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needs and personal taste. The information is instantly relayed to the factory, where the car is assembled and
shipped within two to three days.
BENCHMARKING. Introduced by Xerox in 1979, benchmarking is now a major TQM component.
Benchmarking
23
is defined by Xerox as "the continuous process of measuring products, services, and practices
against the toughest competitors or those companies recognized as industry leaders." The key to successful
benchmarking lies in analysis. Starting with its own mission statement, a company must honestly analyze its
current procedures and determine areas for improvement. As a second step, a company must carefully select
competitors worthy of copying. For example, Xerox studied the order fulfillment techniques of L. L. Bean and
learned ways to reduce warehouse costs by 10 percent. Companies can emulate internal processes and proce-
dures of competitors, but with caution. For example, a small company may court failure by copying the "big
boys" such as Ford or Xerox whose methods are incompatible with a small-company situation. Once a strong,
compatible program is found and analyzed, the benchmarking company can then devise a strategy for imple-
menting a new program.
OUTSOURCING. One of the fastest-growing trends in U.S. business is outsourcing
24
, the farming out of
a company's in-house operation to a preferred vendor with a high quality level in the particular task area. Com-
panies such as B. F. Goodrich and Glacxo Pharmaceuticals have latched on to outsourcing as a route to almost
immediate savings and quality improvement. Traditional in-house operations can be farmed out to save costs on
employee benefits, to reduce personnel, and to free existing personnel for other duties. For example, banks have
outsourced the processing of credit cards to companies that can do it more cheaply. Large oil companies have
outsourced the cleaning and maintenance of refineries. Eastman Kodak outsourced its computer operations to
IBM. Manufacturing companies have outsourced the designing of new plants, and service organizations have
outsourced mailrooms, warehousing, and delivery services. Outsourcing has also become a viable option for
city and state governments trying to slash costs and improve efficiency. In Scotts-dale, Arizona, Rural/Metro
Company contracts with the city to run fire departments and emergency medical services and is able to provide
better service at a fraction of the cost of traditional government-run services. As with other quality systems,
outsourcing is successful when care is taken in selecting the operations that can be accomplished with greater
quality elsewhere and in finding the best outsourcing partners. As described in the Leading the Management
Revolution box, the trend toward outsourcing is widespread.
REDUCED CYCLE TIME. In the book Quality Alone Is Not Enough, the authors refer to cycle time as
the "drivers of improvement." Cycle time
25
refers to the steps taken to complete a company process, such as
teaching a class, publishing a textbook, or designing a new car. The simplification of work cycles, including the
dropping of barriers between work steps and among departments and the removal of worthless steps in the
process, is what enables a TQM program to succeed. Even if an organization decides not to use quality circles,
substantial improvement is possible by focusing on improved responsiveness and acceleration of activities into
a shorter time. Reduction in cycle time improves overall company performance as well as quality.
For example, L. L. Bean, Inc., the Freeport, Maine, mail-order firm, is a recognized leader in cycle time
control. Workers have used flowcharts to track their movements and pinpoint wasted motions, shifting high
volume merchandise closer to the packing station. Improvements such as these have enabled L. L. Bean to re-
spond with a correct shipment rate of 99.9 percent within only a few hours after the order is received.
CONTINUOUS IMPROVEMENT. In North America, crash programs and grand designs have been the
preferred method of innovation. Yet the finding from Japanese success is that continuous improvement pro-
duces an even more effective result. Continuous improvement
26
is the implementation of a large number of
small, incremental improvements in all areas of the organization on an ongoing basis. In a successful TQM
program, all employees learn that they are expected to contribute by initiating changes in their own job activi-
ties. The basic philosophy is that improving things a little bit at a time, all the time, has the highest probability
of success. Find one small way to improve the job today and act on it. That improvement will suggest another
useful piece tomorrow. No improvement is too small to implement–activities are fine-tuned all the time. In this
way, innovations can start simple, and employees can run with their ideas. There is no end to the process. Im-
provements occur all the time, and the resulting changes give a company a significant competitive advantage.
23
Benchmarking The continuous process of measuring products, services, and practices against the toughest competitors or those companies
recognized as industry leaders.
24
Outsourcing The farming out of a company's in-house operation to a preferred vendor.
25
Cycle time The steps taken to complete a company process.
26
Continuous improvement The implementation of a large number of small, incremental improvements in all areas of the organization on an
ongoing basis.
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