed when production downturns occur. The Japanese
manage to provide security in good times and bad in a number of ways.
One is by massive outsourcing of non-core business activities to suppli-
ers. It is not unusual to find as much as 80 percent of the value of the
finished product in purchased materials. Another is by making use of a
large buffer of part-time employees. In some Japanese companies as
many as 50 percent of their employees during peak production periods
are part-time workers.
Prevailing wisdom in America would suggest that this strategy
would result in a great increase in uncertainty and an overall decline in
quality. in Japan, however, suppliers are very tightly controlled using
a system known as Keiretsu. Suppliers within the Keiretsu often have
board members from the parent company, and from other members of
the Keiretsu. Unlike American businesses, which tend to deal with
their suppliers at arm’s length, parent companies play a very active
role in the affairs of their suppliers. While in the USA a firm might
regularly appraise the quality of the product delivered by a supplier,
in Japan the parent would also carefully evaluate how the product was
made. If appropriate, the parent would suggest better, more economi-
cal ways to produce the product. Parent companies provide larger,
longer-term contracts than their American counterparts, and they often
demand steady price decreases. The supplier might be expected to
become “dedicated” to its parent, providing product only to the parent
and not to competitors. Continuous improvement in quality, cost, and
delivery is expected of all Japanese suppliers, just as it is expected
from the employees.
KAIZEN™ (a trademark of the KAIZEN Institute, Ltd.) is a philoso-
phy of continuous improvement, a belief that all aspects of life should be
constantly improved. In Japan, where the concept originated, KAIZEN
applies to all aspects of life, not just the workplace. In America the term is
usually applied to work processes.
The KAIZEN approach focuses on ongoing incremental improve-
ment that involves all stakeholders. Over time these small improve-
ments produce changes every bit as dramatic as the “big project”
approach. KAIZEN does not concern itself with changing fundamental
systems, but seeks to optimize existing systems.
All employees in an organization have responsibilities for two aspects
of quality: process improvement and process control. Control involves
taking action on deviations to maintain a given process state. In the
absence of signals indicating that the process has gone astray, control is
achieved by adhering to established standard operating procedures
(SOPs). In contrast, improvement requires experimentally modifying the

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