Management Case Study
Where the Rubber Meets the Road
Total quality management (TQM), defined in the most simplistic of terms, is the incremental improvement of all facets of a business to increase customer satisfaction and, in turn, company viability. Although TQM is often applied first to manufacturing functions in an organization (zero defects, ), the intent of TQM is equally meaningful in all aspects of business, from administrative (zero defects in billing and timely collection of accounts receivable), to distribution (no breakage, ) to management (appropriate incentive structures, timely and accurate stakeholder reporting). The increased efficiency and competitiveness created through TQM initiatives is not limited to only the manufacturing sector, with many of the benefits of TQM occurring in the service sector, too.
In the case of Bridgestone/Firestone, TQM was not pursued prior to the recall of its 6.5 million tires in 2000, as evidenced by the magnitude of the defective products involved in the recall. If a TQM program had existed at Bridgestone/Firestone, the scale of the recall would have been significantly reduced or eliminated. A TQM initiative within Bridgestone/Firestone would have uncovered the improper processing of rubber at its plant in Decatur, Illinois over the nearly 10 years that inferior products were produced at this location. The inadequacy of a TQM program at Ford is also apparent. While the direct problem of tire blowouts rested with Bridgestone/Firestone and not with Ford, Ford should have been concerned with quality measurements such as 150 people killed in rollovers involving Ford Explorers with Bridgestone/Firestone tires on them. A functioning TQM program would not have rested on safety rankings alone, but instead would have forced quality improvements on its supply chain including Bridgestone/Firestone.
Typical tools for quality assurance, derived from criteria for the Baldridge Award program, include information and analysis (industry benchmarks), quality planning (setting goals), process quality management (creating products according to plans), quality results (measurements), and customer satisfaction. In Bridgestone/Firestone’s case, process quality management is a critical tool for resolving the problem of defective products. The purpose of this tool is to ensure properly functioning processes. The tire recall indicates these processes were absent over a number of years. The use of a quality-results tool would also have been useful for Bridgestone/Firestone. The purpose of this tool is to assess the quality of products being produced — a measure that would have resulted in a more timely identification and resolution of the improper rubber processing.
Quality serves as a competitive tool in several ways. Waste is reduced by minimizing scrapped material and eliminating rework. Unusable products are avoided by ensuring that processes either eliminate or catch and correct deficiencies before reaching the consumer. Efficiencies are achieved in support processes such as elimination of redundant steps in administrative practices. Savings can be passed directly to the consumer, thereby , increased consumer satisfaction and higher customer loyalty. Savings can be reinvested in processes, equipment and employees, which in turn creates higher quality and improved efficiency, resulting in increased competitiveness. Thus quality directly supports competitiveness. The converse also applies, as demonstrated by the Bridgestone/Firestone case. In the absence of quality, competitiveness is reduced or lost, creating significant business obstacles that are difficult to mitigate or overcome in the short-term.
Firestone can salvage its quality image. Through a TQM system, the company can create processes that will not allow such manufacturing failings to occur in the future. An aggressive marketing campaign can let consumers know what steps have been taken to address the company’s failings, thus positioning Firestone as a company that learned from past mistakes. Firestone can work with safety councils and target audiences such as the trailering market to promote vehicle safety, thereby positioning Firestone as a company with a renewed sense of safety, community obligation and quality products. The challenge is immense but not impossible. A properly functioning TQM program can be the cornerstone to Firestone’s rejuvenated image as a quality tire manufacturer.
Case study: Where the rubber meets the road