Archive for Sunday, January 26, 1992


January 26, 1992


The secret to Japanese industry's edge is really no secret at all, two Kansas University business professors say.

Dennis Karney and Steve Hillmer believe the success of Japanese manufacturing is the result of a focus on quality rather than profit in the workplace. By putting the customer's needs first, they say, Japanese industry is building value and customer satisfaction into its products.

Ironically, one of the first proponents of this philosophy what Karney and Hillmer call Total Quality Commitment was Kansas City entrepreneur Joyce C. Hall, who founded the Hallmark greeting card empire.

Karney paraphrases Hall's philosophy this way: "If a man goes into business with the goal of making money, chances are he won't." But if a businessman adheres to the greater values of quality and service, Hall believed, profit will follow in due course.

"The important point to realize is that J.C. Hall founded his company in the early 1900s," Karney said, noting that TQC principles have since been recycled by such business gurus as W. Edwards Deming, who found a receptive audience in Japan during the 1950s, and J.M. Juran.

"This is not some new Japanese Samurai-spirit philisophy," Karney said.

SINCE 1988, Karney and Hillmer have been reintroducing the principles of TQC to businesses in this region through a series of five-day seminars held on the KU campus.

The first offering in their 1992 series is scheduled for Feb. 24-28, with others planned for May 18-22 and Sept. 21-25.

They also present shorter versions of the program customized for individual companies. They have presented the in-house seminars for about a dozen area companies.

In addition to classroom instruction, Hillmer, Karney and Marvin Pratt, president of Heartland Management Services Inc., a Baldwin-based consulting firm, provide followup to companies implementing the on-going TQC process in the workplace.

The seminars fit neatly into the School of Business' plan to be a regional resource for business. Karney notes that just three or four U.S. universities offer total quaility training.

GETTING AN insider's glimpse at how businesses really operate and their efforts at improvement also pays dividends for students in KU's master's of business administration, Hillmer said.

"We couldn't teach them without being involved with some companies," he said. "We can bring some stuff into the classroom you wouldn't have access to otherwise experiences."

What the TQC philosophy advocates is, to many executives' way of thinking, a cultural revolution within the corporation. The way most firms operate, "organizational charts are drawn upside down from what they need to be," Karney said.

"Usually it's the management team that's more resistant than the worker team," he said.

That's why followup often is necessary once the seminar is completed.

"It's a methodology of running a business," Karney said, adding that making the philosophy work requires a paradigm shift in the way a company does business. The traditional workplace, which is organized along departmental lines, must be redesigned operationally with the focus on customer satisfaction rather than the bottom line.

INSTEAD OF dictatorial management from above, TQC asks managers to support employees in solving problems and improving quality. Employees are allowed greater input in proposing solutions, with management setting parameters and making final decisions on what solutions to implement.

"Your greatest asset in satisfying customers is your people," Karney said. "They're not the liability most people think them to be."

Karney and Hillmer break TQC down into two fundamental mandates: Do the right things right and do the right things better.

The aim of the TQC program is to help executives decide what the right thing is and then how to do it better.

Karney said the process begins with companies targeting ways to add value to a product. That calls for utilizing resources, such as manpower, machinery and capital, in the most effective ways and delivering products in a timely fashion.

DOING IT better usually means adding value to a product, not just cost.

As it is with most companies, Karney said, "for every eight or nine activities that they do, only one adds value for the customer."

In service industries, the waste is even greater, with only one in 10 functions actually enhancing value.

Where the Japanese gain an advantage, Karney said, is in the reducing of waste by maintaining consistent quality throughout the production process.

While U.S. manufacturers waste 20-40 percent of their resources because of poor quality, the Japanese have cut their loss to about 5 percent.

"You have to build a process of work that guarantees that you can build a defect-free product out the door," Karney said.

"It gives them a huge cost differential in the marketplace," he said of the Japanese.

THE SAVINGS from reduced waste then can be funneled back into such areas as capital improvements and research and development.

"Bottom line," Karney said, "is that you can invest in things that improve your market share."

The benefits from those gains are spread among customers, employees, stockholders, suppliers and the community, he said.

Hillmer said the TQC concept is gaining renewed momentum, partly because of increased awareness of Japanese competition and other business problems.

"A lot of people got into this early on because they got into trouble. They didn't have any choice," Hillmer said.

However, he noted U.S. business gradually is starting to take a more proactive approach to change.

Commenting has been disabled for this item.