There are four prongs of quality and four ways to improve quality of product and service:
- Innovation in product and service
- Innovation in process
- Improvement of existing product and service
- Improvement of existing process
The common mistake is the supposition that quality is ensured by No. 4, improvement of process, that operations going off without blemish on the factory floor, in the bank, in the hotel will ensure quality. Good operations are essential, yet they do not ensure quality. Quality is made in the boardroom.
A bank that failed last week may have had excellent operations— speed at the tellers’ windows with few mistakes; few mistakes in bank statements; likewise in the calculation of interest and of penalties and loans. The cause of failure at the bank was bad management, not operations.
Profit in business comes from repeat customers, customers that boast about your product and service, and that bring friends with them.
It will not suffice to have customers that are merely satisfied. An unhappy customer will switch. Unfortunately, a satisfied customer may also switch, on the theory that he could not lose much, and might gain.
No defects, no jobs. Absence of defects does not necessarily build business… Something more is required.
Training for a job must teach the customer’s needs
New product and new types of service are generated, not by asking the consumer, but by knowledge, imagination, innovation, risk, trial and error on the part of the producer, backed by enough capital to develop the product or service and to stay in business during the lean months of introduction.
No one can measure the loss of business that may arise from a defective item that goes out to a customer.
The consumer is the most important point on the production-line.
Does the customer invent new product or service? The customer generates nothing. No customer asked for electric lights. There was gas and gas mantles, which gave good light. The first electric lights had carbon filaments. They were fragile and inefficient. No customer asked for photography. No customer asked for the telegraph, nor for a telephone. No customer asked for an automobile. We have horses: what could be better’? No customer asked for pneumatic tires. Tires are made of rubber. It is silly to think of riding on air. The first pneumatic tires in the United States were not good. The user had to carry with him rubber cement, plugs, and a pump, and know how to use them.
The aim proposed here for any organization is for everybody to gain - stockholders, employees, suppliers, customers, community, the environment - over the long term.