Industry News/Research/Trends 

New Baldrige Award category for not-for-profit organizations 

On October 5, 2004, President Bush signed legislation granting nonprofit organizations (including charities and government agencies) eligibility to apply for the Baldrige Award. Appropriation of funds is needed to actually begin an Award competition for nonprofit organizations. If Congress appropriates the necessary funding, nonprofit entities will be eligible to apply for the Baldrige Award in 2006. 

Current award categories include Manufacturing, Service, Small Business, Health Care and Education.  If funding is approved, the new category will open up the recognition process to State and Government Agencies, trade associations, charities, etc.  This is seen as a major step in driving organizational learning and sharing and should bolster interest and involvement in the Baldrige process for many years to come.  

DeBaylo Associates has been actively involved in the Baldrige Award process since 1989, working with not-for-profits and other organizations using the Baldrige Criteria to achieve Performance Excellence.  CEO Paul DeBaylo has served as a member of the Board of Examiners, as a senior examiner and as an alumni examiner at various times during this period.  

Two manufacturers, a business school and a hospital to receive Presidential Award for Quality and Performance Excellence 

President Bush and Commerce Secretary Don Evans announced four organizations as recipients of the 2004 Malcolm Baldrige National Quality Award, the nation’s only Presidential award for quality and organizational excellence.  

The four winners are:

·      The Bama Corporation, Tulsa, OK – a frozen pie and food supplier to the fast food industry (manufacturing)

·      Texas Name Plate, Inc., Dallas, TX – a two time winner manufacturer of specialty equipment name plates (small business category)

·      Kenneth W. Monfort College of Business, Greeley, CO – a 1200 student business college (education)

·      Robert Wood Johnson University Hospital, Hamilton, NJ – a tertiary health care facility (health care) 

DeBaylo Associates helped one of the above winners prepare their first Baldrige application and has worked in a similar capability with other applicants over the years.  Summaries of each of the 2204 winners as well as the previous 54 winning organizations can be found on the NIST web site www.nist.gov.
 

Integrated approach to achieve performance excellence gains momentum 

For more than twenty five years, increased competitive pressures and the need to reduce costs have driven companies down a path of continuous improvement. During this period, we have observed many of these organizations looking for a quick fix or some assurance of business survival.  They seized upon the latest approaches and tools developed by other companies, consultants and academia –  Zero defects, TQM, Baldrige Criteria, Activity Based Costing, SCOR, Six Sigma and Lean, to name just a few.  

While this may seem to be just an alphabet soup of programs du jour, it has become apparent to us that each new initiative has added something of value to the body of improvement knowledge that preceded it.  Organizations are now waking up to this fact recognizing that all problems are unique, and that one size fits all strategies do not work.    

We are seeing the emergence of more integrated approaches to business excellence. For example, many companies are using the Baldrige Criteria for self-assessment, to gain a holistic view of their key business process strengths and opportunities for improvement.  These companies then use value-stream mapping (Lean) to identify specific improvement opportunities.  Often both process tools (Lean) and statistical data analysis tools (Six Sigma) are used to reduce cycle time, complexity, and variation, and together, are producing significant cost savings.  

The movement from initiative-specific tools to a more integrate approach is picking up momentum e.g., Six Sigma has now become Lean Six Sigma or Six Sigma Plus.  Process design, improvement, measurement and management are rapidly merging, becoming the most powerful and useful approach to business enhancement yet devised.
 

Design for Six Sigma still struggles to get out of the blocks, despite its power and fundamental importance 

Back in the mid-1980’s, we had discussions with IBM’s corporate quality management group regarding their sources of product failure.  After considerable analysis, IBM recognized that most of the failure costs were not due to manufacturing (where most of their improvement efforts were concentrated), but could be attributed to poor design.  As a result, they refocused their improvement efforts on teaching their engineers about reliability, design for manufacturability, tolerance analysis, and other design related topics. 

Similar experiences can be found in the service side of the business. An example that comes to mind was AT&T’s launch of their “I” program, the first frequent flyer programs for the telephone industry.  Millions of people signed up only to find out they didn’t get their usage minute credits.  The design team didn’t include the local Bell operating companies in the design process.  The local operating units, who collect the usage data, were incapable of signing up so many new subscribers so quickly.  As a result of this design problem, a great idea turned into a big failure. 

Although these design tools are not new, they were popularized by the launch of the Design for Six Sigma (DFSS) initiative.  DFSS recognizes the need to do it right the first time, and incorporates the learning of many of these pioneering organizations.  Despite the power of DFSS, most companies decide to focus their initial attention on Six Sigma Improvement i.e., put out the fires and reel in financial gains.  It appears it is a lot easier to fix problems than to prevent them. 

DFSS has been successfully implemented in some companies, but most organizations have been reluctant to go after it with passion.  Perhaps there are too many misperceptions about DFSS, including: it takes too long to realize any benefit; it requires too much additional work; documentation is excessive; and the change required is overwhelming.  Nothing could be further from the truth.  

The methods of DFSS are the backbone of good engineering.  When design is done right, customer needs are fully considered, all parties involved in the design are integrated into the process, and knowledge is gained that provides a corporate memory and a foundation for improvement of other products and processes.  Deming called this memory Profound Knowledge. The facts are that DFSS projects require half the resources and can be done in one-third the time.  For additional information, see our DFSS offerings under Services.  

Research study launched to examine what’s working in Six Sigma deployment 

The American Society for Quality (ASQ) is organizing a research committee to study Six Sigma.  The purpose of this effort will be to foster a world-wide exchange of knowledge, learning and research collaboration.  The initial focus of the group will be on assessing what is working and what is not working in Six Sigma and to formally document the economic benefits.  ASQ has asked Bill King (GOAL/QPC) and Bill Tony (Publisher of Six Sigma Forum) to organize this committee.  For more information on how to become a member of the committee, download an application at www.asq.org/pub/research/Application_research_committees.PDF (case sensitive).